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Segment Reporting
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
Segment Reporting
5. Segment reporting

Reporting segments are based upon the Company’s internal organizational structure, the manner in which the Company’s operations are managed, the criteria used by management to evaluate the Company’s performance, the availability of separate financial information, and overall materiality considerations.

Segment reporting is based on geography as the main basis of segment breakdown to reflect the evaluation of the Company’s performance defined by the management. The Company’s segments include Brazil, Argentina, Mexico, Venezuela and other countries (such as Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Uruguay and USA).

Direct contribution consists of net revenues from external customers less direct costs. Direct costs include specific costs of net revenues, sales and marketing expenses, and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, allowances for doubtful accounts, headcount compensation, third party fees. All corporate related costs have been excluded from the Company’s direct contribution.

Expenses over which segment managers do not currently have discretionary control, such as certain technology and general and administrative costs are monitored by management through shared cost centers and are not evaluated in the measurement of segment performance.

The following tables summarize the financial performance of the Company’s reporting segments:

 

    Three Months Ended June 30, 2013  
    Brazil     Argentina     Mexico     Venezuela     Other Countries     Total  

Net revenues

   $ 51,116,153      $ 29,000,836      $ 7,823,566      $ 17,563,547      $ 6,679,258      $ 112,183,360   

Direct costs

     (27,849,992 )      (16,203,748 )      (5,122,425 )      (6,478,796 )      (3,215,003 )      (58,869,964 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Direct contribution

     23,266,161        12,797,088        2,701,141        11,084,751        3,464,255        53,313,396   

Operating expenses and indirect costs of net revenues

               (17,864,101 ) 
           

 

 

  

Income from operations

               35,449,295   
           

 

 

  

Other income (expenses):

            

Interest income and other financial gains

               2,202,314   

Interest expense and other financial losses

               (531,668 ) 

Foreign currency gain

               3,600,866   

Other gains, net

               1,393   
           

 

 

  

Net income before income / asset tax expense

             $ 40,722,200   
           

 

 

  
    Three Months Ended June 30, 2012  
    Brazil     Argentina     Mexico     Venezuela     Other Countries     Total  

Net revenues

   $ 44,205,857      $ 20,561,213      $ 6,046,812      $ 12,417,318      $ 5,612,859      $ 88,844,059   

Direct costs

     (25,066,435 )      (9,543,476 )      (3,269,574 )      (3,728,913 )      (2,896,426 )      (44,504,824 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Direct contribution

     19,139,422        11,017,737        2,777,238        8,688,405        2,716,433        44,339,235   

Operating expenses and indirect costs of net revenues

               (12,454,315 ) 
           

 

 

  

Income from operations

               31,884,920   
           

 

 

  

Other income (expenses):

            

Interest income and other financial gains

               2,982,303   

Interest expense and other financial losses

               (474,300 ) 

Foreign currency gain

               749,008   

Other losses, net

               (7,009 ) 
           

 

 

  

Net income before income / asset tax expense

             $ 35,134,922   
           

 

 

  

 

    Six Months Ended June 30, 2013  
    Brazil     Argentina     Mexico     Venezuela     Other Countries     Total  

Net revenues

   $ 98,881,836      $ 54,621,583      $ 15,613,867      $ 32,694,097      $ 13,097,724      $ 214,909,107   

Direct costs

     (58,843,536 )      (29,679,458 )      (9,239,252 )      (12,486,903 )      (6,082,984 )      (116,332,133 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Direct contribution

     40,038,300        24,942,125        6,374,615        20,207,194        7,014,740        98,576,974   

Operating expenses and indirect costs of net revenues

               (34,556,496 ) 
           

 

 

  

Income from operations

               64,020,478   
           

 

 

  

Other income (expenses):

            

Interest income and other financial gains

               5,596,320   

Interest expense and other financial losses

               (892,020 ) 

Foreign currency loss

               (2,648,848 ) 

Other losses, net

               (2,340 ) 
           

 

 

  

Net income before income / asset tax expense

             $ 66,073,590   
           

 

 

  
    Six Months Ended June 30, 2012  
    Brazil     Argentina     Mexico     Venezuela     Other Countries     Total  

