JAVER REPORTS FINANCIAL RESULTS

FOR SECOND QUARTER 2014

INVESTOR RELATIONS CONTACTS:

In Monterrey:
Felipe Loera, Chief Financial Officer
Tel: +52 81 1133-6468
floera@javer.com.mx
Veronica Lozano, Investor Relations
Tel. +52 (81) 1133-6699 Ext. 6515
vlozano@javer.com.mx

In New York:
Melanie Carpenter
i-advize Corporate Communications, Inc.
Tel: +212-406-3692
mcarpenter@i-advize.com
For more information, visit:
http://www.javer.com.mx/inversionistasHome.html

Second Quarter 2014

Earnings Release

JAVER REPORTS SIGNIFICANT GROWTH IN HOMES TITLED AND REVENUES FOR 2Q14
AND 6M14
Monterrey, Nuevo Leon, Mexico July 23, 2014 - Servicios Corporativos Javer S.A.P.I. de
C.V., (Javer or the Company), one of the largest housing development companies in
Mexico, today announced financial results for the second quarter (2Q14) and first six
months (6M14) periods ended June 30, 2014.

2Q14 and 6M14 Highlights:

Units Sold totaled 4,602 homes, up 6.8% compared to 4,311 units in 2Q13. For 6M14,
homes titled reached 9,020, an 11.1% increase from 8,122 units in 6M13.
Net Revenues were Ps. 1,433.8 million in 2Q14 and Ps. 2,804.5 million in 6M14, up 6.9%
and 13.9%, respectively, mainly due to the increase in homes titled and a better average
sales price in the affordable entry level segment (AEL).
EBITDA increased 6.8% in 2Q14 to Ps. 185.2 million and 23.9% in 6M14 to Ps. 358.8
million driven by the effects described above.
Net Income reached Ps. 38.2 million in 2Q14 and Ps. 48.3 million in 6M14 compared to
Ps. (106.2) million and Ps. (22.7) million in 2Q13 and 6M13, respectively, mainly due to
the depreciation of the peso in both periods of 2013.

EXECUTIVE SUMMARY

(Figures in thousand pesos)

Homes titled
Net Revenues
Gross Profit
Gross Margin
EBITDA
EBITDA Margin
Net Income
Net Margin

2Q14
2Q13
Variance
4,602
4,311
6.8%
1,433,797 1,341,830
6.9%
377,052
348,789
8.1%
26.3%
26.0%
0.3%
185,159
173,312
6.8%
12.9%
12.9% (0.0%)
38,235
(106,229) 136.0%
2.7%
(7.9%) 10.6%

6M14
6M13
Variance
9,020
8,122
11.1%
2,804,456 2,463,086
13.9%
754,817
648,404
16.4%
26.9%
26.3%
0.6%
358,750
289,658
23.9%
12.8%
11.8%
1.0%
48,268
(22,693) 312.7%
1.7%
(0.9%)
2.6%

