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Release 1 t11 (eng)
Release 1 t11 (eng)
Release 1 t11 (eng)
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Release 1 t11 (eng)

  1. 1. Earnings Release 1Q11 Earnings Release 1Q11Investor Relations: 1Q11 Conference Call:Leandro Bousquet EnglishCFO and IR Director May 2, 2011 9:00 a.m. (US ET)Derek Tang Tel: +55 11 3301-3000Coordinator ReplayLeonardo VazquezAnalyst Tel: +55 (11) 3127-4999 Código: 41708803Bruno Caniri@brmalls.com.brTel: +55 21 3138-9900 1Fax: +55 21 3138-9901
  2. 2. Earnings Release 1Q11 BRMALLS ANNOUNCES ADJUSTED EBITDA OF R$140.6 MILLION IN 1Q11, UP 58.6% OVER 1Q10.Rio de Janeiro, April 29, 2011 – BRMALLS Participações S.A. (Bovespa: BRML3), the largest integrated shopping mallcompany in Brazil, announces today its results for the f irst quarter (1Q11). BRMALLS has a portfolio of 40malls, comprising 1,219,218 m² of gross leasable area (GLA ) and 634,316 m² of owned GLA. The Company currentlyhas 3 greenf ield projects under development and 8 expansion projects, which together will increase its total GLA to1.407,200 m² and its owned GLA to 748,100 m² by 2013. BRMALLS is the only shopping mall company in Brazil with anationwide presence that caters to all income segments. The Company provides management and leasing services for32 malls, in 31 of which it retains an ownership interest.1Q11 Highlights and Subsequent Events:• Net revenues grew 68.4% in 1Q11 reaching R$179.1 million;• Net operating income (NOI) totaled R$158.6 million in 1Q11, an inc reas e of 70.5% over the NOI in 1Q10 of R$93.0million, f or NOI margin of 89.5% in the quarter. Same-property NOI climbed by 26.0% over 1Q10.• Adjusted EBITDA reached R$140.6 million in the quarter, expanding 58.6% over the same period last year.• In 1Q11, Net Income totaled R$57.2 million, an increase of 36.1% over 1Q10. Our FFO reached R$60.1 million, up33.3% year over year. Adjusted FFO totaled R$56.4 million in the quarter, against R$60.2 million in 1Q10.• In 1Q11, we increased our interest in Shopping Center Crystal Plaza, Shopping Piracicaba and ShoppingCuritiba, totaling R$108.7 million in investments, with real and unleveraged average IRR of 13.1%. We sold our814.9 m 2 stake in the GLA of Esplanada Shopping f or R$11.8 million, with real IRR of 16.7%.• We inaugurated, with great success, Via Brasil Shopping and the expansion of Shopping Tamboré, adding a totalowned GLA of 30,100 m 2, with occupancy rates of 95% and 100%, respectively.• Our malls continue to present high occupancy rates, averaging 98.1% of total GLA occupied in 1Q11. Of the 39malls in which we hold an interest, 18 achieved occupancy rates of over 99.0% of GLA.• Renewal leasing spreads reached 28.1% and new contract leasing spreads reached 21.0% in the quarter, showingthe high demand f or space combined with our high occupancy rates.• Same-store rent continued its near double-digit growth, reaching 9.7% in the quarter. Same-store sales (SSS) grew8.7% in the period, inf luenced by the eff ects of the high comparison base in 1Q10 and the E aster holiday. Excluding thestores that were af f ected the most, SSS in 1Q11 would be 9.3%.• In the f irst quarter of 2011, our owned GLA and total GLA expanded by 6.9% and 1.8%, respectively, over 4Q10. Weadded 11,200 m2 of owned GLA through acquisitions, 14,300 m 2 through greenfield projects and 15,100 m 2 throughexpansions.• We f ully prepaid the loan we took for the acquisition of Shopping Tijuca, amounting to R$520.5 million, which wouldbe repaid in 10 quarterly installments after the 21st month, at a cost of CDI+2% p.a., replacing it with a CRI for the sameamount, with monthly installments over 14 years and grace period of two years, at a cost of TR+10.7% p.a. 2
  3. 3. Earnings Release 1Q11• We raised US$230 million through the issue of perpetual bonds at 8.50% p.a. The coupon payments were swappedto 99.15% of CDI until the January 2016 call date. In 1Q11, we raised a total of R$670.7 million in TR linked debt forShopping Tijuca, Shopping Tamboré and Mooca Plaza Shopping. Financial Highlights (R$ 000) 1Q11 1Q10 % Net Revenues 179,083 106,325 68.4% S, G & A 24,549 15,904 54.4% S, G & A (% of Gross Revenues) 12.7% 13.7% -1.1% NOI 158,635 93,021 70.5% adjusted margin for Ub erlândia results% 91.5% 88.8% 2.7% Gross Profit 160,068 94,412 69.5% margin % 89.4% 88.8% 0.6% EBITDA 139,314 87,560 59.1% Adjusted EBITDA 140,602 88,638 58.6% adjusted margin for Ub erlândia results% 79.3% 83.4% -4.1% Net Income 57,224 42,052 36.1% margin % 32.0% 39.6% -7.6% FFO 60,077 45,055 33.3% Adjusted FFO 56,433 60,177 -6.2% margin % 31.5% 56.6% -25.1% Operating Highlights 1Q11 1Q10 % Total GLA (m²) 1,173,179 1,034,911 13.4% Owned GLA (m²) 603,633 467,752 29.0% Same Store Sales per m² 1,038 956 8.7% Total Sales (R$ million) 3,251 2,702 20.3% Sales per m² 955 897 6.4% Sales per m² (stores up to 1,000 m²) 1,347 1,293 4.1% Same Store Sales per ft² (US$) (stores up to 1,000 m²) 920 828 11.2% Same Store Rents per m² 62 57 9.7% Rent per m² (monthly average) 83 68 21.2% NOI per m² (monthly average) 94 73 29.9% Occupancy Cost (% of sales) 10.5% 10.2% 0.3% (+) Occupancy Cost (% of rent) 6.5% 6.4% 0.1% (+) Occupancy Cost (% of condominium and marketing 4.0% 3.8% 0.2% Occupancy (monthly average) 98.1% 97.9% 0.2% Net Late Payments 1.3% 1.6% -0.3% Late Payments - 30 days (monthly average) 3.6% 3.7% -0.1% Tenant Turnover 5.0% 4.5% 0.5% Leasing Spread (renewals) 28.1% 18.3% 9.8% Leasing Spread (new contracts) 21.0% 12.6% 8.4% Market Indicators 1Q11 1Q10 % Number of Shares 406,884,274 404,825,782 0.5% Number of Outstanding Shares 383,135,379 378,022,816 1.4% Average Share Price 16.04 10.86 47.7% Closing Share Price 17.00 10.39 63.6% Market Value 6,917 4,206 64.5% Average Daily Traded Volume 27.9 27.2 2.6% Closing Exchange Rate (US$) 1.63 1.78 -8.4% Net Debt 1,898.8 413.4 359.3% NOI per share 0.39 0.23 69.7% Adjusted Net Income per share 0.14 0.10 35.4% Adjusted FFO per share 0.14 0.15 -6.7% EV/EBITDA (annualized) 15.7 13.0 20.3% P/FFO (annualized) 30.6 17.5 75.4% *Check glossary for definitions. 3
