4Q17 AND 2017 EARNINGS RELEASE. Viver Announces its Results for the Fourth Quarter and Full-Year of Highlights

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1 4Q17 AND 2017 EARNINGS RELEASE Conference Call Thursday, March 29 th, 2017 Portuguese (with simultaneous interpreting into English) 10:00 a.m. (Brasilia) 09:00 a.m. (New York) Phone: +55 (11) (11) Access code: Viver Replay: +55 (11) Password: English Phone: +1 (516) Access code: Viver Replay: +55 (11) Password: Viver Announces its Results for the Fourth Quarter and Full-Year of 2017 São Paulo, March 28 th, 2017 Viver Incorporadora Construtora S.A. (VIVR3) announces today its operating and financial results related to the fourth quarter (4Q17) and full-year of 2017 (FY2017). Highlights Judicial Recovery (17 Plans) were approved and e homologated by the 2ª Vara de Falências e Recuperações Judiciais da Comarca de São Paulo Improvement of capital structure with a reduction of approximately R$ 600 million in debt, due to the debt that will be converted into equity (VIVR3) at the 1 st Tranche of the Capital Increase Restructuring of 95% of the Viver Group s tax debt, approximately R$ 108,9 million in value, under the Programa Especial de Regularização Tributária (PERT) Gross Revenues amounted to R$ 46.6 million in 2017, with net revenues of R$ 2.7 million in the same period. In the 4Q17, net revenues were negative R$ 0.3 million due to cancelations of delinquent clients contracts Total Repasse was R$ 97.0 million in 2017, with R$14.9 million of that occuring in 4Q17. The Company ended 2017 with approximately R$414.3 million in receivables and R$ million in inventory at market value, of which R$ million and R$ million respectively were for units delivered. General and Administrative expenses, net of depreciation and amortization, severance and restructuring costs, was R$ 2.9 million in 4Q17, representing a decrease of 5.7% compared to 4Q16, and an annual reduction of R$ 11.8 million. 1

2 Subsequent Events After the end of quarter, we had the following highlights: Conclusion on negotiation on a SPE with Patrimônio de Afetação, resulting in the full repayment of R$ 15.3 million bank debt by payment in kind of R$ 3.4 million in units that were collateral of the bank March 8, 2018 was the deadline for creditors to raise objections to the terms and conditions of the 6 Judicial Recovery Plans that were presented after the stay granted by the Agravo de Instrumento nº ruled by 2ª Câmara Reservada de Direito Empresarial has expired and no objections were raised for any of the plans: therefore it is expected that all plans will be homologated automatically by the Judicial Recovery Court, as in the article 57 of the Lei nº /2005. The Company s Board approved capital increase of up to R$ billion for private subscription, allowing the capitalization of debt under the Judicial Recovery, the fulfillment of the Judicial Recovery Plan payment conditions approved by creditors and homologated by the Court, as well as improvement of the capital structure and the company s financial statement. 2

3 List of Contents Message from Management... 4 Operating and Financial Indicators... 5 Operating Performance... 5 Financial Performance... 7 Balance Sheet... 9 Adherence to the Programa Especial de Regularização Tributária (PERT).. 11 Judicial Reorganization Process Appendix

4 Message from Management The year of 2017 can be considered a key point in the restructuring process of the Company. On the operational side, different measures were taken with a focus on the monetization of inventory and complex receivables. On the financial side, the company maintained a conservative approach, with rigid mechanisms of controllership and cost reduction. Moreover, it was possible to finalize negotiations with financial institutions that were extra-court creditors those resulted in the repayment of their debt with discounts. On the fiscal side, the company adhered to the new tax parceling under the Medida Provisória nº 783/2017, then converted into the Lei nº /2017 (PERT - Programa Especial de Regularização Tributária). Tax debt under Receita Federal (RFB) and Procuradoria Geral da Fazenda Nacional (PGFN) was restructured and reduced by approximately R$ million, corresponding to 95% of Viver s tax liabilities. Considering the parceling conditions chosen by the Company, it was already possible to accrue more than R$ 70 million in potential gains due to the compensation of accumulated losses. Finally, regarding the Judicial Recovery procedure, the Company was able to reach agreements with most of Viver s creditors, resulting in a plan approval of more than 80% of the creditors and thereafter the homologation of the plans by the Judicial Recovery Court. The results achieved until now already represent a game changes in Viver s restructuring process. Looking forward, Viver will continue to focus on the fulfillment of the approved plans. Viver will keep being conservative on its capital structure and continue adopting rigid measurers of controllership and cost reduction, focusing on operations and profitability recovery. 4