Page 2

Second Quarter 2014

Earnings Release

CEO STATEMENT
Mr. Eugenio Garza, Javers Chief Executive Officer commented, We are pleased with our
performance in what proved to be another solid quarter under a continued favorable
commercial environment. Subsidy availability remained widespread across all our
geographies, while industry wide supply in the AEL segment continues to be constrained,
allowing us to achieve strong average realized pricing (about $10 thousand pesos higher)
in our AEL sales which continue to be our main growth driver in 2014. Our 2Q
performance would have been even stronger had it not been for a number of exogenous
factors including: (i) permitting delays in our new Queretaro developments (which were
resolved in July) and (ii) abnormal sporadic interruptions in the Infonavit titling IT
platforms during the quarter which have been resolved. Our inventory levels greatly
improved over the quarter as we finished with over 1,314 units in finished home
inventories and 8,215 homes under active development, Javers best inventory position
since 2012. Although still not ideal given what we foresee to be a continued favorable
commercial environment in the second half of 2014, we are in a much better position to
deliver what we believe will be an even stronger 3Q and 4Q. Although we are heavily
investing and selling in the subsidy focused market so far in the year, and likely into the
second half, we continue to maintain medium-term caution and make land purchase
decisions based on maintaining our flexibility to return to unsubsidized markets quickly if
the market changes.
During the quarter, we sold our first homes (32 titlings during the last 20 days of June)
under the 5 minimum wage subsidy program and have expanded it to include a larger
geographic footprint. We are now selling homes under this program in 6 of our
developments nationwide; so far in July, we have sold 65 units under this program,
allowing us to reach a much broader customer base than before. Furthermore, over the
past couple of weeks we have also been able to re-categorize two of our largest
developments under the new operating rules from merely being grandfathered to now
being in-contour developments. This allows us to reach up to 73 thousand pesos in
subsidy per home sold in those developments from 51 thousand pesos under the current
categorization. All of these achievements should continue to allow us to maintain strong
pricing and volumes for the remainder of the year.
On the land acquisition side, notwithstanding the fact that several of our deals in the
pipeline related to plots under bankruptcy continue to be blocked in the judicial process,
we were able to close on 6 deals covering 9,036 units during the quarter and up until last
week. 4 additional plots of land covering 7,064 units are awaiting judicial approval to
proceed. With the acquisitions closed to date we are guaranteeing that Javer will
maintain its 2014 levels of land availability through 2015. However, we will continue
acquiring attractive options to round our land bank and maintain a flexible structure in
case subsidy availability changes in 2015 or beyond. We continue to be encouraged by

Page 3

Second Quarter 2014

Earnings Release
the administrations pro-activeness in supporting the sector through new
financial/mortgage products, continued subsidy availability, and responsiveness as we
adapt to the new operating and commercial rules and realities.
On the financial front, we continue to operate above our targeted pre-tax ROIC levels with
22.6% for the last twelve months, thanks to the operating environment and a working
capital cycle of 317 days, the highest level since 3Q09. Furthermore we achieved this with
only a slight negative free cash flow of Ps. 38.5 million for the first half of the year which
historically has been the weakest half, despite a significant increase in our inventory levels
and record amounts of cash spent on new land acquisitions.
Our net leverage levels continue to remain below 3x and we continue to actively monitor
our acquisition opportunities to make a final determination on our liquidity position and
capital structure.
We remain bullish on Javers near term outlook and stay cautiously optimistic that the
new norms in the industry play to our strengths. With the right land acquisitions and
inventory decisions, Javer will remain flexible and seize upon the opportunities in our
ever-changing industry.

Page 4

Second Quarter 2014

Earnings Release

UNITS SOLD AND NET REVENUES*

Equivalent Units Sold
Affordable Entry Level
Middle Income
Residential
TOTAL

2Q14
2,617
1,810
175
4,602

% of
56.9%
39.3%
3.8%
100.0%

2Q13
1,950
2,226
135
4,311

% of
Variance
45.2%
34.2%
51.6% (18.7%)
3.1%
29.6%
100.0%
6.8%

Revenues (Figures in
% of
% of
2Q14
2Q13
Variance
thousand pesos)
revenues
revenues
Affordable Entry Level
616,063 43.0%
434,720 32.4%
41.7%
Middle Income
597,356 41.7%
741,915 55.3% (19.5%)
Residential
192,046 13.4%
148,978 11.1%
28.9%
Total Home Sales
1,405,465 98.0%
1,325,612 98.8%
6.0%
Commercial Lot Sales
28,332
2.0%
16,218
1.2%
74.7%
TOTAL
1,433,797 100.0% 1,341,830 100.0%
6.9%

6M14
4,976
3,719
325
9,020
6M14
1,168,711
1,233,552
348,208
2,750,472
53,984
2,804,456

% of
55.2%
41.2%
3.6%
100.0%

6M13
4,052
3,803
267
8,122

% of
Variance
49.9%
22.8%
46.8%
(2.2%)
3.3%
21.7%
100.0% 11.1%

% of
% of
6M13
Variance
revenues
revenues
41.7%
890,698 36.2%
31.2%
44.0%
1,267,643 51.5%
(2.7%)
12.4%
276,168 11.2%
26.1%
98.1%
2,434,509 98.8%
13.0%
1.9%
28,577
1.2%
88.9%
100.0% 2,463,086 100.0% 13.9%