  4. 4. Earnings Release 1Q11Management Comments:We began 2011 with a strong outlook in the company’s three growth drivers: current malls, acquisitions anddevelopments. As in 2010, we continue to benef it f rom the continued f avorable economic scenario for the country and forthe retail sector.In 1Q11 we increased our owners hip stake in S hopping Center Crystal Plaza, Shopping Piracicaba and ShoppingCuritiba, totaling R$108.7 million in investments. With the af orementioned acquisitions, we consolidate our position inCuritiba reaching an owned GLA of 74.7 thousand m². The actual NOI f or our acquisitions since 2006 have delivered areal increase of 27,2% above what we had projected f or 1Q11.This week we added 30.7 thousand m² of owned GLA to our portfolio with the openings of Via Brasil Shopping and theexpansion of Shopping Tamboré, increasing our total number of malls to 40, of which 10 are located in the state of Rio deJaneiro.We currently have three other greenf ield projects under development, which are according to schedule and together willadd 72.4 thousand m² of owned GLA. Mooca Plaza Shopping is expected to open on 4Q11 and has already leasedapproximately 80% of its GLA, six months prior to opening. Additionally, we have eight expansions planned to open by2013, representing an addition of 42.2 thousand m² of owned GLA.In our current portfolio, same store sales (SSS) registered an increase of 8.7% over 1Q10, when compared to the sameperiod in the previous year, primarily impacted by the higher base of comparison in 1Q10 and the Easterseasonality, which this year occurred in the second half of April, compared to last year when it occurred in the first weekof April. Same store rent (SSR) increased around two digits, reaching 9.7% f or the same period, contributed to the realincrements of rents above IGP-M.Our NOI grew by 70.5%, compared to 1Q10, reaching R$158.6 million, with a margin of 89.5%. The same mall NOIincreased 26.0% compared to the same period in 2010, benef ited by the high rate of leasing spread and occupancy rate.Adjusted EBITDA totaled R$140.6 million, an increase of 58.6% over 1Q10, with a margin of 79.3%.One of the highlights f or this quarter was the occupancy rate which reached 98.1%, completing a f ull year of occupancylevels above 98% and an increase of 0.2 p.p. over 1Q10. Our net delinquency rate totaled 1.3% this quarter, a decreaseof 0.3 p.p. compared to 1Q10, which indicates the f avorable conditions experienced by our tenants. The occupancy costcontinued to post low levels, ending the quarter at 10.5% and providing the opportunity for us to continue to record highleasing spreads in our renewals and new leases.In 1Q11 we leased 218 stores, representing 21.7 thousand m² of total GLA. We highlight the leasing activity in ourgreenf ield projects and expansions that totaled 71 contracts, or 10.3 thousand m² of total GLA. The high occupancy in ourmalls, the f ocus in controlling occupancy cost and the good sales perf ormance of our tenants, contributed for us to reachhigh leasing spread f or renewals and new leases, reaching 28.1% and 21.0%, respectively.The good market conditions gives us conf idence to continue to explore the growth opportunities and seek to improve oureff iciency even f urther. We are scheduled to open an additional greenf ield project and an expansion this year and weexpect to announce new development projects throughout the year. Furthermore, in line with our strategy, continue togrow through acquisitions. 4
  5. 5. Earnings Release 1Q11All the f inancial and operational inf ormation below is in reais (R$), and comparisons ref er to the f irst quarter of 2011(1Q11), except where otherwise indicated. The complete f inancial statements in accordance with the accountingpractices and norms required by the CVM (Brazilian Securities & Exchange Commission) are av ailable at the end of thisreport.The consolidated f inancial statements have been prepared and are presented in accordance with the standards of IFRS(International Financial Reporting Standards) issued by the International Accounting Standards Board.In compliance with CVM Instruction 603/09 and CVM 626/10, the Company is re-stating the present ITRs so that theyare also in accordance with International Accounting Standard IAS 34 - Interim Financial Statements, issued by the IASB- International Accounting Standards Board . In this context the only diff erence between the accounting practices earlieradopted by BR Malls and IAS 34 ref ers to the balance of def erred assets, which was reversed as shown in Note 2. Dueto the immateriality of this adjustment, the Companys management decided not to change the comment of performancesince the write-of f of these def erred assets does not generate signif icant impacts on the analysis, rates and results. MANAGEMENT COMMENTS ON 1Q11 RESULTSGross Revenues:During the quarter, gross revenues totaled R$193.9 Gross Revenues Growth (R$ thousand)million, an increase of 67.2% over the same period 67.2%last year, mainly due to the f ollowing f actors: 193,895Base RentBase rent revenue grew R$44. 2 million, or 115,96068.1%, over 1Q10, due to the increase in the leasingspread rates in new contracts and renewals, theincrease in inf lation that was ref lected in contractualadjustments and acquisitions/greenf ields concludedduring 2010, along with three stake increases in the 1Q10 1Q11quarter. The straight-line recognition of rent addedR$10.0 million in 1Q11; Overage Rent Overage rent increased R$4.3 million, or 53.0%, over 1Q10, mainly driven by the 20.3% growth in total sales registered by tenants, and acquisitions/greenf ieldsMall & Merchandising concluded during 2010, which represented 25.7% of totalMall and merchandising revenues amounted to overage rent. This line was negatively impacted in theR$17.0 million, up 69.7% year over year, mainly due quarter by the Easter holiday, which distorted theto acquisitions/greenf ields concluded during comparison base between 1Q11 and 1Q10. 30.0% of the2010, which represented 23.5% of total mall &merchandising revenue. This revenue corresponded percentage rent came f rom stores that were audited during the quarter. Percentage rent accounted for 9.0% ofto 7.2% of total rent revenue in the quarter; total rent revenue in the quarter;Services Revenues Key Money Key money increased R$7.5 million, or 152.8% overService revenues increased R$5.3 million, or 1Q10, excluding the eff ects of straight-line recognition.47.4%, over 1Q10, due to the higher number of malls This growth was aided by the increased pace in sales ofmanaged by the Company (29 in 1Q11 compared to the Company’s greenf ield projects and the expansions22 in 1Q10) and the entry of Shopping Uberlândia compared to the previous year. Key money, including theinto the Shared Services Center (CS C), bringing the eff ects of straight-line recognition, increased R$4.3total to 23. million, or 135.1%, over 1Q10. Stock of key money in 1Q11 came to R$84.4 million, an increase of 98.9% over 1Q10; 5
