Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | MERCADOLIBRE INC | |
Entity Central Index Key | 1099590 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,154,932 |
Interim_Condensed_Consolidated
Interim Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $219,768 | $223,144 |
Short-term investments | 148,052 | 148,810 |
Accounts receivable, net | 54,054 | 46,672 |
Credit cards receivables, net | 133,644 | 85,162 |
Prepaid expenses | 6,433 | 3,458 |
Deferred tax assets | 11,222 | 11,520 |
Other assets | 15,002 | 13,984 |
Total current assets | 588,175 | 532,750 |
Non-current assets: | ||
Long-term investments | 190,152 | 205,265 |
Property and equipment, net | 75,945 | 91,545 |
Goodwill | 65,577 | 68,829 |
Intangible assets, net | 22,801 | 23,171 |
Deferred tax assets | 13,817 | 21,554 |
Other assets | 20,316 | 23,734 |
Total non-current assets | 388,608 | 434,098 |
Total assets | 976,783 | 966,848 |
Current liabilities: | ||
Accounts payable and accrued expenses | 58,160 | 58,006 |
Funds payable to customers | 193,188 | 165,034 |
Salaries and social security payable | 36,212 | 28,777 |
Taxes payable | 23,733 | 26,013 |
Loans payable and other financial liabilities | 1,565 | 1,642 |
Deferred tax liabilities | 1,673 | 1,645 |
Other liabilities | 4,081 | 4,176 |
Dividends payable | 4,548 | 7,330 |
Total current liabilities | 323,160 | 292,623 |
Non-current liabilities: | ||
Salaries and social security payable | 12,193 | 11,326 |
Loans payable and other financial liabilities | 286,180 | 282,184 |
Deferred tax liabilities | 18,774 | 18,746 |
Other liabilities | 5,358 | 6,181 |
Total non-current liabilities | 322,505 | 318,437 |
Total liabilities | 645,665 | 611,060 |
Commitments and contingencies (Note 7) | ||
Equity: | ||
Common stock, $0.001 par value, 110,000,000 shares authorized, 44,154,932 and 44,154,572 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 44 | 44 |
Additional paid-in capital | 137,692 | 137,645 |
Retained earnings | 350,346 | 353,173 |
Accumulated other comprehensive loss | -156,964 | -135,074 |
Total Equity | 331,118 | 355,788 |
Total Liabilities and Equity | $976,783 | $966,848 |
Interim_Condensed_Consolidated1
Interim Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 110,000,000 | 110,000,000 |
Common stock, shares issued | 44,154,932 | 44,154,572 |
Common stock, shares outstanding | 44,154,932 | 44,154,572 |
Interim_Condensed_Consolidated2
Interim Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net revenues | $148,103 | $115,382 |
Cost of net revenues | -44,708 | -31,540 |
Gross profit | 103,395 | 83,842 |
Operating expenses: | ||
Product and technology development | -17,245 | -12,257 |
Sales and marketing | -26,202 | -22,352 |
General and administrative | -18,134 | -15,232 |
Impairment of Long-Lived Assets | -16,226 | |
Total operating expenses | -77,807 | -49,841 |
Income from operations | 25,588 | 34,001 |
Other income (expenses): | ||
Interest income and other financial gains | 4,308 | 3,036 |
Interest expense and other financial losses | -4,950 | -1,027 |
Foreign currency (losses) gains | -8,570 | 3,093 |
Net income before income / asset tax expense | 16,376 | 39,103 |
Income / asset tax expense | -14,655 | -8,775 |
Net income | 1,721 | 30,328 |
Less: Net Income attributable to Redeemable Noncontrolling Interest | 64 | |
Net income attributable to MercadoLibre, Inc. shareholders | $1,721 | $30,264 |
Basic EPS | ||
Basic net income attributable to MercadoLibre, Inc. Shareholders per common share | $0.04 | $0.69 |
Weighted average of outstanding common shares | 44,154,796 | 44,153,818 |
Diluted EPS | ||
Diluted net income attributable to MercadoLibre, Inc. Shareholders per common share | $0.04 | $0.69 |
Weighted average of outstanding common shares | 44,154,796 | 44,153,818 |
Cash Dividends declared | $0.10 | $0.17 |
Interim_Condensed_Consolidated3
Interim Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income | $1,721 | $30,328 |
Other comprehensive (loss) income, net of income tax: | ||
Currency translation adjustment | -22,530 | -16,611 |
Unrealized net gains on available for sale investments | 261 | 38 |
Less: reclassification adjustment for gains (loss) on available for sale investments included in net income | 379 | -25 |
Net change in accumulated other comprehensive loss, net of income tax | -21,890 | -16,598 |
Total comprehensive (loss) income | -20,169 | 13,730 |
Less: Comprehensive income attributable to Redeemable Noncontrolling Interest | 72 | |
Comprehensive (loss) income attributable to MercadoLibre, Inc. Shareholders | ($20,169) | $13,658 |
Interim_Condensed_Consolidated4
Interim Condensed Consolidated Statement of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operations: | ||
Net income attributable to MercadoLibre, Inc. Shareholders | $1,721 | $30,264 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net income attributable to Redeemable Noncontrolling Interest | 64 | |
Devaluation Loss (Gain), net | 10,862 | -2,658 |
Impairment of Long-Lived Assets | 16,226 | |
Depreciation and amortization | 5,081 | 3,519 |
Accrued interest | -2,780 | -2,019 |
Convertible bonds accrued interest and amortization of debt discount | 3,984 | |
Long Term Retention Program accrued compensation | 3,327 | 766 |
Deferred income taxes | 6,118 | -4,675 |
Changes in assets and liabilities: | ||
Accounts receivable | -27,923 | -9,410 |
Credit Card Receivables | -54,763 | -9,871 |
Prepaid expenses | -3,451 | -962 |
Other assets | -2,306 | 925 |
Accounts payable and accrued expenses | 30,395 | 11,755 |
Funds payable to customers | 48,683 | 7,366 |
Other liabilities | 181 | 318 |
Interest received from investments | 2,824 | 2,246 |
Net cash provided by operating activities | 38,179 | 27,628 |
Cash flows from investing activities: | ||
Purchase of investments | -420,070 | -386,755 |
Proceeds from sale and maturity of investments | 431,636 | 379,720 |
Purchases of intangible assets | -942 | -144 |
Purchases of property and equipment | -7,315 | -6,966 |
Net cash provided by (used in) investing activities | 3,309 | -14,145 |
Cash flows from financing activities: | ||
Payments on loans payable and other financial liabilities | -139 | -582 |
Dividends paid | -7,330 | -6,314 |
Net cash used in financing activities | -7,469 | -6,896 |
Effect of exchange rate changes on cash and cash equivalents | -37,395 | -15,732 |
Net decrease in cash and cash equivalents | -3,376 | -9,145 |
Cash and cash equivalents, beginning of the period | 223,144 | 140,285 |
Cash and cash equivalents, end of the period | $219,768 | $131,140 |
Nature_of_Business
Nature of Business | 3 Months Ended |
Mar. 31, 2015 | |
Nature of Business [Abstract] | |
Nature of Business | 1. Nature of Business |
MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in Delaware in October 1999. MercadoLibre is a Latin American e-commerce and payments-platform. MercadoLibre is an e-commerce enabler whose mission is to build the necessary online and technology tools to allow practically anyone to trade almost anything in Latin America. MercadoLibre enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), a Latin American online marketplace, which allows users to buy and sell in most of the Latin America countries; through MercadoPago, which enables individuals and businesses to send and receive online payments; through MercadoEnvios, which facilitate the shipping of goods from sellers to buyers; through MercadoClics, which facilitates the advertising service to large retailers and brands to promote their product and services on the web; and through MercadoShops which facilitates users to set-up, manage promote their own on-line web-stores. | |
As of March 31, 2015, the Company, through its wholly-owned subsidiaries, operated online commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, Uruguay and Venezuela, and online payments solutions directed towards Argentina, Brazil, Mexico, Venezuela, Chile and Colombia. In addition, the Company operates a real estate classified platform that covers some areas of State of Florida, U.S.A. | |
MercadoPago is currently available to users in each of Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. | |
MercadoEnvios is currently available to users in Argentina, Brazil and Mexico. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies | ||||||||
Basis of presentation | |||||||||
The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. These interim condensed consolidated financial statements are stated in U.S. dollars, except for amounts otherwise indicated. Intercompany transactions and balances have been eliminated for consolidation purposes. | |||||||||
Substantially all net revenues, cost of net revenues and operating expenses, are generated in the Company’s foreign operations, amounting to approximately 99.7% and 99.4% of the consolidated amounts during the three-month periods ended March 31, 2015 and 2014. Long-lived assets, Intangible assets and Goodwill located in the foreign operations totaled $152,736 thousands and $170,147 thousands as of March 31, 2015 and December 31, 2014, respectively. | |||||||||
These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of March 31, 2015 and December 31, 2014. These financial statements also show the Company’s consolidated statements of income, of comprehensive income and statement of cash flows for the three-month periods ended March 31, 2015 and 2014. These interim condensed consolidated financial statements include all normal recurring adjustments that management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. | |||||||||
Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2014, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, of comprehensive income and of cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. | |||||||||
Foreign currency translation | |||||||||
Venezuelan currency status | |||||||||
All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Venezuela since January 1, 2010, as described below. Accordingly, these foreign subsidiaries translate assets and liabilities from their local currencies into U.S. dollars by using the period-end exchange rates while income and expense accounts are translated at the average rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. | |||||||||
According to U.S. GAAP, the Company has transitioned its Venezuelan operations to highly inflationary status as from January 1, 2010, which requires that transactions and balances are re-measured as if the U.S. dollar were the functional currency for such operation. | |||||||||
During December 2013, the Venezuelan regulation that created the SICAD 1 exchange system was amended to expand its use, and to require publication of the average exchange rate implied by transactions settled in SICAD 1 auctions. Additionally, on January 23, 2014, the exchange regulation was amended to include foreign currency sales for certain transactions, such as but not limited to: contracts for leasing and services, use and exploitation of patents, trademarks, foreign investments and payments of royalties, contracts for technology import and technical assistance. Due to the change in rules that provided for the creation of the SICAD 1 system, the official exchange rate remains only available to obtain foreign currency to pay for a limited list of goods considered to be of high priority by the Government, which does not include those relating to the Company’s business. As a consequence, SICAD 1 became, from that moment, the primary system to which the Company would have to request U.S. dollars to settle its transactions. As a result, from January 24 to May 15, 2014, the exchange rate used to re-measure the Company’s net monetary asset position in Bolivares Fuertes (“BsF”) and BsF transactions of its Venezuelan operations was the SICAD 1 exchange rate. | |||||||||
In late February 2014, the Venezuelan government issued a decree to open a new exchange control mechanism (“SICAD 2”) that was intended to allow the purchase of foreign exchange currencies, through authorized foreign exchange operators offered by individuals and companies such as Petróleos de Venezuela, S.A. (PDVSA, the oil state-owned corporation of Venezuela), the Central Bank of Venezuela (“BCV”) and other public entities authorized by the Ministry of Finance. The Venezuelan government published operating rules for that exchange mechanism in Exchange Agreement N° 27, and SICAD 2 began operating on March 24, 2014. Since implementation of the SICAD 1 system, the Company was unsuccessful in gaining access to U.S. dollars through SICAD 1. As a result of this ongoing lack of access to the SICAD 1 auction system, on May 16, 2014, the Company decided to start requesting U.S. dollars through the SICAD 2 mechanism. The SICAD 2 system was an open mechanism that was intended to permit any company to request dollars for any purpose. Consequently, the Company was eligible for and was granted, U.S. dollars through the SICAD 2 mechanism. | |||||||||
As a consequence of the determination to obtain U.S. dollars through SICAD 2 and the lack of access to SICAD 1, since May 16, 2014 the Company concluded that the SICAD 2 exchange rate should be used to re-measure their bolivar-denominated monetary assets and liabilities in BsF and to re-measure the results of its Venezuelan operations, effective as of May 16, 2014. As a consequence, the Company recorded a foreign exchange loss of $16.5 million during the second quarter of 2014. | |||||||||
In light of those economic conditions in Venezuela, the determination to access SICAD 2 and re-measure the BsF denominated monetary assets and liabilities of its Venezuelan subsidiaries, and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed in May 2014, the long-lived assets, goodwill and intangible assets with indefinite useful life for impairment. For that purpose, the Company considered the current expected use of these assets, which in the case of two office spaces in Venezuela that had been expected to be used to support the growth of the main operating activities in that country, are currently for rent, and eventually consider opportunities for disposal if real estate market conditions are favorable in the future. Because the Company concluded that the carrying value of these two real estate properties would not be fully recoverable, it recorded an impairment of long-lived assets of $49.5 million in the second quarter of 2014. The carrying amount was adjusted to its estimated fair value of that date, by using the market approach, and considering prices for similar assets. | |||||||||
Later, on February 10, 2015, the Venezuelan government issued a decree that unified the two previous foreign exchange systems “SICAD 1 and SICAD 2” into a new single system denominated SICAD, with an initial public foreign exchange rate of 12 BsF per U.S. dollar. The SICAD auction process remains available only to obtain foreign currency to pay for a limited list of goods considered to be of high priority by the Venezuelan government, which does not include those relating to the Company’s business. In the same decree the Venezuelan government created the “Sistema Marginal de Divisas” (“SIMADI”), a new foreign exchange system that is separate from SICAD, which publishes a foreign exchange rate from the BCV on a daily basis. | |||||||||
In light of the disappearance of SICAD 2, and the Company’s inability to gain access to U.S. dollars through the new single system under SICAD, it started requesting and has been granted U.S. dollars through SIMADI. As a result, the Company now expects to settle its transactions through SIMADI and has concluded that the SIMADI exchange rate should be used to re-measure its bolivar-denominated monetary assets and liabilities and to re-measure the revenues and expenses of the Venezuelan subsidiaries effective as of March 31, 2015. In connection with this re-measurement, the Company recorded a foreign exchange loss of $20.4 million during the first quarter of 2015. As of March 31, 2015, the SIMADI exchange rate was 192.95 BsF per U.S. dollar. | |||||||||
Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows now expected from the Venezuelan business, the Company has reviewed its long-lived assets, goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of March 31, 2015 will not be fully recoverable. As a result, the Company has recorded an impairment of long-lived assets of $ 16.2 million on March 31, 2015. The carrying amount has been adjusted to its estimated fair value of approximately $9.2 million as of that date, by using the market approach, and considering prices for similar assets. | |||||||||
Until 2010 the Company was able to obtain U.S. dollars for any purpose, including dividends distribution, using alternative mechanisms other than through the Commission for the Administration of Foreign Exchange Control (CADIVI). Those U.S. dollars, obtained at a higher exchange rate than the one offered by CADIVI, and held in balance at U.S. bank accounts of our Venezuelan subsidiaries, were used for dividend distributions from our Venezuelan subsidiaries. The Venezuelan subsidiaries have not requested authorization since 2012 to acquire U.S. dollars to make dividend distributions. The Company has not distributed dividends from the Venezuelan subsidiaries since 2011. | |||||||||
The following table sets forth the assets, liabilities and net assets of the Company’s Venezuelan subsidiaries, before intercompany eliminations, as of March 31, 2015 and December 31, 2014 and net revenues for the three-month periods ended March 31, 2015 and 2014: | |||||||||
Three-month periods ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Venezuelan operations | (In thousands) | ||||||||
Net Revenues | $ 13,955 | $ 19,357 | |||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Assets | 41,587 | 75,153 | |||||||
Liabilities | -38,565 | -43,359 | |||||||
Net Assets | $ 3,022 | $ 31,794 | |||||||
As of March 31, 2015, net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to approximately 0.9% of consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to approximately 1.3% of our consolidated cash and investments. | |||||||||
The Company’s ability to obtain U.S. dollars in Venezuela is negatively affected by the exchange regulations in Venezuela that are described above and elsewhere in these financial statements. In addition, its business and ability to obtain U.S. dollars in Venezuela would be negatively affected by additional material devaluations or the imposition of significant additional and more stringent controls on foreign currency exchange by the Venezuelan government. | |||||||||
Despite the current difficult macroeconomic environment in Venezuela, the Company continues to actively manage, through its Venezuelan subsidiaries, its investment in Venezuela. Regardless the current operating, political and economic conditions and certain other factors in Venezuela, management currently plans to continue supporting its business in Venezuela in the long run. | |||||||||
Argentine currency status | |||||||||
The Argentine government has implemented certain measures that control and restrict the ability of companies and individuals to exchange Argentine pesos for foreign currencies. Those measures include, among other things, the requirement to obtain the prior approval from the Argentine Tax Authority of the foreign currency transaction (for example and without limitation, for the payment of non-Argentine goods and services, payment of principal and interest on non-Argentine debt and also payment of dividends to parties outside of the country), which approval process could delay, and eventually restrict, the ability to exchange Argentine pesos for other currencies, such as U.S. dollars. Those approvals are administered by the Argentine Central Bank through the Local Exchange Market (“Mercado Unico Libre de Cambios”, or “MULC”), which is the only market where exchange transactions may be lawfully made. | |||||||||
