UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		-OR-

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-33647

MercadoLibre, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware		98-0212790
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification Number)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

44,142,020 shares of the issuer’s common stock, $0.001 par value, outstanding as of November 1, 2011.

 

 

MERCADOLIBRE, INC.
INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION
Item 1 — Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010			2
Condensed Consolidated Statements of Income for the three- and nine-month periods ended September 30, 2011 and 2010			3
Condensed Consolidated Statements of Changes in Equity for the nine-month periods ended September 30, 2011 and 2010			4
Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2011 and 2010			6
Notes to Condensed Consolidated Financial Statements			8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			34
Item 3 — Qualitative and Quantitative Disclosures About Market Risk			51
Item 4 — Controls and Procedures			54
PART II. OTHER INFORMATION
Item 1 — Legal Proceedings			54
Item 1A — Risk Factors			56
Item 6 — Exhibits			56
INDEX TO EXHIBITS			58
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

Item 1.		Unaudited Condensed Consolidated Financial Statements

MercadoLibre, Inc.

Condensed Consolidated Financial Statements
as of September 30, 2011 and December 31, 2010
and for the three- and nine-month periods
ended September 30, 2011 and 2010

MercadoLibre, Inc.

Condensed Consolidated Balance Sheets
As of September 30, 2011 and December 31, 2010

		September 30,				December 31,
		2011				2010
		(Unaudited)				(Audited)
Assets
Current assets:
Cash and cash equivalents		$	59,083,417			$	56,830,466
Short-term investments			67,578,494				5,342,766
Accounts receivable, net			15,429,301				12,618,173
Funds receivable from customers			13,244,197				6,151,518
Prepaid expenses			1,140,002				913,262
Deferred tax assets			11,922,213				12,911,256
Other assets			6,093,323				6,867,767
Total current assets			174,490,947				101,635,208
Non-current assets:
Long-term investments			41,002,762				78,846,281
Property and equipment, net			31,351,966				20,817,712
Goodwill, net			62,861,760				60,496,314
Intangible assets, net			6,710,125				4,141,167
Deferred tax assets			3,495,916				2,975,118
Other assets			5,430,114				771,223
Total non-current assets			150,852,643				168,047,815
Total assets		$	325,343,590			$	269,683,023
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses		$	19,998,140			$	17,232,103
Funds payable to customers			58,874,916				48,788,225
Payroll and social security payable			11,722,130				10,786,534
Taxes payable			9,997,791				11,487,574
Loans payable and other financial liabilities			140,107				100,031
Dividends payable			3,531,362				—
Total current liabilities			104,264,446				88,394,467
Non-current liabilities:
Payroll and social security payable			3,056,099				2,562,343
Loans payable and other financial liabilities			178,543				188,846
Deferred tax liabilities			8,219,638				5,167,699
Other liabilities			1,770,821				1,651,398
Total non-current liabilities			13,225,101				9,570,286
Total liabilities		$	117,489,547			$	97,964,753
Commitments and contingencies (Note 8)
Equity:
Common stock, $0.001 par value, 110,000,000 shares authorized, 44,142,020 and 44,131,376 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively		$	44,142			$	44,131
Additional paid-in capital			120,440,906				120,391,622
Retained earnings			118,262,734				73,681,556
Accumulated other comprehensive loss			(34,304,372	)			(22,399,039	)
Total Equity of MercadoLibre, Inc.			204,443,410				171,718,270
Noncontrolling Interest			3,410,633				—
Total equity			207,854,043				171,718,270
Total liabilities and equity		$	325,343,590			$	269,683,023

The accompanying notes are an integral part of these condensed consolidated financial statements.

MercadoLibre, Inc.

Condensed Consolidated Statements of Income
For the three- and nine-month periods ended September 30, 2011 and 2010

		Nine Months Ended September 30,								Three Months Ended September 30,
		2011				2010				2011				2010
		(Unaudited)								(Unaudited)
Net revenues		$	212,465,972			$	154,399,483			$	81,628,144			$	55,951,378
Cost of net revenues			(51,331,295	)			(32,755,531	)			(20,060,474	)			(11,450,919	)
Gross profit			161,134,677				121,643,952				61,567,670				44,500,459
Operating expenses:
Product and technology development			(16,600,802	)			(11,425,716	)			(5,925,019	)			(4,224,476	)
Sales and marketing			(45,567,338	)			(34,863,616	)			(16,701,982	)			(12,281,672	)
General and administrative			(28,160,262	)			(21,725,081	)			(8,976,946	)			(8,683,605	)
Total operating expenses			(90,328,402	)			(68,014,413	)			(31,603,947	)			(25,189,753	)
Income from operations			70,806,275				53,629,539				29,963,723				19,310,706
Other income (expenses):
Interest income and other financial gains			7,037,264				3,073,427				2,913,596				1,361,899
Interest expense and other financial charges			(2,562,633	)			(6,919,307	)			(1,052,865	)			(567,969	)
Foreign currency gain / (loss)			2,080,822				7,275				3,284,190				(354,219	)
Other income / (loss), net			253,148				—				(7,292	)			—
Net income before income / asset tax expense			77,614,876				49,790,934				35,101,352				19,750,417
Income / asset tax expense			(22,439,967	)			(9,705,408	)			(8,804,905	)			(959,454	)
Net income		$	55,174,909			$	40,085,526			$	26,296,447			$	18,790,963
Less: Net Income attributable to Noncontrolling Interest			522				—				522				—
Net income attibutable to MercadoLibre, Inc.		$	55,174,387			$	40,085,526			$	26,295,925			$	18,790,963

