MERCADOLIBRE INC [MELI] Filings

10-Q 1 meli-20240630.htm 10-Q meli-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended June 30, 2024

-OR-


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

For the transition period from _________ to _________

Commission file number 001-33647

___________________________________________________________________________________________________

MercadoLibre, Inc.

(Exact name of Registrant as specified in its Charter)

___________________________________________________________________________________________________


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

WTC Free Zone

Dr. Luis Bonavita 1294, Of. 1733, Tower II

Montevideo, Uruguay, 11300

(Address of principal executive offices) (Zip Code)

(+598) 2-927-2770

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

MELI

Nasdaq Global Select Market

2.375% Sustainability Notes due 2026

MELI26

The Nasdaq Stock Market LLC

3.125% Notes due 2031

MELI31

The Nasdaq Stock Market LLC

___________________________________________________________________________________________________

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ☒ No ☐

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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

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

50,697,438 shares of the issuer’s common stock, $0.001 par value, outstanding as of August 1, 2024.

Table of Contents

MERCADOLIBRE, INC.

INDEX TO FORM 10-Q


			Page
PART I. FINANCIAL INFORMATION

ITEM 1 — UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			1

Interim Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023			1

Interim Condensed Consolidated Statements of Income for the six and three-month periods ended June 30, 2024 and 2023			2

Interim Condensed Consolidated Statements of Comprehensive Income for the six and three-month periods ended June 30, 2024 and 2023			3

Interim Condensed Consolidated Statements of Equity for the six and three-month periods ended June 30, 2024 and 2023			4

Interim Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2024 and 2023			5

Notes to Interim Condensed Consolidated Financial Statements (unaudited)			7

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			41

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			63

ITEM 4 — CONTROLS AND PROCEDURES			66

PART II. OTHER INFORMATION			66

ITEM 1 — LEGAL PROCEEDINGS			66

ITEM 1A — RISK FACTORS			66

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			67

ITEM 5 — OTHER INFORMATION			67

ITEM 6 — EXHIBITS			67

INDEX TO EXHIBITS			68

SIGNATURES			69

Table of Contents

MercadoLibre, Inc. - Interim Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023

(In millions of U.S. dollars, except par value) (Unaudited)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	2,818	$	2,556
Restricted cash and cash equivalents	1,005		1,292
Short-term investments	4,073		3,480
Accounts receivable, net	190		156
Credit card receivables and other means of payments, net	4,168		3,632
Loans receivable, net of allowances of $1,312 and $1,042	3,440		2,629
Inventories	257		238
Customer crypto-assets safeguarding assets	67		34
Other assets	461		277
Total current assets	16,479		14,294
Non-current assets:
Long-term investments	416		162
Loans receivable, net of allowances of $41 and $42	111		65
Property and equipment, net	1,218		1,250
Operating lease right-of-use assets	775		899
Goodwill	149		163
Intangible assets, net	13		11
Intangible assets at fair value	36		24
Deferred tax assets	767		710
Other assets	66		68
Total non-current assets	3,551		3,352
Total assets	$	20,030	$	17,646
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	2,556	$	2,117
Funds payable to customers	5,402		4,475
Amounts payable due to credit and debit card transactions	1,480		1,072
Salaries and social security payable	482		545
Taxes payable	419		477
Loans payable and other financial liabilities	2,203		2,292
Operating lease liabilities	138		166
Customer crypto-assets safeguarding liabilities	67		34
Other liabilities	167		119
Total current liabilities	12,914		11,297
Non-current liabilities:
Amounts payable due to credit and debit card transactions	26		20
Loans payable and other financial liabilities	2,439		2,203
Operating lease liabilities	623		672
Deferred tax liabilities	159		183
Other liabilities	213		200
Total non-current liabilities	3,460		3,278
Total liabilities	$	16,374	$	14,575
Commitments and contingencies (Note 11)
Equity
Common stock, $0.001 par value, 110,000,000 shares authorized, 50,697,438 and 50,697,442 shares issued and outstanding	$	—	$	—
Additional paid-in capital	1,770		1,770
Treasury stock	(311)		(310)
Retained earnings	2,776		1,901
Accumulated other comprehensive loss	(579)		(290)
Total equity	3,656		3,071
Total liabilities and equity	$	20,030	$	17,646

