brasil brokers reports 3q07 results1 3q07 earnings release brasil brokers reports 3q07 results rio...
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1
3Q07 Earnings Release
Brasil Brokers Reports 3Q07 Results
Rio de Janeiro, November 14th, 2007, Brasil Brokers Participações S.A. (Bovespa: BBRK3), a real estate brokerage and consulting firm consisting of 16 individual real estate brokerages, with a strong presence in Brazil’s major real estate markets, announces today its results for third quarter 2007 (3Q07).
The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in Brazil (BR GAAP), pursuant to Brazilian Corporate Law and CVM regulations.
3Q07 Highlights
On October 29, the Company held its Initial Public
Offering (IPO), raising R$304.0 million through the issue
of 320,018 common shares (code BBRK3).
Total of 4,862 Units Sold by subsidiaries, representing
Sale Orders of R$887.3 million, with 15.0% of this total
in the affordable segment, 19.3% in the lower-middle
segment, 33.3% in the middle-income segment, 17.6%
in the upper-middle segment, and 14.2% in the high-end
segment.
Total of 6,030 Units Launched by subsidiaries in the
3Q07, for Launched Potential Sales Value (PSV) of
R$1.05 billion in the 3Q07.
Sales Bank, from launches expected in November 2007
through December 2009, of R$28.6 billion, representing
162,121 units.
Financing and Operating Highlights
3Q07 9M07
PSV Launched (R$ thousand) 1,050,462.8 2,577,446.5
Number of Units Launched 6,030 12,461
Contracted Sales (R$ thousand) 887,344.9 2,240,917.1
Number of Units Sold 4,862 9,403
Number of Brokers 3,061 3,061
Conference Call 3Q07
Portuguese
November 21st, 2007
11:00 AM (Brasília Time)
08:00 AM (NY Time)
Tel.: +55 (11) 2188-0188
Code: Brasil Brokers
Replay: +55 (11) 2188-0188
English
November 21st, 2007
10:00 AM (NY Time)
01:00 PM (Brasilia Time)
Tel.: +1 (973) 935-8893
Code: 9462096
Replay: +1 (973) 341-3080
IR Contact
Álvaro Soares – CFO and IRO
Tel.: +55 (21) 3433-9550
e-mail: [email protected]
www.brbrokers.com.br
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3Q07 Earnings Release
Subsequent Events
On October 29, 2007, common share in BrasilBrokers began trading on the São Paulo Stock Exchange (Bovespa) under the code BBRK3. On November 12, 2007, BrasilBrokers successfully concluded its primary and secondary distribution of shares, issuing 320,018 common shares in the primary offering with the distribution of 415,882 common shares, 319,982 shares in the secondary offering, and 95,900 shares via the over-allotment option.
The company raised R$288,011,958.74 net of commissions, which will be used mainly to acquire new operating companies. Funds are partially allocated in an exclusive fund managed by a first-tier financial institution, with the remainder managed directly by the Company’s treasury, with immediate liquidity and targeting return in line with the CDI overnight rate.
Below we show a breakdown of the company’s ownership before and after the offering.
Shares % Part. Shares % Part.
Controlling Shareholders 1,269,397 96.19% 853,515 52.05%
Board of Directors 5 0.00% 5 0.00%
Other (Free-float) - 0.00% 735,900 44.88%
Treasury 50,312 3.81% 50,312 3.07%
TOTAL 1,319,714 100.0% 1,639,732 100.0%
After OfferBefore Offer
History and Operations
BrasilBrokers was constituted on January 16, 2007 and initiated its operations on June 11, 2007. Over the past eight months the company has acquired controlling interests in 16 companies in the real estate brokerage sector (except for Niterói Administradora, in which it holds a 50% interest). Of these 16 companies, eight have operating histories, and eight are newly formed companies that received 100% of the operations and nearly 100% of the assets (including goodwill and brand equity) of companies formed at least three years ago that enjoy strong brand recognition in their respective markets.
As of September 30, 2007, of the 16 companies acquired, ten are fully operational with results already included in our financial statements: Primaz, Ágil (Gribel), Niterói Administradora, IPrice, Brito e Amoedo, Ética, Delforte, Pactual, Avance and Noblesse. The other six companies (Basimóvel, Américas, Abreu, Sardenberg, Tropical and Chão&Teto) were recently constituted and will launch operations in November 2007. The revenues and expenses of our subsidiaries involve real estate brokerage and consulting activities.
