CETIP S.A. Mercados Organizados

Transcription

1 (A free translation of the original in Portuguese) CETIP S.A. Mercados Organizados Quarterly Information at

2 Quarterly Information at Contents Comments on performance 3-13 Independent auditors review report on interim financial statements Balance sheets 16 Statements of income 17 Statements of comprehensive income 18 Statements of changes in shareholders equity 19 Statements of cash flows 20 Statements of value added 21 Notes to the quarterly information

3 Comments on performance Dear Shareholders, We submit to your appreciation the Quarterly Information of CETIP S.A. Mercados Organizados ( CETIP or Company ) for the quarter ended on, together with the independent auditors' report on the review of the interim financial statements. All the Company s operating and financial information below, except when otherwise indicated, is presented in million reais based on the individual financial statements prepared according to the generally accepted accounting principles in Brazil, including the Accounting Pronouncement CPC 21 Interim Financial Statements established by the Accounting Pronouncement Committee (CPC) and the consolidated financial statements also prepared according to the CPCs and IAS 34 Interim Financial Reporting established by the International Accounting Standards Board IASB Additional information regarding the Company s operating and financial performance are available on the internet at ( Highlights of the Period Launch of Cetip Plataforma Imobiliária June 18, 2013 saw the launch of the first product developed by Cetip to generate efficiency, speed and cost reduction in the mortgage process. Created in partnership with FNC, the U.S. leader in real estate data technology, Cetip developed a new tool to automate, standardize and organize the process of appraisal, providing players with agility of response for credit approval. Opening a new front in 2013 this solution is the first step towards the development of a unique solution focused on a sector that carries strong expectations of development. Payment of Interest on Equity On June 19, 2013, the Board of Directors approved the payment of Interest on Equity relative to the second quarter of 2013 in the amount of R$17.8 million or R$0.0687/share (gross). Payment to entitled shareholders was made on July 08,

4 Financial Results Analysis Operating Revenues In 2Q13, CETIP s gross operating revenue totaled R$270.6 million, up 20.2% over 2Q12 with net operating revenue at R$228.9 million. In the period, the Securities Unit accounted for 64.8% of gross operating revenue and the Financing Unit, 35.2%. Gross revenue from the Securities Unit totaled R$175.4 million in 2Q13, up 22.0% over 2Q12, as follows: i) 32.0% of revenue from custody; ii) 22.5% from monthly utilization; iii) 16.5% from transactions; iv) 16.7% from registration; and v) 12.3% other service revenues. Gross operating revenue from the Financing Unit totaled R$95.2 million in 2Q13, up 17.0% over 2Q12, broken down as: i) 50.3% from SNG; ii) 38.4% from Sircof; iii) 10.6% from market data and development of solutions; and iv) 0.7% from other revenues and services. In the first half of 2013 (1H13), CETIP's total gross revenue amounted to R$515.1 million, up 16.0% over the R$443.9 million in the first half of 2012 (1H12). The table below details the breakdown of CETIP s gross operating revenue: Quarter YTD Change (%) (R$ million) 2Q13 2Q12 1H13 1H12 2Q13/2Q12 1H13/1H12 Gross Operating Revenue % 16.0% Securities Unit % 17.8% Registration % 2.8% Custody % 27.2% Monthly Utilization % 12.6% Transactions % 24.3% Other Revenues % 18.5% Financing Unit % 12.9% SNG % 4.5% Sircof % 34.3% Market Data and Development of Solutions % 0.4% Other Revenues % -44.5% Deductions (41.7) (31.1) (79.2) (57.4) 34.4% 37.9% Net Operating Revenue % 12.8% 4

5 The graphs below show the breakdown of the key revenue lines from the Securities and Financing units: Securities Unit Registration Revenue Registration revenue reached R$29.3 million in 2Q13, up 17.0% over the 2Q12, due to the 62.6% and 1.5% growth in the OTC derivatives registration revenue and fixed income securities registration revenue, respectively. The good performance of OTC derivatives registration was manly influenced by: i) the 85.9% expansion in other registration derivatives revenue primarily as a result of the increase in National Supply Company (Companhia Nacional de Abastecimento - CONAB) options registration revenue, which sporadically occur, and ii) by the 55.0% and 26.1% growth in swaps and forwards contracts revenues, respectively. In this way the increase of 1.5% in the fixed income securities registration revenue was influenced mainly by the growth of: i) 16.7% in real estate securities registration; ii) 58.8% in other fixed income instruments and iii) 25.9% in Letras Financeiras, despite of the 12.1% and the 7.6% retraction on the DI and CDB registration revenues, representing 38.8% and 25.5% of the total fixed income registration during the quarter, respectively. In 2Q13, revenue from other registration services contributed with R$3.6 million to total registration revenues, up 24.8% over 2Q12, manly due to the R$2.6 million pre registration revenue. In 1H13, registration revenues totaled R$51.4 million, up 2.8% over than 1H12. Custody Revenue Revenue from custody totaled R$56.1 million in 2Q13, up 25.7% over 2Q12 with robust growth in key lines that compose this revenue line: i) debentures (+25.8%), representing 40.5% of total custody revenue in 2Q13, at R$22.7 million; ii) Letras Financeiras (+37.1%) with revenues at R$12.1 million, 21.5% of total custody revenues; iii) OTC derivatives (+21.4%), whose revenue totaled R$7.9 million in 2Q13, highlighting the operations with forward contracts; and iv) investment fund quotas (+15.2%), with revenue at R$5.6 million. End users contributed with revenue of R$4.7 million and other assets under custody, R$3.1 million. In 1H13, custody revenue totaled R$109.4 million, up 27.2% over the 1H12. 5