Further, restrictions also currently apply to the acquisition of any foreign currency for holding as cash within Argentina. Although the controls and restrictions on the acquisition of foreign currencies in Argentina place certain limitations on our current ability to convert cash generated by our Argentine subsidiaries into foreign currencies, based on the current state of Argentine currency rules and regulations, we do not expect that the current controls and restrictions, will have a material adverse effect on our business plans in Argentina or on our overall business, financial condition or results of operations. | |||||||||
Additionally, during January 2014 the Argentinean peso exchange rate against the U.S. dollar increased in approximately 23%, from 6.52 Argentinean Pesos per U.S. dollar as of December 31, 2013 to approximately 8.0 Argentinean Pesos per U.S. dollar. Due to the abovementioned devaluation, during the first quarter of 2014, the reported net assets in Argentina decreased in $14,625 thousands with the related impact in Other Comprehensive Income and the Company recognized a foreign exchange gain of $4,597 thousands. As of March 31, 2015, the Argentinean Peso exchange rate was $8.82 per U.S. dollar. | |||||||||
Income Tax Holiday in Argentina | |||||||||
According to Argentine law, from fiscal year 2008, the Company’s Argentine subsidiary was a beneficiary of a software development law. Part of the benefits obtained from being a beneficiary of the aforementioned law was a relief of 60% of total income tax determined in each year, thus resulting in an effective tax rate in Argentina lower than the income tax law statutory rate. The law expired on September 17, 2014. As a consequence, the average tax rate for 2014 was approximately 22% as we expected no income tax holiday for last quarter of fiscal year 2014. | |||||||||
Aggregate tax benefit totaled $2,102 thousands and aggregate per share effect of the Argentine tax holiday amounted to $0.05 for the three-month period ended March 31, 2014. In addition, during fiscal year 2013 and on December 15, 2014 the Company acquired a software development company, located in the Province of Cordoba and the City of Buenos Aires, Argentina, which were also beneficiaries of the aforementioned income tax holiday, however the total benefit obtained is immaterial. | |||||||||
On August 17, 2011, the Argentine government issued a new software development law and on September 9, 2013 the regulatory decree was issued, which established the new requirement to become beneficiary of the new software development law. The new decree establishes compliance requirements with annual incremental ratios related to exports of services and research and development expenses that must be achieved to remain within the tax holiday. The Argentine operation will have to achieve certain required ratios annually under the new software development law. | |||||||||
If we are successful in being admitted as beneficiaries under the new law, we estimate that the Argentine effective income tax rate would be materially lower than the statutory income tax rate. Also, the tax holiday under the new law would last until 2019. | |||||||||
The Industry Secretary resolution which rules, among other provisions, on the mechanism to file the information to obtain the benefits derived from the new software development law was issued in late February 2014. During May 2014, the Company presented all the required documentation in order to apply for the new software development law. At the date of issuance of these interim condensed consolidated financial statements, the Industry Secretary resolution which approves the Company’s application is still pending, and for that reason no tax holiday was recorded for the three-month period ended March 31, 2015. | |||||||||
Accumulated other comprehensive income | |||||||||
The following table sets forth the Company’s accumulated other comprehensive income as of March 31, 2015 and the year ended December 31, 2014: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Foreign currency translation | $ (157,225) | $ (134,695) | |||||||
Unrealized gain (loss) on investments | 396 | -578 | |||||||
Estimated tax (loss) gain on unrealized gains on investments | -135 | 199 | |||||||
$ (156,964) | $ (135,074) | ||||||||
The following tables summarize the changes in accumulated balances of other comprehensive income for the three-month period ended March 31, 2015 and the year ended December 31, 2014: | |||||||||
Unrealized | Foreign | Estimated tax | |||||||
Gains (Losses) on | Currency | (expense) | |||||||
Investments | Translation | benefit | Total | ||||||
(In thousands) | |||||||||
Balances as of December 31, 2014 | $ (578) | $ (134,695) | $ 199 | $ (135,074) | |||||
Other comprehensive loss before reclassification | |||||||||
adjustments for gains on available for sale investments | 396 | -22,530 | -135 | -22,269 | |||||
Amount of gain (loss) reclassified from accumulated | |||||||||
other comprehensive income to net income | 578 | — | -199 | 379 | |||||
Net current period other comprehensive loss | 974 | -22,530 | -334 | -21,890 | |||||
Balances as of March 31, 2015 | $ 396 | $ (157,225) | $ (135) | $ (156,964) | |||||
Amount of Gain (Loss) | |||||||||
Details about Accumulated | Reclassified from | ||||||||
Other Comprehensive Income | Accumulated Other | ||||||||
Components for the three-month | Comprehensive | Affected Line Item | |||||||
period ended March 31, 2015 | Income | in the Statement of Income | |||||||
(In thousands) | |||||||||
Unrealized losses on investments | $ (578) | Interest income and other financial gains | |||||||
Estimated tax gain on unrealized losses on investments | 199 | Income / asset tax expense | |||||||
Total reclassifications for the period | $ (379) | Total, net of income taxes | |||||||
Impairment of long-lived assets | |||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. | |||||||||
As explained in section “Foreign Currency Translation” of the present Note to these interim condensed consolidated financial statements, in first quarter of 2015, as a result of the disappearance of SICAD 2 in February 2015 and the Company’s inability to gain access to U.S. dollars through the new single system under SICAD, it started requesting and has been granted U.S. dollars through SIMADI. As a result, the Company now expects to settle its transactions through SIMADI and has concluded that the SIMADI exchange rate should be used to re-measure its bolivar-denominated monetary assets and liabilities and to re-measure the revenues and expenses of the Venezuelan subsidiaries effective as of March 31, 2015. | |||||||||
Considering these changes in facts and circumstances and the lower U.S. dollar-equivalent cash flows expected from the Venezuelan business, and long-lived assets expected use, the Company compared the carrying amount of the long-lived assets with the expected undiscounted future net cash flows and concluded that certain office spaces held in Caracas, Venezuela, should be impaired. As a consequence, the Company estimated the fair value of the impaired long-lived assets and recorded impairment losses of $16.2 million on March 31, 2015, by using the market approach and considering prices for similar assets. | |||||||||
Convertible Senior Notes | |||||||||
On June 30, 2014, the Company issued $330 million of 2.25% convertible senior notes due 2019 (the “Notes”). The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on January 1 and July 1, at a rate of 2.25% per annum. The Notes will mature on July 1, 2019 unless earlier repurchased or converted in accordance with their terms prior to such date. The Notes may be converted, under specific conditions, based on an initial conversion rate of 7.9353 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $126.02 per share of common stock), subject to adjustment as described in the indenture governing the Notes. | |||||||||
Prior to January 1, 2019, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes. The conversion rate is subject to customary anti-dilution adjustments. Following certain corporate events described in the Indenture that occur prior to the maturity date, the conversion rate will be increased for a holder who elects to convert its Notes in connection with such corporate event in certain circumstances. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable. | |||||||||
In accordance with ASC 470-20 Debt with Conversion and Other Options, the convertible debt instrument within the scope of the cash conversion subsection, was separated into debt and equity components at issuance and a fair value was assigned. The value assigned to the debt component was the estimated fair value, as of the issuance date, of a similar debt without the conversion feature. As of the issuance date, the Company determined the fair value of the liability component of the Notes based on market data that was available for senior, unsecured nonconvertible corporate bonds issued by comparable companies. The difference between the cash proceeds and this estimated fair value, represents the value assigned to the equity component and was recorded as a debt discount. The debt discount is amortized using the effective interest method from the origination date through its stated contractual maturity date. | |||||||||
The initial debt component of the Notes was valued at $283,015 thousands, based on the contractual cash flows discounted at an appropriate market rate for a non-convertible debt at the date of issuance, which was determined to be 5.55%. The carrying value of the permanent equity component reported in additional paid-in-capital was initially valued at $46,985 thousands. The effective interest rate after allocation of transaction costs to the liability component is 6.1% and is used to amortize the debt discount and transaction costs. | |||||||||
In connection with the issuance of the Notes, the Company paid approximately $19,668 thousands to enter into capped call transactions with respect to its common shares (the “Capped Call Transactions”), with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and / or offset any cash payments the Company may be required to make in excess of the principal amount of any converted notes in the event that the market price of the common shares is greater than the strike price of the Capped Call Transactions, initially set at $126.02 per common share, which corresponds to the initial conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes, and have a cap price of approximately $155.78 per common share. | |||||||||
The $19,668 thousands cost of the capped call transactions, which net of deferred income tax effect amounts to $12,784 thousands, is included as a net reduction to additional paid-in capital in the stockholders’ equity section of our consolidated balance sheets. | |||||||||
For more detailed information in relation to the Notes and the Capped Call transactions, see Note 9 to these interim condensed consolidated financial statements. | |||||||||
Use of estimates | |||||||||
The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to accounting for allowance for doubtful accounts and chargeback provisions, depreciation, amortization, recoverability of goodwill and intangible assets with indefinite useful life, useful life of long-lived assets and intangible assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt note, recognition of income taxes and contingencies. Actual results could differ from those estimates. | |||||||||
Recently issued accounting pronouncements | |||||||||
On January 9, 2015, the FASB issued the ASU 2015-01. This new standard eliminates from general accepted accounting principles the concept of extraordinary items included in Subtopic 225-20. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the year of adoption. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. | |||||||||
On February 18, 2015 the FASB issued the ASU 2015-02. The update affects reporting entities that are required to evaluate whether they should consolidate certain legal entities and is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The amendments eliminate three of the six conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. | |||||||||
On April 7, 2015 the FASB issued the ASU 2015-03. To simplify presentation of debt issuance costs, the amendments in this update would require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. | |||||||||
On April 15, 2015 the FASB issued the ASU 2015-05. The amendments in this update will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company is assessing the effects that the adoption of this accounting pronouncement may have on the Company’s financial statements. | |||||||||
On May, 2015 the FASB issued the ASU 2015-07. The amendments in this update remove, from the fair value hierarchy, investments for which the practical expedient is used to measure fair value at net asset value. Instead, an entity is required to include those investments as a reconciling line item so that the total fair value amount of investments in the disclosure is consistent with the amount on the balance sheet. For public companies, this amendment is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Early adoption is permitted. The amendment should be applied retrospectively to all periods presented. The Company is assessing the effects that the adoption of this accounting pronouncement may have on the Company’s financial statements. | |||||||||
Net_Income_Per_Share
Net Income Per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Net Income Per Share [Abstract] | |||||||||
Net Income per Share | 3. Net income per share | ||||||||
Basic earnings per share for the Company’s common stock is computed by dividing, net income available to common shareholders attributable to common stock for the period, and the corresponding adjustment attributable to changes in redeemable non-controlling interest, by the weighted average number of common shares outstanding during the period. | |||||||||
Diluted earnings per share for the Company’s common stock assume the issuance of shares as a consequence of a convertible debt securities conversion event. | |||||||||
The following table shows how net income is allocated using the “if converted” method for earnings per common share for the three-month periods ended March 31, 2015 and 2014: | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Basic | Diluted | Basic | Diluted | ||||||
Net income | $ 1,721 | $ 1,721 | $ 30,328 | $ 30,328 | |||||
Net income attributable to noncontrolling interests | — | — | -64 | -64 | |||||
Change in redeemable amount of noncontrolling interest | — | — | 61 | 61 | |||||
Net income attributable to MercadoLibre, Inc. Shareholders | |||||||||
corresponding to common stock | $ 1,721 | $ 1,721 | $ 30,325 | $ 30,325 | |||||
Net income per share of common stock is as follows for the three-month periods ended March 31, 2015 and 2014: | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands, except per share data) | |||||||||
Basic | Diluted | Basic | Diluted | ||||||
Net income attributable to MercadoLibre, Inc. Shareholders per common share | $ 0.04 | $ 0.04 | $ 0.69 | $ 0.69 | |||||
Numerator: | |||||||||
Net income attributable to MercadoLibre, Inc. Shareholders | $ 1,721 | $ 1,721 | $ 30,325 | $ 30,325 | |||||
Denominator: | |||||||||
Weighted average of common stock outstanding for Basic earnings per share | 44,154,796 | 44,154,796 | 44,153,818 | 44,153,818 | |||||
Adjustment for Convertible Notes | — | — | — | — | |||||
Adjusted weighted average of common stock outstanding for Diluted earnings per share | 44,154,796 | 44,154,796 | 44,153,818 | 44,153,818 | |||||
On June 30, 2014, the Company issued the 2.25% Convertible Senior Notes due 2019 (please refer to Note 9 of these interim condensed consolidated financial statements for discussion regarding these debt notes). The conversion of these debt notes are considered for diluted earnings per share utilizing the “if converted” method, the effect of that conversion is not assumed for purposes of computing diluted earnings per share if the effect is antidilutive. For the three-month period ended March 31, 2015, the effect of the Convertible Senior Notes due 2019 on diluted earnings per share was anti-dilutive and, as a consequence, it was not computed for diluted earnings per share. | |||||||||
The denominator for diluted net income per share for the three-month period ended March 31, 2015 does not include any effect from the capped call because it would be antidilutive. In the event of conversion of any or all of the Notes, the shares that would be delivered to the Company under the note hedges are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes. | |||||||||
Business_Combinations_Goodwill
Business Combinations, Goodwill and Intangible Assets | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Business Combinations, Goodwill And Intangible Assets [Abstract] | |||||||||||||||||
Business Combinations, Goodwill and Intangible Assets | 4. Business combinations, goodwill and intangible assets | ||||||||||||||||
Business combinations | |||||||||||||||||
Acquisition of online classifieds advertisement companies in Chile and Mexico | |||||||||||||||||
On April 8, 2014, through its subsidiaries Meli Inversiones SpA and Meli Participaciones, S.L., the Company acquired 100% of the issued and outstanding shares of capital stock of the companies VMK S.A., Inmobiliaria Web Chile S. de R.L. de C.V. and Inmuebles Online S.A., companies that operate online classified advertisements platforms dedicated to the sale of real estate in Chile through Portal Inmobiliario brand and in Mexico through Guia de Inmuebles brand, in order to increase its participation on e-commerce business in those countries. | |||||||||||||||||
The aggregate purchase price for the acquisition of the 100% of the acquired business was $37,990 thousands, measured at its fair value, amount that included: (i) the total cash payment of $32,148 thousands at closing day; (ii) an escrow of $1,000 thousand held in an escrow agent, according to the stock purchase agreement; (iii) the contingent additional cash considerations and escrows up to $4,621 thousands in case the companies achieve certain revenue performance targets during 2014 and 2015, measured at fair value; and, (iv) an additional price adjustment escrow of $221 thousands, which was paid in January 2015. | |||||||||||||||||
In addition, the Company incurred in certain direct costs of the business combination which were expensed as incurred. | |||||||||||||||||
As of March 31, 2015 and December 31, 2014, the fair value of the contingent consideration recorded is $4,875 thousands and $4,833 thousands, respectively. Contingent additional cash considerations are to be paid after the achievement of the performance targets. | |||||||||||||||||
The following table summarizes the definite purchase price allocation (in thousands of U.S. dollars) for the acquisition: | |||||||||||||||||
Chile | Mexico | Total | |||||||||||||||
Cash and cash equivalents | $ | 547 | $ | 474 | $ | 1,021 | |||||||||||
Other net tangible assets / (liabilities) | 2,306 | -2,727 | -421 | ||||||||||||||
Trademarks | 5,422 | 2,155 | 7,577 | ||||||||||||||
Customer Lists | 10,104 | 322 | 10,426 | ||||||||||||||
Software | 447 | — | 447 | ||||||||||||||
Non solicitation agreement | 587 | — | 587 | ||||||||||||||
Deferred tax assets and liabilities | -2,644 | 214 | -2,430 | ||||||||||||||
Goodwill | 14,709 | 6,074 | 20,783 | ||||||||||||||
Purchase Price | $ | 31,478 | $ | 6,512 | $ | 37,990 | |||||||||||
The purchase price was allocated based on the definite measurement of the fair value of assets acquired and liabilities assumed considering the information available as of the date of these unaudited interim condensed consolidated financial statements. The valuation of identifiable intangible assets acquired reflects management’s estimates based on the use of established valuation methods. Such assets consist of trademarks, customer lists, software and non-solicitation agreements for a total amount of $19,036 thousands. Management of the Company estimates that trademarks have an indefinite lifetime and the intangible assets associated with customer list will be amortized over a ten year period. The non-solicitation agreement intangible asset will be amortized over a four year period and the software in three years. | |||||||||||||||||
