JAVER REPORTS FINANCIAL RESULTS FOR

THIRD QUARTER 2012

Monterrey, Nuevo Leon, Mexico October 22, 2012 - Servicios
Corporativos Javer S.A.P.I. de C.V., (Javer or the Company), one
of the largest privately-owned housing development companies in
Mexico, today announced financial results for the third quarter and first
nine-month periods ended September 30, 2012.
EXECUTIVE SUMMARY
3Q12
4,161

Homes titled
Net Revenues (Ps.mm)
Gross Profit (Ps.mm)
Gross Margin
EBITDA (Ps.mm)
EBITDA Margin
Net Income
Net Margin
Comprehensive income

Ps.
Ps.
Ps.
Ps.
Ps.

1,142,594
275,401
24.1%
106,818
9.3%
79,230
6.9%
32,010

3Q11
Variance
4,010
3.8%
1,173,824
337,124
28.7%
Ps.
193,891
16.5%
Ps. 128,359
(10.9%)
Ps.
194,001
Ps.
Ps.

(2.7%)
(18.3%)
(4.6%)
(44.9%)
(7.2%)
161.7%
17.9%
(83.5%)

9M12
13,081
Ps.
Ps.
Ps.
Ps.
Ps.

3,772,181
968,334
25.7%
500,908
13.3%
207,548
5.5%
89,447

9M11
10,903

Variance
20.0%

3,127,681
20.6%
942,189
2.8%
30.1% (4.5%)
Ps.
508,395 (1.5%)
16.3% (3.0%)
Ps. 12,157 1807.2%
(0.4%) 5.9%
Ps.
294,992 (69.7%)
Ps.
Ps.

Net Revenues in the third quarter 2012 decreased 2.7% to Ps. 1,142.6
million from Ps. 1,173.8 million in 3Q11, driven by a slight reduction in
volumes and a deterioration of the product mix. For the first nine months
2012, the Company increased revenues 20.6% to Ps. 3,772.2 million,
from Ps. 3,127.7 million in the first nine months 2011, mainly due to a
20.0% increase in accumulated volume (from 10,903 units sold to 13,081
units sold).
EBITDA decreased to Ps. 106.8 million in 3Q12 from 193.9 million in
3Q11 due to a decline in gross margins driven by a sales mix shift and
the absence of significant commercial lot sales. For the first nine months
2012, EBITDA decreased 1.5% to Ps. 500.9 million from Ps. 508.4
million in the first nine months 2011 as a result of lower gross margins
and accumulated SG&A expenses.
Net Income increased to Ps. 79.2 million in 3Q12 from Ps. (128.4)
million in 3Q11, mainly due to a Ps. 154.9 million gain in the interest
income line as a result of the appreciation of the peso. For the first nine
months 2012, net income increased to Ps. 207.5 million from Ps. (12.2)
million in the first nine months 2011 due to similar effects experienced
during the third quarter, evidenced by the Ps. 243.8 million gain in the
interest income line.
Investor Relations Contacts:
In Monterrey:
Eugenio Garza, Chief Financial Officer
Tel: +52 81 1133-6684
eugenio.garza@javer.com.mx
Veronica Lozano, Investor Relations
Tel. +52 (81) 1133-6699 Ext. 6515
vlozano@javer.com.mx

In New York:
Melanie Carpenter
i-advize Corporate Communications, Inc.
Tel: +212-406-3692
javer@i-advize.com
For more information, visit:
http://www.javer.com.mx/inversionistasHome.html

