CONSORCIO ARA, S. A. B. DE C. V. (ARA*) RESULTS FOR THE THIRD QUARTER OF 2018 (3Q18)

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1 CONSORCIO ARA, S. A. B. DE C. V. (ARA*) RESULTS FOR THE THIRD QUARTER OF 2018 (3Q18) (All figures in millions of pesos) Mexico City, October 24, 2018 Consorcio ARA, S.A.B. de C.V. ( ARA BMV: ARA*) reports its results for 3Q18. I. Remarks by the Chief Executive Officer Valle Esmeralda, Nayarit Puerta al Sol, Guerrero Paseos de Xcacel, Quintana Roo Las Misiones II, Estado de México Germán Ahumada Russek remarks: In the first nine months of the year, we brought in revenues of P$6.10 billion, a growth of 1% and in line with our projections. This year we have the opening of eleven new housing developments that will enable us to continue serving the Middle-Income and Residential segments. Because of the maturation of these projects we expect the fourth quarter of 2018 to be the most representative in terms of revenues, with double-digit growth. I should mention that currently ten out of eleven new developments are in the construction process, and six are already in the sell-in phase, so starting in the fourth quarter, and in future quarters, the revenues from these new projects will be reflected in our results. In the third quarter of 2018, we sold a total of 3,187 homes, 4.3% more than in the same period of last year, primarily due to a higher volume of sales in the Affordable Entry-Level segment. Total revenues came to P$2.15 billion, a 3.9% decline from the same period of 2017, which was the highest level reached last year. The decline was due to a reduction in revenues in the Middle-Income and Residential segments. Middle-Income home sales were P$571.9 million, an 8.5% decline; and Residential home sales came to P$494.2 million, falling 38.3%. As we have explained in previous quarters, this decline was the result of our completion of various projects, but as I mentioned above, these segments should recover in coming quarters with the revenues from new projects. The Affordable Entry-Level segment continued its positive trend with revenues of P$1.03 billion, a double-digit growth of 36.2%. With regard to this segment, I d like to point out that on September 25, Consorcio ARA was awarded the National Housing Prize 2016 for its Misión de las Flores III housing development in the Affordable Entry-Level category, based on features like its location, urban design, densification, service feasibility, connectivity, financing, affordability and accessibility to people with disabilities. We are grateful to CONAVI, along with INFONAVIT, FOVISSSTE, SHF and FONHAPO for this distinction, which makes us very proud and motivates us to continue offering Mexican families quality homes, with added value that helps them build their equity. This was our sixth consecutive quarter of positive Free Cash Flow to the Firm, which totaled P$224.9 million in 3Q18. In the first nine months of the year we generated a Flow of P$778.8 million, which is commendable considering the amount of investment we have devoted to new developments. With this we have strengthened our position in Cash and Equivalents to a record high of P$2.87 billion, equivalent to 38% of ARA s market capitalization. Our leverage ratios as of September 30, 2018 remained healthy, with cost-bearing debt to EBITDA at 2.09 times and net debt to EBITDA negative by times, because our balance in Cash and Equivalents was higher than our cost-bearing debt. We confirm our guidance on results for this year, with revenue growth of more than 6% and a net margin of around 10%, as well as positive Free Cash Flow to the Firm of about P$450 million. Dream Lagoons Cancún, Quintana Roo Finance and Investor Relations Alicia Enriquez (5255) aenriquez@ara.com.mx (5255) x. 4096