6 Monthly Utilization Revenue Monthly utilization revenue totaled R$39.5 million in 2Q13, up 13.0% over 2Q12, mainly due to: (i) the 6.7% expansion of the average margin per participant which increased R$1,064 in 2Q12 to R$1,136 in 2Q13, mainly as a result of the annual price adjustment by the 2012 accumulated IGPM (+7.8%) in Jan/13; and (ii) the 6.0% increase of the average number of participants, mainly classified in segments 1 and 2. In 1H13, monthly utilization revenue totaled R$77.9 million, up 12.6% over the 1H12. Transaction Revenue Transaction revenue reached R$28.9 million, up 32.3% over 2Q12, influenced by the 21.3% expansion of the average margin per transaction and the 9.3% growth in the volume of transactions processed, from 30.8 million in 2Q12 to 33.7 million in 2Q13, reflecting the increase in the number of assets held under custody and CETIP's depositary activities. In 1H13, the transaction revenue totaled R$54.1 million, up 24.3% over the 1H12. Other Service Revenues Other service revenues from the Securities Unit totaled R$21.7 million, up 24.8% over 2Q12, of which: i) R$9.2 million related to services provided to CIP, chiefly payment processing (EFTs); ii) R$9.8 million from operations carried out on the Cetip Net trading platform and repo and final transactions; and iii) R$2.7 million from other services provided. In 1H13, other service revenues totaled R$38.8 million, up 18.5% over 1H12. 6

7 The graphs below show some operating performance indicators of the key assets related to the Securities Unit: Financing Unit SNG Revenues generated by the SNG totaled R$47.9 million in 2Q13, up 9.1% over 2Q12. The SNG s revenue performance is due to the following combined factors: i) 1.2% expansion in the number of vehicles financed, as a result of the 6.8% growth in the total of vehicles sold and 2.1 p.p. decline in the ratio of vehicles financed over vehicles sold, which decreased from 39.8% in 2Q12 to 37.7% in 2Q13; and ii) annual price adjustment in Jan/13 based on the 2012 accumulated IGPM (+7.8%). In 1H13, SNG revenues totaled R$92.3 million, up 4.5% over 1H12. 7

8 Sircof Revenues from Sircof totaled R$36.6 million, up 40.7% over 2Q12. The Sircof s performance in the period can be explained by the same drivers behind the SNG results, associated with the net effect of: i) greater participation of Cetip over the Sircof s final price and real growth of prices ii) decline of 8.0 p.p in the ratio of contracts registered on total financing (product penetration), as a result of variation in the relative share of the states that are connected to the Sircof and reduced market share. In 1H13, Sircof revenues totaled R$70.6 million, up 34.3% over 1H12. Market data and development of solutions Revenues from market data and development of solutions reached R$10.1 million in 2Q13, down 1.9% over 2Q12, accounting for 10.6% of the total gross revenue of the Financing Unit. In the period, Cetip InfoAuto accounted for 40.3% of total revenues with market data and development of solutions in the quarter, Cetip InfoAuto Pagamentos for 27.4%, Cetip Performance Market Share for 18.7% and other services of Market Data and Development of Solutions 13.6%. In 1H13, market data and development of solutions amounted R$19.4 million, practically stable over 1H12. The table below details some operating performance indicators related to the Financing Unit: ( 000) Quarter YTD Change (%) SNG 2Q13 2Q12 1H13 1H12 2Q13/2Q12 1H13/1H12 Number of vehicles sold 4,509 4,222 8,501 8, % 2.7% New 1,407 1,355 2,628 2, % -1.3% Used 3,102 2,867 5,873 5, % 4.5% Number of Vehicles Financed 1,700 1,679 3,270 3, % -3.1% New ,683 1, % -2.6% Used ,587 1, % -3.7% % Vehicles financed / vehicles sold 37.7% 39.8% 38.5% 40.8% -2.1 p.p p.p. SIRCOF 2Q13 2Q12 1H13 1H12 2Q13/2Q12 1H13/1H12 Contracts Additions (Units) 988 1,112 1,906 2, % -15.2% % Contracts additions / vehicles financed 58.2% 66.2% 58.3% 66.6% -8.0 p.p p.p. Expenses/Other Operating Revenues Other operating revenues/expenses totaled R$86.7 million in 2Q13, up 13.8% over 2Q12, mainly composed of: i) personnel expenses and Board member s fees at R$34.4 million, 39.6% of operating expenses; ii) outsourced services at R$17.7 million, 20.4% of the total; and iii) general and administrative expenses at R$8.3 million, 9.5% of total operating expenses in the period. Depreciation and amortization expenses totaled R$18.8 million, primarily due to amortization of intangible assets (contractual relationships) registered due to the acquisition of GRV Solutions. Expenses with share-based compensation totaled R$6.0 million in the period. Other operating revenues/expenses totaled R$167.8 million in 1H13, up 15.1% over 1H12. 8

