Interim Financial Information (ITR) MRV Engenharia e Participações S.A.

Transcription

1 Interim Financial Information (ITR) MRV Engenharia e Participações S.A. Individual and Consolidated Interim Financial Information for the quarter Ended June 30, 2015 and Report on Review of Interim Financial Information

2 MRV Engenharia e Participações S.A. Interim Financial Information (ITR) June 30, 2015 Contents Report on Review of Interim Financial Information... 1 Reviewed Interim Financial Information Individual Balance Sheet... 4 Income Statement... 7 Statement of Comprehensive Income... 8 Statement of Cash Flows... 9 Statements of Changes in Shareholders Equity Statement of Value Added Consolidated Balance Sheet Income Statement Statement of Comprehensive Income Statement of Cash Flows Statements of Changes in Shareholders Equity Statement of Value Added Notes to the Interim Financial Information... 22

3 Edifício Phelps Rua Antônio de Albuquerque, º andar - Savassi Belo Horizonte, MG, Brasil Tel: (5531) Fax: (5531) A free translation from Portuguese into English of report on review of quarterly information (ITR) Review report on quarterly information (ITR) The Shareholders and Officers MRV Engenharia e Participações S.A. Belo Horizonte - MG Introduction We have reviewed the accompanying individual and consolidated interim financial information of MRV Engenharia e Participações S.A. ( Company ), contained in the Quarterly Information Form ITR for the quarter ended June 30, 2015, which comprise the balance sheet as at June 30, 2015 and the related statement of income and statement of comprehensive income for the three and six months ended on that date and statement of changes in equity and cash flow statement for the six months ended on that date including the explanatory notes. Management is responsible for the preparation of the individual interim financial information in accordance with CPC 21(R1) Interim Financial Reporting and the consolidated interim financial information in accordance with CPC 21(R1) and IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board IASB, which consider Guideline OCPC 04 related to the application of Interpretation ICPC 02 to the entities engaged in the construction of real estate in Brazil, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Brazil s National Association of State Boards of Accounting (CFC), as well as for the fair presentation of this information consistently with standards issued by the CVM applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR 2410 and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

4 Conclusion on the individual and consolidated interim financial information in accordance with the Accounting Pronouncement CPC 21 (R1) and IAS 34 Interim Financial Reporting, which consider Guideline OCPC 04 related to the application of Interpretation ICPC 02 to the entities engaged in the construction of real estate in Brazil, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Brazil s National Association of State Boards of Accounting (CFC) Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above is not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, which consider Guideline OCPC 04 related to the application of Interpretation ICPC 02 to the entities engaged in the construction of real estate in Brazil, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Brazil s National Association of State Boards of Accounting (CFC) and applicable to the preparation of Quarterly Information (ITR) and presented consistently with the rules issued by the Brazilian Securities Exchange Commission. Emphasis of a matter Guidance OCPC 04 As mentioned in Note 2.1, the individual and consolidated interim financial information were prepared in accordance with accounting practices adopted in Brazil (CPC 21 R1). The consolidated interim financial information prepared in accordance with IFRS applicable to Brazilian Real Estate Development Entities (IAS 34 for interim financial information) additionally considers Guidance OCPC 04 issued by the Accounting Pronouncements Committee (CPC), which addresses revenue recognition for this industry and involves matters related to the meaning and application of the concept of continuous transfer of risks, rewards and control in selling real estate units as described in Note 2.1. Our conclusion is not qualified in respect of this matter.

5 Other matters Statements of value added We have also reviewed the individual and consolidated statement of value added (SVA) for the sixmonth period ended June 30, 2015, prepared under the responsibility of Company s management. The presentation of interim financial information is required in accordance with CVM Standards applicable to the preparation of quarterly information (ITR), and as supplementary information by IFRS, which do not require SVA presentation. These statements have been subject to the same review procedures described above and, based on our review nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the individual and consolidated interim financial information taken as a whole. B e l o H o r i zon te, Au gus t 14, ERNST & YOUNG Auditores Independentes S.S. CRC-2SP015199/O-6 Flávio de Aquino Machado Accountant CRC -1MG065899/O-2

6 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Balance Sheets Assets (In thousands of Brazilian reais R$) Code Description Current Quarter 6/30/2015 Previous year 12/31/ Total assets 9,463,489 8,955, Current assets 4,369,756 3,955, Cash and cash equivalents 1,095, , Cash and banks 219, , Short-term investments 875, , Receivables 1,300,286 1,410, Trade accounts receivable 1,300,286 1,410, Receivables from real estate development 1,298,775 1,409, Receivables from services provided 1,511 1, Inventories 1,650,335 1,450, Real estate under construction 1,003, , Completed units 41,743 37, Land bank 573, , Advances to suppliers 24,960 19, Material inventories 6,518 4, Recoverable taxes 129, , Recoverable current taxes 129, , Prepaid expenses 26,452 26, Other current assets 167, , Others 167, , Other assets 36,745 45, Investments securities 131, , Noncurrent assets 5,093,733 5,000, Long-term assets 2,400,032 2,323, Receivables 886, , Trade accounts receivable 886, , Inventories 1,379,563 1,305, Land bank 1,379,563 1,305, Prepaid expenses 22,712 19, Prepaid expenses 22,712 19, Intercompany receivables 52,656 53, Other related parties 52,656 53, Other noncurrent assets 58,231 53, Judicial deposits and other 58,231 53, Investments 2,522,004 2,532, Investments 2,522,004 2,532, Investments in Subsidiaries 1,643,878 1,632, Interests in Jointly Controlled 878, , Property and equipment 91,930 67, Operating property and equipment 84,428 52, Property and equipment under construction 7,502 15, Intangible assets 79,767 76, Intangible assets 79,767 76, Intangible assets 64,539 69, Intangible assets under development 15,228 7,112 4

