Professional Documents
Culture Documents
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
2010
Highlights: Brazil, Retail and Shopping Centers
Purchasing Power
Classes D/E
11%
Class C
13%
48%
12%
44%
12%
46%
15%
52%
16%
54%
42%
17.7%
18.5% 418.6 Bi
12.1% 9.3%
11.3% 7.9%
5.7% 3.8% 4.5%
16.3%
47%
44%
42%
38%
36%
32%
31%
13.2%
11.2%
13.7% 323.8 Bi
7.6% 7.7%
272.5 Bi
10.7% 8.7%
2003
2004
2005
2006
2007
2008
2009
155.2 Bi
88.1 Bi 113.3 Bi
240.2 Bi
191.8 Bi
1.2%
2003 2004 2005
3.1%
2006 2007 2008
-1.4%
2009 2010
Evolution of Sales
2003 2004 2005 2006 2007 2008 2009 2010
Source: BACEN
27.9%
Retail
Shopping Centers
Multiplan
22.4% 19.3%
20.5%
18.7%
1,800
Source: IPDM (2008)
1,262
-3.7%
9.2%
10.0% 9.7%
6.2%
9.9% 5.9%
231
105
45
2003
2004
2005
2006
2007
2008
2009
2010
USA
Canada
France
Mexico
Brazil
Source: ICSC of 2006 and 2007; ABRASCE of 2008 *Does not consider fuel and lubricants; Construction materials & tools.
2010
Shopping Centers in Brazil
3.1% of the GLA
Shopping Centers: 12 GLA: 294,794 m Population: 15.3 million GDP per Capita: R$ 10.2 thousand GLA/1,000 inhabitants: 29
North
Northeast
Midwest
Federal District
3.9% of the GLA
Shopping Centers: 17 GLA: 367,497 m Population: 2.6 million GDP per Capita: R$ 45.9 thousand GLA/1,000 inhabitants: 141
408 shopping centers in operation, of which 217 are located in the 20 largest cities.
About 329 per month.
million visitors
South
Southeast
5,412
2010
Advantages of the Sector
High operating margins Results leveraged by retail growth Synergy with the real estate sector (mixed-use projects) Leasing contracts indexed to inflation Cash flow predictability (standard 5-year contract) Shopping center as a solution to urban chaos Underpenetrated market Barrier to entry
Medical Center in BarraShopping Entertainment Area in BarraShoppingSul
2010
USA and Brazil Shopping Center Sectors
USA
. Consolidated market . Consolidated market . Low revenue increase . Low revenue increase . Reit structure . REIT structure . Real Estate driven . Real Estate driven . Large tenants with high bargain power . Large tenants with high bargaining power . Payment of TI (Tenants induction) . Payment of TI (Tenant induction) . Dividend play . Dividend play
Brazil
. Lack of shopping centers . Lack of shopping centers
. High revenue growth, indexed to inflation . High revenue growth, indexed to the inflation
. Company structure . Company structure . Real Estate && Retail driven . Real Estate retail driven . Small tenants with low bargaining power . Small tenants with low bargain power . Key Money revenue . Key money Revenue . Growth play . Growth play
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
2010
Reference in the Sector since 1975
* 753 Multiplans Historical Total GLA Growth
825*
* 602
533
484
553
345 290
Growing 29x with a CAGR of 11.5% between 1979 and 2010. Developed 11 shopping centers and 37 expansions.
79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Developments
Acquisitions
Developments
Partners
8
* Considering projects under development
2010
Ownership Structure
179,197,214 Shares
Adm+Treasury 0.6% Free Float 38.9%
OTPP* 29.1% MTP+Peres 31.3%
*
The Ontario Teachers Pension Plan is the pension fund of the Canadian teachers, with assets under management amounting to C$96.4 billion (on Dec/09). In June 2006, OTPP became a partner in Multiplan, acquiring a minority stake. One of OTPP assets is a commercial properties company called Cadillac Fairview.