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

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MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the six and three-month periods ended June 30, 2024 and 2023

(In millions of U.S. dollars, except for share data)

(Unaudited)


	Six Months Ended June 30,				Three Months Ended June 30,
	2024		2023 (1)		2024		2023 (1)
Net service revenues and financial income	$	8,547	$	6,133	$	4,592	$	3,221
Net product revenues	859		638		481		364
Net revenues and financial income	9,406		6,771		5,073		3,585
Cost of net revenues and financial expenses	(5,017)		(3,326)		(2,708)		(1,754)
Gross profit	4,389		3,445		2,365		1,831
Operating expenses:
Product and technology development	(918)		(749)		(460)		(368)
Sales and marketing	(989)		(766)		(511)		(383)
Provision for doubtful accounts	(824)		(474)		(450)		(222)
General and administrative	(404)		(369)		(218)		(189)
Total operating expenses	(3,135)		(2,358)		(1,639)		(1,162)
Income from operations	1,254		1,087		726		669

Other income (expenses):
Interest income and other financial gains	64		57		39		34
Interest expense and other financial losses	(77)		(83)		(39)		(49)
Foreign currency losses, net	(92)		(269)		(58)		(182)
Net income before income tax expense and equity in earnings of unconsolidated entity	1,149		792		668		472

Income tax expense	(274)		(332)		(137)		(210)
Equity in earnings of unconsolidated entity	—		3		—		—
Net income	$	875	$	463	$	531	$	262

(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior year results.


	Six Months Ended June 30,				Three Months Ended June 30,
	2024		2023		2024		2023
Basic earning per share
Basic net income available to shareholders per common share	$	17.26	$	9.23	$	10.48	$	5.22
Weighted average of outstanding common shares	50,697,444		50,203,652		50,697,447		50,162,687
Diluted earning per share
Diluted net income available to shareholders per common share	$	17.26	$	9.12	$	10.48	$	5.16
Weighted average of outstanding common shares	50,697,444		51,193,920		50,697,447		51,152,955

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

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MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Comprehensive Income

For the six and three-month periods ended June 30, 2024 and 2023

(In millions of U.S. dollars)

(Unaudited)


	Six Months Ended June 30,				Three Months Ended June 30,
	2024		2023		2024		2023
Net income	$	875	$	463	$	531	$	262
Other comprehensive (loss) income, net of income tax:
Currency translation adjustment	(298)		175		(270)		98
Unrealized gains (losses) on hedging activities	12		(10)		10		(3)
Tax (expense) benefit on unrealized gains (losses) on hedging activities	(4)		3		(3)		1
Less: Reclassification adjustment for (losses) gains on hedging activities included in cost of net revenues and financial expenses, interest expense and other financial losses and foreign currency losses, net	(2)		(2)		1		—
Less: Reclassification adjustment for estimated tax benefit on unrealized losses	1		1		—		—
Total other comprehensive (loss) income, net of income tax	(289)		169		(264)		96
Total comprehensive income	$	586	$	632	$	267	$	358

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

3 | MercadoLibre, Inc.

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MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Equity

For the six and three-month periods ended June 30, 2024 and 2023

(In millions of U.S. dollars)

(Unaudited)


	Common stock			Additional paid-in capital		Treasury Stock (1)		Retained Earnings		Accumulated other comprehensive loss		Total Equity
	Shares	Amount
Balance as of December 31, 2023	50	$	—	$	1,770	$	(310)	$	1,901	$	(290)	$	3,071
Net income	—	—		—		—		344		—		344
Other comprehensive loss	—	—		—		—		—		(25)		(25)
Balance as of March 31, 2024	50	$	—	$	1,770	$	(310)	$	2,245	$	(315)	$	3,390
Common Stock repurchased	—	—		—		(1)		—		—		(1)
Net income	—	—		—		—		531		—		531
Other comprehensive loss	—	—		—		—		—		(264)		(264)
Balance as of June 30, 2024	50	$	—	$	1,770	$	(311)	$	2,776	$	(579)	$	3,656

(1) As of June 30, 2024, the Company held 225,474 shares as treasury stock.