2 Note: On January 1, 2018, two new accounting standards took effect: IFRS 15, Revenue from contracts with customers, and IFRS 9, Financial instruments. For this reason, the 3Q17 figures presented here have been restated for the purposes of comparison with 3Q18. II. Overview 3Q18 vs. 3Q17 Revenues rose to P$2.15 billion, a decline of 3.9%. A total of 3,187 homes were sold in the quarter, a 4.3% increase, and the average price was P$657,300, a decrease of 7.9%. Operating income was P$261.2 million, a decline of 11.0%, and the operating margin was 12.2%. EBITDA came to P$317.6 million, a reduction of 5.4%, and the EBITDA margin was 14.8% Net income was P$229.4 million, declining by 29.5%, and the net margin was 10.7%. Excluding tax benefits in 3Q17, net profit would have risen 1.5%. Free Cash Flow to the Firm was positive by P$224.9 million. Jan-Sep 18 vs. Jan-Sep 17 Revenues rose to P$6.10 billion, a growth of 0.9%. A total of 8,895 homes were sold in the quarter, a 5.7% increase, and the average price was P$666,000, a decline of 4.7%. Operating income was P$741.1 million, a decline of 2.7%, and the operating margin was 11.7%. EBITDA came to P$891.8 million, an increase of 0.2%, and the EBITDA margin was 14.6%. Net income was P$611.2 million, an 8.6% decline, and the net margin was 10.0%. Excluding tax benefits in 3Q17, net profit would have risen 7.5%. Free Cash Flow to the Firm was positive by P$778.8 million. Results (Millions of pesos) 3Q18 3Q17 Chge. % Jan-Sep'18 Jan-Sep'17 Chge. % Revenues 2, , , , Sales (homes) 3,187 3, ,895 8, Average price (thousands of pesos) Gross profit , , Income from operations Net income Net profit excluding tax benefits EBITDA (1) Gross margin 26.6% 27.4% 26.7% 27.2% Operating margin 12.2% 13.1% 11.7% 12.1% Net margin 10.7% 14.6% 10.0% 11.1% Net margin excluding tax benefits 10.7% 10.1% 10.0% 9.4% EBITDA margin 14.8% 15.0% 14.6% 14.7% Free Cash Flow to the Firm (1) EBITDA: Income from operations excluding depreciation, capitalized interest expense that was transferred to cost, and other income (expense) - net

3 Financial Position (Millions of pesos) As of Sep'18 As of Dec'17 Chge. % Cash and cash equivalents 2, , Cost bearing liabilities 2, , Net debt ,165.6 Cost bearing liabilities (Times) As of Sep'18 As of Dec'17 Change / Stockholders equity / Total assets / EBITDA (12m) Net debt / EBITDA (12m) Net debt / Stockholders equity Interest coverage: 3Q18 3Q17 Chge. 9M18 9M17 Chge. EBITDA / Interest expense Land Bank As of September 30, 2018, ARA s land bank had an assessed value of P$4.75 billion and included 34.3 million m 2, enough to build 131,147 master-plan homes. This land bank includes 2.3 million m 2 set aside for non-housing development, such as the retail properties, tourist resorts and industrial zones

4 III. Third Quarter Results 2018 / 2017 (3Q18 / 3Q17) Revenues 100% 80% Revenues 3Q18 / 3Q17 Other Real Estate Proj. 2.5% 2.4% Residential 23.0% 35.8% In 3Q18, revenues totaled P$2.15 billion, and fell by -3.9% compared to the same period of last year. Revenues as home builder totaled P$2.10 billion, a 4.0% decline compared to 3T17. The breakdown of revenues by segment was as follows: 60% 40% 20% 0% 100% 80% 60% Middle Income Affordable Entry Level Residential 26.6% 47.9% 3Q18 Units 3Q18 / 3Q17 8.2% Middle Income 19.4% 28.0% 33.8% 3Q % 26.4% 3Q18 3Q17 Chge. 3Q 18/17 Units Mill. $ Rev% Units Mill. $ Rev% Mill. $ % Affordable Entry Level 2,307 1, , Middle Income Residential Total as Home Builder 3,187 2, ,055 2, Other Real Estate Projects Total 3,187 2, ,055 2, The Affordable Entry-Level housing segment continued its positive trend and in 3Q18 showed double-digit growth of 36.2% compared to 3Q17. This growth originated mainly in revenues from new developments. As for the Middle-Income and Residential segments, revenues dropped by -8.5% and -38.3%, respectively, due to the conclusion of some developments. In 2018 we have the opening of eleven new developments that will enable us to continue serving the Middle-income and Residential segments, so starting in the fourth quarter we should see a recovery in these revenues. Revenues from homes sold with federal government subsidies in 3Q18 accounted for 13.1% of total revenues, up from 6.1% in 3Q17. In 3Q18, we sold 3,187 homes, 4.3% more than in the same quarter of last year. This growth is attributable to a 27.5% rise in homes sold in the Affordable Entry Level segment and offset by a reduction of 23.1% in sales of Middle-Income homes and 40.8% in Residential segment homes. 40% Affordable Entry Level 72.4% 59.2% Homes in vertical developments accounted for 61.7% of the total number sold in 3Q18, higher than the 50.5% reported in 3Q17. 20% 0% 3Q18 3Q17 Sales of "Other Real Estate Projects" (primarily land sales and shopping center leases) accounted for 2.5% of total revenues in 3Q18 (2.4% in 3Q17). This line declined by a slight 0.8% from the third quarter of last year to 3Q