9 2Q13 2Q12 2H13 2H12 Note: Personnel Expenses include expenses with Board Member s fee Income Tax and Social Contribution Income tax and social contribution expenses totaled R$39.9 million in 2Q13, compared to expenses of R$26.6 million in 2Q12. The effective income tax and social contribution rate in 2Q13 was 30%, practically stable over 2Q12. Tax amortization of goodwill for expected future profitability from the merger of Advent Depository and GRV Solutions represented a cash tax savings of R$17.7 million in 2Q13. Income tax and social contribution expenses totaled R$73.4 million in 1H13, up 33.2% million over 1H12 (R$55.1 million), mainly due to the increase in net income before taxes in the comparison between these periods. 9

10 Net Income and EBITDA In 2Q13, CETIP s net income totaled R$91.2 million (basic earnings per share 1 of R$ and R$ in diluted income per share), up 43.6% over R$63.5 million in 2Q12, as a result of: i) the good Company s operating performance; and ii) lower net financial expenses, mainly due to the Company s lower indebtedness. Net margin reached 39.8%, up 7.1 p.p. over 32.7% margin reported in 2Q12. In 1H13, CETIP s net income was R$171.3 million, up 26.9% over R$134.9 million in 1H12. Net margin was 4.4 p.p. greater than that posted in 1H12, reaching 39.3%. The Company s strong performance also positively contributed to the advance of Adjusted EBITDA 2, which reached R$167.0 million in 2Q13, up 17.1% over the R$142.6 million reported in 2Q12. Adjusted EBITDA margin reached 73.0% in 2Q13, down 0.5 p.p. as compared to 73.5% of margin in 2Q12. CETIP s adjusted EBITDA in 1H13 amounted to R$316.4 million, with an adjusted EBITDA margin at 72.6%, up 11.2% over the R$284.6 million in 1H12. The table below details CETIP s calculation of EBITDA and reconciliation of Adjusted EBITDA: Quarter YTD Change (%) EBITDA and Adjusted EBITDA reconciliation (R$ million) 2Q13 2Q12 1H13 1H12 2Q13/2Q12 1H13/1H12 NET INCOME % 26.9% (+) Income tax and social contribution % 33.2% (+) Depreciation and amortization % 13.3% (-) Financial result % -52.7% EBITDA % 11.9% (+) Share-based remuneration without cash disbursement % 0.2% (-) Equity in the results of associated companies (0.3) 0.4 (0.4) % % ADJUSTED EBITDA % 11.2% ADJUSTED EBITDA MARGIN 73.0% 73.5% 72.6% 73.6% -0.5 p.p p.p. 1 Considers new EBITDA and adjusted EBITDA methodology of calculation as CVM 527 instruction, October 04, Basic earnings per share is calculated by the division of profit attributable to the Company s shareholders by the average weighted number of shares issued in the period, excluding common shares in treasury. Diluted earnings per share is calculated based on the adjustment of the weighted average number of outstanding common shares, presuming the conversion of all potentially diluting common shares. 2 EBITDA and Adjusted EBITDA are non-accounting measures prepared by CETIP, reconciled with its financial statements, complying with the provisions of the CVM Instruction no. 527/2012. Adjusted EBITDA is not a measure recognized by Brazilian GAAP, does not have a standard meaning and may not be comparable to measures with the same nomenclature provided by other companies. This measurement basis excludes from EBITDA the effects of expenses with share based compensation and equity in net income of affiliate company, items that have no impact on the Company s cash generation. CETIP discloses Adjusted EBITDA because it uses the measure to gauge its performance and understands that the adjusted indicator provides an appropriate view on the potential of the Company s gross cash generation. 10

11 Indebtedness At the end of 2Q13, CETIP s gross short and long-term debt (debentures, loans, financial leases) totaled R$688.4 million and its net debt was R$442.5 million. The ratio of net debt over LTM Adjusted EBITDA was 0.7x and the financial leverage ratio (net debt / total capital) reached 22.2%, showing the Company s solid financial position. The table below shows the reconciliation of the Company s net debt by the end of 2Q13, 1Q13 and 2Q12: (R$ milhões) 2Q13 1Q13 2Q12 Debentures issued Purchase price - deferred payments Loans and financial leases Total Gross Debt ,206.8 Cash and cash equivalents and marketable securities* (245.8) (421.4) (431.4) Net Debt Shareholders equity 1, , ,308.0 Total Capital 1, , ,083.3 EBITDA (LTM)** Adjusted EBITDA (LTM)** Net Debt/EBITDA (LTM) 0.8X 0.9X 1.4X Net Debt/Adjusted EBITDA (LTM) 0.7X 0.9X 1.4X Financial Leverage Ratio (Net Debt/Total Capital) 22.2% 25.0% 37.2% * Net of R$44.9 million in 2Q13, R$44.1 million in 1Q13, and R$41.9 million in 2Q12, regarding investments that constitute the special equity of CETIP and are registered in a linked account in the Special System of Clearance and Custody (Sistema Especial de Liquidação e Custódia SELIC). ** Last twelve months. CAPEX CETIP s CAPEX totaled R$8.7 million in 2Q13, down 15.3% over 2Q12, amount equivalent to 3.8% of net revenue in the period. The main investments in the period were focused on (i) acquisition of equipment, expansion of servers and adjustment of our processing capacity; and (ii) development of new products and services. In 1H13, investments amounted to R$19.1 million, up 8.4% over 1H12 (R$17.6 million), representing 4.4% of net revenue in the period. Capital Markets At the end of 2Q13, CETIP shares were quoted at R$22.84, down 8.5% compared to the end of 2012, while in the same period the Bovespa Index decreased 22.1%. Over the last 12 months ended on, CETIP shares depreciated 6.9%, compared to a 12.7% decline in the Bovespa index in the same period. By the end of 2Q13, CETIP s market value was R$5.9 billion. 11

