Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 26, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | MERCADOLIBRE INC | |
Entity Central Index Key | 1,099,590 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,156,854 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 173,024 | $ 223,144 |
Short-term investments | 168,015 | 148,810 |
Accounts receivable, net | 54,551 | 46,672 |
Credit cards receivables, net | 187,566 | 85,162 |
Prepaid expenses | 7,614 | 3,458 |
Inventory | 135 | |
Deferred tax assets | 10,443 | 11,520 |
Other assets | 23,866 | 13,984 |
Total current assets | 625,214 | 532,750 |
Non-current assets: | ||
Long-term investments | 185,733 | 205,265 |
Property and equipment, net | 82,510 | 91,545 |
Goodwill | 91,857 | 68,829 |
Intangible assets, net | 30,509 | 23,171 |
Deferred tax assets | 16,004 | 21,554 |
Other assets | 37,001 | 23,734 |
Total non-current assets | 443,614 | 434,098 |
Total assets | 1,068,828 | 966,848 |
Current liabilities: | ||
Accounts payable and accrued expenses | 75,820 | 58,006 |
Funds payable to customers | 219,751 | 165,034 |
Salaries and social security payable | 32,778 | 28,777 |
Taxes payable | 21,593 | 26,013 |
Loans payable and other financial liabilities | 4,294 | 1,642 |
Deferred tax liabilities | 1,731 | 1,645 |
Other liabilities | 6,796 | 4,176 |
Dividends payable | 4,548 | 7,330 |
Total current liabilities | 367,311 | 292,623 |
Non-current liabilities: | ||
Salaries and social security payable | 9,867 | 11,326 |
Loans payable and other financial liabilities | 292,726 | 282,184 |
Deferred tax liabilities | 23,834 | 18,746 |
Other liabilities | 11,638 | 6,181 |
Total non-current liabilities | 338,065 | 318,437 |
Total liabilities | $ 705,376 | $ 611,060 |
Commitments and contingencies (Note 7) | ||
Equity: | ||
Common stock, $0.001 par value, 110,000,000 shares authorized, 44,156,024 and 44,154,572 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 44 | $ 44 |
Additional paid-in capital | 137,842 | 137,645 |
Retained earnings | 406,353 | 353,173 |
Accumulated other comprehensive loss | (180,787) | (135,074) |
Total Equity | 363,452 | 355,788 |
Total Liabilities and Equity | $ 1,068,828 | $ 966,848 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 110,000,000 | 110,000,000 |
Common stock, shares issued | 44,156,024 | 44,154,572 |
Common stock, shares outstanding | 44,156,024 | 44,154,572 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenues | $ 168,641 | $ 147,935 | $ 471,058 | $ 395,166 |
Cost of net revenues | (56,813) | (43,402) | (151,832) | (111,313) |
Gross profit | 111,828 | 104,533 | 319,226 | 283,853 |
Operating expenses: | ||||
Product and technology development | (17,042) | (13,574) | (53,927) | (37,572) |
Sales and marketing | (31,125) | (29,406) | (86,442) | (78,227) |
General and administrative | (18,381) | (14,406) | (57,127) | (43,324) |
Impairment of Long-Lived Assets | (16,226) | (49,496) | ||
Total operating expenses | (66,548) | (57,386) | (213,722) | (208,619) |
Income from operations | 45,280 | 47,147 | 105,504 | 75,234 |
Other income (expenses): | ||||
Interest income and other financial gains | 5,777 | 4,360 | 14,768 | 10,969 |
Interest expense and other financial losses | (6,011) | (4,913) | (16,162) | (6,718) |
Foreign currency (losses) gains | 2,570 | 5,220 | (6,647) | (7,651) |
Net income before income / asset tax expense | 47,616 | 51,814 | 97,463 | 71,834 |
Income / asset tax expense | (1,976) | (18,062) | (30,639) | (33,343) |
Net income | 45,640 | 33,752 | 66,824 | 38,491 |
Less: Net Income (loss) attributable to Redeemable Noncontrolling Interest | (14) | 56 | ||
Net income attributable to MercadoLibre, Inc. shareholders | $ 45,640 | $ 33,766 | $ 66,824 | $ 38,435 |
Basic EPS | ||||
Basic net income attributable to MercadoLibre, Inc. Shareholders per common share | $ 1.03 | $ 0.76 | $ 1.51 | $ 0.87 |
Weighted average of outstanding common shares | 44,155,830 | 44,153,892 | 44,155,303 | 44,153,867 |
Diluted EPS | ||||
Diluted net income attributable to MercadoLibre, Inc. Shareholders per common share | $ 1.03 | $ 0.76 | $ 1.51 | $ 0.87 |
Weighted average of outstanding common shares | 44,155,830 | 44,153,892 | 44,155,303 | 44,153,867 |
Cash Dividends declared | $ 0.103 | $ 0.166 | $ 0.309 | $ 0.498 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 45,640 | $ 33,752 | $ 66,824 | $ 38,491 |
Other comprehensive (loss) income, net of income tax: | ||||
Currency translation adjustment | (22,127) | (19,731) | (46,054) | (35,832) |
Unrealized net (losses) gains on available for sale investments | (11) | (260) | (38) | (138) |
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 | (22,138) | (19,991) | (45,713) | (35,995) |
Total comprehensive income | 23,502 | 13,761 | 21,111 | 2,496 |
Less: Comprehensive income attributable to Redeemable Noncontrolling Interest | (138) | (37) | ||
Comprehensive income attributable to MercadoLibre, Inc. Shareholders | $ 23,502 | $ 13,899 | $ 21,111 | $ 2,533 |
Interim Condensed Consolidated6
Interim Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operations: | ||
Net income attributable to MercadoLibre, Inc. Shareholders | $ 66,824 | $ 38,435 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net income attributable to Redeemable Noncontrolling Interest | 56 | |
Devaluation Loss, net | 6,080 | 13,808 |
Impairment of Long-Lived Assets | 16,226 | 49,496 |
Depreciation and amortization | 16,956 | 12,346 |
Accrued interest | (9,311) | (6,928) |
Convertible bonds accrued interest and amortization of debt discount | 12,917 | 3,927 |
Long Term Retention Program accrued compensation | 8,032 | 6,311 |
Deferred income taxes | 6,206 | (16,515) |
Changes in assets and liabilities: | ||
Accounts receivable | (50,105) | (39,477) |
Credit Card Receivables | (122,328) | (46,297) |
Prepaid expenses | (4,922) | (2,574) |
Inventory | (169) | |
Other assets | (13,089) | (6,079) |
Accounts payable and accrued expenses | 66,898 | 74,589 |
Funds payable to customers | 100,938 | 48,414 |
Other liabilities | 2,226 | 1,957 |
Interest received from investments | 7,900 | 6,970 |
Net cash provided by operating activities | 111,279 | 138,439 |
Cash flows from investing activities: | ||
Purchase of investments | (1,435,655) | (1,713,488) |
Proceeds from sale and maturity of investments | 1,424,150 | 1,498,970 |
Payment for acquired businesses, net of cash acquired | (45,009) | (32,127) |
Purchases of intangible assets | (1,502) | (543) |
Advance for property and equipment | (17,779) | |
Purchases of property and equipment | (19,063) | (24,446) |
Net cash used in investing activities | (94,858) | (271,634) |
Cash flows from financing activities: | ||
Funds received from the issuance of convertible notes | 330,000 | |
Transaction costs from the issuance of convertible notes | (8,084) | |
Purchase of convertible notes capped call | (19,668) | |
Proceed from payable and other financial liabilities | 5,015 | |
Payments on loans payable and other financial liabilities | (4,622) | (3,309) |
Dividends paid | (16,426) | (20,937) |
Repurchase of Common Stock | (2,714) | (1,944) |
Net cash (used in) provided by financing activities | (18,747) | 276,058 |
Effect of exchange rate changes on cash and cash equivalents | (47,794) | (45,644) |
Net (decrease) increase in cash and cash equivalents | (50,120) | 97,219 |
Cash and cash equivalents, beginning of the period | 223,144 | 140,285 |
Cash and cash equivalents, end of the period | $ 173,024 | $ 237,504 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2015 | |
Nature of Business [Abstract] | |
Nature of Business | 1. Nature of Business MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America in October 1999. MercadoLibre is the leading ecommerce company in Latin America, serving as an integrated regional platform and as an enabler of the necessary online and technology tools to allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America. Through MercadoPago, MercadoLibre enables individuals and businesses to send and receive online payments; through MercadoEnvios, MercadoLibre facilitates the shipping of goods from sellers to buyers; through MercadoClics and other ad-sales products, MercadoLibre facilitates advertising services to large retailers and brands to promote their product and services on the web; and through MercadoShops, MercadoLibre facilitates users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model. In addition, MercadoLibre develops and sells software enterprise solutions to e-commerce business clients in Brazil. As of September 30, 2015, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, Uruguay and Venezuela, including the recently launched online ecommerce platforms in Bolivia and Guatemala. Additionally, MercadoLibre operates an online payments solution directed towards Argentina, Brazil, Mexico, Venezuela, Chile and Colombia. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, and added Colombia to its list of countries where the service is offered from June 2015. In addition, the Company operates a real estate classified platform that covers some areas of State of Florida, in the United States of America. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 with subsidiaries 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 99.7% of the consolidated amounts during the nine -month periods ended September 30 , 201 5 and 201 4 . Long-lived assets , Intangible assets and Goodwill located in the foreign operations totaled $194,509 thousands and $170,147 thousands as of September 30 , 201 5 and December 31, 201 4 , respectively. These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of September 30 , 201 5 and December 31, 201 4 . These financial statements also show the Company’s consolidated statements of income and comprehensive income for the nine and three-month periods ended September 30 , 201 5 and 201 4; and statement of cash flows for the nine-month periods ended September 30, 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, 201 4 , 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. For more detailed discussion about the Company’s significant accounting policies, see note 2 to the Form 10-K. During the nine-month period ended September 30, 2015, there were no material updates made to the Company’s significant accounting policies. 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 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 and concluded that the carrying value of certain real estate properties would not be fully recoverable. As a result, the Company 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 was granted U.S. dollars through SIMADI. As a result, the Company from that moment expected to settle its transactions through SIMADI and 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, with no significant foreign exchange losses recorded during the second and third quarter of 2015. As of September 30, 2015, the SIMADI exchange rate was 199.42 BsF per U.S. dollar. Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows then 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 would 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 March 31, 2015 , 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 no t 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 of a net liability of $25,745 and $30,798 thousands, as of September 30, 2015 and December 31, 2014 and net revenues for the nine-month periods ended September 30, 2015 and 2014: Nine-month periods ended September 30, 2015 2014 Venezuelan operations (In thousands) Net Revenues $ 28,529 $ 45,184 September 30, December 31, 2015 2014 Assets Liabilities Net Assets $ 21,735 $ 31,794 As of September 30 , 201 5 , net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to approximately 6.0% o f consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to approximately 0.9% 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 increase in the Argentinean peso exchange rate against the U.S. dollar , during the first quarter of 2014, the reported Other Comprehensive Loss increased in $14,625 thousands as a result having a net asset position in Argentinean Pesos; and the Company recognized a foreign exchange gain of $4,597 thousands . As of September 30 , 201 5 , the Argentinean Peso exchange rate was $ 9.43 per U.S. dollar. Brazilian currency status D uring 2015, the Brazilian Reais exchange rate against the U.S. dollar increased in approximately 49% , from 2.66 Brazilian Reais per U.S . dollar as of December 31, 2014 to approximately 3.97 Brazilian Reais per U.S. dollar as of September 30, 2015 . Due to the abovementioned devaluation, during the nine and three-month periods ended September 30, 2015 , the reported Other Comprehensive Loss of the Brazilian segment increased in $9,733 thousands and $12,306 thousands, respectively, as a result of having a net asset position in Brazilian Reais; and the Company recognized a foreign exchange gain of $14,468 thousands and $5,704 thousands, respectively, during the same periods . 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 in connection with promoted activities , thus resulting in an effective tax rate in Argentina lower than the income tax law statutory rate. The law expired on September 17, 2014. Aggregate tax benefit totaled $2,045 thousands for the three-month period ended September 30, 2014, while for the nine-month period ended at such date amounted to $5,644 thousands. Aggregate per share effect of the Argentine tax holiday amounted to $0.05 for the three-month period ended September 30, 2014, while for the nine-month period ended at such date amounted to $0.13 . 