7 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Balance Sheets Liabilities and Shareholder's Equity (In thousands of Brazilian reais R$) Code Description Current Quarter 6/30/2015 Previous year 12/31/ Total liabilities 9,463,489 8,955, Current Liabilities 2,246,890 2,289, Labor and social liabilities 57,320 61, Social liabilities 8,106 10, Labor liabilities 49,214 51, Suppliers 242, , Domestic trade accounts payable 242, , Tax liabilities 24,210 23, Federal taxes 20,158 19, Income taxes and social contribution 5,926 5, Other federal taxes 14,232 14, Municipal taxes 4,052 4, Loans, financing and debentures 945, , Loans, financing and debentures 378, , Loans and financing in domestic currency 378, , Debentures 566, , Leasing 512 1, Others liabilities 957,061 1,099, Payables to related parties 39, Due to other related parties 39, Others 917,803 1,099, Mandatory minimum dividend payable - 171, Land payables 271, , Advances from customers 536, , Other payables 71,106 12, Deferred tax liabilities 39,124 42, Accruals 20,339 18, Other accruals 20,339 18, Accrual for maintenance of real estate 20,339 18, Noncurrent liabilities 2,595,839 2,278, Loans, financing and debentures 1,400,556 1,283, Loans, financing and debentures 511, , Loans and financing in domestic currency 511, , Debentures 889, , Others liabilities 1,047, , Payables to related parties 50, Due to other related parties 50, Others 997, , Land payables 546, , Advances from customers 450, , Other payables 21 3, Deferred tax liabilities 35,840 24, Accruals 111,730 98, Social Security Tax Labor and Civil Provisions 60,663 48, Tax provisions Labour and Social Security Provisions 24,435 18, Civil provisions 36,217 29, Other accruals 51,067 49, Accrual for maintenance of real estate 51,067 49, Shareholders equity 4,620,760 4,388, Paid in capital 4,059,521 3,507, Capital reserves 20,862 18, Recognized options granted 47,171 44,756 5

8 Code Description Current Quarter 6/30/2015 Previous year 12/31/ Expenses on share issuance (26,309) (26,309) Earnings reserve 274, , Legal reserve 36,011 36, Retained profit reserve 296, , Treasury Shares (57,918) (25,971) Earnings/losses accumulated 266,121-6

9 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Income Statement (In thousands of Brazilian reais R$) Code Description 4/1/2015 to 6/30/2015 1/1/2015 to 6/30/2015 4/1/2014 to 6/30/2014 1/1/2014 to 6/30/ Revenue from sales and services 738,291 1,344, ,909 1,128, Net operating revenue 738,291 1,344, ,909 1,128, Cost of sales and services (522,323) (943,186) (418,943) (814,324) Cost of real estate sales and services (522,323) (943,186) (418,943) (814,324) 3.03 Gross profit 215, , , , Operating income (expenses) (76,938) (171,538) 217, , Selling expenses (72,562) (145,051) (53,026) (97,816) General and administrative expenses (63,301) (121,797) (54,728) (114,686) Other operating incomes 10,900 20,775 11,864 25, Other operating expenses (25,349) (56,727) (23,962) (51,887) Results from equity participation 73, , , , Income before financial income and taxes 139, , , , Financial income (expenses), net 34,280 60,689 16,465 17, Financial income 54, ,678 40,275 72, Financial income 40,314 74,102 24,713 50, Financial income from receivables from real estate development 14,393 32,576 15,562 21, Financial expenses (20,427) (45,989) (23,810) (55,094) 3.07 Income before taxes 173, , , , Income tax and social contribution (13,880) (25,301) (6,383) (12,638) Current (14,366) (26,617) (9,701) (17,978) Deferred 486 1,316 3,318 5, Net income (loss) from continuing operations 159, , , , Net income (loss) for the period 159, , , , Earnings per share (In Reais - R$): Basic ON Diluted ON

10 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Statements of Comprehensive Income (In thousands of Brazilian reais R$) Code Description 4/1/2015 to 6/30/2015 1/1/2015 to 6/30/2015 4/1/2014 to 6/30/2014 1/1/2014 to 6/30/ Net income 159, , , , Comprehensive income for the period 159, , , ,176 8

11 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Statement of Cash Flows - Indirect Method (In thousands of Brazilian reais R$) Code Description 1/1/2015 to 6/30/2015 1/1/2014 to 6/30/ Net cash used in operating activities 141,914 23, Cash provided by operating activities 239, , Net income for the quarter 265, , Depreciation and amortization 14,665 15, Recognized options granted 2,331 2, Result from sale of property and equipment 1,973 3, Financial income (expenses) 16,279 53, Results from equity participation (131,262) (401,833) Accrual for property maintenance 16,571 14, Amortization of prepaid expenses 21,848 17, Deferred taxes on income (1,316) (5,340) Deferred taxes on revenue (PIS and COFINS) 8,923 (1,377) Provision for civil, labor and tax risks 24,374 13, Increase (decrease) in assets and liabilities (97,951) (170,011) (Increase) decrease in receivables from real estate development 143,444 50, (Increase) decrease in real estate for sale (71,569) 58, (Increase) decrease in prepaid expenses (24,381) (23,276) (Increase) decrease other assets 29,093 (46,458) Increase (decrease) in trade payables 47,828 48, Increase (decrease) in payroll and related taxes (4,360) (23,243) Increase (decrease) in taxes, fees and contributions (219) 14, Increase (decrease) in advances from customers (26,840) (69,816) Increase (decrease) in other liabilities (9,859) (3,500) Interest paid (146,057) (128,835) Income tax and social contribution paid (28) (17,107) Realization of accrual for maintenance of real estate (19,264) (22,889) Amounts paid for civil, labor and tax risks (15,739) (6,234) 6.02 Net cash provided in investing activities 219, , (Increase) decrease in investment securities 31,772 90, Advances to related parties (30,394) (53,258) Receipts from related companies 33,300 49, (Increase) decrease in investments 246,019 90, Purchase of property and equipment and intangible assets (43,805) (15,654) Payment for acquisition of subsidiary (17,600) Net cash provided by (used in) financing activities 21,623 (630,217) Net proceeds from shares issuance Advances from related parties 61, Proceeds from loans, financing 557, , Repayment of loans, financing and debentures (390,777) (648,876) Paid dividends (171,050) (140,676) Treasury shares (39,032) (159,814) Proceeds from exercised stock options 3,248 1, Capital transaction 642 (48) 6.05 Net decrease in cash and cash equivalents 382,829 (445,729) Cash and cash equivalents at beginning of period 712,618 1,014, Cash and cash equivalents at end of period 1,095, ,113 9

