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Marcopolo S.A.

Quarterly Information at September 30, 2013 and Report on Review of Quarterly Information
(A free translation of the original report in Portuguese as published in Brazil containing financial statements prepared in accordance with accounting practices adopted in Brazil)

(A free translation of the original in Portuguese)


Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Contents
Company Information Capital Composition Dividends Approved and/or Paid During and After the Quarter Parent Company Financial Statements Balance Sheet - Assets Balance Sheet - Liabilities and Equity Statement of Income Statement of Comprehensive Income Statement of Cash Flows Statement of Changes in Equity 1/1/2013 to 9/30/2013 1/1/2012 to 9/30/2012 Statement of Value Added Consolidated Financial Statements Balance Sheet - Assets Balance Sheet - Liabilities and Equity Statement of Income Statement of Comprehensive Income Statement of Cash Flows Statement of Changes in Equity 1/1/2013 to 9/30/2013 1/1/2012 to 9/30/2012 Statement of Value Added Management Report / Comments on Company Performance Notes to the Quarterly Information Other Information Considered Relevant by the Company Reports Report on Special Review - Without Exceptions 93 18 19 20 21 32 91 13 14 15 16 17 10 11 12 5 6 7 8 9 3 4

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Company Information / Capital Composition


Number of shares (units) Paid-up capital Common shares Preferred shares Total Treasury shares Common shares Preferred shares Total 341,625,744 555,274,340 896,900,084 Current quarter 9/30/2013

0 1,965,074 1,965,074

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Company Information / Dividends Approved and/or Paid During and After the Quarter
Event Board of Directors' Meeting Board of Directors' Meeting Board of Directors' Meeting Board of Directors' Meeting Date approved Amount 2/21/2013 2/21/2013 2/21/2013 2/21/2013 Interest on capital Interest on capital Interest on capital Interest on capital Date of payment 9/30/2013 9/30/2013 12/30/2013 12/30/2013 Type of share Common Preferred Common Preferred Class of share Amount per share (Reais / Share) 0.0175 0.0175 0.0175 0.0175

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Balance Sheet - Assets (Thousands of Reais)


1 Account Code 2 Account Description 1 1.01 1.01.01 1.01.02 1.01.02.01 1.01.02.01.01 1.01.03 1.01.03.01 1.01.04 1.01.06 1.01.06.01 1.01.08 1.01.08.03 1.02 1.02.01 1.02.01.01 1.02.01.01.02 1.02.01.03 1.02.01.03.02 1.02.01.06 1.02.01.06.01 1.02.02 1.02.02.01 1.02.02.01.01 1.02.02.01.02 1.02.02.01.03 1.02.03 1.02.03.01 1.02.04 1.02.04.01 Total assets Current assets Cash and cash equivalents Short-term investments Short-term investments valued at Fair Value Marketable Securities Accounts Receivable Trade accounts receivable Inventory Recoverable Taxes Current taxes recoverable Other current assets Other Noncurrent Assets Long-term Assets Short-term investments valued at Fair Value Available-for-sale securities Accounts Receivable Other Accounts Receivable Deferred taxes Deferred income tax and social contribution Investments Equity interests Interests in Associated Companies Interests in subsidiaries Interests in Joint Ventures Property, plant and equipment Property, plant and equipment in operation Intangible assets Intangible assets Current quarter 9/30/2013 3,118,087 1,705,925 563,680 16,814 16,814 16,814 700,713 700,713 293,010 101,618 101,618 30,090 30,090 1,412,162 84,960 24,515 24,515 7,293 7,293 53,152 53,152 1,105,773 1,105,773 31,099 917,411 157,263 216,499 216,499 4,930 4,930 Previous year 12/31/2012 2,387,855 1,376,113 233,119 135,220 135,220 135,220 668,044 668,044 242,204 73,462 73,462 24,064 24,064 1,011,742 85,855 36,942 36,942 7,361 7,361 41,552 41,552 730,522 730,522 27,811 546,344 156,367 190,584 190,584 4,781 4,781

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Balance Sheet - Liabilities and Equity (Thousands of Reais)
1 Account Code 2 Account Description 2 2.01 2.01.01 2.01.01.02 2.01.02 2.01.02.01 2.01.02.02 2.01.03 2.01.03.01 2.01.03.01.01 2.01.03.02 2.01.03.03 2.01.04 2.01.04.01 2.01.04.01.01 2.01.04.01.02 2.01.05 2.01.05.02 2.01.05.02.01 2.01.05.02.02 2.01.05.02.04 2.01.05.02.05 2.01.05.02.06 2.01.05.02.07 2.02 2.02.01 2.02.01.01 2.02.01.01.01 2.02.01.01.02 2.02.04 2.02.04.01 2.02.04.01.01 2.02.04.01.02 2.02.04.01.03 2.03 2.03.01 2.03.02 2.03.02.04 2.03.04 2.03.04.01 2.03.04.02 2.03.04.08 2.03.04.09 2.03.05 2.03.06 Total liabilities Current liabilities Social and labor obligations Labor obligations Trade payables Domestic Trade payables Foreign Trade payables Tax obligations Federal tax liabilities Income taxes and contribuitions payable State tax liabilities Municipal tax liabilities Loans and Financing Loans and Financing In local currency Foreign currency Other obligations Other Dividends and interest on Shareholders Equity Payable Minimum mandatory dividend payable Advances from customers Representatives on commission D&O profit shares Other current accounts payable Noncurrent liabilities Loans and financing Loans and financing In local currency Foreign currency Provisions Tax, welfare and civil contingencies Tax provisions Social security and labor provisions Pension plan and retirement benefits for employees provision Shareholders equity Realized capital Capital reserves Goodwil on share issuance Profit reserves Legal reserve Statutory reserve Additional dividend proposed Treasury shares Retained earnings/accumulated losses Equity valuation adjustments Current quarter 9/30/2013 3,118,087 667,097 102,569 102,569 328,558 320,234 8,324 63,338 60,467 60,467 2,662 209 74,292 74,292 44,917 29,375 98,340 98,340 14,502 9,247 23,992 5,769 44,830 1,040,306 963,107 963,107 724,716 238,391 77,199 77,199 6,094 5,089 66,016 1,410,684 1,200,000 593 593 68,748 8,471 66,179 (5,902) 167,824 (26,481) Previous year 12/31/2012 2,387,855 931,664 70,176 70,176 261,069 255,958 5,111 23,400 19,710 19,710 3,617 73 452,445 452,445 384,501 67,944 124,574 124,574 21,620 27,068 26,327 7,570 41,989 156,266 106,606 106,606 106,606 49,660 49,660 4,289 2,314 43,057 1,299,925 700,000 (999) (999) 639,642 48,471 526,179 72,790 (7,798) (38,718)

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Statement of Income (Thousands of Reais)


1 Account Code 3.01 3.02 3.03 3.04 3.04.01 3.04.02 3.04.04 3.04.05 3.04.06 3.05 3.06 3.06.01 3.06.02 3.07 3.08 3.08.01 3.08.02 3.09 3.11 3.99 3.99.01 3.99.01.01 3.99.01.02 3.99.02 3.99.02.01 3.99.02.02 2 Account Description Accrued value of the current quarter 7/1/2013 to 9/30/2013 705,122 (561,703) 143,419 (38,802) (37,932) (25,084) (8,743) 32,957 104,617 3 30,989 (30,986) 104,620 (18,229) (14,762) (3,467) 86,391 86,391 0.0965 0.0965 0.0963 0.0963 Accrued value of the current year 1/1/2013 to 9/30/2013 2,008,311 (1,645,665) 362,646 (105,632) (105,597) (67,719) (13,055) 80,739 257,014 (4,435) 127,391 (131,826) 252,579 (37,771) (41,565) 3,794 214,808 214,808 0.2400 0.2400 0.2395 0.2395 Accrued value of the prior quarter 7/1/2012 to 9/30/2012 604,492 (490,123) 114,369 (38,127) (34,033) (22,363) (5,631) 23,900 76,242 11,450 36,087 (24,637) 87,692 (19,056) (15,184) (3,872) 68,636 68,636 0.0767 0.0767 0.0765 0.0765 Accrued value of the prior year 1/1/2012 to 9/30/2012 1,722,553 (1,394,345) 328,208 (98,374) (102,485) (66,723) (9,895) 80,729 229,834 27,040 144,050 (117,010) 256,874 (49,780) (49,044) (736) 207,094 207,094 0.2316 0.2316 0.2309 0.2309

Revenue from goods sold and services provided Cost of goods and/or services sold Gross profit Operating (expenses) income Sales expenses General and administrative expenses Other operating income Other operating expenses Equity in net income of subsidiaries Net income (loss) from operations Financial Income/loss Financial revenue Financial expenses Profit before income tax and social contribution Income taxes and social contribution Current Deferred charges Net income from continued operations Net income/loss for the period Earnings per share - (reais/share) Basic earnings per share Common Preferred Diluted earnings per share Common Preferred

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Statement of Comprehensive Income (Thousands of Reais)


1 Account Code 4.01 4.02 4.02.01 4.02.02 4.02.03 4.02.04 4.03 2 Account Description Accrued value of the Accrued value of the Accrued value of the Accrued value of the current quarter current year prior quarter prior year 7/1/2013 to 9/30/2013 1/1/2013 to 9/30/2013 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 86,391 214,808 68,636 207,094 16,303 12,237 1,124 17,185 21,444 27,498 1,124 17,185 (7,736) (22,959) 2,630 7,806 (35) (108) 102,694 227,045 69,760 224,279

Net income for the period Other comprehensive income/loss Exchange variance on foreign investments Actuarial losses over employees benefits Deferred tax income and social contribution over actuarial gains/losses Result of comprehensive income of subsidiaries Comprehensive income for the period

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Statement of Cash Flows - Indirect Method (Thousands of Reais)
1 Account Code 6.01 6.01.01 6.01.01.01 6.01.01.02 6.01.01.03 6.01.01.04 6.01.01.05 6.01.01.06 6.01.01.07 6.01.02 6.01.02.01 6.01.02.02 6.01.02.03 6.01.02.04 6.01.02.05 6.01.02.06 6.02 6.02.01 6.02.02 6.02.03 6.02.04 6.02.05 6.03 6.03.01 6.03.02 6.03.03 6.03.04 6.03.05 6.03.06 6.05 6.05.01 6.05.02 2 Account Description Accrued value of the current year 1/1/2013 to 9/30/2013 318,360 224,866 214,808 15,855 362 (80,739) (1,434) 37,771 38,243 93,494 (31,235) (50,806) (45,714) 130,833 67,489 22,927 (309,295) (278,570) 11,556 (40,878) (1,583) 180 321,496 902,041 (433,841) (28,096) (122,096) 3,488 330,561 233,119 563,680 Accrued value of the prior year 1/1/2012 to 9/30/2012 61,260 216,868 207,094 16,501 8,995 (80,729) 6,555 49,780 8,672 (155,608) (59,545) (31,051) (57,314) (13,716) 36,718 (30,700) (74,165) (54,752) 17,607 (36,197) (1,849) 1,026 (500,366) (1,530) 24,850 (360,758) (15,027) (153,167) 5,266 (513,271) 739,949 226,678

Cash flows from operating activities Cash flows from operating activities Net income for the year Depreciation and amortization Earnings on disposal of investments, property, plant and equipment and intangible assets Equity in net income of subsidiaries Allowance for doubtful accounts Current and deferred income tax and social contribution Interest and exchange variance appropriated Changes in assets and liabilities (Increase) decrease in trade accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in assets stated at fai value Increase (decrease) in trade payables Increase (decrease) in actuarial benefits Cash flow from investment activities Investments Dividends from subsidiaries, jointly-controlled entities and associates Purchases of property, plant and equipment Purchases of intangible assets Receipt on sale of property, plant and equipment Cash flow from financing activities Loans from related parties Loans secured from unrelated parties Payment of loans principal Payment of loans interest Payment of interest in shareholders equity and dividends Treasury shares Increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements /Statement of Changes in Equity - 1/1/2013 to 9/30/2013 (Thousands of Reais)
1 Account 2 Account Description Code 5.01 5.03 5.04 5.04.01 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07 Opening balances Adjusted opening balances Capital transactions with partners Capital Increase Treasury stock sold Interest in shareholders equity Total comprehensive income/loss Net income for the period Other comprehensive income/loss Translation adjustments in the period Closing balances Paid-up share capital 700,000 700,000 500,000 500,000 1,200,000 Capital reserves, options awarded and treasury shares (8,797) (8,797) 3,488 3,488 (5,309) Profit Retained earnings / reserves accumulated losses 647,440 647,440 (572,790) (500,000) (72,790) 74,650 (46,984) (46,984) 214,808 214,808 167,824 Other comprehensive income / loss (38,718) (38,718) 12,237 12,237 12,237 (26,481) Shareholders equity 1,299,925 1,299,925 (116,286) 3,488 (119,774) 227,045 214,808 12,237 12,237 1,410,684

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements /Statement of Changes in Equity - 1/1/2012 to 9/30/2012 (Thousands of Reais)
1 Account Code 5.01 5.03 5.04 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07 2 Account Description Paid-up share capital 700,000 700,000 700,000 Capital reserves, options awarded and treasury shares (14,063) (14,063) 5,266 5,266 (8,797) Profit Retained earnings / reserves accumulated losses 506,556 506,556 (84,805) (84,805) 421,751 (30,986) (30,986) 207,094 207,094 176,108 Other comprehensive income / loss (26,305) (26,305) 17,185 17,185 17,185 (9,120) Shareholders equity 1,166,188 1,166,188 (110,525) 5,266 (115,791) 224,279 207,094 17,185 17,185 1,279,942

Opening balances Adjusted opening balances Capital transactions with partners Treasury stock sold Interest in shareholders equity Total comprehensive income/loss Net income for the period Other comprehensive income/loss Translation adjustments in the period Adjusted opening balances

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Parent Company Financial Statements / Statement of Value Added (Thousands of Reais)


1 Account Code 7.01 7.01.01 7.01.02 7.01.04 7.02 7.02.01 7.02.02 7.02.03 7.03 7.04 7.04.01 7.05 7.06 7.06.01 7.06.02 7.07 7.08 7.08.01 7.08.01.01 7.08.01.02 7.08.01.03 7.08.02 7.08.02.01 7.08.02.02 7.08.02.03 7.08.03 7.08.03.01 7.08.03.02 7.08.04 7.08.04.01 7.08.04.03 2 Account Description Accrued value of the current year 1/1/2013 to 9/30/2013 2,321,991 2,317,622 2,935 1,434 (1,764,593) (1,485,035) (263,568) (15,990) 557,398 (15,855) (15,855) 541,543 208,130 80,739 127,391 749,673 749,673 411,100 297,241 90,803 23,056 (15,798) 25,864 (42,614) 952 139,563 131,826 7,737 214,808 46,984 167,824 Accrued value of the prior year 1/1/2012 to 9/30/2012 1,982,665 1,983,538 5,682 (6,555) (1,458,533) (1,280,111) (162,845) (15,577) 524,132 (16,501) (16,501) 507,631 224,779 80,729 144,050 732,410 732,410 352,449 258,039 72,122 22,288 50,486 70,258 (20,755) 983 122,381 117,010 5,371 207,094 30,986 176,108

Revenue Sales of goods, products and services Other revenue Allowance/(reversal of allowance) for doubtful accounts Consumables acquired from third parties Cost of goods and services sold Materials, energy, outsourced services and other Loss/recovery of assets Gross value added Retentions Depreciation, amortization and depletion Net added value produced Transferred added value Equity in net income of subsidiaries Financial revenue Total added value to be distributed Distribution of added value Personnel Direct remuneration Benefits Government Severance Indemnity Fund for Employees (FGTS) Taxes, duties and contributions Federal State Municipal Interest expenses Interest Rent Interest earnings Interest on shareholders equity Retained earnings / loss for the period

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Balance Sheet - Assets (Thousands of Reais)


1 Account Code 1 1.01 1.01.01 1.01.02 1.01.02.01 1.01.02.01.01 1.01.03 1.01.03.01 1.01.04 1.01.06 1.01.06.01 1.01.08 1.01.08.03 1.02 1.02.01 1.02.01.01 1.02.01.01.02 1.02.01.03 1.02.01.03.01 1.02.01.03.02 1.02.01.06 1.02.01.06.01 1.02.02 1.02.02.01 1.02.02.01.01 1.02.02.01.04 1.02.03 1.02.03.01 1.02.04 1.02.04.01 2 Account Description Total assets Current assets Cash and cash equivalents Short-term investments Short-term investments valued at Fair Value Marketable Securities Accounts Receivable Trade accounts receivable Inventory Recoverable Taxes Current taxes recoverable Other current assets Other Noncurrent Assets Long-term Assets Short-term investments valued at Fair Value Available-for-sale securities Accounts Receivable Trade accounts Receivable Other Accounts Receivable Deferred taxes Deferred income tax and social contribution Investments Equity interests Interests in Associated Companies Interests in subsidiaries Property, plant and equipment Property, plant and equipment in operation Intangible assets Intangible assets Current quarter 9/30/2013 4,212,545 2,605,335 760,630 17,066 17,066 17,066 1,140,354 1,140,354 474,517 132,950 132,950 79,818 79,818 1,607,210 641,214 24,056 24,056 540,924 526,177 14,747 76,234 76,234 357,464 357,464 31,099 326,365 328,698 328,698 279,834 279,834 Previous year 12/31/2012 3,329,423 2,087,328 374,219 135,286 135,286 135,286 1,069,324 1,069,324 364,529 86,299 86,299 57,671 57,671 1,242,095 573,674 22,130 22,130 486,368 471,235 15,133 65,176 65,176 155,954 155,954 27,811 128,143 298,808 298,808 213,659 213,659

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Balance Sheet - Liabilities and Equity (Thousands of Reais)
1 Account Code 2 2.01 2.01.01 2.01.01.01 2.01.02 2.01.02.01 2.01.02.02 2.01.03 2.01.03.01 2.01.03.01.01 2.01.03.02 2.01.03.03 2.01.04 2.01.04.01 2.01.04.01.01 2.01.04.01.02 2.01.05 2.01.05.02 2.01.05.02.01 2.01.05.02.02 2.01.05.02.04 2.01.05.02.05 2.01.05.02.06 2.01.05.02.07 2.02 2.02.01 2.02.01.01 2.02.01.01.01 2.02.01.01.02 2.02.02 2.02.02.02 2.02.02.02.03 2.02.04 2.02.04.01 2.02.04.01.01 2.02.04.01.02 2.02.04.01.03 2.03 2.03.01 2.03.02 2.03.02.04 2.03.04 2.03.04.01 2.03.04.02 2.03.04.09 2.03.05 2.03.06 2.03.09 2 Account Description Total liabilities and equity Current liabilities Social and labor obligations Payroll obrigations Trade payables Domestic trade payables Foreign trade payables Tax obligations Federal tax liabilities Income taxes and contributions payable State tax liabilities Municipal tax liabilities Loans and financing Loans and financing In local currency Foreign currency Other obligations Other Dividends and interest on equity payable Minimum mandatory dividend payable Advances from customers Representatives on commission D&O profit shares Other current accounts payable Noncurrent liabilities Loans and financing Loans and financing In local currency Foreign currency Other obligations Other Obligations to purchase equity interests Provisions Tax, welfare and civil contingencies Tax provisions Social security and labor provisions Pension plan and retirement benefits for employees provision Consolidated shareholders equity Realized capital Capital reserves Options awarded Profit reserves Legal reserve Statutory reserve Treasury stock Retained earnings/accumulated losses Equity valuation adjustments Non-controlling interests Current quarter 9/30/2013 4,212,545 1,201,210 138,145 138,145 420,926 330,909 90,017 111,237 104,945 104,945 5,887 405 392,206 392,206 262,303 129,903 138,696 138,696 14,502 22,395 28,655 5,769 67,375 1,584,795 1,440,437 1,440,437 1,202,022 238,415 56,148 56,148 56,148 88,210 88,210 14,072 7,630 66,508 1,426,540 1,200,000 593 593 68,748 8,471 66,179 (5,902) 167,824 (26,481) 15,856 Previous year 12/31/2012 3,329,423 1,373,885 94,328 94,328 333,431 268,069 65,362 54,678 45,624 45,624 8,949 105 722,715 722,715 579,398 143,317 168,733 168,733 21,620 29,928 30,487 7,570 79,128 643,094 527,997 527,997 527,967 30 55,380 55,380 55,380 59,717 59,717 11,846 4,503 43,368 1,312,444 700,000 (999) (999) 639,642 48,471 598,969 (7,798) (38,718) 12,519

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Statement of Income (Thousands of Reais)


1 Account Code 3.01 3.02 3.03 3.04 3.04.01 3.04.02 3.04.05 3.04.06 3.05 3.06 3.06.01 3.06.02 3.07 3.08 3.08.01 3.08.02 3.09 3.11 3.11.01 3.11.02 3.99 3.99.01 3.99.01.01 3.99.01.02 3.99.02 3.99.02.01 3.99.02.02 2 Account Description Accrued value of the current quarter 7/1/2013 to 9/30/2013 975,849 (769,690) 206,159 (88,051) (47,512) (44,417) (6,399) 10,277 118,108 1,836 37,025 (35,189) 119,944 (33,008) (28,739) (4,269) 86,936 86,936 86,391 545 0.0971 0.0971 0.0969 0.0969 Accrued value of the current year 1/1/2013 to 9/30/2013 2,737,086 (2,199,080) 538,006 (242,462) (133,450) (120,266) (7,746) 19,000 295,544 (2,149) 146,752 (148,901) 293,395 (76,669) (85,019) 8,350 216,726 216,726 214,808 1,918 0.2422 0.2422 0.2416 0.2416 Accrued value of the prior quarter 7/1/2012 to 9/30/2012 840,838 (671,728) 169,110 (80,734) (46,780) (37,330) (3,954) 7,330 88,376 10,774 39,886 (29,112) 99,150 (29,932) (25,327) (4,605) 69,218 69,218 68,589 629 0.0774 0.0774 0.0772 0.0772 Accrued value of the prior year 1/1/2012 to 9/30/2012 2,399,803 (1,918,616) 481,187 (218,725) (131,213) (108,836) (4,708) 26,032 262,462 28,920 163,682 (134,762) 291,382 (83,161) (67,989) (15,172) 208,221 208,221 207,258 963 0.2328 0.2328 0.2322 0.2322