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 s 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. 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. On September 17, 2015, the Argentine Industry Secretary issued Resolution 1041/2015 approving the Company’s application for eligibility under the new software development law. As a result, the Company’s Argentinean subsidiary has been granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained as beneficiaries of the new law is a relief of 60% of total income tax related to software development activities and a 70% relief in payroll taxes related to software development activities. The new software development law, which provides that beneficiaries must meet certain on-going eligibility requirements, will expire on December 31, 2019. As a result of the Company’s eligibility under the new law, it recorded a one-time income tax gain of approximately $16 million in the third quarter of 2015, corresponding $5.6 million to the income tax benefit of the third quarter of 2015 and $3.2 million of the fourth quarter of 2014. Furthermore, the Company recorded a one-time labor cost gain of approximately $4.2 million, corresponding $1.0 million to the labor cost benefit of the third quarter of 2015 and $1.3 million of the fourth quarter of 2014 . Additionally, $1.4 million were reserved to pay software development law audit fees. Aggregate per share effect of the Argentine tax holiday amounted to $0.43 and $0.15 for the nine and three-month periods ended September 30, 2015, respectively. Accumulated other comprehensive income The following table sets forth the Company’s accumulated other comprehensive income as of September 30 , 201 5 and the year ended December 31, 2014 : September 30, December 31, 2015 2014 (In thousands) Foreign currency translation $ (180,749) $ (134,695) Unrealized loss on investments Estimated tax gain on unrealized losses on investments $ (180,787) $ (135,074) The following tables summarize the changes in accumulated balances of other comprehensive income for the nine -month period ended September 30 , 201 5 : 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 Amount of gain (loss) reclassified from accumulated other comprehensive income to net income — Net current period other comprehensive gain (loss) Balances as of September 30, 2015 $ (64) $ (180,749) $ 26 $ (180,787) Amount of Gain (Loss) Details about Accumulated Reclassified from Other Comprehensive Income Accumulated Other Components for the nine-month Comprehensive Affected Line Item period ended September 30, 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 Income / asset tax expense Total reclassifications for the period $ (379) Total, net of income taxes Inventory I nventory , consisting of points of sale (“POS”) available for sale, are accounted for using the first-in first-out (“FIFO”) method, and are valued at the lower of cost or market value. 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 con solidated financial statements, the Company has subsequently accessed to more unfavorable exchange markets in Venezuela as from December 2013 . 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 and $ 49.5 million on March 31, 2015 and in the second quarter of 2014, respectively , 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. 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. 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. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of our common stock, at our election. As of September 30, 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 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. 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 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. 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 . 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. 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 ca p price of approximately $155.78 per common share. The C apped Call Transactions allows the Company to receive shares of the 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. 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 A ccounting S tandard U pdate (“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 adoption of this standard is not expected to have a material impact on the Company’s financial statements. On July 22, 2015 the FASB issued the ASU 2015-11. The amendments in this update apply to inventory measured using first-in, first-out (“FIFO”), or average cost. An Entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably practicable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update are effective for fiscal years beginning after December 15, 2016, including 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 May 28, 2014, the FASB issued A SU No. 2014-09, Revenue from |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 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 (refer to Note 9 to these interim condensed consolidated financial statements) and the effect of assumed share settlement of Long-term retention plans (refer to Note 2 – Section “Convertible Senior Notes” to these interim condensed consolidated financial statements) for earnings per share calculations. The following table shows how net income is al located using the “if converted” and the “treasury stock” method for convertible debt securities and Long-term retention plans, respectively, for earnings per common share for the nine and three -month periods ended September 30 , 201 5 and 201 4 : Nine Months Ended September 30, 2015 2014 (In thousands) Basic Diluted Basic Diluted Net income $ 66,824 $ 66,824 $ 38,491 $ 38,491 Net income attributable to noncontrolling interests — — Change in redeemable amount of noncontrolling interest — — Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock $ 66,824 $ 66,824 $ 38,327 $ 38,327 Three Months Ended September 30, 2015 2014 (In thousands) Basic Diluted Basic Diluted Net income $ 45,640 $ 45,640 $ 33,752 $ 33,752 Net income attributable to noncontrolling interests — — Change in redeemable amount of noncontrolling interest — — Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock $ 45,640 $ 45,640 $ 33,655 $ 33,655 Net income per share of common st ock is as follows for the nine and three -month periods ended September 30 , 201 5 and 201 4 : Nine months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) (In thousands, except per share data) Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income attributable to MercadoLibre, Inc. Shareholders per common share $ $ $ $ $ 1.03 $ 1.03 $ 0.76 $ 0.76 Numerator: Net income attributable to MercadoLibre, Inc. Shareholders $ $ $ $ $ 45,640 $ 45,640 $ 33,655 $ 33,655 Denominator: Weighted average of common stock outstanding for Basic earnings per share Adjusted weighted average of common stock outstanding for Diluted earnings per share For the nine and three-month periods ended September 30, 2015 and 2014 there was no impact on the calculation of diluted earnings per share as a consequence of the consideration of the Notes and the Long term retention plan referred to above. |
Business Combinations, Goodwill
Business Combinations, Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 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 company in Mexico On April 22, 2015, through its subsidiaries Deremate.com de Mexico, S. de R.L. de C.V. and MercadoLibre, 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., company that operates an online classified advertisement platform dedicated to the sale of real estate in Mexico, in order to increase its participation on e-commerce business in that country . The aggregate purchase price for the acquisition of the 100% of the acquired business was $29,917 thousands, measured at its fair value, amount that included: (i) the total cash payment of $26,917 thousands at closing day; and (ii) an escrow of $3,000 thousands held in an escrow account, according to the stock purchase agreement . In addition, the Company incurred in certain direct costs of the business combination which were expensed as incurred. The Company’s unaudited interim condensed consolidated statement of income includes the results of operations of the acquired business as from April 22, 2015. The net revenues and net income of the acquiree included in the Company’s unaudited interim condensed consolidated statement of income since the acquisition amounted to $1,865 thousands and $281 thousands, respectively. The following table summarizes the purchase price allocation calculated at the date of acquisition : Metros Cúbicos S.A. de C.V. In thousands of U.S. dollars Cash and cash equivalents $ Other net tangible assets / (liabilities) Trademarks Customer Lists Non-solicitation and Non-compete agreements Deferred tax assets and liabilities Goodwill Purchase Price $ The purchase price was allocated based on the 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 and non-solicitation and non-compete agreements for a total amount of $8,721 thousands. Management of the Company estimates that trademarks have an indefinite useful life and the intangible asset associated with the customer list will be amortized over a five -year period. The non-solicitation and non-compete agreement intangible asset will be amortized over a three -year period. The Company recognized goodwill for this acquisition based on management expectation that the acquired business will improve the Company’s business in Mexico. Arising goodwill ha s been allocated to the Mexican segment 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 segment. Goodwill is not deductible for tax purposes. Acquisition of a software development company in Brazil 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 the company KPL Soluções Ltda., a company that develops ERP software for the e-commerce industry in Brazil. The aggregate purchase price for the acquisition of the 100% of the acquired business was $22,685 thousands, measured at its fair value, amount that included: (i) the total cash payment of $12,529 thousands at closing day; (ii) an escrow of $3,316 thousands, and (i i i) the contingent additional cash considerations up to $6,840 thousands in case the company achieve s certain performance targets during the 24 months since the acquisition date, measured at fair value . Additionally, a payment of $1,584 thousands will be transferred to the sellers after the end of the second year after the acquisition date , aiming to continue the employment relationship as key employees. This additional payment will be expensed over the 24 month-period up to fulfillment of the conditions required by the selling and purchase agreement. The Company’s unaudited interim condensed consolidated statement of income includes the results of operations of the acquired business as from April 1, 2015. The net revenues and net loss of the acquiree included in the Company’s interim condensed consolidated statement of income since the acquisition amounted to $1,338 thousands and $343 thousands, respectively. In addition, the Company incurred in certain direct costs of the business combination which were expensed as incurred. As of September 30, 2015, the fair value of the contingent consideration recorded is $5,747 thousands. Contingent additional cash considerations are to be paid after the achievement of the performance targets. The following table summarizes the purchase price allocation for the acquisition : KPL Soluções Ltda. In thousands of U.S. dollars Cash and cash equivalents $ Other net tangible assets / (liabilities) Customer lists Software Non-solicitation and Non-compete agreements Goodwill Purchase Price $ The purchase price was allocated based on the provisional 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 customer lists, software, non-solicitation and non-compete agreements for a total amount of $8,433 thousands. Management of the Company estimates that customer lists, the software and the non-solicitation and non-compete agreements will be amortized over a five -year period. The Company recognized goodwill for this acquisition based on management expectation that the acquired business will improve the Company’s business. Arising goodwill has been allocated to the Brazilian segment 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 segment. Goodwill is deductible for tax purposes. Supplemental pro forma financial information required by U.S. GAAP for each acquisition, both individually and in the aggregate, was not material to the interim condensed consolidated financial statements of income of the Company and, accordingly, such information has not been presented . Goodwill and intangible assets The composition of goodwill and intangible assets is as follows: September 30, December 31, 2015 2014 (In thousands) Goodwill $ 91,857 $ 68,829 Intangible assets with indefinite lives — Trademarks Amortizable intangible assets — Licenses and others — Non-compete / solicitation agreement — Customer lists Total intangible assets $ 37,422 $ 28,510 Accumulated amortization Total intangible assets, net $ 30,509 $ 23,171 