5 Operating and Financial Indicators Operating Performance Launches The Company did not launch any projects in 2017, due to its strategy of cash preservation and its focus on the monetization of receivables and sale of inventories. Pre-sales and Cancellations In 2017, gross pre-sales totaled R$ 46.6 million and net pre-sales R$ 2.7 million. In 4Q17, gross sales contracted totaled R$ 12.4 million. Cancellations amounted to R$ 12.7 million in 4Q17, and of those approximately 60% refer to cancellations from court decisions of client related claims, which are under the Judicial Recovery procedure and will be paid as per the approved Judicial Recovery Plans. The table below shows the details of net pre-sales in 4Q17 and FY2017 compared to the same periods in 2016: 5

6 Net Sales 4Q17 Pre Sales % Viver (R$ million) # of units Average unit price (R$000) Segment 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 Super Low Income (2.0) % (10) % 136, , % Low Income 0.7 (1.3) % % 206, , % Mid Income % % 284, , % Mid High (0.8) % % 424, , % High - - na - - na - - na Tourism and Commercial na 1 - na 200,000 - na TOTAL (0.3) % % 189, , % Region 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 São Paulo (1.8) % % 173, , % Southest (ex SP) % % 250, , % South (1.5) % (6) % 126, , % Mid West (0.8) % (4) % - 174, % North (0.4) % (1) % - 132, % Northeast (0.1) % (3) % - 139, % TOTAL (0.3) % % 189, , % Launch Year 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 4Q17 4Q16 4Q17 x 4Q16 Launches from na - - na - - na Launches from (0.8) % 1 (2) % 140, , % Launches from % % - 146, % Launches from % % 247, , % Launches from 2010 (1.9) % (8) % 126, , % Launches up to 2010 (0.7) % % 216, , % TOTAL (0.3) % % 189, , % Net Sales 2017 Pre Sales % Viver (R$ million) # of units Average unit price (R$000) Segment x x x 2016 Super Low Income (1.6) (17.0) -90.6% 14 (94) % 138, , % Low Income 1.7 (0.4) % % 201, , % Mid Income 2.9 (14.3) % 14 (32) % 216, , % Mid High (0.5) (16.3) -96.8% 1 (25) % 648, , % High - - na - - na - - na Tourism and Commercial % % 277, , % TOTAL 2.7 (47.6) % 49 (130) % 172, , % Region x x x 2016 São Paulo (0.2) (5.4) -96.6% 23 (54) % 169, , % Southest (ex SP) 3.8 (32.9) % 24 (19) % 224, , % South (6.8) % (33) % 148, , % Mid West (1.5) (0.8) 80.4% (4) % 178, , % North 7.8 (15.1) % 42 (88) % 174, , % Northeast (0.5) % (3) % 345, , % TOTAL 2.7 (47.6) % 49 (130) % 172, , % Launch Year x x x 2016 Launches from na - - na - - na Launches from 2013 (0.3) (0.6) -57.5% 2 - na 168, , % Launches from % % 153, , % Launches from (0.8) % 34 (6) % 202, , % Launches from 2010 (6.3) (31.7) -80.2% (28) (120) -76.7% 123, , % Launches up to (14.8) % 31 (8) % 189, , % TOTAL 2.7 (47.6) % 49 (130) % 172, , % 6

7 Projects under Construction and Completed Projects On December 31 th, 2017 the Company had 3 sites with Patrimônio de Afetação under construction, and 2 of such projects had received partial permits. The Company already started a new round of negotiations with banks and clients to find alternatives for resuming construction of these projects. The table below shows the detail of delivered projects and projects to be delivered with their expected receivables and inventory at market value: Land bank On December 31 th, 2017, the Company s land bank represented an estimated PSV of R$ 2 billion. It s important to mention that R$ 406 million of the potential PSV consists of projects approved for launches, representing 2,413 units. It s important to mention that 92% of the potential PSV comes from lands that is currently collateral for financial operations. The table below shows the breakdown of the Company s current land bank: PSV Viver's share (R$ million) Super Low Income Low Income Mid Income Mid High High Commercial Total São Paulo (state) ,062.2 Southeast (ex SP) South Mid West North Northeast Total of VGV (% Viver) ,998.0 % of Total 11.0% 11.0% 38.3% 8.3% 22.5% 8.8% 100.0% # of units 1,624 1,215 3, ,772 Financial Performance Results are shown in accordance with the accounting practices adopted in Brazil, in Brazilian Reais (R$) and in compliance with Brazilian corporate law. Net Revenue Net operating revenue was R$ 3.4 million in 4Q17. For the year of 2017, net operating revenue was R$ 5.9 million. Not launching new projects and a high volume of cancellations are still impacting the company s revenue. Property Costs Property costs totaled R$ 0.5 million in 4Q17 and R$ 14.8 million in 2017, compared to R$ 58.4 million in 2016, which represents a reduction of 74.6% in costs, reflecting the 3 sites to be delivered 7