Revenue from goods sold and services provided Cost of goods and/or services sold Gross profit Operating (expenses) income Sales expenses General and administrative expenses Other operating expenses Equity in net income of subsidiaries Net income (loss) from operations Financial Income/loss Financial revenue Financial expenses Profit before income tax and social contribution Income taxes and social contribution Current Deferred charges Net income from continued operations Consolidated net income/loss for the period Attributed to partners of the parent Company Attributed to non-controlling interests Earnings per share (Reais / Share) Basic earnings per share Common Preferred Diluted earnings per share Common Preferred

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Statement of Comprehensive Income (Thousands of Reais)


1 Account Code 4.01 4.02 4.02.01 4.02.02 4.02.03 4.03 4.03.01 4.03.02 2 Account Description Accrued value of the current quarter 7/1/2013 to 9/30/2013 86,936 16,303 21,444 (7,794) 2,653 103,239 102,414 825 Accrued value of the Accrued value of the Accrued value of the current year prior quarter prior year 1/1/2013 to 9/30/2013 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 216,726 69,218 208,221 12,237 1,124 17,185 27,498 1,124 17,185 (23,140) 7,879 228,963 70,342 225,406 225,626 69,667 223,661 3,337 675 1,745

Consolidated net income for the period Other comprehensive income/loss Exchange variance on foreign investments Actuarial losses over employees benefits Deferred tax income and social contribution over actuarial gains/losses Consolidated comprehensive income for the period Attributed to partners of the parent Company Attributed to non-controlling interests

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(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013- MARCOPOLO SA

Consolidated Financial Statements / Statement of Cash Flows - Indirect Method (Thousands of Reais)
1 Account Code 6.01 6.01.01 6.01.01.01 6.01.01.02 6.01.01.03 6.01.01.04 6.01.01.05 6.01.01.06 6.01.01.07 6.01.01.08 6.01.02 6.01.02.01 6.01.02.02 6.01.02.03 6.01.02.04 6.01.02.05 6.01.02.06 6.02 6.02.01 6.02.02 6.02.03 6.02.04 6.02.05 6.03 6.03.02 6.03.03 6.03.04 6.03.05 6.03.06 6.04 6.05 6.05.01 6.05.02 2 Account Description Accrued value of the current year 1/1/2013 to 9/30/2013 271,706 371,719 216,726 28,336 5,092 (19,000) 1,348 76,669 60,630 1,918 (100,013) (127,131) (108,896) (78,767) 116,294 86,537 11,950 (284,280) (172,025) 15,073 (58,419) (69,389) 480 396,369 1,255,262 (684,826) (49,021) (128,534) 3,488 2,616 386,411 374,219 760,630 Accrued value of the prior year 1/1/2012 to 9/30/2012 110,277 334,843 208,221 27,272 154 (26,032) 6,017 83,161 35,087 963 (224,566) (94,022) (75,095) (110,887) (16,355) 48,348 23,445 (174,889) 17,607 (62,404) (131,120) 1,028 (462,603) 267,902 (538,274) (44,330) (153,167) 5,266 1,246 (525,969) 887,497 361,528

Cash flows from operating activities Cash flows from operating activities Net income for the year Depreciation and amortization Earnings on disposal of investments, property, plant and equipment and intangible assets Equity in net income of subsidiaries Allowance for doubtful accounts Current and deferred income tax and social contribution Interest and exchange variance appropriated Non-controlling interests Changes in assets and liabilities (Increase) decrease in trade accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in assets stated at fai value Increase (decrease) in trade payables Increase (decrease) in actuarial benefits Cash flow from investment activities Investments Dividends from subsidiaries, jointly-controlled entities and associates Purchases of property, plant and equipment Purchases of intangible assets Receipt on sale of property, plant and equipment Cash flow from financing activities Loans secured from unrelated parties Payment of loans principal Payment of loans interest Payment of interest in shareholders equity and dividends Treasury shares Foreign exchange gains/(losses) on cash equivalents Increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents

17

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements /Statement of Changes in Equity - 1/1/2013 to 9/30/2013 (Thousands of Reais)
1 Account Code 5.01 5.03 5.04 5.04.01 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.05.02.06 5.07 2 Account Description Paid-up share capital Capital reserves, options awarded and treasury shares (8,797) (8,797) 3,488 3,488 (5,309) Profit reserves Retained earnings / accumulated losses (46,984) (46,984) 214,808 214,808 167,824 Other Shareholders comprehensive equity income / loss (38,718) (38,718) 12,237 12,237 12,237 (26,481) 1,299,925 1,299,925 (116,286) 3,488 (119,774) 227,045 214,808 12,237 12,237 1,410,684 Noncontrolling interests 12,519 12,519 3,337 1,918 1,419 1,209 210 15,856 Consolidated Shareholders equity 1,312,444 1,312,444 (116,286) 3,488 (119,774) 230,382 216,726 13,656 13,446 210 1,426,540

Opening balances Adjusted opening balances Capital transactions with partners Capital Increase Treasury stock sold Interest in shareholders equity Total comprehensive income Net income for the period Other comprehensive income/loss Translation adjustments in the period Non-controlling interests Closing balances

700,000 700,000 500,000 500,000 1,200,000

647,440 647,440 (572,790) (500,000) (72,790) 74,650

18

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Statement of Changes in Equity - 1/1/2012 to 9/30/2012 (Thousands of Reais)

1 Account Code 5.01 5.03 5.04 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07

2 Account Description

Paid-up share capital

Capital reserves, options awarded and treasury shares (14,063) (14,063) 5,266 5,266 (8,797)

Profit reserves

Opening balances Adjusted opening balances Capital transactions with partners Treasury stock sold Interest in shareholders equity Total comprehensive income Net income for the period Other comprehensive income/loss Translation adjustments in the period Closing balances

700,000 700,000 700,000

502,512 502,512 (84,805) (84,805) 417,707

Retained earnings / accumulated losses (30,986) (30,986) 207,258 207,258 176,272

Other Shareholders comprehensive equity income / loss (26,305) (26,305) 17,185 17,185 17,185 (9,120) 1,162,144 1,162,144 (110,525) 5,266 (115,791) 224,443 207,258 17,185 17,185 1,276,062

Noncontrolling interests 9,348 9,348 1,745 963 782 782 11,093

Consolidated Shareholders equity 1,171,492 1,171,492 (110,525) 5,266 (115,791) 226,188 208,221 17,967 17,967 1,287,155

19

(A free translation of the original in Portuguese)

Quarterly Information (ITR) - 9/30/2013 - MARCOPOLO SA

Consolidated Financial Statements / Statement of Value Added (Thousands of Reais)


1 Account 2 Account Description Code 7.01 7.01.01 7.01.02 7.01.04 7.02 7.02.01 7.02.02 7.02.03 7.03 7.04 7.04.01 7.05 7.06 7.06.01 7.06.02 7.07 7.08 7.08.01 7.08.01.01 7.08.01.02 7.08.01.03 7.08.02 7.08.02.01 7.08.02.02 7.08.02.03 7.08.03 7.08.03.01 7.08.03.02 7.08.04 7.08.04.01 7.08.04.03 Revenue Sales of goods, products and services Other revenue Allowance/(reversal of allowance) for doubtful accounts Consumables acquired from third parties Cost of goods and services sold Materials, energy, outsourced services and other Loss/recovery of assets Gross value added Retentions Depreciation, amortization and depletion Net added value produced Transferred added value Equity in net income of subsidiaries Financial revenue Total added value to be distributed Distribution of added value Personnel Direct remuneration Benefits Government Severance Indemnity Fund for Employees (FGTS) Taxes, duties and contributions Federal State Municipal Interest expenses Interest Rent Interest earnings Interest on shareholders equity Retained earnings/loss for the period Accrued value of the Accrued value of the current year prior year 1/1/2013 to 9/30/2013 1/1/2012 to 9/30/2012 3,159,577 2,741,418 3,148,281 2,733,817 12,644 13,618 (1,348) (6,017) (2,263,266) (1,920,403) (1,920,555) (1,791,641) (322,321) (110,052) (20,390) (18,710) 896,311 821,015 (28,336) (27,272) (28,336) (27,272) 867,975 793,743 165,752 189,714 19,000 26,032 146,752 163,682 1,033,727 983,457 1,033,727 983,457 584,989 510,161 436,151 375,536 119,263 110,076 29,575 24,549 62,640 113,768 86,136 124,534 (24,538) (11,808) 1,042 1,042 169,372 151,307 148,901 134,762 20,471 16,545 216,726 208,221 46,984 30,986 169,742 177,235

20

MARCOPOLO S.A.
Consolidated Information - 3Q13
Caxias do Sul - November 04, 2013 - Marcopolo S.A. (BM&FBOVESPA: POMO3; POMO4), hereby announces its earnings figures for the third quarter of 2013 (3Q13) and accumulated (9M13). The financial statements are presented in accordance with accounting practices adopted in Brazil and with IFRS - International Financial Reporting Standards issued by the IASB - International Accounting Standards Board.

Selected information with adoption of IFRS 10 and 11 (CPC 36 R3 and CPC 19 R2)
MARCOPOLO IR
Carlos Zignani IR Director +55 (54) 2101.4115

HIGHLIGHTS OF THE 3ND QUARTER OF 2013


Consolidated Net Revenue amounted to R$ 975.8 million Gross Profit totaled R$ 206.2 million with a margin of 21.1%. EBITDA was R$ 127.7 million with a margin of 13.1% or 12.3% in the previous accounting standards. Net Income totaled R$ 86.9 million with a margin of 8.9%. Marcopolo's Production in Brazil reached 5,365 units and 5,812 units including overseas operations.

Thiago A.Deiro IR Manager +55 (54) 2101.4660


www.marcopolo.com.br/ri ri@marcopolo.com.br

(R$ million, unless stated otherwise).

SELECTED INFORMATION Net operating revenue - Revenue in Brazil - Revenues from exports and abroad Gross Profit EBITDA (1) Net Income Earnings per Share Return on Invested Capital (ROIC) (2) Return on shareholders' equity (ROE) (3) Investments Gross Margin EBITDA Margin EBITDA Margin (previous accounting standards) Net Margin DADOS DO BALANO PATRIMONIAL Shareholders Equity Cash and cash equivalents and short-term investments Current financial liabilities Noncurrent financial liabilities Net financial liability (asset) - Industrial Segment

3Q13 975.8 696.7 279.1 206.2 127.7 86.9 0.097 17.5% 24.4% 12.0 21.1% 13.1% 12.3% 8.9%
9/30/13

3Q12 840.8 534.8 306.0 169.1 99.5 69.2 0.077 17.9% 29.9% 10.2 20.1% 11.8% 11.1% 8.2%
6/30/13

Var. % 16.1 30.3 (8.8) 21.9 28.3 25.6 26.0 (0.4)pp (5.5)pp 17.6 1.0pp 1.3pp 1.2pp 0.7pp Var. % 6.6 1.5 (3.0) 4.2 0.5

9M13 2,737.1 2,009.4 727.7 538.0 323.9 216.7 0.242 17.5% 24.4% 284.3 19.7% 11.8% 11.2% 7.9%

9M12 2,399.8 1,628.7 771.1 481.2 289.7 208.2 0.232 17.9% 29.9% 174.9 20.1% 12.1% 11.2% 8.7%

Var. % 14.1 23.4 (5.6) 11.8 11.8 4.1 4.3 (0.4)pp (5.5)pp 62.6 (0.4)pp (0.3)pp (0.8)pp

1,410,7 801,8 392,2 1,440,4 (359,6)

1,323,7 789,8 404,2 1,382,0 (361,5)

Notes: (1) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization; (2) ROIC (Return on Invested Capital) = EBIT of the last 12 months (inventories + trade receivables + property, plant and equipment + intangible assets - trade payables); (3) ROE (Return on Equity) = Net Income for the last 12 months/Initial Shareholders' Equity; pp = percentage points

21

BRAZILIAN BUS INDUSTRY PERFORMANCE In 3Q13 Brazilian production of buses amounted to 9,255 units, an increase of 12.1% in relation to the third quarter of 2012. In 9M13 production reached 25,510 units, 2.9% more than the production of the same period last year. a) Domestic Sales. 8,163 units were produced for the domestic market in 3Q13, 22.6% above the 6,656 units produced in 3Q12, and 22,669 units in 9M13, representing 88.2% and 88.9% of Brazil's total production, respectively. b) Foreign Sales. Exports totaled 1.092 units in 3Q13, 31.7% less than the 1,598 units exported in the third quarter last year. In 9M13 exports totaled 2,841 units, 13.6% less than the 3,290 units exported in 9M12.

BRAZILIAN BUS PRODUCTION (in units)


3Q13 3Q12 TOTAL 2,902 4,778 1,575 9,255 DM 1,846 4,193 617 6,656 OM
(2)

PRODUCTS Intercity Urban Micros TOTAL

(1)

Change TOTAL 2,470 4,697 1,087 8,254 %


17.5 1.7 44.9 12.1

DM
2,164 4,550 1,449 8,163

OM

(2)

738 228 126 1,092 9M13

624 504 470 1,598 9M12

PRODUCTS Intercity Urban Micros TOTAL

(1)

Change TOTAL 7,017 14,160 3,621 24,798 %


12.8 (2.8) 5.9 2.9

DM
6,188 13,265 3,216 22,669

OM

(2)

TOTAL 7,918 13,758 3,834 25,510

DM 5,550 13,284 2,674 21,508

OM

(2)

1,730 493 618 2,841

1,467 876 947 3,290

Sources: FABUS (National Association of Bus Manufacturers) and SIMEFRE (Interstate Syndicate of the Industrial of Rail and Road Materials and Equipment). Notes:
(1)

DM = Domestic Market; OM = Overseas Market; (2) Includes units exported as KD (Knockdown) buses does not include the production of entire units such as Volare.

(3)

The production data of the Mini-

MARCOPOLOS OPERATING AND FINANCIAL PERFORMANCE

Units Recorded in Net Revenue

5,543 units were recorded in net revenue in 3Q13. Of this volume, 5,061 units were registered in Brazil representing 91.3% of the total, and 482 units abroad representing the remaining 8.7%, as shown in the table below:

22

OPERATIONS BRAZIL: - Domestic Sales - Overseas Sales SUBTOTAL Exclusion of exported KDs TOTAL IN BRAZIL INTERNATIONAL: - South Africa - Australia - Mexico TOTAL INTERNATIONAL OVERALL TOTAL
Notes:
(1)

3Q13

3Q12

Var. %

9M13

9M12

Var. %

4,579 505 5,084


(1)

3,556 925 4,481 14 4,467 75 96 417 588 5,055

28.8 (45.4) 13.5 64.3 13.3

13,079 1,292 14,371 48 14,323 217 371 876 1,464 15,787

10,974 2,028 13,002 115 12,887 208 339 1,022 1,569 14,456

19.2 (36.3) 10.5 (58.3) 11.1

23 5,061 98 138 246 482 5,543

30.7 43.8 (41.0) (18.0) 9.7

4.3 9.4 (14.3) (6.7) 9.2

Bodies partially or completely knocked down.

Production

Marcopolo's consolidated production was 5,812 units in 3Q13, 10.5% above the 5,261 units produced in 3Q12. In Brazil production reached 5,365 units in 3Q13, 14.8% more than 3Q12, while overseas production was 447 units, 24.1% less than the production of the same period last year. Marcopolo's consolidated production data and the respective comparison with the previous year are shown in the following table: MARCOPOLO - CONSOLIDATED WORLDWIDE PRODUCTION
OPERATIONS BRAZIL:
(1)

3Q13

3Q12

Var. %

9M13

9M12

Var. %

- Domestic Sales - Foreign Sales SUBTOTAL Exclusion of exported KDs TOTAL IN BRAZIL INTERNATIONAL: - South Africa - Australia - Mexico TOTAL INTERNATIONAL OVERALL TOTAL
Notes:
(1)

4,878 509 5,387


(2)

3,742 944 4,686 14 4,672 76 96 417 589 5,261

30.4 (46.1) 15.0 57.1 14.8

13,185 1,323 14,508 87 14,421 190 371 876 1,437 15,858

10,874 2,068 12,942 118 12,824 182 339 1,022 1,543 14,367

21.3 (36.0) 12.1 (26.3) 12.5

22 5,365 63 138 246 447 5,812

(17.1) 43.8 (41.0) (24.1) 10.5

4.4 9.4 (14.3) (6.9) 10.4

Includes the production of the Volare model as well as the production of the companies Ciferal (1,731 units in 3Q13 and 1,351 units in 3Q12) (2) Bodies partially or completely knocked down;

23

MARCOPOLO - CONSOLIDATED WORLDWIDE PRODUCTION BY MODEL


PRODUCTS
(in units)

3Q13 DM 1,357 1,782 231 3,370 1,508 4,878 OM


(1)

3Q12 TOTAL 1,686 2,232 342 4,260 1,552 5,812 DM 1,183 1,369 106 2,658 1,084 3,742 OM
(1)

TOTAL 1,474 2,124 265 3,863 1,398 5,261

Intercity Urban Micros SUBTOTAL Volares


(2)

329 450 111 890 44 934 9M13

291 755 159 1,205 314 1,519 9M12

TOTAL PRODUCTION PRODUCTS


(in units)

DM 3,809 4,752 644 9,205 3,980 13,185


(2)

OM

(1)

TOTAL 4,547 6,182 1,001 11,730 4,128 15,858

DM 3,490 4,279 443 8,212 2,662 10,874

OM

(1)

TOTAL 4,202 6,144 895 11,241 3,126 14,367

Intercity Urban Micros SUBTOTAL Volares


Notes:
(1)

738 1,430 357 2,525 148 2,673

712 1,865 452 3,029 464 3,493

TOTAL PRODUCTION

Total production of OM includes units exported in KD (bodies partially or completely knocked down), which totaled 22 units in 3Q13 and 87 units in 9M13, 14 in 3Q12 and 118 units in 9M12; (2) The production of Volares is not part of the data from SIMEFRE and from FABUS, Marcopolo's market share or the sector's production.

MARCOPOLO - PRODUCTION IN BRAZIL


PRODUCTS
(in units)

3Q13 DM 1,357 1,782 231 3,370 1,508 4,878 OM


(1)

3Q12 TOTAL 1,677 1,816 342 3,835 1,552 5,387 DM 1,183 1,369 106 2,658 1,084 3,742 OM
(1)

TOTAL 1,442 1,581 265 3,288 1,398 4,686

Intercity Urban Micros SUBTOTAL Volares (2) TOTAL PRODUCTION PRODUTOS Intercity Urban Micros SUBTOTAL Volares (2) TOTAL PRODUCTION

320 34 111 465 44 509 9M13

259 212 159 630 314 944 9M12

(em unidades)

DM 3,809 4,752 644 9,205 3,980 13,185

OM

(1)

TOTAL 4,569 4,810 1,001 10,380 4,128 14,508

DM 3,490 4,279 443 8,212 2,662 10,874

OM

(1)

TOTAL 4,189 4,732 895 9,816 3,126 12,942

760 58 357 1,175 148 1,323

699 453 452 1,604 464 2,068

Note: See notes under the Consolidated World Production by Model.

Brazilian Market Share

The Company's market share in Brazil following was 41.4% in 3Q13 and 40,7% over the first nine months of the year. It is important to note the segment of coach buses, wich market share was 57.7% in 9M13.

24

MARKET SHARE IN BRAZILIAN PRODUCTION (%)


PRODUCTS Intercity Urban Micros TOTAL
Source: FABUS and SIMEFRE Notes: (1) Includes 100.0% of Ciferal;
(1)

9M13 57.7 35.0 26.1 40.7


(2)

3T13 57.8 38.0 21.7 41.4

9M12 59.8 33.4 25.0 39.6

3T12 58.4 33.7 24.4 39.8

The Volare is not counted for purposes of market share.

Net Revenue

The consolidated net revenue reached R$ 975.8 million in 3Q13, up by 16.1% over the R$ 840.8 million recorded in 3Q12, explained by an increase of 9.7% in sales, an improvement in mix (greater Intercity and Volare sales) and due to the devaluation of the Brazilian Real compared the United States dollar, which reflected positively on exports revenue. Domestic sales generated revenue of R$ 696.7 million, or 71.4% of the total, while overseas sales totaled R$ 279.1 million, comprising the remaining 28.6% of the consolidated net revenue. The table and graphs below show the breakdown of the net revenue by products and markets: CONSOLIDATED TOTAL NET REVENUE By Products and Markets (R$ million)
PRODUCTS / MARKETS Intercity Urban Micros Subtotal bodies Volares Chassis Bco. Moneo Bank, Parts & Others OVERALL TOTAL
(2)
(1)

3Q13 DM 265.4 160.1 20.3 445.8 217.7 10.4 22.8 696.7 OM 118.6 120.4 11.4 250.4 3.9 6.5 18.3 279.1 DM

3Q12 OM 90.2 122.0 9.9 222.1 49.9 9.4 24.6 306.0 3Q13 201.3 120.8 11.9 334.0 150.6 24.9 25.3 534.8

TOTAL 3Q12 291.5 242.8 21.8 556.1 200.5 34.3 49.9 840.8 384.0 280.5 31.7 696.2 221.6 16.9 41.1 975.8

PRODUCTS / MARKETS Intercity Urban Micros Subtotal bodies Volares Chassis Bco. Moneo Bank, Parts & Others OVERALL TOTAL
(2)

(1)

9M13 DM 710.4 443.7 58.1 1.212.2 647.2 85.2 64.8 2.009.4


(2)

9M12 OM 257.3 312.4 31.1 600.8 20.3 21.6 85.0 727.7 DM 612.6 415.8 43.0 1.071.4 425.6 59.3 72.4 1.628.7 OM 216.9 348.3 32.4 597.6 62.4 38.3 72.8 771.1 9M13

TOTAL 9M12 829.5 764.1 75.4 1.669.0 488.0 97.6 145.2 2.399.8 967.7 756.1 89.2 1.813.0 667.5 106.8 149.8 2.737.1

Notes: (1) DM = Domestic Sales; OM = Overseas Sales;

Revenues from Volares includes the chassis.