Goodwill The changes in the carrying amount of goodwill for the nine -month period ended September 30, 2015 and the year ended December 31, 2014 are as follows: Period ended September 30, 2015 (In thousands) Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total Balance, beginning of the period $ 11,859 $ 19,101 $ 15,719 $ 5,729 $ 4,521 $ 1,343 $ 68,829 - Business acquisition — — — — — - Effect of exchange rates changes — Balance, end of the period $ 18,785 $ 10,847 $ 17,150 $ 34,614 $ 5,729 $ 3,502 $ 1,230 $ 91,857 Year ended December 31, 2014 (In thousands) Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total Balance, beginning of year $ 10,366 $ 14,676 $ 6,520 $ 11,376 $ 5,252 $ 5,506 $ 1,405 $ 55,101 - Bussiness Acquisition - Effect of exchange rates changes — 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 $909 thousands and $829 thousands for the three-month periods ended September 30, 2015 and 2014, respectively, while for the nine-month periods ended at such dates amounted to $2,273 thousands and $1,177 thousands, respectively. The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of September 30, 2015 : For year ended 12/31/2015 $ 959 For year ended 12/31/2016 For year ended 12/31/2017 For year ended 12/31/2018 Thereafter $ 17,232 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 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, Bolivia, Guatemala, 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: Nine Months Ended September 30, 2015 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 215,651 $ 171,496 $ 29,308 $ 28,529 $ 26,074 $ 471,058 Direct costs Impairment of Long-lived Assets — — — — Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency loss Net income before income / asset tax expense $ 97,463 Nine Months Ended September 30, 2014 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 194,010 $ 102,182 $ 27,304 $ 45,184 $ 26,486 $ 395,166 Direct costs $ (111,528) $ (54,914) $ (16,965) $ (13,121) $ (14,527) $ (211,055) Impairment of Long-lived Assets $ — $ — $ — $ (49,496) $ — $ (49,496) Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency loss Net income before income / asset tax expense $ 71,834 Three Months Ended September 30, 2015 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 74,286 $ 67,234 $ 9,880 $ 8,860 $ 8,381 $ 168,641 Direct costs Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency gain Net income before income / asset tax expense $ 47,616 Three Months Ended September 30, 2014 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 78,175 $ 40,953 $ 9,851 $ 9,276 $ 9,680 $ 147,935 Direct costs Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency gain Net loss before income / asset tax expense $ 51,814 The following table summarizes the allocation of property and equipment, net based on geography: September 30, December 31, 2015 2014 (In thousands) US Property and equipment, net $ 11,642 $ 13,226 Other countries property and equipment, net Argentina Brazil Mexico Venezuela (*) Other countries $ 70,868 $ 78,319 Total Property and equipment, net $ 82,510 $ 91,545 (*) After the impairment of Venezuelan long-lived assets. See Note 2 “Foreign currency translation - Venezuelan currency status” . During June 2015, our Venezuelan subsidiary acquired two offices in process of construction of a total of 475.48 square meters, in Caracas, Venezuela for a total purchase price of approximately BF$1,474 million, or $7.4 million, for investment purposes and included in non-current other assets. The Venezuelan subsidiary paid the purchase price in Bolivares Fuertes, and funded the transaction with funds from its own operations. During August 2015, our Venezuelan subsidiary acquired an office in process of construction of a total of 309.19 square meters, in Caracas, Venezuela for a total purchase price of approximately BF$1,188 million, or $6. 0 million, for investment purposes and included in non-current other assets. The Venezuelan subsidiary paid the purchase price in Bolivares Fuertes. During September 2015, our Venezuelan subsidiary acquired an office in process of construction of a total of 169.06 square meters, in Caracas, Venezuela for a total purchase price of approximately BF$883.1 million, or $4.4 million, for investment purposes and included in non-current other assets. The Venezuelan subsidiary paid the purchase price in Bolivares Fuertes. The offices acquired during August and September 2015 were funded with funds from its own operations for an amount of BF$1,071 million, and the remaining BF$ 1,000 were funded with a mortgage loan celebrated with Banco del Caribe, C.A. Banco Universal to be paid in monthly installments during five years, and included in current and non-current liabilities under the caption “Loans payable and other financial liabilities”. The mortgage loan bears a fixed interest rate of 24% per annum. The amount of the mortgage climbs to BF$2,000 million, or $10 million as of September 30, 2015. The offices will be delivered on October, 2016 according to the agreements. The following table summarizes the allocation of the goodwill and intangible assets based on geography: September 30, December 31, 2015 2014 (In thousands) US intangible assets $ 268 $ 172 Other countries goodwill and intangible assets Argentina Brazil Mexico Venezuela Other countries $ 122,098 $ 91,828 Total goodwill and intangible assets $ 122,366 $ 92,000 Consolidated net revenues by similar prod ucts and services for the nine and three -month periods ended September 30 , 201 5 and 201 4 were as follows: Nine-months Ended September 30, Three-months Ended September 30, Consolidated Net Revenues 2015 2014 2015 2014 (In thousands) (In thousands) Marketplace $ 286,523 $ 271,891 $ 98,580 $ 96,931 Non-marketplace (*) Total $ 471,058 $ 395,166 $ 168,641 $ 147,935 (*) Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services. |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 9 Months Ended |
Sep. 30, 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 September 30 , 201 5 and December 31, 201 4 : Quoted Prices in Quoted Prices in Balances as of active markets for Significant other Balances as of active markets for Significant other September 30, 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 $ 53,793 $ 53,793 — $ 37,495 $ 37,495 $ — Sovereign Debt Securities — — — — Corporate Debt Securities — Investments: Sovereign Debt Securities — Corporate Debt Securities Certificates of deposits — — Total Financial Assets $ 374,361 $ 249,609 $ 124,752 $ 346,099 $ 146,672 $ 199,427 Liabilities: Contingent considerations $ 11,395 $ — $ 11,395 $ 4,833 $ — $ 4,833 Total Financial Liabilities $ 11,395 $ — $ 11,395 $ 4,833 $ — $ 4,833 As of September 30 , 201 5 , 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 September 30 , 201 5 , 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 September 30, 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 September 30 , 201 5 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 September 30 , 201 5 and December 31, 2014 , the Company had $53,856 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 September 30 , 201 5 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 September 30 , 201 5 and December 31, 201 4 : Balances as of Significant other Balances as of Significant other September 30, observable inputs December 31, observable inputs 2015 (Level 2) 2014 (Level 2) (In thousands) Assets Time Deposits $ 53,856 $ 53,856 $ 58,475 $ 58,475 Accounts receivable Credit Cards receivable Other assets Total Assets $ 339,061 $ 339,061 $ 228,027 $ 228,027 Liabilities Accounts payable and accrued expenses $ 75,820 $ 75,820 $ 58,006 $ 58,006 Funds payable to customers Salaries and social security payable Tax payable Dividends payable Loans payable and other financial liabilities Other liabilities Total Liabilities $ 648,577 $ 648,577 $ 564,568 $ 564,568 As of September 30 , 201 5 and December 31, 201 4 , 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 September 30 , 201 5 and December 31, 201 4 , the fair value of money market funds, short and long-term investments classified as available for sale securities are as follows: September 30, 2015 (In thousands) Cost Gross Unrealized Gains Gross Unrealized Losses (1) Estimated Fair Value Cash and cash equivalents Money Market Funds $ 53,793 $ — $ — $ 53,793 Sovereign Debt Securities — Corporate Debt Securities Total Cash and cash equivalents $ 74,464 $ 16 $ (11) $ 74,469 Short-term investments Sovereign Debt Securities $ 13,851 $ 9 $ — $ 13,860 Corporate Debt Securities Certificates of deposits Total Short-term investments $ 114,206 $ 25 $ (72) $ 114,159 Long-term investments Sovereign Debt Securities $ 44,945 $ 195 $ (32) $ 45,108 Corporate Debt Securities Certificates of deposits — Total Long-term investments $ 185,755 $ 384 $ (406) $ 185,733 Total $ 374,425 $ 425 $ (489) $ 374,361 December 31, 2014 (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 — 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 — Certificates of deposit Total Short-term investments $ 90,414 $ 1 $ (80) $ 90,335 Long-term investments Sovereign Debt Securities $ 44,511 $ — $ (83) $ Corporate Debt Securities Certificates of deposit — Total Long-term investments $ $ $ $ Total $ $ $ $ (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 September 30, 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 September 30 , 201 5 , 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 One year to two years Two years to three years Three years to four years Four years to five years Total $ |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 September 30 , 201 5 , the Company had established reserves for proceeding-related contingencies of $1,641 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 September 30 , 201 5 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 $3,413 thousands . As of September 30 , 201 5 , there were 49 lawsuits pending against the Argentine subsidiary in the Argentine ordinary courts and 965 pending claims in the Argentine Consumer Protection Agencies, where a lawyer is not required to file or pursue a claim. As of September 30 , 201 5 , there were two claims pending against the Mexican subsidiaries in the Mexican ordinary courts and 73 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 September 30, 2015, there were 646 lawsuits pending against the Brazilian subsidiaries in the Brazilian ordinary courts. In addition, as of September 30, 2015, there were 2,561 lawsuits pending against the Brazilian subsidiaries in the Brazilian consumer courts, where a lawyer is not required to file or pursue a claim. In most of these cases, the plaintiffs asserted that the Company was responsible for fraud committed against them, or responsible for damages suffered when purchasing an item on our website, when using MercadoPago, or when the Company invoiced them. Management believes that the Company has meritorious defenses to these claims and intends to continue defending them. No loss amount has been accrued for such reasonably possible legal actions. The most significant legal actions (individually or in the aggregate) are described below. 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 C itizen’s pleas and allegations. Citizen did not appeal the mentioned decision and, as a consequence, the case is closed. O n the merits of the injunction is still pending. In the opinion of the Company’s management and its legal counsel the risk of loss is therefore remote. 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. On July 15, 2015, the settlement was homologated and therefore the case is closed as of the date of these interim condensed financial statements. 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$ 12.4 million or $3.1 million, according to the exchange rate at September 30, 2015, and filed a lawsuit in 8th Publi c 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 September 30, 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 $10.3 million, according to the exchange rate at September 30, 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 m entioned defense. As of September 30, 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$6.2 million or $1.6 million, according to the ex change rate at September 30, 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. On May 5, 2015 the Brazilian Superior Court of Justice did not accept the extraordinary appeal filed by the Public Prosecutor. The Public Prosecutor filed an appeal against such decision, aiming the appeal to be accepted and ruled by Brazilian Federal Supreme Court, which was not accepted on June 16, 2015. The state prosecutor filed the last appeal, which awaits trial . 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 injuncti on. As of the date of issuance o f 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. Argentine Labor Union Claim On September 29, 2014, the Argentina Commercial Labor Union “Federación Argentina de Empleados de Comercio y Servicios” (“Sindicato de Comercio” or the “Plaintiff”) filed a lawsuit against our Argentine subsidiary, MercadoLibre S.R.L. (“MercadoLibre” or the “Company”), in the First Instance National Court on Labor Matters Number Fifty Eight of Buenos Aires, Argentina (the “Court”). The Plaintiff seeks the payment of allegedly unpaid monthly obligations due for employees for the last 10 years, for AR$ 3.2 million or $0.43 million plus interests and legal expenses. On August 12, 2015 the Company has settled the case in the amount of ARS 2.4 million plus interest and legal expenses. As a consequence, as of September 30, 2015, this case is closed. 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 | 9 Months Ended |