A wholly owned subsidiary of OTPP and one of the largest mall developers, managers and owners in North America, with a portfolio valued at more than C$ 17 billion and a GLA of approximately 4.6 million m, Cadillac Fairview holds stakes in ventures located in Canada, USA, England and, in Brazil, through a partnership with Multiplan.
Source: Ontario Teachers Pension Plan and Cadillac Fairview
Champlain Place
Richmond Centre
2010
The Multiplan Effect
BH Shopping (MG) RibeiroShopping (SP) ShoppingAnliaFranco (SP)
1997
1984
1999
2010 2007
2010
2010
BHS
1997
2010
SAF
1999
2010
10
2010
Cycle of High Returns in our Leading Shoppings
High Returns
(2010)
6.9%
6.2%
Higher Sales
(2010)
14.6%
More Investments
Increase in Own GLA (000 m)
12.4%
Tenant
+41.8%
371.6
526.9
2010
2013E
Tenant
#1 #1
#1 #1 #1 #1
4/4 6 / 11
7 / 60 4/4 6 / 11 6 / 84
11
2010
98,0%
2010
100.0% 84.6%
Rationale
Strategic Control of the Malls
Strategic Approach Ability to change tenant mix and a greater bargaining power with retailers
Average interest in 2010 Malls with 50% or more interest Management
Full control over the renovation and expansions in terms of timing, size and tenant mix
Majority interest allows Multiplan to implement its state-of-the-art management tools and techniques
Award - Best Shopping Center of So Paulo Fashion Week, a successful event created by Multiplan Medical Center integrated into a shopping center
12
2010
Who We Are
Quality Shopping Centers
Monthly Rental Revenue per owned GLA in 2010 - (R$/m)
102 79 79 57
1,174 1,048
1,229 879
903 860 651
1,065
766
499 450
Multiplan BRMalls
Iguatemi Aliansce
Net Revenue
NOI
Adjusted FFO
Low Risk
Interest, Management and Control 2010
Multiplan BRMalls Iguatemi 85% Aliansce
High Returns
Real, unleveraged IRR 15%
Average Interest
Morumbi Corporate
ParkShopping Corporate
Source: Company reports. Note: NOI = (Rental Revenue + Parking Revenue ) - (Shopping Center Expenses + Parking Expenses) ; Adjusted FFO = Net Income + Deferred Taxes + Depreciation (BRMalls figures were adjusted by the asset valuation). Owned GLA for BRMalls and Aliansce represent the average of quarterly reported owned GLA.
13
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
14
2010
Control of the Leading Shopping Centers in the Market
Multiplans Footprint Multiplan Shopping Centers and Projects
Portfolio State Multiplan % 80.0% 76.2% 51.1% 65.8% 59.6% 90.0% 50.0% 30.0% 84.0% 96.5% 62.5% 100.0% 30.0% 67.3% 100.0% 50.0% 100.0% 100.0% 90.0% 87.6% 100.0% 50.0% 100.0% 93.1% 74.7% Total GLA (100%) 47,547 m 46,784 m 69,278 m 55,085 m 51,526 m 21,388 m 22,271 m 50,974 m 49,917 m 17,254 m 23,132 m 68,400 m 28,274 m 551,830 m 38,973 m 35,470 m 35,418 m 25,653 m 40,743 m 176,257 m 10,150 m 13,360 m 73,388 m 96,898 m2 824,986 m Occupancy Rate 99.8% 98.8% 99.8% 99.8% 99.9% 99.8% 99.5% 99.9% 99.7% 100.0% 88.3% 98.9% 88.5% 98.6% Operating Shopping Centers BH Shopping MG RibeiroShopping SP BarraShopping RJ MorumbiShopping SP ParkShopping DF DiamondMall MG New York City Center RJ Shopping AnliaFranco SP ParkShoppingBarigi PR Ptio Savassi MG Shopping Santa rsula SP BarraShoppingSul RS Shopping Vila Olmpia SP Sub-Total Operating Shopping Centers Shopping Centers under Development ParkShoppingSoCaetano SP Shopping Macei AL Shopping Jundia SP Village Mall RJ ParkShopping Campo Grande RJ Sub-Total Shopping Centers under Development Office Towers for Lease under Development Morumbi Business Center SP ParkShopping Corporate DF Morumbi Corporate SP Sub-Total Office Towers for Lease under Develop. Total Portfolio