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3Q07 Earnings Release
Operational Areas
The map below shows the locations in which the Company has operations:
States where Brasil Brokers has
subsidiaries
Other states where Brasil Brokers
operates through its subsidiary
Primaz
Rio de Janeiro Metropolitan Area
Ética (MF Consultoria Imobiliária S.A)
With head offices in the city of Rio de Janeiro, Ética received 100% of the activities and nearly 100% of the
assets held by Ética Empresa Imobiliária Ltda., including its goodwill and brand equity, launching
operations in August 2007. With a focus on the resale segment, as of September 30, Ética had 134
employees and a large and highly qualified team composed of 705 brokers distributed in 17 branches
located in strategic districts of the Rio de Janeiro Metropolitan Area, including the Center, Tijuca, Méier,
Flamengo, Vila da Penha, Cachambi, Madureira, Copacabana, Barra da Tijuca, Taquara, Jardim Botânico,
Ipanema, Campo Grande, Grajaú, Engenho de Dentro and Freguesia.
Manaus
Natal
Salvador
Belém
Belo Horizonte
São Paulo Rio de Janeiro
Vitória
Recife
Curitiba
a Florianópolis
Porto Alegre
Goiânia
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3Q07 Earnings Release
Basimóvel (Basimóvel Consultoria Imobiliária S.A.)
With head offices in Rio de Janeiro, Basimóvel received 100% of the activities and nearly 100% of the
assets held by Basimóvel Marketing Imobiliário Ltda., including its goodwill and “Basimóvel” brand,
launching operations in October 2007. Basimóvel operates in the Rio de Janeiro Metropolitan Area and in
the following cities in Rio de Janeiro state: Mangaratiba, Angra dos Reis, Nova Iguaçu, Duque de Caxias,
São João de Meriti, Cabo Frio, Búzios, Volta Redonda and Resende. On September 30, Basimóvel had
29 employees and a team of 457 brokers.
As of November 1, Basimóvel had a sales bank of approximately R$2.10 billion, consisting of 12,705 Units,
which is expected to be fully launched by 2009.
Américas (BB Américas 2007 Consultoria Imobiliária S.A.)
With head offices in Rio de Janeiro, Américas received 100% of the activities and nearly 100% of the
assets held by RFC Américas 2005 Consultoria Imobiliária Ltda., including its goodwill and “Américas”
brand, launching operations in October 2007. Américas operates in the Rio de Janeiro Metropolitan
Area, and in the following cities of Rio de Janeiro state: Angra dos Reis, Nova Iguaçu, Duque de
Caxias, Cabo Frio and Búzios municipalities. As of September 30, it had 10 employees and a team of
93 brokers.
As of November 1, Américas had a sales bank of approximately R$312.6 million, consisting of 1,235 Units,
which is expected to be fully launched by 2009.
Niterói Administradora
With head offices in the city of Niterói city in Rio de Janeiro state, the company initiated its operations in
1999, providing brokerage services for development launches and mainly targeting the upper-middle and
middle-income residential segments.
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3Q07 Earnings Release
We believe Niterói Administradora is the absolute leader in the real estate brokerage market in Niterói,
which also operates in several other cities in Rio de Janeiro state, such as Niterói, São Gonçalo and
Maricá. Niterói Administradora has a strong brand in the markets where it operates and a solid
relationship with the main developers in the market. As of September 30, it had 40 employees and a
team of 151 brokers.
As of November 31, Niterói Administradora had a sales bank of approximately R$4.77 billion, consisting of
14,788 Units, with R$2.90 billion of this amount expected to be fully launched by 2009.
São Paulo Metropolitan Area
IPrice
With head offices in São Paulo, IPrice initiated its operations in 2005 as a real estate brokerage
targeting the upper-middle, middle and lower-middle segments, providing brokerage services for
both new development launches and resale, with operations in the cities of São Paulo, Campinas, São
Bernardo and Jundiaí. On September 30, Iprice had 53 employees and a large team of 296 brokers.
As of November 31, A I. Price had a sales bank of approximately R$4.21 billion, consisting of 22,498 Units,
with R$3.72 billion of this amount expected to be fully launched by 2009.
