Abril Educação S.A. Quarterly Information (ITR) at June 30, 2013 and report on review of quarterly information

Abril Educação S.A. Quarterly Information (ITR) at June 30, 2013 and report on review of quarterly information

ABRIL EDUCAÇÃO S.A. QUARTERLY INFORMATION (ITR) at June 30, 2013 and Report on Review of Quarterly Information CONTENTS Page Management report 1-26 Balance sheet 27-28 Statement of income Statement of comprehensive income (loss) 29 30 Statement of changes in equity 31 Statement of cash flows 32 Statement of value added 33 Notes to the quarterly information 34-80 Board of Directors and Fiscal Council 81 Board of Executive Officers 82 Report on Review of Quarterly Information 83-84

June 2013 Management Report. São Paulo, August 12, 2013 - Abril Educação S.A. (BM&FBOVESPA: ABRE11) announces its results for the second quarter of 2013 (2Q13) and first half of 2013 (1H13). The comments herein refer to the consolidated results in accordance with International Financial Reporting Standards (IFRS) and the comparisons are in relation to the same period of 2012, as indicated. INCOME STATEMENT - CONSOLIDATED (R$ mm) QUARTER Change (%) Change (%) Financial Information 2Q13 Adjustments 2Q13 (After Adjustments) 2Q12 Adjustments 2Q12 (After Adjustments) 2Q13/2Q12 Financial Information 164.7 (8.2) 156.5 102.5 2.1 104.6 61% 50% Net Revenue (50.0) 1.5 (48.5) (60.2) 20.3 (39.9) -17% 22% (-) Cost of goods sold (COGS) 114.7 (6.7) 107.9 42.3 22.4 64.7 171% 67% 2Q13/2Q12 (After Adjustments) (=) Gross Profit 70% 69% 41% 62% 29 p.p. 7 p.p. Gross margin (%) (106.3) 7.2 (99.1) (78.9) 1.1 (77.8) 35% 27% (-) Selling, general and administrative expenses 8.4 0.5 8.9 (36.6) 23.5 (13.1) n/a n/a (=) Operating income (loss) 5% 6% -36% -13% 41 p.p. 19 p.p. Operating Margin(%) (11.3) 0.0 (11.3) (10.4) 0.0 (10.4) -9% -9% (-) Financial Result (3.0) 0.5 (2.5) (46.9) 23.5 (23.5) 94% 89% (=) Net Income (loss) before income tax and social contributio (5.2) 0.0 (5.2) 25.5 0.0 25.5 n/a n/a (-) Income tax and social contribution (8.2) 0.5 (7.7) (21.4) 23.5 2.0 62% n/a (=) Net Income (loss) before non-controlling interest (0.6) 0.0 (0.6) 0.9 0.0 0.9 n/a n/a (+) Non-controlling interest (8.8) 0.5 (8.4) (20.5) 23.5 3.0 57% n/a (=) Net Income (loss) after non-controlling interest -5% -5% -20% 3% 15 p.p. -8 p.p. (=) Operating income (loss) 8.4 0.5 8.9 (36.6) 23.5 (13.1) n/a n/a (+) Depreciation and Amortization 11.9 0.0 11.9 9.1 0.0 9.1 32% 32% (+) Amortization of publishing investment 4.5 0.0 4.5 2.4 0.0 2.4 91% 91% (=) EBITDA 24.8 0.5 25.3 (25.1) 23.5 (1.7) n/a n/a EBITDA Margin (%) 15% 16% -25% -2% 40 p.p. 18 p.p. Note: For Income tax and social contribution, no adjustment has been made. For the purposes of both financial and operational analysis, it is necessary to consider the acquisition periods and equity interests in each business and their respective contributions to revenue and expenses. Escola Satélite was acquired in February 2012; the GEO Learning System in June 2012; Red Balloon Language School in July 2012; Alfacon Concursos Públicos in November 2012; and Wise Up in May 2013.The assets arising from these transactions began to be booked in the Company s consolidated financial statements as from their respective acquisition dates, and consequently influenced Abril Educação s performance in the quarterly and six-month comparison between 2012 and 2013. In accordance with CVM Instruction 527/12, EBITDA is defined as Earnings Before Interest, Tax (Income and Social Contribution Taxes), Depreciation and Amortization. Based on this definition and in accordance with such instruction, EBITDA amounted to negative R$27.5 million in 2Q12, R$20.0 million in 2Q13, R$72.6 million in 1H12 and R$97.5 million in 1H13. Adjusted EBITDA is calculated based on operating income including the amounts related to depreciation and amortization and including amortization of publishing investments. Pursuant to CVM Instruction 527/12, the Company may opt to report EBITDA excluding the net amounts related to discontinued operations, as per Technical Pronouncement CPC 31 Non-Current Assets Held for Sale and Discontinued Operations, and adjusted for other items that contribute to information on potential gross cash generation. 1