Net revenues

   $ 86,370,511      $ 38,677,682      $ 12,630,678      $ 23,658,890      $ 11,242,304      $ 172,580,065   

Direct costs

     (50,809,649 )      (17,666,411 )      (6,916,211 )      (8,576,248 )      (5,712,094 )      (89,680,613 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Direct contribution

     35,560,862        21,011,271        5,714,467        15,082,642        5,530,210        82,899,452   

Operating expenses and indirect costs of net revenues

               (26,083,786 ) 
           

 

 

  

Income from operations

               56,815,666   
           

 

 

  

Other income (expenses):

            

Interest income and other financial gains

               6,070,862   

Interest expense and other financial losses

               (551,617 ) 

Foreign currency loss

               (283,969 ) 

Other losses, net

               (11,263 ) 
           

 

 

  

Net income before income / asset tax expense

               62,039,679   
           

 

 

  

The following table summarizes the allocation of the long-lived tangible assets based on geography, as of June 30, 2013 and December 31, 2012:

 

     June 30,      December 31,  
     2013      2012  
     (Unaudited)      (Audited)  

US long-lived tangible assets

    $ 9,519,177       $ 6,782,077   

Other countries long-lived tangible assets

      

Argentina

      33,568,284         16,955,438   

Brazil

      3,459,910         2,421,618   

Mexico

      572,537         378,653   

Venezuela

      29,755,221         8,455,816   

Other countries

      3,206,530         2,732,620   
  

 

 

     

 

 

  
   $ 70,562,482       $ 30,944,145   
  

 

 

     

 

 

  

Total long-lived tangible assets

    $ 80,081,659       $ 37,726,222   
  

 

 

     

 

 

  

 

Long-lived tangible assets acquired:

Office building acquisition agreement in Buenos Aires

In April 2013, the Company acquired three floors or 3,865 square meters in a new office building located in Buenos Aires for a total amount of $18.0 million plus VAT. The price will be paid in Argentine pesos. At the date of this interim condensed consolidated financial statements the Company paid: i) $0.4 million plus VAT in advance; ii) $3.2 million plus VAT at the date of signing of the purchase agreement and iii) the first two installments in June and in July 2013, for an aggregate amount of $4.1 million.

As of June 30, 2013, the Company recorded a liability for the unpaid balance of this building acquisition for a total amount of $12.2 million.

Office building acquisition agreement in Caracas

In May 2013, the Company acquired 1,158 square meters, 13 parking spaces and 4 storage spaces, in an office building located in Caracas for a total amount of $20.0 million or BF$126.0 million. The price has been paid in Bolivares Fuertes.

The following table summarizes the allocation of the goodwill and intangible assets based on geography, as of June 30, 2013 and December 31, 2012:

 

     June 30,
2013		      December 31,
2012		  
     (Unaudited)      (Audited)  

US intangible assets

    $ 15,754       $ 21,005   

Other countries goodwill and intangible assets

      

Argentina

      19,067,487         20,328,154   

Brazil

      11,129,343         10,724,007   

Mexico

      14,667,740         14,644,795   

Venezuela

      6,980,576         6,595,117   

Other countries

      14,414,889         15,332,850   
  

 

 

     

 

 

  
   $ 66,260,035       $ 67,624,923   
  

 

 

     

 

 

  

Total goodwill and intangible assets

    $ 66,275,789       $ 67,645,928   
  

 

 

     

 

 

  

 

Consolidated net revenues by similar products and services for the three and six-months ended June 30, 2013 and 2012 were as follows:

 

Consolidated Net

    Three Months Ended June 30,  

Revenues

    2013      2012  

Marketplace

    $ 77,915,508       $ 61,936,103   

Non-marketplace (*)

    $ 34,267,852       $ 26,907,956   
  

 

 

     

 

 

  

Total

    $ 112,183,360       $ 88,844,059   
  

 

 

     

 

 

  
Consolidated Net    Six Months Ended June 30,  

Revenues

    2013      2012  

Marketplace

    $ 149,630,271       $ 122,218,201   

Non-marketplace (*)

    $ 65,278,836       $ 50,361,864   
  

 

 

     

 

 

  

Total

    $ 214,909,107       $ 172,580,065   
  

 

 

     

 

 

  

 

(*) Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services.