Del Forte (Del Forte Empreendimentos Imobiliários S.A.)
With head offices in the city of São Paulo, Del Forte received 100% of the activities and nearly 100% of the
assets held by Del Forte Planejamento e Empreendimentos Imobiliários Ltda., including its goodwill and
brand equity, initiating operations in July 2007. Del Forte has a strong presence in the ABCD region of the
São Paulo Metropolitan Area and also operates in the cities of São Paulo, Guarulhos and Bertioga. On
September 30, it had 38 employees and a team of 311 brokers.
As of November 1, Del Forte had a sales bank of approximately R$2.16 billion, consisting of 11,619 Units,
which is expected to be fully launched by 2009.
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3Q07 Earnings Release
Avance
With head offices in the city of São Paulo, Avance initiated its activities in 2005, providing brokerage
services for launches in the upper-middle, middle and lower-middle residential segments. On September
30, Avance had 45 employees and a team of 151 brokers, operating in the São Paulo Metropolitan Area
and the cities of Campinas and Jundiaí.
As of November 1, Avance had a sales bank of approximately R$3.91 billion, consisting of 31,464 Units,
with R$3.44 billion of this amount expected to be fully launched by 2009.
Belo Horizonte Metropolitan Area
Gribel
With head offices in the city of Belo Horizonte, Gribel launched its activities in 2004, offering
brokerage services in the upper-middle, middle and lower-middle residential segments for both new
development launches and resale. On September 30, Gribel had 16 employees and a team of 84
brokers.
As of November 1, Gribel had a sales bank of approximately R$2.06 billion, consisting of 4,422 Units,
which is expected to be fully launched by 2009.
Pactual
With head offices in the city of Belo Horizonte, Minas Gerais state, Pactual launched activities in
1995, selling and renting properties in the upper-middle, middle and lower-middle segments, for
both new development launches and resale. On September 30, Pactual had 11 employees and a team
of 30 brokers.
As of November 1, Pactual had a sales bank of approximately R$737.6 million, consisting of 659 Units,
with R$673.6 million of this amount expected to be fully launched by 2009.
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3Q07 Earnings Release
Salvador Metropolitan Area
Brito & Amoedo
With head offices in the city of Salvador, Bahia state, Brito & Amoedo launched its brokerage
operations in 2004 for the upper-middle, middle and lower-middle segments, for both new
development launches and resale. The company has operations in the Salvador Metropolitan Area and
in the cities of Camaçari, Lauro de Freitas, Mata de São João and Itacaré. On September 30, Brito &
Amoedo had 10 employees and a team of 220 brokers.
As of November 1, Brito & Amoedo had a sales bank of approximately R$1.58 billion, consisting of 7,068
Units, which is expected to be fully launched by 2009.
Natal Metropolitan Area
Abreu (Abreu Brokers Serviços Imobiliários S.A.)
With head offices in the city of Natal, Rio Grande do Norte state, Abreu received 100% of the
operations and nearly 100% of the assets, including goodwill and brand equity, of Abreu Imóveis
Ltda, launching its operation in November 2007. Abreu operates as a brokerage in the segments of
residential, land and hotel development launches in the upper-middle, middle and lower-middle
residential segments, and is a leader in the real estate brokerage market in the Natal Metropolitan
Area. On September 30, Abreu had 70 employees and a team of 45 brokers.
As of November 1, Abreu had a sales bank of approximately R$7.08 billion, consisting of 33,655
Units, with R$4.46 billion of this amount expected to be fully launched by 2009.
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3Q07 Earnings Release
Porto Alegre Metropolitan Area
Noblesse
With head offices in the city of Porto Alegre, Rio Grande do Sul state, Noblesse launched operations in
August 2007 as a brokerage in both the new development launch and resale segments. Noblesse has a
strong brand in its market, and on September 30 had 46 employees and a team of 186 brokers, in
addition to a highly automated team of brokers and excellent IT platform.
As of October 31, Noblesse had a sales bank of approximately R$867.4 million, consisting of 4,491
Units, which are expected to be fully launched by 2009.
Belém Metropolitan Area
Chão e Teto (Chão e Teto Consultoria Imobiliária S.A.)