  6. 6. Earnings Release 1Q11ParkingParking revenues increased R$12.7 million, or 89.9%, over Parking NOI Evolution (R$ thousand)the same period last year, largely due to the change in t heownership structure of the parking operations at our malls.Moreover, the entry of new malls acquired since 1Q10contributed 41.3% to the growth in this line. In 1Q11, parking 77.4%NOI grew 77.4% to reach R$22.5 million. 22,481 12,673 1Q10 1Q11 Gross Revenues Breakdown 1Q11 Parking 0.9% 1.3% 56.3% Services 3.9% 71.5% Base Rent Key Money 8.5% Overage Rent Others Mall & Merchandising Transfer Fee 13.9% Base Rent 6.4% 8.8% Overage Rent Mall & Merchandising Gross Revenue Breakdown (R$ mil) 1Q10 1Q11 % Base Rent 109,102 64,891 68.1% Overage Rent 12,452 8,137 53.0% Mall & Merchandising 17,020 10,032 69.7% Parking 26,898 14,163 89.9% Services 16,552 11,226 47.4% Key Money 7,520 3,199 135.1% Transfer Fee 1,779 483 268.3% Others 2,572 3,829 -32.8% Gross Revenue 193,895 115,960 67.2% 6
  7. 7. Earnings Release 1Q11Net Revenues:Net revenues totaled R$179. 1 million in 1Q11, up R$72.8 Net Revenues Growth (R$ thousand)million, or 68.4%, on 1Q10.Excluding the eff ects of straight-line recognition, net revenues 68.4%would be R$174.1 million in the quarter, up R$67.5 million, or63.3% on 1Q10. 179,083 106,325 1Q10 1Q11Costs:In 1Q11, costs associated with rents and Costs Growth (R$ thousand)services increased R$7.1 million, or 59.6%, over1Q10. Excluding the non-recurring commoncosts of Center Shopping Uberlândia, total costs 59.6%would be R$17.0 million in 1Q11, up 42.4%. The 19,015cost components were: 11,913 1Q10 1Q11Other Services Personnel CostsThe R$3.6 million increase in costs associated Personnel costs increased R$2.5 million, mainlywith other services was mainly due to the non- impacted by the common costs of Centerrecurring common costs of Center Shopping Shopping Uberlândia, as explained before, whichUberlândia, which totaled R$2.0 million in the represented 11.0% of total personnel costs, andquarter, and the increase in GLA due to new the increase in our GLA due to the addition of newmalls being included in our portfolio during 2010. malls in our portf olio during 2010. Moreover, theThe corporate restructuring of the mall was change in the ownership structure of a f ew parkingcompleted in February 2011 and hence these operations and increased audit eff orts also drovecosts started to be transf erred to the up personnel costs, but the latter resulted in acondominium, no longer impacting the Companys 53.0% increase in percentage rent revenue duringresults of subsequent quarters. the quarter. 7
  8. 8. Earnings Release 1Q11NOI:In 1Q11, NOI totaled R$158.6 million, up R$65.4million, or 70.5%, over the same period last year. NOI Growth (R$ thousand) and NOINOI margin in the quarter was 89.5%, a growth of Margin (%)0.7 p.p. over 1Q10, once again impacted by the 88.8% 89.5%above-mentioned non-recurring eff ects of CenterShopping Uberlândia and the change inownership at a f ew parking operations, which now 70.5%recognize revenues and costs separately as ofthe end of 1Q10. NOI margin adjusted for the 158,635non-recurring eff ects of Uberlândia would be91.5% in 1Q11, an increase of 2.7 p.p. 93,021 Same Mall NOI Growth (R$ thousand) 1Q10 1Q11 26.0% 111,552 In the quarter, same-property NOI rose by 26.0% over 88,539 1Q10. Malls managed by BRMALLS registered same- property NOI growth of 27.5%. Bulk of our NOI in t he quarter (89.2% ) was concentrated in the 29 malls managed by the Company with an average ownership of 63.1%. 1Q10 1Q11 NOI and Total Tenants´Sales by Mall (R$ million) NOI 1Q11 Sales 1Q11 NOI Reconciliation (R$ thousand) Shopping Tijuca 17,667 140,664 Plaza Shopping 17,512 163,688 1Q11 1Q10 NorteShopping 15,247 262,884 Gross Revenue 193,895 115,960 Shopping Uberlândia 8,153 104,070 (-) Services (16,552) (11,226) Shopping Recife 7,943 263,372 (-) Costs (19,015) (11,913) Shopping Metrô Santa Cruz 7,147 74,937 (+) Aruaguaia Debenture 1,288 1,078 Shopping Tamboré 7,091 81,980 (+) Presumed Credit PIS/COFINS (981) (878) Shopping Del Rey 6,136 107,597 NOI 158,635 93,021 Campinas Shopping 6,102 66,405 Granja Vianna 5,664 51,419 Margin % 89.5% 88.8% Shopping Estação 5,335 69,178 Adjusted Margin % * 91.5% 88.8% Shopping Campo Grande 5,126 72,848 * Adjusted by Uberlândia s condominiums costs and revenues Shopping Villa-Lobos 4,754 119,772 Fashion Mall 4,709 53,605 Ilha Plaza Shopping 4,185 57,447 Independência Shopping 4,104 45,222 Goiânia Shopping 3,786 64,264 82,4% of NOI 1Q11 Others 27,972 1,451,925 Total 158,635 3,251,278 * NOI considers the straight linning effect 8
  9. 9. Earnings Release 1Q11Selling, General and Administrative Expenses:In 1Q11, selling, general and administrativeexpenses, excluding depreciation and G & A Expenses Growth (R$ thousand)amortization, totaled R$24.5 million, an increase ofR$8. 6 million, or 54.4%, over 1Q10. These 54.4%expenses corresponded to 12.7% of gross revenuein the quarter, 1.0 p.p. down f rom the 13.7% 24,549registered in 1Q10. 15,904General & Administrative ExpensesGeneral and administrative expenses increased54.4%, or R$8.6 million, over 1Q10. Personnelexpenses increased 108.8% year over year, due toprovisions of R$4.3 million for the new stock option 1Q10 1Q11plan approved in September 2010, addition of fourmalls to the Company’s portfolio since Selling Expenses1Q10, increase in t he number of ongoing projects Selling expenses decreased 0.3%, due to f ewer expiringand addition of malls to the shared service center. contracts in the quarter than in 1Q10. We leased 218 stores in 1Q11, totaling 21,700 m2 in GLA, compared toExpenses associated with services provided 242 contracts, totaling 27,100 m2 in GLA in 1Q10. Indropped 28.9%, or R$0.9 million, f rom 1Q10, due 1Q11, 147 stores in existing malls were leasedto the integration of the previously outsourced out, compared to 201 contracts in 1Q10.shared service center staf f .Depreciation and Amortization:In view of the early adoption of the CPC accounting directives in accordance with CVM Resolution 603, we no longerdepreciate our investment properties, which are appraised annually at f air value in December. Moreover, we no longeramortize the goodwill generated by acquisitions.Depreciation in the quarter came to R$0.04 million, versus a negative adjustment of R$0.4 million in 1Q10.Amortization expenses came to R$2.8 million, up 9.9% over the same period last year, mainly relat ed to def erredassets and def erred f iscal assets.Other Operational Revenues:In 1Q11, other operating revenues totaled R$3.5 million, compared to R$9.1 million in 1Q10. The main contribution wasthe sale of the entire stake in Esplanada Shopping in January, f or a real and unleveraged IRR of 16.7%. 9