Multiplan is responsible for 100% of the CAPEX
AL DF 67% of the Countrys GDP(*) 55% of the Countrys population(*) 65% of the Countrys total GLA is in South and Southeast regions PR MG SP RJ
98.6%
RS
Source: IBGE and ABRASCE * 2008 Data
15
2010
Performance Summary
Sales Growth by Shopping Center 31.3% (2010/2009) 30.0%
27.9% 31.0%
72.4%
19.9%
26.7%
11.0%
11.7%
13.3%
8.0% 5.0% 7.2%
9.3%
7.9%
5.9%
BHS RBS BRS MBS PKS DMM NYC SAF PKB PSS SSU BSS
BHS RBS BRS MBS PKS DMM NYC SAF PKB PSS SSU BSS
IPCA
GDP
IPCA
Retail Sales
Sales
Rent
NOI
Brazil
Portfolio
16
2010
Expansions and Renovations
Occupancy Rate Average per Quarter
Shopping Vila Olmpia
ParkShoppingBarigi
98,6%
MorumbiShopping
94,2%
92,3%
Shopping AnliaFranco
87,5%
ParkShopping
BH Shopping RibeiroShopping BarraShopping MorumbiShopping ParkShopping DiamondMall New York City Center Shopping AnliaFranco ParkShoppingBarigi Ptio Savassi Shopping Santarsula BarraShoppingSul Shopping VilaOlmpia Total
MG SP RJ SP DF MG RJ SP PR MG SP RS SP
1979 1981 1981 1982 1983 1996 1999 1999 2003 2007 2008 2008 2009
Expansions 5 5 6 5 9 3 1 2 1 37
DiamondMall
17
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
18
2010
Potential Growth
(Scarcity of SCs GLA/000 Inhab.)
1,800 1,262
94.2%
Expansions
Higher attraction power Growth of consumer flow Increases competitiveness Cost reduction through gains of scale
96.5% 96.1%
95.4%
95.1%
231
105
45
Minority Acquisitions
2003 2004 2005 2006 2007 2008 2009 2010
USA
Canada
France
Mexico
Brazil
Synergies with real estate projects Potential for expansions New clients and tenants
Return (IRR)
19%
Growth Strategies
Expansions Mixed-Use Projects Minority Interest Acquisitions New SCs Third Party SCs
ANAF 6%
16%
MTE 67%
PREVI 10%
Risk
75.8%
5.2%
4.0%
Quick way to grow Access to new markets Consolidation and gains of scale Possible synergy with portfolio
2.6% Aliansce 2.6% Brascan/Malzoni 2.1% 2.3% Others Source: ABRASCE, BNDES and companies (2008)
19
2010
Investment Strategy
Development Pipeline
( m)
543,711 m 16,830 m
410,647 m 371,596 m 39,051 m
+1 Shopping center
617,111 m
73,400 m
+1 Office tower project
617,111 m 90,230 m
116,234 m
+4 Shopping centers +2 Office tower project
155,285 m
371,596 m
371,596 m
2011E
2012E
Stores to open
+ 28.6%
536.2 M
4,456
3,464
181.4 M
354.9 M 20.8 M
71.1 M 71.1 M
91.5 M
2010 2011E Renovation & Others Mall Development Office for Lease
Stores in 2010
20
* Including ShoppingMacei
2010
Shopping Centers Under Development
ParkShoppingSoCaetano(SP) - Shopping Center Under Construction
ParkShoppingSoCaetano had over 80% of its stores leased in less than 70% of the time between its announcement and the expected opening*. The construction started in March 2010 and is following the planned schedule, having already recorded 42.2% of its estimated project costs. The mall is expected to be delivered in November 2011.
