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This excerpt taken from the EBAY 10-K filed Feb 28, 2007. Impact
of Foreign Currency Translation
During 2006, 2005 and 2004, our international net revenues,
based upon the country in which the seller, payment recipient,
Skype user’s Internet protocol address, advertiser or other
service provider is located, accounted for approximately 48%,
46% and 42%, of our consolidated net revenues, respectively. The
growth in our international operations has increased our
exposure to foreign currency fluctuations. Net revenues and
related expenses generated from most international locations are
denominated in the functional currencies of the local countries,
and primarily include Euros, British pounds, Korean won,
Canadian dollars, Australian dollars, Chinese renminbi, and
Indian rupees. Our results of operations and certain of our
inter-company balances associated with our international
locations are exposed to foreign exchange rate fluctuations. The
statements of income of our international operations are
translated into U.S. dollars at the average exchange rates
in each applicable period. If the U.S. dollar weakens
against foreign currencies, the translation of these
foreign-currency-denominated transactions will result in
increased consolidated net revenues, operating expenses, and net
income. Similarly, our net revenues, operating expenses, and net
income will decrease if the U.S. dollar strengthens against
foreign currencies.
Table of Contents
Net revenues were positively impacted by foreign currency
translation by approximately $40.1 million in 2006 and
$12.0 million in 2005 as compared to the same periods of
the prior year. Operating income was positively impacted by
foreign currency translation by approximately $14.4 million
in 2006 and $5.6 million in 2005, as compared to the same
periods of the prior year.
We expect our international operations will continue to grow in
significance. As a result, the impact of foreign currency
fluctuations in future periods could become more significant and
may have a negative impact on our consolidated net revenues and
net income in the event the U.S. dollar strengthens
relative to other currencies. See the information in
“Item 7A: Quantitative and Qualitative Disclosure
About Market Risk” under the caption “Foreign Currency
Risk” for additional discussion of the impact of foreign
currency translation and related hedging activities.
This excerpt taken from the EBAY 10-Q filed Jul 28, 2006. Impact of
Foreign Currency Translation
During the second quarter and first six months of 2006, our
international net revenues, based upon the country in which the
seller, payment recipient, advertiser or other service provider
is located, accounted for approximately 49% and 47% of our
consolidated net revenues, as compared to approximately 46% of
our net revenues in the same periods in the prior year. The
growth in our international operations has increased our
exposure to foreign currency fluctuations. Net revenues and
related expenses generated from international locations are
denominated in the functional currencies of the local countries,
and primarily include Euros, British pounds, Korean won,
Canadian dollars, Taiwanese dollars, Australian dollars, Chinese
renminbi, and Indian rupee. Our results of operations and
certain of our inter-company balances associated with our
international locations are exposed to foreign exchange rate
fluctuations. The statements of income of our international
operations are translated into U.S. dollars at the average
exchange rates in each applicable period. If the
U.S. dollar weakens against foreign currencies, the
translation of these foreign-currency-denominated transactions
will result in increased consolidated net revenues, operating
expenses, and net income. Similarly, our net revenues, operating
expenses, and net income will decrease if the U.S. dollar
strengthens against foreign currencies.
Net revenues were negatively impacted by foreign currency
translation of approximately $0.6 million and
$50.8 million, respectively, in the second quarter and
first six months of 2006 as compared to the same periods of the
prior year. Operating income was negatively impacted by foreign
currency translation of approximately $3.1 million and
$28.2 million in the second quarter and first six months of
2006, respectively, as compared to the same periods of the prior
year.
We expect our international operations will continue to grow in
significance as we develop and deploy our global marketplaces
and global payments platform. As a result, the impact of foreign
currency fluctuations in future periods could become more
significant and may have a negative impact on our consolidated
net revenues and net income in the event the U.S. dollar
strengthens relative to other currencies. See the information in
Item 3 under “Foreign Currency Risk” for
additional discussion of the impact of foreign currency
translation and related hedging activities.
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