5 Percentage of titled homes by type of financing 3Q18 / 3Q17 3Q18 3.8% INFONAVIT Total and Cofinavit 3Q17 5.2% INFONAVIT Total and Cofinavit 64.9% INFONAVIT 18.7% FOVISSSTE 58.5% INFONAVIT 23.4% FOVISSSTE 12.6% 12.9% Banks and No Credit Banks and No Credit 68.7 % Total INFONAVIT 63.7 % Total INFONAVIT Aff. Entry Level AVERAGE Middle Income Residential Average sales prices by type of housing unit 3Q18 (Thousands of pesos) , ,000 1,200 1,400 1,600 1,800 2,000 2,200 The average price of the homes sold in 3Q18 was P$657,300, a reduction of 7.9% over the same period of last year, due to the higher weight of the Affordable Entry Level segment in the revenue mix. By housing segment, the average prices of Affordable Entry Level, Middle Income and Residential homes rose 6.8%, 19.0% and 4.2%, respectively. Costs In 3Q18, costs totaled P$1.58 billion, which compared to the P$1.62 billion reported in 3Q17, declined by -2.7%, primarily because of the reduction in revenues. Costs in 3Q18 were equivalent to 73.4% of total revenues with an 80bp increase, due to a higher contribution from Affordable Entry-Level homes to the revenue mix, higher capitalized interest transferred to costs, and because of the increase in the cost of certain materials. Gross Profit At the close of 3Q18, gross profit totaled P$571.0 million, a reduction of -6.9% compared to the same period of last year, because of both lower revenues and higher costs. The gross margin in 3Q18 was 26.6%, a reduction of 80bp compared to 3Q17. General Expenses In 3Q18, general expenses, which include wages and compensation for administrative and sales personnel as well as sales expense, came to P$309.7 million, a decline of -4.3% compared to 3Q17. General expenses in 3Q18 were equivalent to 14.4% of revenues, 10bp lower than in 3Q17. Operating Income Operating income for 3Q18 was P$261.2 million, 11.0% lower than in 3Q17, attributable mainly to lower revenues and higher costs. The operating margin in 3Q18 was 12.2% for the quarter, down 90bp from the 3Q17 margin