		Nine Months Ended September 30,								Three Months Ended September 30,
		2011				2010				2011				2010
		(Unaudited)								(Unaudited)
Basic EPS
Basic net income attibutable to MercadoLibre, Inc. per common share		$	1.25			$	0.91			$	0.60			$	0.43
Weighted average shares			44,137,176				44,121,539				44,141,925				44,129,762
Diluted EPS
Diluted net income attibutable to MercadoLibre, Inc. per common share		$	1.25			$	0.91			$	0.60			$	0.43
Weighted average shares			44,150,872				44,144,678				44,151,218				44,151,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

MercadoLibre, Inc.

Condensed Consolidated Statements of Changes in Equity
For the nine-month periods ended September 30, 2011 and 2010 (unaudited)

																						Accumulated
														Additional								other				Total Equity				Total
		Comprehensive				Common stock								paid-in				Retained				comprehensive				of				Noncontrolling
		income				Shares				Amount				capital				Earnings				income / (loss)				MercadoLibre, Inc.				Equity				Total
Balance as of December 31, 2009							44,120,269			$	44,120			$	120,257,998			$	17,656,537			$	(23,765,418	)		$	114,193,237			$	—			$	114,193,237
Stock options exercised							7,126				7				18,192				—				—				18,199				—				18,199
Stock-based compensation — stock options							—				—				183				—				—				183				—				183
Stock-based compensation — restricted shares							—				—				37,696				—				—				37,696				—				37,696
Stock-based compensation LTRP							—				—				52,291				—				—				52,291				—				52,291
LTRP shares issued							3,981				4				(4	)			—				—				—				—				—
Net income		$	40,085,526				—				—				—				40,085,526				—				40,085,526				—				40,085,526
Currency translation adjustment			1,129,724				—				—				—				—				1,129,724				1,129,724				—				1,129,724
Unrealized net gain on investments			670,471				—				—				—				—				670,471				670,471				—				670,471
Realized net gain on investments			(27,630	)			—				—				—				—				(27,630	)			(27,630	)			—				(27,630	)
Comprehensive income		$	41,858,091
Balance as of September 30, 2010							44,131,376			$	44,131			$	120,366,356			$	57,742,063			$	(21,992,853	)		$	156,159,697			$	—			$	156,159,697
Stock options exercised							—				—				—				—				—				—				—				—
Stock-based compensation — stock options							—				—				61				—				—				61				—				61
Stock-based compensation — restricted shares							—				—				—				—				—				—				—				—
Stock-based compensation LTRP							—				—				25,205				—				—				25,205				—				25,205
Net income		$	15,939,493				—				—				—				15,939,493				—				15,939,493				—				15,939,493
Currency translation adjustment			218,758				—				—				—				—				218,758				218,758				—				218,758
Unrealized net loss on investments			(624,944	)			—				—				—				—				(624,944	)			(624,944	)			—				(624,944	)
Realized net gains on investments			—				—				—				—				—				—				—				—				—
Comprehensive income		$	15,533,307
Balance as of December 31, 2010							44,131,376			$	44,131			$	120,391,622			$	73,681,556			$	(22,399,039	)		$	171,718,270			$	—			$	171,718,270

The accompanying notes are an integral part of these condensed consolidated financial statements.

MercadoLibre, Inc.
Condensed Consolidated Statements of Changes in Equity
For the nine-month periods ended September 30, 2011 and 2010 (unaudited)

																						Accumulated
														Additional								other				Total Equity				Total
		Comprehensive				Common stock								paid-in				Retained				comprehensive				of				Noncontrolling				Total
		income				Shares				Amount				capital				Earnings				income / (loss)				MercadoLibre, Inc.				Equity				Equity
Balance as of December 31, 2010							44,131,376			$	44,131			$	120,391,622			$	73,681,556			$	(22,399,039	)		$	171,718,270			$	—			$	171,718,270
Stock options exercised							5,950				6				11,169				—				—				11,175				—				11,175
Stock-based compensation LTRP							—				—				38,120				—				—				38,120				—				38,120
Dividend Distribution							—				—				—				(10,593,209	)			—				(10,593,209	)			—				(10,593,209	)
LTRP shares issued							4,694				5				(5	)			—				—				—				—				—
Noncontrolling interest							—				—				—				—				—				—				3,648,037				3,648,037
Net income		$	55,174,387				—				—				—				55,174,387				—				55,174,387				522				55,174,909
Currency translation adjustment			(12,787,985	)			—				—				—				—				(12,787,985	)			(12,787,985	)			(237,926	)			(13,025,911	)
Unrealized net gains on investments			928,179				—				—				—				—				928,179				928,179				—				928,179
Realized net gain on investments			(45,527	)			—				—				—				—				(45,527	)			(45,527	)			—				(45,527	)
Comprehensive income		$	43,269,054
Balance as of September 30, 2011							44,142,020			$	44,142			$	120,440,906			$	118,262,734			$	(34,304,372	)		$	204,443,410			$	3,410,633			$	207,854,043

The accompanying notes are an integral part of these condensed consolidated financial statements.

MercadoLibre, Inc.