25

BREAKDOWN OF CONSOLIDATED NET REVENUE (%)

3Q13

3Q12

9M13

9M12

GROSS PROFIT AND MARGINS Consolidated gross profit in 3Q13 reached R$ 206.2 million, with margin of 21.1%, compared with R$ 169.1 million in 3Q12, with a margin of 20.1%. This increase is explained by an improvement in the export margin due to the devaluation of the Brazilian Real against the United States dollar, an improvement in sales mix, greater Volare revenue and lower income in sales of chassis.

26

OPERATING EXPENSES

Selling Expenses

Selling expenses totaled R$ 47.5 million in 3Q13 comparing to R$ 46.8 million in 3Q12, corresponding to 4.9% and 5.6% of net revenue, respectively. The decrease in these expenses is due to a lower allowance for doubtful accounts and for a higher noncommissioned sales revenue.

General and Administrative Expenses

The general and administrative expenses totaled R$ 44.4 million in 3Q13, or 4.6% of net revenue, while these expenses in 3Q12 totaled R$ 37.3 million, or 4.4% of revenue. This increase is explained mainly by higher costs with labor caused by the Collective Bargaining Agreement (ACT)

Other Operating Income/Expenses

In 3Q13, R$ 6.4 million was recorded as "Other Operating Expenses", due to provisions for tax contingencies and legal fees, compared with expenses of R$ 4.0 million in 3Q12.

NET FINANCIAL RESULTS


The net financial result in 3Q13 was positive in R$ 1.8 million versus the R$ 10.8 million in 3Q12, also positive. This result is mostly explained by the increase from results with short-term investments and gains with hedges on exports. EBITDA The EBITDA reached R$ 127.7 million in 3Q13 with a margin of 13.1% versus R$ 99.5 million and a margin of 11.8% in 3Q12. Improvement in the EBITDA margin is explained by the same factors of gross profit. The table below highlights the accounts that are part of EBITDA:
(R$ millions) Operating Income Financial Revenue Financial Expenses Depreciation / Amortization EBITDA Equity in net income of subsidiaries Adjusted EBITDA 3Q13 119.9 (37.0) 35.2 9.6 127.7 (10.3) 117.4 3Q12 99.2 (39.9) 29.1 11.1 99.5 (7.3) 92.2 Var. % 20.9 (7.3) 21.0 (13.5) 28.3 41.1 27.3 9M13 293.4 (146.8) 148.9 28.4 323.9 (19.0) 304.9 9M12 291.4 (163.7) 134.8 27.2 289.7 (26.0) 263.7 Var. % 0.7 (10.3) 10.5 4.4 11.8 (26.9) 15.6

27

NET PROFIT The consolidated net income in 3Q13 totaled R$ 86.9 million, with margin of 8.9%, due to higher sales volume, improved margins, more favorable exchange rate and positive financial results. Net income in 3Q12 was R$ 69.2 million with a margin of 8.2%. FINANCIAL DEBT The net financial debt amounted to R$ 1,030.9 million as of 9/30/2013 (R$ 996.4 million as of 6/30/2013). Of this total, R$ 671.3 million came from the financial sector (Banco Moneo) and R$ 359.6 million from the industrial sector. It is important to point out that the financial sector debt derives from the consolidation of the activities of Banco Moneo and should be analyzed separately since it has different characteristics from that of the Company's operating activities. Banco Moneo's financial liability is charged to the account "Trade accounts receivable" in the bank's assets. The credit risk is properly provisioned for. As they relate to FINAME transfers, each disbursement made by the Bank for Economic and Social Development (BNDES) is charged to Banco Moneo's trade accounts receivable, both in term and fixed rate. On September 30, 2013 the net financial liabilities from industrial sector represented 0.8x EBITDA of twelve last months. CASH GENERATION In 3Q13, the amount of R$ 17.3 million were absorbed by the operating activities. Investment activities received R$ 12 million. Financing activities generated R$ 33.7 million, in which R$ 47.6 million correspond to contracting and repayments of loans and R$ 13.9 million consumed in payments of interest in shareholders equity and dividends. As a result, the opening cash balance of R$ 755.4 million, plus R$ 0.8 million of exchange variance on cash, increased to R$ 760.6 million at the end of September 2013. INVESTMENTS IN PERMANENT ASSETS In 3Q13 Marcopolo invested R$ 12.0 million in capital goods, of which R$ 11.3 million was spent by the parent company and invested as follows: R$ 2.2 in machinery and equipment, R$ 2.3 million in buildings and improvements, R$ 5.6 million related to construction im progress and R$ 1.2 million in other fixed assets. In subsidiaries and associated companies, were invested: R$ 6.3 million in Ciferal, R$ 2.2 million in Polomex and R$ 1.0 million on the other plants. The net balance of investments in subsidiaries and associated companies, discounted R$ 8.8 million received as dividends, was R$ 0.7 million. CAPITAL MARKETS Marcopolo's preferred shares - POMO4 - have appreciated by 11.3% in the last 12 months, compared with the 11.6% devaluation of IBOVESPA in the same period. In 3Q13, 125.0 million of Marcopolo shares were traded in a volume of R$ 998.6 million.

28

INDICATORS Number of transactions Shares Traded (million) Trading volume (R$ million) Market Value (R$ millions) Existing shares (thousands) Book value per share (R$)
(1) (2) (*)

3Q13 316,6 125,0 998,6 5,906.6 896.9 1.57 6.60

3Q12 236,9 108,4 1.182,8 5,310.9 896.9 1.45 5.93

9M13 740,4 268,7 2.901,7 5,906.6 896.9 1.57 6.60

9M12 521,6 252,1 2.467,9 5,310.9 896.9 1.45 5.93

(*)

POMO4 price at end of period (*)


Notes:
(1)

Price of the last transaction of the period for a Book Entry Preferred (PE) share multiplied by the total shares (OE+PE) from the same period; (2) Of this total, 1,965,074 were preferred shares in the treasury at 9/30/2013.

Performance of Marcopolo Shares on BM&FBovespa


Marcopolo PN x Ibovespa Base 100 POMO4: +11.3% IBOV: -11.6%

R$ 5.93*

R$ 6.60*

59,175 pts

52,338 pts

* Amounts adjusted for bonus of 100.0% approved on 8.05.2013.

OUTLOOK The third quarter of 2013 has been presenting itself as the best quarter of the year regarding the bus industry in Brazil. The Brazilian production that is destined to domestic market has grown 22.6% when compared to the third quarter of 2012. The fleeting and tourism segments are still going well, as well as the demand for microbuses, encouraged by the federal government program known as "Caminho da Escola" and also by the large amount of tourists expected during the period of the World Cup to be held in Brazil in 2014. Otherwise, the demand of medium to large distance intercity buses and for urban buses has suffered a decrease starting in October, that has been affecting the results of the fourth quarter. The decrease in the demand for intercity buses is mainly due to bids related to interstate bus routes, that are expected to end on May/2014. The current
29

concessions had already expired in 2008 and they have been postponed since then. Even though the bidding data sheet has already been divulged by the national agency of transportation, the operators are, at first, holding back the renewal of their fleet in account of the uncertainties related to the continuation of their operations. Regarding urban buses, the retraction in the demand is happening due to the freezing and cut in prices of public transportation fares in some of the main Brazilian cities. Federal government has acted in order to diminish the impact in profitability of the transportation industry by cutting off some of the taxes (PIS and COFINS) related to public transportation fares. Still, the current situation is of uncertainties and the urban buses renewal is happening at lower rates. Regarding this less favorable scenario, it is undeniable that the actions in municipal, state and federal governments are intended to improve public transportation in Brazil. Popular manifestations happened in June and July of 2013 were the trigger for new projects of urban mobility and reduction or freezing in public transportation fares. This new system will require a renewed fleet, one that is more sophisticated and that propitiates more comfortable and fast ways of commuting for users, thus stimulating population to use public transportation. With reference to finance, the FINAME PSI-4 of BNDES, currently with an interest rate of 4.0% per year and valid until December, 31 2013, shall be extended by BNDES, according to recent news from the government. This extension, however, will possibly implicate in higher interest rates, which might anticipate orders still in 2013 to be delivered along the first semester of 2014. The beginning of operations of the new plant Volare in So Mateus, Esprito Santo is still expected to happen in the second semester of 2014. In the first phase, it will manufacture the pre existing models in the portfolios of products, which will be sent as knocked down bodies from Caxias do Sul. In external market, the volume of Marcopolo exports from Brazil has increased 11.5% in relation to 2Q13. Besides greater revenue, also the margins are benefitted, specially due to the devaluation of the Brazilian real compared to the US dollar. Regarding subsidiaries and associates companies, the highlight of the quarter was Volgren, in Australia, where production has increased 7.8% when compared to 2Q13 and 43.8% when compared to 3Q13. In regard to strategic investment in New Flyer, Marcopolo has performed two investments that were used in projects that must increase the business revenue. We must also point out the higher volume of deliveries in 9M13, totalizing 1,556 unities, 22.6% higher when compared to the same period in the previous year. There has also been an evolution in orders along the first nine months of 2013, evolving from 6,325 orders in December, 31 2012 to 9,890 orders in September, 30 2013. This year, the NFI
30

shares has increased value in 29.7%, going from C$8.79 in January, 2 to C$11.40 at the end of September.

The Management.

31

Operations
Marcopolo S.A. ("Marcopolo") is a publicly held company, having its registered office in Caxias do Sul, Rio Grande do Sul state. Marcopolo's core activity is the manufacturing and sale of buses, automobiles, wagons, parts, agricultural and industrial machinery, and imports and exports, and may also acquire equity interests in other companies. Marcopolo's stock is traded under the symbols POMO3 and POMO4 on the So Paulo Stock Exchange BM&FBOVESPA.

Description of significant accounting policies


The main accounting policies used to prepare these quarterly financial statements are as follows. These policies were consistently applied to all the periods presented, unless stipulated otherwise.

2.1 a.

Basis of preparation Statement of compliance with IFRS and CPC standards


The financial information include: Consolidated financial information have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and accounting practices generally accepted in Brazil (BR GAAP); and The individual financial information of the parent company have been prepared in accordance with accounting practices generally accepted in Brazil (BR GAAP).

The parent company's individual financial information were prepared in accordance with BR GAAP. For the Company these practices differ from the IFRS applicable to the separate financial statements in respect of the valuation of investments in subsidiaries, associated companies and joint ventures, which are valued by the equity method in BR GAAP but at cost or fair value under IFRS. There is, however, no difference between the consolidated shareholders' equity and net income presented by the Company and the shareholders' equity and net income of the Parent Company in its individual financial information. The Company's consolidated financial informatin and parent company's individual financial information are therefore being presented side-by-side in a single set of financial information. Since January 1, 2013, the Company has adopted IFRS 10/CPC 36 (R3) - "Consolidated Financial Statements", IFRS 11/CPC 19 (R2) - "Joint Arrangements" (see note 2.2.1) and IFRS 12/CPC 45 "Disclosure of interests in Other Entities". As determined by the respective IFRS, their effects should be reflected at the beginning of the earliest period presented. Thus, the comparative values presented in this interim financial statements have been adjusted relative to those previously reported.

b.

Reporting basis
The individual and consolidated financial statements have been prepared on the historical cost basis, except for the following material items recognized in the balance sheets: derivative financial instruments are measured at fair value; the non-derivative financial instruments stated at fair value through profit and loss are measured at fair value; and available-for-sale financial assets are measured at their fair value.

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c.

Use of judgment and estimates


Preparing the individual and consolidated financial statements in accordance with IFRS and CPC standards requires Management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported values of assets, liabilities, revenue and expenses. The actual results may differ from these estimates. Estimates and assumptions are continually reviewed. Reviews of accounting estimates are recognized in the period in which the estimates are reviewed and any future periods affected. Information about uncertainties in the assumptions and estimates that pose a significant risk of an adjustment in the next financial year have been included in the following notes: Note 16 provisions; Note 17 measuring employees benefits; and Note 18 income and social contribution taxes.

d.

Statement of added value


The Company prepared individual and consolidated statements of added value (DVA) in accordance with technical pronouncement CPC 09 Statement of Added Value, which are presented as an integral part of the financial statements in BRGAAP applicable to publicly held companies, while consisting of supplementary financial information under IFRS.

2.2 a.

Basis of consolidation Consolidated financial statements


The following accounting policies are applied in the preparation of the consolidated financial informations.

i.

Subsidiary
Subsidiaries are all entities (including the specific purpose companies) over which the Company has the power to determine the financial and operating policies, and in which it generally holds over half the voting rights (voting stock). The existence and the effect of possible voting rights currently exercisable or convertible are taken into account when evaluating whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. The Company use the acquisition method to record business combinations. The amount transferred to acquire a subsidiary is the fair value of the transferred assets, liabilities incurred and equity instruments issued by the Company. The amount transferred includes the fair value of a given asset or liability resulting from a contingent payment contract when applicable. Acquisition costs are expensed in the income statement for the year as and when incurred. The identifiable assets acquired and the liabilities and the contingent liabilities undertaken in a business combination are initially measured at fair value as of the acquisition date. The minority interest to be recognized is measured on the date of each acquisition. Any excess amount transferred and the fair value at the acquisition date of any previous equity interest in the acquired party in relation to the fair value of the Company's interest in net identifiable assets acquired is recorded as goodwill. In acquisitions where the Company attributes fair value to minority shareholders, the goodwill determined also includes the value of any minority interest in the acquired party, and the goodwill is determined based on the Company and the minority interests. If the amount transferred is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement for the year (Note 2.11).

33

Inter-company transactions, balances and unrealized gains on intercompany transactions are eliminated. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. ii.

Investments in joint venture - joint operation


Business combination can be classified as a joint operation or the joint venture. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement and consequently accounts for their parts in the assets, liabilities, revenues and expenses (proportional consolidation). A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement and accounts for the investment by the equity income method (note 2.2.1).

iii.

Loss of control
When control is lost, the Company derecognizes the subsidiary's assets and liabilities, any noncontrolling interest and other components recorded under shareholders' equity related to this subsidiary. Any gain or loss generated by the loss of control is recognized in net income. If the Company retained any interest in the former subsidiary, this interest is measured at fair value on the date the control was lost. This interest is subsequently recorded by the equity method in associated companies or at cost or fair value in an available-for-sale asset, depending on the level of influence retained.

iv.

Associated companies
Associated companies are all the entities over which the Company exercises significant influence but does not control, in which it generally holds an equity interest of between 20% and 50% of the voting rights. Investments in associated companies are recorded by the equity income method and recognized initially at cost. The Company's investment in associated companies include the goodwill identified in the acquisition, net of any accumulated impairment loss. See Note 2.11 about impairment of nonfinancial assets, including goodwill. The Company's interest in the profits or losses of its associated companies post-acquisition is recognized in the income statement and its interest in the changes in post-acquisition reserves is recognized in the reserves. Accrued changes post-acquisition are adjusted against the book value of the investment. When the Company's interest in the losses of an associated company is equal to or greater than its interest in that company, including any other receivables, the Company does not recognize additional losses, unless it has incurred on obligations or makes payments on behalf of the associated company. Unrealized gains on transactions between the Company and its associated companies are eliminated in proportion to the Company's interest in the associated companies. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of associated companies have been changed where necessary to ensure consistency with the policies adopted by the Company.

34

If the equity interest in the associated company diminishes but significant influence is maintained, only a proportional part of the amount previously recognized in other comprehensive income shall be reclassified in the income statement, where appropriate. Gains and losses resulting from dilutions occurring in interests in associated companies are recognized in the income statement. 2.2.1 a) Changes regarding first adoption of IFRS 10 and 11 (CPC 36 R3 and CPC 19 R2) IFRS 10/CPC 36 R3 Consolidated Financial Statements Effective since January 1, 2013, IFRS 10/CPC 36 R3 - "Consolidated Financial Statements", have extended the concept of control, taking into account the power and the returns an investor has about an investment. In this context, a scenario of shareholding with voting rights is analyzed together with the substantive rights that give power over the relevant activities of the investee. If a control is recognized, the subsidiary is totally consolidated from the date on which control is transferred to the Company and transactions with non-controlling subsidiaries, such as transactions with owners of the Group assets, are presented within equity as "participation of non-controlling shareholders" The Company did not change its statements after adoption of IFRS 10. b) IFRS 11/CPC 19 R2 Joint Arrangements Effective since January 1, 2013, IFRS 11/CPC 19 R2 - " Joint Arrangements " has evidenced more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, instead of its legal form providing two types of joint arrangements: (i) joint operations - usually occurring when investors have rights to the assets and contractual obligations and they consequently accounts for their parts in the assets, liabilities, revenues and expenses (proportional consolidation) and (ii) joint venture - occurring when investors have rights to the net assets of the arrangement and accounts for the investment by the equity income method. In this case the proportional consolidation is no longer permitted. Based on the new standard aforesaid, the Company conducted an evaluation of their joint operations, reclassifying them to jointly controlled arrangement. So, these joint arrangements are evaluated by the equity income method and no longer evaluated based on the proportional consolidation. Thus, the comparative amounts disclosed for the periods ended December 31, 2012 no longer reflect the proportional consolidation of its joint arrangements composed by companies: San Marino nibus e Implementos Ltda., San Marino Bus de Mxico S.A. de C.V., Rotas do Sul Logstica Ltda., FCO Participaes Indstria e Comrcio de Componentes Ltda., GB Polo Bus Manufacturing S.A.E., Loma Hermosa S.A., Metalpar S.A., Metalsur Carrocerias S.R.L., Marcopolo Argentina S.A., Superpolo S.A., Hanegas S.A.S., Tata Marcopolo Motors Limited. We reflect below effects on the financial statements originally issued by the Company and the financial statements adjusted regarding application of IFRS 11 for comparative purposes: Reconciliation of balance statement as for December 31, 2012.

35

Consolidated 12/31/12 Published Balance Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable Adjustment IFRS 11/ CPC 19/R2 Adjusted Balance

393,945 132,167 3,523 1,127,115 409,502 170,598 2,236,850

(19,726) (327) (77) (57,791) (44,973) (26,628) (149,522)

374,219 131,840 3,446 1,069,324 364,529 143,970 2,087,328

Noncurrent Long Term Credit Other accounts receivable Investments Property, plant and equipment Goodwill and intangible

471,964 88,308 39,198 454,915 220,840 1,275,225

(729) 14,131 116,756 (156,107) (7,181) (33,130) (182,652)

471,235 102,439 155,954 298,808 213,659 1,242,095 3,329,423

Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable

3,512,075

382,264 757,412 247 356,856 1,496,779

(48,833) (34,944) (39,117) (122,894)

333,431 722,468 247 317,739 1,373,885

Noncurrent Financial institutions Other accounts payable

583,316 119,536 702,852

(55,319) (4,439) (59,758) (182,652)

527,997 115,097 643,094 12,519 1,299,925 3,329,423

Minority Interest Shareholders equity Total liabilities

12,519 1,299,925 3,512,075

Reconciliation of income statement as for September 30, 2012.


Consolidated 9/30/12 Published Statement Statement of Income Net revenue from Sales and services Cost of goods sold and services provided Gross profit Operational expenses(income) Sales Administrative expenses Other net operating income (expenses) Equity in net income of subsidaries Operating profit before financial income and equity interest Financial income Financial revenue Financial expenses Profit before income and social contribution taxes Income and social contribution taxes 2,755,933 (2,207,101) 548,832 (150,088) (124,571) (6,277) 6,999 274,895 170,176 (146,706) 298,365 (90,144) 208,221
36

Adjustment IFRS 11/ CPC 19/R2 (356,130) 288,485 (67,645) 18,875 15,735 1,569 19,033 (12,433) (6,494) 11,944 (6,983) 6,983 -

Adjusted Statement 2,399,803 (1,918,616) 481,187 (131,213) (108,836) (4,708) 26,032 262,462 163,682 (134,762) 291,382 (83,161) 208,221

Net income for the period from continuing operations

Reconciliation of statement of cash flow as for September 30, 2012.

Consolidated 9/30/12 Adjustment IFRS 11/ CPC 19/R2

Published Cash flow Cash flow from operating activities Net income in the period Reconciliation of income (loss) to cash provided by operating activities: Depreciation and amortization Cost on the Sales of permanent assets Equity in net income of subsidiaries Allowance for doubtful accounts Deferred income and social contribution taxes Interest and variance appropriated Non-controlling interests Changes in assets and liabilities (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in securities Increase (decrease) in trade payables Increase (decrease) in actuarial liabilities Cash provided in operating activities Taxes paid over income Net cash provided by operating activities Cash flow from investment activities Investments Subsidiary dividends Permanent purchases Receipt on sale of property, plant and equipment Net cash provided by investment activities Cash flows from financing activities Gain on the sale of treasury stock Dividends and interest on shareholders equity paid Obtainment of loans and financing Payment of loans and financing Net cash used in financing activities Exchange variance on cash and cash equivalents Net increase (decrease) in cash and cash equivalent Cash and cash equivalent at beginning of the period Cash and cash equivalent at the end of the period 208,221

Adjusted Cash flow

208,221

34,548 1,258 (6,999) 5,595 90,144 38,639 963

(7,276) (1,104) (19,033) 422 (6,983) (3,552) -

27,272 154 (26,032) 6,017 83,161 35,087 963

(79,882) (70,427) (102,025) (14,945) 40,673 89,081 234,844 (76,311) 158,533

(14,140) (4,668) (8,862) (1,410) 7,675 2,353 (56,578) 8,322 (48,256)

(94,022) (75,095) (110,887) (16,355) 48,348 91,434 178,266 (67,989) 110,277

4,100 (212,279) 1,028 (207,151)

13,507 18,755 32,262

17,607 (193,524) 1,028 (174,889)

5,266 (153,167) 321,388 (645,056) (471,569) 1,904 (518,283) 904,318 386,035

(53,486) 62,452 8,966 (658) (7,686) (16,821) (24,507)

5,266 (153,167) 267,902 (582,604) (462,603) 1,246 (525,969) 887,497 361,528

37

Reconciliation of statement of value added as for September 30, 2012.