(R$ mm) YTD Change (%) Change (%) Financial Information 1H13 Adjustments 1H13 (After Adjustments) 1H12 Adjustments 1H12 (After Adjustments) 1H13/1H12 Financial Information 389.6 (1.7) 387.9 351.3 (30.9) 320.4 11% 21% Net Revenue (111.3) 0.3 (111.0) (124.6) 33.3 (91.3) -11% 22% (-) Cost of goods sold (COGS) 278.3 (1.4) 276.9 226.8 2.4 229.1 23% 21% 1H13/1H12 (After Adjustments) (=) Gross Profit 71% 71% 65% 72% 6 p.p. -1 p.p. Gross margin (%) (202.5) 8.9 (193.7) (172.2) 5.6 (166.5) 18% 16% (-) Selling, general and administrative expenses 75.8 7.4 83.2 54.6 8.0 62.6 39% 33% (=) Operating income (loss) 19% 21% 16% 20% 3 p.p. 1 p.p. Operating Margin(%) (19.6) 0.0 (19.6) (19.5) 0.0 (19.5) -1% -1% (-) Financial Result 56.2 7.4 63.6 35.1 8.0 43.1 60% 47% (=) Net Income (loss) before income tax and social contributio (27.0) 0.0 (27.0) (2.8) 0.0 (2.8) 867% 867% (-) Income tax and social contribution 29.1 7.4 36.5 32.4 8.0 40.3-10% -9% (=) Net Income (loss) before non-controlling interest (1.7) 0.0 (1.7) 1.0 0.0 1.0 n/a n/a (+) Non-controlling interest 27.4 7.4 34.8 33.4 8.0 41.3-18% -16% (=) Net Income (loss) after non-controlling interest 7% 9% 10% 13% -3 p.p. -4 p.p. (=) Operating income (loss) 75.8 7.4 83.2 54.6 8.0 62.6 39% 33% (+) Depreciation and Amortization 22.0 0.0 22.0 18.0 0.0 18.0 22% 22% (+) Amortization of publishing investment 12.1 0.0 12.1 12.4 (1.2) 11.2-2% 8% (=) EBITDA 109.9 7.4 117.3 85.0 6.8 91.7 29% 28% EBITDA Margin (%) 28% 30% 24% 29% 4 p.p. 1 p.p. Note: For Income tax and social contribution, no adjustment has been made. INTRODUCTION The year 2013 had an atypical start, as mentioned in the first quarter earnings release. This year classes at both own schools and client schools started later than usual due to the holiday calendar at the start of the year. As a result, a portion of the revenue from learning systems shifted from the first to the second quarter. Furthermore, the ph Group, which was acquired in 2011 and whose systems were integrated into the Company s systems in 2012, began recognizing revenue on an accrual basis rather than on a cash basis as previously, which shifted revenue recognition in the first quarter to subsequent quarters. Lastly, the Company decided to optimize processes in order to anticipate the production and billing of textbooks purchased by the federal government program (PNLD) in the second half of the year, which led it to conclude, unlike in previous years, the billing of the entire production before year-end, which resulted in no PNLD revenues in the first quarter of 2013. As a result of these factors, the Company s results in the first quarter of the year analyzed with the exclusion of this scenario were below those of the same period last year. Similarly, while certain effects, such as the lack of PNLD billing in the first quarter, ceased in that quarter, others will continue to appear over the course of the year as the effects from the postponement of revenue due to business or accounting factors are recognized this quarter and in subsequent quarters, portraying the true evolution in the business of Abril Educação based on actual trends. Furthermore and as widely disclosed by the Company over the last few months, we recently concluded a number of acquisitions that at the start of the year were in the advanced stages of negotiation. 2

The initial effects from these acquisitions on the consolidated results were felt in the second quarter of this year. For these reasons, we are making a special effort this quarter and in the remaining quarters of 2013 to present to our shareholders and the general market the Company s evolution on a comparable basis. In particular, for all comparative tables in this earnings release, we have excluded the following effects: (i) In the case of Publishers of textbooks, we excluded: (a) from the 2012 comparison base the books billed to PNLD in 1Q12, for which orders of R$27 million were placed in 2011, as well as the associated variable costs and expenses; and (b) the negative effect from the accounting adjustment of inventories in 2Q12 in the amount of R$20.3 million. (ii) For the Learning System business, we excluded the following effects from the 2Q13 results: (a) R$5.2 million in revenue from 1Q13 that was postponed from 2Q13 due to the late start of classes; and (b) the anticipation of revenue from 3Q13 to 2Q13 in the amount of R$3.0 million. We also added to 1Q13 revenue the anticipation of revenue in 4Q12 in the amount of R$1.3 million. All variable costs and expenses associated with the revenues above were also added or excluded, as applicable. (iii) In the case of Schools and Preparatory Courses, for the purpose of comparison with 2012 we included the effects on revenue recognition that would have been observed if accrual basis accounting were adopted. (iv) Lastly, we also excluded nonrecurring expenses related to the contract for sponsorship of the 2014 FIFA World Cup by the brand Wise Up, as well as nonrecurring M&A costs over the amounts in 2012. After making these adjustments to enable adequate comparability, the Company s revenue in 2Q13 and 1H13 grew by 50% and 21%, respectively, over the same periods last year. Excluding the results for May and June from the OMETZ Group (Wise Up), which were consolidated into the Company s results for the first time this quarter, revenue grew by 29% and 14%. Details are provided below. HIGHLIGHTS Operating cash flow remained robust. Operating cash flow was R$78.0 million in 2Q13, up 26% from R$61.9 million in 2Q12. In the first six months of 2013, cash flow was R$175.5 million, increasing 14.5% from the cash generation of R$153.3 million in 1H12. Cash flow, net of interest and taxes, was R$ 60.4 million and R$ 145.9 million in 2Q13 and 1H13, respectively, with growth of 59.8% and 22.2% compared to the same period of 2012. 3

Growing revenue. Consolidated net revenue came to R$164.7 million in 2Q13, increasing 61% over 2Q12. In the six-month period, net revenue was R$389.6 million, up 11% over 1H12. Revenue for 2Q13 includes the R$21.3 million in revenue from Wise Up from May and June. Revenues from the Learning System and Publisher businesses are subject to anticipations or postponements that could affect the results of a certain quarter and distort the comparability of the Company's results. Considering the following adjustments, which aim to offset such time distortions on revenue recognition from these businesses, consolidated net revenue was R$156.5 million in 2Q13, increasing 50% from 2Q12. In 1H13, consolidated net revenue was R$387.9 million, growing 21% from 1H12. Learning Systems driving growth. Learning Systems net revenue grew 43% over 2Q12 to reach R$71.5 million in 2Q13. Excluding the R$5.2 million in revenue from the Anglo Learning System in 1Q13 that was postponed to 2Q13, as mentioned in the prior-quarter earnings release, and also excluding the anticipation, from 3Q13 to 2Q13, of a portion of revenue from Anglo, SER and Maxi Learning Systems amounting to R$3.0 million, revenue in the period grew by 27%, from R$49.9 million in 2Q12 to R$63.3 million in 2Q13. We highlight that the total amount of Learning Systems revenue includes R$ 7.3 million from GEO revenue, acquired in June 2012, on the same student basis as of 2012, since the GEO was a significant client of SER before the acquisition. In 1H13, revenue from Learning Systems came to R$149.8 million, growing 24% from 1H12. Excluding the abovementioned effects, as well as the anticipation, from 4Q12 to 1Q13, of R$1.3 million in revenue from SER, revenue grew by 22%, from R$121.0 million to R$148.1 million in 1H13. GEO learning System revenue was R$ 11.8 million in the same period.with the growth experienced in the private segment the company estimates that, based on the collection of lists adopted by 20,000 schools across the country made by an independent company, and the sales force of publishers and learning systems, has consolidated its leadership in the segment with private schools with a market share of 17.6% in 2013. We ended June with 60,900 students in the public sector and 495,200 in the private. More details on page 9 of this document. Revenue recovery at publishers. Net revenue grew by 145% from 2Q12 amounting to R$16.5 million in 2Q13. Growth was concentrated in the public segment, which registered revenue of R$14.6 million, driven by the billing of government sales take up in the quarter, as mentioned in 1Q13 earnings release. In 1H13, net revenue from Publishers amounted to R$123.8 million, down 18% from 1H12. However, excluding the R$27 million revenue related to the PNLD 2012 usually billed in 2011 and that was postponed to 1Q12 benefiting Publishers revenue in 1H12, net revenue was virtually stable, contracting by a mere 0.6% in the six-month period. 4