Sep. 30, 2015 | |
Long Term Retention Plan [Abstract] | |
Long Term Retention Plan | 8. Long term retention plan (“LTRP”) The following table summarize s t he 2009, 2010, 2011, 2012, 2013, 2014 and 2015 long term retention plan accrued compensation expense for the nine and three-month periods ended September 30 , 201 5 and 201 4 : Nine Months Ended September 30, Three Months Ended September 30, 2015 (*) 2014 (*) 2015 (*) (**) 2014 (*) (In thousands) (In thousands) LTRP 2009 $ 7 $ 45 $ (301) $ 484 LTRP 2010 LTRP 2011 LTRP 2012 LTRP 2013 LTRP 2014 LTRP 2015 — — Total $ 8,032 $ 6,311 $ 1,755 $ 4,380 (*) (Gain) / Loss (**) For the three-month period ended September 30, 2015, the table above shows a negative change of compensation costs for LTRP 2009, 2010, 2011, 2012 and 2013 as a consequence of a decrease in the Company’s stock price during the quarter. On August 4, 2015, the Board of Directors, upon the recommendation of the Compensation Committee, adopted the 2015 Long-Term Retention Plan (“2015 LTRP”). In order to receive an award under the 2015 LTRP, each eligible employee must satisfy the performance conditions established by the Board of Directors for such employee. The awards under 2015 LTRP are payable in cash, common stock or a combination thereof, in addition to the annual salary and bonus of each employee. The Company has granted the right to any LTRP participant to request settlement in cash. If these conditions are satisfied, the eligible employee will, subject to his or her continued employment as of each applicable payment date, receive the full amount of his or her 2015 LTRP bonus, payable as follows: · the eligible employee will receive a fixed payment equal to 8.333% of his or her 2015 LTRP bonus once a year for a period of six years starting in March 2016; and · on each date the Company pays the Annual Fixed Payment to the officer, he or she will also receive a payment equal to the product of (i) 8.333% of the applicable 2015 LTRP bonus and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the 2014 Stock Price (as defined below). For purposes of the 2015 LTRP, the “2014 Stock Price” shall equal $127.29 (the average closing price of the Company´s common stock on the NASDAQ Global Market during the final 60 -trading days of 2014) and the “Applicable Year Stock Price” shall equal the average closing price of the Company´s common stock on the NASDAQ Global Market during the final 60-trading days of the year preceding the applicable payment date for so long as the Company´s common stock is listed on the NASDAQ. Additionally, on the same date, the Board of Directors, upon recommendation of the Compensation Committee, approved an amendment of each of the Company´s 2009, 2010, 2011, 2012 2013 and 2014 Long Term Retention Plans (“LTRPs”), effective as of January 1, 2015. These LTRPs were amended to (a) revise the prior LTRPs’ definition of the term “Market Value” to distinguish between a Change in Control (as defined in the amended LTRPs) in which the Company is the surviving entity and those transactions in which it is not the surviving entity and (b) include special payment rules in the case of participants who experience a Covered Termination within 120 days before a Change in Control or after a Change in Control. These amendments are also included in the 2015 LTRP described above. Under these amendments, (a) each participant should receive a single payment equal to fifty percent (50%) of the Award payments scheduled to be paid after a Change in Control (based on the Market Value on the date the Change in Control occurs), and (b) each award payment scheduled to be paid after the Change in Control shall be reduced by fifty percent (50%), to reflect the single payment, and should continue to be paid on March 31 every year. As of the date of issuance of these interim condensed consolidated financial statements, the probability of a Change in Control is remote. According to the amended Change in Control provision, the effects of the acceleration in vesting shall be recorded once the Change in Control event becomes probable. |
2.25% Convertible Senior Notes
2.25% Convertible Senior Notes Due 2019 | 9 Months Ended |
Sep. 30, 2015 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | |
2.25% Convertible Senior Notes Due 2019 | 9. 2.25% Convertible Senior Notes Due 2019 The following table presents the carrying amounts of the liability and equity components related to the 2.25% Convertible Senior Notes Due 2019 as of September 30, 2015 : September 30, 2015 December 31, 2014 (In thousands) Amount of the equity component (1) $ $ 2.25% convertible senior notes due 2019 $ $ Unamortized debt discount (2) Unamortized transaction costs related to the debt component Contractual coupon interest accrual Contractual coupon interest payment Net carrying amount $ $ (1) Net of $1,177 thousands of transaction costs related to the equity component of the Notes. (2) As of September 30, 2015, the remaining period over which the unamortized debt discount will be amortized is 3.75 years. The following table presents the interest expense for the contractual interest and the accretion of debt discount: Nine-month period ended September 30, Three-month period ended September 30, (In thousands) 2015 2014 2015 2014 Contractual coupon interest expense $ $ $ $ Amortization of debt discount Amortization of debt issuance costs Total interest expense related to Notes $ $ $ $ |
Cash Dividend Distribution
Cash Dividend Distribution | 9 Months Ended |
Sep. 30, 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 . On April 30, 2015, the Board of Directors declared a quarterly cash dividend of $4,548 thousands (or $0.103 per share), payable to holders of the Company's common stock. This quarterly cash dividend was paid on July 15, 2015 to stockholders of record as of the close of business on June 30, 2015 . On August 4, 2015, the Board of Directors approved a quart erly cash dividend of $4,548 (or $0.103 per share) on our outstanding shares of Company’s common stock. This quarterly cash dividend was paid on October 15, 2015 to stockholders of record as of the close of business on September 30, 2015 . On November 3 , 2015, the Board of Directors approved a quart erly cash dividend of $4,548 (or $0.103 per share) on our outstanding shares of Company’s common stock. This quarterly cash dividend will be paid on January 15, 2016 to stockholders of record as of the close of business on December 31, 2015 . |
New Law of "Costs, Earnings, an
New Law of "Costs, Earnings, and Fair Profits" | 9 Months Ended |
Sep. 30, 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. On October 26, 2015, the decree number 2,074 was published in the Official Gazette of Venezuela, establishing certain definitions related to the determination of prices in that country. Management of the Company is analyzing the potential effects of this law together with the new implementation Decree issued by the Venezuelan Government. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 with subsidiaries 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 99.7% of the consolidated amounts during the nine -month periods ended September 30 , 201 5 and 201 4 . Long-lived assets , Intangible assets and Goodwill located in the foreign operations totaled $194,509 thousands and $170,147 thousands as of September 30 , 201 5 and December 31, 201 4 , respectively. These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of September 30 , 201 5 and December 31, 201 4 . These financial statements also show the Company’s consolidated statements of income and comprehensive income for the nine and three-month periods ended September 30 , 201 5 and 201 4; and statement of cash flows for the nine-month periods ended September 30, 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, 201 4 , 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. For more detailed discussion about the Company’s significant accounting policies, see note 2 to the Form 10-K. During the nine-month period ended September 30, 2015, there were no material updates made to the Company’s significant accounting policies. |
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 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 and concluded that the carrying value of certain real estate properties would not be fully recoverable. As a result, the Company 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 was granted U.S. dollars through SIMADI. As a result, the Company from that moment expected to settle its transactions through SIMADI and 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, with no significant foreign exchange losses recorded during the second and third quarter of 2015. As of September 30, 2015, the SIMADI exchange rate was 199.42 BsF per U.S. dollar. Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows then 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 would 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 March 31, 2015 , 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 no t 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 of a net liability of $25,745 and $30,798 thousands, as of September 30, 2015 and December 31, 2014 and net revenues for the nine-month periods ended September 30, 2015 and 2014: Nine-month periods ended September 30, 2015 2014 Venezuelan operations (In thousands) Net Revenues $ 28,529 $ 45,184 September 30, December 31, 2015 2014 Assets Liabilities Net Assets $ 21,735 $ 31,794 As of September 30 , 201 5 , net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to approximately 6.0% o f consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to approximately 0.9% 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 increase in the Argentinean peso exchange rate against the U.S. dollar , during the first quarter of 2014, the reported Other Comprehensive Loss increased in $14,625 thousands as a result having a net asset position in Argentinean Pesos; and the Company recognized a foreign exchange gain of $4,597 thousands . As of September 30 , 201 5 , the Argentinean Peso exchange rate was $ 9.43 per U.S. dollar. Brazilian currency status D uring 2015, the Brazilian Reais exchange rate against the U.S. dollar increased in approximately 49% , from 2.66 Brazilian Reais per U.S . dollar as of December 31, 2014 to approximately 3.97 Brazilian Reais per U.S. dollar as of September 30, 2015 . Due to the abovementioned devaluation, during the nine and three-month periods ended September 30, 2015 , the reported Other Comprehensive Loss of the Brazilian segment increased in $9,733 thousands and $12,306 thousands, respectively, as a result of having a net asset position in Brazilian Reais; and the Company recognized a foreign exchange gain of $14,468 thousands and $5,704 thousands, respectively, during the same periods . |
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 in connection with promoted activities , thus resulting in an effective tax rate in Argentina lower than the income tax law statutory rate. The law expired on September 17, 2014. Aggregate tax benefit totaled $2,045 thousands for the three-month period ended September 30, 2014, while for the nine-month period ended at such date amounted to $5,644 thousands. Aggregate per share effect of the Argentine tax holiday amounted to $0.05 for the three-month period ended September 30, 2014, while for the nine-month period ended at such date amounted to $0.13 . 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 s 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. 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. On September 17, 2015, the Argentine Industry Secretary issued Resolution 1041/2015 approving the Company’s application for eligibility under the new software development law. As a result, the Company’s Argentinean subsidiary has been granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained as beneficiaries of the new law is a relief of 60% of total income tax related to software development activities and a 70% relief in payroll taxes related to software development activities. The new software development law, which provides that beneficiaries must meet certain on-going eligibility requirements, will expire on December 31, 2019. As a result of the Company’s eligibility under the new law, it recorded a one-time income tax gain of approximately $16 million in the third quarter of 2015, corresponding $5.6 million to the income tax benefit of the third quarter of 2015 and $3.2 million of the fourth quarter of 2014. Furthermore, the Company recorded a one-time labor cost gain of approximately $4.2 million, corresponding $1.0 million to the labor cost benefit of the third quarter of 2015 and $1.3 million of the fourth quarter of 2014 . Additionally, $1.4 million were reserved to pay software development law audit fees. Aggregate per share effect of the Argentine tax holiday amounted to $0.43 and $0.15 for the nine and three-month periods ended September 30, 2015, respectively. |