Consolidated 9/30/12 Adjustment IFRS 11/ CPC 19/R2 (468,246) 322,651 (145,595) 7,276 (138,319) 19,033 (6,494) (125,780) (125,780) (68,694) (38,104) (18,982) -

Published Value added Revenue Consumables acquired from third parties Gross value added Depreciation, amortization and depletion Net added value produced Equity in net income of subsidiaries Financial revenue Total added value to be distributed Distribution of added value Personnel Taxes, duties and contributions Interest expenses Interest earnings 3,209,664 (2,243,054) 966,610 (34,548) 932,062 6,999 170,176 1,109,237 1,109,237 578,855 151,872 170,289 208,221

Adjusted Value added 2,741,418 (1,920,403) 821,015 (27,272) 793,743 26,032 163,682 983,457 983,457 510,161 113,768 151,307 208,221

2.3

Segment reporting
Operating segments are reported consistently with the internal reports provided to the main operating decision takers. The main taker of operating decisions, responsible for allocating funds and evaluating the performance of operating segments, is the Board of Directors, which is also responsible for taking the Company's strategic decisions.

2.4 a.

Foreign currency translation Functional currency and reporting currency


The items included in each of the company's entities' financial information are measured by using the currency of the main economy in which the company operates ("functional currency"). The consolidated financial informations are presented in R$, which is Marcopolo's functional currency and the Company's reporting currency. Each entity's functional currency can be seen below:
Subsidiary Apolo Solues em Plsticos Ltda. Banco Moneo S.A. Ciferal Indstria de nibus Ltda. Ilmot International Corporation. Laureano S.A. Marcopolo Auto Components Co. Marcopolo Australia Holdings PTY LTD. Pologren Australia Holdings PTY LTD. Volgren Australia PTY Limited. Marcopolo Canada Holdings Corp. Marcopolo Indstria de Carroarias SA. Marcopolo International Corp. Marcopolo Latinoamrica S.A. Marcopolo South frica Pty Ltd. Marcopolo Trading S.A. Moneo Investimentos S.A. Syncroparts Comrcio e Distribuio de Peas Ltda. PoloAutoRus LLC. Polomex S.A. de C.V. Volare Veculos Ltda. Volare Comrcio e Distribuio de Veculos e Peas Ltda. Denomination Apolo Banco Moneo Ciferal Ilmot Laureano MAC MP Austrlia Pologren Volgren MP Canad MPC MIC Mapla Masa Trading Moneo Syncroparts PoloRus Polomex Volare Veculos Volare Comrcio Functional currency Reais Reais Reais US dollar Argentine Peso Remimbi Australian Dollar Australian Dollar Australian Dollar Canadian Dollar Euro US dollar Argentine Peso Rand Reais Reais Reais Rouble US dollar Reais Reais Country Brazil Brazil Brazil Uruguay Argentina China Australia Australia Australia Canada Portugal Virgin Islands Argentina South Africa Brazil Brazil Brazil Russia Mexico Brazil Brazil

38

Subsidiary Apolo Solues em Plsticos Ltda. Joint subsidiaries FCO Participaes Indstria e Comrcio de Componentes Ltda GB Polo Bus Manufacturing S.A.E. Loma Hermosa S.A. Metalpar S.A. Metalsur Carrocerias S.R.L. Marcopolo Argentina S.A. New flyer Industries Inc. Rotas do Sul Logstica Ltda. San Marino Bus de Mxico S.A. de C.V. San Marino nibus e Implementos Ltda. Superpolo S.A. Hanegas S.A.S. Tata Marcopolo Motors Limited. Associated companies Mercobus S.A.C. MVC Componentes Plsticos Ltda. Poloplast Painis e Componentes Ltda. Setbus Solues Automotivas Ltda. Spheros Climatizao do Brasil S.A. Spheros Mxico S.A. de C.V. Spheros Thermosystems Colombia Ltda. WSul Espumas Indstria e Comrcio Ltda.

Denomination Apolo Denomination FCO GB Polo Loma Metalpar Metalsur Marsa New Flyer Rotas do Sul San Marino Mxico San Marino Superpolo Hanegas TMML Denomination Mercobus MVC Switchgear Setbus Spheros Spheros Mxico Spheros Colmbia WSul

Functional currency Reais Functional currency Reais Egyptian Pound Argentine Peso Argentine Peso Argentine Peso Argentine Peso Canadian Dollar Reais Mexican Peso Reais Colombian Peso Colombian Peso Rupee Functional currency Soles Reais Reais Reais Reais Mexican Peso Colombian Peso Reais

Country Brazil Country Brazil Egypt Argentina Argentina Argentina Argentina Canada Brazil Mexico Brazil Colombia Colombia India Country Peru Brazil Brazil Brazil Brazil Mexico Colombia Brazil

b.

Transactions and balances


Foreign-currency transactions are translated into the functional currency at the exchange rates prevailing on the transaction or valuation dates, on which the items are remeasured. Exchange gains and losses resulting from the settlement of these transactions and the translation at the exchange rates at the end of the financial year for monetary assets and liabilities denominated in foreign currency are recognized in the income statement. Exchange gains and losses related to loans and cash and cash equivalents are stated in the income statement as financial revenue or expenses. Exchange variance on non-monetary financial assets and liabilities such as equities recorded at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss.

c.

Company Entities
The results and financial position of all the Company's subsidiaries and joint ventures included in the consolidated financial information and investments recorded by the equity method (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the reporting currency are translated into the Company's reporting currency as follows:

(i)

assets and liabilities are translated at the exchange rate on the closing date of the consolidated financial statements; income and expenses are translated at the monthly average exchange rates, and all differences resulting from exchange rate translation are recognized in shareholders' equity, at equity valuation adjustments account. On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of loans and other currency instruments designated as hedges of such investments, are recognized in comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the statement of income as part of the gain or loss on the sale.
39

(ii) (iii)

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

2.5 2.5.1

Financial instruments Non-derivative financial assets


The Company initially recognizes loans and receivables on the date they were made. All other financial assets (including assets designated at fair value through profit and loss) are initially recognized on the transaction date on which the Company became party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the asset's cash flows expire or when the Company transfers the rights to receive the contractual cash flows of a financial asset in a transaction where essentially all the risks and rewards of ownership of financial assets are transferred to the buyer. Any interest that is created or retained by the Company in transferred financial assets is recognized as a separate asset or liability. Financial assets or liabilities are offset and their net value recorded in the balance sheet only when the Company is legally entitled to offset the amounts and intends to settle on a net basis or realize the asset and settle the liabilities simultaneously. The Company classifies non-derivative financial assets into the following categories: financial assets measured at fair value through profit and loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets.

a.

Financial assets measured at fair value through profit or loss


A financial asset is classified as measured at fair value through profit or loss if it is held for trading or designated as such upon initial recognition. Financial assets are designated as fair value through profit or loss if the Company manages these investments and makes purchase and sales decisions based on their fair value in accordance with the investment strategy and risk management documented by the Company. Transaction costs are recognized in income/expenses when incurred. Financial assets measured at fair value through profit or loss are measured at fair value, and changes in fair value of the assets are recognized in income/expenses for the year, including any dividend gains. Financial assets designated at fair value through profit and loss consist of equity instruments which would otherwise be classified as available for sale.

b.

Held-to-maturity financial assets


These financial assets are classified as held to maturity in the event the Company has the intention and the ability to hold them until maturity. Investments held to maturity are initially recognized at their fair value plus any directly attributable transaction costs. After initial recognition, financial assets held to maturity are measured at their amortized cost by using the effective interest rate method, less any impairment losses. Financial assets held to maturity consist of debt securities.

c.

Loans and receivables


Loans and receivables are financial assets with fixed or determinable payments that are not quoted on the market. These assets are initially recognized at their fair value plus any directly attributable transaction costs. After initial recognition, loans and receivables are measured at their amortized cost by using the effective interest rate method, less any impairment losses. Loans and receivables consist of cash and cash equivalents, trade accounts receivable and other receivables.

40

d.

Cash and cash equivalents


Cash and cash equivalents consist of cash, bank deposits, other short-term investments of high liquidity, originally maturing within three months or less as from the date they are procured. These are subject to an insignificant risk of impairment in fair value and are used by the Company to manage short-term obligations.

e.

Available-for-sale financial assets


Available-for-sale financial assets are non-derivative instruments designated as available for sale or which are not classified in any of the previous categories of financial assets. Financial assets availablefor-sale are initially recognized at fair value plus any directly attributable transaction costs. After initial recognition, they are measured at fair value and changes, other than impairment losses and foreign exchange differences on available-for-sale debt instruments, are recognized in other comprehensive income and stated in shareholders' equity. When an investment is derecognized, the accumulated gains and losses maintained in other comprehensive income are reclassified to net income. Financial assets available-for-sale consist of equity instruments and debt securities.

2.5.2

Non-derivative financial liabilities


The Company initially recognizes debt securities issued and subordinated liabilities on the date they arise. All other financial liabilities are initially recognized on the transaction date on which the Company and its subsidiaries became party to the contractual provisions of the instrument. The Company ceases recognizing financial liabilities when the contractual obligation is withdrawn, cancelled or expires. The Company classifies its non-derivative financial liabilities under other financial liabilities. These financial liabilities are initially recognized at their fair value minus any directly attributable transaction costs. After initial recognition, these financial liabilities are measured at their amortized cost by using the effective interest rate method. Other non-derivative financial liabilities consist of loans and financing, debt securities issued, including certain preferred shares, overdrafts, trade payables and other accounts payable. Bank overdrafts that have to be paid at sight and which are an integral part of the Company's cash management are recorded as a component of cash and cash equivalents in the cash flow statement.

2.5.3 a.

Impairment Non-derivative financial assets (including receivables)


A financial asset not measured at fair value through profit and loss, including the interest in an investee recognized by the equity method, is valued at each reporting date to test for impairment. An asset has incurred impairment if objective evidence indicates impairment has occurred as a result of one or more events after the initial recognition of the asset and this impairment has had a negative effect on the future projected cash flows of that asset that can be estimated reliably. Objective evidence that the financial assets have incurred impairment can include nonpayment or late payment by the debtor, renegotiation of the amount owed to the Company on terms that it would not normally accept in other transactions, signs that the debtor or issuer is going to enter bankruptcy proceedings or the disappearance of an active market for a security. Furthermore, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment.

41

b.

Financial assets carried at amortized cost


At the end of each year the Company assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. An asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss include:

(i) (ii) (iii)

significant financial difficulty of the issuer or obligor; a breach of contract, such as a default or delinquency in interest or principal payments; the Company, for economic or legal reasons relating to the borrower's financial difficulty granting to the borrower a concession that the lender would not otherwise consider; it becomes probable that the borrower will enter bankruptcy or other financial reorganization; the disappearance of an active market for that financial asset because of financial difficulties; or observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment status of borrowers in the portfolio; and national or local economic conditions that correlate with defaults on the assets in the portfolio.

(iv) (v) (vi)

The Company first assesses whether objective evidence of impairment exists. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated statement of income. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated statement of income.

c.

Assets classified as "available-for-sale"


At the end of each year the Company assesses whether there is objective evidence that a financial asset available-for-sale is impaired. The Company uses the criteria mentioned in (a) above for debt securities. For capital investments classified as available-for-sale, a material or prolonged drop in the fair value of a security below cost is also evidence the assets are impaired. If evidence of this type exists for financial assets available-for-sale, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, minus any impairment losses of this financial asset previously recorded in income, is deducted from equity and recognized in the consolidated income statement. Impairment losses recognized in the income statement for equity instruments are not reversed through the consolidated income statement. If the fair value of a debt security available for sale rises in any subsequent period and the increase can be objectively attributed to an event occurring after the impairment had been recognized in the income statement, the impairment is then reversed through the income statement.
42

d.

Non-financial assets
The book values of the Company's non-financial assets, inventory and deferred income and social contribution tax assets, are reviewed at each reporting date for signs of impairment. If signs of impairment are detected, the recoverable value of the assets is then estimated. In the case of goodwill and intangible assets with an indefinite useful life, the recoverable value is tested every year. Impairment losses are recognized in the income statement. Recognized losses on Cash Generating Units (UGC) are initially allocated to reduce any goodwill allocated to this unit (or group of units), and then to the reduction of the book value of other assets of this unit (or group of UGCs), on a pro rata basis. Impairment losses related to goodwill are not reversed. Impairment losses for other assets are only reversed if the book value of the asset does not exceed the book value that would have been determined, net of depreciation or amortization, had the impairment not been recognized.

2.6

Derivatives measured at fair value through profit or loss


Derivative instruments procured do not qualify for hedge accounting. The changes in the fair value of any of the derivative instruments are immediately recognized in the income statement under "financial revenue (expenses)".

2.7

Trade accounts receivable


Trade receivables are amounts due from customers for property sold or services performed in the ordinary course of the Company's business. If collection is expected in one year or less (or other term compatible with the normal cycle of the Company's operations), they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less a provision for impairment.

2.8

Inventory
Stated at the lower of the cost and the net realizable value. Inventory is recorded at average cost and includes expenses incurred on the acquisition of inventory, production and transformation costs and other costs incurred to bring the inventories to their current status and location. For manufactured inventory and goods in progress, the cost includes part of the general manufacturing expenses based on normal production capacity. The net realizable value is the estimated sale price for the normal course of business, minus estimated conclusion costs and selling expenses.

2.9

Noncurrent assets available-for-sale


Noncurrent assets are classified as "available-for-sale" if their book value can be recovered, primarily through sale, and when this sale is a virtual certainty. They are measured at the lower of the book value and fair value, less sales costs, if the book value will be recovered through a sale and not ongoing use.

2.10

Property, plant and equipment Recognition and measurement


Items of property, plant and equipment are measured at the historic cost of acquisition or construction, minus accumulated depreciation and impairment. The cost includes expenses directly attributable to the acquisition of an asset. The cost of assets built by the Company itself includes:

43

The cost of materials and direct labor; Any other costs to bring the asset to its location and condition necessary so it can be operated as intended by Management; The disassembly costs, and the restoration of the site where these assets are located; and Loan costs on qualificable assets.

The cost of property, plant and equipment can include reclassifications from other comprehensive income of qualificable cash flow hedges for the purchase of fixed assets in foreign currency. The software purchased as an integral part of a piece of equipment is capitalized as a part of said equipment. When parts of an item of property, plant and equipment have different useful lives, these items are recorded as separate items (principal constituents) of property, plant and equipment. The gains and losses deriving from the sale of property, plant and equipment (determined by comparing the funds obtained through the sale against the book value of the property, plant and equipment), are recorded net amongst other revenue/expense figures in the income statement.

Reclassification to investment property


When the owner ceases to occupy the property and begins using it for investment purposes, the property is remeasured at fair value and reclassified as investment property. Any gain resulting from this new measurement is recognized in the income statement as and when the gain reverts to a loss due to previous impairment of a specific property, with any remaining gain recognized in other comprehensive income in the equity appraisal adjustments reserve. Any loss is immediately recognized in the income statement.

Subsequent costs
Subsequent expenses are capitalized to the extent it is probable that the future benefits associated with these expenses shall be transferred to the Company. Maintenance and repair expenses are recorded in the income statement.

Depreciation
Items of property, plant and equipment are depreciated by the straight-line method in the income statement for the year, based on the useful estimated economic life of each component. Leased assets are depreciated over the shorter between the useful life and the contractual term, unless the Company is certain it will acquire the property at the end of the lease. Land is not depreciated. Items of property, plant and equipment are depreciated from the date they are installed and are available for use, or in the case of internally constructed assets, on the date construction is completed and the asset is available for use. The estimated useful lives for the current and comparative years are as follows: Year Buildings Machinery Vehicles Furniture, fixtures and equipment 40-60 10-15 5 5-12

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

44

2.11 a.

Intangible assets and goodwill Goodwill


The goodwill consists of the positive difference between the amount paid or payable and the net amount of the acquired entity's assets and liabilities at fair value. Goodwill resulting from the acquisition of subsidiaries is recorded as intangible assets. If the acquirer determines goodwill, the amount should be recorded as a gain in the net income for the period, on the acquisition date. Goodwill is tested annually to check for probable impairment and recorded at cost value less accumulated impairment losses, which are not reversed. The gains and losses from selling an entity include the book value of the goodwill related to the sold entity. The goodwill is allocated to the UGCs for impairment testing. This allocation is made to the UGCs or groups of UGCs that should benefit from the business combination generating the goodwill, duly segregated by operational segment.

b.

Registered trademarks and licenses


Registered trademarks and licenses acquired separately are stated at historic cost. Registered trademarks and licenses acquired in a business combination are recognized at fair value on the acquisition date, as they have a defined useful live and are recorded at cost value minus accumulated amortization. Amortization is calculated by the straight-line method to allocate the cost of registered trademarks and licenses over their estimated useful life of 10 to 20 years.

c.

Software
Software licenses acquired are capitalized based on costs incurred to acquire the software and render it ready for use. These costs are amortized during their estimated useful life of 3 to 5 years. The costs associated with software maintenance are expensed when incurred. Development costs directly related to the design and tests of identifiable and exclusive software products, controlled by the Company are recognized as intangible assets in the following situations: it is technically feasible to complete the software so it is available for use; management intends to conclude the software and use it or sell it; the software can be sold or used; the software will generate probable future economic rewards, which can be demonstrated; technical and financial resources and other suitable resources are available to conclude the development and use or sell the software; and the expense attributable to the software during development can be measured reliably.

Costs directly attributable, which are capitalized as part of the software product, include costs incurred on employees allocated to software development and a suitable portion of the direct relevant expenses. The costs also include financing costs related to the acquisition of the software. Other development expenses that do not meet these criteria are expensed, as and when incurred. Development costs previously recognized as expenses are not recognized as an asset in a subsequent period. Software development costs recognized as assets are amortized during the estimated useful life, not exceeding 5 years.

d.

Research and development


Expenses on research activities resulting in a possible gain of scientific or technological understanding and expertise are recognized in the income statement as and when incurred.

45

Development activities involve a plan or project entailing the production of new or substantially improved products. Development expenses are only capitalized if the development costs can be measured reliably, if the product or process is technically and commercially feasible, if the future economic rewards are probable and if the Company has the intention and resources to conclude the development and use or sell the asset. Capitalized expenses include the cost of materials, direct labor, manufacturing costs that are directly attributable to the preparation of the asset for its intended use, and the cost of loans. Other development expenses are recognized in the income statement when they are incurred. Capitalized development expenses are measured at cost, minus accumulated amortization and impairment losses.

e.

Other intangible assets


Other intangible assets consist of software acquired by the Company, with finite useful lives and measured at cost, minus accumulated amortization and accumulated impairment.

f.

Subsequent expenses
Subsequent expenses are only capitalized when they increase the future economic benefits incorporated into the specific asset they relate to. All other expenses, including expenses on goodwill generated internally and trademarks are recognized in the statement as and when they are incurred.

g.

Amortization
Except for goodwill, amortization is recognized in income statement by the straight line method in relation to the estimated useful lives of intangible assets, as from the date they are available for use.

2.12

Trade accounts payable


Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. (or the normal business cycle, even if it is longer). If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method. In practice, they are usually recognized at the amount of the related invoice.

2.13

Loans and financing


Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of income during the period the loans and financing are in progress, using the effective interest rate method. Loans and financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

2.14

Determining the adjustment to present value


The items discounted to present value are: Trade accounts receivable consisting of the credit sale to Company clients with low credit risk. The discount rate used by Management to discount these items to present value is 100% of the monthly CDI rate for domestic clients and the market rate for advances on export contracts for offshore clients. The interest rate assigned to a sale transaction is determined upon the initial registration of the transaction and is not subsequently adjusted, and
46

Accounts payable to Company suppliers for credit purchases. The Company calculates the present value the same way as it does for accounts receivable.

2.15

Provisions
A provision is recognized for a past event when the Company has a legal or constructive obligation, and it is probable that an outflow of funds will be required to settle the obligation. Provisions are calculated by discounting future expected cash flows at a before-tax rate that reflects current market valuations regarding the value of the money over time and specific risks posed by the liability. The financial costs incurred are expensed in the income statement.

2.16

Warranties
A provision for warranties is recognized when the goods or services are sold and is based on historic warranty data and estimated probabilities of all resulting disbursements.

2.17

Income and social contribution taxes


The income and social contribution taxes, both current and deferred, are calculated based on the rates of 15% plus a surcharge of 10% on taxable income in excess of R$ 180 thousand for income tax and 9% on taxable income for social contribution on net income in the half, and consider the offsetting of tax loss carry forwards and negative basis of social contribution limited to 30% of the taxable income. Income and social contribution expenses consist of current and deferred income tax. Current and deferred taxes are recognized in the income statement, except for those related to business combinations or items directly recognized in the shareholders' equity or other comprehensive income. The current tax is the tax payable or receivable on the expected taxable income or loss for the year, at rates decreed or substantially decreed at the reporting date and any adjustment to the taxes payable in relation to prior years. The deferred tax is recognized in relation to temporary differences between the book values of assets and liabilities for accounting purposes and the corresponding amounts used for tax purposes. Deferred tax is not recognized for the following temporary differences: The initial recognition of assets and liabilities in a transaction other than a business combination and that does not affect the accounts or the taxable income or loss; Differences related to investments in subsidiaries, branches and associated companies and interests in joint ventures when it is probable they will not revert in the foreseeable future; and Deferred tax is not recognized on temporary taxable differences resulting in the initial recognition of goodwill.

The deferred tax is measured at the rates expected to apply to the temporary differences when they are reversed, based on the laws that have been decreed and substantially decreed by the reporting date. Measuring the deferred tax reflects the tax consequences that arise in the manner expected by the Company at the end of the year it prepares its financial statements and recovers or settles the book value of its assets and liabilities. For investment properties measured at fair value, the assumption that the book value of the investment property will be recovered was not refuted. The deferred tax is measured at the rates expected to apply to the temporary differences when they are reversed, based on the laws that have been decreed. Deferred tax assets and liabilities are offset if there is a legal right to offset current tax assets and liabilities, and they are related to income taxes levied by the same tax authority on the same entities subject to taxation.

47

Deferred income and social contribution tax assets are recognized on deductible tax losses, tax credits and temporary differences not used when it is probable that future taxable earnings will be generated against which they can be offset. Deferred income and social contribution tax assets are reviewed at each reporting date and are reduced to the extent that realization is no longer probable.

2.18

Pension and post-employment benefits


The Company recognizes its obligations related to employee benefit plans and related costs, net of plan assets, in accordance with the following practices:

i.