Revenue from Schools and Preparatory Courses accelerate as anticipated. Revenue from Schools and Prep. Courses was R$51.3 million, increasing 14% over 2Q12. As reported in 1Q13, starting in 2013, revenue from the ph Group is no longer recognized linearly over the calendar year (1/12 per month) and is now recognized as the classes are actually ministered. This change in the pace of revenue recognition caused a decline in revenue in 1Q13 compared to 1Q12. This change, similar to the increases in number of students and monthly tuitions that are detailed later in this report, contributed to ph School registering revenue growth of 52% from 1Q13. At the Anglo Preparatory Course, enrollments grew by 13% from 2012, while the prices practiced decreased by 5%. In 1H13, Schools and Prep. Courses revenue totaled R$ 83.2 million, an increase of 6%. Solely for comparison purposes, if we apply the previous method of revenue recognition, net revenue from the School and Prep. Course business would be R$47.1 million in 2Q12, representing growth of 9%. In 1H12, gross revenue would be R$74.3 million, up 12%. Language business net revenue of R$28.1 million in a seasonally weaker quarter for Wise Up. Wise Up s pro-rata contribution (May and June) was R$21.3 million. In 1H13, revenue amounted to R$35.5 million. Further details on the Wise Up business, including the business model data, revenue seasonality, conversion of enrollments into teaching material sales, as well as data on the evolution of available businesses, will be provided later on in the earning release. Revenue from Business and Complementary Products growth. Alfacon, The Leader in Me, Escola Satélite, Edumobi, Ei Você and Pre-Enem contributed R$4.1 million to revenue in 2Q13, compared to R$0.9 million in 2Q12. In 1H13, revenue from these businesses was R$8.3 million, compared to R$1.2 million in 1H12. Consolidated cost of goods sold (COGS) lags revenue growth, boosting gross margin. COGS in 2Q13 was R$50.0 million, down 17% from 2Q12. Excluding the effects of inventory adjustments from prior periods reported in 2Q12 (R$20.3 million), and other adjustments reported throughout this release, COGS grew by 22%. In 1H13, COGS decreased by 11% to R$111.3 million, from R$124.6 million in 1H12, which included the recognition in 2Q12 of a nonrecurring write-off of inventory from prior periods in the amount of R$20.3 million and other effects reported ahead of R$ 13.0 million. Excluding this effect, COGS in 1H13 grew by only 22%. As a result, gross margin in 1Q13 and 1H13 expanded from 41% to 70% and from 65% to 71%, respectively. Excluding the effect of inventory adjustments, gross margin increased from 62% to 69% in the quarter and from 72% to 71% in the six-month period. 5

SG&A expenses also posted a slow pace growth in 2Q13, increasing by 35% from 2Q12 to reach R$106.3 million. In 1H13, SG&A expenses grew by 18% to R$202.5 million. Excluding the nonrecurring effects in the quarter of R$3.8 million related to nonrecurring M&A expenses and of R$2.3 million related to the payment by Wise Up of rights for the 2014 FIFA World Cup, SG&A expenses increased by 27% in 2Q13. In 1H13, by considering non-recurring expenses incremental effect of R$3.2 million effect, the variation would be 16%. EBITDA of R$24.8 million, with EBITDA margin expanding 40 p.p. from the negative margin in 2Q12. Compared to 2Q12, when the Company recorded negative EBITDA of R$25.1 million, EBITDA grew by R$49.9 million in the period. Excluding the extraordinary effects from the inventory write-off in 2Q12 and the R$7.2 million related to M&A expenses and the World Cup coupled with the additional adjusted aforementioned, EBITDA went from negative R$1.7 million in 2Q12 to positive R$25.3 million in 2Q13. In 1H13, EBITDA amounted to R$109.9 million, growing 29% over the same period of 2012, with EBITDA margin expanding by 4 p.p., from 24% in 1H12 to 28% in 1H13.Excluding the nonrecurring effects mentioned above, EBITDA increased by 28% in 1H13. Lower net loss in a seasonally weak quarter. In 2Q13, we posted a net loss after minority interest of R$8.8 million, compared to the net loss of R$20.5 million in 2Q12. In 1H13, net income was R$27.4 million, decreasing 18% from R$33.4 million in 1H12. SUBSEQUENT EVENTS On July 4 and 5, respectively, we announced the acquisitions of Sigma (Federal District) and Motivo (Pernambuco), two schools that enjoy strong academic reputation and with high levels of student acceptance in the region s most competitive college admissions exams, similarly to the Company s other schools and courses, i.e., Anglo (São Paulo) and ph (Rio de Janeiro). The acquisitions strengthen the Company s presence in the Midwest and Northeast, two regions of the country with the fastest growing economies, where we plan to replicate the successful experience we enjoyed with the acquisition of the ph Group in Rio de Janeiro. In May, we signed a commercial partnership with Organização Educacional Farias Brito do Ceará, one of the Brazil s most renowned teaching institutions due to its exceptional results on the admission exams for the schools IME and ITA. As a result, we will launch the Farias Brito System (SFB) focusing on preparatory materials for college admissions exams and, as of 2014, the 2,500 students enrolled in the preparatory courses of Farias Brito and other schools that already use the material will become clients of Abril Educação. The teaching materials will also be offered to partner schools in the North and Northeast regions, strengthening our catalogue concentrated on admissions exams for colleges in the North and Northeast, for IME and for ITA. 6