8 The table below shows a breakdown of property costs: Gross Profit and Backlog of Revenues and Results The gross profit was R$ 3.9 million in 4Q17 and for the year of 2017 gross losses R$ 8.9 million, which was mainly caused by sales cancellations and interest from debt not subject to the Judicial Recovery process. In 4Q17, the revenue backlog was R$ 84.5 million, while the backlog of results to be recognized reached R$ 14.1 million. The backlog margin for the quarter was 16.7%, 156 bps less than 4Q16. Costs to be recognized do not consider financial charges and guarantee provisions, which are recognized as operating costs in proportion to the units sales, when incurred. Selling, General and Administrative Expenses In 4Q17, selling expenses totaled R$ 0.6 million. For the year of 2017, these expenses reached R$ 3.0 million, with a reduction of 41.1% compared to This decrease resulted from changes in marketing policy and cash preservation measures. General and administrative expenses, net of depreciation and amortization, severance and restructuring costs, totaled R$ 2.9 million in 4Q17, the same level as in the previous quarter and this represents a reduction of 5.7% compared to 4Q16, which results in an annual total of R$ 11.8 million for

9 Financial Result The net financial result was R$ 1.6 million in 4Q17. In 2017, financial expenses were R$ 70.5 million, compared to R$ million in Starting from the Judicial Reorganization filing, the debts that were listed had their balances frozen at the date of request due to the stay period. Therefore, only extra-court debts generated financial expenses. Net Profit/Losses In 4Q17, the Company presented a net loss of R$ 24.4 million. In 2017, net loss was R$ million, a reduction of 65,3%, compared to 2016, this was result of the strict cash management policy, with which includes monitoring, controllership and reduction of costs, that is guiding Viver s restructuring process. The recurring negative result, as already highlighted in previous quarters, is a consequence of the lack of new launches, the impact of cancellations on the recognition of revenue and gross profit, as well as provisions for lawsuits and the freeze of the interest accrual of part of the debt. Looking forward, the Company will be focused on continuing to implement its restructuring plan as well as reaching profitability. EBITDA EBITDA was negative R$ 25.0 million in 4Q17. In 2017, EBITDA was negative in R$ 88.9 million. The table below shows EBIT, EBITDA and EBITDA margin trends in recent quarters. Balance Sheet Cash and Cash Equivalents and Securities On December 31 th, 2017, cash, cash equivalents and securities totaled R$ 15.5 million, compared to R$ 17.5 million on September 30 th, It is important to mention that approximately R$ 14.7 million of this balance is pledge. 9

10 Portfolio Management and Client Mortgage Transfers ( Repasse ) The Company ended 4Q17 with a total receivables of R$ million, with R$ million was from completed projects and R$ million from projects to be delivered, as shown in the chart below. The funds generated by repasse and client receivables totaled to R$ 14.9 million in 4Q17 and R$ 97 million in Inventory (properties for development and completed units) The Company s inventory balance on December 31 th, 2017 stood at R$ million and includes sites acquired with cash and through swaps, construction in progress, advances to suppliers and completed units, as detailed below. Inventory at Market Value The table below provides a breakdown of the inventory PSV at market value by project delivery schedule. On December 31, 2017, the market value of the completed unit inventory represented PSV of R$ million. 10

