Quarterly Information (ITR) JHSF Participações S.A.

Transcription

1 Quarterly Information (ITR) JHSF Participações S.A. September 30, 2018 with Independent Auditor s Review Report on Quarterly Information

2 São Paulo Corporate Towers Av. Presidente Juscelino Kubitschek, Vila Nova Conceição São Paulo SP - Brasil Tel: ey.com.br A free translation from Portuguese into English of Independent Auditor s Review Report on individual and consolidated interim financial information prepared in Brazilian currency 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) Independent auditor s review report on quarterly information (ITR) The Shareholders, Board of Directors and Officers of JHSF Participações S.A. São Paulo - SP Introduction We have reviewed the individual and consolidated interim financial information of JHSF Participações S.A. ( Company ), contained in the Quarterly Information (ITR) for the quarter ended September 30, 2018, which comprise the statement of financial position as at September 30, 2018 and the related statements of profit or loss and of comprehensive income for the three and nine-month periods then ended, and the statements of changes in equity and of cash flows for the nine-month period then ended, including explanatory notes. Company management is responsible for the preparation of individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21(R1) Demonstração Intermediária, including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, in connection with application of Technical Orientation OCPC 04, on revenue recognition over time, and consolidated interim financial information in accordance with international standard IAS 34 Interim Financial Reporting, including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, in connection with application of Technical Orientation OCPC 04, on revenue recognition over time, and for the presentation of such information in conformity with the standards issued by the Brazilian Securities Commission (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 Revisão de Informações Intermediárias Executada pelo Auditor da Entidade 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. The scope of a review is substantially less in scope than that an audit conducted in accordance with auditing standards and, accordingly, it did not enable us to obtain assurance that we were aware of all significant matters that could have been identified in an audit. Accordingly, we do not express an audit opinion. Uma empresa-membro da Ernst & Young Global Limited PÁGINA: 1 de 56

3 Conclusion on the individual and consolidated interim financial information prepared in accordance with CPC 21 (R1), including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018 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) Demonstração Intermediária, including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, in connection with application of Technical Orientation OCPC 04, on revenue recognition over time, and that presentation of this information is not in line with the standards issued by the Brazilian Securities Commission (CVM) applicable to the preparation of Quarterly Financial Information (ITR). Conclusion on the consolidated interim financial information prepared in accordance with IAS 34 Interim Financial Reporting, including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018 Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information included in the quarterly information referred to above is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting, including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, in connection with application of Technical Orientation OCPC 04, on revenue recognition over time, and that presentation of this information is not in line with the standards issued by the Brazilian Securities Commission (CVM) applicable to the preparation of Quarterly Financial Information (ITR). Emphasis of a matter Technical Orientation OCPC 04 As described in Note 2.1, this interim financial information was prepared in accordance with CPC 21 (R1) (in individual and consolidated information) and IAS 34 (in consolidated information), including guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, in connection with application of Technical Orientation OCPC 04, on revenue recognition over time, whilst the OCPC 04 discussion process is not complete. Our conclusion is not modified in respect of this matter. PÁGINA: 2 de 56

4 Restatement of corresponding figures As mentioned in Note 2.4, the Company reclassified certain balances in comparative accounts, individual and consolidated, as a result of changes in accounting practices and correction of certain errors. Corresponding figures, individual and consolidated, related to the statement of financial position for the year ended December 31, 2016 (equivalent to January 1, 2017), and the corresponding interim financial information, individual and consolidated, related to the statements of changes in equity, of cash flows and of value added for the nine-month period ended September 30, 2017, presented for comparison purposes, were adjusted and are restated as determined by CPC 23 Políticas Contábeis, Mudança de Estimativa e Retificação de Erro, and CPC 26 (R1) Apresentação das Demonstrações Contábeis. Our conclusion is not modified with respect to this matter. Other matters Prior year s financial statements audited by other independent auditors The individual and consolidated financial statements for the year ended December 31, 2016, originally prepared before the adjustments and reclassifications described in Note 2.4 and presented as data equivalent to January 1, 2017, were audited by another independent auditor, who issued an unmodified audit report dated March 29, As part of our procedures to review the individual and consolidated interim financial information for the three and nine-month periods ended September 30, 2018, we also reviewed the adjustments described in Note 2.4, which were conducted to adjust the information equivalent to January 1, In our opinion, such adjustments and reclassifications are appropriate and have been duly made. We were not engaged to audit, review or apply any other procedures on the Company s individual and consolidated financial statements for the year ended December 31, Therefore, we do not express an opinion or any form of assurance on the overall financial statements as at December 31, PÁGINA: 3 de 56