On August 5, we announced a major organizational restructuring aimed at promoting greater integration and control and capturing synergies across the various business units by streamlining our management processes. We created the following Vice-Presidencies: The Vice-Presidency of Educational Products and Services, which will be formed by the Learning System, Publisher and Complementary Product businesses, as well as Government Sales and Marketing; and The Vice- Presidency of Operations, Services & Integration, which includes the Operations Logistics, Information Technology, Education Technology, Shared Services, Integration and Human Resources areas. The Schools and Preparatory Courses Unit was created following the acquisitions of the schools Sigma and Motivo, and now includes all of the Company s on-site schools and preparatory courses. The Vice-Presidency of Financial and Administrative includes, in addition to financial functions the responsible for the Company s Strategic Planning and Legal areas, while the new Language Business Unit, which will manage the brands of the OMETZ Group (Wise Up, Wise Up Teens, You Move and Go Getter) and of Red Balloon. With this, the lines reporting directly to the CEO decreased from 12 to 5, which will streamline the Company s management and decision-making process. RESULTS BY BUSINESS LINE PUBLISHERS Publishers -R$ mm 2Q13 Adjustments 2Q13 (After Adjustments) 2Q12 Adjustments 2Q12 (After Adjustments) 2Q13/2Q12 2Q13/2Q12 (After Adjustments) Net Revenue 16.5 0.0 16.5 6.8 0.0 6.8 145% 145% (-) Cost of goods sold (COGS) (13.0) 0.0 (13.0) (33.6) 20.3 (13.3) -61% -2% (=) Gross Profit 3.5 0.0 3.5 (26.8) 20.3 (6.5) n/a n/a Gross margin (%) 21% 21% -397% -96% 418 p.p. 117 p.p. (-) Selling, general and administrative expenses (32.6) 0.0 (32.6) (29.4) 0.0 (29.4) 11% 11% (=) Operating income (loss) (29.1) 0.0 (29.1) (56.2) 20.3 (35.9) 48% 19% (+) Depreciation and Amortization 1.8 0.0 1.8 1.8 0.0 1.8 2% 2% (+) Amortization of publishing investment 3.1 0.0 3.1 1.3 0.0 1.3 146% 146% (=) EBITDA (24.2) 0.0 (24.2) (53.1) 20.3 (32.8) 54% 26% EBITDA Margin (%) -146% -146% -786% -485% 640 p.p. 339 p.p. AS IS 7

Publishers -R$ mm 1H13 Adjustments 1H13 (After Adjustments) 1H12 Adjustments 1H12 (After Adjustments) 1H13/1H12 1H13/1H12 (After Adjustments) Net Revenue 123.8 0.0 123.8 151.6 (27.0) 124.6-18% -1% (-) Cost of goods sold (COGS) (37.3) 0.0 (37.3) (72.3) 33.3 (39.0) -48% -4% (=) Gross Profit 86.4 0.0 86.4 79.3 6.3 85.6 9% 1% Gross margin (%) 70% 70% 52% 69% 18 p.p. 1 p.p. (-) Selling, general and administrative expenses (74.5) 0.0 (74.5) (78.0) 3.6 (74.4) -4% 0% (=) Operating income (loss) 11.9 0.0 11.9 1.3 9.9 11.2 820% 6% (+) Depreciation and Amortization 3.7 0.0 3.7 3.7 0.0 3.7 1% 1% (+) Amortization of publishing investment 8.8 0.0 8.8 9.6 (1.2) 8.4-9% 4% (=) EBITDA 24.4 0.0 24.4 14.6 8.7 23.3 67% 5% EBITDA Margin (%) 20% 20% 10% 19% 10 p.p. 1 p.p. AS IS Revenue Net revenue amounted to R$16.5 million in 2Q13, increasing 145% over the same period of 2012. Net revenue growth was led by sales to the government, which did not occur in 2Q12 and amounted to R$14.6 million this quarter, including additional revenue from digital PNLD 2012 of R$5.7 million. In 1H13, including the adjustment from the postponement of a portion of PNLD 2012 revenue to 1Q12 (R$27 million), since program orders by the federal government in 2011 were not fully billed in the period, net revenue from the Publishers business was virtually stable, decreasing by 0.6%.The second and third quarters are historically weak for the Publishers business and should not indicate annual performance. The result of PNLD 2014 will be released in September and will represent a significant portion of the annual results of the Publisher business. On August 2, the teachers from the public school system began the process of including book selections in the National Education Development Fund (FNDE) system for composing the PNLD 2014. The system will be available through August 12, and we expect to gain knowledge of the list of adoption in early September, which would represent a delay of around one month in this year s PNLD process, with an impact on early production. Typically 10% of PNLD revenue is recognized in the third quarter. However, with this delay, we will not be able to recognize revenue linked to the program in 3Q13, as was the case in 3Q12, which benefitted the period by R$25 million. Note that in 2012 we began the practice of delivering PNLD books by year-end, which represents a change from previous years. We invested in improving and increasing the efficiency of the production process, aiming to accelerate the billing of books produced for the program. At the time of this release disclosure we are still working with this hypothesis and are assessing alternatives to eliminate or mitigate the effects of the delayed release of the 2013 program s results which may or not be delayed in the year. The ability to conclude deliveries by year-end will depend on the results release date and the volumes the company is awarded in the PNLD. 8

COGS and Expenses COGS decreased 61.3% and 48.4% in 2Q13 and 1H13, respectively. However, excluding the nonrecurring effects from the recognition in 2Q12 of inventory write-off from prior periods and other effects related to the displacement of revenue, COGS decreased by 2.3% in 2Q13 and 4.2% in 1H13 from the same periods of 2012. The 4.2% reduction in COGS in the six-month period is due to (i) the lower costs with paper and printing services, reflecting the lower sales in the period, coupled with the revenue from digital PNLD 2012 billed in 2013, which had a positive revenue impact without increasing COGS; and (ii) the improved costs with book production for commercial distribution. Gross margin in the period, which is the seasonally weakest for Publishers, expanded from -397% to 21% and from 52% to 70% in the quarter and six-month period, respectively. However, an analysis on a comparable basis should exclude the nonrecurring effects from inventory write off and displacement of revenue in 2012. After these adjustments, comparable basis margins went from -96% to 21% and from 69% to 70% in the quarter and six-month period, respectively. The increase in selling, general and administrative expenses in 2Q13 compared to 2Q12 lagged revenue growth, since 35% of the quarter s revenues came from digital PNLD, which have lower associated copyrights and no sales commissions. In the six-month period, expenses decreased by less than revenues. While 1Q13 did not benefit from the displacement of revenues observed in 2012 mentioned earlier, the administrative structure of the company was obviously maintained, since we had no significant changes to the business structure that would justify any further reductions in the Company s structure. LEARNING SYSTEMS Learning Systems - R$ mm 2Q13 Adjustments 2Q13 (After Adjustments) 2Q12 Adjustments 2Q12 (After Adjustments) 2Q13/2Q12 2Q13/2Q12 (After Adjustments) Net Revenue 71.5 (8.2) 63.3 49.9 0.0 49.9 43% 27% (-) Cost of goods sold (COGS) (15.5) 1.5 (14.0) (9.0) 0.0 (9.0) 72% 56% (=) Gross Profit 56.0 (6.7) 49.3 40.9 0.0 40.9 37% 20% Gross margin (%) 78% 78% 82% 82% -4 p.p. -4 p.p. (-) Selling, general and administrative expenses (13.6) 0.0 (13.6) (12.6) 0.0 (12.6) 8% 8% (=) Operating income (loss) 42.4 (6.7) 35.6 28.3 0.0 28.3 50% 26% (+) Depreciation and Amortization 0.4 0.0 0.4 0.3 0.0 0.3 45% 45% (+) Amortization of publishing investment 1.5 0.0 1.5 1.1 0.0 1.1 36% 36% (=) EBITDA 44.3 (6.7) 37.6 29.7 0.0 29.7 49% 26% EBITDA Margin (%) 62% 59% 60% 60% 2 p.p. -1 p.p. AS IS 9