Condensed Consolidated Statements of Cash Flows
For the nine-month periods ended September 30, 2011 and 2010 (unaudited)

		Nine Months Ended September 30,
		2011				2010
		(Unaudited)
Cash flows from operations:
Net income		$	55,174,909			$	40,085,526
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			5,249,168				3,594,156
Accrued interest			(4,461,828	)			(262,088	)
Stock-based compensation expense — stock options			—				183
Stock-based compensation expense — restricted shares			—				37,696
LTRP accrued compensation			2,527,494				2,798,656
Deferred income taxes			1,174,177				(6,950,762	)
Changes in assets and liabilities, net of the effect of the acquired business :
Accounts receivable			(6,290,360	)			(6,048,287	)
Funds receivable from customers			(8,188,181	)			(877,971	)
Prepaid expenses			(276,976	)			(113,329	)
Other assets			(5,228,268	)			(2,600,348	)
Accounts payable and accrued expenses			6,288,050				7,856,387
Funds payable to customers			16,052,471				7,393,673
Other liabilities			273,016				(2,923,832	)
Net cash provided by operating activities			62,293,672				41,989,660
Cash flows from investing activities:
Purchase of investments			(297,570,336	)			(85,338,161	)
Proceeds from sale and maturity of investments			268,529,776				51,145,297
Payment for acquired businesses, net of cash acquired			(5,468,180	)			—
Purchases of intangible assets			(119,262	)			(12,788	)
Purchases of property and equipment			(17,084,397	)			(10,554,982	)
Net cash used in investing activities			(51,712,399	)			(44,760,634	)
Cash flows from financing activities:
Decrease in loans payable			—				(2,898,702	)
Dividends distribution			(7,061,847	)			—
Stock options exercised			11,175				18,199
Net cash used in financing activities			(7,050,672	)			(2,880,503	)
Effect of exchange rate changes on cash and cash equivalents			(1,277,650	)			299,975
Net increase / (decrease) in cash and cash equivalents			2,252,951				(5,351,502	)
Cash and cash equivalents, beginning of the period			56,830,466				49,803,402
Cash and cash equivalents, end of the period		$	59,083,417			$	44,451,900

MercadoLibre, Inc.
Condensed Consolidated Statements of Cash Flows
For the nine-month periods ended September 30, 2011 and 2010 (unaudited)

		Nine Months Ended September 30,
		2011				2010
		(Unaudited)
Supplemental cash flow information:
Cash paid for interest		$	45,247			$	5,765,634
Cash paid for income and asset taxes		$	22,355,122			$	16,603,211
Acquisition of AutoPlaza.com
Cash and cash equivalents		$	3,876			$	—
Tax credits			49,951				—
Non current assets			99,522				—
Total assets acquired			153,349				—
Total liabilities assumed			—				—
Net assets acquired			153,349				—
Identifiable Intangible Assets			8,966,744				—
Noncontrolling interest			(3,648,037	)
Total purchase price		$	5,472,056				—
Cash and cash equivalents acquired			3,876				—
Payment for acquired businesses, net of cash acquired		$	5,468,180				—

MercadoLibre, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Nature of Business

MercadoLibre Inc. (the “Company”) is an e-commerce enabler whose mission is to build the necessary online and technology tools to allow practically anyone to trade almost anything, helping to make inefficient markets more efficient in Latin America.

The Company developed a web-based marketplace in which buyers and sellers are brought together to browse, buy and sell items such as computers, electronics, collectibles, automobiles, clothing and a host of practical and miscellaneous items. Additionally, the Company introduced MercadoPago in 2004, an integrated online payments solution. MercadoPago was designed to facilitate transactions on the MercadoLibre Marketplace by providing an escrow mechanism that enables users to send and receive payments online.

Since 2004, the Company introduced an online classifieds platform for motor vehicles, vessels and aircrafts and since 2006 the real state online classifieds platform. In 2006, the Company launched eShops, a new platform tailored to attract lower rotation items and increase the breadth of products offered, the introduction of user generated information guides for buyers that improve the shopping experience, and the expansion of the online classifieds model by adding the services category.

During 2007 the Company also launched a new and improved version of its MercadoPago payments platform in Chile and Colombia as well as in Argentina during 2008. The new MercadoPago, in addition to improving the ease of use and efficiency of payments for marketplace purchases, also allows for payments outside of the Company’s marketplaces. Users are able to transfer money to other users with MercadoPago accounts and to incorporate MercadoPago as a means of payments in their independent commerce websites. In this way MercadoPago 3.0 as it has been called is designed to meet the growing demand for Internet based payments systems in Latin America. On March 30, 2010, the Company started processing off-MercadoLibre transactions through its new direct payments product to any site in Brazil which elects to adopt it. On July 16, 2010, the Company launched MercadoPago 3.0 in Brazil for all of its marketplace transactions. In February 2011, the Company started processing off-platform transactions in Mexico using its new direct payments product, MercadoPago 3.0, for any site in Mexico that elects to adopt it, while maintaining the escrow product for on-platform transactions. On April 15, 2011, the Company launched a new and improved version of its MercadoPago payments platform for all its marketplace transactions in Mexico.

As of September 30, 2011, the Company, through its wholly-owned subsidiaries, operated online commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, Uruguay and Venezuela, and online payments solutions directed towards Argentina, Brazil, Mexico, Venezuela, Chile and Colombia. In addition, the Company operates a real estate classified platform that covers some areas of Florida, U.S.A.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

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 financial statements are stated in US dollars. All intercompany transactions and balances have been eliminated.

