eBay 2005 Annual Report Download - page 101

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
technologies that enable and better protect online transactions, including the purchase of up to one million
two-factor authentication tokens.
We accounted for the acquisition as a purchase transaction and, accordingly, the purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective
estimated fair values on the acquisition date. The estimated useful economic lives of the identifiable intangible
assets acquired in the acquisition are five years for registered user base and existing technology and one year
for the trade names. The final purchase price allocation will depend primarily upon the completion of our
integration plan.
PayPal Acquisition-Related Liabilities
During the year ended December 31, 2003, we finalized our formal plan to exit certain activities and
integrate certain facilities of PayPal. This plan included provisions to terminate leases for redundant facilities,
dispose of redundant fixed assets and leasehold improvements, resolve certain pre-acquisition legal contingen-
cies, provide various employee-related benefits and exit certain contractual obligations.
The components of the PayPal acquisition related liabilities are as follows (in thousands):
Balance at Cash Balance at
December 31, 2004 Payments December 31, 2005
Excess facilities and fixed assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $23,746 $(4,086) $19,660
Other liabilities and contingencies ÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,287 Ì 3,287
Total liabilityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $27,033 $(4,086) $22,947
Excess facilities and fixed assets liabilities consist primarily of accruals for PayPal's remaining lease
obligations, net of estimated sublease income. A substantial portion of the excess facilities and fixed assets
liabilities recorded as of December 31, 2005 are expected to settle in cash during future periods.
As of December 31, 2005, other PayPal liabilities and contingencies consist primarily of accruals for
certain employee-related tax liabilities.
Goodwill
Goodwill information for each segment is as follows (in thousands):
December 31, Goodwill December 31,
2004 Acquired Adjustments 2005
Segments:
U.S. Marketplaces ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 148,703 $ 809,590 $ 2,788 $ 961,081
International Marketplaces ÏÏÏÏÏÏÏÏÏÏÏ 1,516,055 71,771 (62,037) 1,525,789
Payments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,072,396 275,989 Ì 1,348,385
Communications ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 2,330,961 (18,777) 2,312,184
$2,737,154 $3,488,311 $(78,026) $6,147,439
The increase in goodwill acquired during the year ended December 31, 2005, resulted primarily from our
acquisition of the outstanding shares of Rent.com, International classifieds websites, Shopping.com, Skype,
and VeriSign's payment gateway business, as well as certain insignificant acquisitions. Adjustments to
goodwill during the year ended December 31, 2005, resulted primarily from foreign currency translation
adjustments relating to goodwill and the release of certain acquisition liabilities associated with our current
and prior period acquisitions.
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