Acquisition of Software Development Company in Argentina | |||||||||||||||||
On December 15, 2014, the Company completed, through its subsidiaries Meli Participaciones S.L. and Marketplace Investment LLC, a limited liability company organized under the laws of Delaware, USA (together referred to as the “Buyers”), the acquisition of the 100% of equity interest of Business Vision S.A., a software development company located and organized under the laws of the Buenos Aires City, Argentina. The objective of the acquisition was to enhance the capabilities of the Company in terms of software development. | |||||||||||||||||
The aggregate purchase price for the acquisition of the 100% of the acquired business was $4,768 thousands. On such same date, the Buyer paid and agreed to pay the purchase price as follows: i) $3,804 thousands in cash, net of $111 thousands of negative working capital adjustments; ii) set an escrow amounting to $250 thousand for a 24-months period, aiming to cover unexpected adjustments to the initial aggregate purchase price; and iii) set an escrow amounting to $735 thousands, 50% for a 12-months period and 50% for a 24-months period since the closing date. | |||||||||||||||||
The following table summarizes the preliminary purchase price allocation (in thousands of U.S. dollars) for the acquisition: | |||||||||||||||||
Cash and cash equivalents | $ | 81 | |||||||||||||||
Other net tangible assets | 857 | ||||||||||||||||
Total net tangible assets acquired | 938 | ||||||||||||||||
Customer Lists | 563 | ||||||||||||||||
Non solicitation agreement | 428 | ||||||||||||||||
Deferred tax assets and liabilities | -300 | ||||||||||||||||
Goodwill | 3,139 | ||||||||||||||||
Purchase Price | $ | 4,768 | |||||||||||||||
In the acquisition described above, arising goodwill has been allocated proportionally to each of the segments identified by the Company’s management, considering the synergies expected from this acquisition and it is expected that the acquiree will contribute to the earnings generation process of such segments. | |||||||||||||||||
The Company recognized goodwill for this acquisition based on management expectation that the acquired businesses will increase the software capabilities of the Company and will improve the Company’s business in Latin America. | |||||||||||||||||
Goodwill is not deductible for tax purposes, except for the proportion acquired by Meli Inversiones SpA (Chile) of the Portal Inmobiliario brand in Chile. | |||||||||||||||||
The results of operations for periods prior to the acquisitions, individually and in the aggregate, were not material to the consolidated statements of operations of the Company and, accordingly, pro forma information has not been presented. | |||||||||||||||||
Goodwill and intangible assets | |||||||||||||||||
The composition of goodwill and intangible assets is as follows: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Goodwill | $ 65,577 | $ 68,829 | |||||||||||||||
Intangible assets with indefinite lives | |||||||||||||||||
— Trademarks | 9,986 | 10,276 | |||||||||||||||
Amortizable intangible assets | |||||||||||||||||
— Licenses and others | 5,862 | 5,111 | |||||||||||||||
— Non-compete / solicitation agreement | 1,662 | 1,829 | |||||||||||||||
— Customer list | 10,826 | 11,294 | |||||||||||||||
Total intangible assets | $ 28,336 | $ 28,510 | |||||||||||||||
Accumulated amortization | -5,535 | -5,339 | |||||||||||||||
Total intangible assets, net | $ 22,801 | $ 23,171 | |||||||||||||||
Goodwill | |||||||||||||||||
The changes in the carrying amount of goodwill for the three-month period ended March 31, 2015 and the year ended December 31, 2014 are as follows: | |||||||||||||||||
Period ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Brazil | Argentina | Chile | Mexico | Venezuela | Colombia | Other | Total | ||||||||||
Countries | |||||||||||||||||
Balance, beginning of the period | $ 10,557 | $ 11,859 | $ 19,101 | $ 15,719 | $ 5,729 | $ 4,521 | $ 1,343 | $ 68,829 | |||||||||
- Effect of exchange rates changes | -1,381 | -376 | -579 | -552 | — | -314 | -50 | -3,252 | |||||||||
Balance, end of the period | $ 9,176 | $ 11,483 | $ 18,522 | $ 15,167 | $ 5,729 | $ 4,207 | $ 1,293 | $ 65,577 | |||||||||
Year ended December 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Brazil | Argentina | Chile | Mexico | Venezuela | Colombia | Other | Total | ||||||||||
Countries | |||||||||||||||||
Balance, beginning of year | $ 10,366 | $ 14,676 | $ 6,520 | $ 11,376 | $ 5,252 | $ 5,506 | $ 1,405 | $ 55,101 | |||||||||
- Bussiness Acquisition | 1,538 | 775 | 14,710 | 6,293 | 477 | 82 | 48 | 23,923 | |||||||||
- Effect of exchange rates changes | -1,347 | -3,592 | -2,129 | -1,950 | — | -1,067 | -110 | -10,195 | |||||||||
Balance, end of the year | $ 10,557 | $ 11,859 | $ 19,101 | $ 15,719 | $ 5,729 | $ 4,521 | $ 1,343 | $ 68,829 | |||||||||
Intangible assets with definite useful life | |||||||||||||||||
Intangible assets with definite useful life are comprised of customer lists and user base, non-compete and solicitation agreements, acquired software licenses and other acquired intangible assets including developed technologies. Aggregate amortization expense for intangible assets totaled $510 thousands and $159 thousands for the three-month periods ended March 31, 2015 and 2014, respectively. | |||||||||||||||||
The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of March 31, 2015: | |||||||||||||||||
For year ended 12/31/2015 | $ 1,795 | ||||||||||||||||
For year ended 12/31/2016 | 2,359 | ||||||||||||||||
For year ended 12/31/2017 | 2,091 | ||||||||||||||||
For year ended 12/31/2018 | 1,336 | ||||||||||||||||
Thereafter | 5,234 | ||||||||||||||||
$ 12,815 | |||||||||||||||||
Segment_Reporting
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 | Total | ||||||||
Countries | |||||||||||||
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 | Total | ||||||||
Countries | |||||||||||||
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. | |||||||||||||
Fair_Value_Measurement_of_Asse
Fair Value Measurement of Assets and Liabilities | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Measurement of Assets and Liabilities [Abstract] | |||||||||||||
Fair Value Measurement of Assets and Liabilities | 6. Fair value measurement of assets and liabilities | ||||||||||||
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014: | |||||||||||||
Quoted Prices in | Quoted Prices in | ||||||||||||
Balances as of | active markets for | Significant other | Balances as of | active markets for | Significant other | ||||||||
March 31, | identical Assets | observable inputs | December 31, | identical Assets | observable inputs | ||||||||
Description | 2015 | (Level 1) | (Level 2) | 2014 | (Level 1) | (Level 2) | |||||||
(In thousands) | |||||||||||||
Assets | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||
Money Market Funds | $ 35,520 | $ 35,520 | $ — | $ 37,495 | $ 37,495 | $ — | |||||||
Corporate Debt Securities | 13,491 | — | 13,491 | 13,004 | 108 | 12,896 | |||||||
Investments: | |||||||||||||
Sovereign Debt Securities | 44,101 | 40,606 | 3,495 | 49,150 | 49,150 | — | |||||||
Corporate Debt Securities | 227,031 | 126,985 | 100,046 | 238,643 | 59,919 | 178,724 | |||||||
Certifcates of deposits | 11,316 | — | 11,316 | 7,807 | — | 7,807 | |||||||
Total Financial Assets | $ 331,459 | $ 203,111 | $ 128,348 | $ 346,099 | $ 146,672 | $ 199,427 | |||||||
Liabilities: | |||||||||||||
Contingent considerations | $ 4,875 | $ — | $ 4,875 | $ | $ — | $ | |||||||
4,833 | 4,833 | ||||||||||||
Total Financial Liabilities | $ 4,875 | $ — | $ 4,875 | $ 4,833 | $ — | $ 4,833 | |||||||
As of March 31, 2015, the Company’s financial assets valued at fair value consisted of assets valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets); and ii) Level 2 inputs, which are obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date. As of March 31, 2015, the Company did not have any assets without market values that would require a high level of judgment to determine fair value (Level 3). | |||||||||||||
As of March 31, 2015 and December 31, 2014, the Company´s liabilities valued at fair value consisted of contingent considerations from acquisitions valued using level 2 inputs. | |||||||||||||
The unrealized net gains or loss on short term and long term investments are reported as a component of other comprehensive income. The Company does not anticipate any significant realized losses associated with those investments in excess of the Company’s historical cost. | |||||||||||||
As of March 31, 2015 and December 31, 2014, the carrying value of the Company’s financial assets and liabilities measured at amortized cost approximated their fair value mainly because of its short term maturity. These assets and liabilities included cash and cash equivalents (excluding money markets funds), accounts receivables, credit card receivables, funds payable to customers, other receivables, other assets, accounts payables, social security payables, taxes payables, provisions and other liabilities. The convertible senior notes, the rest of the loans payable and other financial liabilities approximate their fair value because the interest rates are not materially different from market interest rates. | |||||||||||||
In addition, as of March 31, 2015 and December 31, 2014, the Company had $55,756 thousands and $58,475 thousands of short-term investments, respectively, which consisted of time deposits. | |||||||||||||
Those investments are accounted for at amortized cost which, as of March 31, 2015 and December 31, 2014, approximates their fair values. | |||||||||||||
The following table summarizes the fair value level for those financial assets and liabilities of the Company measured at amortized cost as of March 31, 2015 and December 31, 2014: | |||||||||||||
Balances as of | Significant other | Balances as of | Significant other | ||||||||||
March 31, | observable inputs | December 31, | observable inputs | ||||||||||
2015 | (Level 2) | 2014 | (Level 2) | ||||||||||
(In thousands) | |||||||||||||
Assets | |||||||||||||
Time Deposits | $ 55,756 | $ 55,756 | $ 58,475 | $ 58,475 | |||||||||
Accounts receivable | 54,054 | 54,054 | 46,672 | 46,672 | |||||||||
Credit Cards receivable | 133,644 | 133,644 | 85,162 | 85,162 | |||||||||
Prepaid expenses | 6,433 | 6,433 | 3,458 | 3,458 | |||||||||
Other assets | 35,318 | 35,318 | 37,718 | 37,718 | |||||||||
Total Assets | $ 285,205 | $ 285,205 | $ 231,485 | $ 231,485 | |||||||||
Liabilities | |||||||||||||
Accounts and funds payable | $ 58,160 | $ 58,160 | $ 58,006 | $ 58,006 | |||||||||
Funds payable to customers | 193,188 | 193,188 | 165,034 | 165,034 | |||||||||
Salaries and social security payable | 23,755 | 23,755 | 18,835 | 18,835 | |||||||||
Tax payable | 23,733 | 23,733 | 26,013 | 26,013 | |||||||||
Dividends payable | 4,548 | 4,548 | 7,330 | 7,330 | |||||||||
Loans payable and other financial liabilities | 287,745 | 287,745 | 283,826 | 283,826 | |||||||||
Other liabilities | 4,564 | 4,564 | 5,524 | 5,524 | |||||||||
Total Liabilities | $ 595,693 | $ 595,693 | $ 564,568 | $ 564,568 | |||||||||
As of March 31, 2015 and December 31, 2014, the Company held no direct investments in auction rate securities, collateralized debt obligations or structured investment vehicles, and does not have any non-financial assets or liabilities measured at fair value. | |||||||||||||
As of March 31, 2015 and December 31, 2014, the fair value of money market funds, short and long-term investments classified as available for sale securities are as follows: | |||||||||||||
31-Mar-15 | |||||||||||||
(In thousands) | |||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Estimated Fair Value | ||||||||||
Cash and cash equivalents | |||||||||||||
Money Market Funds | $ 35,543 | $ 5 | $ (28) | $ 35,520 | |||||||||
Corporate Debt Securities | 13,495 | — | -4 | 13,491 | |||||||||
Total Cash and cash equivalents | $ 49,038 | $ 5 | $ (32) | $ 49,011 | |||||||||
Short-term investments | |||||||||||||
Sovereign Debt Securities | $ 651 | $ — | $ (1) | $ 650 | |||||||||
Corporate Debt Securities | 83,884 | 9 | -59 | 83,834 | |||||||||
Certificates of deposits | 7,811 | 3 | -2 | 7,812 | |||||||||
Total Short-term investments | $ 92,346 | $ 12 | $ (62) | $ 92,296 | |||||||||
Long-term investments | |||||||||||||
Sovereign Debt Securities | $ 43,339 | $ 115 | $ (3) | $ 43,451 | |||||||||
Corporate Debt Securities | 142,837 | 408 | -48 | 143,197 | |||||||||
Certificates of deposits | 3,503 | 1 | — | 3,504 | |||||||||
Total Long-term investments | $ 189,679 | $ 524 | $ (51) | $ 190,152 | |||||||||
Total | $ 331,063 | $ 541 | $ (145) | $ 331,459 | |||||||||
31-Dec-14 | |||||||||||||
(In thousands) | |||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Estimated Fair Value | ||||||||||
Cash and cash equivalents | |||||||||||||
Money Market Funds | $ 37,531 | $ 2 | $ (38) | $ 37,495 | |||||||||
Corporate Debt Securities | 13,009 | — | -5 | 13,004 | |||||||||
Total Cash and cash equivalents | $ 50,540 | $ 2 | $ (43) | $ 50,499 | |||||||||
Short-term investments | |||||||||||||
Sovereign Debt Securities | $ 4,726 | $ — | $ (4) | $ 4,722 | |||||||||
Corporate Debt Securities | 81,886 | — | -75 | 81,811 | |||||||||
Certificates of deposit | 3,802 | 1 | -1 | 3,802 | |||||||||
Total Short-term investments | $ 90,414 | $ 1 | $ (80) | $ 90,335 | |||||||||
Long-term investments | |||||||||||||
Sovereign Debt Securities | $ 44,511 | $ — | $ (83) | $ | |||||||||
44,428 | |||||||||||||
Corporate Debt Securities | 157,205 | 22 | -395 | 156,832 | |||||||||
Certificates of deposit | 4,007 | — | -2 | 4,005 | |||||||||
Total Long-term investments | $ | $ | $ | $ | |||||||||
205,723 | 22 | -480 | 205,265 | ||||||||||
Total | $ | $ | $ | $ | |||||||||
346,677 | 25 | -603 | 346,099 | ||||||||||
-1 | Unrealized losses from securities are primarily attributable to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of March 31, 2015 and December 31, 2014. | ||||||||||||
The material portion of the Sovereign Debt Securities is U.S. Treasury Notes with no significant risk associated. | |||||||||||||
As of March 31, 2015, the estimated fair values (in thousands of U.S. dollars) of money market funds, short-term and long-term investments classified by its effective maturities are as follows: | |||||||||||||
One year or less | 141,307 | ||||||||||||
One year to two years | 120,358 | ||||||||||||
Two years to three years | 42,660 | ||||||||||||
Three years to four years | 15,147 | ||||||||||||
Four years to five years | 11,987 | ||||||||||||
More than five years | — | ||||||||||||
Total | $ 331,459 | ||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies |
Litigation and Other Legal Matters | |
The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers probable that future costs will be incurred and such costs can be reasonably estimated. The proceeding-related reserve is based on developments to date and historical information related to actions filed against the Company. As of March 31, 2015, the Company had established reserves for proceeding-related contingencies of $2,708 thousands to cover legal actions against the Company in which its Management has assessed the likelihood of a final adverse outcome as probable. In addition, as of March 31, 2015 the Company and its subsidiaries are subject to certain legal actions considered by the Company’s management and its legal counsels to be reasonably possible for an aggregate amount up to $4,451 thousands. | |
No loss amount has been accrued for such reasonably possible legal actions of which most significant (individually or in the aggregate) are described below. | |
As of March 31, 2015, there were 41 lawsuits pending against our Argentine subsidiary in the Argentine ordinary courts and 767 pending claims in the Argentine Consumer Protection Agencies, where a lawyer is not required to file or pursue a claim. | |
As of March 31, 2015, there were two claims pending against our Mexican subsidiaries in the Mexican ordinary courts and 57 claims pending against our Mexican subsidiary in the Mexican Consumer Protection Agencies, where a lawyer is not required to file or pursue a claim. | |
As of March 31, 2015, 641 legal actions were pending in the Brazilian ordinary courts. In addition, as of March 31, 2015, there were 2,672 cases still pending in Brazilian consumer courts. Filing and pursuing of an action before Brazilian consumer courts do not require the assistance of a lawyer. In most of the cases filed against the Company, the plaintiffs asserted that the Company was responsible for fraud committed against them, or responsible for damages suffered when purchasing an item on the Company’s website, or when using MercadoPago, in other companies’ websites. | |
On August 25, 2010, Citizen Watch do Brasil S/A, or Citizen, sued Brazilian subsidiaries in the 31th Central Civil Court State of São Paulo, Brazil. Citizen alleged that the Brazilian subsidiaries were infringing Citizen’s trademarks as a result of users selling allegedly counterfeit Citizen watches through the Brazilian page of the Brazilian subsidiaries’ website. Citizen sought an order enjoining the sale of Citizen-branded watches on the Brazilian subsidiaries’ Marketplace with a $6,000 daily non-compliance penalty. On September 23, 2010, the Brazilian subsidiaries were summoned of an injunction granted to prohibit the offer of Citizen products on its platform, but the penalty was established at $6,000 per day. On September 26, 2010, the Brazilian subsidiaries presented their defense and appealed the decision of the injunction relief to the State Court of Appeals of São Paulo on September 27, 2010. On October 22, 2010 the injunction granted to Citizen was suspended. On March 23, 2011, the Company’s appeal regarding the injunction granted to Citizen was ruled in favor of the Brazilian subsidiaries. On May 4, 2011, Citizen presented a motion to clarify the decision but it was dismissed on March 14, 2012. On May 28, 2012, the Plaintiff filed a special recourse related to the injunction relief to the State Court of Appeals, and the Brazilian subsidiaries presented their defense on August 16, 2012 which was not admitted. In September 2012, the Plaintiff filed a legal action against the Brazilian subsidiaries with same arguments alleged in the injunction request and seeking for compensatory and statutory damages and defenses were presented on March 20, 2013. On January 9, 2013, Citizen presented a motion to request the appeal to be ruled by the Brazilian Superior Court of Justice (Superior Tribunal de Justiça). On March 1, 2013, the Company presented its response to that appeal. On August 27, 2013, the Brazilian Superior Court of Justice ruled against Citizen’s appeal. The Superior Court of Justice ruled that the Brazilian subsidiaries were not responsible for alleged infringement of intellectual property rights by its users and that they should comply with the “notice and take down” procedure it already have in place. | |
On October 4, 2013, Citizen presented a motion to clarify mentioned decision issued by the Brazilian Superior Court of Justice and such motion was denied on November 11, 2013. Citizen then filed, on November 25, 2013, an Extraordinary Appeal aiming the decision rendered by Brazilian Superior Court of Justice to be reviewed by Brazilian Federal Supreme Court. On February 21, 2014, Brazilian subsidiaries presented its response to Citizen’s Extraordinary Appeal. On March 10, 2014, Citizen’s extraordinary appeal was not accepted by the Brazilian Superior Court of Justice and, on March 26, 2014, Citizen filed an appeal against such decision, aiming at its Extraordinary Appeal to be accepted and ruled by Brazilian Federal Supreme Court. On May 5, 2014 the Company presented its response to Citizen’s appeal to The Brazilian Federal Supreme Court. On December, 19, 2014 Brazilian Federal Supreme Court overruled Citizen’s Extraordinary Appeal, ending the discussion regarding the injunction sought by Citizen which was definitely not granted. On February 19, 2015 the judge presiding the 31st Central Civil Court of the City of São Paulo, State of São Paulo, Brazil ruled the case in its merits totally in favor of the Brazilian subsidiary, stating that MercadoLivre shall not be held responsible for any of Citizen’s pleas and allegations. Citizen did not appeal the mentioned decision and at the date of these interim condensed consolidated Financial Statements the case is closed. | |