  10. 10. Earnings Release 1Q11EBITDA:Adjusted EBITDA totaled R$140.6 million in 1Q11, up 58.6%, or R$52.0 million, over 1Q10. Adjusted EBITDA marginstood at 79.3%, mainly impacted by the changes in the parking operations. Considering the parking net result directly atnet revenue as it was recorded bef ore those changes, our Adjusted EBITDA margin would be 81.5%. EBITDA Reconciliation (R$ thousand) Adjusted EBITDA Growth (R$ thousand) 1Q11 1Q10 58.6% Net Revenue 179,083 106,325 (-) Uberlândia Condominium Revenue 1,735 - Net Revenue ex-Uberlândia 177,348 106,325 140,602 (-) Costs and Expenses (46,417) (30,820) 88,638 (-) Uberlândia Condominium Cost 2,049 - (+) Depreciation and Amortization 2,853 3,003 (+) Other Operating Revenues 3,481 9,052 EBITDA 139,314 87,560 (+) Aruaguaia Debenture 1,288 1,078 1Q10 1Q11 Adjusted EBITDA 140,602 88,638 Margin % * 79.3% 83.4% * Adjusted by Uberlândia s condominiums costs and revenuesFinancial Results:The Company recorded a negative net f inancial result ofR$77.0 million in 1Q11, versus a negative R$40.1 million Financial Result (R$ thousand)in 1Q10. Financial revenue totaled R$73.3 million, whilef inancial expenses totaled R$150.3 million. Our cash Revenues 1Q11 1Q10f inancial result totaled R$(66.2) million versus R$(20.0) Financial Investments 18,068 22,385million in 1Q10. The main f actors that impacted the FX Variation 20,433 10,839f inancial results were: Swap - Law 11,638 19,415 29,045Swap mark to market Swap mark to market 12,841 -The booking of the Company’s swap contracts at market Others 2,529 4,222value generated a net f inancial expense, with no casheff ect, of R$25.6 million in 1Q11, mainly due to the increase Total 73,286 66,490in the f uture curves of IGPM and CDI rates in the Expenses 1Q11 1Q10quarter, since the Company holds liability positions in bothand asset position in TR. Interest (80,001) (44,728) FX Variation (5,660) (20,410)Interest Costs Swap - Law 11,638 (24,737) (29,389)Interest expenses totaled R$80.0 million in 1Q11, versus Swap mark to market (38,421) (10,538)R$44.7 million in 1Q10, mainly aff ected by the increase innet debt, f rom R$413.4 million in 1Q10 to R$1,992.3 million Others (1,460) (1,544)in 1Q11, and interest on the def erred payment f or the Total (150,278) (106,609)acquisition of Shopping Tijuca, at a cost of CDI+2% p.a.Considering that this debt was f ully prepaid and replaced Financial Result (76,992) (40,118)with a CRI in the same amount at a cost of TR+10.7% Cash Financial Result (66,186) (20,009)p.a., subtracting f rom the f inancial result the cost of theearlier debt since the beginning of 1Q11 and adding thedebt cost of CRI for the entire quarter would reduce interestexpense by an estimated R$2.1 million in the period. 10
  11. 11. Earnings ReleaseNet Income: 1Q11Net income in 1Q11 was R$57.2 million, 36.1% more than in 1Q10. Earnings per share was R$0.14. Adjusted Net Income Growth (R$ thousand) 36.1% 57,224 42,052 1Q10 1Q11AFFO:Adjusted FFO amounted to R$56.4 million in 1Q11, down R$3.7 million f rom the R$60.2 million in 1Q10. Adjusted FFOmargin was 31.5%, impacted by a reduction in the cash position and an increase in the f inancial expenses as a result ofthe increase in gross debt and the variations in the debt indicators. Adjusting R$4.3 million due to provisions for thestock option plan, our Adjusted FFO would be R$60.7 million, with a margin of 33.9%. In 1Q11, the Company prepaidthe def erred payments for the acquisition of Shopping Tijuca, which had a cost of CDI+2% p.a. by replacing it with aR$500 million debt at TR+10.7% p.a., which should reduce interest expenses in the coming quarters.FFO Reconciliation (R$ thousand) 1Q11 1Q10 Adjusted FFO Growth (R$ thousand)Net Income 57,224 42,052(+) Depreciation and Amortization 2,853 3,003 -6.2%FFO 60,077 45,055(-) FX Variation 14,774 (9,571) 60,177(-) Swap - Law 11.638 (25,580) (10,538) 56,433(-) Non-cash Taxes Adjustment (14,450) (4,987)Adjusted FFO 56,433 60,177Margin % 31.5% 56.6% 1Q10 1Q11 11
  12. 12. Earnings ReleaseCAPEX: 1Q11During the quarter, the Company invested R$147.3 million, as f ollows: Acquisitions Total of R$37.3 million relating to the acquisitions of Shopping Crystal Plaza, Shopping Piracicaba and Shopping Curitiba; CAPEX Breakdown 1.0%Expansions and Renovations 25.3% AcquisitionsTotal of R$39.5 million, bulk of it for the expansionof Shopping Tamboré, inaugurated on April28, 2011, and f or ongoing renovation works; Expansions and Renovations 46.8% Greenf ield ProjectsGreenfield ProjectsTotal of R$69.0 million, mainly relating to works atShopping Mooca, expected to be completed in Others4Q11, in addition to other greenf ield projects 26.9%already announced; Others Total of R$1.4 million invested in internal systems and processes, among others. 12
  13. 13. Earnings ReleaseCash and Total Debt: 1Q11We ended the quarter with gross debt of R$2,623.7million, up R$1,057.8 million over the y ear ended 2010. Theincrease was mainly due to the issue of the CRI f or Shopping Debt Indices (as a % of the total)Tijuc a in the quarter. Using the CRI f unds, the Companyprepaid the def erred payment for the acquisition of Shopping IPCATijuc a. The replacement of this def erred payment with the 12.7%CRI will represent f or the upcoming quarters a debt costreduction of around 100 bps. The increase in gross debt wasalso impacted by the perpetual bonds issued in January inthe amount of US$ 230 million at a cost of US$ + 8.5%. The TR Dólarescoupon was swapped to 99.15% of CDI for a term of 5 years. 43.4% (USD)The balance at the end of the quarter was R$380.7 million. 