12 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Statement of Changes in Shareholder s Equity 1/1/2015 to 6/30/2015 (In thousands of Brazilian reais R$) Capital reserves, recognized options granted and treasury shares Other comprehensive income Earnings Earnings / losses Shareholders' Code Description Paid-in capital reserves accumulated equity 5.01 Opening balance 3,507,206 18, , ,388, Adjusted opening balance 3,507,206 18, , ,388, Shareholders capital transaction 552,315 2,415 (588,099) (32,727) Recognized options granted - 2, , Treasury shares purchased - - (39,032) - - (39,032) Capitalization of reserves 552,315 - (552,315) Capital transaction Treasury shares disposed to beneficiaries of plan options - - 3, , Comprehensive income , , Net income (loss) , , Closing balance 4,059,521 20, , ,121-4,620,760 10

13 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Statement of Changes in Shareholder s Equity 1/1/2014 to 6/30/2014 (In thousands of Brazilian reais R$) Capital reserves, recognized options granted and treasury shares Other comprehensive income Earnings Earnings / losses Shareholders' Code Description Paid-in capital reserves accumulated equity 5.01 Opening balance 3,197,819 31, , ,101, Adjusted opening balance 3,197,819 31, , ,101, Shareholders capital transaction 309,387 2,291 (510,537) (48) - (198,907) Capital increase Treasury shares purchased - - (162,410) - - (162,410) Dividends - - (40,193) - - (40,193) Capitalization of reserves 308,970 - (308,970) Recognized options granted - 2, , Capital transaction (48) - (48) Treasury shares disposed to beneficiaries of plan options - - 1, , Comprehensive income , , Net income (loss) , , Closing balance 3,507,206 34, , ,128-4,384,452 11

14 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Individual / Statement of Value Added (In thousands of Brazilian reais R$) Code Description 1/1/2015 to 6/30/2015 1/1/2014 to 6/30/ Revenue 1,419,803 1,185, Revenues from sales of goods, services and products 1,394,383 1,155, Other revenue 17,304 23, Revenue from construction of own assets 8,116 6, Inputs purchased from third parties (957,406) (685,579) Inputs purchased from third parties (957,406) (685,579) 7.03 Gross value added 462, , Retentions (14,665) (15,590) Depreciation, amortization and depletion (14,665) (15,590) 7.05 Net value added generated 447, , Value added received in transfer 237, , Results from equity participation 131, , Financial income 106,678 72, Total value added for distribution 685, , Value added distributed 685, , Personnel 146, , Salaries and wages 107, , Benefits 32,521 32, Severance Pay Fund (FGTS) 6,438 15, Taxes, charges and contributions 129, , Federal 103,841 82, State Municipal 25,052 21, Debt remuneration 144, , Interest 103, , Rentals 39,905 32, Others 666 1, Shareholders 265, , Earnings retained in the period 265, ,176 12

15 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Balance Sheets Assets (In thousands of Brazilian reais R$) Code Description Current Quarter 6/30/2015 Previous year 12/31/ Total assets 11,195,017 10,817, Current assets 6,521,198 6,232, Cash and cash equivalents 1,393,651 1,217, Cash and banks 375, , Short-term investments 1,018, , Receivables 2,242,382 2,433, Trade accounts receivable 2,242,382 2,433, Incorporating customer for Homes 2,236,108 2,431, Receivables from services provided 6,274 2, Inventories 2,479,511 2,125, Real estate under construction 1,542,807 1,324, Completed units 57,548 57, Land bank 830, , Advances to Suppliers 38,419 40, Material inventories 9,985 6, Recoverable taxes 181, , Recoverable current taxes 181, , Prepaid expenses 42,574 39, Other current assets 181, , Others 181, , Other assets 48,455 54, Investments securities 133, , Noncurrent assets 4,673,819 4,584, Long-term assets 3,686,854 3,598, Receivables 1,448,267 1,528, Trade accounts receivable 1,448,267 1,528, Inventories 2,049,012 1,920, Land bank 2,049,012 1,920, Prepaid expenses 37,493 32, Prepaid expenses 37,493 32, Intercompany receivables 82,983 56, Other related parties 82,983 56, Other noncurrent assets 69,099 60, Judicial deposits and other 69,099 60, Investments 798, , Investments 798, , Other Equity Interests 798, , Property and equipment 108,703 84, Operating property and equipment 98,735 67, Property and equipment under construction 9,968 16, Intangible assets 79,933 76, Intangible assets 79,933 76, Intangible assets 64,540 69, Intangible assets under development 15,393 7,221 13