6 Financial Income - net 3Q18 3Q17 Change Mill $ Mill $ Mill $ % Net interest expense Interest income Exchange loss (gain) ,104.2 Loss on derivatives Financial income - net Q18 3Q17 Change Mill $ Mill $ Mill $ % Interest expense Capitalized interest expense Net interest expense Financial income - net in 3Q18 was P$32.6 million, compared to P$20.0 million in 3Q17. Most of our net financial income in 3Q18 came from interest income. Exchange-rate fluctuations in 3Q18 resulted in a foreign-exchange loss of P$5.8 million, primarily resulting from the valuation of dollar investments (cash equivalents). Derivatives loss in 3Q18 totaled P$1.4 million was the result of instruments taken out to hedge certain loans (see Debt section). Capitalized interest expense is based on the weighted average acquisition of inventories (which includes land and work in process). The interest is capitalized into inventories and transferred to costs as revenues from the corresponding developments are entered. In 3Q18 and 3Q17, capitalized interest expense included in inventories was P$56.2 million in each of the quarters. At the same time, capitalized interest expense of P$42.5 million was transferred from inventories to costs in 3Q18, compared to P$31.8 million in 3Q17. Income tax ARA s tax bill for 3Q18 totaled P$84.2 million, corresponding to an Income Tax rate of 30% of net fiscal earnings. Net income Net income in 3Q18 was P$229.4 million, with a -29.5% decline compared to the same period of last year, due to the favorable effect of P$99.7 million recognized in 3Q17 in connection with the adoption of a tax rule. Excluding that effect, net profit in 3Q18 would have risen 1.5% in comparison to the same quarter of last year. The net margin was 10.7% in 3Q18, 390bp lower than in 3Q17, and excluding the above-mentioned effect, the net margin in 3Q18 was 60bp higher than in the same period of the previous year. EBITDA Reconciliation of net income with EBITDA 3Q18 3Q17 Change Mill $ Mill $ Mill $ % Net income Depreciation Capitalized interest paid transferred to costs Income taxes Equity method in joint ventures Other expense (income) - net Financial income - net EBITDA In 3Q18, ARA generated P$317.6 million in EBITDA, a 5.4% reduction compared to 3Q17. The EBITDA margin was 14.8%, 20bp lower than the 3Q17 margin

7 IV. Results January-September 2018 / 2017 (9M18 / 9M17) Revenues Revenues 9M18 / 9M17 100% 80% 60% 40% 20% 0% 100% 80% 60% Other Real Estate Proj. Residential Middle Income Affordable Entry Level Residential 2.9% 2.7% 24.3% 26.3% 46.5% 9M18 Units 9M18 / 9M17 8.5% Middle Income 19.5% 34.1% 29.0% 34.2% 9M % 26.8% In Jan-Sep 18 housing revenues came to P$5.92 billion, which was 0.7% higher over the same period of last year. Revenues from Other Real-Estate Projects, primarily land sales and leasing revenues, came to P$176.3 million, and increased 10.0% due to higher leasing revenues from the shopping centers. All together, revenues in Jan- Sep 18 totaled P$6.10 billion, an increase of 0.9% over the same period of last year. The breakdown of revenues by segment was as follows: Jan-Sep'18 Jan-Sep'17 Chge. 9M 18/17 Units Mill. $ Rev% Units Mill. $ Rev% Mill. $ % Affordable Entry Level 6,403 2, ,999 2, Middle Income 1,734 1, ,256 1, Residential 758 1, ,162 2, Total as Home Builder 8,895 5, ,417 5, Other Real Estate Projects Total 8,895 6, ,417 6, Revenues in the Affordable Entry-Level housing segment between Jan-Sep 18 grew at a double digit rate of 37.1% compared to the same period of last year. This growth was due primarily to revenues from new developments. Revenues in the Middle-income and Residential segments fell by -8.4% and -28.2%, respectively, due to the completion of certain developments. In 2018 we have the opening of eleven new developments that should enable us to continue serving the Middle- Income and Residential segments, so these revenues should see a recovery starting in the fourth quarter of this year. Revenues from the sale of homes sold with federal government subsidies accounted for 12.5% of total revenues in Jan-Sep 18, up from 7.2% in the same half of last year. 40% 20% Affordable Entry Level 72.0% 59.4% Between January and September, 2018, we sold 8,895 homes, 5.7% more than in the same period of last year. This growth is attributable to a 28.1% rise in homes sold in the Affordable Entry Level segment and offset by a reduction of 23.1% in sales of Middle-Income homes and 34.8% in Residential segment homes. 0% 9M18 9M17 Homes in vertical developments accounted for 59.2% of the total number sold in the Jan-Sep 2018 period, higher than the 49.6% reported in Jan-Sep