Project Details Launching Opening Interest GLA (m) Key Money CAPEX NOI 1st year NOI 3rd year (Multiplan %) Nov/09 Nov/11 100.0% 39,051 m R$ 33.1 M R$ 250.3 M R$ 34.3 M R$ 46.2 M
Located in the city of Jundia, distant 60 km from So Paulo, its construction started in October 2010 and the mall is expected to open in October 2012. The project showed a quick leasing rhythm, with 64.8% of its stores leased in 40.1% of the launching-to-delivery period*. The Company has already disbursed 20.4% of its cost, which is being recorded as investment properties, and 65.5% of its project expenses.
Launching Opening Interest GLA (m) Key Money CAPEX NOI 1st year NOI 3rd year
21
2010
Shopping Centers Under Development
Village Mall (RJ) - Shopping Center Under Construction
Launched in February 2010, construction works started in October of the same year. As of February 2011, the project reached 78% of stores leased*. The shopping center has already invested 76.1% of its expected project expenses during the leasing phase, mainly with marketing efforts to boost its initial leasing rhythm. VillageMall is expected to open in November 2012.
Project Details Launching Opening Interest GLA (m) Key Money CAPEX NOI 1st year NOI 3rd year (Multiplan %) Feb/10 Nov/12 100.0% 25,581 m R$ 39.2 M R$ 410.0 M R$ 39.1 M R$ 44.9 M
22
Multiplan will have 90% of the Net Operating Income after opening.
2010
Shopping Centers Under Development
Shopping Macei (AL) - Shopping Center Under Approval
Project Details (Multiplan %) TBA* Dec/12
In joint venture with Aliansce Shopping Centers S.A., Multiplan is developing a new greenfield project*, Shopping Macei. The mall will be built on a 200,000 m area in the citys fastestgrowing region. It will be a mixed-use project, with residential and commercial buildings as well as a hotel complex.
Launching Opening
Interest
GLA (m) Key Money CAPEX NOI 1st year NOI 3rd year
*To be announced
50.0%
35,868 m R$ 9.3 M R$ 90.9 M R$ 7.1 M R$ 10.3 M
23
* The time lag between announcing and delivery is of approximately 28 months.
2010
Shopping Center Expansions
Expansions Delivered
Shopping Center BH Shopping Ptio Savassi ParkShoppingBarigi Total GLA (m2) Multiplan % 10,707 985 6,883 18,575 80.00% 96.50% 100.00% 88.3% Opening out/10 ago/10 nov/10
Owned GLA
(000 m)
8
371
16
347
2009
Expansions
Acquisitions
2010
24
2010
Acquisition of Third Party Malls
Consolidation in Belo Horizonte (MG)
Ptio Savassi GLA* Interest Management Vacancy Sales / m ** # of Stores Customers Flow/year 17,254 m 96.5% Multiplan 0.0% R$ 16,457 132 10.7 million BH Shopping 47,547 m 80.0% Multiplan 0.2% R$ 16,116 395 15.6 million
1
Diamond Mall 1 1
1.7 km
2 2
Ptio Savassi
4.3 km
Ribeiro Shopping
GLA*
Share Administration Vacancy Sales / m ** N Stores Customers Flow
1
23,132 m
62.5% Multiplan 11.7% R$ 4,746 121 2.5 million
46,784 m
76.2% Multiplan 1.2% R$ 10,205 243 11.6 million
1
3.5km (8 mins.)