5 Statements of value added We have also reviewed the individual and consolidated Statements of Value Added for the nine-month period ended September 30, 2018, prepared under the responsibility of Company s Management, whose presentation of which in the interim financial information is required by the standards issued by CVM applicable to the preparation of Quarterly Information (ITR) and considered supplementary information under International Financial Reporting Standards (IFRS), whereby no statements of value added presentation is required. These statements were submitted to the same review procedures previously described above and, based on our review, nothing has come to our attention that would make us believe that they are not prepared, in all material respects, consistently with the overall individual and consolidated interim financial information. São Paulo, November 08, 2018 ERNST & YOUNG Auditores Independentes S.S. CRC-2SP034519/O-6 Uilian Dias Castro de Oliveira Accountant CRC-1SP223185/O-3 PÁGINA: 4 de 56

6 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version : 1 Individual financial statements / Statement of financial position Assets (In thousands of reais) Account code Account description 1 Total assets 1.01 Current assets Cash and cash equivalents Cash and cash equivalents Short-term investments Short-term investments measured at fair valu Securities measured at fair value Accounts receivable Trade accounts receivable Taxes recoverable Current taxes recoverable Other current assets Other Sundry receivables Receivables from related parties Dividends receivable 1.02 Noncurrent assets Long-term receivables Accounts receivable Trade accounts receivable Receivables from related parties Receivables from subsidiaries Receivables from other related parties Other noncurrent assets Sundry receivables Investments Equity interest Interests held in affiliates Property and equipment Property and equipment in use Intangible assets Intangible assets PÁGINA: 5 de 56

7 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version : 1 Individual financial statements / statement of financial position Liabilities and equity (In thousands of reais) Account Account description Current quarter Prior year code 09/30/ /31/ Total liabilities 3,271,112 3,018, Current liabilities 223, , Social and labor liabilities 839 1, Social liabilities 839 1, Trade accounts payable 1, Trade accounts payable - domestic suppliers 1, Loans and financing 47,981 47, Loans and financing 41,281 46, In local currency 41,281 46, Debentures 6, Debentures 6, Other liabilities 172, , Payables to related parties 151, , Payables to other related parties 151, , Other 21,669 14, Mandatory minimum dividend payable 14,829 14, Advances from customers 6, Noncurrent liabilities 826, , Loans and financing 699, , Loans and financing 336, , In local currency 336, , Debentures 362, , Debentures 362, , Other liabilities 122,852 93, Payables to related parties 84,625 55, Payables to affiliates 84,625 55, Other 38,227 38, Mandatory minimum dividend payable 38,227 38, Provisions 4,185 2, Provisions for tax, social security, labor and civil contingencies Provisions for contingencies Other provisions 4,087 2, Provisions for capital deficiency in subsidiary 4,087 2, Equity 2,221,513 2,121, Paid-in capital 916, , Paid-in capital 916, , Capital reserves 33,251 32, Options granted 33,251 32, Income reserves 1,285,722 1,187, Unrealized income reserve 97, Retained profits reserve 1,188,255 1,188, Treasury shares Equity adjustments -13,923-13, Fair value adjustment to securities available for sale -13,923-13,687 PÁGINA: 6 de 56

8 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Individual financial statements / Statement of profit or loss (In thousands of reais) Account code Account description 3.04 Operating income/expenses Selling expenses General and administrative expenses Other operating income Other operating income (expenses) Equity pickup 3.05 Income before finance income (costs) and taxes 3.06 Finance income (costs) Finance income Finance costs 3.07 Income before income taxes 3.09 Net income (loss) from continuing operations 3.11 Net income/loss for the period 3.99 Earnings per share (reais/shares) Basic earnings per share Registered common shares Diluted earnings per share Registered common shares PÁGINA: 7 de 56

9 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Individual financial statements / Statement of comprehensive income (In thousands of reais) Account Account description code 07/01/ 4.01 Net income for the period 4.02 Other comprehensive income Fair value adjustment to securities available for sale 4.03 Comprehensive income for the period PÁGINA: 8 de 56

10 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version : 1 Individual financial statements / Statement of cash flows - Indirect method (In thousands of reais) Account code Account description 6.01 Net cash from operating activities Cash from operating activities Income before income and social contribution taxes and non-controlli Depreciation and amortization of property and equipment and intangib Equity pickup Interest and monetary variation on loans, financing and debentures Provisions for contingencies Allowance for doubtful accounts Interest and monetary variation on assets and liabilities Allocation of expenses with stock option plans Interest on loans and financing paid Interest on debentures paid Amortization of costs of loans, financing, debentures and obligations Changes in assets and liabilities Decrease (increase) in accounts receivable Decrease (increase) in transactions with related parties Increase (decrease) in other assets and liabilities Increase (decrease) in advances from customers 6.02 Net cash from investing activities Acquisition of property and equipment and investment properties Future capital contribution Disposal of property and equipment and intangible assets Acquisition of intangible assets Proceeds from sale of equity interest 6.03 Net cash from financing activities Loans and financing taken out Payment of debentures Repayment of loans and financing Issue of debentures 6.05 Increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents PÁGINA: 9 de 56

