eBay 2010 Annual Report Download - page 73

due primarily to the repurchase of approximately 80.6 million shares of our common stock for an aggregate
purchase price of approximately $2.2 billion and the repayment of a bank obligation of $434.0 million assumed
in the Bill Me Later acquisition, offset in part by the proceeds from stock option exercises totaling $152.8 million
and $800.0 million of net proceeds from borrowings under our credit agreement.
The negative effect of currency exchange rates on cash and cash equivalents during 2008, 2009 and 2010
was due to the strengthening of the U.S. dollar against other foreign currencies, primarily the Euro.
Stock Repurchases
In January 2008, our Board of Directors authorized a stock repurchase program that provides for the
repurchase of up to $2.0 billion of our common stock, with no expiration from the date of authorization. In
September 2010, our Board authorized an additional stock repurchase program that provides for the repurchase
of up to an additional $2.0 billion of our common stock, with no expiration from the date of authorization, for the
purpose of offsetting the impact of dilution from our equity compensation programs. During 2010, we
repurchased approximately $712.8 million of our common stock under these stock repurchase programs. As of
December 31, 2010, $1.9 billion remained for further repurchases of our common stock under our $2.0 billion
stock repurchase program approved in September 2010.
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 our 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 determination 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
As of December 31, 2010, no borrowings or letters of credit were outstanding under our $1.8 billion credit
agreement. As described below, we have a $1.0 billion commercial paper program, and we maintain $1.0 billion
of available borrowing capacity under our credit agreement in order to repay commercial paper borrowings in the
event we are unable to repay those borrowings from other sources when they become due. As a result, at
December 31, 2010, $0.8 million of borrowing capacity was available for other purposes permitted by the credit
agreement.
Loans under the credit agreement will bear interest at LIBOR plus a margin ranging from 0.20 percent to
0.50 percent. Subject to certain conditions stated in the credit agreement, we may borrow, prepay and reborrow
amounts under the credit agreement at any time during the term of the credit agreement, which expires in
November 2012. Funds borrowed under the credit agreement may be used for working capital, capital
expenditures, acquisitions and other general corporate purposes. The credit agreement contains customary
representations, warranties, affirmative and negative covenants, including a financial covenant, and events of
default. The negative covenants include restrictions regarding the incurrence of additional indebtedness and liens,
and the entry into certain agreements that restrict the ability of our subsidiaries to provide credit support. The
financial covenant requires us to meet a quarterly financial test with respect to a maximum consolidated leverage
ratio. As of December 31, 2010, we were in compliance with the financial covenants in the credit agreement.
Shelf Registration Statement and Long-Term Debt
At December 31, 2010, we had an effective shelf registration statement on file with the Securities and
Exchange Commission that allows us to issue various types of debt securities, such as fixed or floating rate notes,
U.S. dollar or foreign currency denominated notes, redeemable notes, global notes, and dual currency or other
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