12 120 CTIP3 vs. Ibovespa: 06/30/2012 to 06/30/2013 (Base 100) Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 CTIP3 Ibovespa Source: Bloomberg. Historical values adjusted by corporate actions Amounts in R$, except when otherwise indicated 1H13 1H12 Quote at the start of the period Maximum Mean Minimum Quote at the end of the period Daily average volume (R$ million) Number of shares ( 000)¹ 259, ,178 ¹ Number of shares at the end of the periods Source: Bloomberg. Historical values adjusted by corporate actions Stock Turnover (annualized rate) 1H13 1H12 Number of shares traded ( 000) 233, ,472 Average weighted no. of shares ( 000) 258, ,799 Number of trading days Number of trading days in the year ¹ Annualized turnover (%) 184% 155% ¹ Source: BM&FBOVESPA Estimated number of trading days for 2013 Source: Bloomberg 12

13 Corporate Governance CETIP is committed to the highest standards of corporate governance. In addition to adhering to the Novo Mercado rules, Cetip maintains solid auto-regulation practices according to the provisions of CVM Instruction no. 461, which regulates the functioning of organized securities markets. Companies listed on the Novo Mercado voluntarily agree to comply with stricter rules than those of Brazilian corporate law, such as: (i) maintain only common shares in their capital stock; (ii) maintain a minimum of 25% free float; (iii) detail and include additional quarterly information; (iv) the Board of Directors must be composed of at least five members, with 20% of independent members and the maximum two years term and (v) in the case of sale of control all shareholders are entitled to sell their shares at the same price (100% tag along). Note that some provisions of the Bylaws of Cetip goes beyond the established requirements in the Novo Mercado. Companies join the Novo Mercado through signature of contracts between the company, its management and controlling shareholders and the BM&FBOVESPA, in addition to adaptation of the company s bylaws to the rules contained in the Novo Mercado Listing Rules. Adhesion to the Market Arbitration Chamber The Company joined the Market Arbitration Chamber, as per the clause in its Bylaws. This body, created by the Stock Exchange, arbitrates disputes and controversies that may exist between the controlling shareholders of companies listed on the Novo Mercado and shareholders in general, managers, members of Fiscal Council and the Exchange itself. Relationship with Independent Auditors The Company s policy is governed by the principle of independence of auditors and restricts services to be provided by companies contracted for this purpose. In this sense, during the 2Q13, KPMG Auditores Independentes did not provide other services unrelated to auditing to the Company, being guaranteed the provision of these services in an objective and independent manner. Management Statement As per the provisions in CVM Instruction no. 480/09, the Management declares that it has discussed, reviewed and agreed with the financial statements relative to the quarter ended on and agreed with the opinions expressed in the independent auditors report regarding the review of the interim financial statements. The Management Rio de Janeiro, August 7 th,

14 (A free translation of the original in Portuguese) Independent auditors review report on interim financial statements The Board of Directors and Shareholders CETIP S.A. Mercados Organizados Rio de Janeiro - RJ Introduction We have reviewed the balance sheet of CETIP S.A. Mercados Organizados ( Company ), individual and consolidated, as of, and the related statements of income, comprehensive income for the three and six months period then ended and changes in shareholders equity and cash flows for the six months period then ended, including the respective notes to the financial statements. Management is responsible for preparing the individual interim financial statements in accordance with CPC Technical Pronouncement 21(R1) - Interim reporting and the consolidated interim financial statements in accordance with CPC 21(R1) and IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board IASB. Our responsibility is to express a conclusion on the interim financial statements based on our review. Scope of the review We conducted our review in accordance with Brazilian and International Standard on Review of interim information (NBC TR 2410 and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, and consequently does enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion about the individual interim financial statements Based on our review, we are not aware of any fact that causes us to believe that the individual interim financial statements referred to above is not prepared, in all material respects, in accordance with CPC 21(R1), applicable to the preparation of interim financial statements. Conclusion about the consolidated interim financial statements Based on our review, we are not aware of any fact that causes us to believe that the consolidated interim financial statements referred to above is not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34 applicable to the preparation of interim financial statements. 14

15 Other matters Interim statements of the cash flows We have also reviewed, the interim financial statements, the individual and consolidated, of the cash flows for the three months period ended, prepared under management s responsibility, which the presentation is considered supplementary information by the CPC 21(R1) and by the IAS 34. These statements were subject to the same review procedures previously described and based on our review, we are not aware of any fact that would lead us to believe that they have not been fairly stated, in all material respects, in relation to the Company s individual and consolidated interim financial statements taken as a whole. Interim statements of value added We have also reviewed, the interim financial statements, the individual and consolidated, of added value (DVA) for the six months period ended, prepared under management s responsibility, which the presentation is required in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) and considered supplementary information by the International Financial Reporting Standards (IFRS), which does not require the presentation of the Statement of Value Added. These statements were subject to the same review procedures previously described and based on our review, we are not aware of any fact that would lead us to believe that they have not been fairly stated, in all material respects, in relation to the Company s individual and consolidated interim financial statements taken as a whole. Rio de Janeiro, August 7 th, 2013 KPMG Auditores Independentes CRC 2SP014428/O-6 Original version in Portuguese signed by Jubran Pereira Pinto Coelho Accountant CRC 1MG077045/O-0 T-SP 15