11 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Individual financial statements / Statement of changes in equity - 01/01/2018 to 09/30/2018 (In thousands of reais) Account code Account description Paid-in capital Capita 5.01 Opening balances 5.03 Adjusted opening balances 915,254 PÁGINA: 10 de 56

12 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Individual financial statements / Statement of changes in equity - 01/01/2017 to 09/30/2017 (In thousands of reais) Account code Account description Paid-in capital Capital reser 5.01 Opening balances 5.02 Prior year adjustments 914, Adjusted opening balances Capital transactions with owners 914, Capital increases 1, Recognition of options granted 1, Total comprehensive income 0 PÁGINA: 11 de 56

13 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Individual financial statements / Statement of value added (In thousands of reais) Account code Account description 7.01 Revenues Other revenues Estimated variation in allowance for doubtful accounts 7.02 Inputs acquired from third parties Materials, electric energy, third-party services and other 7.03 Gross value added 7.04 Retentions Depreciation, amortization and depletion 7.05 Net value added produced 7.06 Value added received in transfer Equity pickup Finance income 7.07 Total value added to be distributed 7.08 Distribution of value added Personnel Direct compensation Benefits Unemployment Compensation Fund (FGTS) Taxes, charges and contributions Federal Local Debt remuneration Interest Leases Equity remuneration Retained profits/losses for the period PÁGINA: 12 de 56

14 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / statement of financial position Assets (In thousands of reais) Account code Account description 1 Total assets 1.01 Current assets Cash and cash equivalents Cash and cash equivalents Short-term investments Short-term investments measured at fair valu Marketable securities Accounts receivable Trade accounts receivable Inventories Properties for sale Inventories Taxes recoverable Current taxes recoverable Prepaid expenses Selling expenses to be recognized Other current assets Other Sundry receivables 1.02 Noncurrent assets Long-term receivables Accounts receivable Trade accounts receivable Inventories Properties for sale Deferred taxes Deferred income and social contribution taxe Receivables from related parties Receivables from other related parties Other noncurrent assets Sundry receivables Investments Equity interest Interests held in affiliates Investment properties Property and equipment Property and equipment in use Intangible assets Intangible assets PÁGINA: 13 de 56

15 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of financial position Liabilities and equity (In thousands of reais) Account Code Account description 2 Total liabilities 2.01 Current liabilities Social and labor liabilities Social liabilities Trade accounts payable Trade accounts payable - domestic suppliers Tax liabilities Federal tax liabilities Deferred taxes Loans and financing Loans and financing In local currency Debentures Debentures Other liabilities Payables to related parties Payables to other related parties Other Mandatory minimum dividend payable Advances from customers Sundry creditors Deferred revenue - assignment of right of us 2.02 Noncurrent liabilities Loans and financing Loans and financing In local currency Debentures Debentures Other liabilities Payables to other related parties Payables to affiliates Other Sundry payables Advances from customers Liabilities with partners in ventures Deferred revenue - assignment of right of us Mandatory minimum dividend payable Deferred taxes Deferred income and social contribution taxe Provisions Provisions for tax, social security, labor and Provisions for tax contingencies Provisions for contingencies 2.03 Equity - consolidated Paid-in capital Capital reserves PÁGINA: 14 de 56

16 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of financial position Liabilities and equity (In thousands of reais) Account Code Account description Options granted Treasury shares Income reserves Unrealized income reserve Retained profits reserve Equity adjustments Fair value adjustment to securities available for sale Noncontrolling interests PÁGINA: 15 de 56

17 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of profit or loss (In thousands of reais) Account Account description Current quarter YTD Same prior-year YTD Code 07/01/2018 to 09/30/2018 Current year quarter Prior year 01/01/2018 to 09/30/ /01/2017 to 09/30/ /01/2017 to 09/30/ Revenue from sale of goods and/or services 136, ,804 79, , Income from sale of properties 45,238 83, , Revenue from shopping malls and commercial leases 49, ,412 39, , Revenue from hotels and restaurants 41, ,964 39, , Cost of sales and/or services -62, ,668-50, , With disposal of properties -12,797-33,657-8,237-27, With shopping malls and commercial leases -14,748-38,764-7,090-21, With hotels and restaurants -34, ,247-34, , Gross profit 73, ,136 29, , Operating income/expenses -17,254-45,139-15,325 9, Selling expenses -5,059-8,722-3,083-7, General and administrative expenses -23,654-65,966-22,792-77, Other operating expenses 12,332 32,517 10,520 94, Other operating income (expenses) -3, , Fair value of investment properties 16,049 31,729 10,402 99, Equity pickup , Income before finance income (costs) and taxes 56, ,997 14, , Finance income (costs) -28,606-87,129-36, , Finance income 15,927 34,353-1,421 2, Finance income 15,927 34,353-1,421 2, Finance costs -44, ,482-34, , Finance costs -44, ,482-34, , Income before income taxes 28,080 40,868-22, Income and social contribution taxes 90,281 74,254-7,197-43, Current -2,369-4, , Deferred 92,650 78,979-6,400-39, Net income from continuing operations 118, ,122-29,198-43, Consolidated income (loss) for the period 118, ,122-29,198-43,002 PÁGINA: 16 de 56