The cost of pension and other post-employment benefits provided to employees is actuarially determined using the projected unit credit method and management's best estimate of expected investment performance for funded plans, salary increases, retirement age of employees and expected healthcare costs. The discount rate used for determining future benefit obligations is an estimate of the interest rate in effect at the balance sheet date; Pension plan assets are stated at market value; Past service costs arising from plan adjustments are amortized on a straight-line basis over the remaining service period of active employees at the date of the adjustment; Actuarial gains and losses are immediately recognized in comprehensive income for the year; and A plan curtailment results from significant changes in the expected service period of active employees. A net curtailment loss is recognized when the event is probable and can be estimated, while a net curtailment gain is deferred until realized. In accounting for pension and post-retirement benefits, several statistical and other factors that seek to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, expected return on plan assets, future increases in healthcare costs, and future salary increases. In addition, actuarial consultants also use subjective factors such as withdrawal, turnover, and mortality rates to estimate these factors. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.

ii. iii. iv. v.

2.19

Capital
Common shares Common shares are classified as shareholders' equity. Additional costs directly attributable to the issuance of shares and options are recognized as a deduction from the shareholders' equity, net of tax. Preferred shares Preferred shares are classified as shareholders' equity if they are not redeemable or can only be redeemed with the company's consent and any dividends are discretionary. Discretionary dividends are recognized as profit distributions in shareholders' equity when they have been approved by the Company's shareholders. The minimum mandatory dividends established in the bylaws are recognized as liabilities.

48

2.20

Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of products and goods in the ordinary course of the Company's activities. Revenue is stated net of tax, returns, rebates and discounts and after eliminating intercompany sales. The Company recognizes revenue when its amount can be reliably estimated, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Company's activities, as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the sale specifics.

a.

Sale of bus
Revenue is not recognized until: (i) the vehicles have been delivered to the client; (ii) the risks of obsolescence and loss have been transferred to the client; (iii) the client has accepted the vehicles pursuant to the sale contract; and (iv) the acceptance terms have been agreed, or the Company has objective evidence that all acceptance criteria have been met. Sales are recorded based on the price specified in the sale contract, and are discounted to present value.

b.

Financial revenue
Interest income is recognized on the accrual basis, using the effective interest rate method. When accounts receivable is impaired, the Company reduces the carrying amount to its recoverable amount, which is the estimated future cash flow discounted at the original effective interest rate of the instrument. Subsequently, as time goes by, interest is incorporated into receivables against interest income. This interest income is calculated at the same effective interest rate used to determine the recoverable amount, i.e., the original rate of the receivables.

2.21

Distribution of minimum dividends and interest on shareholders equity


Minimum dividends and interest on shareholders equity paid to Marcopolo's stockholders are recognized as a liability in the Company's financial statements at the end of the year, pursuant to Marcopolo's bylaws. Any amount in excess of the mandatory minimum is only provisioned for on the date they are approved by the shareholders at the annual general meeting.

2.22

Standards, amendments and interpretations a. Standards, amendments and interpretations of standards that are not yet effective
Interpretations and amendments were issued to existing standards and are mandatory for accounting periods beginning on January 1, 2014 or thereafter, or for subsequent periods. In the managements opinion are not relevant to the Company's current operations, except for the standards listed below, whose impact is being evaluated. However, not early adopt these standards and amendments to standards by the Company.
Topic Amendments to IAS 32 and IFRS 7 (2011) - New Key requirements The amendments to IAS 32 aims to clarify the requirements for offsetting financial instruments. These amendments address inconsistencies encountered in practice when applied the offsetting criteria in IAS 32 Financial Instruments: Presentation. The amendments clarify: the meaning of "has a legally enforceable right to settle the net amount" (currently has a legally enforceable right of set-of), and systems that some gross settlement can be considered equivalent to the net settlement. The amendments are effective for annual periods
49

Effective date Effective for annual periods beginning on or after January 1, 2014

Topic

Key requirements beginning on or after January 1, 2014 and its retrospective application is required. The amendments are part of the compensation project IAS. As part of this project, the IASB also issued separately Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7), changes of this IFRS would contain new disclosure requirements for financial assets and financial liabilities which are: compensation of the financial statement, or subject to master netting agreements or similar agreements.

Effective date

Critical accounting estimates and judgments


Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Based on assumptions, the company makes estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are addressed below.

a.

Estimated impairment of goodwill


The Company is testing goodwill for impairment annually. The recoverable amounts of Cash Generating Units (CGUs) have been determined based on value-in-use calculations. These calculations require the use of estimates.

b.

Income and social contribution taxes The Company is subject to income tax in all countries in which it operates. Significant judgment is required to determine the provision for income taxes in different countries. Pension and post-employment benefits
The Company recognizes its obligations related to employee benefit plans and related costs, net of plan assets, in accordance with the following practices:

c.

i.

The cost of pension and other post-employment benefits provided to employees is actuarially determined using the projected unit credit method and management's best estimate of expected investment performance for funded plans, salary increases, retirement age of employees and expected healthcare costs. The discount rate used for determining future benefit obligations is an estimate of the interest rate in effect at the balance sheet date; Pension plan assets are stated at market value; Past service costs arising from plan adjustments are amortized on a straight-line basis over the remaining service period of active employees at the date of the adjustment; Actuarial gains and losses are immediately recognized in comprehensive income for the year; and A plan curtailment results from significant changes in the expected service period of active employees. A net curtailment loss is recognized when the event is probable and can be estimated, while a net curtailment gain is deferred until realized. In accounting for pension and post-retirement benefits, several statistical and other factors that seek to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, expected return on plan assets, future increases in healthcare costs, and
50

ii. iii. iv. v.

future salary increases. In addition, actuarial consultants also use subjective factors such as withdrawal, turnover, and mortality rates to estimate these factors. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.

4
4.1 (a) (i)

Financial risk management


Financial risk factors Market Risk Exchange rate risk
The Company's results are susceptible to currency effects as its liabilities are subject to the volatility of foreign exchange rates, mainly the U.S. dollar. As an exchange rate hedge strategy, Management uses natural hedges and maintains related assets also susceptible to exchange variance. As of September 30, 2013 and December 31, 2012 the Company had assets, liabilities and forwards denominated in foreign currency in the following amounts (thousands of reais):
Consolidated September 30, 2013 Accounts Receivable Currency US dollars Australian dollar
Euros Argentinian pesos

Trade payables

Loans

Forwards

South African rand Chinese renminbi Rublo

229,398 40,654 1 13 11,401 9,690 108 291,265

26,149 36,393 348 14 19,562 7,551 90,017

268,184 84,479 23 15,632 368,318

94,593 59,812 12,083 166,488

Consolidated December 31, 2012 Accounts Receivable Currency US dollars Australian dollar
Euros

Trade payables

Loans

Forwards

South African rand Chinese renminbi

237,312 10,788 1 12,677 7,973 268,751

20,001 25,708 297 15,802 3,536 65,344

85,043 63,687 30 10,846 159,606

233,238 3,148 4,858 241,244

51

(ii)

Interest rate risk


The results of the Company are susceptible to losses arising from fluctuations in interest rates that lead to an increase in financial expenses related to loans and financing obtained in the market, or a decrease in financial income related to financial investments. The Company continuously monitors the market interest rates in order to assess any requirement to use derivatives to protect itself against the risk of variation to these rates.

(iii)

Sales and purchases price risk


Considering that exports are equivalent to 27.0% of the projected revenues for 2013, a possible volatility of foreign exchange rates represents, in fact, a price risk that may alter the results planned by management. On the other hand, the purchases of raw materials considered as commodities represent approximately 38% of total purchases, and accordingly, the Company is subject to the effects of market price oscillations of these items. The Company constantly monitors the price trends to mitigate these risks.

(b)

Credit risk
The credit risk is administrated on a corporate basis. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits at banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and repurchase transactions. If no independent classification exists, the credit ratings department evaluates the quality of the customer's credit, taking into account its financial position, past experience and other factors. The individual risk limits are determined based on internal or external classifications according to the limits established by the Board of Directors. The use of credit limits is monitored regularly. The Company also has an allowance for doubtful accounts of R$ 24,359 (parent company) and R$ 70,286 (consolidated) as of September 30, 2013 (R$ 25,793 and R$ 68,973 on December 31, 2012) representing 3.4% and 4.0%, respectively, of the outstanding accounts receivable balance of the parent company and consolidated (3.7% and 4.3% on December 31,2012) which was recorded to cover credit risk.

(c)

Liquidity risk
This is a risk of the Company having insufficient liquid funds to meet its financial commitments, as a result of a time or volume mismatch between scheduled receipts and payments. Future receipt and payment premises are established to administrate cash liquidity in local and foreign currency, which are directly monitored by the Treasury Department.
9/30/2013 Contractual cash flow Book value Non-derivative financial liabilities Loans Trade payables Derivative financial liabilities Derivative financial instruments Total 1 to 2 years 2 to 5 years Over 5 years

1,831,823 420,926

2,007,690 420,926

403,040 420,926

1,556,439 -

48,211 -

820

820

820

52

12/31/2012 Contractual cash flow Book value Non-derivative financial liabilities Loans Trade payables Derivative financial liabilities Derivative financial instruments Total 1 to 2 years 2 to 5 years Over 5 years

1,250,465 333,431

1,309,460 333,431

946,776 333,431

336,767 -

25,917 -

247

247

247

(d)

Additional sensitivity analysis required by CVM


The table below denotes the sensitivity analysis of the financial instruments, which explains the risks that could generate material changes for the Company, with the most probable scenario as evaluated by management, for a period of 12 months during which the next financial statements shall be released. Two more scenarios are presented, which, if they occur, may generate adverse results for the Company: scenario II, which considers a possible deterioration of 25%; and scenario III, an extreme deterioration of 50%, in accordance with CVM Instruction 475/08.
Probable scenario

Premisses CDI - % TJLP - % Exchange rate - US$ Exchange rate - Euro LIBOR - %
Cost of advances on foreign exchange contracts (ACC) discount - %

Effects on results

(Scenario I)
9.75 5.00 2.20 3.05 1.00

(Scenario II) (Scenario III)


12.19 6.25 2.75 3.81 1.25 14.63 7.50 3.30 4.58 1.50

Short-term investments Interbank transactions Loans and financing Forwards Receivables less payables

2.25 66,078 70,486 (68,068) 1,206 (11,803) 57,899

2.81 82,286 79,444 (135,048) (12,425) 36,059 50,316

3.37 98,491 88,401 (202,313) (20,930) 83,920 47,569

4.2

Capital Risk Management


The Company's objectives when managing capital are to safeguard its operational continuity, in order to provide returns to stockholders and to maintain an optimal capital structure to reduce the cost of capital. In order to preserve the sustainability and perpetuation of its business, in addition to social and environmental concerns, the Company places emphasis on the economic and financial results, which lead to the aggregation of value to the business and return to stockholders. As from 2001, the methodology known as Value-added Management was adopted to monitor the Company's performance. This methodology focuses on operational actions which result in superior financial performance. The staff received training under this program to develop and use measurement and control tools to accomplish targets, thus enabling the simulation and analysis of the efficient management of working capital and the effects of new investments on the Company's profitability. At the same time, Marcopolo adopted the concepts of Balanced Score Card (BSC) that translates each unit's strategy into objectives, drivers, targets and action plans, which are frequently monitored and managed. The tools related to objectives include: WACC (Weighted Average Capital Cost), Net Debt/EBITDA and (Debt/Equity) Ratio. These key indicators were as follows in the past few years:
53

. . .

WACC between 8% and 12% p.a.; Net Debt/EBITDA between 1.50x and 2.50x; Debt/Equity ratio between 25% and 80%.

The financial leverage indexes as of September 30, 2013 and December 31, 2012 have been summarized below:
Consolidated 9/30/2013 Total loans (Note 15) Less: Cash and cash equivalents (Note 7.1) Net debt Total shareholders equity Total capital Financial leverage index - % 1,831,823 (760,630 ) 1,071,193 1,410,684 2,481,877 76 12/31/2012 1,250,465 (374,219 ) 876,246 1,299,925 2,176,171 67

4.3

Fair value estimative


The book value less impairment provision of trade receivables and payables are assumed to approximate their fair value. The fair value of financial liabilities for reporting purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments. The Company adopted CPC 40/IFRS 7 for financial instruments that are measured in the balance sheet at fair value; this requires disclosure of fair value measurements by level of the following fair value hierarchy: . . . Prices quoted (unadjusted) on active markets for identical assets and liabilities (level 1); Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2); e Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs) (level 3).

The following table presents the Company's assets and liabilities that are measured at fair value at September 30, 2013 and December 31, 2012 which were fully classified in level 2:
Consolidated 9/30/2013 Level 2 Assets
Financial assets at fair value through profit or loss - Fixed income investment fund - Trading derivatives Available-for-sale assets - Bank deposit certificates 124 5,949 10,993 17,066 Liabilities Financial liabilities at fair value through profit or loss - Trading derivatives 1,093 3,446 130,747 135,286

12/31/2012

820 820

247 247

54

5
(a)
(i)

Financial instruments by category


Financial assets stated at fair value through profit or loss
Short-term investments are classified as held for trading. The market value is recognized in the balance sheets; and Derivatives - The derivative instruments contracted by the Company aim at protecting its transactions against the risks of foreign exchange and interest rate fluctuations, and are not used for speculative purposes.

(ii)

(b)
(i)

Loans and receivables


Cash and equivalents - The market values of current account balances in banks are similar to the recorded balances, considering their characteristics and maturities; Trade accounts receivable - Accounts receivable on the sale of goods and services; and Related-party transactions - Loans.

(ii) (iii)

(c)

Available-for-sale
Short-term investments Funds held in Bank Deposit Certificates.

(d)

Financial liabilities stated at fair value through profit or loss


Derivatives - The derivative instruments contracted by the Company aim at protecting its transactions against the risks of foreign exchange and interest rate fluctuations, and are not used for speculative purposes.

(e)
(i)

Other financial liabilities


Loans and financing - The loans and financing are registered according to interest incurred. The difference between the book value and the market value, calculated in accordance with the discounted cash flow method, may be summarized as follows:
9/30/2013 Nature of liability Loans and financing Book value 1,831,823 Market Value 1,831,365 Book value 1,250,465 12/31/2012 Market value 1,251,780

(ii)

Trade payables Payables on the acquisition of goods and services.

(f)

Derivative financial instruments


The table below presents an estimate of the market value of the positions of Non-deliverable Forward (NDF) and Forward contracts. Unrealized gains and losses on derivatives are recorded in "derivative financial instruments" in assets or liabilities, with a corresponding entry to the results in the item "Finance income (costs) from exchange variance".

55

Assets
Notional value Company
Marcopolo BBA BRADESCO BRASIL CITIBANK JP MORGAN MERRILL LYNCH PACTUAL SANTANDER VOTORANTIM SAFRA Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale 08.23.13 08.07.13 08.16.13 06.27.13 08.16.13 01.23.14 01.21.14 11.19.13 11.28.13 01.14.14

Fair value 9/30/2013 12/31/2012

Amounts receivale/payable 9/31/2013 12/31/2012

Counterpart

Status

Initial

Final

9/30/2013
USD mil 3,103 9,055 10,620 1,500 6,000

08.22.13 08.15.13

01.16.14 10.31.13

2,500 6,450

350 980 1,722 5 1,202 473 965 5,697

275 27 41 698 1,161 150 486 504 38 3,380

350 980 1,722 5 1,202 473 965 5,697

275 27 41 698 1,161 150 486 504 38 3,380

Ciferal BRADESCO Sale

USD mil 62 62 62 62

Masa ABSA STD

Purchase Purchase

04.25.13 03.26.13

10.15.13 12.03.13

USD mil 700 950

68 59 127 4

4 -

68 59 127

4 4

MP Austrlia WESTERN UNION WESTERN UNION WESTERN UNION

Purchase Purchase Purchase

04.04.13 05.03.13 08.20.13

12.04.13 01.07.14 03.31.14

USD mil 1,202 CHF mil 150 CNY mil 13,381

100 23 2 125 5.949 3.446

100 23 2 125 5.949 3.446

56

Liabilities
Notional value Company
Marcopolo BRASIL MERRILL LYNCH Sale Sale 04.30.13 04.30.13 10.31.13 10.10.13

Fair value 9/30/2013 12/31/2012


(203) (200) (403) -

Amounts receivable/payable 9/30/2013 12/31/2012


(203) (200) (403) -

Counterpart

Status

Initial

Final

9/30/2013
USD mil 1,200 1,200

Ciferal BRADESCO Purchase 08.21.13 12.27.13

EURO mil 802

(205) (205)

(205) (205)

Masa ABSA STD

Purchase Purchase

06.13.13 05.31.13

02.03.14 02.03.14

USD mil 1,408 2,362

(18) (116) (134)

(27) (128) (155)

(18) (116) (134)

(27 ) (128 ) (155 )

MP Austrlia Western Union WESTERN UNION WESTERN UNION WESTERN UNION

Purchase Purchase Purchase Purchase

07.03.12 08.06.13 07.03.13 08.20.13

03.06.13 03.06.14 03.06.14 07.31.14

USD mil 500 CHF mil 125 SGD mil 210 CNY mil 12,352

(55) (8) (13) (2) (78) (820)

(92) (92) (247)

(55) (8) (13) (2) (78) (820)

(92 ) (92 ) (247 )

57

The company earned gain and losses from derivative in the periods ended as of September 30, 2013 and 2012 as follows.
Gains / losses Interest on derivatives 9/30/2013 9/30/2012 Marcopolo Ciferal Masa MP Austrlia 6,841 38 11,240 2,449 Foreign Exchange on derivatives 9/30/2013 9/30/2012 (8,164) 16 (1002) (353) (19,139) (4,089) (373) -

Consolidated financial statement


The consolidated financial statement includes the financial statements of Marcopolo S.A. and its subsidiaries, as listed below:

(a)

Subsidiaries
Percentage interest September 30, 2013 Subsidiary Apolo Banco Moneo Ciferal Ilmot Laureano MAC MPC MIC MIC UY Mapla Masa Trading Moneo MP Austrlia MP Canad Pologren (1) Volgren (1) PoloRus Polomex Syncroparts Volare Veculos Volare Comrcio Direct 65.00 99.99 100.00 100.00 70.00 100.00 99.99 100.00 99.99 100.00 100.00 100.00 100.00 3.61 99.99 99.90 99.90 Indirect 100.00 0.01 100.00 30.00 0.01 75.00 75.00 70.39 0.01 0.10 0.10 Minority Interest 34.00 25.00 25.00 26.00 Direct 99.99 100.00 100.00 70.00 100.00 100.00 99.99 100.00 99.99 100.00 100.00 100.00 3.61 99.99 99.90 99.90 Indirect 100.00 0.01 100.00 30.00 0.01 75.00 75.00 70.39 0.01 0.10 0.10 December 31, 2012 Minority Interest 25.00 25.00 26.00 -

(1)

Consolidated in MP Austrlia.

The following main practices are adopted in the preparation of the consolidated financial information: i. ii. iii. Elimination of inter-company asset and liability account balances; Elimination of investment in the capital, reserves and retained earnings of the subsidiaries; Elimination of intercompany income and expenses and unearned income arising from intercompany transactions. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment; Elimination of tax charges on unearned income and presented as deferred tax in the consolidated balance sheet; and Identification of minority interests in the consolidated financial information.

iv. v.

58

(b)

Joint arrangement (not consolidated)


Percentage interest September, 2013 Direct Joint arrangements FCO GB Polo Loma Metalpar (1) Metalsur (1) Marsa (1) New Flyer San Marino Rotas do Sul (2) San Marino Mxico (2) Superpolo Hanegas TMML Indirect Direct December 31, 2012 Indirect

49.00 50.00 45.00 49.875 49.00

50.00 50.00 51.00 50.00 19.99 45.00 45.00 50.00 0.125 -

49.00 50.00 45.00 49.875 49.00

50.00 50.00 51.00 50.00 45.00 45.00 50.00 0.125 -

(1) Consolidated in the joint venture (unconsolidated) in Loma. (2) Consolidated in the joint venture (unconsolidated) in San Marino.

The main balances of the financial statements of these joint arrangement can be summarized as follows:
Assets 9/30/2013 FCO GBPolo Loma San Marino Superpolo Hanegas TMML 256 69,622 151,304 329,476 166,506 5,847 153,359 12/31/2012 348 69,979 97,291 280,907 132,132 5,817 142,829 9/30/2013 88 69,053 98,450 250,452 92,880 6,649 98,504 Liabilities 12/31/2012 36 62,013 50,704 197,796 59,765 6,609 88,315 9/30/2013 151 17,802 208,716 276,275 192,758 165,935 Net revenue 12/31/2012 13,771 94,711 325,206 141,152 197,648 9/30/2013 (467) (7,202) 10,224 5,526 10,022 (6) 2,814 Profit (loss ) 12/31/2012 (6,238) 1,072 21,394 11,660 (13) 12,455

(c)

Associates (not consolidated)


Percentual de participao 9/30/2013 Direct Associates Mercobus MVC Painis (1) Setbus Spheros Spheros Colombia (2) Spheros Mxico (2) WSul
(1) (2) Consolidated in associate MVC. Consolidated in associate Spheros.

12/31/2012 Direct 40.00 26.00 40.00 30.00 Indirect 26.00 40.00 40.00 -

Indirect 26.00 20.00 40.00 40.00 -

40.00 26.00 25.00 40.00 30.00

59

The main balances of the financial information of the direct joint ventures can be summarized as follows:
Assets 9/30/2013 Mercobus MVC Setbus Spheros Wsul 1,536 228,983 11,147 66,221 8,405 12/31/2012 1,274 138,676 50,840 8,929 9/30/2013 159 169,458 15,542 41,402 1,436 Liabilities 12/31/2012 70,297 16,371 2,053 9/30/2013 1,110 180,392 3,882 109,217 18,030 Net revenue 12/31/2012 108,431 87,604 14,144 9/30/2013 (200) 14,954 (4,144) 13,642 805 Profit (loss) 12/31/2012 7,105 12,881 (3)

Below we present the nature of subsidiaries:


Apolo Solues em Plsticos Ltda. Located in Caxias do Sul, State of Rio Grande do Sul, Brazil, with a share of 65% in the capital. The Apolo aims at the plastic injection parts, development, manufacture and sale of products and plastics. Moneo Investimentos A.S. (Moneo) Wholly owned subsidiary located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Moneo aims at the participation in other companies exclusively those which are defined to be financial institutions or other institutions authorized to operate by the Central Bank of Brazil and it has the following subsidiary: Banco Moneo A.S. located in Caxias do Sul, State of Rio Grande do Sul, Brazil, is engaged in the banking business in general, in all financial operations Central Bank of Brazil has authorized for in the market of Brazil.