State of São Paulo Fraud Claim | |
On June 12, 2007, a state prosecutor of the State of São Paulo, Brazil presented a claim against MercadoLivre. The state prosecutor alleges that MercadoLivre should be held liable for any fraud committed by sellers on MercadoLivre’s website, or responsible for damages suffered by buyers when purchasing an item on the Brazilian version of the MercadoLivre website. On June 26, 2009, the Lower Court Judge ruled in favor of the State of São Paulo prosecutor, declaring that MercadoLivre shall be held joint and severally liable for fraud committed by sellers and damages suffered by buyers when using the website, and ordering MercadoLivre remove from the Terms of Service of the Brazilian website any provision limiting MercadoLivre’s responsibility, with a penalty of approximately $2,500 per day of non-compliance. On June 29, 2009, the Company presented recourse to the lower court, which was not granted. On September 29, 2009, MercadoLivre presented an appeal and requested to suspend the effects of the ruling issued by the lower court until the appeal is decided by State Court of Appeals, which request was granted on December 1, 2009. On May 23, 2014 the State Court of Appeals issued its ruling stating that MercadoLivre shall not be held responsible for the quality, nature or defective products or services purchased through the Brazilian website. While the decision is not clear, it could be understood that the State Court of Appeals ruled that MercadoLivre could be held joint and severally liable for fraud committed by sellers buyers when using the website. On June 13, 2014, MercadoLivre filed a motion to clarify the decision. On October 6, 2014, the State Court of Appeals overruled MercadoLivre’s motion to clarify its decision. The Company appealed the decision to the Brazilian Federal Superior Court of Justice. As of the date of this report the Company appeal to the Brazilian Federal Superior Court of Justice was still being processed before the State Court of Appeals. On March 23, 2015 the State of São Paulo Prosecutor and MercadoLivre have settled the case by agreeing that MercadoLivre (i) will not be held liable for the quality, nature or defective products or services purchased through the Brazilian website, and/or damages suffered by buyers for purchases made using the website and paid directly to sellers, and (ii) will be jointly liable when buyer used MercadoPago in a purchase made through the website and liable for MercadoLivre’s own services. The parties filed a joint petition to get the homologation of the settlement, which is still pending. In the opinion of the Company´s management and its legal counsel the risk of loss is remote. | |
City of São Paulo Tax Claim | |
In 2007 São Paulo tax authorities have asserted taxes and fines against our Brazilian subsidiary relating to the period from 2005 to 2007 in an approximate amount of $5.9 million according to the exchange rate in effect at that time. In 2007, the Company presented administrative defenses against the authorities’ claim and the tax authorities ruled against the Brazilian subsidiary. In 2009, the Company presented an appeal to the Conselho Municipal de Tributos or São Paulo Municipal Council of Taxes which reduced the fine. On February 11, 2011, the Company appealed this decision to the Câmaras Reunidas do Egrégio Conselho Municipal de Tributos or Superior Chamber of the São Paulo Municipal Council of Taxes which affirmed the reduction of the fine. As of the date of these interim condensed consolidated financial statements, the total amount of the claim is approximately $5.8 million including surcharges and interest. With this decision the administrative stage is finished. On August 15, 2011, the Company made a deposit in court of approximately R$ 9.5 million, which including accrued interests amounted to R$ 10.4 million or $3.2 million, according to the exchange rate at March 31, 2015, and filed a lawsuit in 8th Public Treasury Court of the County of São Paulo, State of São Paulo, Brazil, to contest the taxes and fines asserted by the Tax Authorities. As of March 31, 2015, the 8th Public Treasury Court of the County of São Paulo ruling was still pending. | |
In September 2012 São Paulo tax authorities have asserted taxes and fines against our Brazilian subsidiary related to our Brazilian subsidiary’s activities in São Paulo for the period from 2007 through 2010. On July 27, 2012, the Company presented administrative defenses against the authorities’ claim. On February 2, 2013, São Paulo tax authorities ruled against the Brazilian subsidiary maintaining claimed taxes and fines. On March 4, 2013, the Company presented an appeal to the Conselho Municipal de Tributos or São Paulo Municipal Council of Taxes. On August 23, 2013, the Câmaras Reunidas do Egrégio Conselho Municipal de Tributos or Superior Chamber of the São Paulo Municipal Council of Taxes ruled against the Company’s appeal. On September 5, 2013, the Company presented a special appeal to the Superior Chamber of the São Paulo Municipal Council of Taxes. On October 18, 2013, the mentioned appeal was denied to our Brazilian subsidiary and confirmed the fines. With this decision the administrative stage is finished. On November 13, 2013, the Company filed a lawsuit before the 9th Treasury Court of the City of São Paulo, State of São Paulo, Brazil, to contest the taxes and fines asserted by the Tax Authorities. On November 14, 2013, the Company made a deposit in court related to the lawsuit filed, of approximately R$41 million or $12.8 million, according to the exchange rate at March 31, 2015. On January 28, 2014 São Paulo Municipal Council was summoned and on April 8, 2014 the São Paulo Municipal Council presented its defense. On April 24, 2014 the Company presented its response to the mentioned defense. As of March 31, 2015, the lower court’s ruling was still pending. | |
In January 2005 the Brazilian subsidiary moved its operations to Santana de Parnaíba City, Brazil and began paying taxes to that jurisdiction and therefore the Company believes that has strong defenses to the claims of the São Paulo authorities with respect to these periods. | |
The Company’s management and its legal counsel believe that the risk of loss is remote, and as a result, has not reserved any provisions for these claims. | |
The collection date of the legal deposits cannot be determined since it will depend on the actual duration of the related legal proceedings. | |
Brazilian Federal Tax Claims | |
On September 2, 2011, the Brazilian Federal tax authority has asserted taxes and fines against our Brazilian subsidiary relating to the income tax for the 2006 period in an approximate amount of R$5.2 million or $1.6 million, according to the exchange rate at March 31, 2015. On September 30, 2011 the Company presented administrative defenses against the authorities’ claim. On August 24, 2012 the Company presented its appeal to the Board of Tax Appeals (CARF — Conselho Administrativo de Recursos Fiscais) against the tax authorities’ claims. On December 5, 2013, the Board of Tax Appeals ruled against MercadoLivre’s appeal. As of the date of issuance of these interim condensed consolidated financial statements the Superior Administrative Court of Tax Appeals ruling was still pending. The Company’s management and its legal counsel believe that the tax position adopted is more likely than not, based on the technical merits of the tax position, that it will be sustained, and as a result, the Company has not recorded any liability for this claim. | |
State of Rio de Janeiro Customer Service Level Claim | |
On August 19, 2011, a state prosecutor of the State of Rio de Janeiro, Brazil presented a claim against the Company’s Brazilian subsidiary. The state prosecutor alleges that the Brazilian subsidiary should improve our customer service level and provide (among other things) a telephone number for customer support and requested an injunction against our Brazilian subsidiary. On October 22, 2012, a lower court judge ruled in favor of the Company and dismissed the claim against the Company. The Public Prosecutor appealed the decision and the Company presented its defense on December 12, 2012. On April 9, 2013, the State Court of Appeals ruled in favor of the Company confirming the dismissal of the claim. On May 28, 2013 the decision was appealed by the state prosecutor to the Brazilian Superior Court of Justice and the Company presented its response on July 2, 2013. As of March 31, 2015, the Brazilian Superior Court of Justice ruling was still pending. In the opinion of the Company’s management and its legal counsel the risk of loss is remote. | |
State of Rio Grande do Sul Service Claim | |
On November 20, 2013, a state prosecutor of the County of Porto Alegre, State of Rio Grande do Sul, Brazil, presented a claim against our Brazilian subsidiary before the 15th Civil Court of Porto Alegre, State of Rio Grande do Sul, Brazil. The state prosecutor alleged that MercadoLivre should be held liable for any offer or sale of any unlawful products or services through its website. A preliminary injunction was granted on November 25, 2013 ordering the Brazilian subsidiary to monitor and prevent any offer of unlawful products or services. On January 22, 2014, the Brazilian subsidiary was summoned. On March 11, 2014, the Company presented its defense. On March 24, 2014, the Company filed an appeal against the preliminary injunction before the State Court of Rio Grande do Sul, Brazil, and on March 26, 2014 it was granted a motion to stay, revoking temporarily the effects of the injunction until the final ruling of the Interlocutory Appeal. On October 16, 2014, the State Court of Rio Grande do Sul, Brazil, ruled the Interlocutory Appeal in favor of the Brazilian subsidiary, revoking definitely the injunction. As of the date of issuance of these interim condensed consolidated financial statements the case merits’ ruling by the 15th Civil Court of Porto Alegre was still pending. In the opinion of the Company’s management the risk of losing the case is reasonably possible, but not probable. | |
Other third parties have from time to time claimed, and others may claim in the future, that the Company was responsible for fraud committed against them, or that the Company has infringed their intellectual property rights. The underlying laws with respect to the potential liability of online intermediaries like the Company are unclear in the jurisdictions where the Company operates. Management believes that additional lawsuits alleging that the Company has violated copyright or trademark laws will be filed against the Company in the future. | |
Intellectual property and regulatory claims, whether meritorious or not, are time consuming and costly to resolve, require significant amounts of management time, could require expensive changes in the Company’s methods of doing business, or could require the Company to enter into costly royalty or licensing agreements. The Company may be subject to patent disputes, and be subject to patent infringement claims as the Company’s services expand in scope and complexity. In particular, the Company may face additional patent infringement claims involving various aspects of the payments businesses. | |
From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. The number and significance of these disputes and inquiries are increasing as the Company’s business expands and the Company grows larger. | |
Long_Term_Retention_Plan
Long Term Retention Plan | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Long Term Retention Plan [Abstract] | ||||
Long Term Retention Plan | 8. Long term retention plan (“LTRP”) | |||
The following table summarizes the 2009, 2010, 2011, 2012, 2013 and 2014 long term retention plan accrued compensation expense for the three-month periods ended March 31, 2015 and 2014: | ||||
Three Months Ended March 31, | ||||
2015 (*) (**) | 2014 (*) (**) | |||
(In thousands) | ||||
LTRP 2009 | $ (12) | $ (351) | ||
LTRP 2010 | 120 | -183 | ||
LTRP 2011 | 142 | -101 | ||
LTRP 2012 | 185 | -1 | ||
LTRP 2013 | 842 | 604 | ||
LTRP 2014 | 1,059 | 798 | ||
(*) (Gain) / Loss | ||||
(**) For the three-month periods ended March 31, 2015 and 2014, the table above shows a reduction of compensation costs for LTRP 2009, 2010, 2011 and 2012 as a consequence of a decrease in the Company’s stock price during the quarter. | ||||
225_Convertible_Senior_Notes_D
2.25% Convertible Senior Notes Due 2019 | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
2.25% Convertible Senior Notes Due 2019 [Abstract] | ||||||
2.25% Convertible Senior Notes Due 2019 | 9. 2.25% Convertible Senior Notes Due 2019 | |||||
On June 30, 2014, the Company issued $330 million of 2.25% convertible senior notes due 2019 (the “Notes”). The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on January 1 and July 1, at a rate of 2.25% per annum. The Notes will mature on July 1, 2019 unless earlier repurchased or converted in accordance with their terms prior to such date. The Notes may be converted, under the conditions specified below, based on an initial conversion rate of 7.9353 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $126.02 per share of common stock), subject to adjustment as described in the indenture governing the Notes. The net proceeds from the Notes were approximately $322 million, net of the transaction costs. | ||||||
Holders may convert their notes at their option at any time prior to January 1, 2019 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after January 1, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. | ||||||
As of March 31, 2015, none of the conditions allowing holders of the Notes to convert had been met. | ||||||
In accordance with ASC 470-20 Debt with Conversion and Other Options , the convertible debt instrument within the scope of the cash conversion subsection, was separated into debt and equity components at issuance and be assigned a fair value. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt without the conversion feature. As of June 30, 2014, the Company determined the fair value of the liability component of the Notes by reviewing market data that was available for senior, unsecured nonconvertible corporate bonds issued by comparable companies. Assumptions used in the estimate represent what market participants would use in pricing the liability component, including market interest rates, credit standing, and yield curves, all of which are defined as level 2 observable inputs. The difference between the cash proceeds and this estimated fair value, represents the value assigned to the equity component and is recorded as a debt discount. The debt discount is amortized using the effective interest method from the origination date through its stated contractual maturity date. | ||||||
The initial debt component of the Notes was valued at $283,015 thousands, based on the contractual cash flows discounted at an appropriate market rate for a non-convertible debt at the date of issuance, which was determined to be 5.55%. The carrying value of the permanent equity component reported in additional paid-in-capital was initially valued at $46,985 thousands. The effective interest rate after allocation of transaction costs to the liability component is 6.1% and is used to amortize the debt discount and transaction costs. Additionally, the Company recorded a deferred tax liability related to the additional paid in capital component of the convertible notes amounting to $16,445 thousands. | ||||||
The following table presents the carrying amounts of the liability and equity components: | ||||||
31-Mar-15 | 31-Dec-14 | |||||
(In thousands) | ||||||
Amount of the equity component (1) | $ | 45,808 | $ | 45,808 | ||
2.25% convertible senior notes due 2019 | $ | 330,000 | $ | 330,000 | ||
Unamortized debt discount (2) | -40,716 | -42,844 | ||||
Unamortized transaction costs related to the debt component | -6,227 | -6,526 | ||||
Contractual coupon interest accrual | 1,856 | 3,733 | ||||
Contractual coupon interest payment | — | -3,733 | ||||
Net carrying amount | $ | 284,913 | $ | 280,630 | ||
-1 | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. | |||||
-2 | As of March 31, 2015, the remaining period over which the unamortized debt discount will be amortized is 4.25 years. | |||||
The following table presents the interest expense for the contractual interest and the accretion of debt discount: | ||||||
Period ended | ||||||
31-Mar-15 | ||||||
(In thousands) | ||||||
Contractual coupon interest expense | $ | 1,856 | ||||
Amortization of debt discount | 2,128 | |||||
Amortization of debt issuance costs | 299 | |||||
Total interest expense related to Notes | $ | 4,283 | ||||
Capped call transactions | ||||||
The net proceeds from the Notes were approximately $321,732 thousands, after considering the transaction costs in an amount of $8,268 thousands. In connection with the issuance of the Notes, the Company paid $19,668 thousands to enter into capped call transactions with respect to its common shares (the “Capped Call Transactions”), with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and / or offset any cash payments the Company may be required to make in excess of the principal amount of any converted notes in the event that the market price of the common shares is greater than the strike price of the Capped Call Transactions, initially set at $126.02 per common share, which corresponds to the initial conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes, and have a cap price of approximately $155.78 per common share. Therefore, as a result of executing the Capped Call Transactions, the Company will reduce its exposure to potential dilution once the market price of its common shares exceeds the strike price of $126.02 and up to a cap price of approximately $155.78 per common share. The Capped Call Transactions allow us to receive shares of our common stock and/or cash related to the excess conversion value that the Company would pay to the holders of the Notes upon conversion, up to the above mentioned cap price. | ||||||
The $19,668 thousands cost of the capped call transactions, which net of deferred income tax effect amounts to $12,784 thousands, is included as a net reduction to additional paid-in capital in the stockholders’ equity section of these interim condensed consolidated balance sheets, in accordance with the guidance in ASC 815-40 Derivatives and Hedging-Contracts in Entity’s Own Equity. | ||||||
Cash_Dividend_Distribution
Cash Dividend Distribution | 3 Months Ended |
Mar. 31, 2015 | |
Cash Dividend Distribution [Abstract] | |
Cash Dividend Distribution | 10. Cash Dividend Distribution |
During the fiscal year ended December 31, 2014, the Company approved cash dividends for a total amount of $29,318 thousands or $0.664 per share, which had all been paid as of the year-end, except for the one approved in October 2014, consisting of $7,330 thousands (or $0.166 per share), which was paid on January 15, 2015 to stockholders of record as of the close of business on December 31, 2014. | |
In each of February, April, July and October of 2014, our Board of Directors declared quarterly cash dividends of $7,330 thousands (or $0.166 per share on our outstanding shares of common stock). The dividends were paid on April 15, July 15, October 15, 2014 and January 15, 2015 to stockholders of record as of the close of business on March 29, June 30, September 30, and December 31, 2014. | |