16 CETIP S.A. - Mercados Organizados Balance sheets In thousands of reais (A free translation of the original in Portuguese) CETIP Consolidated CETIP Consolidated Assets Notes 06/30/13 12/31/12 06/30/13 12/31/12 Liabilities and shareholders' equity Notes 06/30/13 12/31/12 06/30/13 12/31/12 Current 362, , , ,125 Current 206, , , ,808 Cash and cash equivalents 4 11, , Suppliers 17,093 15,587 21,591 17,721 Financial investments - available and restricted 5 253, , , ,027 Labor obligations and social charges 12 30,349 36,855 30,450 36,953 Accounts receivable 6 81,128 78,779 82,696 81,050 Taxes payable 13 11,013 11,015 11,109 11,114 Recoverable taxes and contributions 3,867 17,212 3,879 17,224 Income tax and social contribution 5,225-5, Other receivables 5,415 2,525 5,428 2,528 Dividends and interest on own capital payable 16,399 24,630 16,399 24,630 Prepaid expenses 7 7,024 2,950 7,024 2,950 Debentures issued 122,532 65, ,532 65,554 Purchase price - deferred payments , ,095 Loans and finance lease obligations 15 4,111 3,000 4,111 3,000 Other liabilities Non-current 2,169,619 2,242,124 2,168,960 2,234,659 Non-current 775, , , ,894 Long-term receivables 71, ,837 71, ,837 Deferred income tax and social contribution 22a 211, , , ,764 Financial investments - available and restricted 5 21,522 73,082 21,522 73,082 Provision for contingencies and legal obligations 14 2,875 2,569 2,875 2,569 Judicial deposits Debentures issued , , , ,189 Prepaid expenses 7 2,348 3,026 2,348 3,026 Loans and finance lease obligations 15 10,747 13,372 10,747 13,372 Deferred income tax and social contribution 22a 46,791 42,299 46,791 42,299 Other receivables Shareholders equity 1,549,183 1,428,082 1,549,183 1,428,082 Investments 51,757 59,489 6,357 5,810 Capital 16a 573, , , ,270 Investment in associate 9b 5,324 4,927 5,324 4,927 Capital reserves 16b 524, , , ,764 Investment in subsidiary 9a 45,400 53, Carrying value adjustments (40) 575 (40) 575 Other investments 1, , Income reserves 16c,d 315, , , ,231 Retained earnings 136, ,000 - Property and equipment 10 39,753 41,207 39,785 41,241 Additional dividends proposed - 58,242-58,242 Intangible assets 11 2,007,009 2,022,591 2,051,717 2,068,771 Total assets 2,531,797 2,630,779 2,537,221 2,633,784 Total liabilities and shareholders' equity 2,531,797 2,630,779 2,537,221 2,633,784 The accompanying notes are an integral part of this quarterly information. 16

17 CETIP S.A. - Mercados Organizados Statements of income Quarters and six-month periods ended June 30 (A free translation of the original in Portuguese) CETIP Consolidated Accumulated Accumulated Accumulated Accumulated Notes 2Q Q Q Q Net revenue from services , , , , , , , ,423 (Operating expenses)/other operating income (84,433) (163,375) (74,940) (143,080) (86,693) (167,805) (76,187) (145,849) Personnel expenses (33,659) (65,066) (29,434) (58,356) (33,956) (65,606) (29,805) (59,262) Share-based remuneration with no cash disbursement 24c (5,993) (11,434) (8,361) (11,407) (5,993) (11,434) (8,361) (11,407) Depreciation and amortization 10 e 11 (18,091) (35,416) (15,590) (31,097) (18,828) (36,890) (16,326) (32,570) Outsourced services 19 (16,491) (32,723) (14,297) (26,932) (17,694) (35,095) (14,300) (26,939) General and administrative expenses 20 (8,241) (15,434) (7,356) (14,588) (8,264) (15,479) (7,492) (14,769) Equipment and systems rental (603) (1,206) (202) (406) (603) (1,206) (202) (406) Board members' compensation (401) (784) (417) (807) (401) (784) (417) (807) Taxes and fees (310) (606) (317) (583) (310) (606) (317) (583) Other operating expenses (646) (717) (151) (151) (646) (717) (152) (353) Other operating income ,185 1, ,185 1,247 Equity in the results of associate 9 3,520 7,018 5,790 10, (350) (208) Financial result 21 (11,587) (24,179) (28,005) (51,629) (11,390) (23,809) (27,368) (50,365) Financial income 7,380 15,024 8,540 16,873 7,579 15,398 9,179 18,140 Financial expenses (18,967) (39,203) (36,545) (68,502) (18,969) (39,207) (36,547) (68,505) Income before taxation 130, ,033 89, , , ,641 90, ,001 Income tax and social contribution (39,047) (71,751) (25,544) (52,973) (39,856) (73,359) (26,649) (55,056) Current 22d (28,323) (50,524) (13,229) (28,725) (29,132) (52,132) (14,334) (30,808) Deferred 22d (10,724) (21,227) (12,315) (24,248) (10,724) (21,227) (12,315) (24,248) Net income for the period 91, ,282 63, ,945 91, ,282 63, ,945 Net income per share attributable to CETIP's shareholders (expressed in R$) 17 Basic earnings per share Diluted earnings per share The accompanying notes are an integral part of this quarterly information. 17