Third Quarter 2012 Earnings Release

CEO STATEMENT
Mr. Roberto Russildi, Javers Chief Executive Officer, commented, During the third quarter, the
operating environment continued to be challenging in terms of subsidy availability, shifting demand
mix, and competition. As anticipated in Javers 2012 business plan, the third quarter was the most
challenging in terms of subsidy availability. Therefore, the focus for both this quarter and the fourth
quarter 2012 will be to leverage more middle income homes with better prices and margins to
improve on the AEL-focused first half of the year. During the quarter, the volumes displaced were
below expectations and at realized prices below those in 2011. Sluggish demand in this segment,
especially in Nuevo Leon, driven by an unexpected rise in the states unemployment levels, coupled
with increased competition, was the main culprit of this effect. Furthermore, the absence of
significant commercial lot sales, which carry higher margins, eroded gross margins compared to
3Q11 levels. Both of these effects, along with negative operating leverage with regards to SG&A,
negatively impacted quarterly EBITDA margins to levels below expectations. Despite these topline headwinds, Javer was able to continue demonstrating working capital and free cash flow
discipline, which is paramount to the Companys strategy. Javers working capital cycle remained
stable compared to 3Q11, and the Company was able to operate under a neutral free cash flow
environment without sacrificing investments in land or work-in-progress inventory. Although
Javers available finished good inventory was slightly below regular levels, the Companys
development pipeline remains at a healthy level and with prototype flexibility to meet any sudden
increase in subsidy availability, which could take place towards the latter part of the fourth quarter
and into 2013.
On a more positive note, Javer formally commenced commercial operations on two new fronts
during the quarter, which will begin to title homes during fourth quarter 2012. Privadas del Poniente
in Nuevo Leons Santa Catarina municipality, focusing on the lower end of the Companys
residential segment, is off to a great start and should contribute to enhance the Companys product
mix over the next few months. Lago de Guadalupe, in the State of Mexicos Nicolas Romero
municipality, represents Javers initial entry into this attractive market, as well as the second major
new regional office opening that the Company has undertaken in the past two years.
Javer is comfortable that the seasonal pickup in non-subsidy customers during the fourth quarter,
which the Company has experienced for a number of years, especially in the middle income
segment, in addition to a more healthy commercial lot sales pipeline, will allow the Company to
reach the lower end of stated guidance, all within the framework of the most prudent working
capital and balance sheet in the industry.
Although challenges remain, Javer is confident that given the Companys accomplishments in 2012
and the manner in which the business has reacted and adapted, the Company will continue to
deliver superior performance and returns to all stakeholders.

Page 2

Third Quarter 2012 Earnings Release

UNITS SOLD AND NET REVENUES*

3Q12
Equivalent Units Sold
Low Income
Middle Income
Residential
TOTAL

% of
revenues

3Q11

2,388
1,679
94
4,161

% of
Variance
revenues

2,322
1,528
160
4,010

2.8%
9.9%
(41.3%)
3.8%

9M12

% of
revenues

8,013
4,811
257
13,081

9M11

% of
Variance
revenues

6,971
3,587
345
10,903

14.9%
34.1%
(25.5%)
20.0%

Revenues (Ps.mm)
Low Income

504,745

44.2%

448,907

38.2%

12.4%

1,705,924

45.2%

1,479,747

47.3%

Middle Income

516,567

45.2%

478,829

40.8%

7.9%

1,466,882

38.9%

1,111,417

35.5%

32.0%

8.5%
97.9%

181,537
Ps. 1,109,273

15.5%
94.5%

(46.7%)
263,248
0.8% Ps. 3,436,055

7.0%
91.1%

396,377
Ps. 2,987,541

12.7%
95.5%

(33.6%)
15.0%

2.1%
64,551
100.0% Ps. 1,173,824

5.5%
100.0%

(62.0%)
336,126
-2.7% Ps. 3,772,181

4.5%
100.0%

139.9%
20.6%

Residential
Total Home Sales

Ps.

96,729
1,118,041

Commercial Lot Sales

TOTAL

Ps.

24,553
1,142,594

8.9%
140,140
100.0% Ps. 3,127,681

15.3%

* Low Income units have selling prices below Ps. 260,000.

Middle Income units have selling prices between Ps. 260,000 and Ps.
560,000. Residential units have selling price exceeding Ps. 560,000.