On February 24, 2015, the board of directors approved a quarterly cash dividend of $4,548 thousands (or $0.103 per share) on the outstanding shares of the Company´s common stock. The first quarterly dividend was paid on April 15, 2015 to stockholders of record as of the close of business on March 31, 2015. | |
New_Law_of_Costs_Earnings_and_
New Law of "Costs, Earnings, and Fair Profits" | 3 Months Ended |
Mar. 31, 2015 | |
New Law Of Costs, Earnings, And Fair Profits [Abstract] | |
New Law of "Costs, Earnings, and Fair Profits" | 11. New Law of “Costs, Earnings, and Fair Profits” |
In November 2013 the Venezuelan Congress approved an “enabling law” granting the president of Venezuela the authority to enact laws and regulations in certain policy areas by decree. This authority includes the ability to restrict profit margins and impose greater controls on foreign exchange and the production, import, and distribution of certain goods. Among other actions, the president has used this decree power to pass the Law of Costs, Earnings, and Fair Profits, which became effective in January 2014 and, among other provisions, authorizes the Venezuelan government to set “fair prices” and maximum profit margins in the private sector. The Management of the Company estimates that this new law will not have a significant effect in 2015 as a consequence of losses incurred in the Venezuelan segment during this year. In addition, management of the Company will continue monitoring the potential effects of this new law as the detailed provisions for its implementation are issued in the future. | |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent events |
Business acquisitions | |
On April 1, 2015, through its subsidiaries Ebazar.com.br Ltda. and MercadoLivre.com Atividades de Internet Ltda. the Company acquired 100% of the issued and outstanding shares of capital stock of KPL Soluções Ltda. an e-commerce management company in Brazil. As of the acquisition date we paid $15.8 million in cash and will pay up to an additional $9.5 million upon the achievement of certain performance targets by the acquired company during 2015 and 2016. | |
Additionally, on April 22, 2015, through its subsidiaries MercadoLibre, S. de R.L. de C.V. and Deremate.com de México, S. de R.L. de C.V. the Company acquired 100% of the issued and outstanding shares of capital stock of Metros Cúbicos, S.A. de C.V., which operates an online classified advertisements platform dedicated to the sale of real estate in México through the site named metroscubicos. At the acquisition date, the Company paid the total price of $27.0 million in cash to the sellers, and $3.0 million was transferred to an escrow trust for a period of 24 months to warrant all covenants and obligations assumed by the sellers in the stock purchase agreement. | |
As of the date of issuance of these interim condensed consolidated financial statements, the initial accounting for these business combinations have not been yet completed. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of presentation | ||||||||
The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. These interim condensed consolidated financial statements are stated in U.S. dollars, except for amounts otherwise indicated. Intercompany transactions and balances have been eliminated for consolidation purposes. | |||||||||
Substantially all net revenues, cost of net revenues and operating expenses, are generated in the Company’s foreign operations, amounting to approximately 99.7% and 99.4% of the consolidated amounts during the three-month periods ended March 31, 2015 and 2014. Long-lived assets, Intangible assets and Goodwill located in the foreign operations totaled $152,736 thousands and $170,147 thousands as of March 31, 2015 and December 31, 2014, respectively. | |||||||||
These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of March 31, 2015 and December 31, 2014. These financial statements also show the Company’s consolidated statements of income, of comprehensive income and statement of cash flows for the three-month periods ended March 31, 2015 and 2014. These interim condensed consolidated financial statements include all normal recurring adjustments that management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. | |||||||||
Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2014, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, of comprehensive income and of cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. | |||||||||
Foreign Currency Translation | Foreign currency translation | ||||||||
Venezuelan currency status | |||||||||
All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Venezuela since January 1, 2010, as described below. Accordingly, these foreign subsidiaries translate assets and liabilities from their local currencies into U.S. dollars by using the period-end exchange rates while income and expense accounts are translated at the average rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. | |||||||||
According to U.S. GAAP, the Company has transitioned its Venezuelan operations to highly inflationary status as from January 1, 2010, which requires that transactions and balances are re-measured as if the U.S. dollar were the functional currency for such operation. | |||||||||
During December 2013, the Venezuelan regulation that created the SICAD 1 exchange system was amended to expand its use, and to require publication of the average exchange rate implied by transactions settled in SICAD 1 auctions. Additionally, on January 23, 2014, the exchange regulation was amended to include foreign currency sales for certain transactions, such as but not limited to: contracts for leasing and services, use and exploitation of patents, trademarks, foreign investments and payments of royalties, contracts for technology import and technical assistance. Due to the change in rules that provided for the creation of the SICAD 1 system, the official exchange rate remains only available to obtain foreign currency to pay for a limited list of goods considered to be of high priority by the Government, which does not include those relating to the Company’s business. As a consequence, SICAD 1 became, from that moment, the primary system to which the Company would have to request U.S. dollars to settle its transactions. As a result, from January 24 to May 15, 2014, the exchange rate used to re-measure the Company’s net monetary asset position in Bolivares Fuertes (“BsF”) and BsF transactions of its Venezuelan operations was the SICAD 1 exchange rate. | |||||||||
In late February 2014, the Venezuelan government issued a decree to open a new exchange control mechanism (“SICAD 2”) that was intended to allow the purchase of foreign exchange currencies, through authorized foreign exchange operators offered by individuals and companies such as Petróleos de Venezuela, S.A. (PDVSA, the oil state-owned corporation of Venezuela), the Central Bank of Venezuela (“BCV”) and other public entities authorized by the Ministry of Finance. The Venezuelan government published operating rules for that exchange mechanism in Exchange Agreement N° 27, and SICAD 2 began operating on March 24, 2014. Since implementation of the SICAD 1 system, the Company was unsuccessful in gaining access to U.S. dollars through SICAD 1. As a result of this ongoing lack of access to the SICAD 1 auction system, on May 16, 2014, the Company decided to start requesting U.S. dollars through the SICAD 2 mechanism. The SICAD 2 system was an open mechanism that was intended to permit any company to request dollars for any purpose. Consequently, the Company was eligible for and was granted, U.S. dollars through the SICAD 2 mechanism. | |||||||||
As a consequence of the determination to obtain U.S. dollars through SICAD 2 and the lack of access to SICAD 1, since May 16, 2014 the Company concluded that the SICAD 2 exchange rate should be used to re-measure their bolivar-denominated monetary assets and liabilities in BsF and to re-measure the results of its Venezuelan operations, effective as of May 16, 2014. As a consequence, the Company recorded a foreign exchange loss of $16.5 million during the second quarter of 2014. | |||||||||
In light of those economic conditions in Venezuela, the determination to access SICAD 2 and re-measure the BsF denominated monetary assets and liabilities of its Venezuelan subsidiaries, and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed in May 2014, the long-lived assets, goodwill and intangible assets with indefinite useful life for impairment. For that purpose, the Company considered the current expected use of these assets, which in the case of two office spaces in Venezuela that had been expected to be used to support the growth of the main operating activities in that country, are currently for rent, and eventually consider opportunities for disposal if real estate market conditions are favorable in the future. Because the Company concluded that the carrying value of these two real estate properties would not be fully recoverable, it recorded an impairment of long-lived assets of $49.5 million in the second quarter of 2014. The carrying amount was adjusted to its estimated fair value of that date, by using the market approach, and considering prices for similar assets. | |||||||||
Later, on February 10, 2015, the Venezuelan government issued a decree that unified the two previous foreign exchange systems “SICAD 1 and SICAD 2” into a new single system denominated SICAD, with an initial public foreign exchange rate of 12 BsF per U.S. dollar. The SICAD auction process remains available only to obtain foreign currency to pay for a limited list of goods considered to be of high priority by the Venezuelan government, which does not include those relating to the Company’s business. In the same decree the Venezuelan government created the “Sistema Marginal de Divisas” (“SIMADI”), a new foreign exchange system that is separate from SICAD, which publishes a foreign exchange rate from the BCV on a daily basis. | |||||||||
In light of the disappearance of SICAD 2, and the Company’s inability to gain access to U.S. dollars through the new single system under SICAD, it started requesting and has been granted U.S. dollars through SIMADI. As a result, the Company now expects to settle its transactions through SIMADI and has concluded that the SIMADI exchange rate should be used to re-measure its bolivar-denominated monetary assets and liabilities and to re-measure the revenues and expenses of the Venezuelan subsidiaries effective as of March 31, 2015. In connection with this re-measurement, the Company recorded a foreign exchange loss of $20.4 million during the first quarter of 2015. As of March 31, 2015, the SIMADI exchange rate was 192.95 BsF per U.S. dollar. | |||||||||
Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows now expected from the Venezuelan business, the Company has reviewed its long-lived assets, goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of March 31, 2015 will not be fully recoverable. As a result, the Company has recorded an impairment of long-lived assets of $ 16.2 million on March 31, 2015. The carrying amount has been adjusted to its estimated fair value of approximately $9.2 million as of that date, by using the market approach, and considering prices for similar assets. | |||||||||
Until 2010 the Company was able to obtain U.S. dollars for any purpose, including dividends distribution, using alternative mechanisms other than through the Commission for the Administration of Foreign Exchange Control (CADIVI). Those U.S. dollars, obtained at a higher exchange rate than the one offered by CADIVI, and held in balance at U.S. bank accounts of our Venezuelan subsidiaries, were used for dividend distributions from our Venezuelan subsidiaries. The Venezuelan subsidiaries have not requested authorization since 2012 to acquire U.S. dollars to make dividend distributions. The Company has not distributed dividends from the Venezuelan subsidiaries since 2011. | |||||||||
The following table sets forth the assets, liabilities and net assets of the Company’s Venezuelan subsidiaries, before intercompany eliminations, as of March 31, 2015 and December 31, 2014 and net revenues for the three-month periods ended March 31, 2015 and 2014: | |||||||||
Three-month periods ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Venezuelan operations | (In thousands) | ||||||||
Net Revenues | $ 13,955 | $ 19,357 | |||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Assets | 41,587 | 75,153 | |||||||
Liabilities | -38,565 | -43,359 | |||||||
Net Assets | $ 3,022 | $ 31,794 | |||||||
As of March 31, 2015, net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to approximately 0.9% of consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to approximately 1.3% of our consolidated cash and investments. | |||||||||
The Company’s ability to obtain U.S. dollars in Venezuela is negatively affected by the exchange regulations in Venezuela that are described above and elsewhere in these financial statements. In addition, its business and ability to obtain U.S. dollars in Venezuela would be negatively affected by additional material devaluations or the imposition of significant additional and more stringent controls on foreign currency exchange by the Venezuelan government. | |||||||||
Despite the current difficult macroeconomic environment in Venezuela, the Company continues to actively manage, through its Venezuelan subsidiaries, its investment in Venezuela. Regardless the current operating, political and economic conditions and certain other factors in Venezuela, management currently plans to continue supporting its business in Venezuela in the long run. | |||||||||
Argentine currency status | |||||||||
The Argentine government has implemented certain measures that control and restrict the ability of companies and individuals to exchange Argentine pesos for foreign currencies. Those measures include, among other things, the requirement to obtain the prior approval from the Argentine Tax Authority of the foreign currency transaction (for example and without limitation, for the payment of non-Argentine goods and services, payment of principal and interest on non-Argentine debt and also payment of dividends to parties outside of the country), which approval process could delay, and eventually restrict, the ability to exchange Argentine pesos for other currencies, such as U.S. dollars. Those approvals are administered by the Argentine Central Bank through the Local Exchange Market (“Mercado Unico Libre de Cambios”, or “MULC”), which is the only market where exchange transactions may be lawfully made. | |||||||||
Further, restrictions also currently apply to the acquisition of any foreign currency for holding as cash within Argentina. Although the controls and restrictions on the acquisition of foreign currencies in Argentina place certain limitations on our current ability to convert cash generated by our Argentine subsidiaries into foreign currencies, based on the current state of Argentine currency rules and regulations, we do not expect that the current controls and restrictions, will have a material adverse effect on our business plans in Argentina or on our overall business, financial condition or results of operations. | |||||||||
Additionally, during January 2014 the Argentinean peso exchange rate against the U.S. dollar increased in approximately 23%, from 6.52 Argentinean Pesos per U.S. dollar as of December 31, 2013 to approximately 8.0 Argentinean Pesos per U.S. dollar. Due to the abovementioned devaluation, during the first quarter of 2014, the reported net assets in Argentina decreased in $14,625 thousands with the related impact in Other Comprehensive Income and the Company recognized a foreign exchange gain of $4,597 thousands. As of March 31, 2015, the Argentinean Peso exchange rate was $8.82 per U.S. dollar. | |||||||||
Income Tax Holiday in Argentina | Income Tax Holiday in Argentina | ||||||||
According to Argentine law, from fiscal year 2008, the Company’s Argentine subsidiary was a beneficiary of a software development law. Part of the benefits obtained from being a beneficiary of the aforementioned law was a relief of 60% of total income tax determined in each year, thus resulting in an effective tax rate in Argentina lower than the income tax law statutory rate. The law expired on September 17, 2014. As a consequence, the average tax rate for 2014 was approximately 22% as we expected no income tax holiday for last quarter of fiscal year 2014. | |||||||||
Aggregate tax benefit totaled $2,102 thousands and aggregate per share effect of the Argentine tax holiday amounted to $0.05 for the three-month period ended March 31, 2014. In addition, during fiscal year 2013 and on December 15, 2014 the Company acquired a software development company, located in the Province of Cordoba and the City of Buenos Aires, Argentina, which were also beneficiaries of the aforementioned income tax holiday, however the total benefit obtained is immaterial. | |||||||||
On August 17, 2011, the Argentine government issued a new software development law and on September 9, 2013 the regulatory decree was issued, which established the new requirement to become beneficiary of the new software development law. The new decree establishes compliance requirements with annual incremental ratios related to exports of services and research and development expenses that must be achieved to remain within the tax holiday. The Argentine operation will have to achieve certain required ratios annually under the new software development law. | |||||||||
If we are successful in being admitted as beneficiaries under the new law, we estimate that the Argentine effective income tax rate would be materially lower than the statutory income tax rate. Also, the tax holiday under the new law would last until 2019. | |||||||||
The Industry Secretary resolution which rules, among other provisions, on the mechanism to file the information to obtain the benefits derived from the new software development law was issued in late February 2014. During May 2014, the Company presented all the required documentation in order to apply for the new software development law. At the date of issuance of these interim condensed consolidated financial statements, the Industry Secretary resolution which approves the Company’s application is still pending, and for that reason no tax holiday was recorded for the three-month period ended March 31, 2015. | |||||||||
Accumulated Other Comprehensive Income | Accumulated other comprehensive income | ||||||||
The following table sets forth the Company’s accumulated other comprehensive income as of March 31, 2015 and the year ended December 31, 2014: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Foreign currency translation | $ (157,225) | $ (134,695) | |||||||
Unrealized gain (loss) on investments | 396 | -578 | |||||||
Estimated tax (loss) gain on unrealized gains on investments | -135 | 199 | |||||||
$ (156,964) | $ (135,074) | ||||||||
The following tables summarize the changes in accumulated balances of other comprehensive income for the three-month period ended March 31, 2015 and the year ended December 31, 2014: | |||||||||
Unrealized | Foreign | Estimated tax | |||||||
Gains (Losses) on | Currency | (expense) | |||||||
Investments | Translation | benefit | Total | ||||||
(In thousands) | |||||||||
Balances as of December 31, 2014 | $ (578) | $ (134,695) | $ 199 | $ (135,074) | |||||
Other comprehensive loss before reclassification | |||||||||
adjustments for gains on available for sale investments | 396 | -22,530 | -135 | -22,269 | |||||
Amount of gain (loss) reclassified from accumulated | |||||||||
other comprehensive income to net income | 578 | — | -199 | 379 | |||||