Ciferal Industria de nibus Ltda (Ciferal) Wholly owned subsidiary located in Duque de Caxias, State of Rio de Janeiro, Brazil, is engaged in manufacturing car bodies for buses and minibuses, besides their parts, components and accessories. Ilmot International Corporation (Ilmot) - Wholly owned subsidiary, located in Uruguay. Ilmot has a participation in subsidiaries / affiliates as follows: Polomex A.S. de C. V. (Polomex) - located in Monterrey, Nuevo Len, Mexico, with a share of 70.39% in the capital. Polomex is engaged in manufacturing bus bodies. Superpolo S. A. (Superpolo) - located in Cundinamarca, Colombia, with a share of 50% in the capital. Superpolo is engaged in manufacturing bus bodies.

Hanegas S. A. S - located in Colombia, with a share of 49.875% of the capital. Hanegas is engaged in manufacturing bus bodies. Laureano A.S. - Wholly owned subsidiary, located in Argentina. Currently this subsidiary is not operating. Marcopolo Auto Componentes Co. (Mac) Wholly owned subsidiary, located in ChangZhou City, China, is engaged in developing and selling buses components. Marcopolo Australia Holdings PTY LTD. (MP Australia) Wholly owned subsidiary, located in Melbourne, Australia. MP Australia has a participation in subsidiaries / affiliates as follows: Pologren Australia Holdings PTY LTD. (Pologren) Wholly owned subsidiary, located in Melbourne, Australia. Pologren has participation in subsidiaries / affiliates as follows: Volgren Australia PTY Limited (Volgren) localizada em Melbourne, Australia, com participao de 75% no capital. A Volgren tem por objeto fabricar carrocerias para nibus.

60

Marcopolo Canad Holdings Corp. (MP Canada) Wholly owned subsidiary, located in Canada. MP Canada has participation in subsidiaries / affiliates as well as a joint arrangement, as follow: New Flyer Industries Inc. (New Flyer) located in Canada, with a share of 19,99% of the capital. New Flyer has engaged in manufacture buses. Marcopolo Industria de Carroarias A.S. (MPC) Wholly owned subsidiary, located in Portugal. Currently this subsidiary is not operating. Marcopolo International Corp. (MIC) Wholly owned subsidiary, located in British Virgin Islands (BVI). Currently this subsidiary is not operating. Marcopolo Latinoamrica S. A. (Mapla) Wholly owned subsidiary, located in Argentina. Currently this subsidiary is not operating. Marcopolo South Africa Pty Ltd. (Masa) Wholly owned subsidiary, located in Johannesburg, South Africa. Masa has engaged in manufacture buses bodies. Marcopolo Trading S. A. (Trading) Wholly owned subsidiary, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Marcopolo trading has engaged in provide technical services regarding foreing trade. Syncroparts Com e Distr. de Peas Ltda (Syncroparts) Wholly owned subsidiary, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Syncroparts has engaged in trading and distribution of parts for vehicles and has participation in subsidiaries / affiliates as follows: FCO Participaes Industria e Comrcio de Componentes Ltda (FCO) Related Company with a share of 50% of capital, located in Joinvile, State of Santa Catarina, Brazil. FCO has engaged in trading and distribution of parts for vehicles.

PoloAutoRus LLC. Wholly owned subsidiary, located in Moscow, Russia. It has engaged in manufacture bus bodies. Volare Veiculos Ltda - Wholly owned subsidiary, located in So Matheus, State of Espirito Santo, Brazil, has engaged in manufacture bus and minibus bodies, besides their parts, components and accessories. Volare Comrcio e Distribuio de Veculos e Peas Ltda - Wholly owned subsidiary, located in So Paulo, State of So Paulo, Brazil, has engaged in sellvehicle parts and accessories. GB Polo Bus Manufacturing S. A. E (GB Polo) Related Company with a share of 50% of capital, located in Suez, Egito, has engaged in manufacture bus bodies. Loma Hermosa S. A. (Loma) - Related Company with a share of 50% of capital, located in Buenos Aires, Argentina. Loma has participation in subsidiaries / affiliates as follows: Metalpar S. A. Subsidiary with a share of 98% of capital, located in Buenos Aires, Argentina. Metalpar has engaged in manufacture bus bodies. Metalsur Carrocerias S.R.L. Subsidiary with a share of 51% of capital, located in Santa F, Argentina. Metalsur has engaged in manufacture bus bodies. Marcopolo Argentina S. A. (Marsa) Wholly owned subsidiary, located in Buenos Aires, Argentina. Marsa has engaged in sell vehicle parts and accessories.

San Marino nibus e Implementos Ltda (San Marino) - Related Company with a share of 45% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. San Marino is engaged in manufacturing bus and minibus bodies, besides their parts, components and accessories and has participation in subsidiaries / affiliates as follows: San Marino Bus de Mxico A.S. de C. V. Subsidiary with a share of 99,99% of capital, located in Toluca, State of Mexico, Mexico, has engaged in manufacture bus bodies.
61

Rotas do Sul Logstica Ltda. Subsidiary with a share of 99,99% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil, has engaged in provide transportation services.

Tata Marcopolo Motors Limited (TMML) Related Company with a share of 49% of capital, located in Dharwad, India, has engaged in manufacture bus bodies. Mercobus S. A. C. Related Company with a share of 40% of capital, located in Peru, is engaged in commercial representation of bus bodies. MVC Componentes Plsticos Ltda (MVC) - Related Company with a share of 26% of capital, located in So Jos dos Pinhais, State of Parana, Brazil. MVC is has engaged in manufacture and sell of parts, components and accessories to vehicles and participation in subsidiaries / affiliates as follows: Poloplast Painis e Componentes Ltda - Wholly owned subsidiary, located in So Jos dos Pinhais, State of Parana, Brazil. Poloplast has engaged in manufacture and sell resin coatings for interior and exterior and respective raw material.

Setbus Solues Automotivas Ltda. (Setbus) Related Company with a direct and indirect share of 25% and 20%, respectively, of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Setbus has engaged in automotive solutions. Spheros Climatizao do Brasil A.S. (Spheros) - Related Company with a share of 40% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Spheros has engaged in manufacture and sell of refrigeration and air conditioning equipments and has participation in subsidiaries /affiliates as follows: Spheros Mxico A.S. de C. V - Wholly owned subsidiary located in Mexico and has engaged in manufacture and sell of refrigeration and air conditioning equipments. Spheros Thermosystems Colombia Ltda - Wholly owned subsidiary located in Colombia and has engaged in manufacture and sell of refrigeration and air conditioning equipments as well.

Wsul Espumas Industria e Comrcio Ltda (Wsul) - Related Company with a share of 30% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Wsul has engaged in manufacture and sell molded polyurethane foam and derivatives thereof.

7
7.1

Cash and equivalents, financial assets and derivatives


Cash and cash equivalents
Parent Company 9/30/2013 Cash and bank Brazil Foreign
Highly liquid marketable securities (*)

Consolidated 9/30/2013 12/31/2012

12/31/2012

10,655 64 552,961 563,680

26,615 146 206,358 233,119

12,057 45,116 703,457 760,630

26,992 43,165 304,062 374,219

Brazil Total cash and cash equivalents

(*) Substantially correspond to Bank Deposit Certificates - CDB remunerated at between 100.0% and 103.3% of the Interbank Deposit Certificate (CDI) rate, resulting in a weighted average of 100.6% of CDI as of September 30, 2013.

62

7.2

Financial assets stated at fair value through profit or loss, available-for-sale and derivative financial instruments
Parent company Current At fair value through profit or loss Fixed-income investment funds
Non Deliverable Forwards (*) 9/30/13 124 5,697 12/31/12 1,093 3,380 9/30/13 124 5,949

Consolidated
12/31/12 1,093 3,446

Available for sale Bank deposits certificates

10,993 16,814

130,747 135,220

10,993 17,066

130,747 135,286

Non-current Available for sale Related parties

24,515 24,515

36,942 36,942

24,056 24,056

22,130 22,130

The bank deposit certificates yield rates of 11% p.a.. Derivative financial instruments are classified in current assets or liabilities. The Company has no financial instruments recognized under the hedge accounting method, pursuant to IAS 39.

Accounts receivable
Parent company 9/30/2013 Current Domestic customers Foreign customers Related parties Interbank transactions Present value adjustment Allowance for doubtful accounts 12/31/2012 9/30/2013 Consolidated 12/31/2012

476,078 187,433 65,171 (3,610) (24,359) 700,713

463,603 184,192 48,320 (2,278) (25,793) 668,044

606,856 299,044 297,698 (4,289) (58,955) 1,140,354

601,680 265,924 271,239 (2,836) (66,683) 1,069,324

Non-current Interbank transactions Allowance for doubtful accounts

700,713

668,044

537,508 (11,331) 526,177 1,666,531

473,489 (2,254) 471,235 1,540,559

Interbank accounts refer to the financing for the acquisition of buses granted by Banco Moneo through the Government Agency for Machinery and Equipment Financing (FINAME) program.

63

See below the aging list of trade accounts receivable:


Parent company 9/30/2013 Amounts outstanding Overdue: - up to 30 days - 31 to 60 days - 61 to 90 days - 91 to 180 days - over 181 days Adjustment to present value (-) Allowance for doubtful accounts 514,210 55,856 46,681 32,919 29,887 49,129 (3,610) (24,359) 700,713 12/31/2012 442,930 109,758 30,620 22,642 22,387 67,778 (2,278) (25,793) 668,044 9/30/2013 1,452,233 79,187 51,602 35,284 36,336 86,464 (4,289) (70,286) 1,666,531 Consolidated 12/31/2012 1,294,553 135,142 38,461 28,463 27,197 88,516 (2,836) (68,937) 1,540,559

The changes in the allowance for doubtful accounts are as follows:


Parent company Balance as of December 31, 2012 Allowance made in the period Reversal of provision for receivables (write-off) Exchange variance Balance as of September 30, 2013 (25,793) (5,110) 6,544 (24,359) Consolidated (68,937) (12,535) 11,896 (710) (70,286)

Accounts receivable are denominated in the following currencies:


Parent company 9/30/2013 Reais US dollar Australian dollar Euro Argentine Peso Rand Renminbi Rublo 513,280 187,433 700,713 12/31/2012 483,852 184,192 668,044 9/30/2013 1,375,266 229,398 40,654 1 13 11,401 9,690 108 1,666,531 Consolidated 12/31/2012 1,281,794 227,315 10,718 82 12,677 7,973 1,540,559

Inventories
Parent company 9/30/2013 12/31/2012 77,510 29,015 129,484 6,612 (417) 242,204 9/30/2013 133,966 76,579 249,843 19,701 (5,572) 474,517 Consolidated 12/31/2012 102,751 55,192 197,009 15,319 (5,742) 364,529

Finished goods Goods in process Raw materials and storeroom materials Advances to suppliers and other Provision for inventory losses

95,012 36,886 156,024 5,505 (417) 293,010

64

The changes in provision for losses on inventories are as follows:


Parent company Balance as of December 31, 2012 Reversal of provision against inventory (write-off) Allowance made in the period Exchange Variation Balance as of September 30, 2013 (417) (417) Consolidated (5,742) (914) 455 629 (5,572)

10

Taxes and contributions recoverable


Parent company 9/30/2013 Current Corporate Income Tax (IRPJ) Social Contribution on Net Income (CSLL) Excise Tax (IPI) Value added Tax on Sales and services (ICMS) Social Integration Program (PIS) Contribution for Social Security Financing (COFINS) Reintegra Value added Tax (IVA) Other 57,370 13,451 13,172 5,511 1,937 5,873 4,303 1 101,618 Non-current Value added Tax on Sales and services (ICMS) Value added Tax (IVA) 12/31/2012 21,222 5,860 8,283 20,616 2,530 10,695 4,256 73,462 9/30/2013 71,915 18,972 14,026 7,179 2,300 8,908 4,306 4,750 594 132,950 Consolidated 12/31/2012 22,796 5,861 9,472 21,321 2,898 14,017 4,330 5,066 538 86,299

1,310 1,310 102,928

1,453 1,453 74,915

1,310 818 2,128 135,078

1,877 780 2,657 88,956

11

Investments
Parent company 9/30/2013 Subsidiary Joint subsidiaries Associated companies Other investments 917,411 157,263 31,099 1,105,773 12/31/2012 546,344 156,367 27,811 730,522 9/30/2013 325,138 31,099 1,227 357,464 Consolidated 12/31/2012 127,098 27,811 1,045 155,954

65

(a)

Investments in subsidiaries, joint ventures and associated companies


Investments in subsidiaries, joint arrangements and associated companies are presented below:
Subsidiary Apolo Investment data Capital Adjusted shareholders equity Shares or quotas held % interest Net income (loss) for the period Changes in investments Opening balances: At equity value Capital subscription Acquisition of equity interest Dividends received Equity in net income of subsidiaries and associated companies Accumulated translation adjustments Capital gain/loss in investments Capital reduction Final balances: At equity value (1) External subsidiaries 600 600 1,830 65,00 Ciferal 20,000 238,557 499,953 99,99 43,380 llmot (1 ) 34,333 79,156 50,000 100,00 10,264 Mac (1) 7,498 6,764 1 100,00 (760) MP Mapla Austrlia (1) (1) 770 451 4,000 99,99 (18) 46,856 45,520 75 75,00 (1,067) Masa (1 ) 6,912 31,609 100,000 100,00 2,010 MIC (1) 3,121 (826) 1,400,000 100 (974) MPC (1) 4,087 (10,924) 1 70,00 (48) Moneo 100,000 195,463 100,000 100,00 17,169 PoloRus (1 ) 2,344 1,179 1 100,00 (364 ) MP Canada Polomex (1) (1) 250,830 268,395 4,925,530 100,00 1,268 19,650 60,176 3,011,659 3,61 7,377 Syncro Trading Volare Volare Veculos Comrcio 33,220 31,696 19,980 99,90 (1,416) 8,000 4,318 999 99,90 (2,366)
9/30/2013 Total 12/31/2012

4,000 3,000 15,082 5,189 1 3,450,103 99,99 99,99 260 157

390 390

195,167 43,378 238,545

70,001 (4,470 ) 10,264 3,361 79,156

6,616 (760) 908 6,764

506 (18) (37) 451

47,375 (1,067) (788) 45,520

32,139 2,010 (2,540 ) 31,609

216 (974) (68) (826)

(6,795) (33) (817) (7,645)

178,402 17,169 (108) 195,463

1,519 (364 ) 25 1,180

237,899 (1,450) 1,268 30,678 268,395

1,738

14,820

5,032

(58) 33,137 (1,415) -

(334) 7,002 (2,364) 4,304

546,344 40,529 237,899 (5,920) 67,781 30,886 (108) 917,411

434,163 2,596 41,553 (11,999 ) 73,058 16,382 (187 ) (9,222 ) 546,344

270 164 2,172

260 15,080

157 5,189

31,664

66

Joint arrangement Total San Marino (2) 56,080 86,554 7,478,482 45,00 5,525

GBPolo (1) Investment data Capital Adjusted Shareholders equity Share or quotas held % interest Net income (loss) for the period Changes in the investments Opening balances: At equity value Capital subscription Dividends received Equity in net income of subsidiaries and associated companies Accumulated translation adjustments Closing balance: At equity value 31,716 569 4,803,922 49,00 (7,202)

Hanegas (1) 4 (802) 1,800 49,875 (6)

Loma (1)(2) 37,872 52,856 15,949,948 50,00 10,204

TMML (1) 60,567 54,855 24,500 49,00 2,814

9/30/2013

12/31/2012

3,903 (3,528) (96) 279

(394) (3) (3) (400)

53,746 5,102 (1,968) 56,880

72,400 (1,246) 2,486 (16) 73,624

26,712 1,379 (1,211) 26,880

156,367 (1,246) 5,436 (3,294) 157,263

146,285 11,642 (13,507) 12,208 (261) 156,367

(1) External subsidiaries/joint arrangements (2) These balances include goodwill and investments.

Associated companies Total MVC Investment data Capital Adjusted Shareholders equity Share or quotas held % interest Net income (loss) for the period Changes in the investments Opening balances: At equity value Capital subscription Acquistion of equity interest Dividends received Equity in net income of subsidiaries and associated companies Accumulated translation adjustments Closing balances: At equity value
(1) External subsidiaries/joint arrangements

Mercobus (1) 465 1,610 232 40,00 (200)

Spheros

Setbus

WSul

9/30/2013

12/31/2012

34,011 59,526 1 26,00 14,954

15,000 34,531 244,898 40,00 13,642

1,000 (3,696) 25 25,00 (4,696)

6,100 6,969 1,830,000 30,00 805

11,513 3,963 15,476

873 (149) (80) 644

13,186 (4,000) 4,640 (14) 13,812

250 (1,174)

2,239 (390) 242 2,091

27,811 250 (4,390) 7,522 (94) 31,099

21,577 873 (4,100) 9,390 71 27,811

(924)

(b)

Strategic Investment Contract


Marcopolo informs that signed on January 23, 2013 a strategic investment contract at C$ 116.4 million (Canadian Dollar) to subscribe 11,087,834 new shares to be emitted by New Flyer Industries Inc, in which represents 19.99% of its capital. Each share was emitted at C$ 10.50. In first step, Marcopolo subscribed 4,925,530 new common shares emitted on February 08, 2013 at C$ 51.7 million and the remaining 6,162,304 shares were subscribed by Marcopolo at same unit price in one unique payment on July 21, 2013 by C$ 64.7 million. This investment is subject for approval of the Toronto Stock Exchange, in Canada.
67

12
(a)

Property, plant and equipment


Summary of changes in the parents company property, plant and equipment
Land Balance as of December 31, 2012 Additions Write-offs Transfers Depreciation Balance as of September 30, 2013 Cost of property, plant and equipment Accumulated depreciation Residual value Annual depreciation rates - %
17,871 200 18,071 18,071 18,071

Buildings and constructions


65,996 3,065 (29) 142 (1,932) 67,242 133,117 (65,875) 67,242

Machinery and equipments


75,110 15,644 (465) 370 (10,446) 80,213 186,429 (106,216) 80,213

Furniture and fixtures


3,470 1,142 (15) (401) 4,196 8,835 (4,639) 4,196

Computer equipment
6,211 2,283 (9) 4 (1,324) 7,165 16,846 (9,681) 7,165

Vehicles
2,151 613 (21) (321) 2,422 5,123 (2,701) 2,422

Other PPE
98 98 98 98

PPE in progress
19,677 17,931 (516)

Total
190,584 40,878 (539) (14,424) 216,499 405,611 (189,112) 216,499

37,092 37,092 37,092

2.0

8.3

8.3

20.0

20.0

68

(b)

Summary of changes in the consolidated property, plant and equipment


Buildings and constructions
90,925 (639) 3,640 (29) 142 (3,221) 90,818 172,643 (81,825) 90,818

Land Balance as of December 31, 2012 Exchange effect Additions Write-offs Transfers Depreciation Balance as of September 30, 2013 Cost of property, plant and equipment Accumulated depreciation Residual value Annual depreciation rates - %
22,656 (80) 200 22,776 22,776 22,776

Machinery and equipments


119,919 104 24,743 (2,115) 370 (17,059) 125,962 295,935 (169,973) 125,962

Furniture and fixture


7,482 (108) 1,943 (341) (970) 8,006 15,783 (7,777) 8,006

Computer equipments
6,943 2,641 (265) 4 (1,231) 8,092 18,902 (10,810) 8,092

Vehicles
4,644 35 2,042 (678) (662) 5,381 10,467 (5,086) 5,381

Other PPE
3,136 320 741 (119) (696) 3,382 8,873 (5,491) 3,382

PPE in progress
43,103 649 22,469 (1,424) (516) 64,281 64,281 64,281

Total
298,808 281 58,419 (4,971) (23,839) 328,698 609,660 (280,962) 328,698

2.0

8.3

8.3

20.0

20.0

13.0

Land and buildings mainly comprise plants and offices.

69

13
(a)

Goodwill and intangible assets


Summary of changes in the parents company intangible assets
Registered Trademarks And licenses
73 (14) 59 1,222 (1,163) 59

Softwares Balance as of December 31, 2012 Additions Write-offs Amortization Balance as of September 30, 2013 Cost of intangible assets Accumulated amortization Residual value Annual amortization rate - %
4,708 1,583 (3) (1,417) 4,871 47,662 (42,791) 4,871

Total
4,781 1,583 (3) (1,431) 4,930 48,884 (43,954) 4,930

20.0

7.0

(b)

Summary of changes in the consolidated intangible assets


Registered Trademarks Softwares And licenses Balance as of December 31, 2012 Exchange effects Additions Write-offs Transfers Amortizations Balance as of September 30, 2013 Cost of intangible assets Accumulated amortization Residual value Annual amortization rates - %
5,535 439 4,244 (4) (1,649) 8,565 52,420 (43,855) 8,565 73 (14) 59 1,222 (1,163) 59

Client Portfolio
14,019 (4) (597) (2,521) 10,897 16,499 (5,602) 10,897

Other Intangibles
9,393 (759) 409 (313) 8,730 9,311 (581) 8,730

Goodwill
184,639 2,208 64,736 251,583 251,583 251,583

Total
213,659 1,884 69,389 (601) (4,497) 279,834 331,035 (51,201) 279,834

2.0

8.3

25

10

Company performs at the end of each year Goodwill impairment test.