Substantially all revenues and operating costs are generated in the Company’s foreign operations, amounting to approximately 99.7% and 99.5% of the consolidated totals during the nine-month periods ended September 30, 2011 and 2010, respectively. Long-lived assets located in the foreign operations totaled $94,052,845 and $81,834,265 as of September 30, 2011 and December 31, 2010, respectively. Cash and cash equivalents as well as short and long-term investments, totaling $167,664,673 and $141,019,513 at September 30, 2011 and December 31, 2010, respectively, are mainly located in the United States of America and Brazil.

These unaudited interim condensed financial statements reflect the Company’s consolidated financial position as of September 30, 2011 and December 31, 2010. These statements also show the Company’s consolidated statement of income for the three- and nine-month periods ended September 30, 2011 and 2010, its consolidated statement of shareholders’ equity and its consolidated statement of cash flows for the nine-month periods ended September 30, 2011 and 2010. These 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 generally accepted accounting principles in the United States of America for annual consolidated financial statements are not included herein, these interim financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2010, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 25, 2011. The condensed consolidated statements of income, equity and cash flows for the periods presented are not necessarily indicative of results expected for any future period.

Revenue Recognition

The Company generates revenues for different services provided. When more than one service is included in one single arrangement with the customer, the Company recognizes revenue according to multiple element arrangements accounting, distinguishing between each of the services provided and allocating revenues based on their respective selling prices.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Revenue Recognition (Continued)

Revenues are recognized when evidence of an arrangement exists, the fee is fixed or determinable, no significant obligation remains and collection of the receivable is reasonably assured.

Services are separately recognized as revenue according to the following criteria described for each type of services:

• Services for intermediation between on-line buyers and sellers, for which the company charges a percentage on the transaction value (“final value fees”), are recognized as revenue once the sale transaction between the buyer and seller is successfully completed (which occurs upon confirmation of the sale by the seller).

• Services for the use of the Company’s on-line payments solution, for transactions off-platform ordered by MercadoPago customers. The Company does not charge a separate fee for on-platform transactions in certain countries. The fee that we charge for all off-marketplace platform transactions is recorded as revenue once the transaction is completed, at the time when the payment is processed by the Company. For on-marketplace platform transactions, we generate revenue in the countries where we offer the service in a way that implies that the customer has to pay an additional fee for the right to use the payments solution.

• Listing and optional feature services, which fees relate to the right of a seller to have the item offered listed in a preferential way, as well as classified advertising services, are recorded as revenue ratably during the listing period. Those fees are charged at the time the listing is uploaded onto the Company’s platform and is not subject to successful sale of the items listed.

• Advertising revenues such as the sale of banners are recognized on accrual basis, and MercadoClics services or sponsorship of sites are recognized based on per-click values and as the impressions are delivered.

Credit Cards Receivables

Credit cards receivables from customers mainly relate to the Company’s payments solution and arise due to the time taken to clear transactions through external payment networks or during a short period of time until those credit cards receivables are sold to financial institutions.

The company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Allowances are based upon several factors including, but not limited to, historical experience and the current condition of specific customers.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Credit Cards Receivables (Continued)

Credit cards receivables are presented net of the related allowance for doubtful accounts and chargebacks.

As of September 30, 2011, there are no past due credit card receivables.

Foreign Currency Translation

All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Venezuela, as described below. Accordingly, these foreign subsidiaries translate assets and liabilities from their local currencies to U.S. dollars using year end exchange rates while income and expense accounts are translated at the average rates in effect during the year. The resulting translation adjustment is recorded as part of accumulated other comprehensive income (loss), a component of MercadoLibre equity. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. Net foreign currency transaction results are included in the consolidated statements of income under the caption “Foreign currency gain / (loss)” and amounted to $3,284,190 and $(354,219) for the three-month periods ended September 30, 2011 and 2010, respectively. For the nine-month periods ended September 30, 2011 and 2010, “Foreign currency gain / (loss)” amounted to $2,080,822 and $7,275, respectively

Until September 30, 2009, the Company translated its Venezuelan subsidiaries assets, liabilities, income and expense accounts at the official rate of 2.15 “Bolivares Fuertes” per US dollar.

Starting in the fourth quarter of 2009, as a result of the changes in facts and circumstances that affected the Company’s ability to convert currency for dividends remittances using the official exchange rate in Venezuela, the Venezuelan subsidiaries assets, liabilities, income and expense accounts were translated using the parallel exchange rate resulting in the recognition in that quarter of a currency translation loss adjustment of $16,977,276 recorded in accumulated other comprehensive income/(loss). The average exchange rate used for translating the fourth quarter of 2009 results was 5.67 “Bolivares Fuertes” per US dollar and the year-end exchange rate used for translating assets and liabilities was 6.05 “Bolivares Fuertes” per US dollar.

As of the date of these interim condensed consolidated financial statements the Company did not buy US dollars at the official rate of 2.15 “Bolivares Fuertes” per US dollar.

According to US GAAP, we have transitioned our Venezuelan operations to highly inflationary status as of January 1, 2010 considering the US dollar as the functional currency. See “Highly inflationary status in Venezuela” below.