	Common stock			Additional paid-in capital		Treasury Stock		Retained Earnings		Accumulated other comprehensive loss		Total Equity
	Shares	Amount
Balance as of December 31, 2022	50	$	—	$	2,309	$	(931)	$	913	$	(464)	$	1,827
Common Stock repurchased	—	—		—		(61)		—		—		(61)
Net income	—	—		—		—		201		—		201
Other comprehensive income	—	—		—		—		—		73		73
Balance as of March 31, 2023	50	$	—	$	2,309	$	(992)	$	1,114	$	(391)	$	2,040
Common Stock repurchased	—	—		—		(146)		—		—		(146)
Net income	—	—		—		—		262		—		262
Other comprehensive income	—	—		—		—		—		96		96
Balance as of June 30, 2023	50	$	—	$	2,309	$	(1,138)	$	1,376	$	(295)	$	2,252

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

4 | MercadoLibre, Inc.

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MercadoLibre, Inc. - Interim Condensed Consolidated Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 2023

(In millions of U.S. dollars)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operations:
Net income	$	875	$	463
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of unconsolidated entity	—		(3)
Unrealized foreign currency losses, net	123		305
Depreciation and amortization	308		254
Accrued interest and financial income	(173)		(147)
Non cash interest expense and amortization of debt issuance costs and other charges	82		117
Provision for doubtful accounts	824		474
Results on derivative instruments	(18)		21
Long term retention program (“LTRP”) accrued compensation	127		83
Results on digital assets at fair value	(12)		—
Deferred income taxes	(191)		24
Changes in assets and liabilities:
Accounts receivable	(63)		(38)
Credit card receivables and other means of payments	(965)		200
Inventories	(45)		(66)
Other assets	(205)		(47)
Payables and accrued expenses	484		308
Funds payable to customers	1,466		119
Amounts payable due to credit and debit card transactions	580		127
Other liabilities	59		(47)
Interest received from investments	138		124
Net cash provided by operating activities	3,394		2,271
Cash flows from investing activities:
Purchases of investments	(8,718)		(10,046)
Proceeds from sale and maturity of investments	7,494		9,923
Payments from settlements of derivative instruments	(5)		(14)
Purchases of intangibles assets	(3)		—
Changes in loans receivable, net	(1,990)		(866)
Investments of property and equipment	(329)		(203)
Net cash used in investing activities	(3,551)		(1,206)
Cash flows from financing activities:
Proceeds from loans payable and other financial liabilities	7,323		12,317
Payments on loans payable and other financing liabilities	(6,820)		(12,569)
Payments of finance lease liabilities	(26)		(13)
Common Stock repurchased	(1)		(207)
Net cash provided by (used in) financing activities	476		(472)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents	(344)		(132)
Net (decrease) increase in cash, cash equivalents, restricted cash and cash equivalents	(25)		461
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period	3,848		3,363
Cash, cash equivalents, restricted cash and cash equivalents, end of the period	$	3,823	$	3,824

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

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MercadoLibre, Inc. - Interim Condensed Consolidated Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 2023

(In millions of U.S. dollars)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Non-cash transactions:
Right-of-use assets obtained under operating leases	$	21	$	122
Property and equipment obtained under finance leases	8		15

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MercadoLibre, Inc.

Notes to unaudited interim condensed consolidated financial statements

NOTE 1. NATURE OF BUSINESS

MercadoLibre, Inc. (“MercadoLibre” and together with its consolidated entities, the “Company”) was incorporated in the state of Delaware, in the United States of America, in October 1999. MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of necessary digital and technology tools that allow businesses and individuals to trade products and services in the region.