3Q12

3Q11

9M12

9M11

Average Sales Price per Unit (in thousands)

Low Income
Middle Income
Residential
TOTAL

Ps.
Ps.
Ps.
Ps.

211.4
307.7
1,029.0
268.7

Ps.
Ps.
Ps.
Ps.

193.3
313.4
1,134.6
276.6

Ps.
Ps.
Ps.
Ps.

212.9
304.9
1,024.3
262.7

Ps.
Ps.
Ps.
Ps.

212.3
309.8
1,148.9
274.0

Units Sold: The Company sold 4,161 units in 3Q12 compared to 4,010 units in 3Q11, representing
an increase of 3.8%. The low income and middle income segment posted increases in revenues of
12.4% and 7.9%, respectively, while the residential segment decreased 46.7%. Low income sales
represented 57.4% of total units titled and 44.2% of total revenues in 3Q12, compared to 57.9% and
38.2%, respectively, in 3Q11. For the first nine months 2012, units titled increased 20.0% to 13,081
from 10,903 in the first nine months 2011. The middle income segment reported the greatest
increase in revenues with 32.0% growth, followed by the low income segment with 15.3%;
conversely, the residential segment decreased 33.6%. Low income sales represented 61.3% of total
units sold and 45.2% of total revenues in the first nine months 2012, compared to 63.9% and 47.3%,
respectively, in the same period 2011.
Prices: During third quarter 2012, Javers average sales price decreased to Ps. 268.7 thousand from
276.6 thousand in 3Q11. For the first nine months 2012, the average sales price decreased to Ps.
262.7 thousand from Ps. 274.0 thousand in the first nine months 2011.
Commercial lot sales decreased 62.0% to Ps. 24.6 million in 3Q12 from Ps. 64.6 million in 3Q11,
as there were no material bulk sales reported during the quarter. For the first nine months 2012,
commercial lot sales registered a 139.9% increase to Ps. 336.1 million from the 140.1 million
reported in the first nine months 2011.

Page 3

Third Quarter 2012 Earnings Release

Mortgage Provider Mix: During 3Q12, Infonavit continued to be Javers primary mortgage
provider representing 97.0% of total units titled compared to 88.2% in 3Q11. For the first nine
months 2012, a similar pattern took place, with 96.0% of sales originating from Infonavit compared
to 91.2% in the same period 2011.

Mortgage Provider
Infonavit
Fovissste
Cofinavit
Banks / Sofoles
Other
TOTAL

3Q12

% of total

3Q11

% of total

9M12

% of total

9M11

% of total

4,036
30
18
35
42
4,161

97.0%
0.7%
0.4%
0.8%
1.0%
100.0%

3,535
89
74
201
111
4,010

88.2%
2.2%
1.8%
5.0%
2.8%
100.0%

12,563
152
52
171
143
13,081

96.0%
1.2%
0.4%
1.3%
1.1%
100.0%

9,943
150
166
462
182
10,903

91.2%
1.4%
1.5%
4.2%
1.7%
100.0%

GROSS PROFIT / MARGIN

3Q12

3Q11

258,008 Ps.
17,393 Ps.
275,401 Ps.

284,124
53,000
337,124

Variance

9M12

9M11

831,339 Ps.
136,995 Ps.
968,334 Ps.

834,359
107,830
942,189

Variance

Gross Profit (PS.mm)

Home Sales
Ps.
Commercial Lot Sales Ps.
TOTAL
Ps.
Gross Margin (%)
Home Sales
Commercial Lot Sales
TOTAL

23.1%
70.8%
24.1%

25.6%
82.1%
28.7%

(9.2%) Ps.
(67.2%) Ps.
(18.3%) Ps.