18 CETIP S.A. - Mercados Organizados Statements of comprehensive income Quarters and six-month periods ended June 30 In thousands of reais (A free translation of the original in Portuguese) CETIP Consolidated Accumulated Accumulated Accumulated Accumulated 2Q Q Q Q Net income for the period 91, ,282 63, ,945 91, ,282 63, ,945 Other comprehensive income Fair value adjustment of available for sale financial assets (236) (933) (236) (933) Deferred taxes on fair value adjustment (21) (36) (21) (36) Total other comprehensive income (156) (615) (156) (615) Total comprehensive income for the period attributable to CETIP's shareholders 91, ,667 63, ,016 91, ,667 63, ,016 The accompanying notes are an integral part of this quarterly information. 18

19 CETIP S.A. - Mercados Organizados Statements of changes in shareholders equity Six-month periods ended June 30 In thousands of reais (A free translation of the original in Portuguese) Carrying Income reserves Additional Capital value Legal Statutory Retained dividends Notes Capital reserves adjustments reserve reserve earnings proposed Total At December 31, , , , ,183-58,242 1,428,082 Comprehensive income Net income for the period , ,282 Fair value adjustment of available for sale financial assets, net of deferred taxes - - (615) (615) Total comprehensive income for the period - - (615) , ,667 Transactions with owners and other movements Approval/payment - additional dividends proposed (58,242) (58,242) Capital increase - capitalization of excess balance of income reserves and capitalization of capital reserves (EGM 04/29/13) 211,963 (150,000) - - (61,963) Capital increase - capitalization of a portion of the goodwill special reserve (Board Meeting 05/08/13) 13,373 (13,373) Capital increase - stock option exercises 32, ,524 Appropriation - stock option plans 24c - 11, ,434 Interest on own capital and dividends expired Appropriation of net income Interest on own capital 16e (35,474) - (35,474) Total transactions with owners and other movements 257,860 (151,939) - - (61,963) (35,282) (58,242) (49,566) At 573, ,825 (40) 2, , ,000-1,549,183 At December 31, , , , , ,181,025 Comprehensive income Net income for the period , ,945 Fair value adjustment of available for sale financial assets, net of deferred taxes Total comprehensive income for the period , ,016 Transactions with owners and other movements Capital increase - capitalization of a portion of the goodwill special reserve (Board Meeting 05/09/12) 13,373 (13,373) Capital increase - stock option exercises 15, ,975 Appropriation - stock option plans 24c - 11, ,407 Interest on own capital and dividends expired Appropriation of net income Interest on own capital 16e (35,811) - (35,811) Total transactions with owners and other movements 29,348 (1,966) (35,462) - (8,080) At June 30, , , , ,670 99,483-1,307,961 The accompanying notes are an integral part of this quarterly information. 19

20 CETIP S.A. - Mercados Organizados Statements of cash flows Quarters and six-month periods ended June 30 In thousands of reais (A free translation of the original in Portuguese) CETIP Consolidated Accumulated Accumulated Accumulated Accumulated Notes 2Q Q Q Q Cash flows from operating activities Income before taxation 130, ,033 89, , , ,641 90, ,001 Adjustments Depreciation and amortization 18,091 35,416 15,590 31,097 18,828 36,890 16,326 32,570 (Profit)/loss on disposal of permanent assets (Profit) on disposal of non-current assets held for sale - - (1,208) (1,208) - - (1,208) (1,208) Equity in the results of associate (3,520) (7,018) (5,790) (10,825) (256) (397) Share-based remuneration with no cash disbursement 5,993 11,434 8,361 11,407 5,993 11,434 8,361 11,407 Interest on financial investments held to maturity (803) (1,519) (866) (1,859) (803) (1,519) (866) (1,859) Interest on debentures and on purchase price deferred payments 18,596 38,393 36,255 67,929 18,596 38,393 36,255 67,929 Interest on loans and finance leases Adjusted income before taxation 169, , , , , , , ,595 Changes in assets and liabilities Non restricted financial investments 166,533 85,700 (92,065) (169,442) 175,882 89,354 (98,893) (181,800) Accounts receivable (4,770) (2,349) (179) 1,551 (4,354) (1,646) (135) 1,391 Recoverable taxes and contributions 2,303 13,345 1,099 12,750 2,303 13,345 1,099 12,738 Other receivables (1,849) (2,879) (1,121) (1,064) (1,854) (2,889) (1,121) (1,064) Prepaid expenses (138) (3,396) 1,252 (2,596) (138) (3,396) 1,252 (2,596) Judicial deposits (6) (19) 6 (71) (6) (19) 6 (71) Suppliers 2,553 1,506 1,956 1,873 3,753 3,870 1,956 1,874 Labor obligations and social charges 10,550 (6,506) 9,101 (7,435) 10,565 (6,504) 9,062 (7,514) Taxes payable (5,610) (911) (5,620) (911) Other liabilities (624) (624) 18 Provision for contingencies and legal obligations Cash from operations 339, ,799 61, , , ,208 62, ,666 Income tax and social contribution paid (26,164) (45,299) (13,436) (27,792) (27,038) (46,848) (14,591) (29,781) Net cash provided by operating activities 313, ,500 47,750 91, , ,360 47,747 91,885 Cash flows from investing activities Acquisition of property and equipment (831) (2,921) (2,063) (3,617) (831) (2,921) (2,063) (3,617) Acquisition of intangible assets (7,851) (16,200) (8,191) (14,024) (7,851) (16,200) (8,191) (14,024) Acquisition of other invesments - (150) (150) - - Dividends received from subsidiary 14,900 14, Proceeds from sale of property and equipament Proceeds from sale of non-current assets held for sale - - 3,109 3, ,109 3,109 Net cash used in investing activities 6,335 (4,254) (7,145) (14,482) (8,565) (19,154) (7,145) (14,482) Cash flows from financing activities Payment of purchase price deferred payment (notional value and interest) (222,126) (222,126) - - (222,126) (222,126) - - Payment of debentures notional value (16,800) (28,000) - - (16,800) (28,000) - - Payment of interest on debentures (14,673) (24,565) (20,883) (44,440) (14,673) (24,565) (20,883) (44,440) Payment of finance lease obligations (961) (1,944) (705) (1,410) (961) (1,944) (705) (1,410) Payment of interest on loans (119) (239) (46) (65) (119) (239) (46) (65) Proceeds from finance lease contracts Net proceeds from loans obtained , ,428 Proceeds from shares issued - stock option exercises 19,695 32,524 2,042 15,975 19,695 32,524 2,042 15,975 Interest on own capital and dividends expired Dividends and interest on own capital paid (84,355) (101,976) (20,846) (52,260) (84,355) (101,976) (20,846) (52,260) Net cash used in financing activities (319,155) (346,134) (40,438) (77,239) (319,155) (346,134) (40,438) (77,239) Increase/(decrease) in cash and cash equivalents , , Cash and cash equivalents at the beginning of the period 10, , Cash and cash equivalents at the end of the period 4 11,413 11, ,418 11, The accompanying notes are an integral part of this quarterly information. 20

