eBay 2015 Annual Report Download - page 50

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(1) We define exchange rate effect as the year-over-year impact of foreign currency movements using prior
period foreign currency rates applied to current year transactional currency amounts.
(2) We define FX-Neutral Gross Merchandise Volume as Gross Merchandise Volume minus the exchange rate
effect. We define the non-GAAP financial measures of FX-Neutral net revenue as net revenue minus the
exchange rate effect.
(3) We define Gross Merchandise Volume (“GMV”) as the total value of all successfully closed transactions
between users on our Marketplace and StubHub platforms during the applicable period regardless of
whether the buyer and seller actually consummated the transaction. We believe that GMV provides a useful
measure of the overall volume of closed transactions that flow through our platforms in a given period,
notwithstanding the inclusion in GMV of closed transactions that are not ultimately consummated.
(4) During the first quarter of 2014, we revised our definition of GMV for certain transactions to align more
closely with our operating metrics. 2013 amounts have been revised to conform to the current period
reporting definition.
In 2015, foreign currency movements relative to the U.S. dollar positively impacted cost of net revenues by
$80 million (inclusive of a positive impact of approximately $24 million from hedging activities). In 2014,
foreign currency movements relative to the U.S. dollar had an immaterial impact on cost of net revenues.
In 2015, foreign currency movements relative to the U.S. dollar positively impacted operating expenses by
$194 million (inclusive of a positive impact of approximately $47 million from hedging activities). In 2014,
foreign currency movements relative to the U.S. dollar had an immaterial impact on operating expenses.
The effect of foreign currency exchange rate movements during 2015 was due to the strengthening of the
U.S. dollar against other currencies, primarily the Euro, the British pound, and the Korean won.
Results of Operations
Summary of Net Revenues
We generate two types of net revenues: net transaction revenues and marketing services and other revenues.
Net transaction revenues are derived principally from final value fees (which are fees payable on transactions
closed on our Marketplace and StubHub platforms), listing fees and other service fees. Marketing services and
other revenues consists of Marketplace and Classifieds revenue principally from the sale of advertisements,
vehicles classifieds listing on Marketplace platforms, revenue sharing arrangements, classifieds fees, marketing
service fees and lead referral fees. To drive traffic to our platforms, we provide incentives to our users in the
form of coupons and buyer and seller rewards. These incentives are generally treated as reductions in revenue.
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