(2.5 pp)
(11.3 pp)
(4.6 pp)

24.2%
40.8%
25.7%

27.9%
76.9%
30.1%

(0.4%)
27.0%
2.8%

(3.7 pp)
(36.2 pp)
(4.5 pp)

Gross Profit decreased 18.3% in 3Q12 to Ps. 275.4 million when compared to the Ps. 337.1
million reported in 3Q11, mainly due to a shift in the sales mix and a decrease in commercial lot
sales, which yield higher margins. For the first nine months 2012, gross profit increased 2.8% to Ps.
968.3 million from the Ps. 942.2 million reported in the same period 2011, given the accumulated
profits of commercial lot sales in first half 2012.
Gross Margin decreased 4.6 percentage points in 3Q12 and 4.5 percentage points in the first nine
months 2012 due to the sales mix shift and commercial lot effects described above.

Page 4

Third Quarter 2012 Earnings Release

EBITDA / MARGIN

3Q12

3Q11

Ps.

177,990 Ps.
15.58%

155,297
13.23%

Ps.

106,818 Ps.
9.3%

193,891
16.5%

Variance

9M12

9M11

Variance

14.6% Ps.
2.3 pp

505,076 Ps.
13.39%

477,003
15.25%

5.9%
(1.9 pp)

(44.9%) Ps.
(7.2 pp)

500,908 Ps.
13.3%

508,395
16.3%

(1.5%)
(3.0) pp

SG&A
Ps.mm
as a % of Sales
EBITDA
Ps.mm
EBITDA Margin

Selling, General and Administrative Expenses increased 14.6% in 3Q12 as a result of corporate
infrastructure expenses and advertising. For the first nine months 2012, SG&A increased 5.9%; as a
percentage of sales, SG&A increased 2.3 percentage points in 3Q12, and decreased 1.9 percentage
points in the first nine months 2012.
EBITDA decreased 44.9% in 3Q12 to Ps. 106.8 million from Ps. 193.9 million in 3Q11; EBITDA
margin decreased 7.2 percentage points as a result of the previously mentioned factors. For the first
nine months 2012, EBITDA decreased 1.5% to Ps. 500.9 million from Ps. 508.4 million; EBITDA
margin decreased 3.0 percentage points in the first nine months 2012 due to accumulated SG&A
expenses.

3Q12

3Q11

Variance

9M12

Interest expense
Interest income
FX gains / losses

Ps.
Ps. Ps. -

123,420 Ps.
4,947 Ps. 154,883 Ps.

115,440
1,891
273,532

6.9% Ps.
161.6% Ps.
(156.6%) Ps.

373,600 Ps.
-16,227 Ps.
-243,768 Ps.

NCFR

Ps. -

36,411 Ps.

387,081

(109.4%) Ps.

113,605 Ps.

9M11
354,875
-4,734
122,570
472,711

Variance
5.3%
242.8%
(298.9%)
(76.0%)

Net Income increased to Ps. 79.2 million in 3Q12 from Ps. (128.4) million in 3Q11. For the first
nine months 2012, net income increased to Ps. 207.5 million from Ps. (12.2) million in the first nine
months 2011 due to a Ps. 243.8 million non-cash gain related to the appreciation of the peso.
Comprehensive Income, which includes MTM gains and losses on derivatives to hedge foreign
exchange exposure on debt, decreased to Ps. 32.0 million in 3Q12 and to Ps. 89.4 million in the first
nine months 2012.

Page 5

Third Quarter 2012 Earnings Release

ASSETS / LIABILITIES
Cash and cash equivalents increased to Ps. 346.2 million as of September 30, 2012 from Ps. 340.3
million as of September 30, 2011.

WORKING CAPITAL

Trade Accounts Receivable

Inventory (Work in Progress)
Inventory (Land Reserves)
Suppliers
Customer Advances
Working Capital

Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

September 2012
Ps.mm
Days
1,789,731
121
2,412,025
227
1,120,629
106
1,085,904
102
3,687
0
4,232,794
352

LTM Sales
LTM Cost of Goods Sold

Ps.
Ps.

5,363,074
3,865,302

Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

September 2011
Ps.mm
Days
1,852,916
129
2,162,906
213
1,064,241
105
1,003,500
99
10,588
1
4,409,266
347

Ps.
Ps.