70

14

Related parties
The main asset and liability balances at September 30, 2013, as well as the transactions with related parties that influenced the statement of income in the period, are detailed below:
Asset balances of loans and current accounts Subsidiary Ciferal GB Polo Ilmot Loma Hermosa Mac Mapla Masa Moneo MPC MPT MVC Polomex Polorus San Marino Setbus Spheros Superpolo TMML Volare Veculos Volare Comrcio WSUL Balance at Sep 30, 2013 Balance at December 31, 2012 130 22,978 279 1 1,035 1 47 44 Liability balances of loans and current Other accounts receivables 20 10,131 -

Trade accounts receivable 19,229 2,077 2,179 3,039 14,067 322 98 12,543 2,264 5,790 15,971 -

Trade payables 147 4,359 182 8,298 3,840 2,114

Sales of goods/ services 59,293 168 5,890 3,274 18,284 2 413 41,857 270 8,185 2,445 17,628 -

Purchase of goods/ services 435 3,988 772 99,902 22,582

Financial revenue 107 325 6 1 1 30 1 23 -

Financial expenses -

24,515

20

10,131

77,579

18,940

157,709

127,679

494

36,942

20

9,048

48,549

4,551

153,265

62,150

375

The loan and current account balances of companies headquartered in Brazil are subject to financial charges at the CDI interest rate, and those of companies abroad to the semi-annual Libor rate plus 3% p.a.

Compensation of key management personnel


Key management personnel include the directors, officers and members of the Executive Committee. The remuneration paid or payable is shown below:
9/30/2013 Retirement plan 163 206 369 Share based payments 105 196 301

Fixed Board of Directors and Executive Board Non-executive officers 7,173 4,687 11,860

Variable 5,661 3,334 8,995

Total 13,102 8,423 21,525

71

9/30/2012 Retirement plan 94 138 232 Share based payments 256 506 762

Fixed Board of Directors and Executive Board Non-executive officers 6,691 4,341 11,032

Variable 5,340 2,436 7,776

Total 12,381 7,421 19,802

15

Loans and financing


Weighted Average Rate Local currency FINAME Bank loans FINEP Special pre-shipment financing(*) Export Credit Bills - Compulsory Foreign currency Advances on export contracts Export prepayments in US dollar Export Credit Bills in US dollar Financing in rands Financing in renminbi Financing in Australian dollar Related parties Money market funding Local currency BNDES Parent company Due date Vencimento 9/30/2013 12/31/2012 9/30/2013 Consolidated 12/31/2012

7,62 8,44 4,63 5,79 5,50

2015 to 2022 2013 to 2021 2014 to 2020 2013 2016

10,511 65 137,339 219,065 402,633

12,067 929 118,034 360,282 -

12,346 65 137,339 219,065 402,633

13,112 1,323 118,034 360,282 -

1,41 2,96 3,00 8,50 5,60 3,53 Libor + 3.00

2013 2013 2014 2014 2013 2013 to 2015 -

20,517 202,329 44,517 20

52,883 14,836 20

20,517 202,329 44,517 23 15,633 84,479 -

53,471 14,836 30 10,846 63,687 -

TJLP + 1.00

2018

1,036,996

559,051 (452,445) 106,606

692,877 1,831,823 (391,386) 1,440,437

614,844 1,250,465 (722,468) 527,997

Current liability Non-current liability

(73,889) 963,107

(*) BNDES credit line used for producing exportation goods, where the shipment must occur no later than 3 years after the initial contract. The long-term installments have the following payment schedule:
Parent company 9/30/2013 From 13 to 24 months From 25 to 60 months After 60 months 34,852 899,066 29,189 963,107 12/31/2012 22,895 62,047 21,664 106,606 9/30/2013 213,276 1,185,264 41,897 1,440,437 Consolidated 12/31/2012 187,352 318,980 21,665 527,997

72

(a)

Loans and financing


The FINAME (Government Agency for Machinery and Equipment Financing) loans are guaranteed by liens on the financed assets, totaling R$ 12,346 as of September 30, 2013 (R$ 13,112 as of December 31, 2012) and the FINEP (Fund for Financing Studies and Projects) loan is guaranteed by real estate of R$ 15,800. The Company has financing agreements that contain negative covenants which are being complied with.

(b)

Money market funding


Funds obtained in the money market are received by Banco Moneo from the National Bank for Economic and Social Development (BNDES) to finance FINAME loans. These liabilities incur financial charges of 1% per annum in addition to TJLP. The face value and the fair value of long-term installments of money market funds are as follows:
Face value (future) 9/30/2013 From 1 to 12 months From 13 to 24 months From 25 to 36 months After 36 months 232,921 187,579 148,347 156,040 724,887 12/31/2012 217,468 179,057 126,375 142,365 665,265 Fair value (present) 9/30/2013 216,952 177,920 143,692 154,313 692,877 12/31/2012 194,334 164,158 118,264 138,088 614,844

The face value of loans in current liabilities approximates the fair value.

16
(a)

Provisions
Civil, labor and tax contingencies
The Company is a party to labor, civil, tax and other lawsuits in progress, and is disputing them at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for any losses under these proceedings are estimated and restated by Management, relaying on the opinion of its independent and in-house legal advisers. The contingencies as of September 30, 2013 and December 31, 2012, which are considered to be probable and possible losses, according to the opinion of legal counsel, are shown below. Contingencies involving probable risks of loss have been provisioned for.
Parent company 9/30/2013 Nature Civil Labor Tax Probable 1,314 3,777 6,092 11,183 Possible 67 7,536 78,907 86,510 Probable 181 2,314 4,108 6,603 12/31/2012 Possible 147 4,628 151,888 156,663

73

Consolidated 9/30/2013 Nature Civil Labor Tax Probable 1,585 6,318 13,799 21,702 Possible 529 7,536 108,799 116,864 Probable 181 4,503 11,665 16,349 12/31/2012 Possible 609 4,628 170,818 176,055 Consolidated 9/30/2013 981 1,505 9,420 11,906 12/31/2012 964 1,749 9,335 12,048

Parent company Judicial deposits Civil Labor Tax 9/30/2013 981 428 4,559 5,968 12/31/2012 964 319 4,564 5,847

(i)

Civil and labor claims


The Company is party to civil and labor lawsuits, which include claims for indemnities for work accidents and occupational diseases. None of these lawsuits involves individually significant amounts.

(ii)

Tax contingencies
The Company and its subsidiaries are party to various tax lawsuits. The nature of the principal lawsuits is detailed below: . Provisioned for:
Parent company 9/30/2013 ICMS Transfer of credits (i) COFINS Increase in rate (ii) INSS On imported services provided fully abroad (iii) Other contingent liabilities of lesser amounts 3,145 2,947 6,092 12/31/2012 3,144 964 4,108 9/30/2013 3,145 7,513 2,947 194 13,799 Consolidated 12/31/2012 3,144 7,362 1,159 11,665

(i) Contingencies regarding the discussion on the transfer to suppliers of ICMS credits arising from exports. (ii) Contingencies relating to the increase in the Social Contribution on Revenues (COFINS) introduced by Law 9.718/98. The lawsuits are still in progress at the judicial level. (iii) Contingencies regarding the incidence of INSS on services provided by employees abroad.

74

. Not provisioned for:


Parent company 9/30/2013 PIS, COFINS e FINSOCIAL - offset IRPJ understated inflationary profit IRPJ e CSLL on exports intermediated by export companies (i) IRPJ e CSLL overseas profit (ii) ICMS shipment of goods with reduced tax rate to non-taxpayers (iii) ICMS disreputable documents (iv) ISS services received from third parties INSS services taken from legal entities Other contingent liabilities of lesses amounts 5,448 2,150 32,135 20,094 11,071 3,348 4,661 78,907 12/31/2012 5,156 2,035 114,083 12,089 10,808 3,168 4,549 151,888 9/30/2013 5,448 2,150 32,135 20,094 15,328 11,071 3,348 4,661 14,564 108,799 Consolidated 12/31/2012 5,156 2,035 114,083 12,089 13,866 10,808 3,168 4,549 5,064 170,818

(i) Contingencies deemed as possible loss, regarding IRPJ and CSLL allegedly due on exports intermediated by offshore subsidiaries, carried out in the period from 1999 to 2007 which, according to the tax authorities, characterize simulated transactions. The processes are awaiting judgment of the appeals to the Administrative Board of Tax Appeals. In September 2011, in the processes related to calendar years 20012007 the Administrative Board of Tax Appeals (CARF) unanimously ruled in favor of the Company, fully canceling the tax assessment notices. In July 2012 the above decision was upheld by the Superior Chamber of Tax Appeals of the Board of Tax Appeals. The processes with respect to the calendar years 2001 to 2007 had become final. (ii) Contingency whose perspective of loss is considered possible related to the consolidation of overseas results from indirect subsidiaries, prior to offer profits to taxation in Brazil. The disputes are in progress at the Brazilian Internal Revenue Service. (iii) Contingency of a subsidiary, deemed as possible loss, regarding ICMS liabilities from shipments of goods with a reduced tax rate to non-taxpayers established out of the state. The disputes are in progress at the Taxpayers Council of the State of Rio de Janeiro. (iv) Contingency, deemed as possible loss, regarding ICMS liabilities for alleged issue tax documents with error in rate application to non-taxpayers established out of the state. The disputes are in progress at the Taxpayers Council of the State of So Paulo. There are other contingent liabilities, with lower values, totaling R$ 30,171 (R$ 19,972 in December 31, 2012) for which unfavorable outcomes are assessed as possible.

(b)

Contingent assets
Contingent assets are summarized below, together with the possibilities of a favorable outcome, according to the opinion of legal counsel:
Consolidated 9/30/2013 Nature Contingent Tax Social Security Probable Possible Probable 12/31/2013 Possible

9,458 9,458

8,835 1,961 10,796

9,605 9,605

8,550 1,855 10,405

75

(i)

Tax contingencies
The Company is the plaintiff in various lawsuits at the state and federal levels, in which the following matters are being disputed:
Excise Tax - IPI. Social Integration Program - PIS and Tax for Social Security Financing - COFINS. Corporate Income Tax - IRPJ and Social Contribution on Net Income - CSLL.

Tax on Financial Transactions (IOF) and Income Tax Withheld at Source (IRRF).
Eletrobrs compulsory loan.

ICMS on consumption and usage materials.

(ii)

Social security contingencies


National Institute of Social Security (INSS) contribution. The Company has not recorded contingency gains, since they only recognized once the lawsuit has became final or the financial asset is effectively received.

17

Pension plan and retirement benefits for employees


Marcopolo is the main sponsor of Marcoprev Sociedade de Previdncia Privada, a non-profit pension entity established in December 1995 with the main purpose of supplementing government social security benefits to all employees of the sponsors: Marcopolo (main sponsor), Syncroparts, Trading, Polo Servios, Banco Moneo and Fundao Marcopolo. The total consolidated contributions for the period ended as of September 30, 2013 is R$ 8,048 (R$ 7,218 in September 30, 2012). The actuarial method for determining the cost and contributions is the capitalization method. This is a mixed plan, with features that are both defined benefit, where the sponsor is solely responsible for the contributions, and defined contribution, where the sponsor and participant are responsible for the contributions on an optional basis. As of September 30, 2013 and December 31, 2012, amounts related to post-employment benefits were determined in the annual actuarial assessment carried out by independent actuaries and were recognized in the financial statements. The balance booked in the financial statement is as follows:
Parent company 9/30/2013 Present value of actuarial liabilities Fair value of active plans Liability to be recognized (248,476) 182,460 (66,016) 12/31/2012 (231,722) 188,665 (43,057) 9/30/2013 (250,328) 183,820 (66,508) Consolidated 12/31/2012 (233,440) 190,072 (43,368)

According to the retirement plan statute and the installment recorded for the supplementary retirement plan it is not possible to reimburse the amounts, increase the benefit or reduce future contributions. The changes over the benefit liability occurred during the year is described as follows:

76

Parent company 9/30/2013 At the beginnig of the period Plan participants contributions Actuarial (gains) / losses Recognized net (expenses)/revenue At the end of the period (43,057) 7,313 (23,237) (7,035) (66,016) 12/31/2012 388 8,497 (51,586) (356) (43,057) 9/30/2013 (43,368) 7,401 (23,321) (7,220) (66,508)

Consolidated 12/31/2012 388 8,602 (51,871) (487) (43,368)

Changes in the fair value of the employee benefit plan are demonstrated below:
Parent company 9/30/2013 At the beginnig of the period Sponsors contribution Employees contribution Benefits paid Expected return of active plans Actuarial gains (losses) At the end of the period 188,665 7,313 359 (4,844) (9,033) 182,460 12/31/2012 160,291 8,497 559 (6,475) 26,578 (785) 188,665 9/30/2013 190,072 7,401 365 (4,844) (9,174) 183,820 Consolidated 12/31/2012 160,291 8,602 569 (6,475) 27,870 (785) 190,072

Changes in the actuarial liability are demonstrated below:


Controladora 9/30/2013 At the beginnig of the period Actuarial gains (losses) Current service costs Financial costs Employees contribution Benefits paid At the end of the period 231,722 1,884 4,580 14,775 359 (4,844) 248,476 12/31/2012 159,903 57,873 4,134 15,728 559 (6,475) 231,722 9/30/2013 233,440 1,732 4,749 14,886 365 (4,844) 250,328 Consolidado 12/31/2012 159,903 59,352 4,283 15,808 569 (6,475) 233,440

Amounts recorded in the income statement are:


Parent company 9/30/2013 Current service costs Financial costs Expected return over plan assets Employees contributions Total included as personal cost 82 (82) 12/31/2012 4,134 15,728 (19,894) (32) 9/30/2013 169 193 (234) 6 134 Consolidated 12/31/2012 4,283 15,808 (19,997) 94

77

The mains actuarial assumptions are:

. Economic hypothesis
Percentage p.a. Parent company 9/30/2013 Discount rate (*) Return rate expected over plans assets Future salary increments Inflation 8.64 8.64 7.63 4.50 12/31/2012 8.64 8.64 7.63 4.50 9/30/2013 8.64 8.64 7.63 4.50 Consolidated 12/31/2012 8.64 8.64 7.63 4.50

(*) The discount rate is: inflation 4.50% p.a. plus interests of 3.96%p.a as of September 30, 2013 (inflation 4.50%p.a. plus interests of 3.96%p.a. as of December 31, 2012).

. Demographic hypothesys
Percentual p.a. Parent company 9/30/2013 Mortality table Invalid and mortality table Invalid entrance table AT 2000 RRB 1983 RRB 1944 12/31/2012 AT 2000 RRB 1983 RRB 1944 9/30/2013 AT 2000 RRB 1983 RRB 1944 Consolidated 12/31/2012 AT 2000 RRB 1983 RRB 1944

18
(a)

Income and social contribution taxes


Deferred income and social contribution taxes
The basis for the calculation of the deferred taxes is as follows:
Parent company 9/30/2013 Assets Provision for technical assistance Provision for commission Allowance for doubtful accounts Provision for profit sharing Provision for contingencies Provision for sureties with third parties Provision for inventory losses Provisions for outsourced services Employees benefit Appropriation of (gains) losses on derivatives Adjustment to present value Other provisions Tax loss/negative social contribution base Calculation basis Standard rate - % Deferred income and social contribution taxes 12/31/2012 9/30/2013 Consolidated 12/31/2012

19,174 24,263 21,115 11,183 66 417 18,692 66,016 (5,294) 1,520 (823) 156,329 34 53,152

19,753 26,595 1,004 26,636 6,603 704 417 16,583 43,057 (3,380) 2,908 (18,668) 122,212 34 41,552

21,829 27,839 36,278 24,065 21,682 66 5,572 18,692 66,508 (5,294) 1,860 5,121 224,218 34 76,234

23,877 30,422 37,461 30,973 16,349 704 5,742 16,583 43,368 (3,442) 2,908 (13,283) 32 191,694 34 65,176

78

(b)

Estimative of realization of income taxes


The recovery of deferred tax assets is based on estimates of taxable income, as well as on the realization of temporary differences, in the following periods:
Parent company 9/30/2013 From 13 to 24 months 53,152 53,152 12/31/2012 41,552 41,552 9/30/2013 76,234 76,234 Consolidated 12/31/2012 65,176 65,176

(c)

Reconciliation of current income taxes and social contribution


Parent company 9/30/2013 Reconciliation Net income before income tax and social contribution Standard rate - % 12/31/2012 9/30/2013 Consolidated 12/31/2012

252,579 34 85,877

256,874 34 87,337

293,395 34 99,754

291,382 34 99,070

Permanent addition and exclusions Equity in net income of subsidiaries Management profit sharing Interest on shareholders equity Other additions (exclusions)

(27,451) (1,961) (15,975) (2,719) 37,771

(27,448) (1,949) (10,535) (2,375) 49,780

(6,460) (1,961) (15,975) 1,311 76,669

(8,851) (1,949) (10,535) (5,426) 83,161

Income and social contribution taxes Current Deferred

(41,565) 3,794 37,771

(49,044) (736) 49,780

(85,019) 8,350 76,669

(67,989) (15,172) 83,161

19

Equity
According a meeting of the Board of Directors held on August 5, 2013 was approved a Company's capital increase of R$ 500 million through capitalization of capital reserves as at 31 December 2012, with bonus shares 100%.

(a)

Capital social
The authorized Parent Companys capital is 869,900,084 shares (448.450.042 as of December 31, 2012), where 341,625,744 are common shares and 555,274,340 are preferred shares, nominal and with no nominal value. Of the total subscribed capital, 295,502,020 (140,901,676 as of December 31, 2012) preferred shares are held by stockholders abroad.

79

(b) (i)

Reserves Legal reserves Constituted at the rate of 5% of the net income determined in each financial year pursuant to article 193 of Law 6.404/76 up to the limit of 20% of the share capital. Statutory reserves At least 25% (twenty-five percent) of the remaining balance of profit is appropriated for the payment of a compulsory dividend on all shares of the Company. The remaining balance of profit is fully appropriated to the following reserves: Reserve for future capital increase - to be used for future capital increases and established at 70% of the remaining balance of the profit for each year, but the balance cannot exceed 60% of share capital. Reserve for payment of interim dividends - to be used for the payment of interim dividends in accordance with Article 33 (1) of the Company's by-laws and established at 15% of the remaining balance of the profit for each year, but the balance cannot exceed 10% of share capital. Reserve for the purchase of own shares - to be used for the purchase of the Company's own shares, to be canceled, held in treasury and/or sold, and established at 15% of the remaining balance of the profit for each year, but the balance cannot exceed 10% of share capital.

(ii)

(c)

Treasury stock Treasury stock comprises 1,965,074 preferred nominative shares, purchased at the average cost of R$ 3.0037 per share. The market value of the treasury stock, calculated at the closing date for the period, was R$ 5.902. According to article 168 (3) of Brazilian Corporation Law and CVM Instruction No. 390/03, the shares will be utilized to grant managers and employees share purchase options, pursuant to the Stock Option Plan approved by the Extraordinary General Meeting held on December 22, 2005.

20

Interest on shareholders equity Law 9.249/95


As permitted by Law 9.249/95, the Company approved at the Board of Directors meeting, held on February 21, 2013 the distribution of interest on shareholders equity based on Long Term Interest Rate (TJLP) of the current period the total gross amount of R$ 15,662 (R$ 15,650 in September 30, 2012), to be imputed as part of the mandatory dividends declared in advance for the current year of 2013, at the net amount. The approved interest, calculated on stockholders equity as per the balance sheet at 12/31/2012, will be paid at R$ 0.0175 per share, less the withholding income tax, pursuant to the applicable legislation. Interest on capital was credited to the individual accounts of stockholders on September 24, 2013, based on their holdings as of September 23, 2013, and will be paid as from Dezember 30, 2013.

21

Insurance coverage
As of September 30, 2013, the Company had insurance coverage against fire and other risks to the assets comprising the property, plant and equipment and inventory, at amounts deemed sufficient to cover any losses.

80

The main insurance policies cover:


Consolidated Assets nature Inventories and warehouses Buildings and contents Vehicles Valor patrimonial Fire and sundry risks Fire and sundry risks Collision, civil liability 9/30/2013 330,092 536,544 8,701 875,337 12/31/2012 288,907 419,864 6,501 715,272

22

Sureties and Guarantees


As of September 30, 2013, the Company had issued sureties and/or guarantees of R$ 14,805 (R$ 11,047 in December 31, 2012), in connection with the financing of customers by banks, which has as a counterguarantee the respective assets financed.

23

Employee profit sharing


The employee profit sharing was calculated in accordance with the terms established in the Instrument for the Agreement of the Marcopolo Targets/Efficiency Program (EFIMAR), dated March 25, 2013, which was approved by the employee union. The amounts were classified in the statement of income as follows:
Parent company 9/30/2013 Cost of goods sold and services provided Sales expenses Administrative expenses 24,138 3,398 3,282 30,818 12/31/2012 23,111 2,966 2,677 28,754 9/30/2013 28,930 3,411 4,984 37,325 Consolidated 12/31/2012 27,437 2,978 3,753 34,168

24

Revenue
The reconciliation between gross sales and net revenue is as follows:
Parent company 9/30/2013 Gross Sales Sales taxes and returns Net revenue 2,508,877 (500,566) 2,008,311 6/30/2012 2,182,999 (460,446) 1,722,553 9/30/2013 3,352,860 (615,774) 2,737,086 Consolidated 6/30/2012 2,956,529 (556,726) 2,399,803

81

25

Expenses by nature
Parent company 9/30/2013 Raw material and consumables Direct remuneration Management remuneration Employee profit sharing Depreciation and amortization charges Private pension plan expenses Other expenses Total Sales costs, distribution costs and administrative expenses 1,485,035 248,428 12,732 30,818 15,855 5,263 20,850 9/30/2012 1,280,111 208,931 13,137 28,754 16,501 7,218 8,901 9/30/2013 1,920,555 380,757 12,732 37,325 28,336 5,337 67,754 Consolidated 9/30/2012 1,680,622 321,014 13,137 34,168 27,272 7,218 75,234

1,818,981

1,563,553

2,452,796

2,158,665

26

Financial income
Parent company 9/30/2013 Financial revenue Interest and monetary earnings Interest on derivatives Income on short-term investments Exchange variance Exchange variance on derivatives Present value adjustment of accounts receivable 9/30/2012 9/30/2013 Consolidated 9/30/2012

7,352 6,841 36,152 44,033 15,546 17,467 127,391

11,881 11,240 47,389 37,671 19,273 16,596 144,050

10,190 6,879 41,582 49,596 15,744 22,761 146,752

14,086 13,689 51,489 41,049 21,182 22,187 163,682

Financial expenses Interest on loans and financing Exchange variance Exchange variance on derivatives Banks expenses Present value adjustment of accounts payable

35,176 53,891 23,710 2,387 16,662 131,826

28,843 34,032 38,412 3,185 12,538 117,010 27,040

41,272 58,884 25,247 3,892 19,606 148,901 (2,149)

34,082 37,026 44,783 3,465 15,406 134,762 28,920

Financial income, net

(4,435)

27
(a)

Earning per share


Basic
The Company calculates basic earnings per share by dividing the net income attributable to the company's shareholders by the weighted average number of common shares issued in the year, excluding the shares purchased by the company and held as treasury stock.