18 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of profit or loss (In thousands of reais) Account Account description Current quarter YTD Same prior-year YTD Code 07/01/2018 to 09/30/2018 Current year quarter Prior year 01/01/2018 to 09/30/ /01/2017 to 09/30/ /01/2017 to 09/30/ Attributed to shareholders of parent company 118, ,863-28,724-44, Attributed to non-controlling interests , Earnings per share (reais/shares) Basic earnings per share Registered common shares Diluted earnings per share Registered common shares PÁGINA: 17 de 56

19 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of comprehensive income (In thousands of reais) Account Account description Current quarter YTD Same prior-year YTD Code 07/01/2018 to 09/30/2018 Current year quarter Prior year 01/01/2018 to 09/30/ /01/2017 to 09/30/ /01/2017 to 09/30/ Consolidated net income (loss) for the period 118, ,122-29,198-43, Other comprehensive income ,919-15, Fair value adjustment to securities available for sale ,919-15, Consolidated comprehensive income for the period 118, ,886-32,117-58, Attributed to shareholders of parent company 118, ,627-31,643-60, Attributed to non-controlling shareholders ,896 PÁGINA: 18 de 56

20 Quarterly Information (ITR) 06/30/ JHSF PARTICIPACOES S.A. Version : 1 Consolidated financial statements / Statement of cash flows indirect method (In thousands of reais) Account code Account description YTD YTD Current year Prior year 01/01/2018 to 09/30/ /01/2017 to 09/30/ Net cash from operating activities -11,854-95, Cash from operating activities 12,599-75, Income before income and social contribution taxes and non-controlling interests Depreciation and amortization of property and equipment and intangible assets 40, ,702 11, Equity pickup 2, Interest and monetary restatement of loans, financing and debentures 78, , Present value adjustment 614-1, Provisions for contingencies -1,603-1, Allocation of expenses with stock option plans 1,177 3, Allowances for doubtful accounts -6,556 4, Fair value of investment properties -31,729-99, Amortization of costs of loans, financing, debentures and obligations with partners 14,254 3, Interest and monetary variation on assets and liabilities -7, Income and social contribution taxes paid -1,161-3, Interest on loans and financing paid -38,894-94, Interest on debentures paid -48,286-5, Changes in assets and liabilities -24,453-20, Decrease (increase) in accounts receivable -28,393 60, Decrease (increase) in properties for sale 331-4, Decrease (increase) in transactions with related parties -20,179-66, Decrease (increase) in other assets and liabilities 10,934 13, Decrease (increase) in selling expenses to be recognized -1, Increase (decrease) in Advances from customers and agreement dissolutions payable 14,060-21, Net cash from investing activities -62, , Acquisition of property and equipment and investment -80,779-41,424 properties Disposal of property and equipment and intangible assets 20, , Sale (purchase) of marketable securities ,513 Sale (purchase) of equity interests Acquisition of intangible assets -1, Net cash from financing activities 70, , Loans and financing taken out 125, , Payment of debentures 0-78, Repayment of loans and financing -97, , Issue of debentures 42, Increase (decrease) in cash and cash equivalents -3,290-55, Opening balance of cash and cash equivalents 9,126 69, Closing balance of cash and cash equivalents 5,836 14,141 PÁGINA: 19 de 56

21 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of changes in equity - 01/01/2018 to 09/30/2018 (In thousands of reais) Account code Account description Paid-in capital Capital reserves, options granted and treasury shares Income reserves Retained earnings (accumulated losses) Other comprehensive income Equity Non-controlling interests 5.01 Opening balances 915,254 31,660 1,188, ,687 2,121,482 26,298 2,147, Adjusted opening balances 915,254 31,660 1,188, ,687 2,121,482 26,298 2,147, Capital transactions with owners 1,209 1, , , Capital increases 1, , , Recognition of options granted 0 1, , , Fair value adjustment to securities available for sale Equity - Consolidated Total comprehensive income , , Net income for the period , , , Other comprehensive income Decrease in equity non-controlling interests Closing balances 916,463 32,837 1,188,255 97,881-13,923 2,221,513 26,157 2,247,670 PÁGINA: 20 de 56