5,229,339
3,689,175

Javer continued with a steady working capital cycle in general terms for the period ended
September 30, 2012, as slightly higher inventory levels were financed by slightly higher supplier
balances.

FREE CASH FLOW

3Q12
EBITDA
(+) Land included in COGS
(+-) Changes in Working Capital
Cash Interest
Cash Taxes
Land CAPEX
Equipment CAPEX
Free Cash Flow

Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

106,817
116,501
(10,583)
(102,826)
(25,014)
(85,677)
(1,688)
(2,470)

3Q11
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

193,891
99,463
(68,335)
(94,659)
(69,221)
(91,283)
(7,968)
(38,112)

9M12
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

500,908
328,121
25,695
(311,657)
(126,730)
(401,306)
6,475
21,506

9M11
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.

508,395
237,137
(348,292)
(327,422)
(158,572)
(353,871)
(17,979)
(460,604)

For the first nine months 2012, the Company reported positive free cash flow of Ps. 21.5 million as
working capital investments were minimized by closely aligning construction spends with
collections.

Page 6

Third Quarter 2012 Earnings Release

DEVELOPMENT PIPELINE

Home Starts
Home Completions
Homes Titled
Available Finished Home Inventory
Homes under active development (incl.
AFHI) Land Reserves
Total

1Q10
5,582
1,340
1,349
1,415
5,294
127,141

2Q10
4,922
3,030
3,062
1,401
7,319
127,238

3Q10
5,333
4,254
4,184
1,374
7,765
122,975

4Q10
2,106
7,725
7,468
1,444
4,725
131,118

1Q11
3,582
2,912
3,007
1,349
8,851
130,234

2Q11
3,178
3,858
3,886
1,321
7,459
104,292

3Q11
8,113
4,204
4,010
1,515
8,650
108,148

4Q11
6,473
6,478
5,436
2,557
7,979
132,996

1Q12
4,989
4,264
4,438
2,383
7,690
128,071

2Q12
3,320
3,692
4,483
1,592
6,869
127,487

3Q12
3,597
3,935
4,161
1,366
6,886
122,962

Home Starts decreased 55.7% to 3,597 in 3Q12 when compared to 8,113 in 3Q11, reflecting a
more normalized development pipeline, which did not need as much investment in 3Q12 compared
to 3Q11.
Home Completions decreased 6.4% in 3Q12 to 3,935 from 4,204 in 3Q11, in-line with the
Companys construction spends during the quarter.
Finished Home Inventory decreased 14.2% to 1,366 units from 1,592 units reported at the end of
2Q12, as home completions failed to replenish Javers finished home inventory to more normalized
levels.

Development Start Year

8,000
7,000
6,000
5,000

2012
2011
2010

Homes Titled 4,000

2009
2008

3,000

2,000

2007
2006
2005

1,000
0

Page 7

Third Quarter 2012 Earnings Release

LAND RESERVES
As of September 30, 2012, the Companys total land bank reached approximately 122,962 units, of
which approximately 72,015 were owned land reserves, while 50,947 were held through land trust
agreements.

DEBT AND DERIVATIVES EXPOSURE

Short Term Debt (Ps.mm)
Notes Payable to Financial Institutions
Current Portion of Long Term Debt

54,785

Derivatives

TOTAL

54,785

Long Term Debt (Ps.mm)

High Yield Bond
Capital Leases
Less Current Portion
TOTAL

2,980,250
95,387
54,785
3,020,852

TOTAL DEBT
CASH AND CASH EQUIVALENTS
MTM DERIVATIVE POSITION
NET DEBT

3,075,637
346,245
260,675
2,468,717

TOTAL DEBT** / LTM EBITDA

NET DEBT / LTM EBITDA
LTM EBITDA / LTM INTEREST EXPENSE

Notional
(US$)
Coupon Swaps (TIIE)
Coupon Swaps (Fix)
Principal Hedges (Forwards)
Embedded derivatives asset
TOTAL

156
120
40

FMV (Ps$)
Ps.
Ps.
Ps.
Ps.
Ps.