With head offices in the city of Belem, Pará state, Chão e Teto received 100% of the operations and
nearly 100% of the assets of Chão & Teto Empreendimentos Ltda., launching operations in November
2007. The company has operations in brokerage services related to appraisal, rental, administration,
acquisition, sale and legalization of properties, whether for residential, commercial, leisure, rural or
investment purposes. On September 30, Chão e Teto had 39 employees and a team of 80 brokers.
As of November 1, Chão & Teto had a sales bank of approximately R$943.8 million, consisting of 7,061
Units, which is expected to be fully launched by 2009.
Vitória Metropolitan Area
Paulo Sardenberg (Paulo Sardenberg Consultoria Imobiliária S.A.)
With head offices in the city of Vitória, Espírito Santo state, the company received 100% of the
operations and nearly 100% of the assets of Paulo Sardenberg Imóveis Ltda., launching operations in
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3Q07 Earnings Release
October 2007. With operations in the development launch, resale and rental administration segments, on
September 30, Paulo Sardenberg had 23 employees and a team of 40 brokers.
As of November 1, Paulo Sardenberg had a sales bank of approximately R$586.2 million, consisting of
4,158 Units, with R$526.2 million of this amount expected to be fully launched by 2009.
Goiânia Metropolitan Area
Tropical (Tropical Corretora e Consultoria Imobiliária S.A.)
With head offices in the city of Goiânia, Goiás state, the company received 100% of the operations
and nearly 100% of the assets of Tropical Consultoria em Administração de Imóveis Ltda, launching its
operations in October 2007. The company has brokerage operations in the segments of new
development launch, resale, land development, rental, and administration of residential and
commercial developments. On September 30, Tropical had 82 employees and a team of 212 brokers.
As of November 1, Tropical had a sales bank of approximately R$4.36 billion, consisting of 45,330
Units, with R$2.82 billion of this amount expected to be fully launched by 2009.
Operations in Brazil’s Major Metropolitan Areas
Primaz
With head offices in the city of Belo Horizonte, Minas Gerais state, though with operations in most
regions of Brazil, Primaz launched activities in 2006, operating in the structuring, purchase and sale of
interests in real estate complexes, targeting the corporate and real estate investment markets. Primaz
also has excellent access to the pension fund industry, mall administrators, major developers and
property holding companies, with a portfolio of more than 100 clients with high investment capacity and
excellent access to resources.
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3Q07 Earnings Release
Operating Performance
Sales by State
Sales Orders totaled R$887.3 million in the third quarter. Of this
total, 46.5% were in São Paulo state, 20.7% in Rio de Janeiro,
16.0% in Bahia, 13.4% in Minas Gerais, and 3.4% in Rio Grande
do Sul.
Sales by Income Segment
Of the total of R$887.3 million in Sales Orders, 15.0% were
from properties in the affordable segment (up to
R$100,000.00), 19.8% in the lower-middle segment (from
R$100,000.01 to R$150,000.00), 33.3% in the middle-income
segment (from R$150,000.01 to R$350,000.00), 17.6% in the
upper-middle segment (from 350,000.01 to R$600,000.00),
and 14.2% in the high-end segment (over R$600,000.00).
Sales by Market Segment
Of the R$887.3 in sales orders, 91.7% was from residential
properties, 7.0% from commercial properties, 1.1% from lot
developments and 0.3% from hotel units.