16 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Balance Sheets Liabilities and Shareholder's Equity (In thousands of Brazilian reais R$) Code Description Current Quarter 6/30/2015 Previous year 12/31/ Total liabilities 11,195,017 10,817, Current Liabilities 2,894,847 3,006, Labor and social liabilities 133, , Social liabilities 17,870 23, Labor liabilities 115,678 99, Suppliers 294, , Domestic trade accounts payable 294, , Tax liabilities 50,028 50, Federal taxes 40,215 40, Income taxes and social contribution 14,501 13, Other federal taxes 25,714 26, Municipal taxes 9,813 9, Loans, financing and debentures 1,014, , Loans, financing and debentures 447, , Loans and financing in domestic currency 447, , Debentures 566, , Leasing 512 1, Others liabilities 1,366,608 1,564, Payables to related parties 39, Due to other related parties 39, Others 1,327,350 1,564, Mandatory minimum dividend payable - 171, Land payables 359, , Advances from customers 878, , Other payables 18,037 14, Deferred tax liabilities 70,489 78, Accruals 36,273 33, Other accruals 36,273 33, Accrual for maintenance of real estate 36,273 33, Noncurrent liabilities 3,394,639 3,138, Loans, financing and debentures 1,546,690 1,508, Loans, financing and debentures 657, , Loans and financing in domestic currency 657, , Debentures 889, , Others liabilities 1,630,952 1,441, Payables to related parties 50, Due to other related parties 50, Others 1,580,952 1,441, Land payables 872, , Advances from customers 694, , Other payables 13,128 16, Deferred tax liabilities 55,728 48, Accruals 161, , Social security tax labor and civil provisions 67,113 49, Tax provisions Labour and Social Security Provisions 24,683 18, Civil provisions 42,418 30, Other accruals 94,156 89, Accrual for maintenance of real estate 94,156 89, Shareholders equity 4,905,531 4,672, Paid in capital 4,059,521 3,507, Capital reserves 20,862 18, Recognized options granted 47,171 44,756 14

17 Code Description Current Quarter 6/30/2015 Previous year 12/31/ Expenses on share issuance (26,309) (26,309) Earnings reserve 274, , Legal reserve 36,011 36, Retained profit reserve 296, , Treasury Shares (57,918) (25,971) Earnings/losses accumulated 266, Participation of non-controlling shareholders 284, ,910 15

18 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Income Statement (In thousands of Brazilian reais R$) Code Description 4/1/2015 to 6/30/2015 1/1/2015 to 6/30/2015 4/1/2014 to 6/30/2014 1/1/2014 to 6/30/ Revenue from sales and services 1,307,319 2,349,674 1,013,731 1,924, Net operating revenue 1,307,319 2,349,674 1,013,731 1,924, Cost of sales and services (925,157) (1,659,954) (731,555) 1,402,109) Cost of real estate sales and services (925,157) (1,659,954) (731,555) (1,402,109) 3.03 Gross profit 382, , , , Operating income (expenses) (233,379) (446,027) 107,580 (42,267) Selling expenses (113,045) (222,065) (80,733) (149,324) General and administrative expenses (68,991) (130,308) (56,112) (116,739) Other operating incomes 10,974 21,003 12,128 25, Other operating expenses (33,807) (70,025) (26,678) (56,772) Results from equity participation (28,510) (44,632) 258, , Income before financial income and taxes 148, , , , Financial income (expenses), net 51,395 96,136 35,250 50, Financial income 73, ,441 60, , Financial income 51,421 97,550 35,660 72, Financial income from receivables from real estate development 22,278 46,891 24,389 34, Financial expenses (22,304) (48,305) (24,799) (56,911) 3.07 Income before taxes 200, , , , Income tax and social contribution (28,380) (51,029) (16,702) (33,581) Current (31,755) (57,868) (20,121) (37,778) Deferred 3,375 6,839 3,419 4, Net income (loss) from continuing operations 171, , , , Net income (loss) for the period 171, , , , Attributable to shareholders of the company 159, , , , Non-controlling interests 12,368 23,321 7,112 14, Earnings per share (In Reais - R$): Basic ON Diluted ON

19 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Statements of Comprehensive Income (In thousands of Brazilian reais R$) Code Description 4/1/2015 to 6/30/2015 1/1/2015 to 6/30/2015 4/1/2014 to 6/30/2014 1/1/2014 to 6/30/ Net income 171, , , , Comprehensive income for the period 171, , , , Company owners 159, , , , Noncontrolling interests 12,368 23,321 7,112 14,763 17