22 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of changes in equity - 01/01/2017 to 09/30/2017 (In thousands of reais) Account code Account description Paid-in capital Capital reserves, options granted and treasury shares Income reserves Retained earnings (accumulated losses) Other comprehensive income Equity Non-controlling interests 5.01 Opening balances 914,183 27,830 1,270, ,644 2,205,043 12,139 2,217, Prior year adjustments , ,766 19,372-40, Adjusted opening balances 914,183 27,830 1,210, ,644 2,145,277 31,511 2,176, Capital transactions with owners 1,071 3, , , Capital increases 1, , , Recognition of options granted 0 3, , , Total comprehensive income ,565-15,153-61,718 1,896-26, Net income for the period , ,565 1,896-13, Other comprehensive income ,153-15, , Fair value adjustment to securities available for sale Equity - Consolidate d ,153-15, , Closing balances 915,254 30,944 1,210,908-46,565-22,797 2,087,744 33,407 2,155,570 PÁGINA: 21 de 56

23 Quarterly Information (ITR) 09/30/ JHSF PARTICIPACOES S.A. Version: 1 Consolidated financial statements / Statement of value added (In thousands of reais) Account code Account description YTD YTD Current year Prior year 01/01/2018 to 09/30/ /01/2017 to 09/30/ Revenues 424, , Sales of goods, products and services 386, , Other revenues 38, , Changes in fair value of investment properties 31,729 99, Estimated changes in allowance for doubtful accounts 6,556 4, Inputs acquired from third parties -219, , Costs of sales and services -175, , Materials, electric energy, third-party services and other -43,679-58, Gross value added 205, , Retentions -9,702-11, Depreciation, amortization and depletion -9,702-11, Net value added produced 195, , Value added received in transfer 31,385 2, Equity pickup -2, Finance income 34,353 2, Total value added to be distributed 227, , Distribution of value added 227, , Personnel 31,888 33, Direct compensation 28,424 30, Benefits 2,322 2, Unemployment Compensation Fund (FGTS) 1, Taxes, charges and contributions -37,243 79, Federal -48,610 67, State 6,530 8, Local 4,837 4, Debt remuneration 117, , Interest 112, , Leases 5,204 3, Equity remuneration 115,122-43, Retained profits/losses for the period 114,863-44, Non-controlling interests in retained profit 259 1,896 PÁGINA: 22 de 56

24 1. Operations JHSF Participações S.A. ( Company ) with headquarters at Avenida Magalhães de Castro, Tower 3 Continental Tower - 27th floor, São Paulo - SP, is a publicly-traded business corporation registered with the Brazilian Securities Commission (CVM) under code with its shares traded on the São Paulo Stock Exchange under ticker symbol JHSF3. Organized on September 29, 2006, the Company is primarily engaged in acting as a holding company, participating in the capital of other companies substantially dedicated to activities of development, purchase and sale of residential and commercial properties, construction and exploration of shopping malls, purchase and sale of goods, lease/rent of owned commercial real estate, provision of administration services, exploration of hotel, gastronomy and tourist activities in general, advisory, consulting and planning services, and operation and management of airfield. Further information on the operations of the Company and its subsidiaries are found in Note 1 to the individual and consolidated financial statements for With the sale of assets to XP Malls Fundo de Investimento Imobiliário - FII ("FII XP Malls") as mentioned in Note 28 - Subsequent events, on October 19, 2018, the Company reduced its interest by 16.99% in the property of Shopping Cidade Jardim, 32% in the property of Catarina Fashion Outlet, 49.0% in the SPE that holds interest equivalent to 24.99% in the property of Shopping Bela Vista, 49.99% in the SPE that holds interest equivalent to 29.99% in the property of Shopping Ponta Negra. 2. Basis of preparation and presentation of quarterly information 2.1. Basis of preparation The individual and consolidated quarterly information was prepared consistently with the accounting practices described in Note 3 to the individual and consolidated annual financial statements for the year ended December 31, 2017, which remain valid, and CVM/SNC/SEP Circular Letter No. 01/2018, which provides guidance to entities regulated by the CVM for preparation of financial statements in compliance with OCPC 04. Following CVM/SNC/SEP Circular Letter No. 01/2018, the CVM Committee issued a decision on revenue recognition on September 3, 2018 (SEI / ), which establishes that the adoption of the method of revenue recognition upon delivery of keys ("at a point in time") or the maintenance of the revenue recognition method denominated POC ("over time") will be subject to adequate contractual analysis by management of the entities in accordance with the provisions of Accounting Pronouncement CPC 47 - Revenue from Contracts with Customers (IFRS 15). The Company prepared the analyses and did not identify changes in relation to the previously adopted criteria. Additionally, on January 1, 2018, the Company adopted CPC 48 - Financial Instruments that did not significantly change the practices disclosed in the year ended December 31, PÁGINA: 23 de 56