11 Indebtedness Viver ended the 4Q17 with debt outstanding of R$ million, this is a reduction of R$ million as compared to the last quarter, which reduction already reflects part of the result of the homologated Judicial Recovery Plan and negotiation under Patrimônio de Afetação. Creditor s proofs of claim are still under analysis at the Judicial Recovery Court, and could be converted in the next tranches of the capital increase. It is important to mention that negotiations under Patrimônio de Afetação and with other extra-court creditors are still ongoing. Indebtedness Evolution (R$ million) 4Q17 3Q17 2Q17 1Q17 4Q16 Debt Corporate Debt SFH / Project Debt Securitization Co-obligation CRI Sub-total Indebtedness Related-Party Transactions+DIP + Convertible Related-Party Transactions Debtor-in-possession financing (DIP Financing) Debentures Convertible Indebtedness Total , , , ,173.2 Availability Adherence to the Programa Especial de Regularização Tributária (PERT) In second semester of 2017 the company concluded its adherence to the new tax parceling under the Medida Provisória nº 783 of May 2017, than converted to Lei of October This tax parceling, named Programa Especial de Regularização Tributária (PERT), establishes discounts for 11

12 financial charges and also allows the use of accumulated losses depending upon the payment conditions chosen. Tax debt restructuring totaled approximately R$ million, approximately 95% of the tax liabilities of Viver Judicial Reorganization Process Latest updates of the Judicial Reorganization process: On October 20 th, 2017 the 2 Câmara Reservada de Direito Empresarial granted the Agravo de Instrumento nº and now included companies in the Judicial Recovery procedure that had been excluded due to irregularities in the power of attorney and lack of units in inventory. On December 17 th, 2017 the Judicial Recovery Court homologated the plans: Projeto Imobiliário Residencial Viver Zona Sul SPE 62 Ltda, Projeto Imobiliário Residencial Viver Bosque SJP SPE 91 Ltda., Inpar Projeto Residencial Condomínio Wellness Resort SPE 42 Ltda., Projeto Imobiliário Canoas Happiness SPE 72 Ltda., Inpar Projeto Residencial Condomínio Ereditá SPE Ltda., Projeto Imobiliário Residencial Esporte & Vida Condomínio Gravataí SPE 53 Ltda., Inpar Projeto Residencial Grand Jardins SPE Ltda., Projeto Residencial Marine Home Resort SPE 66 Ltda., Projeto Imobiliário Condomínio Park Plaza SPE 52 Ltda., Inpar Projeto 50 SPE Ltda., Inpar Projeto Residencial Rio Claro Village SPE 67 Ltda., Projeto Imobiliário SPE 103 Ltda., Projeto Imobiliário SPE 77 Ltda., Inpar Projeto 86 SPE Ltda., Inpar Projeto Residencial Von Schilgen SPE Ltda., Inpar Projeto Wave SPE Ltda. Regarding the capital structure, in 4Q17, the Company made a provision of approximately R$ 600 million due to a reduction in debts caused by its conversion into shares of Viver Incorporadora e Construtora S/A (VIVR3) at the 1 st Tranche of the capital increase, already is showing a meaningful improvement in equity. It s worth to mention that in the next 12 months two more tranches of the capital increase will occur, and therefore it is expected that significant changes will occur in loans and financing, debentures, suppliers, payables and contingency provision accounts. March 8 th, 2018 was the deadline for creditors to raise objections to the terms and conditions of the 6 Judicial Recovery Plans that were presented after the stay granted by the Agravo de Instrumento nº ruled by 2ª Câmara Reservada de Direito Empresarial. No objections were raised for any the plans, and therefore it is expected that all of the plans will be homologated automatically, without objections, by the Judicial Recovery Court, as in the article 57 of the Lei nº /2005. On March 12 th, 2018 the Company s Board approved a capital increase for private subscription, allowing the capitalization of debt under the Judicial Recovery plan. The capital increase fulfills the 12

13 Judicial Recovery Plan payment conditions approved by creditors and homologated by the Court, and improves the capital Company s structure and the company s financial statement, making possible the development, growth and maintenance of operations, within a more solid capital structure, being assured the preemptive right for the shareholders of the Company will also be able to exercise preemptive rights in capital increase Those who are interested in copies of the Judicial Recovery Plan can obtain at: or About Viver Incorporadora e Construtora S.A. Viver is a real estate developer and builder established over 20 years ago and renowned for its high quality developments and pioneering role in construction technology. It focuses on the middle and upper-middle segments of the residential market, especially in the area of Greater Porto Alegre and the state of São Paulo. The Company adopts a management model based on strict standards of corporate governance and close alignment between the executive officers, Board of Directors and shareholders. Viver s stock is listed on the BM&FBOVESPA s Novo Mercado trading segment under the ticker VIVR3. Investor Relations Phone: (55 11) ri.viver@viver.com.br 13

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