The Company enables commerce through its marketplace platform, which allows users to buy and sell in most of Latin America. Through Mercado Pago, the fintech platform, MercadoLibre offers a comprehensive set of financial technology services to users of its e-commerce platform, and to users outside of its e-commerce platform; through Mercado Envios, MercadoLibre facilitates the shipping of goods from the Company and sellers to buyers; through the advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their products and services on the web; through Mercado Shops, MercadoLibre allows users to set-up, manage, and promote their own online web-stores under a subscription-based business model; through Mercado Credito, MercadoLibre extends loans to certain merchants and consumers; and through Mercado Fondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts.

As of June 30, 2024, MercadoLibre, through its wholly-owned subsidiaries, operated online e-commerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates its fintech solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru, Uruguay and Ecuador, and extends loans through Mercado Credito in Argentina, Brazil, Mexico and Chile. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile, Uruguay, Peru and Ecuador.

NOTE 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, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). Investments in entities where the Company holds joint control, but not control, over the investee are accounted for using the equity method of accounting. As of June 30, 2024, the Company had no investments where it has the ability to exercise joint control. These unaudited interim condensed consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Intercompany transactions and balances have been eliminated for consolidation purposes.

Substantially all net revenues and financial income, cost of net revenues and financial expenses and operating expenses, are generated in the Company’s foreign operations. Long-lived assets, intangible assets and goodwill and operating lease right-of-use assets located in the foreign jurisdictions totaled $2,148 million and $2,321 million as of June 30, 2024 and December 31, 2023, respectively.

These unaudited interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of June 30, 2024 and December 31, 2023. These unaudited interim condensed consolidated financial statements include the Company’s consolidated statements of income, comprehensive income and equity for the six and three-month periods ended June 30, 2024 and 2023 and statements of cash flows for the six-month periods ended June 30, 2024 and 2023. These unaudited 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2023, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) (the “Company’s 2023 10-K”). The Company has evaluated all subsequent events through the date these unaudited interim condensed consolidated financial statements were issued. The interim condensed consolidated statements of income, comprehensive income, equity and cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see Note 2 to the financial statements in the Company’s 2023 10-K. During the six-month period ended June 30, 2024, there were no material updates made to the Company’s significant accounting policies. For information regarding the change in the presentation of the statements of income, please refer to section “Change in the presentation of certain financial results and reclassification of prior year results” of Note 2 – Summary of significant accounting policies of these unaudited interim condensed consolidated financial statements.

Change in the presentation of certain financial results and reclassification of prior year results

Change in the presentation of certain financial results

Mercado Pago Fintech platform operations have significantly evolved during the last several years, not only because of the increase in the volume of transactions but also as a result of transitioning from being a non-regulated business to a regulated business, subject to the oversight of central banks and other regulators in the various countries in which the Company operates (refer to Note 3 – Fintech Regulations to the consolidated financial statements in the Company’s 2023 10-K for further details).

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MercadoLibre, Inc.

Notes to unaudited interim condensed consolidated financial statements

Many of the regulations to which the Company is subject require the Company, among other things, to maintain liquidity reserves to guarantee the funds on users’ account balances in their Mercado Pago digital accounts. Depending on the country, these reserves can be partially or totally invested. During the last several years, these new regulations, coupled with the increase in the volume of transactions, have led the Company to view interest income and other financial gains from investments of these liquidity reserves as part of the Company’s operations.

Furthermore, the evolution of Mercado Pago’s activities themselves has resulted in the Company managing a significant volume of cash, cash equivalents and investments. This is due to an increase in users’ account balances in their Mercado Pago digital account managed by the Company, and an increase in the level of the Company’s indebtedness to finance those operations. As a result, these Mercado Pago’s funds, together with the financing activities, have generated a significant volume of interest income and other financial gains and interest expenses and other financial losses, respectively.