19,7%Additionally, we releveraged the CRI for the expansion ofShopping Tamboré in the quarter, raising R$150 million. The CDIthree borrowings accounted f or R$1.0 billion of the R$1.1 1.9% TJLP IGP-Mbillion increase in gross debt. We also signed the loan of São 0.5% 13.1%Bernardo totaling R$107.0 million, with 12 yearinstallments, 2 years of grace period, and a cost ofTR+10.65% p.a. Debt Amortization Schedule (R$ million) 861 We ended the quarter with cash of R$725.0 million, up R$407.3 million over 4Q10, mainly caused by the above-mentioned new f unding operations and the disbursement of R$520.5 million 237 239 231 231 for prepaying the def erred payment for the 150 151 acquisition of Shopping Tijuca, as well as the 114 127 142 94 76 69 disbursements f or acquiring additional stakes in Shopping Crystal Plaza, S hopping Piracicaba and Shopping Curitiba.2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 onwards Main Indicators (R$ thousand)Considering the net result of the above-mentioned 1Q11 4Q10disbursements, net debt totaled R$1,898. 8 Cash Position 724,993 317,716million, R$650. 6 million more than in 4Q10. Debt Average Remuneration 101.1% 101.8%continues to be long-term (94.3% of gross debt) with Gross Debt (R$ thousand) 2,623,751 1,565,896the amortization schedule averaging 11.0 Duration (years) 11.0 10.8years, compared to 10.8 years in 4Q10. Average cost Average Cost IGP-M + 6,70% IGP-M + 7,55%decreased since the last quarter f rom IGP-M + 7.55% Net Debt 1,898,758 1,248,180to IGP-M + 6.70%, representing a nominal cost of debt Net Debt / annualized EBITDA 3.38 0.45of 12.92% p.a. Net Debt (ex-perpetuals) / an. EBITDA 2.18 0.35 EBITDA / Net Financial Expenses 7.30 10.40 Gross Debt / EBITDA 4.67 0.57 FFO / Gross Debt 0.09 0.18 13
  14. 14. Earnings ReleaseOperational Indicators: 1Q11 NOI per m² (R$)NOI per m²This quarter, average NOI per m2 of our 106portfolio, considering the eff ects of straight-line 93 94 83 82recognition, grew 29.9% over the same period last year 68 73 73 73to reach a monthly average of R$94.3. Consideringonly the 10 most representative malls in terms of NOIper m2, the monthly average was R$106.6, up 35.0%. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 *NOI per m² has straight line recognition Rent per m² 94 86 83 68 73 76 65 67 68 Rent per m² In the quarter, rent per m2, considering the eff ects of straight-line recognition, grew 21.2% to reach a monthly average of R$82. 6. In the 10 most representative shopping malls, monthly average was R$89.7, up 24.6%. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Occupancy (%) 98.5% 98.3% 98.3% 98.1% 97.9% 97.9%Occupancy Rate 97.3%Our occupancy rate remains strong, reaching an 96.9% 97.0%average of 98.1% of total GLA in the quarter. Of the 39malls in which the Company holds interest, 18 mallsrecorded occupancy of over 99% of GLA in 1Q11. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Late Payments - 30 days (%) 5.3% 3.7% 3.7% 3.6% Late Payments 3.1% 3.2% 2.9% 2.7% Late payment (30 days) ratio in the quarter came to 2.6% 3.6%, versus 3.7% in the same period last year. Net late payment ratio also declined, registering 1.3% in 1Q11 compared to 1.6% in the same period last year. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 14
  15. 15. Earnings Release 1Q11 Occupancy Cost Breakdown (% of Sales) Occupancy Costs 6.6% 6.1% 6.1% 6.4% 6.5% Occupancy costs as a percentage of tenants’ sales 6.1% 5.8% 5.8% 6.0% increased by 0.3 p.p. f rom 1Q10 to 10.5%, chief ly due to the increase in rent per m² of 21.2% in 4.2% 1Q11, a greater increase when compared to sales 3.7% 3.6% 3.8% 3.4% 3.4% 4.0% 2.9% 2.9% per m² growth of 6,4%.1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Marketing and Condominium Expenses RentIndicators Evolution 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11SSS/m² 833 953 960 1,332 997 1,077 1,114 1,421 1,038SSR/m² 55 57 57 77 59 60 62 81 62Sales/m² 795 874 880 1,186 897 999 1,040 1,317 955Sales/m² (stores < 1,000 m²) 1,220 1,158 1,352 1,616 1,293 1,311 1,387 1,858 1,347Rent/m² 65 68 67 86 68 73 76 94 83NOI/m² 68 73 73 93 73 83 82 106 94Occupancy Cost (% Sales) 10.8% 9.8% 9.8% 9.0% 10.2% 9.3% 9.3% 8.9% 10.5%Late Payments (30 days) 5.3% 3.7% 3.1% 3.2% 3.7% 2.9% 2.7% 2.6% 3.6%Net Late Payments 3.2% 0.7% 1.1% 0.4% 1.6% 0.6% 0.6% 0.2% 1.3%Occupancy (%) 96.9% 97.0% 97.3% 97.9% 97.9% 98.3% 98.5% 98.3% 98.1% Figures in U.S. dollars/sq ft Stores measuring less than 1, 000 m² (approximately 10,764 ft²) recorded sales/m² of US$920.4/f t 2, 11.2% over the same period last year. For comparative purposes, we have included a f ew of the Companys operating indicators using the standards adopted by U.S. companies (US$/f t 2).Annualized figures in USD/ft² 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Same Store Sales/ft² (stores < 1,000 m²) 783 1,171 828 900 975 1,292 920Rent/ft² 42 58 45 48 51 65 67NOI/ft² 46 63 48 55 55 74 58 15
  16. 16. Earnings Release 1Q11Sales Performance: In 1Q11, 39 malls in the Company’s portf olio Same Store Sales per Segment recorded total sales of R$3.3 billion, 20.3% more (1Q11 versus 1Q10) than in 1Q10. Same-store sales grew 8. 7%, against the 16.2% growth recorded in 1Q10. This slowdown was mainly caused by the high comparison base and, to a lesser degree, the Easter holiday which 18.5% occurred in the third week of April this year, while last year it f ell in the f irst week of April. Leisure and 11.6% satellite stores were the top perf ormers with same- 6.7% store sales growth of 18.5% and 0.9% 11.6%, respectively. On the other hand, anchor stores, due to the above-mentioned eff ects, contributed to the slowdown in same-store sales, registering 0.9% in the quarter. Anchors Megastore Satellites Leisure 6.8% 3.4% In regional terms, the Midwest led the SSS growth rankings, with a 10.7% upturn over 1Q10, driven by Araguaia Shopping. The Southeast region, which accounts for 76.6% of the companys NOI, grew 8.6%, led by Shopping Metrô Santa Cruz, which recorded SSS of 20.4%. 10.7% 8.5% 8.6 % SSS (%) % of NOI 6,4% 7,5% In terms of income segment, the shopping malls 10,9% 36,7% targeted at the upper-middle class posted the highest growth of 10.9% over 1Q10, driven by shopping malls Goiânia Shopping and Shopping Uberlândia, which registered SSS of 20.9% and 7,1% 40,3% 14.2%, respectively. Malls targeting the lower- middle class also registered above-average SSS growth of 9.7%. 9,7% 15,6% Low-middle Middle Upper-middle Upper 16