8 Percentage of titled homes by type of financing 9M18 / 9M17 9M18 4.4% INFONAVIT Total and Cofinavit 9M17 5.0% INFONAVIT Total and Cofinavit 64.4% INFONAVIT 19.1% FOVISSSTE 55.5% INFONAVIT 25.6% FOVISSSTE 12.1% 13.9% Banks and No Credit Banks and No Credit 68.8 % Total INFONAVIT 60.5 % Total INFONAVIT Aff. Entry Level AVERAGE Middle Income Residential Average sales prices by type of housing unit 9M18 (Thousands of pesos) , ,000 1,200 1,400 1,600 1,800 2,000 2,200 The average price of the homes sold in Jan- Sep 2018 was P$666,000, a reduction of 4.7% over the same period of last year, due primarily to the higher weight of the Affordable Entry Level segment in the revenue mix. By housing segment, the average prices of Affordable Entry Level, Middle Income and Residential homes rose 7.1%, 19.2% and 10.0%, respectively V. Financial position, liquidity and capital resources Cash and cash equivalents As of September 30, 2018, cash and cash equivalents totaled P$2.87 billion, an increase of 25.5% over the balance at the close of This increase is attributable primarily to Free Cash Flow to the Firm generated in the first nine months of the year. Accounts receivable Accounts receivable on September 30, 2018 totaled P$671.0 million and was 2.3% lower than the balance as of December 31, Accounts receivable turnover remained at one month. Inventories As of September 30, 2018, ARA reported P$14.15 billion in inventory, which includes: i) P$4.75 billion in land currently under development and for future development, and ii) P$9.40 billion in works in progress (building, urbanization, infrastructure, equipment, licenses and capitalized interest expense), and construction materials storage

9 The table and map below show the geographic distribution of ARA s land bank: State Units % State of Mexico 43, Quintana Roo 34, Jalisco 7, Baja California 6, Nuevo León 5, Hidalgo 5, Guanajuato 4, Guerrero 4, Veracruz 4, Nayarit 3, Puebla 3, Sonora 1, Morelos 1, Subtotal 126, Others (5 states) 5, Total 131, Land bank by type housing unit as of September 30, 2018 Middle Income 24,628 Affordable Entry Level 94, % 18.8% 9.3% 131,147 master-plan homes Residential 12,282 Land Bank / Revenues by housing type Percentage obtained by multiplying units per LMT average price. 48% Affordable Entry Level 25% Middle Income 27% Residential - 9 -

10 Property, machinery and equipment ARA is a vertically integrated Company, which allows us to both generate and take fuller advantage of significant economies of scale. Our Concrete, Machinery and Falsework division (COMACI) is a strategic unit that provides the machinery and equipment necessary for our construction, cast-in-place wall and falsework, as well as our supply of ready-mix. As of September 30, 2018, the Company had P$187.4 million invested in property, machinery and equipment. Debt and Net Debet As of September 30, 2018 cost-bearing debt (securities market debt, bank loans and financial leasing) totaled P$2.55 billion, a 10.1% increase compared to the balance of P$2.32 billion reported on December 31, The increase originated primarily in 3Q18 and was attributable to the second and last withdrawal of P$250 million of a simple unsecured bank loan signed in 2Q18, as well as a simple secured loan obtained for the expansion of one of our six shopping centers, Centro San Miguel, of which P$77.6 million was withdrawn, which is discussed below. The breakdown of our cost bearing debt is 19% short-term and 81% long-term. All of the cost-bearing debt was denominated in pesos. 52.2% of cost-bearing debt corresponds to an issuance of unsecured long-term securities certificates issued in December 2017 for P$1.35 billion (P$1.33 billion net of placement expenses pending accrual). The term is 5 years, with target principal repayment in 26 installments starting in year 3, and the rate is 250bp over the Interbank Equilibrium Interest Rate (TIIE). The ARA17 securities certificates are rated A+ by HR Ratings de México and mxa+ by S&P Global Ratings. As of September 30, 2018, the balance of the two simple unsecured bank loans taken out in 2Q18 was P$747.2 million, and accounted for 29.3% of cost-bearing debt. The first of the two loans was for P$300 million, and the balance at the close of 3Q18 was P$275 million, at an interest rates of 215bp over the TIIE and a term of three years, with quarterly payments of principal and interest payable monthly. The second loan was for P$500 million, and the balance at the close of September 2018 was P$472.2 million, with an interest rate of 230bp over the TIIE, a term of three years, and monthly principal and interest payments. Both simple loans are backed by a Federal Mortgage Society (SHF) guarantee for up to 50% of the outstanding balance of the debt. As of September 30, 2018, the balance of bridge loans was P$107.6 million, representing 4.2% of cost bearing debt. The interest rate paid on most of these loans is 285bp over the TIIE, and they expire in terms of between 2 and 3 years. As of September 30, 2018, the balance of the simple loans secured by real property, collection rights, partnership shares and stock in the two shopping centers that are 100% owned by ARA, was P$350.8 million, and accounted for 13.8% of the costbearing debt. This balance includes the withdrawal of P$77.6 million of a new simple credit for up to P$170 million secured by industrial property, stocks, collection rights and the administration and payment trust. The term is 17 years, and the rate is 275 basis points above the TIIE during the construction phase, reducing to 250 basis points during the operating phase. As I mentioned earlier, this loan was taken out for the expansion of the Centro San Miguel, one of our six shopping centers. For some of these loans we took out derivative instruments for hedging purposes (interest rate caps at 8% with no spread and interest rate swaps of 8.035% with no spread), expiring in 2019 and In financial leasing, a source of funding for the acquisition of machinery and equipment, the outstanding balance as of September 30, 2018, was P$18.9 million. Net debt as of September 30, 2018 was negative by -$318.4 million, due to a higher balance of Cash and Cash Equivalents