20 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Statement of Cash Flows Indirect Method (In thousands of Brazilian reais R$) Code Description 1/1/2015 to 6/30/2015 1/1/2014 to 6/30/ Net cash used in operating activities 430, , Cash provided by operating activities 455, , Net income for the quarter 288, , Depreciation and amortization 17,769 19, Recognized options granted 2,331 2, Result from sale of property and equipment 4,605 3, Financial income (expenses) 5,408 63, Results from equity participation 44,632 (254,798) Accrual for property maintenance 29,546 24, Provision for civil, labor and tax risks 33,513 13, Deferred taxes on income (6,839) (4,197) Deferred taxes on revenue (PIS and COFINS) 5,862 (2) Amortization of prepaid expenses 29,909 26, Increase (decrease) in assets and liabilities (25,225) (205,815) (Increase) decrease in receivables from real estate development 312,021 25, (Increase) decrease in real estate for sale (136,575) 118, (Increase) decrease in prepaid expenses (37,396) (36,170) (Increase) decrease other assets 23,076 (53,494) Increase (decrease) in trade payables 52,235 46, Increase (decrease) in payroll and related taxes 10,694 3, Increase (decrease) in taxes, fees and contributions 4,515 38, Increase (decrease) in advances from customers (29,002) (122,902) Increase (decrease) in other liabilities (10,004) (2,956) Interest paid (159,524) (146,206) Income tax and social contribution paid (5,592) (34,391) Realization of accrual for maintenance of real estate (30,462) (36,237) Amounts paid for civil, labor and tax risks (19,211) (6,234) 6.02 Net cash provided in investing activities (78,466) 95, (Increase) decrease in investment securities 30,016 93, Advances to related parties (63,095) (53,258) Receipts from related companies 39,739 49, (Increase) decrease in investments (17,430) 28, Payment for acquisition of subsidiary (17,600) Purchase of property and equipment and intangible assets (50,096) (21,571) 6.03 Net cash provided by (used in) financing activities (175,691) (664,624) Net proceeds from shares issuance Proceeds from exercised stock options 3,248 1, Proceeds from loans, financing 668, , Repayment of loans, financing and debentures (617,042) (829,816) Paid dividends (171,050) (140,676) Capital transaction 48 (48) Advances from related parties 2, Contributions from (distributions to) noncontrolling shareholders (22,866) (10,650) Treasury shares (39,032) (159,814) 6.05 Net decrease in cash and cash equivalents 176,154 (383,431) Cash and cash equivalents at beginning of period 1,217,497 1,422, Cash and cash equivalents at end of period 1,393,651 1,039,164 18

21 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Statement of Changes in Equity 1/1/2015 to 6/30/2015 (In thousands of Brazilian reais R$) Capital reserves, recognized options granted and treasury shares Earnings / losses accumulated Other comprehensive income Noncontrolling interest Code Description Paid-in capital Earnings reserves Shareholders ' equity Total 5.01 Opening balance 3,507,206 18, , ,388, ,910 4,672, Adjusted opening balance 3,507,206 18, , ,388, ,910 4,672, Shareholders capital transaction 552,315 2,415 (588,099) (32,727) (23,460) (56,187) Recognized options granted - 2, ,415-2, Treasury shares purchased - - (39,032) - - (39,032) - (39,032) Capitalization of reserves 552,315 - (552,315) Net contributions from (distribution to) noncontrolling shareholders (22,866) (22,866) Capital transaction (594) Treasury shares disposed to beneficiaries of plan options - - 3, ,248-3, Total comprehensive income , ,479 23, , Net income (loss) for the period , ,479 23, , Closing balance 4,059,521 20, , ,121-4,620, ,771 4,905,531 19

22 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Statement of Changes in Equity 1/1/2014 to 6/30/2014 (In thousands of Brazilian reais R$) Capital reserves, recognized options granted and treasury shares Earnings / losses accumulated Other comprehensive income Noncontrolling interest Code Description Paid-in capital Earnings reserves Shareholders ' equity Total 5.01 Opening balance 3,197,819 31, , ,101, ,217 4,365, Adjusted opening balance 3,197,819 31, , ,101, ,217 4,365, Shareholders capital transaction 309,387 2,291 (510,537) (48) - (198,907) (10,703) (209,610) Capital increase Treasury shares purchased - - (162,410) - - (162,410) - (162,410) Dividends - - (40,193) - - (40,193) - (40,193) Capitalization of reserves 308,970 - (308,970) Recognized options granted - 2, ,291-2, Net contributions from (distribution to) noncontrolling shareholders (10,703) (10,703) Capital transaction (48) - (48) - (48) Treasury shares disposed to beneficiaries of plan options - - 1, ,036-1, Total comprehensive income , ,176 14, , Net income (loss) for the period , ,176 14, , Closing balance 3,507,206 34, , ,128-4,384, ,277 4,652,729 20

23 (Convenience Translation into English from the Original Previously Issued in Portuguese) Quarterly information - ITR - 6/30/2015 MRV Engenharia e Participações S.A. Consolidated / Statement of Value Added (In thousands of Brazilian reais R$) Code Description 1/1/2015 to 6/30/2015 1/1/2014 to 6/30/ Revenue 2,446,361 2,000, Revenues from sales of goods, services and products 2,422,020 1,970, Other revenue 16,225 23, Revenue from construction of own assets 8,116 6, Inputs purchased from third parties (1,475,050) (1,214,087) Inputs purchased from third parties (1,475,050) (1,214,087) 7.03 Gross value added 971, , Retentions (17,769) (19,119) Depreciation, amortization and depletion (17,769) (19,119) 7.05 Net value added generated 953, , Value added received in transfer 99, , Results from equity participation (44,632) 254, Financial income 144, , Total value added for distribution 1,053,351 1,128, Value added distributed 1,053,351 1,128, Personnel 372, , Salaries and wages 289, , Benefits 61,597 48, Severance Pay Fund (FGTS) 20,774 16, Taxes, charges and contributions 210, , Federal 175, , State 642 1, Municipal 35,169 39, Debt remuneration 181, , Interest 126, , Rentals 54,724 50, Others 687 1, Shareholders 288, , Earnings retained in the period 265, , Non-controlling shareholders 23,321 14,763