25 This quarterly information does not include all notes and disclosures required by standards for annual individual and consolidated financial statements, and, as a result, the respective information should be read together with the referred to annual individual and consolidated financial statements. Based on the judgment and assumptions adopted by management on the materiality and changes that should be disclosed in the notes, this quarterly information includes selected notes and does not include all the notes presented in the annual financial statements, as allowed by Circular Letter No. 03/2011, issued by the Brazilian Securities Commission (CVM). The Quarterly Information (ITR) was prepared in accordance with Accounting Pronouncement CPC 21 (R1) and IAS 34 - Interim Financial Reporting, including the guidance contained in CVM/SNC/SEP Circular Letter No. 01/2018, related to adoption of Accounting Guidance OCPC 04, issued by the Brazilian FASB (CPC) and approved by the Brazilian Securities Commission (CVM) and Brazil s National Association of State Boards of Accountancy (CFC), on revenue recognition over time, and is presented consistently with the standards issued by the Securities and Exchange Commission applicable to preparation of the Quarterly Information (ITR). The quarterly information was prepared based on the historical cost, unless otherwise stated. In the financial statements presented by the Company in the period ended September 30, 2018, P&L recorded in the Company and consolidated statements differs due to the unrealized profit from intercompany operations Reconciliation of net working capital The interim financial information was prepared in the ordinary course of business. When preparing the financial information, management assessed the Company s ability to continue as a going concern. The Company recorded current liabilities in excess of current assets, in consolidated, by R$103,418 (R$ 29,938 in 2017). As shown in Note 13, the Company records current liabilities of R$48,712 (R$48,712 in 2017) corresponding to advance for construction of Catarina Aeroporto Executivo, which will be settled upon delivery of the indivisible part of the airport, classified as noncurrent assets, according to Notes 4.b and 14a of the individual and consolidated financial statements for the year ended December 31, 2017, and R$20,000 (R$0 in 2017) referring to the down payment received from XP Malls Fundo de Investimento Imobiliário FII for the sale of assets, classified in noncurrent assets (Note 28). We point out that the lease agreements related to the shopping malls and commercial units are accounted for under the straight-line method, on an accrual basis, and future contractual balances receivable agreed with lessees, which will be part of the cash generation for settlement of debts, was not recognized. The amount of future cash generation is indirectly represented by the fair value of investment properties, recorded in noncurrent assets, which are substantially measured at fair value based on the discounted cash flow method (see Note 24). PÁGINA: 24 de 56

26 2.3. Approval of the quarterly information The interim financial information was approved by the Company s Board of Directors and authorized for filing on November 8, Restatement of the financial statements as of September 30, 2017 The need to adjust certain book balances of the Company and its subsidiaries was identified, retroactively to January 1, 2017, due to the correction of errors, including reclassifications, which were reflected in the restated data as of September 30, The effects on the Company and consolidated information are as follows: January 1, 2017 Company Statements and of consolidated changes in equity - Company and consolidated Original Adjustment Restated Equity at January 1, ,217,182 (40,394) 2,176,788 Capital 914, ,183 Other equity accounts 20,185-20,185 Income reserves (a) 1,270,675 (59,766) 1,210,909 Equity of non-controlling interests (a) 12,139 19,372 31,511 September 30, 2017 Statements of changes in equity - Company and consolidated Original Adjustment Restated Equity at September 30, ,160,304 (39,153) 2,121,151 Capital 915, ,254 Other equity accounts (36,751) (1,667) (38,418) Income reserves (a) 1,270,675 (59,767) 1,210,908 Equity of non-controlling interests (b) 11,127 22,280 33,407 September 30, 2017 Statements of cash flows - Company Original Adjustment Restated From operating activities (c) / (d) 248,370 (368,448) (120,078) From investing activities (d) (155,488) 284, ,025 From financing activities (c) (145,940) 83,935 (62,005) September 30, 2017 Statements of cash flows - Consolidated Original Adjustment Restated From operating activities (c) / (d) 288,807 (384,645) (95,838) From investing activities (d) (41,149) 284, ,364 From financing activities (c) (303,170) 100,132 (203,038) September 30, 2017 Statements of value added - Consolidated Original Adjustment Restated 1. Revenue (e) 271, , , Inputs (e) (208,800) (4,783) (213,583) 3. Gross value added 63, , , Retentions (11,622) - (11,622) 5. Net value added generated 51, , , Value added received in transfer (e) 102,244 (99,661) 2, Value added to be distributed 153,704 33, , Distribution of value added 153,704 33, ,658 PÁGINA: 25 de 56