11 Cost bearing liabilities As of Sep'18 As of Dec'17 (Times) Change / Stockholders equity / Total assets / EBITDA (12m) Net debt / EBITDA (12m) Net debt / Stockholders equity Total Liabilities / Total Assets 34.5% 33.2% 130 bp Total Liabilities (a) / Total Assets 21.3% 20.6% 70 bp Total Liabilities / Stockholders equity 52.6% 49.7% 290 bp For twelve years in a row, ARA has had the highest credit ratings in the Mexican homebuilding sector, from Standard and Poor s mxa+ (CaVal National Scale), and Moody s Investor Services (Ba2 Global Scale, Local Currency) and A2.mx (Mexico National Scale). Furthermore, in 2017 ARA received an A+ rating from HR Ratings. (a) Deferred income tax not included. Other financial ratios In addition to the debt ratios presented previously, the following table contains further indicators of this firm s solid financial structure. As of Sep'18 As of Dec'17 Liabilities in Foreign Currency / Total Liabilities 0.1% 0.1% Cash and Investments / Current Liabilities 134.7% 102.1% Revenues / Total Liabilities 1.22 veces 1.21 veces Current Assets / Current Liabilities 7.19 veces 6.49 veces Current Assets (-) Inventories / Current Liabilities 1.90 veces 1.58 veces Deferred income tax The deferred income tax liability is produced basically by the deductibility of land acquisitions. The balance as of September 30, 2018 was P$2.60 billion, a 9.7% increase over the amount reported at the close of Stockholder s equity Consorcio ARA s stockholders equity totaled P$12.99 billion as of September 30, Of this amount, 92.3% corresponded to accumulated earnings, which totaled P$11.98 billion. Earnings Per Share (EPS) For the last twelve months ended September 2018, earnings per share (EPS) was P$0.654, compared to P$0.667 in last twelve months ending September 2017, a slight decline of 1.9%