Learning Systems - R$ mm 1H13 Adjustments 1H13 (After Adjustments) 1H12 Adjustments 1H12 (After Adjustments) 1H13/1H12 1H13/1H12 (After Adjustments) Net Revenue 149.8 (1.7) 148.1 121.0 0.0 121.0 24% 22% (-) Cost of goods sold (COGS) (34.4) 0.3 (34.1) (23.4) 0.0 (23.4) 47% 46% (=) Gross Profit 115.5 (1.4) 114.0 97.6 0.0 97.6 18% 17% Gross margin (%) 77% 77% 81% 81% -4 p.p. -4 p.p. (-) Selling, general and administrative expenses (28.8) 0.0 (28.8) (27.2) 0.0 (27.2) 6% 6% (=) Operating income (loss) 86.6 (1.4) 85.2 70.3 0.0 70.3 23% 21% (+) Depreciation and Amortization 0.9 0.0 0.9 0.5 0.0 0.5 73% 73% (+) Amortization of publishing investment 3.4 0.0 3.4 2.7 0.0 2.7 25% 25% (=) EBITDA 90.9 (1.4) 89.4 73.5 0.0 73.5 24% 22% EBITDA Margin (%) 61% 60% 61% 61% 0 p.p. -1 p.p. AS IS Revenue Consolidated revenue from Learning Systems amounted to R$71.5 million, up 43% over 2Q12. Excluding the nonrecurring effects from the postponement of a portion of revenue from Anglo Learning System to 2Q13 (R$5.2 million) due to the delay in the academic year beginning, as well as the anticipation of a portion of revenue (R$3.0 million) from 3Q13 to 2Q13; revenue in 2Q13 grew 27% over 2Q12, driven by growth in the student base, higher prices for services, better sales mix and higher GEO revenue in relation to SER revenue from the same student base. In 1H13, revenue from Learning Systems amounted to R$149.8 million, growing 24% over 1H12. Excluding the abovementioned revenue reallocations as well as the anticipation, from 4Q12 to 1Q13, of R$1.3 million in revenue from SER, revenue grew by 22%, from R$121.0 million in 1H12 to R$148.1 million in 1H13. We highlight that the total amount of Learning Systems revenue includes R$ 11.8 million from GEO revenue, acquired in June 2012. We ended the first six months of the year with 556,100 students in the private and public markets enrolled at 1,811 associated schools. The growth in our student base in the public and private markets is presented and commented on in the following charts and texts: Private 2012 2013 Growth 4Q student base (previous year) 400.7 452.9 13.0% New contracts + Organic growth 95.6 92.4-3.3% Cancellations and losses -29.0-26.6-8.3% 1Q student base (before devolutions) 467.3 518.7 11.0% Cancellations in 2Q 0.0-4.7 n/a Devolutions -14.4-18.8 30.6% 2Q student base (after devolutions) 452.9 495.2 9.3% 10

In the private market new contracts and organic growth of client schools reached more than 90,000 students. The number of cancellations in the first two quarters affected contracts by 29,000 students in 2012 and 31,300 students in 2013, which represents a reduction in the cancellation and loss rate on the initial student base from 7.2% to 6.9%. Returns in the second quarter, the only quarter in which this typically occurs, increased from 14,400 students in 2012 to 18,800 students in 2013, representing an increase in the rate of returns on the first-quarter base from 3.1% to 3.6%. These effects resulted in growth in the private student base of 9.3% in the period. Lastly, the highest return rate, of 9%, was registered by our learning system with the lowest average ticket, while the return rate of our more expensive systems remained at historical levels. The Company conducted studies to understand the reasons for this slight increase in return rates observed in the quarter and is taking measures to reduce it by year-end. Public 2012 2013 Growth 4Q student base (previous year) 61.3 76.2 24.3% New contracts + Organic growth 9.2 12.3 33.7% Cancellations and losses 0.0-27.0 n/a 1Q student base (before devolutions) 70.5 61.5-12.8% New contracts 6.1 5.1-16.5% Cancellation -0.4-5.7 1325.0% 2Q student base (after devolutions) 76.2 60.9-20,1% In the public sector, we believe the performance observed, which translated into a decline of 15,300 students served by our systems, will not repeat over the next three years due to the following reasons: (a) 2012 was marked by elections at the local level, which are held every four years in Brazil. By law, new contracts may not be signed by municipal governments until the elections are decided in October and November. Consequently, our sales efforts for new contracts were limited to the last two months of 2012 and the first three months of 2013 before the academic year begins in March; (b) this was the first time that Abril Educação experienced a contract renewal effort following a local election. Most of its contracts with government agencies in force in 2012 came from the acquisitions of the Anglo and Maxi systems. The contracts signed by the sellers registered cancellations amounting to 32,700 students. Over the 15 canceled contracts involved, only 4 were signed under the management of Abril Educação. The Company believes that the contracts renewed and the new contracts signed after the respective acquisitions occurred at conditions that are more propitious for future renewals; and (c) despite the temporary limitations on the sales campaign imposed by the election season and the establishment of a department at the Company dedicated to the public sector only in September 2012, the number of new contracts signed added 17,400 students in six months, or more than in the whole of the previous year, when contracts were signed corresponding to 15,300 students. 11