  17. 17. Earnings ReleaseLeasing Activity: 1Q11Leasing spreads were 28.1% f or contract renewalsand 21.0% f or new contracts. For the f ourthconsecutive quarter, renewal leasing spreadsexceeded 20%, contributing to greater eff iciency ofour commercial areas and ref lecting the strong Renewals Leasing Spread (%)SSS, reduction in occupancy costs and low 27.7% 28.1%vacancy rates in recent quarters. 22.3% 22.5%In 1Q11, 218 stores were leased, 9.9%, or 24 17.7% 18.3%stores, less than in 1Q10, due to the decrease in 13.9% 14.7%the number of expiring contracts andconsequently, the decrease in the number of 8.1%stores in malls leased in the quarter f rom 201 to147. However, contracts of greenf ield andexpansion projects increased by 30 stores, or73.2%, f rom 41 to 71. 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Total GLA leased came to 21,700m2, approximately 1.8% of total GLA, of which 32stores, representing 9,100 m2 in GLA weregreenf ield projects and nine stores, totaling 1,200 Average Rent per m²m2 in GLA, were expansion projects. (Current Portfolio versus New Contracts)In the next six months, contracts representing 22.9%approximately 116,900 m2, or 7.6% of totalGLA, will be renewed. 101.5 82.6 Current Portf olio Negotiated Contracts Contract Maturity Schedule (% GLA) Contract Renewals (% GLA) 69.2% 23.8% 18.6% 19.9% 37.7% 18.1% 5.2% 7.6% Up to 6 6 - 12 12 - 24 More than 1Q10 2Q10 3Q10 4Q10 months months months 24 months 17
  18. 18. Earnings Release 1Q11Acquisitions:In 1Q11, the Company increased its stake inShopping Center Crystal Plaza, Shopping NOI of Realized Acquisitions (R$ thousand)Piracicaba and Shopping Curitiba. These threeacquisitions added 11,200 m2 of owned GLA to 27.2%the BRMALLS portf olio, for a total investment ofR$108.7 million.NOI in this quarter f rom the malls that were 79,356acquired since 2006 continue to outperf orm the 62,378NOI projected in the f easibility studies at the timeof the acquisitions, representing a real growth of27.2% f or 1Q11. Projected NOI Realized NOI 1Q11 1Q11Increase in Ownership Interest - Shopping CenterCystal PlazaIn January 2011, the Company acquired additionalstake in Shopping Crystal Plaza in Curitiba, raisingits interest f rom 40% to 70% in the mall and adding3,700 m2 of owned GLA to its portfolio. Theinvestment was R$43.1 million, with an estimatedcap rate of 11.5% for 2011, and real andunleveraged IRR of 13.4%.This acquisition consolidates our position inShopping Crystal Plaza, a mall we believe hasimportant upsides, and where t he estimated 100% ofNOI f rom the mall for 2011 was recently revised f romR$14.1 million to R$14.8 million. 18
  19. 19. Earnings Release 1Q11Increase in Ownership Interest - ShoppingPiracicabaOn the same date of the Shopping Crystal Plazaannounc ement, the Company also announced theacquisition of an additional 4,300 m2 of GLA inShopping Piracicaba, raising its interest f rom 19.1%to 34.4%. We estimate NOI of R$3.4 million in2011, representing an entry cap rate of 10.9%, witha real and unleveraged IRR of 13.7%.Theinvestment made f or the additional stake wasR$31.0 million.Shopping Piracicaba has been reporting excellentoperational indicators since we f irst acquired interestin it in July 2008 - occupancy rate of 100% sinceAugust 2009, renewal leasing spread of 50% in2010 and occupancy cost below the average of theCompany’s portf olio.Increase in Ownership Interest - ShoppingCuritibaIn January, the Company acquired additionalinterest in Shopping Curitiba, adding 3,200 m2 ofowned GLA to its portfolio, raising its interest f rom35% to 49%. The total investment was R$34.6million, of which R$14.6 million was paid on theacquisition date. The real and unlev eraged IRR isestimated at 12.1%.The mall recorded good operational indicators in1Q11, with leasing spreads of 33.4% on newcontracts, well above the Company’s portfolioaverage. With t his acquisition, in addition to theoperational and commercial synergies arising f romour stake in three shopping malls in Curitiba, wehave consolidated our presence in the city, withtotal owned GLA of 74,700 m2, all managed by thecompany. 19
  20. 20. Earnings Release 1Q11Expansions:BRMALLS has eight expansion projects, which will jointly add 42,200 m2 of owned GLA, an increase of 6.7% to itscurrent portfolio, and an owned stabilized NOI at R$59.3 million. We hold an average stake of 61.3% in the projects, withat least 50% or more in six expansion projects. The inauguration and investment timetable is progressing as planned andof the total Capex planned, 20.1% was spent by the end of 1Q11. The Company continues to analyze opportunities f orcreating value f rom existing assets. Expansions CAPEX Schedule (R$ thousand) Owned GLA with Expansions 225,640 20,855 368,031 42,189 676,505 634,316 96,735 9,125 15,676 Already Until 2010 1Q11 2011 (ex- 2012 2013 Current Owned Owned GLA - Total Owned GLA disbursed 1Q11) GLA Expansions Expansions Sum m ary % % Construction Stabilized NOI Key Money - BRMALLS IRR (real Opening Expansions Total GLA Ow ned GLA Leasing Status Ow nership Com pletion (R$ m illion) (R$ m illion) and unlev.) Date Shopping Campo Grande 5,515 69.1% 3,812 41.0% 4.5 2.5 16.9% 4T11 57.6% Shopping Recife 7,538 31.1% 2,344 22.0% 3.4 3.7 18.0% 3T12 - Plaza Shopping 11,517 100.0% 11,517 18.0% 20.5 14.4 17.1% 2T13 27.5% Top Shopping 15,336 50.0% 7,668 0.0% 12.5 5.4 13.3% 4T13 - Osasco Shopping 10,852 39.6% 4,297 0.0% 3.9 1.3 17.6% 4T12 - NorteShopping 2,172 100.0% 2,172 0.0% 2.2 0.8 16.1% 1T12 - Natal Shopping 8,688 50.0% 4,344 0.0% 5.4 1.6 14.4% 1T13 - Independência Shopping 7,231 83.4% 6,034 0.0% 6.9 4.3 15.4% 2T13 - Total 68,850 61.3% 42,189 59.3 34.2 20
  21. 21. Earnings Release 1Q11Shopping Tamboré ExpansionThe expansion of Shopping Tamboré, BRMALLS’sseventh expansion, was launched yesterday. ShoppingTamboré was inaugurated in 1992 and this will be our7th expansion, which will increase the mall’s GLA byalmost 50% and add 15,100 m2 to total GLA.The mall had been registering an occupancy rate of100% since November 2008, which contributed to thesuccessf ul leasing out of the expansion, which openedwith 100% of its GLA occupied.We expect the expansion to add R$20.4 million instabilized NOI f or BRMALLS, an increase of 60.0% to theNOI delivered by the mall in 2010. Af ter thisexpansion, the consolidated NOI will reach R$46.5million, representing an increase of 200.0% over the NOIin 2007, when the mall was acquired by BRMALLS, anda CAGR of 31.6%.Shopping Campo Grande ExpansionThis expansion to be launched in 4Q11 by the Companywill add 5,500 m2 to total GLA, an increase of 16.5% tothe mall’s total GLA. Our stake will be 69.1% in thisexpansion.Shopping Campo Grande will add a stabilized NOI ofR$4. 5 million to the Company. It has been registering astrong pace of leasing, with 50.0% of its GLA alreadyleased out, 8 months bef ore inauguration. 21