FMV (US$)

209,088
23,454
(256)
28,389
260,675

16,269
1,825
(23)
18,070

3.15
2.76
1.79

** Total debt= Total Debt - MTM Derivative Position

As of September 30, 2012, Javer continued to possess available credit facility lines in excess of Ps.
1,473.5 million.
As of September 30, 2012, Javer maintained derivative positions to hedge 100% of the Companys
currency exposure related to the first five years of 2021 High Yield Bond coupons and 100% of the
coupons related to the remaining principal amount of the 2014 Notes.
As of September 30, 2012, the Company possessed US$38 million in available credit lines from
derivative counterparties to finance any potential negative carrying values of the Companys
derivative contracts.
As of September 30, 2012, Total Debt / LTM EBITDA reached 3.15x; EBITDA interest coverage
reached 1.79x.

Page 8

Third Quarter 2012 Earnings Release

About Javer:
Servicios Corporativos Javer S.A.P.I. de C.V. is one of the largest privately-owned housing
development companies in Mexico, specializing in the construction of low-income, middle income
and residential housing in the Northern region of Mexico. The Company, which is headquartered
the city of Monterrey, in the state of Nuevo Leon, began operations in 1973 and is the regions
leading housing developer in terms of units sold, the fourth-largest supplier of Infonavit homes in
the country, and has a 16% market share in the state of Nuevo Leon. The Company operates in the
states of Nuevo Leon, Aguascalientes, Tamaulipas, Jalisco and recently Queretaro.
During 2011, the Company reported revenues of Ps. 4,718.9 million (US$ 337.5 million) and sold a
total of 16,339 units.

Disclaimer:
This press release may include forward-looking statements. These forward-looking statements
include, without limitation, those regarding Javers future financial position and results of
operations, the Companys strategy, plans, objectives, goals and targets, future developments in the
markets in which Javer participates or are seeking to participate or anticipated regulatory changes in
the markets in which Javer operates or intends to operate.
Javer cautions potential investors that forward looking statements are not guarantees of future
performance and are based on numerous assumptions and that Javers actual results of operations,
including the Companys financial condition and liquidity and the development of the Mexican
mortgage finance industry, may differ materially from the forward-looking statements contained in
this press release. In addition, even if Javers results of operations are consistent with the forwardlooking statements contained in this press release, those results or developments may not be
indicative of results or developments in subsequent periods.
Important factors that could cause these differences include, but are not limited to: risks related to
Javers competitive position; risks related to Javers business and Companys strategy, Javers
expectations about growth in demand for its products and services and to the Companys business
operations, financial condition and results of operations; access to funding sources, and the cost of
the funding; changes in regulatory, administrative, political, fiscal or economic conditions,
including fluctuations in interest rates and growth or diminution of the Mexican real estate and/or
home mortgage market; increases in customer default rates; risks associated with market demand
for and liquidity of the notes; foreign currency exchange fluctuations relative to the U.S. Dollar
against the Mexican Peso; and risks related to Mexicos social, political or economic environment.

Page 9

Third Quarter 2012 Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
(In thousands of Mexican pesos (Ps.))
Assets
Current assets:
Cash and cash equivalents
Trade receivables net
Inventories (Note 1)
Prepaid expenses
Other current assets
Total current assets
Trade receivables
Land held for future development
Improvements, machinery and equipment net
Derivative financial instruments (Note 4)
Other non-current assets
Total
Liabilities and stockholders equity
Current liabilities:
Notes payable to financial institutions (Note 2)
Current portion of long-term debt (Note 3)
Trade accounts payable
Due to related parties
Advances from customers
Income taxes payable
Other liabilities
Total current liabilities
Long-term debt (Note 3)
Real estate liabilities
Employee retirement obligations
Deferred income taxes
Total liabilities
Commitments and contingencies
Stockholders equity:
Capital stock
Retained earnings
Valuation of derivative financial instruments (Note 5)
Total stockholders equity
Total

September 30,
2012

December 31,
2011

Ps.