12 VI. Shopping malls ARA has a unit devoted to developing, managing and marketing shopping centers. These shopping centers are strategically located in areas of high demographic growth potential, typically inside or close to ARA s housing developments, serving as a major source of added value for those developments. The following table shows the geographic location of the developments and their Gross Leasable Area (GLA), as of September 30, 2018: Shopping center State GLA* (m 2 ) % Centro Las Américas State of Mexico 61, Paseo Ventura State of Mexico 25, Centro San Miguel State of Mexico 38, Plaza Centella State of Mexico 14, Centro San Buenaventura State of Mexico 11, Plaza Carey Veracruz 20, Total 173, * Gross Leasable Area In addition, ARA has 7,686m 2 in uni and mini shopping center formats, bringing the full total of Gross Leasable Area to 180,840m 2. The occupancy rate as of September 30, 2018 was 95.2%. Between January and September 2018 revenues totaled P$236.5 million and Net Operating Income (NOI) was P$165.3 million, increases of 11.8% and 9.7%, respectively, compared to the same period of last year. As has been the case since the second quarter of last year, this growth was due primarily to the opening of the Paseo Ventura shopping center in late March For 2018, NOI is estimated at P$225 million, which would be around 11% higher than in These results correspond to shopping centers that are 100% owned by ARA and are consolidated into our financial statements -Centro San Miguel, Plaza Centella, Centro San Buenaventura and Plaza Carey, uni and mini as well as 50% of Centro las Américas and Paseo Ventura, according to our stake in those properties, which are entered under the equity method. As planned, on September 28, we successfully opened part of the expansion at Centro San Miguel, which added 13,000 m 2 to our portfolio, with a total estimated investment of P$351.8 million, of which P$267.2 million has already been invested. 74% of this expansion is already rented out, and 13% is in the signing process. VII. Closing Remarks Dividend payment On July 13, a dividend of P$180 million was paid out, having been approved in the General Ordinary Shareholders Meeting of April 24, Note that this dividend was paid out of the Net Tax Income Account (CUFIN) generated prior to fiscal year 2014, so it was exempt from tax withholding. Consorcio ARA awarded National Housing Prize 2016 On September 25, Consorcio ARA was awarded the National Housing Prize 2016 for its Misión de las Flores III housing development in the Affordable Entry-Level category, based on features like its location, urban design, densification, service feasibility, connectivity, financing, affordability and accessibility to people with disabilities

13 Misión de las Flores III is located in the municipality of Solidaridad, in Playa del Carmen, Quintana Roo, with a surface area of a little over 150,000m 2, where we built 1,200 vertical housing units on four levels. Consorcio ARA is grateful to National Housing Commission (CONAVI), the National Workers Housing Fund Institute (INFONAVIT), the Housing Fund of the Social Security and Services Institute for State Workers (FOVISSSTE), the Federal Mortgage Society (SHF) and the National Low-Income Housing Fund Trust (FONHAPO), for this distinction. Conference Call and Webcast ARA will hold its conference call to discuss the Company s 3Q18 results on Thursday, October 25, 2018 at 10:00 a.m. (Central Daylight Time) 11:00 a.m. (Eastern Daylight Time). In order to connect to the call, please dial up ten minutes before the conference is scheduled to begin, at one the following numbers: United States International Identification code The Conference Call and presentation will also be transmitted live over the Internet. For access, go to: A recording of the full Conference Call will be available for replay beginning at 1:30p.m. on October 25, 2018 until November 1, 2018 at 10:59 p.m. To listen to the replay please dial one of the following numbers: United States International Identification code Company Profile Consorcio ARA has more than 41 years of experience in the building and marketing of Affordable Entry Level, Middle Income and Residential housing. To date, Consorcio ARA has sold around 353,000 homes and at present approximately 1,412,000 people live in ARA homes. It currently has a presence in 17 states, with 48 developments in operation. Since 1996, when ARA became a publicly traded Company, it has been characterized by a diversified product offering and a long-term vision, with a solid financial structure that is reflected in the efficient use of our working capital, liquidity and a moderate level of debt. Disclaimer The information provided herein by Consorcio ARA may contain forward-looking statements about future events and financial results. The reader should understand that the results obtained may differ from the projections contained in this document, because past results in no way offer any guarantee of future performance. For this reason, the Company assumes no responsibility for any indirect factors or elements beyond its control that might occur inside Mexico or abroad and which might affect the outcome of these projections