RJ21%
SP47%
MG13%
BA16%
RS3%
Contracted Sales - by State
Residential 92%
Commercial7%
Lots1%
Hotels0%
Contracted Sales - by Income Segment
Economic15%
Mid-Low20%
Middle33%
Mid-High18%
High14%
Contracted Sales - by Market Segment
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3Q07 Earnings Release
Sales Bank
The table below shows the PSV to be launched and the number of units for each of our subsidiaries:
until
2009Total
ÉTICA
IMOBILIÁRIA(1) Aug/07 Rio de Janeiro Resales N/A N/A N/A
BASIMÓVEL Oct/07 Rio de Janeiro New Launches and Resales R$2,103 R$2,103 12,705
AMÉRICAS Oct/07 Rio de Janeiro New Launches R$312 R$312 1,235
NITERÓI
ADMINISTRADORAMay/99 Niterói New Launches and Resales R$2,902 R$4,774 14,788
GRIBEL Jun/04 Belo Horizonte New Launches and Resales R$2,057 R$2,057 4,422
PACTUAL Jun/95 Belo Horizonte New Launches and Resales R$674 R$738 659
BRITO & AMOEDO Aug/04 Salvador New Launches and Resales R$1,580 R$1,580 7,068
I. PRICE Aug/05 São Paulo New Launches and Resales R$3,724 R$4,211 22,498
DEL FORTE Jul/07 São Paulo New Lauches R$2,165 R$2,165 11,619
AVANCE Oct/05 São Paulo New Lauches R$3,443 R$3,909 31,464
NOBLESSE Aug/07 Porto Alegre New Launches and Resales R$867 R$867 4,491
PAULO SARDENBERG Oct/07 VitóriaNew Launches, Resales and Lease
ManagementR$526 R$586 4,158
CHÃO & TETO Nov/07 BelémNew Launches, Resales and Lease
ManagementR$944 R$944 7,061
TROPICAL Oct/07 Goiânia New Launches and Resales R$2,816 R$4,364 45,330
ABREU Nov/07 Natal New Launches and Resales R$4,457 R$7,084 33,655
PRIMAZ (2) Jun/06 Brasil Commercial Properties N/A N/A N/A
(2) P rimaz has no current value to be launched, since its revenue is derived from the structuring ans sale of ownership in real estate investments.
Total
Number of
Units
Beginning of
Activities
TOTAL R$35,694R$28,570 201,153
Our SubsidiariesMetropolitan Areas
of:Segment
PSV Launches
(in millons of reais)
(1) Ética Imobiliária does not present total value of sales to be launched and real estate units because it specializes in resales.
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3Q07 Earnings Release
Our Sales Bank remains diversified in distribution by state, by property value, and by market
segment.
Sales Bank – by State
RJ19%
SP31%
MG10%
ES2%
RS3%
BA6%
RN16%
PA3%
GO10%
Sales Bank (up to 2009) - by State
Sales Bank – by Income Segment
Economic9%
Mid-Low 20%
Middle42%
Mid-High19%
High10%
Sales Bank (up to 2009 - only residential units) -
by income segment
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3Q07 Earnings Release
Sales Bank – by Market Segment
Residential94%
Commercial2%
Lots2%
Hotels2%
Sales Bank (up to 2009) - by market segment
Financial Performance
Because it is in its pre-operational phase, BrasilBrokers did not account results and therefore did not
report an income statement for the quarter. The founding shareholders of the subsidiaries of
BrasilBrokers have the right to usufruct of retained earnings, to be distributed in the form of
dividends (registered in the Balance Sheet in the account line Related Parties – Short Term), in
accordance with the share exchange contracts signed between the parties. This right includes the
income to be generated up to the settlement date of the public offering (10/31/2007).
For purpose of better understanding the operations of our companies, we present below the
financial performance of the subsidiaries of BrasilBrokers obtained through a non revised proforma
combined Income Statement of their operations – attachment III
Service Revenue
The combined Gross Service Revenue from the subsidiaries of BrasilBrokers, consisting of the
brokerage commissions paid by buyers, amounted to R$25.3 million in the quarter, equivalent to
2.9% of the R$887.3 million sold in the period. This revenue is recognized when the sale order is
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3Q07 Earnings Release
signed, and the average payment term for the commission is 30 days. After deduction of taxes, net
revenue in the quarter was R$23.3 million.
Costs of Services
The combined Cost of Services of the subsidiaries of BrasilBrokers was R$1.9 million, representing
8.3% of net revenue in the period. These costs include rent and utilities of stores, costs with
researching buyer’s application information, and other costs directly related to the brokerage
operations.
Operating Expenses
The combined operating expenses of the subsidiaries of BrasilBrokers totaled R$4.8 million in the
quarter, representing 20.6% of net revenue in the period. The composition of these expenses is
shown below:
Operating Expenses (R$ mm)
3Q07 9M07
Admnistrative Expenses (3,367.2) (7,145.5)
Managment Fees (459.3) (732.2)
Depreciation and Amortization (93.7) (324.3)
Financial Expenses (281.1) (521.7)
Financial Income 50.3 121.1
Other Operating Income/Expenses (656.4) (876.7)
TOTAL (4,807) (9,479)
Administrative expenses consist of expenses with the maintenance of facilities and operating
activities, such as salaries of administrative personnel, rent and utilities (for administrative area),
legal and court fees, office supplies and other supplies.