Ps.

346,245
1,729,870
2,412,025
171,625
270,398
4,930,163
59,861
1,120,629
260,527
260,675
101,938
Ps. 6,733,793

415,721
2,019,973
2,636,334
166,521
204,341
5,442,890
70,425
875,367
288,259
307,099
144,546
Ps. 7,128,586

Ps.

287,397
1,159,340
3,020,853
273,696
27,148
782,992
5,264,029

59,000
49,377
1,170,514
1,268
5,749
8,081
204,452
1,498,441
3,245,577
199,361
25,437
779,453
5,748,269

734,806
626,310
108,648
1,469,764
Ps. 6,733,793

734,806
418,762
226,749
1,380,317
Ps. 7,128,586

Ps.

54,785
812,208
1,263
3,687

The accompanying notes are part of the consolidated financial statements.

Page 10

Third Quarter 2012 Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the three and nine month period ended September 30, 2012 and 2011
(In thousands of Mexican pesos (Ps.))

Revenues
Costs
Gross profit
Selling and administrative expenses
Other expenses net
Net comprehensive financing result
Income (loss) before income taxes
Income taxes
Net income (loss)
Other comprehensive loss item:
Net (loss) gain on cash flow hedges
Total comprehensive income

3Q12

3Q11

9M 2012

9M 2011

Ps. 1,142,594
867,193

Ps. 1,173,824
836,700

Ps. 3,772,181
2,803,847

Ps. 3,127,681
2,185,492

337,124
155,297
57
387,081
(205,311)
(76,952)
(128,359)

968,334
505,076
1,514
113,605
348,139
140,591
207,548

942,189
477,003
11,920
472,711
(19,445)
(7,288)
(12,157)

275,401
177,990
909
(36,411)
132,913
53,683
79,230

Ps.

(47,220)
32,010

322,360
Ps. 194,001

Ps.

(118,101)
89,447

The accompanying notes are part of the consolidated financial statements.

Page 11

307,149
Ps. 294,992

Third Quarter 2012 Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Changes in Stockholders Equity
For the nine month ended September 30, 2012
(In thousands of Mexican pesos (Ps.))

Balance as of December 31, 2011

Comprehensive income
Balance as of September 30, 2012

Capital
Stock
Ps. 734,806
Ps. 734,806

Retained
Earnings
(Accumulated
Deficit)
Ps. 418,762
207,548
Ps. 626,310

Valuation of
Derivative
Financial
Instruments
Ps. 226,749
(118,101)
Ps. 108,648

Total
Stockholders
Equity
Ps. 1,380,317
89,447
Ps. 1,469,764

The accompanying notes are part of the consolidated financial statements.

Page 12

Third Quarter 2012 Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Cash Flows
For the nine month period ended September 30, 2012 and 2011.
(In thousands of Mexican pesos (Ps.))

Operating activities:
(Loss) income before income taxes
Items related to investing activities:
Depreciation and amortization
Unrealized exchange (gain) loss
Items related to financing activities:
Effects of valuation of derivative financial instruments
Interest expense

September 30,
2012

September 30,
2011

Ps.

Ps.