Net current period other comprehensive loss | 974 | -22,530 | -334 | -21,890 | |||||
Balances as of March 31, 2015 | $ 396 | $ (157,225) | $ (135) | $ (156,964) | |||||
Amount of Gain (Loss) | |||||||||
Details about Accumulated | Reclassified from | ||||||||
Other Comprehensive Income | Accumulated Other | ||||||||
Components for the three-month | Comprehensive | Affected Line Item | |||||||
period ended March 31, 2015 | Income | in the Statement of Income | |||||||
(In thousands) | |||||||||
Unrealized losses on investments | $ (578) | Interest income and other financial gains | |||||||
Estimated tax gain on unrealized losses on investments | 199 | Income / asset tax expense | |||||||
Total reclassifications for the period | $ (379) | Total, net of income taxes | |||||||
Impairment of Long-lived Assets | Impairment of long-lived assets | ||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. | |||||||||
As explained in section “Foreign Currency Translation” of the present Note to these interim condensed consolidated financial statements, in first quarter of 2015, as a result of the disappearance of SICAD 2 in February 2015 and the Company’s inability to gain access to U.S. dollars through the new single system under SICAD, it started requesting and has been granted U.S. dollars through SIMADI. As a result, the Company now expects to settle its transactions through SIMADI and has concluded that the SIMADI exchange rate should be used to re-measure its bolivar-denominated monetary assets and liabilities and to re-measure the revenues and expenses of the Venezuelan subsidiaries effective as of March 31, 2015. | |||||||||
Considering these changes in facts and circumstances and the lower U.S. dollar-equivalent cash flows expected from the Venezuelan business, and long-lived assets expected use, the Company compared the carrying amount of the long-lived assets with the expected undiscounted future net cash flows and concluded that certain office spaces held in Caracas, Venezuela, should be impaired. As a consequence, the Company estimated the fair value of the impaired long-lived assets and recorded impairment losses of $16.2 million on March 31, 2015, by using the market approach and considering prices for similar assets. | |||||||||
Convertible Senior Notes | Convertible Senior Notes | ||||||||
On June 30, 2014, the Company issued $330 million of 2.25% convertible senior notes due 2019 (the “Notes”). The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on January 1 and July 1, at a rate of 2.25% per annum. The Notes will mature on July 1, 2019 unless earlier repurchased or converted in accordance with their terms prior to such date. The Notes may be converted, under specific conditions, based on an initial conversion rate of 7.9353 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $126.02 per share of common stock), subject to adjustment as described in the indenture governing the Notes. | |||||||||
Prior to January 1, 2019, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes. The conversion rate is subject to customary anti-dilution adjustments. Following certain corporate events described in the Indenture that occur prior to the maturity date, the conversion rate will be increased for a holder who elects to convert its Notes in connection with such corporate event in certain circumstances. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable. | |||||||||
In accordance with ASC 470-20 Debt with Conversion and Other Options, the convertible debt instrument within the scope of the cash conversion subsection, was separated into debt and equity components at issuance and a fair value was assigned. The value assigned to the debt component was the estimated fair value, as of the issuance date, of a similar debt without the conversion feature. As of the issuance date, the Company determined the fair value of the liability component of the Notes based on market data that was available for senior, unsecured nonconvertible corporate bonds issued by comparable companies. The difference between the cash proceeds and this estimated fair value, represents the value assigned to the equity component and was recorded as a debt discount. The debt discount is amortized using the effective interest method from the origination date through its stated contractual maturity date. | |||||||||
The initial debt component of the Notes was valued at $283,015 thousands, based on the contractual cash flows discounted at an appropriate market rate for a non-convertible debt at the date of issuance, which was determined to be 5.55%. The carrying value of the permanent equity component reported in additional paid-in-capital was initially valued at $46,985 thousands. The effective interest rate after allocation of transaction costs to the liability component is 6.1% and is used to amortize the debt discount and transaction costs. | |||||||||
In connection with the issuance of the Notes, the Company paid approximately $19,668 thousands to enter into capped call transactions with respect to its common shares (the “Capped Call Transactions”), with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and / or offset any cash payments the Company may be required to make in excess of the principal amount of any converted notes in the event that the market price of the common shares is greater than the strike price of the Capped Call Transactions, initially set at $126.02 per common share, which corresponds to the initial conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes, and have a cap price of approximately $155.78 per common share. | |||||||||
The $19,668 thousands cost of the capped call transactions, which net of deferred income tax effect amounts to $12,784 thousands, is included as a net reduction to additional paid-in capital in the stockholders’ equity section of our consolidated balance sheets. | |||||||||
For more detailed information in relation to the Notes and the Capped Call transactions, see Note 9 to these interim condensed consolidated financial statements. | |||||||||
Use of Estimates | Use of estimates | ||||||||
The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to accounting for allowance for doubtful accounts and chargeback provisions, depreciation, amortization, recoverability of goodwill and intangible assets with indefinite useful life, useful life of long-lived assets and intangible assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt note, recognition of income taxes and contingencies. Actual results could differ from those estimates. | |||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries | |||||||||
Three-month periods ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Venezuelan operations | (In thousands) | ||||||||
Net Revenues | $ 13,955 | $ 19,357 | |||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Assets | 41,587 | 75,153 | |||||||
Liabilities | -38,565 | -43,359 | |||||||
Net Assets | $ 3,022 | $ 31,794 | |||||||
Accumulated Other Comprehensive Income | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Foreign currency translation | $ (157,225) | $ (134,695) | |||||||
Unrealized gain (loss) on investments | 396 | -578 | |||||||
Estimated tax (loss) gain on unrealized gains on investments | -135 | 199 | |||||||
$ (156,964) | $ (135,074) | ||||||||
Summary of Changes in Accumulated Balances of Other Comprehensive Income | |||||||||
Unrealized | Foreign | Estimated tax | |||||||
Gains (Losses) on | Currency | (expense) | |||||||
Investments | Translation | benefit | Total | ||||||
(In thousands) | |||||||||
Balances as of December 31, 2014 | $ (578) | $ (134,695) | $ 199 | $ (135,074) | |||||
Other comprehensive loss before reclassification | |||||||||
adjustments for gains on available for sale investments | 396 | -22,530 | -135 | -22,269 | |||||
Amount of gain (loss) reclassified from accumulated | |||||||||
other comprehensive income to net income | 578 | — | -199 | 379 | |||||
Net current period other comprehensive loss | 974 | -22,530 | -334 | -21,890 | |||||
Balances as of March 31, 2015 | $ 396 | $ (157,225) | $ (135) | $ (156,964) | |||||
Amount of Gain (Loss) | |||||||||
Details about Accumulated | Reclassified from | ||||||||
Other Comprehensive Income | Accumulated Other | ||||||||
Components for the three-month | Comprehensive | Affected Line Item | |||||||
period ended March 31, 2015 | Income | in the Statement of Income | |||||||
(In thousands) | |||||||||
Unrealized losses on investments | $ (578) | Interest income and other financial gains | |||||||
Estimated tax gain on unrealized losses on investments | 199 | Income / asset tax expense | |||||||
Total reclassifications for the period | $ (379) | Total, net of income taxes | |||||||
Net_Income_per_Share_Tables
Net Income per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Net Income Per Share [Abstract] | |||||||||
Allocation of Net Income Available to Common Shareholders using Two-Class Method | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Basic | Diluted | Basic | Diluted | ||||||
Net income | $ 1,721 | $ 1,721 | $ 30,328 | $ 30,328 | |||||
Net income attributable to noncontrolling interests | — | — | -64 | -64 | |||||
Change in redeemable amount of noncontrolling interest | — | — | 61 | 61 | |||||
Net income attributable to MercadoLibre, Inc. Shareholders | |||||||||
corresponding to common stock | $ 1,721 | $ 1,721 | $ 30,325 | $ 30,325 | |||||
Net Income (Loss) Per Share of Common Stock | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands, except per share data) | |||||||||
Basic | Diluted | Basic | Diluted | ||||||
Net income attributable to MercadoLibre, Inc. Shareholders per common share | $ 0.04 | $ 0.04 | $ 0.69 | $ 0.69 | |||||
Numerator: | |||||||||
Net income attributable to MercadoLibre, Inc. Shareholders | $ 1,721 | $ 1,721 | $ 30,325 | $ 30,325 | |||||
Denominator: | |||||||||
Weighted average of common stock outstanding for Basic earnings per share | 44,154,796 | 44,154,796 | 44,153,818 | 44,153,818 | |||||
Adjustment for Convertible Notes | — | — | — | — | |||||
Adjusted weighted average of common stock outstanding for Diluted earnings per share | 44,154,796 | 44,154,796 | 44,153,818 | 44,153,818 | |||||
Business_Combinations_Goodwill1
Business Combinations, Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase Price Allocation for Acquisition | |||||||||||||||||
Chile | Mexico | Total | |||||||||||||||
Cash and cash equivalents | $ | 547 | $ | 474 | $ | 1,021 | |||||||||||
Other net tangible assets / (liabilities) | 2,306 | -2,727 | -421 | ||||||||||||||
Trademarks | 5,422 | 2,155 | 7,577 | ||||||||||||||
Customer Lists | 10,104 | 322 | 10,426 | ||||||||||||||
Software | 447 | — | 447 | ||||||||||||||
Non solicitation agreement | 587 | — | 587 | ||||||||||||||
Deferred tax assets and liabilities | -2,644 | 214 | -2,430 | ||||||||||||||
Goodwill | 14,709 | 6,074 | 20,783 | ||||||||||||||
Purchase Price | $ | 31,478 | $ | 6,512 | $ | 37,990 | |||||||||||
Composition of Goodwill and Intangible Assets | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Goodwill | $ 65,577 | $ 68,829 | |||||||||||||||
Intangible assets with indefinite lives | |||||||||||||||||
— Trademarks | 9,986 | 10,276 | |||||||||||||||
Amortizable intangible assets | |||||||||||||||||
— Licenses and others | 5,862 | 5,111 | |||||||||||||||
— Non-compete / solicitation agreement | 1,662 | 1,829 | |||||||||||||||
— Customer list | 10,826 | 11,294 | |||||||||||||||
Total intangible assets | $ 28,336 | $ 28,510 | |||||||||||||||
Accumulated amortization | -5,535 | -5,339 | |||||||||||||||
Total intangible assets, net | $ 22,801 | $ 23,171 | |||||||||||||||
Table Showing Changes in Carrying Amount of Goodwill | |||||||||||||||||
Period ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Brazil | Argentina | Chile | Mexico | Venezuela | Colombia | Other | Total | ||||||||||
Countries | |||||||||||||||||
Balance, beginning of the period | $ 10,557 | $ 11,859 | $ 19,101 | $ 15,719 | $ 5,729 | $ 4,521 | $ 1,343 | $ 68,829 | |||||||||
- Effect of exchange rates changes | -1,381 | -376 | -579 | -552 | — | -314 | -50 | -3,252 | |||||||||
Balance, end of the period | $ 9,176 | $ 11,483 | $ 18,522 | $ 15,167 | $ 5,729 | $ 4,207 | $ 1,293 | $ 65,577 | |||||||||
Year ended December 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Brazil | Argentina | Chile | Mexico | Venezuela | Colombia | Other | Total | ||||||||||
Countries | |||||||||||||||||
Balance, beginning of year | $ 10,366 | $ 14,676 | $ 6,520 | $ 11,376 | $ 5,252 | $ 5,506 | $ 1,405 | $ 55,101 | |||||||||
- Bussiness Acquisition | 1,538 | 775 | 14,710 | 6,293 | 477 | 82 | 48 | 23,923 | |||||||||
- Effect of exchange rates changes | -1,347 | -3,592 | -2,129 | -1,950 | — | -1,067 | -110 | -10,195 | |||||||||
Balance, end of the year | $ 10,557 | $ 11,859 | $ 19,101 | $ 15,719 | $ 5,729 | $ 4,521 | $ 1,343 | $ 68,829 | |||||||||
Expected Intangible Asset Amortization Expense | |||||||||||||||||
For year ended 12/31/2015 | $ 1,795 | ||||||||||||||||
For year ended 12/31/2016 | 2,359 | ||||||||||||||||
For year ended 12/31/2017 | 2,091 | ||||||||||||||||
For year ended 12/31/2018 | 1,336 | ||||||||||||||||
Thereafter | 5,234 | ||||||||||||||||
$ 12,815 | |||||||||||||||||
Business Vision S.A. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Purchase Price Allocation for Acquisition | |||||||||||||||||
Cash and cash equivalents | $ | 81 | |||||||||||||||
Other net tangible assets | 857 | ||||||||||||||||
Total net tangible assets acquired | 938 | ||||||||||||||||
Customer Lists | 563 | ||||||||||||||||
Non solicitation agreement | 428 | ||||||||||||||||
Deferred tax assets and liabilities | -300 | ||||||||||||||||
Goodwill | 3,139 | ||||||||||||||||
Purchase Price | $ | 4,768 | |||||||||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Financial Performance of Company's Reporting Segments | |||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||
(In thousands) | |||||||||||||
Brazil | Argentina | Mexico | Venezuela | Other | Total | ||||||||
Countries | |||||||||||||
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 | Total | ||||||||
Countries | |||||||||||||
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 | ||||||||||||
Allocation of Long-Lived Tangible Assets 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”. | |||||||||||||
Allocation of 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 | |||||||||||||
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. | |||||||||||||
Fair_Value_Measurement_of_Asse1
Fair Value Measurement of Assets and Liabilities (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Measurement of Assets and Liabilities [Abstract] | |||||||||||||
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | |||||||||||||
Quoted Prices in | Quoted Prices in | ||||||||||||
Balances as of | active markets for | Significant other | Balances as of | active markets for | Significant other | ||||||||
March 31, | identical Assets | observable inputs | December 31, | identical Assets | observable inputs | ||||||||
Description | 2015 | (Level 1) | (Level 2) | 2014 | (Level 1) | (Level 2) | |||||||
(In thousands) | |||||||||||||
Assets | |||||||||||||
Cash and Cash Equivalents: | |||||||||||||
Money Market Funds | $ 35,520 | $ 35,520 | $ — | $ 37,495 | $ 37,495 | $ — | |||||||
Corporate Debt Securities | 13,491 | — | 13,491 | 13,004 | 108 | 12,896 | |||||||
Investments: | |||||||||||||
Sovereign Debt Securities | 44,101 | 40,606 | 3,495 | 49,150 | 49,150 | — | |||||||
Corporate Debt Securities | 227,031 | 126,985 | 100,046 | 238,643 | 59,919 | 178,724 | |||||||
Certifcates of deposits | 11,316 | — | 11,316 | 7,807 | — | 7,807 | |||||||
Total Financial Assets | $ 331,459 | $ 203,111 | $ 128,348 | $ 346,099 | $ 146,672 | $ 199,427 | |||||||
Liabilities: | |||||||||||||
Contingent considerations | $ 4,875 | $ — | $ 4,875 | $ | $ — | $ | |||||||
4,833 | 4,833 | ||||||||||||
Total Financial Liabilities | $ 4,875 | $ — | $ 4,875 | $ 4,833 | $ — | $ 4,833 | |||||||
Fair Value of Financial Assets and Liabilities Measured at Amortized Cost | |||||||||||||
Balances as of | Significant other | Balances as of | Significant other | ||||||||||
March 31, | observable inputs | December 31, | observable inputs | ||||||||||
2015 | (Level 2) | 2014 | (Level 2) | ||||||||||
(In thousands) | |||||||||||||
Assets | |||||||||||||
Time Deposits | $ 55,756 | $ 55,756 | $ 58,475 | $ 58,475 | |||||||||
Accounts receivable | 54,054 | 54,054 | 46,672 | 46,672 | |||||||||
Credit Cards receivable | 133,644 | 133,644 | 85,162 | 85,162 | |||||||||
Prepaid expenses | 6,433 | 6,433 | 3,458 | 3,458 | |||||||||
Other assets | 35,318 | 35,318 | 37,718 | 37,718 | |||||||||
Total Assets | $ 285,205 | $ 285,205 | $ 231,485 | $ 231,485 | |||||||||
Liabilities | |||||||||||||
Accounts and funds payable | $ 58,160 | $ 58,160 | $ 58,006 | $ 58,006 | |||||||||
Funds payable to customers | 193,188 | 193,188 | 165,034 | 165,034 | |||||||||
Salaries and social security payable | 23,755 | 23,755 | 18,835 | 18,835 | |||||||||
Tax payable | 23,733 | 23,733 | 26,013 | 26,013 | |||||||||
Dividends payable | 4,548 | 4,548 | 7,330 | 7,330 | |||||||||
Loans payable and other financial liabilities | 287,745 | 287,745 | 283,826 | 283,826 | |||||||||
Other liabilities | 4,564 | 4,564 | 5,524 | 5,524 | |||||||||
Total Liabilities | $ 595,693 | $ 595,693 | $ 564,568 | $ 564,568 | |||||||||
Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities | |||||||||||||
31-Mar-15 | |||||||||||||
(In thousands) | |||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Estimated Fair Value | ||||||||||
Cash and cash equivalents | |||||||||||||
Money Market Funds | $ 35,543 | $ 5 | $ (28) | $ 35,520 | |||||||||
Corporate Debt Securities | 13,495 | — | -4 | 13,491 | |||||||||
Total Cash and cash equivalents | $ 49,038 | $ 5 | $ (32) | $ 49,011 | |||||||||
Short-term investments | |||||||||||||
Sovereign Debt Securities | $ 651 | $ — | $ (1) | $ 650 | |||||||||
Corporate Debt Securities | 83,884 | 9 | -59 | 83,834 | |||||||||
Certificates of deposits | 7,811 | 3 | -2 | 7,812 | |||||||||
Total Short-term investments | $ 92,346 | $ 12 | $ (62) | $ 92,296 | |||||||||
Long-term investments | |||||||||||||
Sovereign Debt Securities | $ 43,339 | $ 115 | $ (3) | $ 43,451 | |||||||||
Corporate Debt Securities | 142,837 | 408 | -48 | 143,197 | |||||||||
Certificates of deposits | 3,503 | 1 | — | 3,504 | |||||||||
Total Long-term investments | $ 189,679 | $ 524 | $ (51) | $ 190,152 | |||||||||
Total | $ 331,063 | $ 541 | $ (145) | $ 331,459 | |||||||||
31-Dec-14 | |||||||||||||
(In thousands) | |||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses (1) | Estimated Fair Value | ||||||||||
Cash and cash equivalents | |||||||||||||
Money Market Funds | $ 37,531 | $ 2 | $ (38) | $ 37,495 | |||||||||
Corporate Debt Securities | 13,009 | — | -5 | 13,004 | |||||||||
Total Cash and cash equivalents | $ 50,540 | $ 2 | $ (43) | $ 50,499 | |||||||||
Short-term investments | |||||||||||||
Sovereign Debt Securities | $ 4,726 | $ — | $ (4) | $ 4,722 | |||||||||
Corporate Debt Securities | 81,886 | — | -75 | 81,811 | |||||||||
Certificates of deposit | 3,802 | 1 | -1 | 3,802 | |||||||||
Total Short-term investments | $ 90,414 | $ 1 | $ (80) | $ 90,335 | |||||||||
Long-term investments | |||||||||||||
Sovereign Debt Securities | $ 44,511 | $ — | $ (83) | $ | |||||||||
44,428 | |||||||||||||
Corporate Debt Securities | 157,205 | 22 | -395 | 156,832 | |||||||||
Certificates of deposit | 4,007 | — | -2 | 4,005 | |||||||||
Total Long-term investments | $ | $ | $ | $ | |||||||||
205,723 | 22 | -480 | 205,265 | ||||||||||
Total | $ | $ | $ | $ | |||||||||
346,677 | 25 | -603 | 346,099 | ||||||||||
-1 | Unrealized losses from securities are primarily attributable to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of March 31, 2015 and December 31, 2014. | ||||||||||||
Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments | |||||||||||||
One year or less | 141,307 | ||||||||||||
One year to two years | 120,358 | ||||||||||||
Two years to three years | 42,660 | ||||||||||||
Three years to four years | 15,147 | ||||||||||||
