eBay 2003 Annual Report Download - page 36

international expansion. In 2003, purchases of property and equipment included the $125.1 million
purchase of additional oÇce space in San Jose, California. Purchases of property and equipment in 2003
also included amounts for improvements to various facilities in the U.S. and around the world as well as
computer equipment and software to support our site operations, customer support and international
expansion. We expect capital expenditures for the purchase of property and equipment to approximate
$250 million during 2004, without taking into account any acquisitions or other costs associated with the
potential purchase of additional facilities. This amount for 2004 consists primarily of hardware and
software for our platform architecture, site operations and corporate information systems. Cash expended
for acquisitions, net of cash acquired, totaled $111.7 million in 2001, $59.4 million in 2002 and
$216.4 million in 2003. In 2001, we expended cash to acquire a controlling interest in Internet Auction,
located in South Korea. Our cash acquisitions in 2002 included acquiring the remaining ownership interest
in our Billpoint subsidiary and a 38% interest in EachNet, located in China. We completed our acquisition
of PayPal during 2002 through the exchange of our common stock, and we did not include cash payments
in the purchase price. Our cash acquisitions in 2003 included acquiring the remaining ownership interest in
EachNet and an additional ownership interest in Internet Auction Co.
The net cash Öows provided by Ñnancing activities in 2001, 2002 and 2003 were due primarily to
proceeds from stock option exercises. Proceeds from stock option exercises totaled $123.7 million in 2001,
$252.2 million in 2002 and $700.8 million in 2003. Our future cash Öows from stock options are diÇcult to
project as such amounts are a function of both our stock price and the decisions by employees to exercise
stock options. In general, we expect proceeds from stock option exercises to increase during periods in
which our stock price has increased.
Commitments and Contingencies
The contractual obligations presented in the table below represent our estimates of future payments
under Ñxed contractual obligations and commitments. Changes in our business needs, cancellation
provisions, changing interest rates, and other factors may result in actual payments diÅering from the
estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented
below a summary of the most signiÑcant assumptions used in our determination of amounts presented in
the tables, in order to assist in the review of this information within the context of our consolidated
Ñnancial position, results of operations, and cash Öows. The following table summarizes our Ñxed
contractual obligations and commitments (in thousands):
Other
Year Ending Capital Operating Purchase
December 31, Leases Leases Obligations Total
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 2,840 $ 22,765 $265,237 $290,842
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 128,376 17,556 162,912 308,844
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 11,693 54,580 66,273
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 9,724 7,601 17,325
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 9,661 749 10,410
ThereafterÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 44,361 Ì 44,361
$131,216 $115,760 $491,079 $738,055
Capital lease amounts include leases obligations associated with computer and other oÇce equipment.
The amounts presented are consistent with contractual terms and are not expected to diÅer signiÑcantly,
unless we decide to purchase the individual assets prior to the end of the respective lease terms. The
purchase obligation amount in 2005 also includes the assumed purchase of the corporate headquarters in
San Jose, California, in March 2005, when the lease is scheduled to expire. See ""Note 17 Ì Subsequent
Events'' in the notes to the Consolidated Financial Statements.
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