348,139

(19,445)

37,648
(260,044)

43,210
266,146

21,093
357,373
504,209

(142,532)
350,142
497,521

(Increase) decrease in:

Trade receivables net
Inventories
Other current assets
Prepaid expenses
Increase (decrease) in:
Trade accounts payable
Due to related parties
Advances from customers
Income tax payable
Other liabilities
Net cash used in operating activities

300,667
31,384
(88,855)
8,432

(120,883)
(186,730)
(120,313)
62,390

(283,971)
(5)
(2,062)
(122,336)
593
348,056

(99,448)
(949)
3,420
(66,747)
(47,335)
(79,074)

Investing activities:
Sales (purchase) of machinery and equipment
Other assets
Net cash used in investing activities

6,475
(21,368)
(14,893)

(17,979)
(31,993)
(49,972)

Financing activities:
Proceeds from notes payable from financial institutions
Payments of notes payable to financial institutions
Proceeds from long-term debt
Payments of long-term debt
Interest paid
Debt issuance costs
Payments commission
Net cash (used in) provided by financing activities
Cash:
Net decrease in cash
Cash at beginning of year
Cash at end of year

(402,639)

100,000
(50,000)
348,754
(25,219)
(327,422)
(64,526)
(4,139)
(22,552)

(69,476)
415,721

(151,598)
491,939

(59,000)
7,495
(39,477)
(311,657)

Ps.

346,245

Ps.

The accompanying notes are part of the consolidated financial statements.

Page 13

340,341

Third Quarter 2012 Earnings Release

Servicios Corporativos Javer, S.A.P.I. de C.V. and Subsidiaries

Notes to Consolidated Financial Statements
As of September 30, 2012 and December 31, 2011
(In thousands of Mexican pesos (Ps.))

1. Inventories

Land under development

Housing units under construction
Urbanization and related equipment

As of
September 30,
2012
Ps. 808,822
349,210
1,253,993
Ps. 2,412,025

As of
December 31,
2011
Ps. 1,060,494
396,118
1,179,722
Ps. 2,636,334

2. Notes payable to financial institutions

As of
December 31,
2011
Unsecured loan with an interest rate of TIIE plus a
spread of 4.0%
Unsecured loan with an interest rate of TIIE plus a
spread of 2.75%

$ 50,000
9,000
$59,000

The TIIE rate is established by the Bank of Mexico. On December 31, 2011, it was 4.79%.

Page 14

Third Quarter 2012 Earnings Release

3. Long-term debt

Senior Notes US$210 million refinanced 2021

Senior Notes US$30 million 2021
Remaining original Senior Notes US$210 million - 2014
Capital lease agreements to acquire molds, bearing annual
fixed interest rates of 12.33% and 12.53% for the year 2012
and 2011, respectively, with various maturities through 2015.
Capital lease agreements to acquire trucks bearing annual fixed
interest rate of 13.53%, with various maturities through 2015.
Capital lease agreements to acquire vehicles, bearing annual
fixed interest rate of 11.04 %, with various maturities
through 2015.
Capital lease agreements to acquire computers, bearing annual
fixed interest rate of 8.22%, whit various maturities through
2014.
Loan to pay suppliers bearing fixed interest rate of 11.80%,
with various maturities through 2015.

As of
September 30,
2012
Ps. 2,520,182
379,298
80,770

As of December
31, 2011
Ps. 2,685,916
412,276
87,681

59,006

76,717

4,299

7,185

13,571

9,721

11,869

15,458

6,643
3,075,638
(54,785)

Less Current portion

Ps. 3,020,853

Long-term debt

3,294,954
(49,377)
Ps. 3,245,577

As of September 30, 2012, long-term debt maturities were as follows:

October 1, 2013 to September 30, 2014
October 1, 2014 to September 30, 2015
October 1, 2015 to September 30, 2016
October 1, 2017 to April 6, 2021

Ps.

106,207
13,244
1,922
2,899,480

Ps. 3,020,853
4. Derivative financial instruments
The Company designated the forwards and combined derivative financial instruments as cash
flow hedges. The fair value of the Companys derivative financial instruments as of
September 30, 2012 was $260,675 as further detailed below (notional amounts in millions):
Instrument
Combined derivative financial instruments
Forward
Embedded derivatives asset

Type of
hedge
Cash flow
Cash flow

Notional
US$277
US$40

September 30,
2012
Ps.232,542
(256)
28,389
Ps.260,675

Total asset

* * * * *

Page 15