21 CETIP S.A. - Mercados Organizados Statements of value added Quarters and six-month periods ended June 30 In thousands of reais (A free translation of the original in Portuguese) CETIP Consolidated Accumulated Accumulated Accumulated Accumulated 2Q Q Q Q Income 249, , , , , , , ,046 Revenue from services 249, , , , , , , ,799 Other operating income ,185 1, ,185 1,247 Goods and services acquired from third parties (25,417) (49,015) (21,842) (41,792) (26,645) (51,436) (21,984) (42,185) General and administrative expenses (8,241) (15,434) (7,356) (14,588) (8,264) (15,479) (7,492) (14,769) Outsourced services (16,491) (32,723) (14,297) (26,932) (17,694) (35,095) (14,300) (26,939) Other operating expenses (685) (858) (189) (272) (687) (862) (192) (477) Gross value added 224, , , , , , , ,861 Depreciation and amortization (18,091) (35,416) (15,590) (31,097) (18,828) (36,890) (16,326) (32,570) Net value added generated by the company 206, , , , , , , ,291 Value added received through transfer 10,900 22,042 14,330 27,698 7,835 15,795 8,829 17,932 Equity in the results of associate 3,520 7,018 5,790 10, (350) (208) Financial income 7,380 15,024 8,540 16,873 7,579 15,398 9,179 18,140 Total value added to be distributed 217, , , , , , , ,223 Distribution of value added Personnel 35,402 68,183 33,835 62,691 35,554 68,435 33,994 63,177 Salaries 15,056 29,246 13,596 27,618 15,160 29,413 13,720 27,938 Benefits 4,043 7,736 3,460 6,697 4,083 7,808 3,489 6,766 Profit sharing 8,701 16,596 6,932 14,072 8,701 16,596 6,932 14,155 Share-based remuneration with no cash disbursement 5,993 11,434 8,361 11,407 5,993 11,434 8,361 11,407 FGTS 1,208 2,387 1,069 2,090 1,216 2,400 1,075 2,104 Board members' compensation Taxes and contributions 71, ,956 53, ,141 72, ,455 54, ,314 Municipal 9,168 17,412 7,711 15,279 9,219 17,514 7,772 15,392 Federal 62, ,486 45,268 90,797 63, ,883 46,884 93,857 Other Third party capital remuneration 19,531 40,268 36,695 68,787 19,531 40,268 36,695 68,787 Interest on debentures and on purchase price deferred payments 18,596 38,393 36,255 67,929 18,596 38,393 36,255 67,929 Interest on loans and finance leases Equipment and systems rental 603 1, , Own capital remuneration 91, ,282 63, ,945 91, ,282 63, ,945 Interest on own capital 17,812 35,474 18,099 35,811 17,812 35,474 18,099 35,811 Net income retained 73, ,808 45,412 99,134 73, ,808 45,412 99,134 Value added distributed 217, , , , , , , ,223 The accompanying notes are an integral part of this quarterly information. 21

22 (A free translation of the original in Portuguese) CETIP S.A. Mercados Organizados 1 Operations CETIP S.A. Mercados Organizados ("CETIP" or "Company") is a publicly traded corporation with headquarters in Rio de Janeiro, which resulted from the demutualization process of CETIP - Câmara de Custódia e Liquidação ( CETIP Associação ) occurred in CETIP administers organized over-the-counter (OTC) markets, i.e. environments for trading and registration of securities, government and corporate fixed income bonds and OTC derivatives. It is a systemically important settlement and clearinghouse, as defined by the legislation of the SPB Brazilian Payment System (Law 10,214), which performs the scriptural custody of assets and contracts, registers the transactions carried out in the OTC market, processes the financial settlement and offers to the market an electronic platform for conducting various types of online transactions, such as auctions and trading of government bonds, corporate bonds and fixed income securities. The company is Latin America s largest depository of corporate fixed income securities and the largest chamber for private assets of the Brazilian financial market. Its activities give the necessary support to the entire cycle of transactions with fixed income securities, securities and OTC derivatives. After the acquisition of GRV Solutions, which occurred on December 29, 2010, the Company also became the leading private provider of information on insertions and removals of financial restrictions related to vehicle financing transactions, with an integrated electronic system and nationwide coverage, providing critical infrastructure to the vehicle financing market. 2 Presentation and preparation of the quarterly information This quarterly information was approved by the Company's Board of Directors on August 7 th, a. Basis of preparation The quarterly information has been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets measured at fair value through profit or loss. 22