Therefore, no translation effect was accounted for in other comprehensive income since January 1, 2010 related to our Venezuelan operations.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Foreign Currency Translation (Continued)

Until May 13, 2010, the only way by which US dollars could be purchased outside the official currency market was using an indirect mechanism consisting in the purchase and sale of securities, including national public debt bonds (DPNs) denominated in Bolivares Fuertes and bonds issued by the government that were denominated in U.S. dollars. This mechanism for transactions in certain securities created an indirect “parallel” foreign currency exchange market in Venezuela that enabled entities to obtain foreign currency through financial brokers without going through Commission for the Administration of Foreign Exchange (“CADIVI”). Although the parallel exchange rate was higher, and accordingly less beneficial, than the official exchange rate, some entities used the “parallel” market to exchange currency because of the delays of CADIVI in approving in a timely manner the exchange of currency requested by such entities. Until May 13, 2010, our Venezuelan subsidiaries used this mechanism to buy US dollars and accordingly we used the parallel average exchange rate to re-measure those foreign currency transactions.

However, on May 14th, 2010, the Venezuelan government enacted reforms to its exchange regulations and close-down such parallel market by declaring that foreign-currency-denominated securities issued by Venezuelan entities were included in the definition of foreign currency, thus making the Venezuelan Central Bank (BCV) the only institution that could legally authorize the purchase or sale of foreign currency bonds, thereby excluding non-authorized brokers from the foreign exchange market.

Trading of foreign currencies was re-opened as a regulated market on June 9, 2010 with the Venezuelan Central Bank as the only institution through which foreign currency-denominated transactions can be brokered. Under the new system, known as the Foreign Currency Securities Transactions System (SITME), entities domiciled in Venezuela can buy U.S. dollar—denominated securities only through banks authorized by the BCV to import goods, services or capital inputs. Additionally, the SITME imposes volume restrictions on an entity’s trading activity, limiting such activity to a maximum equivalent of $50,000 per day, not to exceed $350,000 in a calendar month. This limitation is non-cumulative, meaning that an entity cannot carry over unused volume from one month to the next.

As a consequence of this new system, commencing on June 9, 2010, we have transitioned from the parallel exchange rate to the SITME rate and started re-measuring foreign currency transactions using the SITME rate published by BCV, which was 5.27 “Bolivares Fuertes” per U.S. dollar as of June 9, 2010.

For the period beginning on May 14, 2010 and ending on June 8, 2010 (during which there was no open foreign currency markets) we applied US GAAP guidelines, which state that if exchangeability between two currencies is temporarily lacking at the transaction date or balance sheet date, the first subsequent rate at which exchanges could be made shall be used.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Foreign Currency Translation (Continued)

Accordingly, the June 9, 2010 exchange rate published by the Venezuelan Central Bank has been used to re-measure transactions during the abovementioned period. As of September 30, 2011, the exchange rate used to re-measure transactions is 5.30 “Bolivares Fuertes” per U.S. dollar.

The following table sets forth the assets, liabilities and net assets of the Company’s Venezuelan subsidiaries, before intercompany eliminations, as of September 30, 2011 and December 31, 2010.

		September 30,				December 31,
		2011				2010
Venezuelan operations
Assets		$	24,390,518			$	21,928,340
Liabilities			(7,729,510	)			(8,212,581	)
Net Assets			16,661,008				13,715,759

As of September 30, 2011, net assets of the Venezuelan subsidiaries (before intercompany eliminations) amount to approximately 8.0% of our consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amount to approximately 5.2% of our consolidated cash and investments.

Although, the current mechanisms available to obtain US dollars for dividends distributions to shareholders outside Venezuela imply increased restrictions, the Company does not expect that the current restrictions to purchase dollars have a significant adverse effect on its business plans with regard to the investment in Venezuela.

Highly inflationary status in Venezuela

During May 2009, the International Practices Task Force discussed the highly inflationary status of the Venezuelan economy. Historically, the Task Force has used the Consumer Price Index (CPI) when considering the inflationary status of the Venezuelan economy.

The CPI has existed since 1984. However, the CPI covers only the cities of Caracas and Maracaibo. Commencing on January 1, 2008, the National Consumer Price Index (NCPI) has been developed to cover the entire country of Venezuela. Since inflation data is not available to compute a cumulative three year inflation rate for the entire country solely based on the NCPI, the Company uses a blended rate using the NCPI and CPI to calculate Venezuelan inflation rate.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Foreign Currency Translation (Continued)

The cumulative three year inflation rate as of December 31, 2009 was calculated using the CPI information for periods before January 1, 2008 and NCPI information for the period after January 1, 2008. The blended CPI/NCPI three-year inflation index (23 months of NCPI and 13 months of CPI) as of November 30, 2009 exceeded 100%. According to US GAAP, calendar year-end companies should apply highly inflationary accounting as from January 1, 2010. Therefore, the Company transitioned its Venezuelan operations to highly inflationary status as of January 1, 2010 considering the US dollar as the functional currency.

Taxes on Revenues

The Company’s subsidiaries in Brazil, Argentina, Venezuela and Colombia are subject to certain taxes on revenues which are classified as cost of revenues. Taxes on revenues totaled $5,948,244 and $3,893,210 for the three-month periods ended September 30, 2011 and 2010, respectively. Taxes on revenues totaled $15,698,754 and $10,518,144 for the nine-month periods ended September 30, 2011 and 2010, respectively.

Income and Asset Taxes

The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities.