The consolidated effects of the performance of the public and private markets are presented in the following chart: Consolidated 2012 2013 Growth 4Q student base (previous year) 462.0 529.1 14.5% New contracts + Organic growth 104.8 104.7-0.1% Cancellations and losses -29.0-53.6 84.8% 1Q student base (before devolutions) 537.8 580.2 7.9% New contracts 6.1 5.1-16.5% Cancellation and devolutions -14.8-29.2 97.3% 2Q student base (after devolutions) 529.1 556.1 5.1% COGS and Expenses COGS from Learning Systems amounted to R$15.5 million, increasing by R$6.5 million (+ 72%). Excluding the anticipation of orders from 3Q13 to 2Q13 and the postponement of orders from 1Q13 to 2Q13, COGS increased by 56%, from R$9.0 million in 2Q12 to R$14.0 million in 2Q13. Excluding the same nonrecurring effects from COGS in the first half of this year, COGS in 1H13 increased by 46% to R$34.1 million, from R$23.4 million in 1H12. We highlight that the total amount of Learning Systems revenue includes R$ 7.4 million from GEO revenue, acquired in June 2012, in the six-month period and R$4.8 million in the quarter. SG&A expenses from Learning Systems increased from R$12.6 million in 2Q12 to R$13.6 million in 2Q13. In 1H13, SG&A expenses from Learning Systems increased by 6%. The growth in expenses at a rate well below revenue growth offset the growth in costs in the Learning System business, which supported EBITDA margin expansion in the quarter and a stable margin in 1H13 compared to the year-ago period. 12

SCHOOLS AND PREPARATORY COURSES: Schools and Prep. Courses - R$ mm 2Q13 Adjustments 2Q13 (After Adjustments) 2Q12 Adjustments 2Q12 (After Adjustments) 2Q13/2Q12 2Q13/2Q12 (After Adjustments) Net Revenue 51.3 0.0 51.3 45.0 2.1 47.1 14% 9% (-) Cost of goods sold (COGS) (21.4) 0.0 (21.4) (17.4) 0.0 (17.4) 23% 23% (=) Gross Profit 29.9 0.0 29.9 27.6 2.1 29.7 8% 1% Gross margin (%) 58% 58% 61% 63% -3 p.p. -5 p.p. (-) Selling, general and administrative expenses (17.1) 0.0 (17.1) (17.0) 0.0 (17.0) 1% 1% (=) Operating income (loss) 12.8 0.0 12.8 10.6 2.1 12.7 21% 1% (+) Depreciation and Amortization 0.4 0.0 0.4 0.3 0.0 0.3 45% 45% (+) Amortization of publishing investment 0.0 0.0 0.0 0.0 0.0 0.0 0% 0% (=) EBITDA 13.2 0.0 13.2 10.9 2.1 13.0 22% 2% EBITDA Margin (%) 26% 26% 24% 28% 2 p.p. -2 p.p. AS IS Schools and Prep. Courses - R$ mm 1H13 Adjustments 1H13 (After Adjustments) 1H12 Adjustments 1H12 (After Adjustments) 1H13/1H12 1H13/1H12 (After Adjustments) Net Revenue 83.2 0.0 83.2 78.2 (3.9) 74.3 6% 12% (-) Cost of goods sold (COGS) (37.2) 0.0 (37.2) (29.2) 0.0 (29.2) 27% 27% (=) Gross Profit 46.1 0.0 46.1 49.0 (3.9) 45.1-6% 2% Gross margin (%) 55% 55% 63% 61% -8 p.p. -6 p.p. (-) Selling, general and administrative expenses (33.9) 0.0 (33.9) (32.6) 0.0 (32.6) 4% 4% (=) Operating income (loss) 12.2 0.0 12.2 16.4 (3.9) 12.5-26% -3% (+) Depreciation and Amortization 1.2 0.0 1.2 0.6 0.0 0.6 98% 98% (+) Amortization of publishing investment 0.0 0.0 0.0 0.0 0.0 0.0 0% 0% (=) EBITDA 13.4 0.0 13.4 17.0 (3.9) 13.1-21% 2% EBITDA Margin (%) 16% 16% 22% 18% -6 p.p. -2 p.p. AS IS Revenue Revenue from Schools and Preparatory Courses amounted to R$51.3 million, up 14% over 2Q12. As reported in 1Q13, starting in 2013, revenue from the ph Group is no longer recognized linearly over the calendar year (1/12 per month) and is now recognized as the classes are actually ministered. This change in the pace of revenue recognition caused a decline in revenue in 1Q13 compared to 1Q12. This change coupled with the growth in the number of students and monthly tuitions at ph Group of 9% and 5%, respectively, contributed to revenue growth at ph School of 52% compared to 1Q13. At the Anglo Preparatory Course, enrollments grew by 13% from 2012, while the prices practiced decreased by 5%. The 5% decline was due to student base growth at the Tatuapé Unit still during the period of capturing market and expanding the number of students enrolled in afternoon and night classes, which are traditionally less expensive, and to the higher discounts for courses in Sciences due to the more intense competition among new groups, particularly at the unit located on Rua Tamandaré, which is the largest in São Paulo. 13

As a whole, the Schools and Preparatory Courses business (Anglo, ph and ETB) ended 2Q13 with 17,200 students enrolled at 19 units, representing student base growth of 6% from 2Q12. Note that this figure excludes students from SIGA, which began to be managed by Alfacon Presencial. The Schools and Preparatory Courses business also includes ETB s Technical Learning System, which offers content and services for 19 technical courses to vocational schools, universities and private schools that want to establish technical courses. As of the close of 2Q13, ETB had entered into agreements with 76 educational institutions for 330 courses, which are gradually ramping up activities during 2013, while the authorizations or course approval is given, increasing revenues, accordingly. COGS and Expenses In 2Q13, COGS from Schools and Preparatory Courses amounted to R$21.4 million, increasing 23% from R$17.4 million in 2Q12. The increase of R$4.0 million in COGS in the Schools and Preparatory Courses business was primarily due to: I. the expansion in ph School classes adopting the ph Learning System, which was launched in late 2011, generating an additional cost in teaching materials. However, this cost is transferred to the students parents, generating complementary revenue for ph School and in turn for the Group; II. the change in recognizing pedagogical costs, which were previously allocated to SG&A Expenses and are now allocated to costs (R$1.7 million); and III. the higher number of Elementary School I (K to 5) classes at ph Schools, which since its acquisition by Abril Educação has focused on accelerating the enrollment of students in earlier grades of their primary education, which attracts students in lower grades that tend to remain at the schools for a longer period of time as they graduate to higher grades. In 1H13, COGS from Schools and Preparatory Courses amounted to R$37.2 million, increasing by R$8.0 million or 27% from 1H12. In 2Q13, SG&A expenses from Schools and Preparatory Courses remained virtually stable in relation to 2Q12, increasing from R$17.0 million in 2Q12 to R$17.1 million. In 1H13, the change of R$1.3 million mainly reflects the inclusion of expenses related to the Technical Learning System that did not exist in 2012 (R$1.5 million). Note that this amount excludes the R$3.4 million that is now allocated under costs in this business line, as described above. 14