27 (a) Adjustments to the statements of changes in equity reflect the adjustments for which the Company identified the need to restate regarding book balances at January 1, 2016 and December 31, 2016, as stated in Note 2.3 to the financial statements as of December 31, (b) The adjustments in the statement of changes in equity under Equity of non-controlling interests reflect the adjustments of the book balances as of January 1, 2016 and December 31, 2016, as shown in Note 2.3 to the financial statements. Furthermore, the book balance error in non-controlling interests presented at September 30, 2017 was corrected. (c) In the statements of cash flows as of March 31, 2017, the Company reclassified the amount of interest paid on loans, financing and debentures from the financing activities group to the operating activities group. (d) The Company adjusted non-cash effects stated in the cash flow from investing activities and cash flow from operating activities referring to the cash flow from sale of assets and equity interests. (e) The Company reclassified the amount referring to changes in fair value of investment properties, previously classified in value added received in transfer, and the amount referring to allowance for doubtful accounts, previously classified as inputs, to the revenues group. In addition personnel costs, previously classified as inputs, were reclassified to the personnel and charges group 3. New standards, amendments and interpretations of standards not yet effective at September 30, 2018 The Company elected not to early adopt any other standard, interpretation or amendment issued, but not yet effective. The nature and effectiveness of each of the new standards and amendments are set out below: Pronouncement Description Effectiveness CPC 06 (R2) Leases This refers to the definition and guidance on Annual periods beginning on or after lease agreements contained in IAS17. January 1, 2019 The Company will evaluate the impact of the new standard on its individual and consolidated financial statements and, if applicable, will adopt the respective pronouncement on the effective date and based on the required method. There are no other pronouncements or interpretations of IFRS/CPCs that have not yet come into effect until the date of issue of this quarterly information that could have a material impact on the Company s financial statements. PÁGINA: 26 de 56

28 4. Cash and cash equivalents and marketable securities Company Consolidated Cash and banks 577 3,232 4,151 7,818 Short-term investments (a) (Notes 22.1 and 22.2) 862-1,685 1,308 Cash and cash equivalents (Note 22.3) 1,439 3,232 5,836 9,126 JHSF Catarina Corporate - FII (b) 4,445 4,460 23,153 23,227 JHSF Catarina Corporate Berlim (b) 18,134 18, JHSF Rio Bravo Fazenda Boa Vista (b) Marketable securities (Notes 22.1, 22.2 and 22.3) 22,579 22,758 23,153 23,786 Total 24,018 25,990 28,989 32,912 (a) Short-term investments classified as cash equivalents are recorded at fair value through profit or loss, and refer to bank deposit certificates, which reflect the usual market conditions and can be redeemed within 90 days. They are highly liquid, have no risk of significant changes in value due to fluctuation of interest rates, and are remunerated at the rate of 98.8% of the Interbank Deposit Certificate (CDI) rate (98.5% of CDI in 2017). They are measured at fair value against profit or loss. (b) Details and characteristics of marketable securities can be found in Note 4 to the 2017 annual financial statements. Marketable securities referring to Catarina Corporate Berlim are eliminated in the consolidation of the financial statements, and presented only in the Company s financial statements. 5. Accounts receivable Company Consolidated Accounts receivable from real estate units (a) 51,718 42, , ,888 Leases ,525 30,851 Hotels and restaurants - - 7,168 10,979 Key money - - 8,671 7,569 Parking lots - - 1,992 2,274 Provision of services - - 2,349 3,792 Other (b) 8,090 6,734 10,231 7,485 Total accounts receivable (Note 22.1) 59,808 48, , ,838 (-) Present value adjustment - - (1,834) (1,220) (-) Allowance for doubtful accounts - - (32,822) (39,388) Total (Note 22.2) 59,808 48, , ,230 Current , ,111 Noncurrent 59,808 48, , ,119 (a) The balance in the Company refers to accounts receivable in US dollars translated to Brazilian reais on the reporting date, from Las Piedras venture in Uruguay, assigned by JHSF Uruguay in the amount of R$51,718 (R$42,247 at December 31, 2017), whose changes derive from foreign exchange differences for the period + Libor. (b) The balance of R$8,090 (R$6,734 at December 31, 2017), Company, refers to accounts receivable for the sale of entities abroad (Note 14). PÁGINA: 27 de 56