Four years to five years | 11,987 | ||||||||||||
More than five years | — | ||||||||||||
Total | $ 331,459 | ||||||||||||
Long_Term_Retention_Plan_Table
Long Term Retention Plan (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Long Term Retention Plan [Abstract] | ||||
Long Term Retention Plans Accrued Compensation Expense | ||||
Three Months Ended March 31, | ||||
2015 (*) (**) | 2014 (*) (**) | |||
(In thousands) | ||||
LTRP 2009 | $ (12) | $ (351) | ||
LTRP 2010 | 120 | -183 | ||
LTRP 2011 | 142 | -101 | ||
LTRP 2012 | 185 | -1 | ||
LTRP 2013 | 842 | 604 | ||
LTRP 2014 | 1,059 | 798 | ||
(*) (Gain) / Loss | ||||
(**) For the three-month periods ended March 31, 2015 and 2014, the table above shows a reduction of compensation costs for LTRP 2009, 2010, 2011 and 2012 as a consequence of a decrease in the Company’s stock price during the quarter. | ||||
225_Convertible_Senior_Notes_D1
2.25% Convertible Senior Notes Due 2019 (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
2.25% Convertible Senior Notes Due 2019 [Abstract] | ||||||
Carrying Amounts of Liability and Equity Components | ||||||
31-Mar-15 | 31-Dec-14 | |||||
(In thousands) | ||||||
Amount of the equity component (1) | $ | 45,808 | $ | 45,808 | ||
2.25% convertible senior notes due 2019 | $ | 330,000 | $ | 330,000 | ||
Unamortized debt discount (2) | -40,716 | -42,844 | ||||
Unamortized transaction costs related to the debt component | -6,227 | -6,526 | ||||
Contractual coupon interest accrual | 1,856 | 3,733 | ||||
Contractual coupon interest payment | — | -3,733 | ||||
Net carrying amount | $ | 284,913 | $ | 280,630 | ||
-1 | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. | |||||
-2 | As of March 31, 2015, the remaining period over which the unamortized debt discount will be amortized is 4.25 years. | |||||
Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount | ||||||
Period ended | ||||||
31-Mar-15 | ||||||
(In thousands) | ||||||
Contractual coupon interest expense | $ | 1,856 | ||||
Amortization of debt discount | 2,128 | |||||
Amortization of debt issuance costs | 299 | |||||
Total interest expense related to Notes | $ | 4,283 | ||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Additional Information) (Details) | 1 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||
Jan. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Feb. 10, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2015 | |
ARS | USD ($) | USD ($) | USD ($) | ARS | VEF | VEF | USD ($) | ARS | SICAD 2 [Member] | Venezuelan Operations [Member] | Venezuelan Operations [Member] | Capped Call Transactions [Member] | 2.25% Convertible Senior Notes Due 2019 [Member] | 2.25% Convertible Senior Notes Due 2019 [Member] | 2.25% Convertible Senior Notes Due 2019 [Member] | 2.25% Convertible Senior Notes Due 2019 [Member] | 2.25% Convertible Senior Notes Due 2019 [Member] | |
USD ($) | USD ($) | item | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Capped Call Transactions [Member] | ||||||||||
USD ($) | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Percentage of revenues and operating costs generated in foreign operations | 99.70% | 99.40% | ||||||||||||||||
Long-lived assets and goodwill located in the foreign operations | $152,736,000 | $170,147,000 | ||||||||||||||||
Exchange rate used to re-measure transactions | 8 | 8.82 | 192.95 | 12 | 6.52 | |||||||||||||
Foreign exchange loss | 20,400,000 | 16,500,000 | ||||||||||||||||
Number of office spaces owned | 2 | |||||||||||||||||
Fair value of real estate properties | 9,200,000 | |||||||||||||||||
Impairment of Long lived assets | 16,226,000 | 49,500,000 | 16,200,000 | |||||||||||||||
Percentage of consolidated net assets | 0.90% | |||||||||||||||||
Percentage of consolidated cash and investments | 1.30% | |||||||||||||||||
Percentage of increase in exchange ratio | 23.00% | |||||||||||||||||
Net assets decreased | 14,625 | |||||||||||||||||
Recognize foreign currency gain | 4,597 | |||||||||||||||||
Percentage on relief of total income tax | 60.00% | |||||||||||||||||
Effective tax rate | 22.00% | |||||||||||||||||
Aggregate tax benefit, total | 2,102,000 | |||||||||||||||||
Aggregate per share effect of the Argentine tax holiday | $0.05 | |||||||||||||||||
Convertible senior notes, issued | 330,000,000 | 330,000,000 | 330,000,000 | |||||||||||||||
Convertible senior notes, interest rate | 2.25% | |||||||||||||||||
Convertible senior notes, maturity date | 1-Jul-19 | |||||||||||||||||
Convertible senior notes, conversion rate | 7.94% | |||||||||||||||||
Convertible senior notes, conversion price | $126.02 | |||||||||||||||||
Convertible senior notes, principal amount per share | 1,000 | |||||||||||||||||
Minimum percentage of principal amount outstanding | 25.00% | |||||||||||||||||
Percent of principal holder of 25% of note can declare, including interest due and payable | 100.00% | |||||||||||||||||
Carrying value of the permanent equity component reported in additional paid-in-capital | 46,985,000 | |||||||||||||||||
Net carrying amount | 283,015,000 | |||||||||||||||||
Cash flows, discount rate | 5.55% | |||||||||||||||||
Effective interest rate | 6.10% | |||||||||||||||||
Payment for capped call transactions | 19,668,000 | 19,668,000 | ||||||||||||||||
Strike price, per share | $126.02 | |||||||||||||||||
Approximate cap price, per share | $155.78 | |||||||||||||||||
Net of deferred income tax effect amounts | $6,118,000 | ($4,675,000) | $12,784,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries) (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||
Net revenues | $148,103,000 | $115,382,000 | |
Assets | 976,783,000 | 966,848,000 | |
Liabilities | -645,665,000 | -611,060,000 | |
Venezuelan Operations [Member] | |||
Significant Accounting Policies [Line Items] | |||
Net revenues | 13,955 | 19,357 | |
Assets | 41,587 | 75,153 | |
Liabilities | -38,565 | -43,359 | |
Net Assets | $3,022 | $31,794 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Accumulated Other Comprehensive Income) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of Significant Accounting Policies [Abstract] | ||
Foreign currency translation | ($157,225) | ($134,695) |
Unrealized (loss) gains on investments | 396 | -578 |
Estimated tax gain (loss) on unrealized gains on investments | -135 | 199 |
Accumulated other comprehensive income, Total | ($156,964) | ($135,074) |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Summary of Changes in Accumulated Balances of Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | $199 | |
Amount of gain (loss) reclassified from accumulated other comprehensive income to net income, tax | -199 | |
Net current period other comprehensive income, tax | -334 | |
Balances as of March 31, 2015 | -135 | |
Balances as of December 31, 2014 | -135,074 | |
Amount of gain (loss) reclassified from accumulated other comprehensive income to net income, net of tax | 379 | -25 |
Net current period other comprehensive income, net of tax | -21,890 | |
Balances as of March 31, 2015 | -156,964 | |
Unrealized Gains (Losses) on Investments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | -578 | |
Amount of gain (loss) reclassified from accumulated other comprehensive income to net income, before tax | 578 | |
Net current period other comprehensive income, before tax | 974 | |
Balances as of March 31, 2015 | 396 | |
Foreign Currency Translation [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | -134,695 | |
Net current period other comprehensive income, before tax | -22,530 | |
Balances as of March 31, 2015 | -157,225 | |
Available-for-sale Securities [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other comprehensive income before reclassification adjustments for gains on available for sale investments, tax | -135 | |
Other comprehensive income before reclassification adjustments for gains on available for sale investments, net of tax | -22,269 | |
Available-for-sale Securities [Member] | Unrealized Gains (Losses) on Investments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other comprehensive income before reclassification adjustments for gains on available for sale investments, before tax | 396 | |
Available-for-sale Securities [Member] | Foreign Currency Translation [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other comprehensive income before reclassification adjustments for gains on available for sale investments, before tax | ($22,530) |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Reclassifications Out of Accumulated Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Unrealized gains on investments | $4,308 | $3,036 |
Estimated tax loss on unrealized gains on investments | -14,655 | -8,775 |
Net income attributable to MercadoLibre, Inc. shareholders | 1,721 | 30,264 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Investments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Unrealized gains on investments | -578 | |
Estimated tax loss on unrealized gains on investments | 199 | |
Net income attributable to MercadoLibre, Inc. shareholders | ($379) |
Net_Income_Per_Share_Allocatio
Net Income Per Share (Allocation of Net Income Available to Common Shareholders using Two-Class Method) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Income Per Share [Abstract] | ||
Net income | $1,721 | $30,328 |
Net (income) loss attributable to noncontrolling interests | -64 | |
Change in redeemable amount of noncontrolling interest | 61 | |
Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock, Basic | 1,721 | 30,325 |
Net income | 1,721 | 30,328 |
Net (income) loss attributable to noncontrolling interests | -64 | |
Change in redeemable amount of noncontrolling interest | 61 | |
Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock, Diluted | $1,721 | $30,325 |
Net_Income_Per_Share_Net_Incom
Net Income Per Share (Net Income (Loss) Per Share of Common Stock) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net income attributable to MercadoLibre, Inc. per common share | ||
Net income attributable to MercadoLibre, Inc. per common share, Basic | $0.04 | $0.69 |
Net income attributable to MercadoLibre, Inc. per common share, Diluted | $0.04 | $0.69 |
Numerator: | ||
Net income attributable to MercadoLibre, Inc., Basic | $1,721 | $30,325 |
Net income attributable to MercadoLibre, Inc., Diluted | $1,721 | $30,325 |
Denominator: | ||
Weighted average of common stock outstanding for Basic earnings per share | 44,154,796 | 44,153,818 |
Adjustment for Convertible Notes | ||
Adjusted weighted average of common stock outstanding for Diluted earnings per share | 44,154,796 | 44,153,818 |
Net_Income_Per_Share_Additiona
Net Income Per Share (Additional Information) (Details) (2.25% Convertible Senior Notes Due 2019 [Member]) | Jun. 30, 2014 |
2.25% Convertible Senior Notes Due 2019 [Member] | |
Net Income Per Share [Line Items] | |
Debt instrument, interest rate | 2.25% |
Business_Combinations_Goodwill2
Business Combinations, Goodwill and Intangible Assets (Additional Information) (Details) (USD $) | 3 Months Ended | 0 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Apr. 08, 2014 | Dec. 15, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Fair value of contingent consideration | $4,875 | $4,833 | |||
Amount of Trademarks, customer lists, software and non-solicitation agreements | 22,801 | 23,171 | |||
Total aggregate amortization expense for intangible assets | 510 | 159 | |||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of acquisition | 100.00% | ||||
Total purchase price | 37,990 | ||||
Business acquisition, cash paid | 32,148 | ||||
Cash held in escrows | 1,000 | ||||
Additional cash considerations in escrows | 4,621 | ||||
Additional price adjustment escrow | 221 | ||||
Amount of Trademarks, customer lists, software and non-solicitation agreements | 19,036 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets amortized period | 10 years | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Non Solicitation Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets amortized period | 4 years | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Software [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets amortized period | 3 years | ||||
Business Vision S.A. [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of acquisition | 100.00% | ||||
Total purchase price | 4,768 | ||||
Business acquisition, cash paid | 3,804 | ||||
Business combination net of negative working capital adjustments amount | 111 | ||||
Business Vision S.A. [Member] | 24-Months Period [Member] | |||||
Business Acquisition [Line Items] | |||||
Escrow amount covering unexpected adjustments to initial aggregate purchase price | 250 | ||||
Percentage of amount in escrow account | 50.00% | ||||
Business Vision S.A. [Member] | 12-Months Period [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of amount in escrow account | 50.00% | ||||
Business Vision S.A. [Member] | 12-Months Period and 24-Months Period [Member] | |||||
Business Acquisition [Line Items] | |||||
Amount in escrow account | $735 |
Business_Combinations_Goodwill3
Business Combinations, Goodwill and Intangible Assets (Summary of Preliminary Purchase Price Allocation for Acquisition) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 08, 2014 | Dec. 15, 2014 |
In Thousands, unless otherwise specified | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $65,577 | $68,829 | $55,101 | ||
Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 18,522 | 19,101 | 6,520 | ||
Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 15,167 | 15,719 | 11,376 | ||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 1,021 | ||||
Other net tangible assets / (liabilities) | -421 | ||||
Deferred tax assets and liabilities | -2,430 | ||||
Goodwill | 20,783 | ||||
Purchase Price | 37,990 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 547 | ||||
Other net tangible assets / (liabilities) | 2,306 | ||||
Deferred tax assets and liabilities | -2,644 | ||||
Goodwill | 14,709 | ||||
Purchase Price | 31,478 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 474 | ||||
Other net tangible assets / (liabilities) | -2,727 | ||||
Deferred tax assets and liabilities | 214 | ||||
Goodwill | 6,074 | ||||
Purchase Price | 6,512 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 10,426 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Customer Lists [Member] | Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 10,104 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Customer Lists [Member] | Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 322 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Software [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 447 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Software [Member] | Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 447 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Non Solicitation Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 587 | ||||
Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Non Solicitation Agreement [Member] | Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 587 | ||||
Business Vision S.A. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 81 | ||||
Other net tangible assets / (liabilities) | 857 | ||||
Total net tangible assets acquired | 938 | ||||
Deferred tax assets and liabilities | -300 | ||||
Goodwill | 3,139 | ||||
Purchase Price | 4,768 | ||||
Business Vision S.A. [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 563 | ||||
Business Vision S.A. [Member] | Non Solicitation Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 428 | ||||
Trademarks [Member] | Online Classifieds Advertisement Companies in Chile and Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 7,577 | ||||
Trademarks [Member] | Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 5,422 | ||||
Trademarks [Member] | Online Classifieds Advertisement Companies in Chile and Mexico [Member] | Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $2,155 |
Business_Combinations_Goodwill4
Business Combinations, Goodwill and Intangible Assets (Composition of Goodwill and Intangible Assets) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $65,577 | $68,829 | $55,101 |
Total intangible assets, net | 22,801 | 23,171 | |
Software Development Company In Argentina [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | 65,577 | 68,829 | |
Total intangible assets | 28,336 | 28,510 | |
Accumulated amortization | -5,535 | -5,339 | |
Total intangible assets, net | 22,801 | 23,171 | |
Software Development Company In Argentina [Member] | Licenses and Others [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 5,862 | 5,111 | |
Software Development Company In Argentina [Member] | Non-Compete / Solicitation Agreement [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 1,662 | 1,829 | |
Software Development Company In Argentina [Member] | Customer Lists [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 10,826 | 11,294 | |
Trademarks [Member] | Software Development Company In Argentina [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks | $9,986 | $10,276 |
Business_Combinations_Goodwill5
Business Combinations, Goodwill and Intangible Assets (Table Showing Changes in Carrying Amount of Goodwill) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Balance, beginning of the period | $68,829 | $55,101 |
Business Acquisition | 23,923 | |
Effect of exchange rates changes | -3,252 | -10,195 |
Balance, end of the period | 65,577 | 68,829 |
Brazil [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 10,557 | 10,366 |
Business Acquisition | 1,538 | |
Effect of exchange rates changes | -1,381 | -1,347 |
Balance, end of the period | 9,176 | 10,557 |
Argentina [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 11,859 | 14,676 |
Business Acquisition | 775 | |
Effect of exchange rates changes | -376 | -3,592 |
Balance, end of the period | 11,483 | 11,859 |
Chile [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 19,101 | 6,520 |
Business Acquisition | 14,710 | |
Effect of exchange rates changes | -579 | -2,129 |
Balance, end of the period | 18,522 | 19,101 |
Mexico [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 15,719 | 11,376 |
Business Acquisition | 6,293 | |
Effect of exchange rates changes | -552 | -1,950 |
Balance, end of the period | 15,167 | 15,719 |
Venezuela [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 5,729 | 5,252 |
Business Acquisition | 477 | |
Effect of exchange rates changes | ||
Balance, end of the period | 5,729 | 5,729 |
Colombia [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 4,521 | 5,506 |
Business Acquisition | 82 | |
Effect of exchange rates changes | -314 | -1,067 |
Balance, end of the period | 4,207 | 4,521 |
Other Countries [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 1,343 | 1,405 |
Business Acquisition | 48 | |
Effect of exchange rates changes | -50 | -110 |
Balance, end of the period | $1,293 | $1,343 |
Business_Combinations_Goodwill6
Business Combinations, Goodwill and Intangible Assets (Expected Intangible Asset Amortization Expense) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
For year ended 12/31/2015 | $1,795 |
For year ended 12/31/2016 | 2,359 |
For year ended 12/31/2017 | 2,091 |
For year ended 12/31/2018 | 1,336 |
Thereafter | 5,234 |
Total estimated aggregate amortization expense | $12,815 |
Segment_Reporting_Financial_Pe
Segment Reporting (Financial Performance of Company's Reporting Segments) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $148,103,000 | $115,382,000 |
Direct costs | -79,811,000 | -61,560,000 |
Impairment of Long-Lived Assets | -16,226,000 | |
Direct contribution | 52,066,000 | 53,822,000 |
Operating expenses and indirect costs of net revenues | -26,478,000 | -19,821,000 |
Income from operations | 25,588,000 | 34,001,000 |
Other income (expenses): | ||
Interest income and other financial gains | 4,308,000 | 3,036,000 |
Interest expense and other financial losses | -4,950,000 | -1,027,000 |
Foreign currency gains (losses) | -8,570,000 | 3,093,000 |
Net income before income / asset tax expense | 16,376,000 | 39,103,000 |