LANGUAGES: For the first time since the acquisition of the OMETZ Group, the owner of the brand Wise Up, Wise Up Teens, You Move and Go Getter, which was concluded in April of this year, we are consolidating its results into those of the Company. Seeking the highest levels of transparency regarding the acquisition and its initial results, we present here some material aspects of the acquisition s negotiation, the Group s business model, a breakdown of its main brands, the comparable trends observed in 2013 and the seasonality of the business. We will also present the Company s results without consolidating the results of the OMETZ Group. Note also that, since the companies of the OMETZ Group were limited liability companies (and regulated by the Civil Code), they were not required to present quarterly information, with the adjustments identified by the external audit during the due diligence process consolidated into the base date of December 2012. However, the information for prior periods required these adjustments to be applied retroactively, as per Technical Pronouncement CPC 23 (CV Resolution 592), which was not possible. Therefore, comparisons of carrying amounts between months or quarters are not available in this report. Material aspects of the acquisition s negotiation 1. EBITDA base for pricing The Company concluded the transaction based on the results of cash flow and accounting EBITDA adjusted for nonrecurring effects. The book EBITDA reviewed for 2012 reported in the company's interim quarterly information (ITR) report filed at the time of the recent follow-on offering was R$71.6 million. To this accounting EBITDA, the Company accepted the following adjustments related to effects it deemed nonrecurring or to adjustments to the structure the sellers should make prior to the deal s closing: (i) Adjustment to present value of accounts receivable: R$7.6 million (ii) Adjustment of corporate restructuring: R$ 1.2 million After these non-recurring adjustments, EBITDA reported in the prospectus of the Follow On totaled R$ 80.4 million. The difference between the estimated EBITDA released by the time of the acquisition and the reported one in February 2013, amounts to R$5.2 million and refers to several effects that were considered as nonrecurring for the OMETZ Group operation in 2012, such as FIFA sponsorship expenses, commissions and expenses related to the selling of the company, editorial investment accounting treatment and other effects. 15

2. Financing of the acquisition On top of the R$877.3 million released on the Material Fact dated of February 8, as an estimated acquisition value; adjustments to the December 31, 2012 Wise Up EBITDA and CDI adjustment between the signing and closing of the transaction, were made, and totaled R$9.9 million. In addition to that, the Company paid to its sellers R$65.6 million related to the difference between net working capital ( CCL ) and the required working capital for the Company short term operations, in accordance to a typical net working capital ( CCL ) adjustment involving acquisitions of such nature. Total amount including (i) the R$9.9 million adjustment; and (ii) the abovementioned working capital adjustments; deducted by R$13.2 million related to the fair value units price, at the closing date; totaled R$939.6 million. Of the total amount, R$ 372.5 million was paid in stock issued by the Company through the issue of 25,070,586 million shares, which corresponds to 8,356,862 million units. In addition the Company paid R$247.2 million to the sellers as cash payment, and contracted borrowings in the amount of R$266 million directly from the sellers to be repaid within 48 and 60 months with interest equivalent to the CDI rate. Also, as a cash payment there is the net working capital ( CCL ) adjustment as described above. Besides the debt with sellers the Company also obtained R$280.0 million at a cost of CDI+1.45%, through a debentures issue to fund part of the acquisition of the OMETZ Group and to strengthen its working capital. Company considers a fiscal goodwill arose from the acquisition in the amount of R$897.5 million, to be deductible for fiscal purposes. The benefit of such goodwill will be recognized only after a corporate restructuring planned to occur up to the end of 2013, and within the legal established timeperiod. 3. Cash and working capital In all the acquisitions made by the Company to date, the price negotiation assumes zero net debt and the minimum working capital required to maintain operations after the acquisition without any need for additional capital injections. For example, in the two largest transactions carried out prior to the acquisition of the OMETZ Group, the sellers withdrew, immediately prior to the conclusion of the operation, the existing cash net of working capital, including short-term receivables. In the case of the acquisition of OMETZ Group the acquisition was based on the same assumption incurring in additional payments, as aforementioned. Guarantees For the payments to the sellers within 48 and 60 months after the close of the transaction, the company offered letters of guarantee issued by prime banks in the total amount of debt. 16

The sellers, on the other hand, provided the Company with the following guarantees: (a) R$110 million upon delivery of a letter of credit in guarantee issued by a prime bank to over contingencies for which the sellers are liable, for a period of 6 years. Note that this is the safest type of guarantee available in the market; and (b) up to R$101.4 million via the delivery of a letter of credit issued by a prime bank to cover a special guarantee related to gross revenue decreases at the OMETZ Group caused by certain specific events, for a period of 2 years. OMETZ Group business model The business model of the OMETZ Group is based on certain unique pillars in the language school franchise business in Brazil, namely: 1. Revenue sources: Sale of teaching materials directly to franchisee students. Unlike most franchisers in Brazil, which sell materials directly to their franchisees, which in turn resell them to students, the OMETZ Group sells teaching materials directly to students through the franchisees, which receive commissions on the sales. The sale of the material is fully recognized upon delivery of the material, and can be paid by the student up to 24 installments. Conservatively, if the student fails to settle with just a portion, the remaining amount to be received is already fully provisioned. a. Delinquency in 2011 and 2012, which was audited during the due diligence, stood at around 5.8%. b. Franchise fee. Franchise fees are charged from franchisees in two ways. First, through the purchase of the franchise, which is charged only once from new franchisees, with the amount varying from region to region. Currently these amounts range from R$50,000 to R$120,000. Second is a royalty fee applicable on the franchisee s gross revenue, which covers the trademark licensing rights and the marketing expenses made to benefit the franchisees. Meanwhile, the OMETZ Group undertook to spend 20% of its gross revenue on advertising and marketing in order to promote its brands in the market. The enrollment and management systems used by franchisees are owned by the OMETZ Group, which enables an adequate level of control over the sale of teachings material and the gross revenues of franchisees. In 2012, the revenue of the OMETZ Group amounted to R$ 163.2 million. A breakdown of gross revenue by source follows: 17