Accumulated Other Comprehensive Income | Accumulated other comprehensive income The following table sets forth the Company’s accumulated other comprehensive income as of September 30 , 201 5 and the year ended December 31, 2014 : September 30, December 31, 2015 2014 (In thousands) Foreign currency translation $ (180,749) $ (134,695) Unrealized loss on investments Estimated tax gain on unrealized losses on investments $ (180,787) $ (135,074) The following tables summarize the changes in accumulated balances of other comprehensive income for the nine -month period ended September 30 , 201 5 : 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 Amount of gain (loss) reclassified from accumulated other comprehensive income to net income — Net current period other comprehensive gain (loss) Balances as of September 30, 2015 $ (64) $ (180,749) $ 26 $ (180,787) Amount of Gain (Loss) Details about Accumulated Reclassified from Other Comprehensive Income Accumulated Other Components for the nine-month Comprehensive Affected Line Item period ended September 30, 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 Income / asset tax expense Total reclassifications for the period $ (379) Total, net of income taxes |
Impairment of Long-lived Assets | Inventory I nventory , consisting of points of sale (“POS”) available for sale, are accounted for using the first-in first-out (“FIFO”) method, and are valued at the lower of cost or market value. 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 con solidated financial statements, the Company has subsequently accessed to more unfavorable exchange markets in Venezuela as from December 2013 . 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 and $ 49.5 million on March 31, 2015 and in the second quarter of 2014, respectively , 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. 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. 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. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of our common stock, at our election. As of September 30, 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 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. 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 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. 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 . 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. 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 ca p price of approximately $155.78 per common share. The C apped Call Transactions allows the Company to receive shares of the 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. |
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. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements On January 9, 2015, the FASB issued the A ccounting S tandard U pdate (“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. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries | Nine-month periods ended September 30, 2015 2014 Venezuelan operations (In thousands) Net Revenues $ 28,529 $ 45,184 September 30, December 31, 2015 2014 Assets Liabilities Net Assets $ 21,735 $ 31,794 |
Accumulated Other Comprehensive Income | September 30, December 31, 2015 2014 (In thousands) Foreign currency translation $ (180,749) $ (134,695) Unrealized loss on investments Estimated tax gain on unrealized losses on investments $ (180,787) $ (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 Amount of gain (loss) reclassified from accumulated other comprehensive income to net income — Net current period other comprehensive gain (loss) Balances as of September 30, 2015 $ (64) $ (180,749) $ 26 $ (180,787) Amount of Gain (Loss) Details about Accumulated Reclassified from Other Comprehensive Income Accumulated Other Components for the nine-month Comprehensive Affected Line Item period ended September 30, 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 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) | 9 Months Ended |
Sep. 30, 2015 | |
Net Income Per Share [Abstract] | |
Allocation of Net Income Available to Common Shareholders using Two-Class Method | Nine Months Ended September 30, 2015 2014 (In thousands) Basic Diluted Basic Diluted Net income $ 66,824 $ 66,824 $ 38,491 $ 38,491 Net income attributable to noncontrolling interests — — Change in redeemable amount of noncontrolling interest — — Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock $ 66,824 $ 66,824 $ 38,327 $ 38,327 Three Months Ended September 30, 2015 2014 (In thousands) Basic Diluted Basic Diluted Net income $ 45,640 $ 45,640 $ 33,752 $ 33,752 Net income attributable to noncontrolling interests — — Change in redeemable amount of noncontrolling interest — — Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock $ 45,640 $ 45,640 $ 33,655 $ 33,655 |
Net Income (Loss) Per Share of Common Stock | Nine months Ended September 30, Three Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) (In thousands, except per share data) Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income attributable to MercadoLibre, Inc. Shareholders per common share $ $ $ $ $ 1.03 $ 1.03 $ 0.76 $ 0.76 Numerator: Net income attributable to MercadoLibre, Inc. Shareholders $ $ $ $ $ 45,640 $ 45,640 $ 33,655 $ 33,655 Denominator: Weighted average of common stock outstanding for Basic earnings per share Adjusted weighted average of common stock outstanding for Diluted earnings per share |
Business Combinations, Goodwi21
Business Combinations, Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Acquisition [Line Items] | |
Composition of Goodwill and Intangible Assets | September 30, December 31, 2015 2014 (In thousands) Goodwill $ 91,857 $ 68,829 Intangible assets with indefinite lives — Trademarks Amortizable intangible assets — Licenses and others — Non-compete / solicitation agreement — Customer lists Total intangible assets $ 37,422 $ 28,510 Accumulated amortization Total intangible assets, net $ 30,509 $ 23,171 |
Table Showing Changes in Carrying Amount of Goodwill | Period ended September 30, 2015 (In thousands) Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total Balance, beginning of the period $ 11,859 $ 19,101 $ 15,719 $ 5,729 $ 4,521 $ 1,343 $ 68,829 - Business acquisition — — — — — - Effect of exchange rates changes — Balance, end of the period $ 18,785 $ 10,847 $ 17,150 $ 34,614 $ 5,729 $ 3,502 $ 1,230 $ 91,857 Year ended December 31, 2014 (In thousands) Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total Balance, beginning of year $ 10,366 $ 14,676 $ 6,520 $ 11,376 $ 5,252 $ 5,506 $ 1,405 $ 55,101 - Bussiness Acquisition - Effect of exchange rates changes — 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 $ 959 For year ended 12/31/2016 For year ended 12/31/2017 For year ended 12/31/2018 Thereafter $ 17,232 |
Metros Cubicos, S.A. de C.V. [Member] | |
Business Acquisition [Line Items] | |
Purchase Price Allocation for Acquisition | Metros Cúbicos S.A. de C.V. In thousands of U.S. dollars Cash and cash equivalents $ Other net tangible assets / (liabilities) Trademarks Customer Lists Non-solicitation and Non-compete agreements Deferred tax assets and liabilities Goodwill Purchase Price $ |
KPL Soluções Ltda. [Member] | |
Business Acquisition [Line Items] | |
Purchase Price Allocation for Acquisition | KPL Soluções Ltda. In thousands of U.S. dollars Cash and cash equivalents $ Other net tangible assets / (liabilities) Customer lists Software Non-solicitation and Non-compete agreements Goodwill Purchase Price $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Performance of Company's Reporting Segments | Nine Months Ended September 30, 2015 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 215,651 $ 171,496 $ 29,308 $ 28,529 $ 26,074 $ 471,058 Direct costs Impairment of Long-lived Assets — — — — Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency loss Net income before income / asset tax expense $ 97,463 Nine Months Ended September 30, 2014 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 194,010 $ 102,182 $ 27,304 $ 45,184 $ 26,486 $ 395,166 Direct costs $ (111,528) $ (54,914) $ (16,965) $ (13,121) $ (14,527) $ (211,055) Impairment of Long-lived Assets $ — $ — $ — $ (49,496) $ — $ (49,496) Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency loss Net income before income / asset tax expense $ 71,834 Three Months Ended September 30, 2015 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 74,286 $ 67,234 $ 9,880 $ 8,860 $ 8,381 $ 168,641 Direct costs Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency gain Net income before income / asset tax expense $ 47,616 Three Months Ended September 30, 2014 (In thousands) Brazil Argentina Mexico Venezuela Other Countries Total Net revenues $ 78,175 $ 40,953 $ 9,851 $ 9,276 $ 9,680 $ 147,935 Direct costs Direct contribution Operating expenses and indirect costs of net revenues Income from operations Other income (expenses): Interest income and other financial gains Interest expense and other financial losses Foreign currency gain Net loss before income / asset tax expense $ 51,814 |
Allocation of Long-Lived Tangible Assets Based on Geography | September 30, December 31, 2015 2014 (In thousands) US Property and equipment, net $ 11,642 $ 13,226 Other countries property and equipment, net Argentina Brazil Mexico Venezuela (*) Other countries $ 70,868 $ 78,319 Total Property and equipment, net $ 82,510 $ 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 | September 30, December 31, 2015 2014 (In thousands) US intangible assets $ 268 $ 172 Other countries goodwill and intangible assets Argentina Brazil Mexico Venezuela Other countries $ 122,098 $ 91,828 Total goodwill and intangible assets $ 122,366 $ 92,000 |
Consolidated Net Revenues by Similar Products and Services | Nine-months Ended September 30, Three-months Ended September 30, Consolidated Net Revenues 2015 2014 2015 2014 (In thousands) (In thousands) Marketplace $ 286,523 $ 271,891 $ 98,580 $ 96,931 Non-marketplace (*) Total $ 471,058 $ 395,166 $ 168,641 $ 147,935 (*) Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services. |
Fair Value Measurement of Ass23
Fair Value Measurement of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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 $ 53,793 $ 53,793 — $ 37,495 $ 37,495 $ — Sovereign Debt Securities — — — — Corporate Debt Securities — Investments: Sovereign Debt Securities — Corporate Debt Securities Certificates of deposits — — Total Financial Assets $ 374,361 $ 249,609 $ 124,752 $ 346,099 $ 146,672 $ 199,427 Liabilities: Contingent considerations $ 11,395 $ — $ 11,395 $ 4,833 $ — $ 4,833 Total Financial Liabilities $ 11,395 $ — $ 11,395 $ 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 September 30, observable inputs December 31, observable inputs 2015 (Level 2) 2014 (Level 2) (In thousands) Assets Time Deposits $ 53,856 $ 53,856 $ 58,475 $ 58,475 Accounts receivable Credit Cards receivable Other assets Total Assets $ 339,061 $ 339,061 $ 228,027 $ 228,027 Liabilities Accounts payable and accrued expenses $ 75,820 $ 75,820 $ 58,006 $ 58,006 Funds payable to customers Salaries and social security payable Tax payable Dividends payable Loans payable and other financial liabilities Other liabilities Total Liabilities $ 648,577 $ 648,577 $ 564,568 $ 564,568 |
Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities | September 30, 2015 (In thousands) Cost Gross Unrealized Gains Gross Unrealized Losses (1) Estimated Fair Value Cash and cash equivalents Money Market Funds $ 53,793 $ — $ — $ 53,793 Sovereign Debt Securities — Corporate Debt Securities Total Cash and cash equivalents $ 74,464 $ 16 $ (11) $ 74,469 Short-term investments Sovereign Debt Securities $ 13,851 $ 9 $ — $ 13,860 Corporate Debt Securities Certificates of deposits Total Short-term investments $ 114,206 $ 25 $ (72) $ 114,159 Long-term investments Sovereign Debt Securities $ 44,945 $ 195 $ (32) $ 45,108 Corporate Debt Securities Certificates of deposits — Total Long-term investments $ 185,755 $ 384 $ (406) $ 185,733 Total $ 374,425 $ 425 $ (489) $ 374,361 December 31, 2014 (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 — 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 — Certificates of deposit Total Short-term investments $ 90,414 $ 1 $ (80) $ 90,335 Long-term investments Sovereign Debt Securities $ 44,511 $ — $ (83) $ Corporate Debt Securities Certificates of deposit — Total Long-term investments $ $ $ $ Total $ $ $ $ (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 September 30, 2015 and December 31, 2014. |
Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments | One year or less One year to two years Two years to three years Three years to four years Four years to five years Total $ |
Long Term Retention Plan (Table
Long Term Retention Plan (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Long Term Retention Plan [Abstract] | |
Long Term Retention Plans Accrued Compensation Expense | Nine Months Ended September 30, Three Months Ended September 30, 2015 (*) 2014 (*) 2015 (*) (**) 2014 (*) (In thousands) (In thousands) LTRP 2009 $ 7 $ 45 $ (301) $ 484 LTRP 2010 LTRP 2011 LTRP 2012 LTRP 2013 LTRP 2014 LTRP 2015 — — Total $ 8,032 $ 6,311 $ 1,755 $ 4,380 |
2.25% Convertible Senior Note25
2.25% Convertible Senior Notes Due 2019 (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | |
