Etsy 2015 Annual Report Download - page 69

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
described above). A 10% increase or decrease in our current interest rate would not have a significant impact on our interest expense.

Approximately 90% of our GMS is denominated in U.S. dollars, and therefore, the resulting revenue is not subject to foreign currency risk. However, in the
year ended December 31, 2015, approximately 10% of GMS was from goods that were not listed in U.S. dollars and, as a result, was impacted by currency
exchange fluctuations. On a currency-neutral basis, GMS growth for the year ended December 31, 2015 would have been 25.2%, or approximately 1.6
percentage points higher than the reported 23.6% growth. In addition, we believe weaker local currencies in key international markets continued to dampen
the demand for U.S. dollar-denominated goods during the year ended December 31, 2015, impacting both GMS growth and percent international GMS. In
light of these factors, we estimate that the impact of currency translation on goods not listed in U.S. dollars and the impact of currency exchange rates on
international buyer behavior reduced our year-over-year GMS growth rate by approximately two to four percentage points for the year ended December 31,
2015.
Our operating expenses are denominated in the currencies of the countries in which our operations are located, and may be subject to fluctuations due to
changes in currency exchange rates, particularly changes in the Pound Sterling and Euro. Fluctuations in currency exchange rates may cause us to recognize
transaction gains and losses in our statement of operations.
On January 1, 2015, we implemented a revised corporate structure to more closely align our structure with our global operations and future expansion plans
outside of the United States, which resulted in a U.S. dollar-denominated intercompany debt on a Euro-denominated ledger that may be subject to continued
currency exchange rate risk. A 10% increase or decrease in current exchange rates could result in an increase or decrease to currency exchange (loss) gain of
$24.8 million.
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