i. Sale of teaching materials: 75% ii. Royalties from existing franchisees: 18% iii. Franchise fees from new franchisees: 2% iv. Other: 4% 2. Operating Model Unlike the models typically seen in Brazil s franchise market, the OMETZ Group has the right to require from franchisees a minimum of three managers hired at each franchise: one responsible for the commercial area, one for the educational area and one for the operational area. The Group participates in the hiring of these managers and may request that they be replaced should they underperform. The Group offers daily training to the network of franchisees broadcast from its studio in Curitiba via satellite and over the Internet. Seasonality of teaching material sales In 2012, 59.3% of school material kits were sold in the first six months of the year. In addition, the months of May and June accounted for 13.2% of kit sales. These figures were in line with those observed in 2011. The graph below shows the seasonality of the sale of teaching materials, with a view of the monthly kits sale for 2012 and up to July. 8.000 Course Material revenue - Number of packages 6.000 4.000 2.000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Amount of packages - 2012 (Amnt) Amount of packages - 2013 (Amnt) 18

Consolidated results for 2Q13 and 1H13 in the Language business Language - R$ mm 2Q13 Adjustments 2Q13 (After Adjustments) 2Q12 Adjustments 2Q12 (After Adjustments) 2Q13/2Q12 2Q13/2Q12 (After Adjustments) Net Revenue 28.1 0.0 28.1-0.0 0.0 n/a n/a (-) Cost of goods sold (COGS) (4.3) 0.0 (4.3) - 0.0 0.0 n/a n/a (=) Gross Profit 23.8 0.0 23.8-0.0 0.0 n/a n/a Gross margin (%) 85% 85% - n/a n/a n/a (-) Selling, general and administrative expenses (14.7) 2.3 (12.4) - 0.0 0.0 n/a n/a (=) Operating income (loss) 9.1 2.3 11.4-0.0 0.0 n/a n/a (+) Depreciation and Amortization 0.3 0.0 0.3-0.0 0.0 n/a n/a (+) Amortization of publishing investment 0.0 0.0 0.0-0.0 0.0 n/a n/a (=) EBITDA 9.4 2.3 11.7-0.0 0.0 n/a n/a EBITDA Margin (%) 33% 42% n/a n/a n/a AS IS Language - R$ mm 1H13 Adjustments 1H13 (After Adjustments) 1H12 Adjustments 1H12 (After Adjustments) 1H13/1H12 1H13/1H12 (After Adjustments) Net Revenue 35.5 0.0 35.5-0.0 0.0 n/a n/a (-) Cost of goods sold (COGS) (8.7) 0.0 (8.7) - 0.0 0.0 n/a n/a (=) Gross Profit 26.8 0.0 26.8-0.0 0.0 n/a n/a Gross margin (%) 75% 75% - n/a n/a n/a (-) Selling, general and administrative expenses (15.1) 2.3 (12.8) - 0.0 0.0 n/a n/a (=) Operating income (loss) 11.7 2.3 14.0-0.0 0.0 n/a n/a (+) Depreciation and Amortization 0.3 0.0 0.3-0.0 0.0 n/a n/a (+) Amortization of publishing investment 0.0 0.0 0.0-0.0 0.0 n/a n/a (=) EBITDA 11.9 2.3 14.2-0.0 0.0 n/a n/a EBITDA Margin (%) 34% 40% - n/a n/a n/a AS IS The Language business posted net revenue of R$28.1 million in 2Q13, including the full recognition of R$6.8 million in revenue from Red Balloon, as well as the partial recognition of two months of revenue from Wise Up, which was acquired in May 2013 and contributed R$21.3 million in the quarter. In 1H13, net revenue was R$35.5 million, of which R$14.2 million was from Red Balloon and R$21.3 million from Wise Up. Note that this quarter we recognized R$2.3 million in expenses related to the sponsorship of the FIFA World Cup. EBITDA from the OMETZ Group adjusted by the FIFA World Cup marketing expenses amounted to R$8.7 million, with EBITDA margin of 41%, which is seasonally lower due to the typically lower sales in the period. Trends observed in 2013 Lastly, after acquiring the OMETZ Group, which was concluded in April 30, we noticed that in the first half of the year, kit sales and number of students enrolled decreased by 11%. This decline was partially offset by the same increase in prices compared to the first six months of 2012. Furthermore, only 2 new franchises were opened to date, compared to 33 in the prior year. 19

The situation observed at the OMETZ Group during the two months between the transaction s announcement and its conclusion resembles our experience after acquiring Anglo Learning System, when the announcement of the transition and the challenges faced in the first few months led to a slowdown in sales. In the case of Anglo, the trend was reversed over the course of the first six months of new management, with a subsequent recovery in growth, which has been maintained to date. The Company believes it can replicate similar measures in the case of the OMETZ Group. Measures to reverse trends On August 2, 2013, the Company instated Julio de Angeli as CEO of the OMETZ Group. He will be responsible for the successful operations of Englishtown in the Americas and Europe, whose business is very similar to that of Wise Up in terms of target public and the enrollment process based on the generation of quality leads. During the negotiation period and the closing of the operation, Company negotiated a transition period, in which Mr. Flavio Silva would be ahead of the business until the end of this year, training a new CEO to be hired throughout 2013. However, after the hiring of Mr. Julio de Angeli, parties decided to move on with the transition, in a manner that Mr. De Angeli would be instated immediately, remaining Mr. Silva at the new CEO disposal to enable transition period. Furthermore, main executives from OMETZ Group signed a retention agreement with the Company, at a cost absorbed by the sellers. An initial growth acceleration plan was created that began to be implemented in August and includes a review of the media plan to increase the generation of leads as well as joint promotional activities by the OMETZ Group and the schools using the learning systems of Abril Educação in order to present the Wise Up Teens brand to the students and parents of these schools. We will also more aggressively explore the possibilities created by the sponsorship of the 2014 FIFA World Cup and also implement a competition for the sales teams of the OMETZ Group and those of its franchisees. The Company also decided to accelerate the sale of new franchisees, focusing on areas of intersection that do not have a high density of Wise Up, Wise Up Teens or You Move franchisees and where Abril Educação has school owners that adopt the Company s learning systems and are interested in becoming franchisees of one of the brands of the OMETZ Group. Prior to the acquisition and in 2013 alone, the OMETZ Group had received a relevant volume of consultations for potential new franchisees and no action has been taken to date. This pool of interested entrepreneurs, coupled with the owners of schools using the Abril Educação learning system, will be the initial target of the franchise expansion plan. 20