14 VIII. Financial Statements Statements of Profit or Loss and other Comprehensive Income Third Quarter Change January-September Change 2018 / Q18 / 3Q / M18 / 9M17 3Q18 % 3Q17 9M17 % $ % 9M18 % Restated Restated % $ % Revenues 2, , (87.0) (3.9) 6, , Costs 1, , (44.4) (2.7) 4, , Gross profit (42.6) (6.9) 1, , (17.0) (1.0) General expenses (13.9) (4.3) (4.2) (0.5) Other (expense) income - net (0.1) (3.6) (103.5) (7.1) (7.1) (511,022) Income from operations (32.3) (11.0) (19.9) (2.7) Financial income - net: Interest expense (3.1) (4.4) (2.6) (1.4) Capitalized interest expense (56.2) -2.6 (56.2) (0.1) (151.8) -2.5 (156.5) (3.0) Interest income (50.0) -2.3 (32.8) -1.5 (17.2) 52.4 (119.7) -2.0 (75.2) -1.2 (44.5) 59.2 Exchange loss (gain) (0.6) (1,104.2) (7.1) (54.0) Loss on derivatives (1.0) (32.1) (32.6) -1.5 (20.0) -0.9 (12.6) 63.0 (75.5) -1.2 (25.0) -0.4 (50.5) Equity method in join ventures (3.5) (15.1) (1.2) (2.0) Income before Income taxes (23.3) (6.9) Taxes: ISR deferred (159.1) (66.1) ISR current (229.2) (101.2) (71.5) (106.2) Net Income (96.1) (29.5) (57.2) (8.6) Other comprehensive income Comprehensive income (96.1) (29.5) (57.2) (8.6) Depreciation (0.3) (2.1) NCFR recognized in costs EBITDA (18.3) (5.4)

15 Statements of financial position ASSETS As of Sep'18 As of Dec'17 Restated Change Amount % CURRENT ASSETS: Cash and cash equivalents 2, , Accounts receivable (2.3) Land for development 1, , (2.7) Work in process (mainly) 9, , Total Inventories 11, , Other current assets (9.6) 15, , NON-CURRENT ASSETS: Golf Club memberships available for sale Investment properties Land for development 2, , Property, machinery and equipment Net (9.1) Investments in joint venture Deferred tax asset (3.8) Derivative financial instrument (89.2) Other non-current assets , , TOTAL ASSETS 19, , CURRENT LIABILITIES: Bank Loans (30.8) Financial Leasing (38.5) Suppliers Other current liabilities (13.8) 2, , (4.9) NON-CURRENT LIABILITIES: Unsecured Securities Certificate and Bank Loans 2, , Financial Leasing (24.3) Deferred income tax 2, , Other Long Term Liabilities (28.8) 4, , TOTAL LIABILITIES 6, , STOCKHOLDERS' EQUITY 12, , LIABILITIES AND STOCKHOLDERS' EQUITY 19, ,

16 Statements of changes in stockholder s equity Common stock Additional paid-in capital (A) Reserve for acquisition of own stock Retained earnings Noncontrolling interest Total stockholders equity Balances as of January 1, 2017 Restated , ,833.4 Net repurchase of own stock Dividends Other Net comprehensive income Balances as of September 30, , ,376.9 Balances as of January 1, , ,615.7 Dividends Net repurchase of own stock Others Net comprehensive income Balances as of September 30, , ,985.8 (A) Includes Premium on sale of repurchased stock

17 Statements of cash flow Jan-Sep'18 Jan-Sep'17 Restated Operating activities: Income before taxes Items related to investing activities: Depreciation Equity in earnings of equity method investees Other Items related to financing activities: Interest expense (Increase) decrease in: Trade accounts receivable - Net Inventories Other assets Increase (decrease) in: Suppliers Other liabilities Income taxes paid Net cash provided by operating activities Investing activities: Investments in equity method investees Purchasing of property, machinery and equipment Disposal of other permanent investments Dividends received from equity method investees Investment property Cash excess to apply to financing activities Proceeds from debt ,098.3 Payment for debt ,155.0 Payments of capital lease obligations Dividends Interest paid Repurchase of own stock - net Decrease in common stock Financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year 2, ,786.6 Cash and cash equivalents at end of the period 2, ,