25
2010
Mixed-Used Strategy Analysis
Centro Empresarial BarraShopping
1 2
BarraShopping GLA Sales (2010) People Flow 69,278 m R$ 1.4 billion 27 million
5
4
New York City Center GLA Sales (2010) People Flow 22,271 m R$ 179 million 8,5 million
26
2010
Cristal Tower, in Porto Alegre Illustration (right) and construction site (left)
Commercial Real Estate for Sale Project Cristal Tower Centro Profissional RBS Total
**Potential Sales value Potential sales Value
Area
27
2010
Mixed-Use Projects: Commercial Towers for Rent
Morumbi Business Center So Paulo (SP) Park Shopping Corporate Morumbi Corporate
Brasilia (DF)
So Paulo (SP)
Commercial Real Estate for Lease Project Morumbi Business Center ParkShopping Corporate Morumbi Corporate Total Opening Interest Jan - 12 Nov - 12 Sep - 13 GLA CAPEX (R$000) 74,000 39,800
28
2010
Land Bank
Land Bank*
Location BarraShoppingSul Campo Grande Macei Jundia ParkShoppingBarigi ParkShoppingBarigi Ptio Savassi RibeiroShopping So Caetano Shopping AnliaFranco Total
% 100% 90% 50% 100% 84% 94% 96.5% 100% 100% 36% 81%
Type Residential, Hotel Residential, Office/Retail Residential, Office/Retail, Hotel Office/Retail Apart-Hotel Office/Retail Retail Residential, Office/Retail, Medical Center Retail Residential
Land Area 12,099 m 71,480 m 140,000 m 4,500 m 843 m 27,370 m 2,606 m 195,875 m 24,948 m 29,800 m 509,521 m
* This land bank and projects are only illustrative and only suggsts the types of investments that may be made.
29
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
30
2010
How Does a Shopping Center Work?
Stores
Pay Rent Pay Key Money to Open Generate Pay Condo and Contribute to a Promotion Fund Pay Management & Brokerage Fees
Revenue: Rent Key Money Services Revenue Parking Expenses: Vacant Store Costs Headquarters
Urban Chaos
Demand for Shopping Malls
Shopping Malls
Sales
Renovation
Customers drive to
Shopping Centers
Parking Lots
Parking Fees
31
2010
Revenue Breakdown*
Real Estate & Other Grows with demand for projects near our malls (Mixed-use)
0.35% 9.3%
Straight-Line Effect
Key money Grows with openings of new SCs Services Revenue Grows with improved SC performance
10.5%
5.3%
Merchandising
11.0% 10.4%
4.9%
Grows with higher demand for alternative marketing Overage Grows with higher sales
Rent
3 types of revenues
62.8%
84.7%
32
2010
Expenses Breakdown*
Breakdown of Operating Expenses
Operating Expenses
Stock-optionbased Compensation 2.2% Other Operating Expenses 4.0% New Projects for Sale 1.7% Equity Pickup 1.4%
G&A expenses and developments All expenses related to malls, such as brokerage, vacant stores and auditing of sales All costs and expenses related to the construction and selling of real estate projects Comes mainly from the results of the Royal Green Pennsula SPE Pre-operational expenses from SC greenfields, expansions and office tower projects. Pre-operational expenses generated by projects for sale.
Cost of Properties Sold 12.7% Headquarters 36.6% New Projects for Lease 15.4%
Equity pickup New projects for lease New projects for sale
Breakdown of Taxes
12.5%
Income and Social Contribution Taxex Def erred Income and Social Contribution Taxex
25% income tax, 9% social contribution Benefits related to the Bertolinos reverse acquisition goodwill Amount payed to minority stockholders in consolidated companies
Differed taxes
Participation of minority stakeholders
87.5%
33
* Based on 2010 figures
2010
Greenfield Project
Assumptions of a Shopping Center project Construction start: 6 months after the launching. Construction Duration: 12-24 months (Expansions are usually faster than greenfields). Construction Cost: 4,000-9,000 R$/m (Vertical Shoppings are more expensive than horizontal Shopping Centers. The parking area may increase this cost) average of 4,500 R$/m. Store Mix: 50% satellites in new shopping centers and 70% in expansions (May vary according with location and purpose). Key money: 0-8,000 R$/m (Anchors usually do not pay this fee) average of 1.500 R$/m or one year of rent. Standard Key Money contracts: 20% at the signing of the contract and the remaining 80% in 24 monthly installments, starting at the signing. date. (Multiplan accrues this revenue in its balance sheet in 60 monthly installments after the opening). Until then, this amount is accrued in the deferred income account). Satellites Rent: 50-250 R$/m per month, indexed by the IGP-DI with a real increase of 10% after the second and fourth year, and a double rent in December average of 100 R$/m per month (indexed value), being up to 4 times higher than anchors sales. Anchors Rent: these stores usually pay a percentage over their monthly revenue instead of the base rent Average of 25 R$/m per month (indexed by the IGP-DI). Others Revenues: Complementary: approximately 2% of rent; merchandising: approximately 8% of rent; and parking: approximately 15% of rent. All these additional revenues are recorded only after the third year, depending on the project. NOI margin: 80-90% - average of 85%. For more detailed information and examples, please consult Multiplan earnings release on our website www.multiplam.com.br/ri DISCLAIMER: These are only assumptions which may vary significantly from one Shopping Center to another, therefore showing numbers substantially different from the ones showed above. The company uses this as an example of a greenfield project, but does not consider it as a guidance or goal.