24 MRV ANNOUNCES ITS 2Q15 RESULTS Company s highest Net Revenue of R$ 1.3 billion in the 2Q15. Strong increase of 54.5% on *Earnings per Share compared to 1Q15. Growth of 45.5% on annualized ROE* in relation to 1Q15. Growth of 11.7% in cash generation in comparison to 2Q14. Belo Horizonte, August 14, 2015 MRV Engenharia e Participações S.A. (BM&FBovespa: MRVE3 ADR OTCQX: MRVNY), announces its results for the second quarter of The financial information is presented in million Reais (R$ million), except where otherwise indicated, and is based on the consolidated financial statements prepared and presented in accordance to the International Financial Reporting Standards (IFRS), which considers Guideline CPC 04 Application of Interpretation ICPC 02 to Brazilian Real Estate Development Entities, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Federal Accounting Council (CFC), consistent with the standards issued by CPC. English CONFERENCE CALLS EARNINGS RELEASE 2Q15 Portuguese August 17, 2015 August 17, :00 AM (New York) / 11:00 AM (Brasília) 10:00 AM (New York) / 11:00 AM (Brasília) Phone: Phone: +55 (11) Code: MRV Code: MRV Highlights Free Cash Generation of R$ 154 million, totaling R$ 301 million in Adjusted Net Margin of 14.4%, an increase of 2.7 p.p. compared to 1Q15 and 0.3 p.p. compared to the 2Q14. Adjusted EBITDA Margin of 16.9%, an increase of 2.6 p.p. compared to the 1Q15 and 0.1 p.p. compared to the 2Q14. Leverage ratio of 21.1%: reaching cash position of R$ 1.5 billion. Fitch Ratings affirms MRV's Rating at 'AA-(bra). *ex-equity income 1

25 Message from Management Market: demand on low-income segment remains The recognition of MRV as a Premium Brand of the low-income segment and the solitude of our operations, are key factors of the decision-making process of buying an own property. We observe that our segment has a strong demand and that conditions for loan concession for our customers remain stable. Additionally, we maintained our geographic presence in 133 cities, where 90% of our launching are eligible units to FGTS. Financial Performance: growing net margin Our financial performance has gradually improved in relation to previous periods. We released an enhancement of the IP (productivity index measured by the number of workers needed to build one unit), mechanization of construction sites and higher volume of investments on training of work force capacitation, such as: Production Internship and Trainee Program. The increasing net margin has been positevily impacting the Company`s ROE. The growth of 2.0 p.p. on 2Q15 net margin in relation to 1Q15, came in an increase of approximately 0.5 p.p. in ROE 12 months. We had a negative contribution from the subsidiares Prime (mid-west) and MRL (Rio de Janeiro), which impacted our equity income. In 1S14 we collectively initiated the reformulation of the companies structure in which we have participation. In order to maximize our operational and financial results, we directed MRV s experienced professionals to contribute with this improvement process. The secondary cities of Rio de Janeiro State presented a performance below the estimation due our units not be framed as MCMV units, which might be overcame as the 3rd phase of MCMV program is launched. In mid-west, we own a project with high launching PSV that has been reporting cancellations above MRV s average and not eligible to FGTS. The resale value of these units are below the contract price adjusted by the INCC index (Construction Cost National Index) of the period. In this project, we are prioritizing liquidity in detriment of profitability. There is a significant volume of units in inventory that are not eligible to MCMV 2

26 which we will be reduced during the next 3 quarters and with launching of the 3rd phase of MCMV will positively impact in this scenario. Transfers and Cash Generation: 12nd consecutive quarter of cash generation In 2Q15 we reported a strong operational free cash generation of R$ 154 million, due to the efficiency on transfers to the banks, simultaneous sales process, and the improvement of internal procedures. All this while maintaining the pace and balance of our operational activities. The consecutive cash generation over the last 12 quarters allows the company to optimize its capital structure, through more efficiency on the collection of receivables and lower level of leverage (21.1%). MRV presented a cash balance of R$ 1.5 billion, in line with its conservative management policy and the current macroeconomic scenario. Shareholder s payback The financial improvements and cash generated from our projects are results from the good sales performance and efficiency on transfers to the banks, which allow us to enhance shareholder s payback. In 1Q15 the Company has repurchased 5,623,400 shares, equivalent to R$ 39 million, as well as an increase on Earnings per share in 51% compared to 1Q15. 3

27 Subsequent Events Fitch Ratings affirms MRV's Rating at 'AA-(bra) On July 30, 2015, Fitch Ratings affirmed the following ratings of the company and its issuances: - Long Term National Rating AA-(bra) ; - 5 th Debenture Issuance, with total amount of R$ 500 million, and maturity in 2016, AA-(bra) ; - 6 th Debenture Issuance, with total amount of R$ 500 million, and maturity in 2017, AA-(bra) ; - 7 th Debenture Issuance, with total amount of R$ 300 million, and maturity in 2016, AA-(bra) ; The perspective of the corporate rating is stable. Debt Maturity In July 2015 MRV paid an amount of R$ 250 million related to the maturity of 50% of principal from the 5 th Debenture Emission. Additionally, we have concluded the rollover of the cash flow contracted with CEF in the amount of R$ 200 million with new maturity date set as 50% of principal in June 2016 and the other 50% in June

28 Launch of environmental seal Selo Verde Our Company assumes best social, environmental and economical practices in all its supply chain, proving high quality results and add value to its several stakeholders: shareholders, clients, employees, community, governmental agencies, financial institutions and partners. Examples of social-environmental practices promoted by the Company are the certification of projects and constructions sites through the seals Lar Verde Lar and Obra Viva. The Lar Verde Lar seal certifies the projects that promotes: improvement of surrounding community, development of landscape designs, selective waste collection structure, leisure equipment, solutions for reduction of water and energy consumption, and so on. The Obra Viva seal certifies the construction sites that promotes: development of programs to reduce and optimize water, energy and waste usage, use of certified wood and education and development of our employees.. 5