29 The aging list of accounts receivable is as follows: Consolidated Aging list Overdue above 365 days 36,265 51,412 Overdue from 91 days to 365 days 6,503 20,224 Overdue from 61 days to 90 days Overdue from 31 days to 60 days 824 6,144 Overdue within 30 days 3,165 3,946 Total overdue 47,674 82,613 Falling due within 365 days 111,471 80,106 Falling due above 365 days 123, ,119 Total falling due 234, ,225 Total 282, ,838 Overdue balances in the table above, for which no allowance for doubtful accounts was set up, refer to notes that have been renegotiated, whose customers are not in default. The aging list reflects the original date of each note, with no change in the original dates of the overdue notes that were renegotiated. Details on the accounts receivable policy and on ADA are shown in Note (b) to the 2017 annual financial statements. Changes in allowance for doubtful accounts are as follows: Consolidated Balances at December 31, 2017 (39,388) Net changes in the six-month period (Note 20) Balances at September 30, 2018 (32.822) 6. Properties for sale Consolidated Development properties 356, ,912 Units completed Fazenda Boa Vista 226, ,334 Cidade Jardim Townhouses 14,027 12,285 Horto Bela Vista 4,682 7,370 Mena Barreto 8,681 8,417 Total 610, ,318 Current 113, ,214 Noncurrent 497, ,104 The Company annually tests its properties for sale for impairment, and quarterly assesses if there is any indication of impairment considering the scenarios analyzed in the annual testing. For the period ended September 30, 2018, management detected no need to adjust assets for impairment. PÁGINA: 28 de 56

30 Classification of inventories as noncurrent assets considered the prospect of sale of properties and launching of development properties. 7. Investments (Company) Company Net amount of goodwill on acquisition of investments 2,782 2,782 Investments: Investments in subsidiaries and affiliates (a) 2,512,307 2,375,750 Total equity interest 2,512,307 2,375,750 Total investments 2,515,089 2,378,532 (a) The Company s direct subsidiaries and significant financial information is as follows: % interest Assets Liabilities Equity (capital deficiency) P&L Investee Aveiro Incorporações Ltda , ,143 38,370 34, , ,581 (4,032) (16,612) Boa Vista de Desenvolvimento Imobiliário Ltda , , , , , ,525 14,414 11,375 Hotéis Fasano & Resorts S.A ,357 63,764 2,489 2,489 62,869 61,276 1,593 (756) Hotel Marco Internacional S.A. (a) ,725 93,983 38,977 32,574 63,748 61,409 1,850 (879) Infinitum Incorporações Ltda ,772 15,438 2, ,990 15,018 (1,027) (785) JHSF Administradora do Catarina Aeroporto Executivo S.A , , , , , ,087 (89) (107) JHSF Engenharia Ltda ,230 4,718 3, ,876 4,036 (1,159) 28 JHSF Incorporações Ltda ,131,055 1,039,714 4,259-1,126,796 1,039,714 93,388 73,679 Nova TH Empreendimentos e Incorporações ,379 30,227 12,396 12,235 17,982 17,992 (9) (4) Polônia Incorporações Ltda , , , , , ,573 8,376 - JHSF Malls S.A. (b) ,458,571 2,243,378 1,119,762 1,078,421 1,338,809 1,164, ,718 6,481 Other investees , (1,671) (37) (1,634) (1,445) Total 5,617,400 5,226,151 1,922,862 1,809,021 3,694,535 3,417, ,389 70,975 (a) The Company holds direct interest of 13.90% and indirect interest of 86.10%. (b) The Company holds direct interest of 17.16% and indirect interest of 82.83% PÁGINA: 29 de 56

31 Changes in investments for the period ended September 30, 2018 and year ended December 31, 2017 are shown below: Opening balance Capital increase - 514,668 Reflections of fair value adjustment of marketable securities (102) (2,617) Equity pickup 118,324 64,862 Equity interest adjustments - 73,908 Reversal of dividends (Note 14) 14,248 - Transfer of investments - (435,064) Capital deficiency 4,087 2,172 Closing balance 2,512,307 2,375, Property and Equipment Changes in property and equipment for the period ended September 30, 2018 and year ended December 31, 2017 are shown below: Company Consolidated Opening balance residual value 12,682 11, , ,458 Additions (a) - 2,094 26,325 22,226 Capitalized interest (b) ,544 40,271 Transfers (2,482) 995 (2,482) (93,114) Write-offs Depreciation (Note 19) (1,588) (1,743) (8,642) (10,250) Closing balance residual value 8,613 12, , ,592 (a) Additions for the period ended September 30, 2018 and year ended December 31, 2017 refer substantially to the construction of São Paulo Catarina Aeroporto Executivo. (b) Interest on loans, financing and debentures of the portion of debt used in the acquisition or construction of property and equipment items is allocated to the cost of such assets. At September 30, 2018, capitalized interest in Consolidated amounted to R$33,544 (R$23,490 at September 30, 2017) (Note 21) and refers to the construction of São Paulo Catarina Aeroporto Executivo. For further details on property and equipment balances, see Note 8 to the 2017 annual individual and consolidated financial statements. The Company conducts annual impairment tests and quarterly assessments of indication of impairment considering the scenarios analyzed in the annual testing. For the period ended September 30, 2018, management detected no need to adjust assets for impairment. PÁGINA: 30 de 56