Carrying Amounts of Liability and Equity Components | September 30, 2015 December 31, 2014 (In thousands) Amount of the equity component (1) $ $ 2.25% convertible senior notes due 2019 $ $ Unamortized debt discount (2) Unamortized transaction costs related to the debt component Contractual coupon interest accrual Contractual coupon interest payment Net carrying amount $ $ (1) Net of $1,177 thousands of transaction costs related to the equity component of the Notes. (2) As of September 30, 2015, the remaining period over which the unamortized debt discount will be amortized is 3.75 years. |
Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount | Nine-month period ended September 30, Three-month period ended September 30, (In thousands) 2015 2014 2015 2014 Contractual coupon interest expense $ $ $ $ Amortization of debt discount Amortization of debt issuance costs Total interest expense related to Notes $ $ $ $ |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Additional Information) (Details) | Sep. 17, 2015 | Jun. 30, 2014USD ($)$ / shares | Jan. 31, 2014ARS / $ | Sep. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($)BRL / $ | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($) | Sep. 30, 2015USD ($)item$ / shares | Sep. 30, 2014USD ($)$ / shares | Sep. 30, 2015VEF / $ | Sep. 30, 2015BRL / $ | Sep. 30, 2015ARS / $ | Sep. 30, 2015$ / shares | Sep. 30, 2015USD ($) | Feb. 10, 2015VEF / $ | Dec. 31, 2013ARS / $ |
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Percentage of revenues and operating costs generated in foreign operations | 99.70% | 99.70% | ||||||||||||||||
Long-lived assets and goodwill located in the foreign operations | $ 170,147,000 | $ 194,509,000 | ||||||||||||||||
Exchange rate used to re-measure transactions | 8 | 2.66 | 199.42 | 3.97 | 9.43 | 12 | 6.52 | |||||||||||
Foreign exchange loss | $ 20,400,000 | $ 16,500,000 | ||||||||||||||||
Liabilities | $ 611,060,000 | 705,376,000 | ||||||||||||||||
Impairment of Long lived assets | $ 16,226,000 | $ 49,496,000 | ||||||||||||||||
Percentage of increase in exchange ratio | 23.00% | 49.00% | ||||||||||||||||
Net assets increase | $ 12,306,000 | $ 14,625,000 | $ 9,733,000 | |||||||||||||||
Recognize foreign currency gain | 5,704,000 | 4,597,000 | $ 14,468,000 | |||||||||||||||
Percentage on relief of total income tax | 60.00% | |||||||||||||||||
Income / asset tax expense | (1,976,000) | $ (18,062,000) | $ (30,639,000) | (33,343,000) | ||||||||||||||
Aggregate tax benefit, total | $ 2,045,000 | $ 5,644,000 | ||||||||||||||||
Aggregate per share effect of the Argentine tax holiday | $ / shares | $ 0.05 | $ 0.13 | ||||||||||||||||
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% | |||||||||||||||||
Payment for capped call transactions | $ 19,668,000 | |||||||||||||||||
Net of deferred income tax effect amounts | $ 6,206,000 | $ (16,515,000) | ||||||||||||||||
SICAD 2 [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Impairment of Long lived assets | 49,500,000 | |||||||||||||||||
New Software Development Law [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Income tax gain | 16,000,000 | |||||||||||||||||
Income / asset tax expense | 5,600,000 | 3,200,000 | ||||||||||||||||
Labor cost gain | 4,200,000 | |||||||||||||||||
Labor cost benefit | $ 1,000,000 | 1,300,000 | ||||||||||||||||
Aggregate per share effect of the Argentine tax holiday | $ / shares | $ 0.150 | $ 0.430 | ||||||||||||||||
Software development law audit fees | $ 1,400,000 | |||||||||||||||||
Venezuelan Operations [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Liabilities | 43,359,000 | 36,235,000 | ||||||||||||||||
Fair value of real estate properties | 9,200,000 | |||||||||||||||||
Impairment of Long lived assets | $ 16,200,000 | 49,500,000 | $ 16,200,000 | |||||||||||||||
Percentage of consolidated net assets | 6.00% | 6.00% | ||||||||||||||||
Percentage of consolidated cash and investments | 0.90% | 0.90% | ||||||||||||||||
Venezuelan Operations [Member] | Intersegment Eliminations [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Liabilities | 30,798,000 | 25,745,000 | ||||||||||||||||
Argentinean Subsidiaries [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Percentage on relief of total income tax | 60.00% | |||||||||||||||||
Percentage on relief of payroll tax | 70.00% | |||||||||||||||||
2.25% Convertible Senior Notes Due 2019 [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Convertible senior notes, issued | $ 330,000,000 | $ 330,000,000 | $ 330,000,000 | 330,000,000 | ||||||||||||||
Convertible senior notes, interest rate | 2.25% | 2.25% | 2.25% | 2.25% | ||||||||||||||
Convertible senior notes, maturity date | Jul. 1, 2019 | |||||||||||||||||
Convertible senior notes, conversion rate | 7.9353% | |||||||||||||||||
Convertible senior notes, conversion price | $ / shares | $ 126.02 | $ 126.02 | ||||||||||||||||
Convertible senior notes, principal amount per share | $ 1,000 | |||||||||||||||||
Net proceeds, net of transaction costs | $ 322,000,000 | |||||||||||||||||
Carrying value of the permanent equity component reported in additional paid-in-capital | $ 46,985,000 | |||||||||||||||||
Deferred tax liabilities, convertible notes | 16,445,000 | |||||||||||||||||
Net carrying amount | $ 283,015,000 | |||||||||||||||||
Cash flows, discount rate | 5.55% | |||||||||||||||||
Effective interest rate | 6.10% | 6.10% | ||||||||||||||||
2.25% Convertible Senior Notes Due 2019 [Member] | Convertible Debt, Circumstance 1 [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 days | |||||||||||||||||
Debt Instrument, Convertible, Threshold Trading Days | item | 20 | |||||||||||||||||
Percentage of debt conversion price | 130.00% | |||||||||||||||||
2.25% Convertible Senior Notes Due 2019 [Member] | Convertible Debt, Circumstance 2 [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Convertible senior notes, principal amount per share | $ 1,000 | |||||||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 5 days | |||||||||||||||||
Debt Instrument, Convertible, Threshold Trading Days | item | 5 | |||||||||||||||||
Percentage of debt conversion price | 98.00% | |||||||||||||||||
2.25% Convertible Senior Notes Due 2019 [Member] | Capped Call Transactions [Member] | ||||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||
Payment for capped call transactions | $ 19,668,000 | |||||||||||||||||
Strike price, per share | $ / shares | $ 126.02 | |||||||||||||||||
Approximate cap price, per share | $ / shares | $ 155.78 | |||||||||||||||||
Net of deferred income tax effect amounts | $ 12,784,000 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||||
Net revenues | $ 168,641 | $ 147,935 | $ 471,058 | $ 395,166 | |
Assets | 1,068,828 | 1,068,828 | $ 966,848 | ||
Liabilities | (705,376) | (705,376) | (611,060) | ||
Venezuelan Operations [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Net revenues | 28,529 | $ 45,184 | |||
Assets | 57,970 | 57,970 | 75,153 | ||
Liabilities | (36,235) | (36,235) | (43,359) | ||
Net Assets | $ 21,735 | $ 21,735 | $ 31,794 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Summary of Significant Accounting Policies [Abstract] | ||
Foreign currency translation | $ (180,749) | $ (134,695) |
Unrealized loss on investments | (64) | (578) |
Estimated tax gain on unrealized losses on investments | 26 | 199 |
Accumulated other comprehensive income, Total | $ (180,787) | $ (135,074) |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Summary of Changes in Accumulated Balances of Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | $ 199 | |
Other comprehensive income before reclassification adjustments for gains on available for sale investments, tax | 26 | |
Amount of gain (loss) reclassified from accumulated other comprehensive income to net income, tax | (199) | |
Net current period other comprehensive income, tax | (173) | |
Balances as of September 30, 2015 | 26 | |
Balances as of December 31, 2014 | (135,074) | |
Other comprehensive income before reclassification adjustments for gains on available for sale investments, net of tax | (46,092) | |
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 | (45,713) | |
Balances as of September 30, 2015 | (180,787) | |
Unrealized Gains (Losses) on Investments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | (578) | |
Other comprehensive income before reclassification adjustments for gains on available for sale investments, before tax | (64) | |
Amount of gain (loss) reclassified from accumulated other comprehensive income to net income, before tax | 578 | |
Net current period other comprehensive income, before tax | 514 | |
Balances as of September 30, 2015 | (64) | |
Foreign Currency Translation [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Balances as of December 31, 2014 | (134,695) | |
Other comprehensive income before reclassification adjustments for gains on available for sale investments, before tax | (46,054) | |
Net current period other comprehensive income, before tax | (46,054) | |
Balances as of September 30, 2015 | $ (180,749) |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Reclassifications Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized gains on investments | $ 5,777 | $ 4,360 | $ 14,768 | $ 10,969 |
Estimated tax loss on unrealized gains on investments | (1,976) | (18,062) | (30,639) | (33,343) |
Net income attributable to MercadoLibre, Inc. shareholders | $ 45,640 | $ 33,766 | 66,824 | $ 38,435 |
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 ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net Income Per Share [Abstract] | ||||
Net income | $ 45,640 | $ 33,752 | $ 66,824 | $ 38,491 |
Net income attributable to noncontrolling interests | 14 | (56) | ||
Change in redeemable amount of noncontrolling interest | (111) | (108) | ||
Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock, Basic | 45,640 | 33,655 | 66,824 | 38,327 |
Net income attributable to MercadoLibre, Inc. Shareholders corresponding to common stock, Diluted | $ 45,640 | $ 33,655 | $ 66,824 | $ 38,327 |
Net Income Per Share (Net Incom
Net Income Per Share (Net Income (Loss) Per Share of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income attributable to MercadoLibre, Inc. per common share | ||||
Net income attributable to MercadoLibre, Inc. per common share, Basic | $ 1.03 | $ 0.76 | $ 1.51 | $ 0.87 |
Net income attributable to MercadoLibre, Inc. per common share, Diluted | $ 1.03 | $ 0.76 | $ 1.51 | $ 0.87 |
Numerator: | ||||
Net income attributable to MercadoLibre, Inc., Basic | $ 45,640 | $ 33,655 | $ 66,824 | $ 38,327 |
Net income attributable to MercadoLibre, Inc., Diluted | $ 45,640 | $ 33,655 | $ 66,824 | $ 38,327 |
Denominator: | ||||
Weighted average of common stock outstanding for Basic earnings per share | 44,155,830 | 44,153,892 | 44,155,303 | 44,153,867 |
Adjusted weighted average of common stock outstanding for Diluted earnings per share | 44,155,830 | 44,153,892 | 44,155,303 | 44,153,867 |
Business Combinations, Goodwi33
Business Combinations, Goodwill and Intangible Assets (Narrative I) (Details) - USD ($) $ in Thousands | Apr. 22, 2015 | Apr. 01, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Metros Cubicos, S.A. de C.V. [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of acquisition | 100.00% | ||||
Aggregate purchase price for acquisition | $ 29,917 | ||||
Business acquisition, cash paid | 26,917 | ||||
Amount in escrow account | 3,000 | ||||
Net revenues | $ 1,865 | ||||
Net income (loss) | 281 | ||||
Intangible assets | 8,721 | ||||
Metros Cubicos, S.A. de C.V. [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 3,924 | ||||
Amortized period, years | 5 years | ||||
Metros Cubicos, S.A. de C.V. [Member] | Non-Compete / Solicitation Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Amortized period, years | 3 years | ||||
KPL Soluções Ltda [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of acquisition | 100.00% | ||||
Aggregate purchase price for acquisition | $ 22,685 | ||||
Business acquisition, cash paid | 12,529 | ||||
Additional contingent consideration | 6,840 | ||||
Contingent consideration arrangements, performance measurement period | 24 months | ||||
Additional payments trasferred after two years | 1,584 | ||||
Additional payment expense period | 24 months | ||||
Amount in escrow account | 3,316 | ||||
Net revenues | $ 1,338 | ||||
Net income (loss) | $ 343 | ||||
Fair value of contingent consideration | $ 5,747 | $ 5,747 | |||
Intangible assets | 8,433 | ||||
Amortized period, years | 5 years | ||||
KPL Soluções Ltda [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 3,137 |
Business Combinations, Goodwi34
Business Combinations, Goodwill and Intangible Assets (Narrative II) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Business Combinations [Abstract] | |||||
Amount of Trademarks, customer lists, software and non-solicitation agreements | $ 30,509 | $ 30,509 | $ 23,171 | ||
Aggregate amortization expense for intangible assets | $ 909 | $ 829 | $ 2,273 | $ 1,177 |
Business Combinations, Goodwi35
Business Combinations, Goodwill and Intangible Assets (Summary of Preliminary Purchase Price Allocation for Acquisition) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Apr. 22, 2015 | Apr. 01, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 91,857 | $ 68,829 | $ 55,101 | ||
Argentina [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 10,847 | 11,859 | 14,676 | ||