Net Income
The combined net income of the subsidiaries of BrasilBrokers in the third quarter was R$13.9 million,
for net margin of 59.5%.
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3Q07 Earnings Release
Adjusted EBITDA(1)
The combined adjusted EBITDA of the subsidiaries of BrasilBrokers in the third quarter was R$16.8
million, representing adjusted EBITDA margin of 71.4%.
Reconciliation (R$ mm) 3Q07 9M07
Net Profit 13,857 29,934
IR and CS (2,704) (5,957)
Non Operating Results 14 130
Net Financial Results (231) (401)
Depreciation and Amortization (94) (324)
Adjusted EBITDA 16,871 36,486
Adjusted EBITDA Margin 71.4% 71.1%
Net Margin 59.5% 59.0%
(1) Adjusted EBITDA consists of income before net financial result, income tax and social contribution tax, depreciation and amortization and non-
operating income. Adjusted EBITDA is not a measure in accordance with generally accepted accounting principles in Brazil (BR GAAP), does not
represent cash flow for the periods presented, and should not be considered a substitute for net income as an indicator of operating performance, or as
a substitute for cash flow as an indicator of liquidity. Adjusted EBITDA does not have a standardized meaning and our definition of Adjusted EBITDA may
not be comparable to that used by other companies.
Income Tax and Social Contribution Tax
The combined Income Tax and Social Contribution Tax on the net income of the subsidiaries of
BrasilBrokers was R$2.7 million in the quarter, equivalent to 11.6% of net revenue in the period.
Indebtedness
At the close of the third quarter, the company’s total debt was R$ 9.6 million. Of this amount, the
debits of subsidiaries related to loans with financial institutions totaled R$0.2 million, and R$7.2
million refers to the provisioning for dividends for payment to the founding partners due to their
usufruct of the income generated up to the settlement date of the public offering.
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3Q07 Earnings Release
Attachments
I – Controlling e Consolidated Balance Sheet
II – Controlling e Consolidated Cash Flow
III – Proforma non revised Combined Income Statement
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3Q07 Earnings Release
Anexo I – Controlling e Consolidated Balance Sheet
09/30/07 (in thousand of reais)Controlling Company Consolidated
A S S E T S
Current Assets: Cash, Cash Equivalents 76 2,315 Accounts Receivable from Clients - 10,866 Accounts Receivable - Other - 30 Tax to Recover - 119 Other Current Assets - 268
Total Current Assets: 76 13,598
Noncurrent Assets:
Long Term Assets Accounts Receivable of the Clients - - Related Parties - 388 Other - 5
- 393
Permanent Assets Investments 182 - Goodwill Investments 5 5 Property and Equipment - 4,623 Deferred 230 600
418 5,228
Total Noncurrent Assets: 418 5,620
Total Assets 493 19,219
30/09/07 (in thousand of reais)Controlling Company Consolidated
L I A B I L I T I E S
Current Liabilities: Loans and Financings - 145 Suppliers - 582 Wages and Burden Payable 19 1,592 Taxes and Contributions payable - 4,564 Advances from Clients - 144 Related Parties 210 2,197 Deferred - 7,220 Other - 417
Total Current Liabilities: 229 16,860
Noncurrent Liabilities: Long-term Liabilities Loans and Financings - 56 Related Parties Provision for contingencies - 1,757 Taxes to Recover - 221 Deferred - - Other - 51
Total Noncurrent Liabilities: 2,084
Minority Interest - 10
Shareholders´ Equity: Subscribed Capital 216 216 Unpaid Capital - - Capital Reserve 47 47 Legal Reserve - - Accumulated Gains / Losses - -
Total Shareholders´ Equity 264 264
Total Liabilities 493 19,219
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3Q07 Earnings Release
Anexo II – Controlling e Consolidated Cash Flow
Cash Flow
Controlling Company Consolidated
From Activities
Changes in the Assets and Liabilities
Accounts Receivable from clients (short term) - (5,901,440)