From fiscal year 2008 to fiscal year 2019, the Company’s Argentine subsidiary is a beneficiary of a software development law. Part of the benefits obtained from being a beneficiary of the aforementioned law is a relief of 60% of total income tax determined in each year, until fiscal year 2019. Aggregate tax benefit totaled $1,527,295 and $1,250,042 for the three-month periods ended September 30, 2011 and 2010, respectively. Aggregate tax benefit totaled $4,062,730 and $3,220,530 for the nine-month periods ended September 30, 2011 and 2010, respectively. Aggregate per share effect of the Argentine tax holiday amounts to $0.03 and $0.03 for the three-month periods ended September 30, 2011 and 2010, respectively. Aggregate per share effect of the Argentine tax holiday amounts to $0.09 and $0.07 for the nine-month periods ended September 30, 2011 and 2010, respectively. If the Company had not been granted the Argentine tax holiday, the Company would have pursued an alternative tax planning strategy and, therefore, the impact of not having this particular benefit would not necessarily be the abovementioned dollar and per share effect.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Income and Asset Taxes (Continued)

As of September 30, 2011 and December 31, 2010, MercadoLibre, Inc has included in the non-current deferred tax assets line the foreign tax credits related to the dividend distributions received from its subsidiaries for a total amount of $3,000,169 and $2,436,224, respectively. Those foreign tax credits will be used to offset the future domestic income tax payable.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles 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, depreciation, amortization, impairment and useful lives of long-lived assets, compensation cost related to cash and share-based compensation and restricted shares, recognition of current and deferred income taxes and contingencies. Actual results could differ from those estimates.

Comprehensive Income

Comprehensive income is comprised of two components, net income and other comprehensive income (loss), and defined as all other changes in equity of the Company that result from transactions other than with shareholders. Other comprehensive income (loss) includes the cumulative translation adjustment relating to the translation of the financial statements of the Company’s foreign subsidiaries and unrealized gains/(losses) on investments classified as available-for-sale securities. Total comprehensive income for the three-month periods ended September 30, 2011 and 2010 amounted to $10,096,602 and $22,447,005, respectively and for the nine-month periods ended September 30, 2011 and 2010 amounted to $43,031,650 and $41,858,091 respectively.

Recent Accounting Pronouncements

Goodwill Impairment Test

On September 15, 2011, the Financial Accounting Standards Board (FASB) issued an amendment to the guidance on testing goodwill for impairment. Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

2. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements (Continued)

Goodwill Impairment Test (Continued)

carrying amount, the two-step impairment test would be required. The accounting standard update does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. In addition, it does not amend the requirement to test goodwill for impairment between annual tests if events or circumstances warrant; however, it does revise the examples of events and circumstances that an entity should consider. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company expects to adopt this new guidance for its financial statements related to the fiscal year ending December 31, 2011.

Presentation of Comprehensive Income

On June 16, 2011 the Financial Accounting Standards Board (“FASB”) issued an amendment to disclosures about the presentation of the comprehensive income in the financial statements. The new guidance provides two ways to present the components of the comprehensive income, in either (a) a continuous statement of comprehensive income, or (b) two separate but consecutive statements. The amended disclosures about the presentation of the comprehensive income in the financial statements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect to have a significant impact on the presentation of the consolidated financial statements.

Fair value measurement and disclosure

In May 2011, the FASB issued new accounting guidance that amends some fair value measurement principles and it expands the ASC 820 existing disclosure requirements for fair value measurements. The new guidance states that the concepts of highest and best use and valuation premise are only relevant when measuring the fair value of nonfinancial assets and prohibits the grouping of financial instruments for purposes of determining their fair values when the unit of account is specified in other guidance. We will adopt this accounting standard upon its effective date for periods beginning on or after December 15, 2011, and do not anticipate that this adoption will have a significant impact on our financial position or results of operations.

3. Net Income per Share

Basic earnings per share for the Company’s common stock is computed by dividing net income attributable to MercadoLibre, Inc. common stock for the period by the weighted average number of common shares outstanding during the period.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

3. Net Income per Share (Continued)

The Company’s restricted shares granted to its outside directors were participating securities. Accordingly, net income attributable to MercadoLibre, Inc. for the nine-month periods ended September 30, 2010, was allocated between unvested restricted shares and common stock under the “two class method” for purposes of computing basic and diluted earnings per share.

Diluted earnings per share for the Company’s common stock assume the exercise of outstanding stock options and vesting restricted shares, additional shares and shares granted under the 2008 Long Term Retention Plan under the Company’s stock based employee compensation plans.

The following table shows how net income attributable to MercadoLibre, Inc. is allocated using the two-class method, for the three-month periods ended September 30, 2011 and 2010:

		Three Months Ended September 30,
		2011								2010
		Basic				Diluted				Basic				Diluted
Net income		$	26,296,447			$	26,296,447			$	18,790,963			$	18,790,963
Net income attributable to MercadoLibre, Inc. corresponding to unvested restricted shares			—				—				—				—
Net income attributable to Noncontrolling interests			522				522				—				—
Net income attributable to MercadoLibre, Inc. corresponding to common stock		$	26,295,925			$	26,295,925			$	18,790,963			$	18,790,963

The following table shows how net income attributable to MercadoLibre, Inc. is allocated using the two-class method, for the nine-month periods ended September 30, 2011 and 2010:

		Nine Months Ended September 30,
		2011								2010
		Basic				Diluted				Basic				Diluted
Net income		$	55,174,909			$	55,174,909			$	40,085,526			$	40,085,526
Net income attributable to MercadoLibre, Inc. corresponding to unvested restricted shares			—				—				4,474				4,474
Net income attributable to Noncontrolling interests			522				522				—				—
Net income attributable to MercadoLibre, Inc. corresponding to common stock		$	55,174,387			$	55,174,387			$	40,081,052			$	40,081,052

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

3. Net Income per Share (Continued)

Net income attributable to MercadoLibre, Inc. per share of common stock is as follows for the three-month periods ended September 30, 2011 and 2010:

		Three Months Ended September 30,
		2011								2010
		Basic				Diluted				Basic				Diluted
Net income attributable to MercadoLibre, Inc. per common share		$	0.60			$	0.60			$	0.43			$	0.43
Numerator:
Net income attributable to MercadoLibre, Inc.		$	26,295,925			$	26,295,925			$	18,790,963			$	18,790,963
Denominator:
Weighted average of common stock outstanding for Basic earnings per share			44,141,925				44,141,925				44,129,762				44,129,762
Adjustment for stock options			—				4,513				—				12,949
Adjustment for shares granted under LTRP			—				4,780				—				8,656
Adjusted weighted average of common stock outstanding for Diluted earnings per share			44,141,925				44,151,218				44,129,762				44,151,367

Net income attributable to MercadoLibre, Inc. per share of common stock is as follows for the nine-month periods ended September 30, 2011 and 2010:

		Nine Months Ended September 30,
		2011								2010
		Basic				Diluted				Basic				Diluted
Net income attributable to MercadoLibre, Inc. per common share		$	1.25			$	1.25			$	0.91			$	0.91
Numerator:
Net income attributable to MercadoLibre, Inc.		$	55,174,387			$	55,174,387			$	40,081,052			$	40,081,052
Denominator:
Weighted average of common stock outstanding for Basic earnings per share			44,137,176				44,137,176				44,121,539				44,121,539
Adjustment for stock options			—				8,894				—				14,821
Adjustment for shares granted under LTRP			—				4,802				—				8,318
Adjusted weighted average of common stock outstanding for Diluted earnings per share			44,137,176				44,150,872				44,121,539				44,144,678

The calculation of diluted net income per share excludes all anti-dilutive shares. For the three- and nine-month periods ended September 30, 2011 and 2010, there were no anti-dilutive shares.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

4. Business Combinations, Goodwill and Intangible Assets

		Business Combinations
		On September 14, 2011, the Company completed, through one of its subsidiaries, Meli Participaciones S.L. (“ETVE” or “the Buyer”), the acquisition of the 60% of outstanding membership interest of Autopark LLC, a limited liability company organized under the laws of Delaware, from Hasteny Trading S.A. (“Hasteny“or “the Seller”), a parent company organized under the laws of Uruguay, who owned all the shares of the capital stock of Autopark LLC.

Autopark LLC owns directly and indirectly the 100% of the membership interest of AP Clasificados S.R.L. de C.V. (“AP Clasificados”), a company organized under the laws of Mexico. AP Clasificados operates an online classified advertisements platform in Mexico primarily dedicated to the sale of automobiles at www.autoplaza.com.mx and real estate at www.homeshop.com.mx (“the Acquired Business”).

The aggregate purchase price paid by the Company to the Seller for the 60% of the Acquired Business was $5,472,056. In addition, the Company incurred in certain direct costs of the business combination which were expensed as incurred.

On September 12, 2011 (the “settlement date”), part of the purchase price amounting to $1,500,000, was placed into an escrow account, in order to cover unexpected liabilities and working capital. On September 12, 2012 and 2013, 50% of the escrow amount less the amount of all claims made by the Buyer, if any, will be released, respectively.

In addition, ETVE has the right and option (but not the obligation) to purchase the remaining 40% of the membership interest of Autopark LLC following the earlier to occur of (i) third anniversary of the settlement date, or (ii) additional capital contribution be required to capitalize Autopark LLC by their own member’s decision and Hasteny does not make such additional capital contribution within ten (10) days of such members’ consent. The total consideration to be paid shall be the greater of (i) $4,000,000 and (ii) the amount resulting from multiplying (A) the percentage of the membership interest held by Hasteny as of the date of the Call Notice by (B) an amount equal to 3.5 times the amount of invoiced sales of the Acquired Business for the twelve months period ending on the date of Call Notice.

On the other hand, Hasteny has the right and option (but not the obligation) to sell and transfer, all of the Hasteny interest in Autopark LLC, to ETVE and ETVE has the obligation to buy following the earlier to occur (i) the third anniversary of the effective date, (ii) the termination of the employment of the main operating officer of the acquired company, or (iii) death or incapacitation of the main operating officer of the acquired company. The total consideration to be paid by ETVE for the Hasteny Interests shall be the same as described in the preceding paragraph.

The Seller and its affiliates have also agreed to enter into certain non-compete agreements with the Company for 5 years since September 12, 2011.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

4. Business Combinations, Goodwill and Intangible Assets (Continued)

Business Combinations (Continued)

The Company’s statement of income includes the results of operations of the Acquired Businesses from September 15, 2011.