Brazil [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 18,785 | 10,557 | 10,366 | ||
Chile [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 17,150 | 19,101 | 6,520 | ||
Mexico [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 34,614 | $ 15,719 | $ 11,376 | ||
Metros Cubicos, S.A. de C.V. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 593 | ||||
Other net tangible assets / (liabilities) | 241 | ||||
Intangible assets | 8,721 | ||||
Deferred tax assets and liabilities | (2,616) | ||||
Goodwill | 22,978 | ||||
Aggregate price paid | 29,917 | ||||
Metros Cubicos, S.A. de C.V. [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 3,924 | ||||
Metros Cubicos, S.A. de C.V. [Member] | Non Solicitation Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 229 | ||||
KPL Soluções Ltda [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 159 | ||||
Other net tangible assets / (liabilities) | 27 | ||||
Intangible assets | 8,433 | ||||
Goodwill | 14,066 | ||||
Aggregate price paid | 22,685 | ||||
KPL Soluções Ltda [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 3,137 | ||||
KPL Soluções Ltda [Member] | Software [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 4,791 | ||||
KPL Soluções Ltda [Member] | Non Solicitation Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 505 | ||||
Trademarks [Member] | Metros Cubicos, S.A. de C.V. [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 4,568 |
Business Combinations, Goodwi36
Business Combinations, Goodwill and Intangible Assets (Composition of Goodwill and Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 91,857 | $ 68,829 | $ 55,101 |
Total intangible assets, net | 30,509 | 23,171 | |
Software Development Company In Argentina [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | 91,857 | 68,829 | |
Total intangible assets | 37,422 | 28,510 | |
Accumulated amortization | (6,913) | (5,339) | |
Total intangible assets, net | 30,509 | 23,171 | |
Software Development Company In Argentina [Member] | Licenses and Others [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 9,415 | 5,111 | |
Software Development Company In Argentina [Member] | Non-Compete / Solicitation Agreement [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 1,636 | 1,829 | |
Software Development Company In Argentina [Member] | Customer Lists [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 13,094 | 11,294 | |
Trademarks [Member] | Software Development Company In Argentina [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks | $ 13,277 | $ 10,276 |
Business Combinations, Goodwi37
Business Combinations, Goodwill and Intangible Assets (Table Showing Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Balance, beginning of the period | $ 68,829 | $ 55,101 |
Business Acquisition | 37,044 | 23,923 |
Effect of exchange rates changes | (14,016) | (10,195) |
Balance, end of the period | 91,857 | 68,829 |
Brazil [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 10,557 | 10,366 |
Business Acquisition | 14,066 | 1,538 |
Effect of exchange rates changes | (5,838) | (1,347) |
Balance, end of the period | 18,785 | 10,557 |
Argentina [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 11,859 | 14,676 |
Business Acquisition | 775 | |
Effect of exchange rates changes | (1,012) | (3,592) |
Balance, end of the period | 10,847 | 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 | (1,951) | (2,129) |
Balance, end of the period | 17,150 | 19,101 |
Mexico [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 15,719 | 11,376 |
Business Acquisition | 22,978 | 6,293 |
Effect of exchange rates changes | (4,083) | (1,950) |
Balance, end of the period | 34,614 | 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 | (1,019) | (1,067) |
Balance, end of the period | 3,502 | 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 | (113) | (110) |
Balance, end of the period | $ 1,230 | $ 1,343 |
Business Combinations, Goodwi38
Business Combinations, Goodwill and Intangible Assets (Expected Intangible Asset Amortization Expense) (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
For year ended 12/31/2015 | $ 959 |
For year ended 12/31/2016 | 3,836 |
For year ended 12/31/2017 | 3,582 |
For year ended 12/31/2018 | 2,792 |
Thereafter | 6,063 |
Total estimated aggregate amortization expense | $ 17,232 |
Segment Reporting (Additional I
Segment Reporting (Additional Information) (Details) - Venezuelan Operations [Member] $ in Millions | 1 Months Ended | 2 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015VEFm² | Sep. 30, 2015USD ($)m² | Aug. 31, 2015VEFm² | Aug. 31, 2015USD ($)m² | Jun. 30, 2015VEFm²property | Jun. 30, 2015USD ($)m²property | Sep. 30, 2015VEF | Sep. 30, 2015VEF | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||||||
Number of properties acquired | property | 2 | 2 | |||||||
Area of new office building | m² | 169.06 | 169.06 | 309.19 | 309.19 | 475.48 | 475.48 | |||
Acquisition agreement amount | VEF 883,100,000 | $ 4.4 | VEF 1,188,000,000 | $ 6 | VEF 1,474,000,000 | $ 7.4 | |||
Own funding to acquire offices | VEF 1,071,000,000 | ||||||||
Mortgages [Member] | Banco del Caribe, C.A. Banco Universal [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Debt instrument, face amount | VEF 1,000,000,000 | VEF 1,000,000,000 | VEF 1,000,000,000 | ||||||
Debt Instrument, Term | 5 years | ||||||||
Debt instrument, interest rate | 24.00% | 24.00% | 24.00% | 24.00% | |||||
Debt instrument outstanding | VEF 2,000,000,000 | VEF 2,000,000,000 | VEF 2,000,000,000 | $ 10 |
Segment Reporting (Financial Pe
Segment Reporting (Financial Performance of Company's Reporting Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 168,641 | $ 147,935 | $ 471,058 | $ 395,166 |
Direct costs | (100,005) | (78,548) | (268,055) | (211,055) |
Impairment of Long-Lived Assets | (16,226) | (49,496) | ||
Direct contribution | 68,636 | 69,387 | 186,777 | 134,615 |
Operating expenses and indirect costs of net revenues | (23,356) | (22,240) | (81,273) | (59,381) |
Income from operations | 45,280 | 47,147 | 105,504 | 75,234 |
Other income (expenses): | ||||
Interest income and other financial gains | 5,777 | 4,360 | 14,768 | 10,969 |
Interest expense and other financial losses | (6,011) | (4,913) | (16,162) | (6,718) |
Foreign currency gains (losses) | 2,570 | 5,220 | (6,647) | (7,651) |
Net income before income / asset tax expense | 47,616 | 51,814 | 97,463 | 71,834 |
Brazil [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 74,286 | 78,175 | 215,651 | 194,010 |
Direct costs | (43,730) | (43,218) | (127,406) | (111,528) |
Direct contribution | 30,556 | 34,957 | 88,245 | 82,482 |
Argentina [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 67,234 | 40,953 | 171,496 | 102,182 |
Direct costs | (38,705) | (20,388) | (92,547) | (54,914) |
Direct contribution | 28,529 | 20,565 | 78,949 | 47,268 |
Mexico [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 9,880 | 9,851 | 29,308 | 27,304 |
Direct costs | (8,560) | (6,672) | (21,175) | (16,965) |
Direct contribution | 1,320 | 3,179 | 8,133 | 10,339 |
Venezuela [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 9,276 | |||
Direct costs | (2,630) | |||
Direct contribution | 6,646 | |||
Venezuela [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 8,860 | 28,529 | 45,184 | |
Direct costs | (3,665) | (10,500) | (13,121) | |
Impairment of Long-Lived Assets | (16,226) | (49,496) | ||
Direct contribution | 5,195 | 1,803 | (17,433) | |
Other Countries [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 9,680 | |||
Direct costs | (5,640) | |||
Direct contribution | $ 4,040 | |||
Other Countries [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 8,381 | 26,074 | 26,486 | |
Direct costs | (5,345) | (16,427) | (14,527) | |
Direct contribution | $ 3,036 | $ 9,647 | $ 11,959 |
Segment Reporting (Allocation o
Segment Reporting (Allocation of Long-Lived Tangible Assets Based on Geography) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | $ 70,868 | $ 78,319 | |
Total long-lived tangible assets | 82,510 | 91,545 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | 11,642 | 13,226 | |
Argentina [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | 29,775 | 28,005 | |
Brazil [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | 13,114 | 8,237 | |
Mexico [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | 2,557 | 2,801 | |
Venezuela [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | [1] | 21,496 | 36,237 |
Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Other countries long-lived tangible assets | $ 3,926 | $ 3,039 | |
[1] | After the impairment of Venezuelan long-lived assets. See Note 2 "Foreign currency translation - Venezuelan currency status". |
Segment Reporting (Allocation42
Segment Reporting (Allocation of Goodwill and Intangible Assets Based on Geography) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
US intangible assets | $ 268 | $ 172 |
Other countries goodwill and intangible assets | 122,098 | 91,828 |
Total goodwill and intangible assets | 122,366 | 92,000 |
Argentina [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Other countries goodwill and intangible assets | 12,428 | 12,580 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Other countries goodwill and intangible assets | 22,096 | 11,212 |
Mexico [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Other countries goodwill and intangible assets | 47,375 | 21,734 |
Venezuela [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Other countries goodwill and intangible assets | 7,508 | 7,515 |
Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Other countries goodwill and intangible assets | $ 32,691 | $ 38,787 |
Segment Reporting (Consolidated
Segment Reporting (Consolidated Net Revenues by Similar Products and Services) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | $ 168,641 | $ 147,935 | $ 471,058 | $ 395,166 | |
Marketplace [Member] | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | 98,580 | 96,931 | 286,523 | 271,891 | |
Non-marketplace [Member] | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | [1] | $ 70,061 | $ 51,004 | $ 184,535 | $ 123,275 |
[1] | Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services. |
Fair Value Measurement of Ass44
Fair Value Measurement of Assets and Liabilities (Additional Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $ 53,856 | $ 58,475 |
Non-financial assets | 0 | 0 |
Non-financial liabilities | 0 | 0 |
Auction Rate Securities [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | 0 | 0 |
Collateralized Debt Obligations [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | 0 | 0 |
Structured Investment Vehicles [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value Measurement of Ass45
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 ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Total Financial Assets | $ 374,361 | $ 346,099 |
Contingent consideration | 11,395 | 4,833 |
Total Financial Liabilities | 11,395 | 4,833 |
Certificates of Deposit [Member] | ||
Assets | ||
Investments | 9,516 | 7,807 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Total Financial Assets | 249,609 | 146,672 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Total Financial Assets | 124,752 | 199,427 |
Contingent consideration | 11,395 | 4,833 |
Total Financial Liabilities | 11,395 | 4,833 |
Significant Other Observable Inputs (Level 2) [Member] | Certificates of Deposit [Member] | ||
Assets | ||
Investments | 9,516 | 7,807 |
Money Market Funds [Member] | ||
Assets | ||
Cash and Cash Equivalents | 53,793 | 37,495 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 53,793 | 37,495 |
Sovereign Debt Securities [Member] | ||
Assets | ||
Cash and Cash Equivalents | 483 | |
Investments | 58,968 | 49,150 |
Sovereign Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 483 | |
Investments | 54,682 | 49,150 |
Sovereign Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Investments | 4,286 | |
Corporate Debt Securities [Member] | ||
Assets | ||
Cash and Cash Equivalents | 20,193 | 13,004 |
Investments | 231,408 | 238,643 |
Corporate Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 108 | |
Investments | 140,651 | 59,919 |
Corporate Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Cash and Cash Equivalents | 20,193 | 12,896 |
Investments | $ 90,757 | $ 178,724 |
Fair Value Measurement of Ass46
Fair Value Measurement of Assets and Liabilities (Fair Value of Financial Assets and Liabilities Measured at Amortized Cost) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Assets | $ 339,061 | $ 228,027 |
Liabilities | ||
Liabilities | 648,577 | 564,568 |
Accounts Payable And Accrued Expenses [Member] | ||
Liabilities | ||
Liabilities | 75,820 | 58,006 |
Funds Payable to Customers [Member] | ||
Liabilities | ||
Liabilities | 219,751 | 165,034 |
Salaries and Social Security Payable [Member] | ||
Liabilities | ||
Liabilities | 22,806 | 18,835 |
Tax Payable [Member] | ||
Liabilities | ||
Liabilities | 21,593 | 26,013 |
Dividends Payable [Member] | ||
Liabilities | ||
Liabilities | 4,548 | 7,330 |
Loans Payable and Other Financial Liabilities [Member] | ||
Liabilities | ||
Liabilities | 297,020 | 283,826 |
Other Liabilities [Member] | ||
Liabilities | ||
Liabilities | 7,039 | 5,524 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 339,061 | 228,027 |
Liabilities | ||
Liabilities | 648,577 | 564,568 |
Significant Other Observable Inputs (Level 2) [Member] | Accounts Payable And Accrued Expenses [Member] | ||
