7.	Segments

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 and any impairment of long lived assets. 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, payroll, 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:


	Year Ended December 31, 2014
	Brazil			Argentina			Mexico			Venezuela			Other Countries			Total
Net revenues	$	273,638,197		$	150,667,541		$	37,668,802		$	58,025,886		$	36,535,576		$	556,536,002
Direct costs		(158,412,078	)		(81,273,193	)		(24,067,532	)		(16,584,667	)		(20,163,263	)		(300,500,733	)
Impairment of Long-lived Assets		—			—			—			(49,495,686	)		—			(49,495,686	)

Direct contribution		115,226,119			69,394,348			13,601,270			(8,054,467	)		16,372,313			206,539,583

Operating expenses and indirect costs of net revenues																	(86,068,720	)

Income from operations																	120,470,863


Other income (expenses):
Interest income and other financial gains																	15,335,853
Interest expense and other financial losses																	(11,659,356	)
Foreign currency loss																	(2,351,539	)

Net income before income / asset tax expense																$	121,795,821


	Year Ended December 31, 2013
	Brazil			Argentina			Mexico			Venezuela			Other Countries			Total
Net revenues	$	206,394,480		$	122,123,347		$	32,843,482		$	84,572,485		$	26,660,915		$	472,594,709
Direct costs		(119,422,924	)		(66,492,770	)		(18,558,010	)		(29,578,762	)		(12,339,112	)		(246,391,578	)

Direct contribution		86,971,556			55,630,577			14,285,472			54,993,723			14,321,803			226,203,131

Operating expenses and indirect costs of net revenues																	(72,664,076	)

Income from operations																	153,539,055


Other income (expenses):
Interest income and other financial gains																	10,668,593
Interest expense and other financial losses																	(2,355,929	)
Foreign currency gains																	1,258,476
Other losses, net																	(751	)

Net income before income / asset tax expense																	163,109,444


	Year Ended December 31, 2012
	Brazil			Argentina			Mexico			Venezuela			Other Countries			Total
Net revenues	$	179,639,592		$	88,513,640		$	26,987,130		$	54,676,170		$	23,784,962		$	373,601,494
Direct costs		(104,501,652	)		(41,841,587	)		(14,912,375	)		(17,768,989	)		(11,458,627	)		(190,483,230	)

Direct contribution		75,137,940			46,672,053			12,074,755			36,907,181			12,326,335			183,118,264

Operating expenses and indirect costs of net revenues																	(53,460,393	)

Income from operations																	129,657,871


Other income (expenses):
Interest income and other financial gains																	11,877,375
Interest expense and other financial losses																	(1,138,379	)
Foreign currency gain																	11,597
Other losses, net																	(190,938	)

Net income before income / asset tax expense																$	140,217,526

The following table summarizes the allocation of property and equipment, net based on geography:


	December 31, 2014		December 31, 2013
US property and equipment, net	$	13,226,091	$	9,131,777

Other countries property and equipment, net
Argentina		28,005,493		29,119,057
Brazil		8,237,459		5,559,702
Mexico		2,801,115		711,200
Venezuela *()**		36,237,494		83,655,816
Other countries		3,037,184		3,194,357

	$	78,318,745	$	122,240,132

Total property and equipment, net	$	91,544,836	$	131,371,909

(*)	After the impairment of Venezuelan long-lived assets (See Note 2 “Impairment of Long-lived assets”).

Office building acquisition agreement in Caracas, Venezuela

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 $20,002,357 or BF$126,014,852. The price has been paid in Bolivares Fuertes.

In addition, in October 2013, one of the Company’s Venezuelan subsidiaries acquired an office property totaling 1,367 square meters, in Caracas, Venezuela. The purchase price of BF$328,195,200, or approximately $52,094,476, was paid in local currency. The Company’s Venezuelan subsidiary funded a portion of the purchase price with its own funds and the balance of approximately BF$85,115,000, or $13,510,317, pursuant to an unsecured line of credit, which has a 12-month term, obtained from a Venezuelan bank at a fixed interest rate of 13% per annum. As of December 31, 2014, the loan was fully paid.

On October 9, 2014, the Company through its Venezuelan subsidiary acquired an office property located in Centro San Ignacio, Caracas, for a total amount of BF$170.6 million, or approximately $3.4 million. The price of the transaction was paid as follows: i) 50% of the price, or BF$ 85.3 was paid at the date of signing the memorandum of understanding; ii) 30% of the price, or BF$ 51.2 million, was paid on October 20, 2014; and iii) the remaining 20% was paid at the moment of transfer of the property ownership.

The following table summarizes the allocation of the goodwill and intangible assets based on geography:


	December 31, 2014		December 31, 2013
US intangible assets	$	171,463	$	10,503

Other countries goodwill and intangible assets
Argentina		12,580,157		15,575,776
Brazil		11,212,437		10,380,974
Mexico		21,734,078		14,512,949
Venezuela		7,514,679		6,913,604
Other countries *()**		38,787,039		14,298,997

	$	91,828,390	$	61,682,300

Total goodwill and intangible assets	$	91,999,853	$	61,692,803

(*)	Includes the acquisition of online classified advertisement company in Chile. See Note 6.

Consolidated net revenues by similar products and services for the years ended December 31, 2014, 2013 and 2012 were as follows:


Consolidated Net Revenues	2014		2013		2012
Marketplace	$	376,156,156	$	331,338,080	$	261,997,021
Non-marketplace (*)	$	180,379,846	$	141,256,629	$	111,604,473


Total	$	556,536,002	$	472,594,709	$	373,601,494

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