34
2010
OUR PORTFOLIO
GROWTH STRATEGY
MODELING
FINANCIAL AND OPERATIONAL HIGHLIGHTS
35
2010
Operational Highlights
Total Sales
(R$ million)
+ 22.4%
6,109
7,476
Rental Revenue *
(R$ million)
+ 15.5%
360
416
2007
2008
2009
2010
2007
2008
2009
2010
15.5%
12.0%
14.6% 12.4%
10.9% 5.9%
10.5%
4.0%
IPCA
SSS
SAS
Sales
SAR
SSR
Rental Revenue
36
2010
Financial Highlights
Net Revenue
(R$ million)
+ 25.2%
483 411
604
EBITDA
(R$ million)
+ 15.3%
304
350
336
2007
2008
2009
2010
2007
2008
2009
2010
368
324
+ 35.1%
+ 36.6%
237
241
209
200
176
2007
2008
2009
2010
2007
2008
2009
2010
37
Adjusted FFO = FFO + Deferred income and socialcontribution taxes; Adjusted Net Income = Net Income + Deferred income and socialcontribution taxes
2010
Indebtedness
Debt Breakdown Debt vs. Cash Generation
(R$)
900.000
794.8M
CDI 23%
IGP-M 12% Fixed 1% TJLP IPCA 6% 13%
NonBank 26%
549.8M 350.2M
Bank 74%
900.000
368.2M
TR 45%
245.0M
Cash
Gross Debt
EBITDA
AFFO
Debt Amortization
(R$ million)
100.7
61.8 42.0
46.8 32.3 48.2
Loans and financing (banks) Obligations from acquisition of goods (land and minority interest) Debentures
36.5
43.4 18.9
36.1 11.3
24.5
32.3 15.1 -
2011
2012
2013
2014
2015
2016
2017
>=2018
38
2010
Main Figures
Performance (R$ '000) Financial (MTE %) Gross Revenue Net Revenue Rental Revenue (w/ Straight Line Effect) Rental Revenue R$/m Net Operating Income (NOI) NOI R$/m NOI Margin Headquarter Expenses EBITDA EBITDA R$/m EBITDA Margin 4Q10 195,337 178,388 119,417 335 R$/m 139,941 393 R$/m 87.9% 22,962 110,970 311 R$/m 62.2% 4Q09 174,245 158,097 123,533 380 R$/m 119,673 368 R$/m 88.5% 25,945 94,433 290 R$/m 59.7% Chg. % 12.1% 12.8% 3.3% 11.8% 16.9% 6.7% 59 b.p 11.5% 17.5% 7.2% 248 b.p 2010 662,624 604,375 421,218 1,219 R$/m 419,735 1,215 R$/m 86.4% 93,098 350,195 1,013 R$/m 57.9% 2009 534,368 482,734 366,180 1,148 R$/m 353,361 1,107 R$/m 85.1% 88,182 303,955 953 R$/m 63.0% Chg. % 24.0% 25.2% 15.0% 6.2% 18.8% 9.7% 131 b.p 5.6% 15.2% 6.4% 502 b.p
Adjusted Net Income Adjusted Net Income R$/m Adjusted Net Income Margin Adjusted FFO Adjusted FFO R$/m
Adjusted FFO Margin Operational (100%) Final Total GLA Final Owned GLA Owned GLA % Adjusted Total GLA (avg.) Adjusted Owned GLA (avg.) Total Sales Total Sales R$/m Occupancy Costs Rent as Sales % Others as Sales % Turnover Occupancy Rate Delinquency (25 days delay) Rent Loss
20.1% 7,475,923 14.2% 14,332 R$/m 11 b.p 11.4% 18 b.p 7.6% 28 b.p 3.9% 3.9% 98.6% 1.2% 0.9%
2.1% 141 b.p 96.9% 165 b.p 0.6% 1.2% 25 b.p 32 b.p
39
2010
Glossary