29 Financial Performance - MRV 6

30 Operational Performance - MRV Land bank The company has been taking advantage from good market conditions to expand its land bank. In 2Q15 85% of land acquisition was acquired through swap or installment payment after project approval. Out of the R$ 29.5 billion in the land bank, R$ 1.2 billion already has incorporation permits (8.290 units), an increase of 20.3% compared to the same period last year. 7

31 Gross Launches (%MRV) The Company has been taking advantages from its geographic diversity to strategically launch in cities with stronger demand and lower competition. Launches elegible to FGTS have been prioritazed. In 2Q15 90% of total launches were elegible to FGTS funding, which represented an increase of 10.9 p.p. compared to 1Q15 and 22.5 p.p. compared to 2Q14. 8

32 Pre-Sales (%MRV), net of swaps We note a demanding market, as shown by the growth of sales. The low-income segment credit conditions along with our geographical diversity contribute to the market resilience in our business. Cancellations (%MRV) The cancellations are mainly derived from sales carried out the new process, the vendas simultâneas. In this new model we have already identified lower level of cancellations and better performance on transfers. In our business model, the units are cancelled during the construction phase, allowing a resale and clients base transfering during the progress of the project. Resale speed of Cancelled Units Average resale price x Average cancelled unit selling price 9

33 adjusted by the INCC % 94.6% 8.0% 14.0% 5.4% 4.5% 2.2% 1.2% 0.0% 4.9% % 95.6% 94.8% 94.5% 95.7% 89.7% Q14 2Q14 3Q14 4Q Q15 2Q Q14 2Q14 3Q14 4Q Q15 2Q15 Cancelled units Resold units Average price - cancelled units, INCC adjusted Average price - resold units Real Estate Financing The credit operations remain unchanged and normalized. We are CEF s and BB s main partner in the Minha Casa, Minha Vida program. We are focusing on maintaining the efficiency on transfers, which can be verified by the expressive increase on the volume of transfers in The units transferred to the banks have access mainly to the FGTS funding, once 86% of sales are eligible to finance it. The construction financing units refers to those that have been financed by a contracted financial institution. 1 Average contract value of the cancelled unit adjusted by the period s INCC between the original sale and the resale. 10

34 In our business model, sold units are transferred during the construction phase. The finished and under construction units have high percentage of sales and transfers. In short term, we have a low level of units under construction to be sold, which contribute to a low level of inventory of finished units. Production The increase on the volume of production in 2Q15 has positively affected the Net Revenue in this quarter, adding to a higher SG&A dilution and an increase on EBITDA and Net margins. Inventory at Market Value (%MRV) 11

35 Cash Generation R$ 154 million in 2Q15 We have a comfortable financial position, reaching 12 consecutive quarters with consistent cash generation and maintaining a balanced operational level and a solid financial operation. The Company remains focused on continuous improvement on the accounts receivables cycle and on the mortgage origination process from the banks (client financing process), which will reflect in lower working capital needs optimizing the capital structure in the medium / long term. 12

36 MRV Financial Performance Net Operational Revenue The increase of the net operational revenue compared to 2Q15, is due to the increase in sales and production. Gross Profit For the year of 2015, we have seen less pressure on costs, reflected on the decrease of annual accumulated INCC, and also successfully renegotiated contracts with suppliers, which will positively affect the gross margin to be reported in the future. In the table below, we demonstrate the financial charges allocated on COGS: Financial Cost recorded under COGS Selling, General and Administrative Expenses (SG&A) The selling expenses varies quarterly due to its accounting method. Considering that they are accounted along with the project progress (Percentage of completion method - POC), the commissions are deferred and accounted as the POC progresses. Therefore, the presented expenses are derived from new and old sales. The G&A expenses maintain in line with expected for this quarter. Even with the accrued inflation in the period we have maintained the expenses normalized for the last 12 months. In 2Q15 the expenses have been affected by the Profit Sharing Program accrued during 1Q15 and 2Q15 once its goals were reached in 1Q15, and by the higher volume of judicial expenses. 13

37 Financial Results The financial expenses have decreased due to the growth of interest capitalization from inventory variation; while financial revenue have increased due to better profitability on investments, because of higher Selic and CDI rates. We demonstrate below the total financial result adjusted by the financial charges allocated to COGS. EBITDA 2 Net Income (R$ million) 2Q15 1Q15 2Q14 Chg. 2Q15 x 1Q15 Chg. 2Q15 x 2Q14 1H15 1H14 Chg. 1H15 x 1H14 Earnings per share %? 58.2%? %? Earnings per share (ex. Equity Income) %? 39.0%? %? Unearned Results 2 See EBITDA definition at the Glossary 14

38 Balance Sheet Cash and Cash Equivalents and Short-term Investments Due to the macroeconomic unstable scenario we chose to maintain the generated cash in balance sheet. The change on our cash position is due to R$ 170 million of dividends payment in 1Q15. Receivables from Real Estate Development The Company s receivables cycle have been improved with more efficiency on transferring new sales to banks and focus on transfer of old sales, which means a reduced receivables period, enhancement on cash generation and less cash flow required. Because of the improvement on the transfer speed, presented in the Simultaneous Sales (SICAQ/SAC) process, there is a natural increase in pro-soluto, especially before keys delivery. Advances from Customers 15

39 Real Estate for Sale and Development Total Debt Total debt as of June 30, 2015 was R$ 2,561 million, fully denominated in Brazilian Reais, and mainly indexed to the interbank deposit rate and referential rate. Debt Maturity Schedule The 12 months Corporate Debt has been amortized in an amount of R$ 250 million in July, related to the maturity of 50% of principal from the 5 th Debenture Emission. Additionally, we have concluded the rollover of the cash flow contracted with CEF totaled in R$ 200 million with new maturity date set as 50% of principal in June 2016 and the other 50% in June On June 30, 2015, the duration 3 of MRV s debt was 16 months. Debt Breakdown 3 Duration see attachment 8 - glossary 16