Liabilities | ||
Liabilities | 75,820 | 58,006 |
Significant Other Observable Inputs (Level 2) [Member] | Funds Payable to Customers [Member] | ||
Liabilities | ||
Liabilities | 219,751 | 165,034 |
Significant Other Observable Inputs (Level 2) [Member] | Salaries and Social Security Payable [Member] | ||
Liabilities | ||
Liabilities | 22,806 | 18,835 |
Significant Other Observable Inputs (Level 2) [Member] | Tax Payable [Member] | ||
Liabilities | ||
Liabilities | 21,593 | 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 | 297,020 | 283,826 |
Significant Other Observable Inputs (Level 2) [Member] | Other Liabilities [Member] | ||
Liabilities | ||
Liabilities | 7,039 | 5,524 |
Time Deposits [Member] | ||
Assets | ||
Assets | 53,856 | 58,475 |
Time Deposits [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 53,856 | 58,475 |
Accounts Receivable [Member] | ||
Assets | ||
Assets | 54,551 | 46,672 |
Accounts Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 54,551 | 46,672 |
Credit Cards Receivable [Member] | ||
Assets | ||
Assets | 187,566 | 85,162 |
Credit Cards Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Assets | 187,566 | 85,162 |
Other Assets [Member] | Accounts Payable And Accrued Expenses [Member] | ||
Assets | ||
Assets | 43,088 | 37,718 |
Other Assets [Member] | Significant Other Observable Inputs (Level 2) [Member] | Accounts Payable And Accrued Expenses [Member] | ||
Assets | ||
Assets | $ 43,088 | $ 37,718 |
Fair Value Measurement of Ass47
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 ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | $ 374,425 | $ 346,677 | |
Gross Unrealized Gains | 425 | 25 | |
Gross Unrealized Losses | [1] | (489) | (603) |
Estimated Fair Value | 374,361 | 346,099 | |
Cash and Cash Equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 74,464 | 50,540 | |
Gross Unrealized Gains | 16 | 2 | |
Gross Unrealized Losses | [1] | (11) | (43) |
Estimated Fair Value | 74,469 | 50,499 | |
Time Deposits [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 114,206 | 90,414 | |
Gross Unrealized Gains | 25 | 1 | |
Gross Unrealized Losses | [1] | (72) | (80) |
Estimated Fair Value | 114,159 | 90,335 | |
Long-Term Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 185,755 | 205,723 | |
Gross Unrealized Gains | 384 | 22 | |
Gross Unrealized Losses | [1] | (406) | (480) |
Estimated Fair Value | 185,733 | 205,265 | |
Money Market Funds [Member] | Cash and Cash Equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 53,793 | 37,531 | |
Gross Unrealized Gains | 2 | ||
Gross Unrealized Losses | [1] | (38) | |
Estimated Fair Value | 53,793 | 37,495 | |
Sovereign Debt Securities [Member] | Cash and Cash Equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 487 | ||
Gross Unrealized Losses | [1] | (4) | |
Estimated Fair Value | 483 | ||
Sovereign Debt Securities [Member] | Time Deposits [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 13,851 | 4,726 | |
Gross Unrealized Gains | 9 | ||
Gross Unrealized Losses | [1] | (4) | |
Estimated Fair Value | 13,860 | 4,722 | |
Sovereign Debt Securities [Member] | Long-Term Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 44,945 | 44,511 | |
Gross Unrealized Gains | 195 | ||
Gross Unrealized Losses | [1] | (32) | (83) |
Estimated Fair Value | 45,108 | 44,428 | |
Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 20,184 | 13,009 | |
Gross Unrealized Gains | 16 | ||
Gross Unrealized Losses | [1] | (7) | (5) |
Estimated Fair Value | 20,193 | 13,004 | |
Corporate Debt Securities [Member] | Time Deposits [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 94,341 | 81,886 | |
Gross Unrealized Gains | 14 | ||
Gross Unrealized Losses | [1] | (71) | (75) |
Estimated Fair Value | 94,284 | 81,811 | |
Corporate Debt Securities [Member] | Long-Term Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 137,310 | 157,205 | |
Gross Unrealized Gains | 188 | 22 | |
Gross Unrealized Losses | [1] | (374) | (395) |
Estimated Fair Value | 137,124 | 156,832 | |
Certificates of Deposit [Member] | Time Deposits [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 6,014 | 3,802 | |
Gross Unrealized Gains | 2 | 1 | |
Gross Unrealized Losses | [1] | (1) | (1) |
Estimated Fair Value | 6,015 | 3,802 | |
Certificates of Deposit [Member] | Long-Term Investments [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 3,500 | 4,007 | |
Gross Unrealized Gains | 1 | ||
Gross Unrealized Losses | [1] | (2) | |
Estimated Fair Value | $ 3,501 | $ 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 September 30, 2015 and December 31, 2014. |
Fair Value Measurement of Ass48
Fair Value Measurement of Assets and Liabilities (Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Measurement of Assets and Liabilities [Abstract] | ||
One year or less | $ 188,628 | |
One year to two years | 102,532 | |
Two years to three years | 56,139 | |
Three years to four years | 11,310 | |
Four years to five years | 15,752 | |
Total | $ 374,361 | $ 346,099 |
Commitments and Contingencies (
Commitments and Contingencies (Details) BRL in Millions, ARS in Millions | Aug. 12, 2015USD ($) | Sep. 29, 2014ARS | Sep. 29, 2014USD ($) | Aug. 15, 2011BRL | Sep. 23, 2010USD ($) | Aug. 25, 2010USD ($) | Jun. 26, 2009USD ($) | Sep. 30, 2015BRLitem | Sep. 30, 2015USD ($) | Dec. 31, 2007USD ($) | Sep. 30, 2015USD ($)item |
Loss Contingencies [Line Items] | |||||||||||
Reserves for proceeding-related contingencies | $ | $ 1,641,000 | ||||||||||
Aggregate amount for legal actions for which no loss amount has been accrued | $ | $ 3,413,000 | ||||||||||
Argentinean Subsidiaries [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits pending | 49 | 49 | |||||||||
Number of legal actions pending | 965 | 965 | |||||||||
Mexican Subsidiaries [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits pending | 2 | 2 | |||||||||
Number of legal actions pending | 73 | 73 | |||||||||
State of Sao Paulo Fraud Claim [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Daily non-compliance penalty | $ | $ 6,000 | $ 2,500 | |||||||||
Penalty and damages | $ | $ 6,000 | ||||||||||
City of Sao Paulo Tax Claim [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Approximate additional amount related to asserted taxes and fines | BRL 41 | $ 10,300,000 | $ 5,900,000 | ||||||||
Total amount of claim including surcharges and interest | $ | $ 5,800,000 | ||||||||||
Deposit with court | BRL | BRL 9.5 | ||||||||||
Accrued interests | BRL 12.4 | $ 3,100,000 | |||||||||
Brazilian Ordinary Courts [Member] | Brazilian Subsidiaries [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits pending | 646 | 646 | |||||||||
Brazilian Consumer Courts [Member] | Brazilian Subsidiaries [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits pending | 2,561 | 2,561 | |||||||||
Brazilian Federal Tax Claims [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Approximate additional amount related to asserted taxes and fines | BRL 6.2 | $ 1,600,000 | |||||||||
Argentine Labor Union Claim [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Daily non-compliance penalty | ARS 3.2 | $ 430,000 | |||||||||
Payment of unpaid monthly obligations for employees | 10 years | 10 years | |||||||||
Litigation Settlement, Amount | $ | $ 2,400,000 |
Long Term Retention Plan (Addit
Long Term Retention Plan (Additional Information) (Details) - Long Term Retention Plan 2015 [Member] | 9 Months Ended |
Sep. 30, 2015$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of bonus for fixed payments | 8.333% |
Period of fixed payments from long term retention plan | 6 years |
Stock price per share, average closing price | $ 127.29 |
Long term retention plan, number of trading days | 60 days |
Covered termination period | 120 days |
Percent of award payment paid after change in control | 50.00% |
Long Term Retention Plan (Long
Long Term Retention Plan (Long Term Retention Plans Accrued Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | [2] | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | [2] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | $ 1,755 | $ 4,380 | $ 8,032 | $ 6,311 | ||
Long Term Retention Plan 2009 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | (301) | 484 | 7 | 45 | ||
Long Term Retention Plan 2010 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | (237) | 495 | 274 | 305 | ||
Long Term Retention Plan 2011 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | (222) | 516 | 365 | 459 | ||
Long Term Retention Plan 2012 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | (211) | 573 | 496 | 663 | ||
Long Term Retention Plan 2013 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | (276) | 1,280 | 1,762 | 2,319 | ||
Long Term Retention Plan 2014 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | 90 | $ 1,033 | 2,216 | $ 2,522 | ||
Long Term Retention Plan 2015 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Long term retention plan | [1] | $ 2,912 | $ 2,912 | ||||
[1] | (Gain) / Loss | ||||||
[2] | For the three-month period ended September 30, 2015, the table above shows a negative change of compensation costs for LTRP 2009, 2010, 2011, 2012 and 2013 as a consequence of a decrease in the Company's stock price during the quarter. |
2.25% Convertible Senior Note52
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components) (Details) - 2.25% Convertible Senior Notes Due 2019 [Member] - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | ||||
Amount of the equity component | [1] | $ 45,808,000 | $ 45,808,000 | |
2.25% convertible senior notes due 2019 | 330,000,000 | 330,000,000 | $ 330,000,000 | |
Unamortized debt discount | [2] | (36,401,000) | (42,844,000) | |
Unamortized transaction costs related to the debt component | (5,621,000) | (6,526,000) | ||
Contractual coupon interest accrual | 5,569,000 | 3,733,000 | ||
Contractual Coupon Interest Payment | (3,713,000) | (3,733,000) | ||
Net carrying amount | $ 289,834,000 | $ 280,630,000 | ||
[1] | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. | |||
[2] | As of September 30, 2015, the remaining period over which the unamortized debt discount will be amortized is 3.75 years. |
2.25% Convertible Senior Note53
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components - Additional Information) (Details) - 2.25% Convertible Senior Notes Due 2019 [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.25% | 2.25% |
Transaction costs related to the equity component | $ 1,177 | |
Remaining period over which the unamortized debt discount will be amortized | 3 years 9 months |
2.25% Convertible Senior Note54
2.25% Convertible Senior Notes Due 2019 (Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | ||||
Contractual coupon interest expense | $ 1,856 | $ 1,856 | $ 5,569 | $ 1,856 |
Amortization of debt discount | 2,187 | 2,071 | 6,443 | 2,071 |
Amortization of debt issuance costs | 312 | 282 | 905 | 282 |
Total interest expense related to Notes | $ 4,355 | $ 4,209 | $ 12,917 | $ 4,209 |
Cash Dividend Distribution (Add
Cash Dividend Distribution (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 30, 2015 | Feb. 24, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Nov. 03, 2015 | Aug. 04, 2015 |
Dividends Payable [Line Items] | |||||||||||||
Cash dividends approved | $ 4,548 | ||||||||||||
Cash dividends approved, per share | $ 0.103 | $ 0.103 | |||||||||||
Cash dividend distribution | $ 4,548 | $ 7,330 | $ 29,318 | ||||||||||
Cash dividend distribution, per share | $ 0.166 | $ 0.664 | |||||||||||
Cash dividend declared | $ 4,548 | $ 7,330 | $ 7,330 | $ 7,330 | $ 7,330 | ||||||||
Cash dividend declared, per share | $ 0.103 | $ 0.166 | $ 0.166 | $ 0.166 | $ 0.166 | $ 0.103 | $ 0.166 | $ 0.309 | $ 0.498 | ||||
Dividend payable date | Jan. 15, 2016 | ||||||||||||
Dividends payment, date of record | Dec. 31, 2015 | ||||||||||||
Subsequent Events [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Cash dividends approved | $ 4,548 | ||||||||||||
Cash dividends approved, per share | $ 0.103 | ||||||||||||
First Quarter Previous Year [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Apr. 15, 2015 | ||||||||||||
Dividends payment, date of record | Mar. 29, 2015 | ||||||||||||
Second Quarter Previous Year [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Jul. 15, 2015 | ||||||||||||
Dividends payment, date of record | Jun. 30, 2015 | ||||||||||||
Third Quarter Previous Year [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Oct. 15, 2014 | ||||||||||||
Dividends payment, date of record | Sep. 30, 2015 | ||||||||||||
Fourth Quarter Previous Year [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Jan. 15, 2015 | ||||||||||||
Dividends payment, date of record | Dec. 31, 2014 | ||||||||||||
Fourth Quarter [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Jan. 15, 2015 | ||||||||||||
Dividends payment, date of record | Dec. 31, 2014 | ||||||||||||
First Quarter [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Apr. 15, 2015 | ||||||||||||
Dividends payment, date of record | Mar. 31, 2015 | ||||||||||||
Second Quarter [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Jul. 15, 2015 | ||||||||||||
Dividends payment, date of record | Jun. 30, 2015 | ||||||||||||
Third Quarter [Member] | |||||||||||||
Dividends Payable [Line Items] | |||||||||||||
Dividend payable date | Oct. 15, 2015 | ||||||||||||
Dividends payment, date of record | Sep. 30, 2015 |