The following table summarizes the preliminary allocation of the cash paid in the acquisition:

Net Tangible Assets		$	153,349
Identifiable Intangible Assets			3,290,998
Deferred Tax Liabilities			(987,299	)
Goodwill			6,663,045
Noncontrolling interest			(3,648,037	)
Aggregate Purchase Price		$	5,472,056

		Assets acquired were valued at their respective fair values at the acquisition date according to U.S. GAAP. The valuation of identifiable intangible assets acquired as well as non-controlling interest reflects management’s estimates based on, among other factors, use of established valuation methods. The identifiable intangible assets consist of trademarks and domains, customer lists and non-compete agreements. Management of the Company estimates that trademarks have an indefinite useful life, for that reason, these intangible assets are not amortized but they are subject to an annual impairment test. Intangible assets associated with customer list and non-compete agreements are amortized over a five year period.

The Company recognized a goodwill because the acquired business is expected to expand the company’s business in Mexico and to strengthen the Company`s leadership position in that country.

Goodwill is not expected to be deductible for tax purposes.

The purchase price allocation, as fully described above, is preliminary.

The results of operations for periods prior to the acquisition, individually and in the aggregate, were not material to the condensed consolidated statements of operations of the Company and, accordingly, pro forma results of operations have not been presented.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

4.

Business Combinations, Goodwill and Intangible Assets (Continued)

Goodwill and Intangible Assets

The composition of goodwill and intangible assets is as follows:

		September 30,				December 31,
		2011				2010
Goodwill		$	62,861,760			$	60,496,314
Intangible assets with indefinite lives
- Trademarks			5,106,747				2,460,952
Amortizable intangible assets
- Licenses and others			2,671,058				2,606,402
- Non-compete agreement			1,288,216				1,241,357
- Customer list			1,765,069				1,607,097
Total intangible assets		$	10,831,090			$	7,915,808
Accumulated amortization			(4,120,965	)			(3,774,641	)
Total intangible assets, net		$	6,710,125			$	4,141,167

Goodwill

The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2011 and the year ended December 31, 2010, are as follows:

		Nine Months Ended September 30, 2011
		Brazil				Argentina				Chile				Mexico				Venezuela				Colombia				Other Countries				Total
Balance, beginning of year		$	13,130,649			$	23,364,326			$	7,296,888			$	5,025,623			$	4,846,030			$	5,448,068			$	1,384,730			$	60,496,314
- Purchase of Autoplaza.com			—				—				—				6,663,045				—				—				—				6,663,045
- Effect of exchange rates changes			(1,332,609	)			(1,272,397	)			(751,701	)			(951,712	)			—				(3,186	)			14,006				(4,297,599	)
Balance, end of the period		$	11,798,040			$	22,091,929			$	6,545,187			$	10,736,956			$	4,846,030			$	5,444,882			$	1,398,736			$	62,861,760

		Year Ended December 31, 2010
		Brazil				Argentina				Chile				Mexico				Venezuela				Colombia				Other Countries				Total
Balance, beginning of year		$	12,565,062			$	24,446,463			$	6,734,405			$	4,770,560			$	4,846,030			$	5,100,939			$	1,359,287			$	59,822,746
- Effect of exchange rates changes			565,587				(1,082,137	)			562,483				255,063				—				347,129				25,443				673,568
Balance, end of the year		$	13,130,649			$	23,364,326			$	7,296,888			$	5,025,623			$	4,846,030			$	5,448,068			$	1,384,730			$	60,496,314

Amortizable intangible assets

Amortizable intangible assets are comprised of customer lists and user base, trademarks and trade names, non-compete agreements, acquired software licenses and other acquired intangible assets including developed technologies. Aggregate amortization expense for intangible assets totaled $252,293 and $236,637 for the three-month periods ended September 30, 2011 and 2010, respectively. Aggregate amortization expense for intangible assets totaled $730,815 and $616,984 for the nine-month periods ended September 30, 2011 and 2010, respectively.

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

4.

Business Combinations, Goodwill and Intangible Assets (Continued)

Goodwill and Intangible Assets

Expected future intangible asset amortization from acquisitions completed as of September 30, 2011 is as follows:

For year ended 12/31/2011		$	211,694
For year ended 12/31/2012			698,693
For year ended 12/31/2013			430,549
For year ended 12/31/2014			112,035
For year ended 12/31/2015			85,947
Thereafter			64,460
		$	1,603,378

5. Segments

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

Segment reporting is based on geography as the main basis of segment breakdown to reflect the evaluation of the Company’s performance defined by the management.

The MercadoLibre segments include Brazil, Argentina, Mexico, Venezuela and other countries (such as Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal and Uruguay).

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

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

MercadoLibre, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)

5.

Segments (Continued)

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

		Three Months Ended September 30, 2011
		Brazil				Argentina				Mexico				Venezuela				Other Countries				Total
Net revenues		$	46,003,915			$	15,828,272			$	5,608,572			$	9,045,783			$	5,141,602			$	81,628,144
Direct costs			(25,709,957	)			(6,264,769	)			(3,183,432	)			(3,180,061	)			(2,636,836	)			(40,975,055	)
Direct contribution			20,293,958				9,563,503				2,425,140				5,865,722				2,504,766				40,653,089
Operating expenses and indirect costs of net revenues																							(10,689,366	)
Income from operations																							29,963,723
Other income (expenses):
Interest income and other financial gains																							2,913,596
Interest expense and other financial results																							(1,052,865	)
Foreign currency gain																							3,284,190
Other losses, net																							(7,292	)
Net income before income / asset tax expense																						$	35,101,352