23 b. Consolidated quarterly information The consolidated quarterly information has been prepared and is being presented in accordance with the accounting practices adopted in Brazil, including the pronouncements issued by the Accounting Pronouncement Committee (CPCs). The consolidated quarterly information has also been prepared and is being presented in accordance with IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board IASB, as well as in accordance with the rules issued by the Brazilian Securities Commission (CVM). The quarterly information includes the balances of CETIP and of its wholly-owned subsidiary, GRV Info Tecnologia S.A. ( GRV Info ), entity acquired in connection with the acquisition of GRV. c. Individual quarterly information The individual quarterly information of the parent company was prepared in accordance with the accounting practices adopted in Brazil, including the Technical Pronouncement CPC 21 Interim Financial Reporting and in accordance with the rules issued by the Brazilian Securities Commission. In the individual quarterly information, investments in subsidiaries and associates are accounted for using the equity method of accounting. In the Company s situation, the accounting practices adopted in Brazil differ from the IFRS applicable to separate financial statements only by the measurement of investments in subsidiaries and associates using the equity method of accounting, since that in accordance with IFRS those would be measured at cost or fair value. Nevertheless, there are no differences between the shareholders equity and consolidated net income presented in the consolidated quarterly information and the shareholders equity and net income presented in the individual quarterly information. Therefore, the consolidated quarterly information and the individual quarterly information are being presented in a single set of quarterly information. d. Functional and presentation currency The consolidated and individual quarterly information is presented in Brazilian reais, which is the Company s functional currency. 23

24 e. Segment information Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Board that makes strategic decisions. f. Accounting estimates The preparation of individual and consolidated quarterly information in conformity with IFRS and CPCs requires management to exercise its judgment, to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and assumption are constantly revised. Reviews in estimates are recognized in the period in which they are made and in any future periods affected. Information about critical judgments relating to the accounting policies applied and critical estimates and assumptions that could have a significant impact in the amounts reported in the individual and consolidated quarterly information are included in the following notes: (i) Notes 10 and 11 determination of the estimated useful life of property and equipment and intangible assets items; (ii) Note 14 determination of provisions for contingent liabilities; (iii) Note 24c determination of the fair value of stock options granted to employees and estimate of the amount of options that will achieve vesting. 24

25 3 Summary of significant accounting policies The main accounting policies described below have been consistently applied to all the periods presented in this individual and consolidated quarterly information. a. Basis of consolidation (i) Investment in subsidiaries Subsidiaries are all entities in which the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity, usually caracterized by a participation of more than half of the voting rights (voting capital). The subsidiaries are fully consolidated from the date on which the control is transferred to the Company. Consolidation is interrupted from the date on which control ends. (ii) Investment in associates Associates are those entities in which the Company, directly or indirectly, has significant influence over the financial and operating policies, but not control. The significant influence supposedly occurs when the company, directly or indirectly, holds between 20 and 50 per cent of the voting rights in another entity. Investments in associates are accounted for using the equity method of accounting and are initially recognized at cost. The Company s share of its associates profits or losses is recognized in the income statement, and its share of movements in reserves is recognized in reserves. The cumulative movements are adjusted against the carrying amount of the investment. The accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Company. (iii) Transactions eliminated on consolidation Balances and inter-company transactions, and any income or expenses arising from intercompany transactions are eliminated in the consolidated quarterly information. Unrealized gains arising from transactions with companies accounted for using the equity method of accounting are eliminated against the investment in proportion to the Company s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of an impairment loss. 25

26 b. Cash and cash equivalents For the purpose of the statement of cash flows, the balance of cash and cash equivalents includes cash, bank deposits and short-term investments (term of up to 3 months), with high liquidity and a negligible risk of change in value. c. Financial instruments i. Classification and measurement of financial assets The Company classifies its financial assets according to the following categories: measured at fair value through profit or loss, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired and is determined when the asset is first recorded. ii. Financial assets measured at fair value through profit or loss The financial assets measured at fair value through profit or loss are (i) financial assets held for active and frequent trading or (ii) assets designated by the Company, when first recorded, as measurable at fair value through profit or loss. The assets held for trading are classified as current assets irrespective of their contractual maturities. Gains or losses arising from the fair value variations of financial assets measured at fair value through profit or loss are recorded in the statement of income in "financial result" for the period in which they occur. iii. Loans and receivables These comprise loans granted and receivables which are non-derivative financial assets with fixed or determinable payments, not quoted in an active market. The Company's loans and receivables comprise trade accounts receivable, advances and other receivables. Loans and receivables are recorded at amortized cost, based on the effective interest rate method. iv. Assets held to maturity These are financial assets quoted in an active market which are acquired with the intention and financial ability to be held in the portfolio up to their maturity. They are recorded at the acquisition cost, plus related earnings which are recognized in the statement of income under "financial result", using the effective interest rate method. 26