82

Parent company 9/30/2013 Profit attributable to Marcopolo's shareholders From continuing operations Weighted average number of shares outstanding (in thousands) Earnings per share from continuing operations 214,808 9/30/2012 207,094 9/30/2013 216,726

Consolidated 9/30/2012 208,221

894,935 0.2400

894,304 0.2316

894,935 0.2422

894,304 0.2328

(b)

Diluted

Diluted earnings per share are calculated by adjusting the weighted average number of common and preferred shares outstanding to assume conversion of all dilutive potential common shares. The Company considers as dilution effect of common and preferred shares, the exercise of share options by employees and management. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Parent company 9/30/2013 Profit attributable to Marcopolo's shareholders From continuing operations Weighted average number of shares outstanding (in thousands) Adjustments: - Exercising of share call options Earnings per share from continuing operations 9/30/2012 9/30/2013

Consolidated 9/30/2012

214,808

207,094

216,726

208,221

894,935 1,965 0.2395

894,304 2,596 0.2309

894,935 1,965 0.2416

894,304 2,596 0.2322

83

28

Balance sheets and statement of income by segment

The industrial segment produces bus bodies and spare parts. The financial segment is responsible for financing transactions through Banco Moneo.

Balance sheet
Consolidated 9/30/2013 Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable 12/31/2012 Industrial Segment 9/30/2013 12/31/2012 Financial Segment 9/30/2013 12/31/2012

760,630 11,117 5,949 1,140,354 474,517 212,768 2,605,335

374,219 131,840 3,446 1,069,324 364,529 143,970 2,087,328

739,013 11,117 5,949 843,654 474,517 163,376 2,237,626

339,838 131,840 3,446 809,130 364,529 106,208 1,754,991

21,617 296,700 49,392 367,709

34,381 260,194 37,762 332,337

Non-current Long Term Credit Financial assets stated at fair value Other accounts receivable Investments Property, plant and equipment Goodwill and intangible

526,177 24,056 90,981 357,464 328,698 279,834 1,607,210

471,235 22,130 80,309 155,954 298,808 213,659 1,242,095 3,329,423

24,056 85,192 357,464 328,005 279,224 1,073,941 3,311,567

22,130 73,871 155,954 298,411 213,317 763,683 2,518,674

526,177 5,789 693 610 533,269 900,978

471,235 6,438 397 342 478,412 810,749

Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable

4,212,545

420,926 391,386 820 388,078 1,201,210

333,431 722,468 247 317,739 1,373,885

420,926 174,434 820 375,251 971,431

333,431 528,134 247 299,828 1,161,640

216,952 12,827 229,779

194,334 17,911 212,245

Noncurrent Financial institutions Other accounts payable

1,440,437 144,358 1,584,795

527,997 115,097 643,094 12,519 1,299,925 3,329,423

964,512 143,866 1,108,378 15,856 1,215,902 3,311,567

107,487 114,786 222,273 12,519 1,122,242 2,518,674

475,925 492 476,417 194,782 900,978

420,510 311 420,821 177,683 810,749

Minority Interest Shareholders equity Total liabilities

15,856 1,410,684 4,212,545

84

Statement of Income
Consolidated 9/30/2013 Continued operations Net revenue from Sales and services Cost of goods sold and services provided Gross profit Operational expenses(income) Sales Administrative expenses Other net operating income (expenses) Equity in net income of subsidaries Operating profit before financial income and equity interest Financial income Financial revenue Financial expenses Profit before income and social contribution taxes Income and social contribution taxes Net income for the period from continuing operations
2,737,086 (2,199,080) 538,006 (133,450) (120,266) (7,746) 19,000 295,544 (2,149) 146,752 (148,901) 293,395 (76,669)

Industrial Segment 9/30/2013


2,697,198 (2,199,080) 498,118 (133,434) (109,778) (7,353) 19,000 266,553 (2,149) 146,752 (148,901) 264,404 (64,885)

Financial Segment 9/30/2013


39,888 39,888 (16) (10,488) (393) 28,991 28,991 (11,784)

9/30/2012
2,399,803 (1,918,616) 481,187 (131,213) (108,836) (4,708) 26,032 262,462 28,920 163,682 (134,762) 291,382 (83,161)

9/30/2012
2,352,326 (1,918,616) 433,710 (128,291) (99,497) (3,302) 26,032 228,652 28,920 163,682 (134,762) 257,572 (69,007)

9/30/2012
47,477 47,477 (2,922) (9,339) (1,406) 33,810 33,810 (14,154)

216,726

208,221

199,519

188,565

17,207

19,656

85

29

Statement of cash flow by business segment indirect method


Consolidated 9/30/2013 Cash flow from operating activities Net income in the period Reconciliation of income (loss) to cash provided by operating activities: Depreciation and amortization Cost on the Sales of permanent assets Equity in net income of subsidiaries Allowance for doubtful accounts Deferred income and social contribution taxes Interest and variance appropriated Non-controlling interests Changes in assets and liabilities (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in securities Increase (decrease) in trade payables Increase (decrease) in other accounts payable Cash provided in operating activities Taxes paid over income Net cash provided by operating activities Cash flow from investment activities Investments Subsidiary dividends Permanent purchases Receipt on sale of property, plant and equipment Net cash provided by investment activities Cash flows from financing activities Gain on the sale of treasury stock Dividends and interest on shareholders equity paid Obtainment of loans and financing Payment of loans and financing Net cash used in financing activities Exchange variance on cash and cash equivalents 9/30/2012 Industrial Segment 9/30/2013 9/30/2012 Financial Segment 9/30/2013 9/30/2012

216,726

208,221

199,519

188,565

17,207

19,656

28,336 5,092 (19,000) 1,348 76,669 60,630 1,918

27,272 154 (26,032) 6,017 83,161 35,087 963

28,123 5,092 (19,000) 2,318 64,885 42,564 1,918

27,114 154 (26,032) 5,432 69,007 9,611 963

213 (970) 11,784 18,066 -

158 (585) 14,154 25,476 -

(127,131) (108,896) (78,767) 116,294 86,537 96,969 356,725 (85,019) 271,706

(94,022) (75,095) (110,887) (16,355) (48,348) 91,434 178,266 (67,989) 110,277

(36,653) (108,896) (67,786) 116,294 86,537 96,262 411,177 (73,955) 337,222

(91,457) (75,095) (89,844) (16,355) (48,348) 103,737 155,318 (56,759) 98,559

(90,478) (10,981) 707 (54,452) (11,064) (65,516)

(2,565) (21,043) (12,303) 22,948 (11,230) 11,718

(172,025) 15,073 (127,808) 480 (284,280)

17,607 (193,524) 1,028 (174,889)

(172,025) 15,073 (127,031) 480 (283,503)

17,607 (193,312) 1,028 (174,677)

(777) (777)

(212) (212)

3,488 (128,534) 1,255,262 (733,847) 396,369 2,616

5,266 (153,167) 267,902 (582,604) (462,603) 1,246

3,488 (122,096) 1,020,710 (559,262) 342,840 2,616

5,266 (147,167) 111,448 (414,057) (444,510) 1,246

(6,438) 234,552 (174,585) 53,529 -

(6,000) 156,454 (168,547) (18,093) -

Net increase (decrease) in cash and cash equivalent Cash and cash equivalent at beginning of the period Cash and cash equivalent at the end of the period

386,411 374,219 760,630

(525,969) 887,497 361,528

399,175 339,838 739,013

(519,382) 833,436 314,054

(12,764) 34,381 21,617

(6,587) 54,061 47,474

86

30

Consolidated financial statement and by segment, according to the new standards and interpretations.
Considering the implementation of IFRS10/CPC 36 (R3) and IFRS 11/CPC 19 (R2), the company is demonstrating the effects with and without adoption of these new standards over the consolidated financial statement for the period ended in September 30, 2013.

Balance sheet
Consolidated 9/30/2013
Adoption IFRS 10 and 11 No adoption IFRS 10 and 11

Industrial Segment 9/30/2013


Adoption IFRS 10 and 11 No adoption IFRS 10 and 11

Financial Segment 9/30/2013


Adoption IFRS 10 and 11 No adoption IFRS 10 and 11

Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable

760,630 11,117 5,949 1,140,354 474,517 212,768 2,605,335

770,182 11,117 5,949 1,239,400 531,916 257,665 2,816,229

739,013 11,117 5,949 843,654 474,517 163,376 2,237,626

748,565 11,117 5,949 942,700 531,916 208,273 2,448,520

21,617 296,700 49,392 367,709

21,617 296,700 49,392 367,709

Noncurrent Long Term Credit Other accounts receivable Investments Property, plant and equipment Goodwill and intangible

526,177 115,037 357,464 328,698 279,834 1,607,210

526,889 103,358 228,840 500,057 291,330 1,650,474 4,466,703

109,248 357,464 328,005 279,224 1,073,941 3,311,567

712 97,569 228,840 499,364 290,720 1,117,205 3,565,725

526,177 5,789 693 610 533,269 900,978

526,177 5,789 693 610 533,269 900,978

Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable

4,212,545

420,926 391,386 820 388,078 1,201,210

469,359 439,371 820 452,816 1,362,366

420,926 174,434 820 375,251 971,431

469,359 222,419 820 439,989 1,132,587

216,952 12,827 229,779

216,952 12,827 229,779

Noncurrent Financial institutions Other accounts payable

1,440,437 144,358 1,584,795

1,521,269 156,528 1,677,797 15,856 1,410,684 4,466,703

964,512 143,866 1,108,378 15,856 1,215,902 3,311,567

1,045,344 156,036 1,201,380 15,856 1,215,902 3,565,725

475,925 492 476,417 194,782 900,978

475,925 492 476,417 194,782 900,978

Minority Interest Shareholders equity Total liabilities

15,856 1,410,684 4,212,545

87

Statement of Income
Consolidated 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 Continued operations Net revenue from Sales and services Cost of goods sold and services provided Gross profit Operational expenses(income) Sales Administrative expenses Other net operating income (expenses) Equity in net income of subsidaries Operating profit before financial income and equity interest Financial income Financial revenue Financial expenses Profit before income and social contribution taxes Income and social contribution taxes Net income for the period from continuing operations 2,737,086 (2,199,080) 538,006 (133,450) (120,266) (7,746) 19,000 295,544 146,752 (148,901) 293,395 (76,669) 3,134,806 (2,530,651) 604,155 (153,056) (139,417) (6,778) 8,554 313,458 152,416 (164,939) 300,935 (84,209) Industrial segment 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 2,697,198 (2,199,080) 498,118 (133,434) (109,778) (7,353) 19,000 266,553 146,752 (148,901) 264,404 (64,885) 3,094,918 (2,530,651) 564,267 (153,040) (128,929) (6,385) 8,554 284,467 152,416 (164,939) 271,944 (72,425) Financial segment 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 39,888 39,888 (16) (10,488) (393) 28,991 28,991 (11,784) 39,888 39,888 (16 (10,488) (393) 28,991 28,991 (11,784)

216,726

216,726

199,519

199,519

17,207

17,207

88

31

Additional information
The industrial segment operates in the geographic areas listed below. The financial segment operates exclusively in Brazil.

(a)

Net revenue by geographic area


Consolidated 9/30/2013 Brazil frica Australia China Russia Mexico 2,339,528 47,706 213,016 32,401 772 103,663 2,737,086 9/30/2012 2,041,880 51,233 199,027 19,942 458 87,263 2,399,803

(b)

Fixed assets, goodwill and intangible by geographic area


Consolidated 9/30/2013 Brazil frica Australia China Virgin Islands Mexico Portugal Russia Uruguay 357,100 12,447 151,756 4,006 2 83,168 8 5 40 608,532 9/30/2012 321,678 14,493 159,331 3,631 3 13,242 8 45 36 512,467

89

32

Subsequent events
(a) Interest on shareholders' equity - 4th stage 2013.
According to minute of the Director's Board meeting occurred on November 4, 2013, at 11 o'clock the payment of interest on shareholders' equity has been approved - 4th stage 2013, at a rate of R$ 0.0175 for each representative share over the company's capital. These interests are to be added to the compulsory dividends (which will be previously declared) regarding the period of 2013. The value of the interests will be credited to the individual accounts of stockholders on December 24, 2013 based upon the stockholders' positions on December 23, 2013 and they shall start to be paid on March 31, 2014.

(b) Regulatory Instruction 1,397 of Receita Federal do Brasil.


On September, 16, 2013, Receita Federal do Brasil (RFB) issued the Regulatory Instruction 1,397 that establishes, in general terms, that regarding verification of actual profit and calculation basis of social contribution on net income of the legal person following an specific tax regimen it must be taken in account the accountability methods and criteria in force on December 31, 2007, among other dispositions. On October 3, 2013, representatives of entities such as Conselho Federal de Contabilidade (CFC), Associao Brasileira de Companhias Abertas (ABRASCA), Ibracon - Instituto dos Auditores Independentes do Brasil and Comit de Pronunciamentos Contbeis (CPC), after a meeting that intended to discuss Regulatory Instruction 1,397 with the secretary of Receita Federal do Brasil, have released an instruction to establish that there shall not occur doubled accounting nor dividends taxation, interests on shareholders' equity and equity in net income of subsidiaries by the difference on corporative and tax accounting criteria until December, 2013. Also, RFB has informed that the release of provisional measure over the taxed matter and the review of the Regulatory Instruction will be expedited, in order to come into force on 2014. The Director's Board has been evaluating the possible impacts that shall emerge about this matter.

90

(A free translation of the original in Portuguese)

1 Shareholders of Marcopolo S.A. with over 5% of common shares and/or preferred shares, to the level of individuals, as of September 30, 2013:
SHAREHOLDER Paulo Pedro Bellini Valter Antonio Gomes Pinto Vate Part. e Adm. Ltda Davos Participaes Ltda Subtotal Controlling Group COMMON NUMBER % 149,390,864 43.73 32,047,224 9.38 10,086,520 2.95 32,000,000 9.37 223,524,608 65.43 PREFERRED NUMBER % 2,606,124 0.47 594,200 0.11 0.00 0.00 3,200,324 0.58 TOTAL NUMBER % 151,996,988 16.95 32,641,424 3.64 10,086,520 1.12 32,000,000 3.57 226,724,932 25.28

51,922,784 15.20 0.00 51,922,784 5.79 Fund. Central Bank CENTRUS 936,524 0.27 28,220,312 5.08 29,156,836 3.25 Jos Antonio Fernandes Martins Fund Petrobras Seg Soc Petros 0.00 92,683,154 16.69 92,683,154 10.33 Norges Bank (offshore) 10,000,000 2.93 28,572,465 5.15 38,572,465 4.30 0.00 15,962,400 2.87 15,962,400 1.78 BlackRock Inc (offshore) Treasury stock 0.00 1,965,074 0.35 1,965,074 0.22 Other offshore shareholders (*) 11,302,262 3.31 250,967,155 45.20 262,269,417 29.24 Other shareholders (*) 43,939,566 12.86 133,703,456 24.08 177,643,022 19.81 TOTAL 341,625,744 100.00 555,274,340 100.00 896,900,084 100.00 PROPORTION 38.09 61.91 100.00 * There are no individual shareholders in this item with more than 5% of the common and/or preferred shares. 2 Capital Breakdown of Davos Participao Ltda. as of September 30, 2013: Table denoting quotas: SHAREHOLDER

QUOTAS NUMBER FACE VALUE Paulo Pedro Bellini 4,120,000 4,120,000 James Eduardo Bellini 4,120,000 4,120,000 Mauro Gilberto Bellini 4,120,000 4,120,000 Valter Antonio Gomes Pinto 4,120,000 4,120,000 Viviane Maria Pinto Bado 4,120,000 4,120,000 TOTAL 20,600,000 20,600,000

% 20.00 20.00 20.00 20.00 20.00 100.00

3 Capital Breakdown of Vate - Participaes e Administrao Ltda. as of September 30, 2013: Table denoting quotas: SHAREHOLDER Valter Antonio Gomes Pinto Therezinha Lourdes Comerlato Pinto Viviane Maria Pinto TOTAL

QUOTAS NUMBER FACE VALUE 6,303,669 6,303,669 770,968 770,968 68,150 68,150 7,142,787 7,142,787

% 88.25 10.79 0.96 100.00

91

(A free translation of the original in Portuguese) 4 Quantity and features of the securities issued by the company owned by the groups Controlling Shareholders, Executives, Members of the Audit Committee and free float. Consolidated Shareholdings of Controlling Shareholders, Executives and free float. Position at 9/30/2013 Table denoting shares: SHAREHOLDER

COMMON PREFERRED TOTAL NUMBER % NUMBER % NUMBER % Parent companies 223,524,608 65.43 3,200,324 0.58 226,724,932 25.28 Controllers spouses 1,498,480 0.44 1,638,132 0.30 3,136,612 0.35 Executives 82,824 0.02 1,760,832 0.32 1,843,656 0.21 Board of Directors 506,600 0.15 2,165,826 0.39 2,672,426 0.30 Executive Board Audit Committee (*) 504,696 0.15 758,760 0.14 1,263,456 0.14 Treasury stock 0.00 1,965,074 0.35 1,965,074 0.22 Other 115,508,536 33.81 543,785,392 97.92 659,293,928 73.50 TOTAL 341,625,744 100.00 555,274,340 100.00 896,900,084 100.00 Free Float in the Market 115,508,536 33.81 543,785,392 97.92 659,293,928 73.50 * Shares held by a director and member of the audit committee, elected by the controlling group.

Consolidated Shareholdings of Controlling Shareholders, Executives and free float. Position at 9/30/2012 Table denoting shares: SHAREHOLDER Parent companies Controllers spouses Executives Board of Directors Executive Board Audit Committee (*) Treasury stock Other TOTAL

COMMON NUMBER 223,524,608 1,477,680 82,824 506,600 504,696 115,529,336

% 65.43 0.43 0.02 0.15 0.15 0.00 33.82

PREFERRED NUMBER 3,200,324 1,638,132 1,760,832 2,450,798 758,760 2,596,480 542,869,014

TOTAL % NUMBER 0.58 226,724,932 0.30 0.32 0.44 0.14 0.47 3,115,812 1,843,656 2,957,398 1,263,456 2,596,480

% 25.28 0.35 0.21 0.33 0.14 0.29 73.40

97.75 658,398,350

341,625,744 100.00

555,274,340 100.00 896,900,084 100.00

Free Float in the Market 115,529,336 33.82 542,869,014 97.75 658,398,350 73.40 * Shares held by a director and member of the audit committee, elected by the controlling group. NOTE: For comparison purposes, the shares in this table were subsidized according to bonus of August 2013. 5 The Company is bound to arbitration at the commercial Arbitration Chamber, as per the arbitration clause in its bylaws.

92

(A free translation of the original in Portuguese)

Report on the quarterly information review


To the Board of Directors and Shareholders of Marcopolo S.A. Caxias do Sul - RS

Introduction
We have reviewed the interim, individual and consolidated financial statements of the company Marcopolo S.A. (Company), contained in the Quarterly Information Fo rm - ITR for the quarter ended September 30, 2013, consisting of the balance sheets as of September 30, 2013 and the related statements of income, the comprehensive statements of income for the three-month and nine-month periods then ended, the statement of changes in shareholders equity and statements of cash flows for the nine-month period then ended, in addition to the 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, for presenting this information in due accordance with the standards issued by the Brazilian Securities Commission that apply to the preparation of Quarterly Information - ITR. Our responsibility is to express an opinion on the interim financial statements based on review. Review scope We conducted our review in accordance with Brazilian and international standards for reviewing interim information (NBC TR 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity 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 to the individuals in charge of financial and accounting matters, and applying analytical and other review procedures. A review is substantially shorter in scope than a full audit conducted in accordance with audit standards, and we cannot therefore provide an assurance that we have discovered all the significant matters that could have been identified by an audit. We are not therefore expressing an audit opinion. Conclusion about the individual interim information Our review did not detect any facts that suggest the individual interim financial statements were not prepared, in all material aspects, in accordance with CPC 21 (R1) that applies to Quarterly Information - ITR, presented in accordance with the standards issued by the Brazilian Securities Commission - CVM. Conclusion about the consolidated interim information Our review did not detect any facts that suggest the consolidated interim financial information included in the aforesaid quarterly information was not prepared, in all material aspects, in accordance with CPC 21 (R1) and IAS 34 that applies to Quarterly Information - ITR, presented in accordance with the standards issued by the Brazilian Securities Commission - CVM. Emphasis Restatement of corresponding figures As mentioned in Note 2.2.1, due to changes in accounting policies adopted by the Company in 2013, the corresponding figures for the year ended December 31, 2012 and the interim financial information for September 30, 2012 presented for comparative purposes were adjusted and are being restated as required by CPC 23 - Accounting Policies, changes in Accounting Estimates and Errors. Our conclusion does not contain changes related to this subject.

93

(A free translation of the original in Portuguese) Other matters Statements of added value We have also reviewed the individual and consolidated Statements of added value (DVA) for the nine-month period ended September 30, 2013, prepared by Company management, the presentation of which in the interim information is required by the standards issued by the CVM - Brazilian Securities Commission applicable to the preparation of the Quarterly Information - ITR and is considered supplementary information to IFRS which does not require the publication of DVAs. These statements were subject to the audit procedures described earlier and our review did not detect any facts that suggest they have not been prepared, in all material respects, in accordance with the individual and consolidated interim financial statements.

Caxias do Sul, November 4, 2013 KPMG Auditores Independentes CRC 2SP014428/F-RS

Wladimir Omiechuk Accountant CRC 1RS-041241/O-2

94