Adjusted Funds from Operations (FFO): Addition of adjusted net income, depreciation and amortization. Adjusted Net Income: Net income adjusted for non-recurring expenses with the IPO, restructuring costs and amortization of goodwill from acquisitions and mergers (including deferred taxes). Anchor Stores: Large, well known stores with special marketing and structural features that can attract consumers, thus ensuring permanent attraction and uniform traffic in all areas of the mall. Stores must have more than 1,000 m to be considered anchors. Brownfield: Expansion project. CAGR: Compounded Annual Growth Rate. Corresponds to a geometric mean growth rate, on an annualized basis. CAPEX: Capital Expenditure. Correspond to the estimated resources to be disbursed in asset development, expansion or improvement. The capitalized value shows the variation of property and equipment added of depreciation. CDI: (Certificado de Depsito Interbancrio or Interbank Deposit Certificate). Certificates issued by banks to generate liquidity. Its average overnight annualized rate is used as a reference of interest rates in Brazilian Economy. Debenture: debt instrument issued by companies to borrow money. Multiplans debentures are non-convertible, which means that they cannot be converted into equity shares. Moreover, a debenture holder has no voting rights. Deferred Income: Deferred key money and store buy back expenses. Double Rent: Extra rent charged from the majority of tenants usually in December due to higher sales in consequence of Christmas and extra charges on the month. EBITDA Margin: EBITDA divided by Net Revenue. EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization. Net income (loss) plus expenses with income tax and social contribution on net income, financial result, depreciation and amortization. EBITDA does not have a single definition, and this definition of EBITDA may not be comparable with the EBITDA used by other companies. EPS: Earnings per Share. Net Income divided by the total shares of the Company. Equity Pickup: Interest held in the associate will be shown in the income statement as equity pickup, representing the net income attributable to the associates shareholders. Expected Owned GLA: Multiplans proportionate interest in each shopping mall, including projects under development and expansions. GLA: Gross Leasable Area, equivalent to the sum of all the areas available for lease in malls, excluding merchandising. Greenfield: Shopping center project. IBGE: The Brazilian Institute of Geography and Statistics. IGP-DI Adjustment Effect: Is the weighted average of the monthly IGP-DI increase with a month of delay, multiplied by the percentage GLA that was adjusted on the respective month.
