eBay 2012 Annual Report Download - page 113

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2012 and 2011, we held $6 million and $5 million
, respectively, of time deposits classified as held to maturity which are
recorded at amortized cost.
We had no material long-term or short-term investments that have been in a continuous unrealized loss position for greater than 12 months
as of December 31, 2012 . Amounts reclassified to earnings from unrealized gains and losses were not material in 2012, 2011 and 2010,
Our fixed-income investment portfolio consists of corporate debt securities and government and agency securities that have a maximum
maturity of six years. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on
their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market
interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The
unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of all these investments
upon maturity or sale. As of December 31, 2012 , these securities had a weighted average remaining duration of approximately 18 months.
Restricted cash is held primarily in money market funds and interest bearing accounts for letters of credit related primarily to our global
sabbatical program and various lease arrangements.
The estimated fair values of our short-term and long-term investments classified as available for sale by date of contractual maturity at
December 31, 2012 are as follows:
Equity and cost method investments
We have made multiple equity and cost method investments which are reported in long-term investments on our consolidated balance
sheet. As of December 31, 2012 and 2011 , our equity and cost method investments totaled $327 million and $190 million , respectively. During
2012, we entered into a joint venture arrangement with a third party resulting in an equity investment of $130 million in exchange for our
contribution of $12 million cash and commitment to contribute certain assets of a business unit upon obtaining further regulatory approvals.
F-21
December 31, 2011
Gross
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
(In millions)
Short-term investments:
Restricted cash
$
19
$
—
$
—
$
19
Corporate debt securities
448
1
—
449
Government and agency securities
42
—
—
42
Time deposits and other
82
—
—
82
Equity instruments
8
638
—
646
$
599
$
639
$
—
$
1,238
Long-term investments:
Restricted cash
$
1
$
—
$
—
$
1
Corporate debt securities
2,238
6
(58
)
2,186
Government and agency securities
70
1
—
71
$
2,309
$
7
$
(58
)
$
2,258
December 31,
2012
(In millions)
One year or less (including restricted cash of $15)
$
2,591
One year through two years
1,016
Two years through three years
493
Three years through four years
766
Four years through five years
420
Five years through six years
16
$
5,302