40 Weighted Average Debt Cost On June 30, 2015, the Company weighted average debt cost is 2.0 p.p lower than Selic set up to the period (14.25%) and 1.4 p.p. lower than annualized CDI. Net Debt Consolidated MRV Net Debt MRV s rating was affirmed by Fitch Ratings as braa-, on July 29 maintaining MRV s position of holding the best rating in the industry since

41 Covenants & Corporate Risk Ratings braa- braa-- Debt Covenant 4 Receivables Covenant (0.01) (0.04) (0.10) Net Debt + Properties Payable Equity < 0.65 Receivables + Unearned Income + Inventories Net Debt + Properties Payable + Unincurred Costs > 1.6 Repurchases Since August / 2011, we have been active in share buyback programs to hold in treasury and/or eventual cancellation or disposal. In 2Q15, no repurchase have occurred. Shares 4 Debt and Receivables Covenants calculated in accordance to new accounting consolidation rules as of 1Q13. 18

42 LOG Commercial Properties LOG CP, from 3Q13 on, as LOG has requested for public company in CVM s B category, started to release its detailed results. LOG s earnings release is available on MRV s website ( Find below LOG CP s main metrics: Operating Highlights (in GLA sq.m., in %LOG) 2Q15 1Q15 2Q14 2Q15 x 1Q15 2Q15 x 2Q14 1H15 Accum. 1H14 Accum. 1H15 x 1H14 Portfolio 1,267,406 1,267,738 1,354, % -6.4% 1,267,406 1,354, % Warehouses 1,201,802 1,202,133 1,188, % 1.1% 1,201,802 1,188, % Retail * 51,136 51,136 51, % 0.2% 51,136 51, % Office 14,469 14, , % -87.3% 14, , % Approved GLA 67,476 4,004 41, % 63.0% 1,009, , % Warehouses 53,008 2,935 41, % 28.1% 978, , % Retail * - 1, % 0.0% 16,148 13, % Office 14, % 0.0% 14, % Built GLA 2,441 5,508 38, % -93.6% 657, , % Warehouses 2,441 5,508 36, % -93.3% 642, , % Retail * - - 1, % % 15,191 11, % Office % 0.0% % Delivered GLA 10,167 4,714 37, % -73.1% 604, , % Warehouses 10,167 3,757 37, % -73.1% 588, , % Retail * % 0.0% 15,191 2, % Office % 0.0% % Financial Highlights (in R$ million) 2Q15 1Q15 2Q14 2Q15 x 1Q15 2Q15 x 2Q14 1H15 1H14 1H15 x 1H14 Net Operating Revenues % 43.0% % EBITDA % -92.0% % EBITDA Margin (%) 88.1% -26.8% % p.p p.p. 30.5% 874.9% p.p. Adjusted EBITDA ** % 68.6% % Adjusted EBITDA Margin (%) 82.0% 80.5% 69.6% 1.5 p.p p.p. 81.3% 69.6% 11.6 p.p. FFO % -96.6% % FFO Margin (%) 37.5% -70.4% % p.p p.p % 863.5% p.p. Adjusted FFO ** % 36.6% % Adjusted FFO Margin (%) 38.6% 31.1% 40.4% 7.5 p.p p.p. 34.8% 41.2% -6.3 p.p. * Retail: Shopping Centers and Strip Malls. ** Adjusted EBITDA and FFO does not consider non recurrent events as Shopping Contagem stake sale, SPE sale and gain/loss with investment properties Fair Value. *** The operating highlights considers LOG s JV s. 19

43 Urbamais Landbank (R$ million) Launches (R$ million) 20

44 Pre-sales (R$ million) Production (R$ million) 21

45 Investor Relations Leonardo Corrêa Chief Financial and Investor Relations Officer Phone :+(55 31) Ricardo Paixão Investor Relations and Financial Planning Director Phone. :+(55 31) Matheus Torga Investor Relations Manager Phone.: +(55 31)

46 Attachment 01 Consolidated Statement of Income (R$ million) EBITDA (R$ million) 23

47 Attachment 02 Consolidated MRV Balance Sheet (R$ million) ASSETS 6/30/2015 3/31/2015 6/30/2014 CURRENT ASSETS Chg. Jun/15 x Mar/14 Chg. Jun/15 x Jun/14 Cash and cash equivalents 1,394 1,469 1, %? 34.1%? Short-term investments %? 27.6%? Receivables from real estate development 2,236 2,282 2, %? 1.1%? Receivables from services provided %? 447.9%? Real estate for sale and development 2,480 2,337 1, %? 35.4%? Recoverable current taxes %? 20.1%? Deferred expenses %? %? Other assets %? 9.0%? Total Current Assets 6,521 6,517 5, %? 18.3%? NONCURRENT ASSETS Receivables from real estate development 1,448 1,479 1, %? 25.1%? Real estate for sale and development 2,049 1,920 1, %? 39.8%? Due from related parties %? 46.1%? Deferred expenses %? 16.8%? Other noncurrent assets %? 44.6%? Investment property %? 7.1%? Property and equipment %? 39.4%? Intangible Assets %? 65.8%? Total Noncurrent Assets 4,674 4,554 4, %? 3.1%? TOTAL ASSETS 11,195 11,071 10, %? 11.4%? 24

48 Attachment 02 Consolidated MRV Balance Sheet (R$ million) continuation 25

49 Attachment 03 Consolidated Statement of Cash Flow (R$ million) 26