eBay 2008 Annual Report Download - page 68

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The negative effect of exchange rates on cash and cash equivalents during 2008 was due to the strengthening of
the U.S. dollar against other foreign currencies, primarily the Euro. The positive effect of exchange rates on cash
and cash equivalents during 2007 and 2006 was due to the weakening of the U.S. dollar against other foreign
currencies, primarily the Euro.
Stock Repurchases
In July 2006, our Board authorized the repurchase of up to $2.0 billion of our common stock within two years
from the date of authorization. During 2006, we repurchased approximately 54.5 million shares of our common
stock at an average price of $30.56 per share for an aggregate purchase price of $1.7 billion. In January 2007, our
Board authorized, and we announced, an expansion of the stock repurchase program to provide for the repurchase of
up to an additional $2.0 billion of our common stock over the next two years. During 2007, we repurchased
approximately 44.6 million shares of our common stock at an average price of $33.42 per share for an aggregate
purchase price of $1.5 billion under this stock repurchase program. In January 2008, our Board authorized, and we
announced, another stock repurchase program of up to $2.0 billion of our common stock. During 2008, we
repurchased approximately 80.6 million shares of our common stock at an average price of $27.15 per share for an
aggregate purchase price of $2.2 billion, under these stock repurchase programs.
Our stock repurchase programs may be limited or terminated at any time without prior notice. Stock
repurchases under these programs may be made through a variety of open market and privately negotiated
transactions, including structured stock repurchase transactions or other derivative transactions, at times and in such
amounts as management deems appropriate and will be funded from the company’s working capital or other
financing alternatives. The timing and actual number of shares repurchased will depend on a variety of factors
including corporate and regulatory requirements, price and other market conditions and management’s determi-
nation as to the appropriate use of our cash. The programs are intended to comply with the volume, timing and other
limitations set forth in Rule 10b-18 under the Securities Exchange Act of 1934.
Credit Agreement
In August 2007, we entered into an amendment to our 2006 credit agreement. The amendment agreement
increased the lender commitments and borrowing capacity under the 2006 credit agreement from its prior level of
$1.0 billion to $2.0 billion, maintained an option to increase borrowing capacity by an additional $1.0 billion (after
giving effect to the $1.0 billion increase described above) and extended the maturity date by an additional year to
November 7, 2012. Lehman Brothers Commercial Bank was a participating lender in our $2.0 billion credit
agreement. As a result of the bankruptcy of its parent company, our available line of credit has been effectively
reduced by its commitment of $160.0 million. As of December 31, 2008, $1.0 billion was outstanding and
$840.0 million was available under the credit agreement.
Liquidity and Capital Resource Requirements
At December 31, 2008, we had cash and cash equivalents of $3.2 billion, compared to $4.2 billion at
December 31, 2007. At December 31, 2008, we held balances in cash and cash equivalents outside the U.S. in
certain of our foreign operations totaling approximately $2.8 billion. If these cash and cash equivalents were
distributed to the U.S. we may be subject to additional U.S. taxes in certain circumstances. See “Note 16 — Income
Taxes” to the consolidated financial statements included in this report. Our available cash and cash equivalents are
held in bank deposits and money market funds. We actively monitor the third-party depository institutions that hold
our cash and cash equivalents. Our emphasis is primarily on safety of principal while secondarily maximizing yield
on those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one
of these entities. To date, we have experienced no material loss or lack of access to our invested cash or cash
equivalents; however, we can provide no assurances that access to our invested cash and cash equivalents will not be
impacted by adverse conditions in the financial markets.
At any point in time we have funds in our operating accounts and customer accounts that are with third party
financial institutions. These balances in the U.S. may exceed the Federal Deposit Insurance Corporation (FDIC)
insurance limits. While we monitor the cash balances in our operating accounts, these cash balances could be
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