The Company believes that these regulatory trends and related activities will continue and, therefore, with the goal of creating a better measure of the performance of the Company, the Company decided to reclassify and present certain financial results from “Other income (expenses)” to “Net services revenues and financial income” and “Cost of net revenues and financial expenses,” in the statement of income, starting January 1, 2024 and for all prior periods presented.

The reclassified financial results are related to activities that are needed or mandatory for Mercado Pago’s operations, and consist of:

■interest income derived from investments and cash and cash equivalents, generated as part of the treasury strategy of the fintech business and because of the different regulations that require liquidity reserves, net of sales taxes;

■interest expense and other financing costs generated by the different sources of funding of the fintech activities; and

■gains and losses of derivatives hedging risks related to Mercado Pago’s activities.

Reclassification of prior year results

According to the Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements, the Company should present in a consistent manner all periods presented within the accompanying unaudited interim condensed consolidated financial statements. Therefore, prior period balances have been reclassified for consistency with the current presentation. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s 2023 10-K.

This reclassification did not have an impact on previously reported net income, earnings per share, retained earnings or other components of equity or total equity.

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MercadoLibre, Inc.

Notes to unaudited interim condensed consolidated financial statements

The following tables, recast for the changes summarized above, present condensed statement of income line items affected by the revisions and reclassifications of previously reported financial statements, detailing amounts previously reported, the impact upon those line items due to reclassifications and amounts as currently revised within the financial statements:


	Three Months Ended March 31, 2023		Six Months Ended June 30, 2023						Nine Months Ended September 30, 2023		For the Year Ended December 31, 2023
	Recast		As reported		Reclassification		Recast		Recast		Recast
	(In millions)		(In millions)						(In millions)		(In millions)
Net service revenues and financial income	$	2,912	$	5,814	$	319	$	6,133	$	9,719	$	13,617
Net product revenues	274		638		—		638		979		1,490
Net revenues and financial income	3,186		6,452		319		6,771		10,698		15,107
Cost of net revenues and financial expenses	(1,572)		(3,196)		(130)		(3,326)		(5,158)		(7,517)
Gross profit	1,614		3,256		189		3,445		5,540		7,590
Operating expenses:
Product and technology development	(381)		(749)		—		(749)		(1,145)		(1,831)
Sales and marketing	(383)		(766)		—		(766)		(1,207)		(1,736)
Provision for doubtful accounts	(252)		(474)		—		(474)		(751)		(1,050)
General and administrative	(180)		(369)		—		(369)		(565)		(766)
Total operating expenses	(1,196)		(2,358)		—		(2,358)		(3,668)		(5,383)
Income from operations	418		898		189		1,087		1,872		2,207

Other income (expenses):
Interest income and other financial gains	23		349		(292)		57		95		135
Interest expense and other financial losses	(34)		(186)		103		(83)		(136)		(174)
Foreign currency losses, net	(87)		(269)		—		(269)		(508)		(615)
Net income before income tax expense and equity in earnings of unconsolidated entity	320		792		—		792		1,323		1,553

Income tax expense	(122)		(332)		—		(332)		(504)		(569)
Equity in earnings of unconsolidated entity	3		3		—		3		3		3
Net income	$	201	$	463	$	—	$	463	$	822	$	987

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MercadoLibre, Inc.

Notes to unaudited interim condensed consolidated financial statements


	Three Months Ended March 31, 2023		Three Months Ended June 30, 2023						Three Months Ended September 30, 2023		Three Months Ended December 31, 2023		For the Year Ended December 31, 2023
	Recast		As reported		Reclassification		Recast		Recast		Recast		Recast
	(In millions)		(In millions)						(In millions)		(In millions)		(In millions)
Net service revenues and financial income	$	2,912	$	3,051	$	170	$	3,221	$	3,586	$	3,898	$	13,617
Net product revenues	274		364		—		364