Brazil [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 68,498,000 | 52,434,000 |
Direct costs | -39,681,000 | -30,517,000 |
Direct contribution | 28,817,000 | 21,917,000 |
Argentina [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 47,431,000 | 27,962,000 |
Direct costs | -24,785,000 | -16,916,000 |
Direct contribution | 22,646,000 | 11,046,000 |
Mexico [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 9,437,000 | 8,083,000 |
Direct costs | -5,969,000 | -4,578,000 |
Direct contribution | 3,468,000 | 3,505,000 |
Venezuela [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 13,955,000 | 19,357,000 |
Direct costs | -4,204,000 | -5,635,000 |
Impairment of Long-Lived Assets | -16,226,000 | |
Direct contribution | -6,475,000 | 13,722,000 |
Other Countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 8,782,000 | 7,546,000 |
Direct costs | -5,172,000 | -3,914,000 |
Direct contribution | $3,610,000 | $3,632,000 |
Segment_Reporting_Allocation_o
Segment Reporting (Allocation of Long-Lived Tangible Assets Based on Geography) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | $64,511 | $78,319 | ||
Total long-lived tangible assets | 75,945 | 91,545 | ||
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | 11,434 | 13,226 | ||
Argentina [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | 29,382 | 28,005 | ||
Brazil [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | 8,211 | 8,237 | ||
Mexico [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | 2,745 | 2,801 | ||
Venezuela [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | 20,618 | [1] | 36,237 | [1] |
Other Countries [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries long-lived tangible assets | $3,555 | $3,039 | ||
[1] | After the impairment of Venezuelan long-lived assets. See Note 2 bForeign currency translation - Venezuelan currency statusb. |
Segment_Reporting_Allocation_o1
Segment Reporting (Allocation of Goodwill and Intangible Assets Based on Geography) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | $88,225 | $91,828 | ||
Total goodwill and intangible assets | 88,378 | 92,000 | ||
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
US intangible assets | 153 | 172 | ||
Argentina [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | 12,975 | 12,580 | ||
Brazil [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | 9,645 | 11,212 | ||
Mexico [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | 20,929 | 21,734 | ||
Venezuela [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | 7,480 | 7,515 | ||
Other Countries [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Other countries goodwill and intangible assets | $37,196 | [1] | $38,787 | [1] |
[1] | Includes the acquisition of online classified advertisement company in Chile. See Note 6. |
Segment_Reporting_Consolidated
Segment Reporting (Consolidated Net Revenues by Similar Products and Services) (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | $148,103,000 | $115,382,000 | ||
Marketplace [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | 94,762,000 | 83,442,000 | ||
Non-marketplace [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net revenues | $53,341,000 | [1] | $31,940,000 | [1] |
[1] | Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services. |
Fair_Value_Measurement_of_Asse2
Fair Value Measurement of Assets and Liabilities (Additional Information) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value Measurement of Assets and Liabilities [Abstract] | ||
Short-term investments | $55,756 | $58,475 |
Fair_Value_Measurement_of_Asse3
Fair Value Measurement of Assets and Liabilities (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Total Financial Assets | $331,459 | $346,099 |
Contingent consideration | 4,875 | 4,833 |
Total Financial Liabilities | 4,875 | 4,833 |
Certificates of Deposit [Member] | ||
Assets | ||
Investments | 11,316 | 7,807 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Total Financial Assets | 203,111 | 146,672 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Total Financial Assets | 128,348 | 199,427 |
Contingent consideration | 4,875 | 4,833 |
Total Financial Liabilities | 4,875 | 4,833 |
Significant Other Observable Inputs (Level 2) [Member] | Certificates of Deposit [Member] | ||
Assets | ||
Investments | 11,316 | 7,807 |
Money Market Funds [Member] | ||
Assets | ||
Cash and Cash Equivalents | 35,520 | 37,495 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 35,520 | 37,495 |
Sovereign Debt Securities [Member] | ||
Assets | ||
Investments | 44,101 | 49,150 |
Sovereign Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Investments | 40,606 | 49,150 |
Sovereign Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Investments | 3,495 | |
Corporate Debt Securities [Member] | ||
Assets | ||
Cash and Cash Equivalents | 13,491 | 13,004 |
Investments | 227,031 | 238,643 |
Corporate Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 108 | |
Investments | 126,985 | 59,919 |
Corporate Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 13,491 | 12,896 |
Investments | $100,046 | $178,724 |
Fair_Value_Measurement_of_Asse4
Fair Value Measurement of Assets and Liabilities (Fair Value of Financial Assets and Liabilities Measured at Amortized Cost) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Assets | $285,205 | $231,485 |
Liabilities | ||
Liabilities | 595,693 | 564,568 |
Accounts and Funds Payable [Member] | ||
Liabilities | ||
Liabilities | 58,160 | 58,006 |
Funds Payable to Customers [Member] | ||
Liabilities | ||
Liabilities | 193,188 | 165,034 |
Salaries and Social Security Payable [Member] | ||
Liabilities | ||
Liabilities | 23,755 | 18,835 |
Tax Payable [Member] | ||
Liabilities | ||
Liabilities | 23,733 | 26,013 |
Dividends Payable [Member] | ||
Liabilities | ||
Liabilities | 4,548 | 7,330 |
Loans Payable and Other Financial Liabilities [Member] | ||
Liabilities | ||
Liabilities | 287,745 | 283,826 |
Other Liabilities [Member] | ||
Liabilities | ||
Liabilities | 4,564 | 5,524 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 285,205 | 231,485 |
Liabilities | ||
Liabilities | 595,693 | 564,568 |
Significant Other Observable Inputs (Level 2) [Member] | Accounts and Funds Payable [Member] | ||
Liabilities | ||
Liabilities | 58,160 | 58,006 |
Significant Other Observable Inputs (Level 2) [Member] | Funds Payable to Customers [Member] | ||
Liabilities | ||
Liabilities | 193,188 | 165,034 |
Significant Other Observable Inputs (Level 2) [Member] | Salaries and Social Security Payable [Member] | ||
Liabilities | ||
Liabilities | 23,755 | 18,835 |
Significant Other Observable Inputs (Level 2) [Member] | Tax Payable [Member] | ||
Liabilities | ||
Liabilities | 23,733 | 26,013 |
Significant Other Observable Inputs (Level 2) [Member] | Dividends Payable [Member] | ||
Liabilities | ||
Liabilities | 4,548 | 7,330 |
Significant Other Observable Inputs (Level 2) [Member] | Loans Payable and Other Financial Liabilities [Member] | ||
Liabilities | ||
Liabilities | 287,745 | 283,826 |
Significant Other Observable Inputs (Level 2) [Member] | Other Liabilities [Member] | ||
Liabilities | ||
Liabilities | 4,564 | 5,524 |
Short-Term Investments [Member] | ||
Assets | ||
Assets | 55,756 | 58,475 |
Short-Term Investments [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 55,756 | 58,475 |
Accounts Receivable [Member] | ||
Assets | ||
Assets | 54,054 | 46,672 |
Accounts Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 54,054 | 46,672 |
Credit Cards Receivable [Member] | ||
Assets | ||
Assets | 133,644 | 85,162 |
Credit Cards Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 133,644 | 85,162 |
Prepaid Expenses [Member] | ||
Assets | ||
Assets | 6,433 | 3,458 |
Prepaid Expenses [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 6,433 | 3,458 |
Other Assets [Member] | Accounts and Funds Payable [Member] | ||
Assets | ||
Assets | 35,318 | 37,718 |
Other Assets [Member] | Significant Other Observable Inputs (Level 2) [Member] | Accounts and Funds Payable [Member] | ||
Assets | ||
Assets | $35,318 | $37,718 |
Fair_Value_Measurement_of_Asse5
Fair Value Measurement of Assets and Liabilities (Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | $331,063 | $346,677 | ||
Gross Unrealized Gains | 541 | 25 | ||
Gross Unrealized Losses | -145 | [1] | -603 | [1] |
Estimated Fair Value | 331,459 | 346,099 | ||
Cash and Cash Equivalents [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 49,038 | 50,540 | ||
Gross Unrealized Gains | 5 | 2 | ||
Gross Unrealized Losses | -32 | [1] | -43 | [1] |
Estimated Fair Value | 49,011 | 50,499 | ||
Short-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 92,346 | 90,414 | ||
Gross Unrealized Gains | 12 | 1 | ||
Gross Unrealized Losses | -62 | [1] | -80 | [1] |
Estimated Fair Value | 92,296 | 90,335 | ||
Long-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 189,679 | 205,723 | ||
Gross Unrealized Gains | 524 | 22 | ||
Gross Unrealized Losses | -51 | [1] | -480 | [1] |
Estimated Fair Value | 190,152 | 205,265 | ||
Money Market Funds [Member] | Cash and Cash Equivalents [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 35,543 | 37,531 | ||
Gross Unrealized Gains | 5 | 2 | ||
Gross Unrealized Losses | -28 | [1] | -38 | [1] |
Estimated Fair Value | 35,520 | 37,495 | ||
Sovereign Debt Securities [Member] | Short-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 651 | 4,726 | ||
Gross Unrealized Losses | -1 | [1] | -4 | [1] |
Estimated Fair Value | 650 | 4,722 | ||
Sovereign Debt Securities [Member] | Long-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 43,339 | 44,511 | ||
Gross Unrealized Gains | 115 | |||
Gross Unrealized Losses | -3 | [1] | -83 | [1] |
Estimated Fair Value | 43,451 | 44,428 | ||
Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 13,495 | 13,009 | ||
Gross Unrealized Losses | -4 | [1] | -5 | [1] |
Estimated Fair Value | 13,491 | 13,004 | ||
Corporate Debt Securities [Member] | Short-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 83,884 | 81,886 | ||
Gross Unrealized Gains | 9 | |||
Gross Unrealized Losses | -59 | [1] | -75 | [1] |
Estimated Fair Value | 83,834 | 81,811 | ||
Corporate Debt Securities [Member] | Long-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 142,837 | 157,205 | ||
Gross Unrealized Gains | 408 | 22 | ||
Gross Unrealized Losses | -48 | [1] | -395 | [1] |
Estimated Fair Value | 143,197 | 156,832 | ||
Certificates of Deposit [Member] | Short-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 7,811 | 3,802 | ||
Gross Unrealized Gains | 3 | 1 | ||
Gross Unrealized Losses | -2 | [1] | -1 | [1] |
Estimated Fair Value | 7,812 | 3,802 | ||
Certificates of Deposit [Member] | Long-Term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 3,503 | 4,007 | ||
Gross Unrealized Gains | 1 | |||
Gross Unrealized Losses | -2 | [1] | ||
Estimated Fair Value | $3,504 | $4,005 | ||
[1] | Unrealized losses from securities are primarily attributable to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of MarchB 31, 2015 and DecemberB 31, 2014. |
Fair_Value_Measurement_of_Asse6
Fair Value Measurement of Assets and Liabilities (Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value Measurement of Assets and Liabilities [Abstract] | ||
One year or less | $141,307 | |
One year to two years | 120,358 | |
Two years to three years | 42,660 | |
Three years to four years | 15,147 | |
Four years to five years | 11,987 | |
Total | $331,459 | $346,099 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Sep. 23, 2010 | Aug. 25, 2010 | Jun. 29, 2009 | Aug. 15, 2011 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2007 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
USD ($) | Argentinean Subsidiaries [Member] | Mexican Subsidiaries [Member] | State of Sao Paulo Fraud Claim [Member] | State of Sao Paulo Fraud Claim [Member] | State of Sao Paulo Fraud Claim [Member] | City of Sao Paulo Tax Claim [Member] | City of Sao Paulo Tax Claim [Member] | City of Sao Paulo Tax Claim [Member] | City of Sao Paulo Tax Claim [Member] | Brazilian Ordinary Courts [Member] | Brazilian Consumer Courts [Member] | Brazilian Federal Tax Claims [Member] | Brazilian Federal Tax Claims [Member] | |
item | item | USD ($) | USD ($) | USD ($) | BRL | USD ($) | BRL | USD ($) | item | item | USD ($) | BRL | ||
Loss Contingencies [Line Items] | ||||||||||||||
Reserves for proceeding-related contingencies | $2,708,000 | |||||||||||||
Aggregate amount for legal actions for which no loss amount has been accrued | 4,451,000 | |||||||||||||
Number of lawsuits pending | 41 | 2 | ||||||||||||
Number of legal actions pending | 767 | 57 | 641 | 2,672 | ||||||||||
Daily non-compliance penalty | 6,000 | 2,500 | ||||||||||||
Penalty and damages | 6,000 | |||||||||||||
Approximate additional amount related to asserted taxes and fines | 12,800,000 | 41,000,000 | 5,900,000 | 1,600,000 | 5,200,000 | |||||||||
Total amount of claim including surcharges and interest | 5,800,000 | |||||||||||||
Deposit with court | 9,500,000 | |||||||||||||
Accrued interests | $3,200,000 | 10,400,000 |
Long_Term_Retention_Plan_Long_
Long Term Retention Plan (Long Term Retention Plans Accrued Compensation Expense) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Long Term Retention Plan 2009 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | ($12) | ($351) |
Long Term Retention Plan 2010 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | 120 | -183 |
Long Term Retention Plan 2011 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | 142 | -101 |
Long Term Retention Plan 2012 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | 185 | -1 |
Long Term Retention Plan 2013 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | 842 | 604 |
Long Term Retention Plan 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long term retention plan | $1,059 | $798 |
225_Convertible_Senior_Notes_D2
2.25% Convertible Senior Notes Due 2019 (Additional Information) (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | |
item | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, convertible maturity start date | 1-Jan-19 | |||
Debt instrument, convertible trading days | 20 | |||
Debt instrument, convertible consecutive trading days | 30 days | |||
Payment for capped call transactions | $19,668,000 | |||
Net of deferred income tax effect amounts | 6,118,000 | -4,675,000 | ||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of debt conversion price | 130.00% | |||
Capped Call Transactions [Member] | ||||
Debt Instrument [Line Items] | ||||
Strike price, per share | $126.02 | |||
Approximate cap price, per share | $155.78 | |||
2.25% Convertible Senior Notes Due 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, aggregate principal amount | 330,000,000 | 330,000,000 | 330,000,000 | |
Debt instrument, interest rate | 2.25% | |||
Debt instrument, maturity end date | 1-Jul-19 | |||
Initial conversion rate | 7.94% | |||
Debt conversion price per share of common stock | $126.02 | |||
Proceeds from issuance of convertible debt, net of transaction cost | 322,000,000 | |||
Debt Conversion, Converted Instrument, Amount | 1,000 | |||
Net carrying amount | 283,015,000 | |||
Carrying value of the permanent equity component reported in additional paid-in-capital | 46,985,000 | |||
Effective interest rate after allocation of transaction costs | 6.10% | |||
Cash flows, discount rate | 5.55% | |||
Deferred tax liabilities, convertible notes | 16,445,000 | |||
2.25% Convertible Senior Notes Due 2019 [Member] | Capped Call Transactions [Member] | ||||
Debt Instrument [Line Items] | ||||
Net proceeds from issuance of convertible debt | 321,732,000 | |||
Transaction costs | 8,268,000 | |||
Payment for capped call transactions | 19,668,000 | |||
Net of deferred income tax effect amounts | $12,784,000 | |||
Measurement Period [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of debt conversion price | 98.00% |
225_Convertible_Senior_Notes_D3
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components) (Details) (2.25% Convertible Senior Notes Due 2019 [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | ||
2.25% Convertible Senior Notes Due 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount of the equity component | $45,808,000 | [1] | $45,808,000 | [1] | |
2.25% convertible senior notes due 2019 | 330,000,000 | 330,000,000 | 330,000,000 | ||
Unamortized debt discount | -40,716,000 | [2] | -42,844,000 | [2] | |
Unamortized transaction costs related to the debt component | -6,227,000 | -6,526,000 | |||
Contractual coupon interest accrual | 1,856,000 | 3,733,000 | |||
Contractual Coupon Interest Payment | -3,733,000 | ||||
Net carrying amount | $284,913,000 | $280,630,000 | |||
[1] | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. | ||||
[2] | As of MarchB 31, 2015, the remaining period over which the unamortized debt discount will be amortized is 4.25 years. |
225_Convertible_Senior_Notes_D4
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components - Additional Information) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Jun. 30, 2014 |
Debt Instrument [Line Items] | ||
Transaction costs related to the equity component | $1,177 | |
Remaining period over which the unamortized debt discount will be amortized | 4 years 3 months | |
2.25% Convertible Senior Notes Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.25% |
225_Convertible_Senior_Notes_D5
2.25% Convertible Senior Notes Due 2019 (Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount) (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
2.25% Convertible Senior Notes Due 2019 [Abstract] | |
Contractual coupon interest expense | $1,856 |
Amortization of debt discount | 2,128 |
Amortization of debt issuance costs | 299 |
Total interest expense related to Notes | $4,283 |
Cash_Dividend_Distribution_Add
Cash Dividend Distribution (Additional Information) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Feb. 24, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Dividends Payable [Line Items] | ||||||||
Cash dividend distribution | $4,548 | $7,330 | $7,330 | $7,330 | $7,330 | $29,318 | ||
Cash dividend distribution, per share | $0.10 | $0.17 | $0.17 | $0.17 | $0.17 | $0.66 | ||
Cash dividend declared, per share | $0.10 | $0.17 | ||||||
First Quarter Previous Year [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Apr-15 | |||||||
Dividends payment, date of record | 29-Mar-15 | |||||||
Second Quarter Previous Year [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Jul-15 | |||||||
Dividends payment, date of record | 30-Jun-15 | |||||||
Third Quarter Previous Year [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Oct-14 | |||||||
Dividends payment, date of record | 30-Sep-15 | |||||||
Fourth Quarter Previous Year [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Jan-15 | |||||||
Dividends payment, date of record | 31-Dec-14 | |||||||
Fourth Quarter [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Jan-15 | |||||||
Dividends payment, date of record | 31-Dec-14 | |||||||
First Quarter [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividend payable date | 15-Apr-15 | |||||||
Dividends payment, date of record | 31-Mar-15 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | |
Apr. 22, 2015 | Apr. 01, 2015 | |
MercadoLibre, S. de R.L. de C.V. and Deremate.com de MC)xico, S. de R.L. de C.V. [Member] | Metros CC:bicos, S.A. de C.V. [Member] | ||
Subsequent Event [Line Items] | ||
Escrow period | 24 months | |
Subsequent Events [Member] | Ebazar.com.br Ltda. And MercadoLivre.com [Member] | KPL SoluC'C5es Ltda [Member] | ||
Subsequent Event [Line Items] | ||
Acquired percentage of shares | 100.00% | |
Business acquisition, cash paid | $15,800,000 | |
Business acquisition, possible additional cash payment | 9,500,000 | |
Subsequent Events [Member] | MercadoLibre, S. de R.L. de C.V. and Deremate.com de MC)xico, S. de R.L. de C.V. [Member] | Metros CC:bicos, S.A. de C.V. [Member] | ||
Subsequent Event [Line Items] | ||
Acquired percentage of shares | 100.00% | |
Business acquisition, cash paid | 27,000,000 | |
Escrow Deposit | 3,000,000 |