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Segment Reporting
 3 Months Ended
Mar. 31, 2015
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 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2015

 

 

(In thousands)

 

 

Brazil

 

Argentina

 

Mexico

 

Venezuela

 

Other
Countries

 

Total

Net revenues

 

$             68,498 

 

$             47,431 

 

$            9,437 

 

$             13,955 

 

$            8,782 

 

$             148,103 

Direct costs

 
(39,681)

 
(24,785)

 
(5,969)

 
(4,204)

 
(5,172)

 
(79,811)

Impairment of Long-lived Assets

 

 —

 

 —

 

 —

 
(16,226)

 

 —

 
(16,226)

Direct contribution

 
28,817 

 
22,646 

 
3,468 

 
(6,475)

 
3,610 

 
52,066 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

 
(26,478)

Income from operations

 

 

 

 

 

 

 

 

 

 

 
25,588 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

 
4,308 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

 
(4,950)

Foreign currency losses

 

 

 

 

 

 

 

 

 

 

 
(8,570)

Net income before income / asset tax expense

 

 

 

 

 

 

 

 

 

 

 

$               16,376 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2014

 

 

(In thousands)

 

 

Brazil

 

Argentina

 

Mexico

 

Venezuela

 

Other
Countries

 

Total

Net revenues

 

$             52,434 

 

$             27,962 

 

$            8,083 

 

$             19,357 

 

$            7,546 

 

$             115,382 

Direct costs

 
(30,517)

 
(16,916)

 
(4,578)

 
(5,635)

 
(3,914)

 
(61,560)

Direct contribution

 
21,917 

 
11,046 

 
3,505 

 
13,722 

 
3,632 

 
53,822 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

 
(19,821)

Income from operations

 

 

 

 

 

 

 

 

 

 

 
34,001 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

 
3,036 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

 
(1,027)

Foreign currency gains

 

 

 

 

 

 

 

 

 

 

 
3,093 

Net income before income / asset tax expense

 

 

 

 

 

 

 

 

 

 

 

$               39,103 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

2015

 

2014

 

 

(In thousands)

 

 

 

 

 

US Property and equipment, net

 

$               11,434

 

$               13,226

Other countries property and equipment, net

 

 

 

 

Argentina

 
29,382 

 
28,005 

Brazil

 
8,211 

 
8,237 

Mexico

 
2,745 

 
2,801 

Venezuela (*)

 
20,618 

 
36,237 

Other countries

 
3,555 

 
3,039 

 

 

$               64,511

 

$               78,319

Total Property and equipment, net

 

$               75,945

 

$               91,545

 

(*)  After the impairment of Venezuelan long-lived assets. See Note 2 “Foreign currency translation - Venezuelan currency status”.

 

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

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

2015

 

2014

 

 

(In thousands)

 

 

 

 

 

US intangible assets

 

$                   153

 

$                    172

Other countries goodwill and intangible assets

 

 

 

 

Argentina

 
12,975 

 
12,580 

Brazil

 
9,645 

 
11,212 

Mexico

 
20,929 

 
21,734 

Venezuela

 
7,480 

 
7,515 

Other countries (*)

 
37,196 

 
38,787 

 

 

$              88,225

 

$               91,828

Total goodwill and intangible assets

 

$              88,378

 

$               92,000

 

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

 

Consolidated net revenues by similar products and services for the three-month periods ended March 31, 2015 and 2014 were as follows:

 

 

 

 

 

 

 

 

 

Three-months Ended March 31,

 

 

2015

 

2014

Consolidated Net Revenues

 

(In thousands)

Marketplace

 

$            94,762

 

$            83,442

Non-marketplace (*)

 
53,341 

 
31,940 

Total

 

$          148,103

 

$          115,382

 

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