  22. 22. Earnings ReleaseDevelopments: 1Q11We have three greenf ield projects under way, one of which (Mooca Plaza Shopping) is scheduled to open in 4Q11.These projects will add 72,400 m2 of owned GLA, a growth of 11.4% to the present owned GLA.Own investment in 2011 is around R$226.6 million, 16.3% was spent during the 1Q11. Our average int erest is 60.0%and stabilized NOI f or the Company is estimated at R$87.7 million. Greenfield Capex Schedule (R$ thousand) Owned GLA with Developments 72,370 706,687 994 433,610 634,316 99,680 2,712 194,859 103,656 31,709 Until 2010 1Q112011 (ex-1Q11) 2012 2013 2014 Total Current Owned Owned GLA - Total Owned GLA GLA DevelopmentsGreenfield Projects % % Construction Stabilized NOI Key Money - BRMALLS IRR (real OpeningProjects Total GLA Ow ned GLA Leasing Status Ow nership Evolution (R$ m illion) (R$ m illion) and unlev.) DateMooca Plaza Shopping 41,963 60.0% 25,178 39.5% 33.3 18.1 18.3% 4T11 79.7%Shopping Estação BH 36,317 60.0% 21,790 37.0% 23.6 11.0 19.2% 1T12 66.4%São Bernardo 42,338 60.0% 25,403 16.6% 30.7 14.3 16.8% 4T12 17.3%Total 120,617 60.0% 72,370 87.7 43.5 22
  23. 23. Earnings Release 1Q11Inauguration - Via Brasil ShoppingThis week, we opened Via Brasil Shopping, BRMALLS’s40th shopping mall, its 10th in the state of Rio de Janeiroand the 3rd shopping mall opened in about six months.The project was acquired by BRMALLS in May 2010 whenit was still in progress.This mall is strategically located at the junction of AvenidaBrasil with the Presidente Dut ra Highway, two high-traff icroads, which will contribute to a higher number of visitorsto the mall.The mall, which was initially leased by an independentcompany, opens with 95% of its GLA leased. In February2011, BRMALLS became responsible forleasing, theref ore implementing its expertise on theleasing activity. The occupancy rate grew f rom 82% to95% in only 2 months.The inauguration added 30,700 m2 of total GLA and15,000 m2 of owned GLA, contributing to increases of2.4% and 4.9%, respectively. We estimate the mall to addR$13.9 million in stabilized NOI.Mooca Plaza ShoppingWorks in the mall are already in an advanced stage andare in line wit h the expected inauguration in 4Q11. Onceinaugurated, Mooca Plaza Shopping will add 42,000 m2 oftotal GLA and 25,200 m2 of owned GLA, representingincreases of 3.5% and 4.2%, respectively.Of the mall’s total GLA, 79.7% has already been leased 8months bef ore inauguration. We estimate the mall to addR$33.3 million to our stabilized NOI. 23
  24. 24. Earnings ReleaseCapital Markets: 1Q11BRMALLS common shares are traded on the Novo Indices:Mercado listing segment of the São Paulo Stock ExchangeA BRMALLS tem under the ordinária negociada Company Weight(BM&FBovespa) sua ação ticker BRML3. The no NovoMercado a level 1 ADR program, allowing its shares to bealso has da BM&F Bovespa sob o código BRML3. A BM&F Bovespa IBrX 0.56%empresa também possuiorum programa de ADR in thetraded on the secondary over-the-counter market nível BM&F Bovespa IGC 0.98%1, permitindo a negociação das ações no result ourUnited States, under the ticker BRMLL. As a mercado BM&F Bovespa ITAG 0.93%secundário ou de balcão nos Estados Unidos, sob oshares are available to a greater number of U.S. andcódigo BRMLL, disponibilizando as ações a um númerointernational investors. BM&F Bovespa MLC 0.57%maior de investidores nos Estados Unidos e no mundo. BM&F Bovespa IMOB 15.53% iShares MSCI Brazil 0.52% Source: Bloomberg (31/03/2011) Regional Shareholder Distribution (31/03/2011) 6.0% 2.0% USA 0.8% Investor Profile 7.0% Europe Brazil We ended 1Q11 with an investor base well 9.2% Asia distributed across Brazil, the United States and 47.7% Europe. Average financial volume in the quarter Latin America was R$27.9 million, 1.3% more than in 1Q10. The Individuals average number of trades in 1Q11 was 2,518, an increase of 71.6%. Others 27.3%Share PerformanceBRMALLS’ shares closed the quarter at R$17.0, 0.6%down f rom the 4Q10 closing price of R$17.1, compared tothe 1.0% downturn of the Ibovespa Index. Stock split Base 100 200 45 Millions 180 40 160 35 140 30 120 25 100 20 80 15 60 40 10 20 5 0 0 ago-09 out-09 dez-09 fev-10 abr-10 jun-10 ago-10 out-10 dez-10 fev-11 Trading Volume (30 days) BRML3 Ibovespa 24
  25. 25. Earnings ReleaseOur Portfolio: 1Q11BRMALLS currently holds an ownership interest in 40 malls, with a total GLA of 1,219,218 m² and owned GLA of634,316 m². Our average ownership interest is 52.0%. The malls in which we ret ain a 50% or higher interest account f or83.6% of our NOI and our interest in these 19 malls averages 82.3%. Of our portfolio, nine malls are 100% owned. Weprovide services for 32 of our 40 malls. We provide leasing services to 32 malls in our portfolio and managementservices to 29, while 24 are serviced by the CSC (shared service center).Our malls have 6,900 stores and attract millions of visitors per year. BRMALLS is the only shopping mall company inBrazil with a nationwide presence and targeting all income segments. Mall State Total GLA % Owned GLA Services Maceió Shopping AL 34,742 34.2% 11,892 Amazonas Shopping AM 34,214 17.9% 6,124 Manag./Leasing/CSC Araguaia Shopping GO 22,078 50.0% 11,039 Manag. / Leasing Goiânia Shopping GO 22,692 48.4% 10,983 Manag./Leasing/CSC São Luís Shopping MA 34,123 15.0% 5,118 Center Shopping Uberlândia MG 52,415 51.0% 26,732 Manag./Leasing/CSC Shopping Del Rey MG 37,171 65.0% 24,161 Manag./Leasing/CSC Shopping Sete Lagoas MG 16,451 70.0% 11,515 Manag./Leasing/CSC Independência Shopping MG 23,214 83.4% 19,360 Manag./Leasing/CSC Minas Shopping MG 35,120 2.1% 747 Big Shopping MG 17,555 13.0% 2,282 Shopping Campo Grande MS 33,415 71.2% 23,792 Manag./Leasing/CSC Pantanal Shopping MT 43,187 10.0% 4,319 Shopping Pátio Belém PA 20,631 13.3% 2,744 Shopping Recife PE 61,079 31.1% 18,968 Shared Management / Leasing Shopping Crystal Plaza PR 12,686 70.0% 8,880 Manag. / Leasing Shopping Curitiba PR 23,379 49.0% 11,456 Manag./Leasing/CSC Shopping Estação PR 54,716 100.0% 54,716 Manag./Leasing/CSC West Shopping RJ 38,481 30.0% 11,544 Manag. / Leasing Center Shopping RJ 14,294 30.0% 4,288 Manag. / Leasing Norteshopping RJ 77,908 74.5% 58,041 Manag./Leasing/CSC Plaza Shopping RJ 33,196 100.0% 33,196 Manag./Leasing/CSC Fashion Mall RJ 