40
2010
IGP-DI: (ndice Geral de Preos - Disponibilidade Interna) General Domestic Price Index. Inflation index published by the Getlio Vargas Foundation, referring to the data collection period between the first and the last day of the month in reference, with disclosure date near the 20th of the following month. It has the same composition as the IGP-M (ndice Geral de Preos do Mercado), though with a different data collection period. IPCA (ndice de Preos ao Consumidor Amplo): Published by the IBGE (Brazilian institute of statistics), it is the national consumer price index, subject to the control of Brazils Central Bank. Key Money (KM): Key money is the money paid by a tenant in order to open a store in a shopping center. The key money contract when signed is accrued in the deferred revenue account and in accounts receivable, but its revenue is accrued in the key money revenue account in linear installments, only on the occasion of an opening, throughout the term of the leasing contract. Nonrecurring key money from new stores, of new developments or expansions (opened in the last 5 years), Operational key money from stores that are moving to a mall already in operation. Merchandising: consists of all leases in a mall not involving the GLA area of the mall. Merchandise includes revenue from kiosks, stands, posters, leasing of pillar space, doors and escalators and other display locations in a mall. Minimum Rent (or Base Rent): Minimum rent paid by a tenant for a lease contract. Some tenants sign contracts with no fixed base rent, and in that case minimum rent corresponds to a percentage of their sales. Mixed-use: Strategy based on the development of projects that integrate shopping centers with office and residential developments. Net Operating Income (NOI): Refers to the sum of the operating income (Rental revenue and shopping expenses) and income from parking operations (revenue and expenses). Revenue taxes are not considered. The NOI + KM also includes the key money from the contracts signed in the same period. Projects for lease expenses: Pre-operational expenses from shopping center greenfields, expansions and office tower projects. Refers to the portion of the CAPEX which is recorded as an expense in the income statement as determined by the CPC 04 pronouncement in 2009. Projects for sale expenses: Pre-operational expenses generated by real estate for sale activity. Refers to the portion of the CAPEX which is recorded as an expense in the income statement as determined by the CPC 04 pronouncement in 2009. NOI Margin: NOI divided by Rental Revenue and net parking revenue. Occupancy cost: Is the cost of leasing a store as a percentage of sales. It includes rent and other expenses (condo and promotion fund expenses). Occupancy rate: leased GLA divided by total GLA. Overage Rent: The difference paid as rent (when positive), between the base rent and the rent consisting of a percentage of sales, as determined in the lease agreement. Owned GLA: or Company's GLA or Multiplan GLA, refers to total GLA weighted by Multiplans interest in each mall.
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Parking: Parking revenue is the total amount (100%) of revenue collected by the shopping centers. Parking revenue transfers are the share of the parking revenue that need to be passed on to the Companys partners and condominiums. Potential Sales Value (PSV) or Total Sell Out: Refers to the total number of units for sale in a real estate development, multiplied by the list price of each. Sales: Sales reported by the stores in each of the malls. Same Area Rent (SAR): Rent of the same area of the year before divided by the areas rent of the current year, less vacancy. Same Area Sales (SAS): Sales of the same area of the year before divided by the areas GLA less vacancy. Same store Rent (SSR): Rent earned from stores that were in operation for over a year. Same store Sales (SSS): Sales of stores that were in operation for over a year. Satellite Stores: Small stores with no special marketing and structural features located around the anchor stores and intended for general retailing. Straight Line Effect: Accounting method that has the purpose of removing volatility and seasonality of minimum lease revenue. The criterion adopted to account for revenue rent is based on straight-line revenues during the effectiveness of the contract, regardless of the receipt term. TJLP: (Taxa de Juros de Longo Prazo, or Long Term Interest Rate). The usual cost of financing conceived by BNDES. TR: (Taxa Referencial, or Reference interest rate). Average interest rate used in the market. Turnover: Leased GLA of operating malls divided by total GLA. Shopping Center Segments: Food Court & Gourmet Areas Includes fast food and restaurants operations Diverse Cosmetics, bookstores, hair salons, pet shops and etc Home & Office Electronic stores, decoration, art, office supplies, etc Services Sports centers, entertainment centers, theaters, cinemas, medical centers, banks operations, and etc. Apparel Women and men clothing, shoes and accessories stores
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IR Contact
Armando dAlmeida Neto
CFO and Investors Relation Director
Rodrigo Krause
Leonardo Oliveira
Franco Carrion
Diana Litewski
E-mail: ri@multiplan.com.br
http://www.multiplan.com.br/ri
Disclaimer
This document may contain prospective statements. which are subject to risks and uncertainties. as they were based on expectations of the Companys management and on available information. These prospects include statements concerning our managements current intentions or expectations. Readers/investors should be aware that many factors may mean that our future results differ from the forward-looking statements in this document. The Company has no obligation to update said statements. The words "anticipate, wish, "expect, foresee, intend, "plan, "predict, forecast, aim" and similar words are intended to identify affirmations. Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside the companys control or expectation. The reader/investor is encouraged not to completely rely on the information above.