Accounts Receivable - Other - 30,000
Taxes to Recover - 28,352
Other Current Assets - (182,789)
Accounts Receivable from clients (long term) - 132,661
Related Parties (short term) - 2,580,396
Other Noncurrent Assets - (4,908)
Suppliers - 83,877
Wages and Burden Payable 19,217 1,148,657
Taxes and Contributions payable - 1,308,807
Advances from Clients - 5,220
Related Parties (short term) 210,178 1,389,689
Accounts Payable - Other - 128,868
Related Parties (long term) - (5,858)
Provision for Contigencies - 629,446
Taxes and Contribution quota - (8,868)
Other Noncurrent Liabilities - 50,945
Cash Flow from Activities 229,395 1,413,055
From Investments Activities
Investiments (47,438) (5,238)
Fixed Assets - (2,640,150)
Deferred Assets (229,395) (581,370)
Net Cash Used in Investment Activities (276,833) (3,226,758)
From Financing Activities With Third Parties
Loans and Financing (short term) - (82,522)
Loans and Financing (long term) - (14,494)
Net Cash Used in Financing Activies - (97,016)
From Financing Activities with Shareholders
Capital Increase 55,688 55,688
Capital Reserve – Goodwill in subscription shares 47,437 47,437
Net Cash Used in Financing Activies 103,125 103,125
Cash Increase (Decrease) 55,687 (1,807,594)
Cash
In the Beginning of the period 20,021 4,122,962
In the End of the period 75,708 2,315,368
Cash Increase (Decrease) 55,687 (1,807,594)
September
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3Q07 Earnings Release
Anexo III - Proforma non revised Combined Income Statement
Income Statement 3Q07 % 30/9/2007 %
Gross Service Revenues 25,346,041 108.8% 55,092,319 108.6%
Taxes (2,047,034) 8.8% (4,357,579) 8.6%
Net Revenue 23,299,007 100.0% 50,734,740 100.0%
Cost of services rendered (1,944,826) 8.3% (5,494,612) 10.8%
Gross Income 21,354,181 91.7% 45,240,128 89.2%
Operating Cost and Expenses (4,807,414) 20.6% (9,479,359) 18.7%
Managment Expenses (3,367,186) 14.5% (7,145,540) 14.1%
Managment Fees (459,300) 2.0% (732,187) 1.4%
Depreciation and Amortization (93,662) 0.4% (324,328) 0.6%
Financial Expenses (281,140) 1.2% (521,661) 1.0%
Financial Income 50,266 0.2% 121,066 0.2%
Other Operating Income/Expenses (656,392) 2.8% (876,709) 1.7%
Operating Income 16,546,767 71.0% 35,760,769 70.5%
Non Operating Revenues/Expenses 13,576 0.1% 129,972 0.3%
Income/Loss before Taxes 16,560,343 71.1% 35,890,741 70.7%
Social Contribution Allowance (745,073) 3.2% (1,609,404) 3.2%
Income Tax Allowance (1,958,630) 8.4% (4,347,791) 8.6%
Net Income/Loss of the Period 13,856,640 59.5% 29,933,546 59.0%
(1) The financial statements for 9/30/2007 and the 3Q07 present the combined results of the 5 companies acquired on July 2007 and
operating since January 2007 (IPrice, Ágil (Gribel), Primaz, Niterói Administradora e Brito and Amoedo) and the other 5 companies that
also launched their operations or were acquired in the quarter: Avance (acquired in August 2007 and operating since 1/1/2007), Pactual
(acquired in September 2007 and operating since 1/1/2007), Delforte (acquired in June 2007 and operating since 7/1/2007), Ética
(acquired in June 2007 and operating since 8/1/2007) and Noblesse (acquired in September 2007 and operating since August 2007).
(2) The other six companies owned by BrasilBrokers (Basimóvel, Américas, Abreu, Sardemberg, Tropical and Chão&Teto) started up
operation recently in October and November this year.
(3) The net income presented in the financial statements above belongs to the founding shareholders of the subsidiaries of BrasilBrokers,
which hold usufruct rights to the retained earnings, to be distributed in the form of dividends (registered in the Balance Sheet in the
account line Related Parties – Short Term), in accordance with the share exchange contracts signed between the parties. This right
includes the income to be generated up to the settlement date of the public offering (10/31/2007).