14,886 100.0% 14,886 Manag./Leasing/CSC Ilha Plaza Shopping RJ 21,614 100.0% 21,614 Manag./Leasing/CSC Rio Plaza Shopping RJ 6,955 100.0% 6,955 Manag./Leasing/CSC Shopping Tijuca RJ 35,055 100.0% 35,055 Manag./Leasing/CSC Top Shopping RJ 18,168 35.0% 6,359 Leasing Via Brasil Shopping RJ 30,680 49.0% 15,033 Manag. / Leasing/CSC Natal Shopping RN 17,690 50.0% 8,845 Leasing Shopping Iguatemi Caxias do Sul RS 29,101 45.5% 13,241 Manag./Leasing/CSC Shopping Mueller Joinville SC 27,453 10.4% 2,855 Shopping ABC SP 46,285 1.3% 602 Manag./Leasing/CSC Shopping Piracicaba SP 27,870 34.4% 9,587 Manag./Leasing/CSC Shopping Villa-Lobos SP 27,023 39.7% 10,733 Manag./Leasing/CSC Granja Vianna SP 29,813 77.8% 23,188 Manag./Leasing/CSC Shopping Tamboré SP 46,776 100.0% 46,776 Manag./Leasing/CSC Shopping Metrô Santa Cruz SP 19,248 100.0% 19,248 Manag./Leasing/CSC Campinas Shopping SP 30,769 100.0% 30,769 Manag./Leasing/CSC Osasco Plaza Shopping SP 14,367 39.6% 5,689 Leasing Shopping Metrô Tatuapé SP 32,718 3.0% 982 Total 1,219,218 52.0% 634,316 25
  26. 26. Earnings ReleaseGlossary: 1Q11Gross Leasable Area or GLA: Sum of all areas in a shopping mall that are available f or lease, except f or kiosks.Owned GLA: GLA multiplied by our ownership stake.Net Operating Income or NOI: Gross revenue (less service revenue) - costs + depreciation + amortization.Law 11,638: Law 11,638 was enacted with the purpose of including publicly-held Brazilian companies in the internationalaccounting convergence process. The 4Q08 f inancial and operating f igures will be impacted by certain accountingef f ects due to the changes arising f rom Law 11,638/07.Same-Property NOI: NOI f rom the exact same properties in which we currently own a stake, proportional to ourownership stake in the property f or both periods.EBITDA (Earnings Before Interest, Taxes, Depreci ation and Amortization): ref ers to gross income - SG&A +depreciation + amortization.Adjusted E BITDA: EB ITDA + Shopping Araguaia prof it-sharing debenture revenues + straight-line ef f ects – otheroperating revenues f rom investment propertyAdjusted FFO (Funds From Operations): Adjusted net income (excluding exchange rate variations and Law 11,638eff ects) + depreciation + amortization + straight-lining eff ects – other operating revenues and def erred taxes f rominvestment propertySame store sale (SSS): Sales f igures f or the same stores that were operating in the same space in both periods.Same store rent (SSR): Rent f igures f or the same stores that were operating at the same space in both periods.Occupancy Rate: Total leased and occupied GLA as a percentage of total leasable GLA.Tenant Turnover: sum of new contract GLA negotiated in the last 12 months – the GLA variation for unoccupied storesin the last 12 months / average GLA in the last 12 monthsLate Payment: Measured on the last day of each month, includes total revenues in that month over total revenuesef f ectively collected in the same month. It does not include inactive stores.Occupancy Cost as a Percentage of Sales: Rent revenues (minimum rent + % overage) + common charges(excluding specif ic tenant costs) + merchandising f und contributions. (This item should be analyzed f rom the tenant’spoint of view.)Leasing Spread: Comparison between the average rent f or the new contract and the rent charged in the previouscontract f or the same space.Average GLA (Rent/m² and NOI/m²): Does not include 27,921 m² of GLA f rom the Convention Center located inShopping Estação. In the average GLA used f or rent/m², we do not consider owned GLA f or Araguaia Shopping, since itsrevenues are recognized via debenture payments.Shopping Malls by Income Group (Brazil Criterion): The B razil Criterion is related to the purchasing power ofindividuals and f amilies and is def ined by IBOPE. According to this criterion, our malls are divided into f our categories:• Upper: Villa Lobos and Fashion Mall;• Upper-middle: Goiânia, Iguatemi Caxias, Plaza Niterói and Rio Plaza;• Middle: Amazonas, Independência; Campo Grande, Curitiba, Norte Shopping, Campinas Shopping, ABC, Metrô SantaCruz, Piracicaba, Tamboré, Belém, Esplanada, Mueller, São Luís, Recif e, Natal, Iguatemi Maceió and Pantanal;• Lower-middle: Metrô Tatuapé, BIG, Minas, TopShopping, Osasco, Araguaia, Del Rey, Estação, Center, Ilha Plaza andWest. 26
  27. 27. Earnings Release 1Q11Original Portfolio: Original malls acquired f rom ECISA (Norte Shopping, Shopping Recif e, Villa-Lobos, Del Rey, CampoGrande andIguatemi Caxias).Acquired Portfolio: Other malls acquired in 2007 and on.Cash on cash: Stabilized NOI (f ourth year af ter inauguration) over net capex (total Investment – key money revenues)EV/EBITDA: Market Capitalization + Net debt / Annualized Adjusted EBITDAP/FFO: Market Capitalization / Annualized Adjusted FFOROE: Annualized Adjusted Net Income / Shareholders’ EquityROIC: Annualized EBIT * (1 - ef f ective tax rate) / invested capital 27
  28. 28. Earnings ReleaseIncome Statement: 1Q11 Income Statement (R$ thousand) 1Q11 1Q10 % Gross Revenue 193,895 115,960 67.2% Rents 128,559 81,587 57.6% Rent straight-lining 10,015 1,473 579.9% Key Money 12,572 4,973 152.8% Key Money straight-lining (5,052) (1,774) 184.8% Parking 26,898 14,163 89.9% Transfer Fee 1,779 483 268.3% Services Provided 16,552 11,226 47.4% Others 2,572 3,829 -32.8% (-)Taxes and Contributions (14,812) (9,635) 53.7% Net Revenue 179,083 106,325 68.4% Costs (19,015) (11,913) 59.6% Payroll (4,013) (1,556) 157.9% Services Provided (9,925) (6,343) 56.5% Common Costs (3,942) (3,005) 31.2% Merchandising Costs (1,135) (1,009) 12.5% Gross Profit 160,068 94,412 69.5% Sales, General and Administrative Expenses (24,549) (15,904) 54.4% Sales Expenses (2,328) (2,336) -0.3% Personnel Expenses (18,237) (8,734) 108.8% Services Hired (2,323) (3,267) -28.9% Other Expenses (1,661) (1,567) 6.0% Depreciation (37) (440) -91.6% Amortization (2,816) (2,563) 9.9% Financial Income (76,992) (40,118) 91.9% Financial Revenues 73,286 66,490 10.2% Financial Expenses (150,278) (106,609) 41.0% Financial Income Adjustment - Law 11,638 - - 0.0% Revenue based on Equity Revenue 3,481 9,052 -61.5% Other Operational Revenues 59,155 44,439 33.1% Operating Income 59,155 44,439 33.1% Income before Income Taxes and Minority Interest (10,716) (6,007) 78.4% Income Tax and Social Contribution Provision 14,450 4,987 189.8% Minority Interest (5,665) (1,367) 314.4% Net Income (Loss) 57,224 42,052 36.1% 28