* Low Income units have selling prices below Ps. 260,000. Middle Income units have selling prices between Ps.
260,000 and Ps. 560,000. Residential units have selling price exceeding Ps. 560,000

Units Sold: The Company sold 4,602 units in 2Q14 compared to

4,311 in 2Q13, representing a 6.8% increase. Regarding home sales,
the AEL and residential segments increased 41.7% and 28.9%,
respectively, as opposed to the 19.5% decrease in the middle
income segment. AEL sales represented 56.9% of total homes titled
and 43.0% of total revenues in 2Q14, compared to 45.2% and 32.4%,
respectively, in 2Q13.
For the first half 2014, units titled increased 11.1% to 9,020 units
from 8,122 units in 6M13. In terms of revenues, the AEL and
residential segments rose 31.2% and 26.1%, respectively, while the
middle income declined 2.7%. AEL sales represented 55.2% of total
units sold and 41.7% of total revenues in 6M14, compared to 49.9%
and 36.2%, respectively, in 6M13.
Commercial lot sales increased 74.7% to Ps. 28.3 million in 2Q14,
from Ps. 16.2 million in 2Q13. For 6M14, commercial lot sales grew
88.9% to Ps. 54.0 million from Ps. 28.6 million in 6M13, due to
material bulk sales.
Prices: In 2Q14, Javers average home sales price decreased to Ps.
305.4 thousand, from Ps. 307.5 thousand in 2Q13. Conversely, in the
first half 2014, the average overall sales price increased to Ps. 304.9
thousand from 299.7 thousand in 6M13. The AEL sector specifically

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Second Quarter 2014

Earnings Release
had a strong increase from 2013 levels given subsidy availability and constrained industry
supply.

AEL
Middle Income
Residential
Average Sales Price per Unit

2Q14
235.4
330.0
1,097.4
305.4

2Q13
222.9
333.3
1,103.5
307.5

6M14
234.9
331.7
1,071.4
304.9

6M13
219.8
333.3
1,034.3
299.7

Mortgage Provider Mix: During 2Q14, Infonavit continued to be Javers primary mortgage
provider, representing 97.3% of total units titled (including Cofinavit), compared to 96.8%
in 2Q13. Under the same criteria, 97.2% of sales were originated from Infonavit in 6M14
compared to 96.7% in 6M13. Cofinavit represented 3.7% in 2Q14 and 3.9% in 6M14, given
that this product is utilized to acquire residential homes. Typically, workers get their
Infonavit loan which can then be supplemented by a bank loan.
Mortgage Provider
Infonavit
Fovissste
Cofinavit
Banks / Sofoles
Other
TOTAL

2Q14
4,308
40
169
51
34
4,602

% of total
93.6%
0.9%
3.7%
1.1%
0.7%
100.0%

2Q13
4,149
39
28
38
57
4,311

% of total
96.2%
0.9%
0.6%
0.9%
1.3%
100.0%

6M14
8,414
87
352
113
54
9,020

% of total
93.3%
1.0%
3.9%
1.3%
0.6%
100.0%

6M13
7,812
131
39
53
87
8,122

% of total
96.2%
1.6%
0.5%
0.7%
1.1%
100.0%

Subsidies: During 2Q14, subsidies represented 52.5% of total units sold, compared to
16.8% in 2Q13 as we continue to take advantage of the historical levels of subsidy funding
and availability; vertical housing absorbed just 27.8% of the total subsidies during the
period compared to 99.7% in 2Q13 as the new operating rules for subsidies no longer rely
primarily on verticality. In the first six months 2014, 53.4% of units titled were sold with a
subsidy compared to 23.0% in 6M13. Vertical housing represented 40.9% of total
subsidies in comparison with 99.9% in 6M13.
2Q14
2,417

Subsidies

2Q14
Vertical Housing

672

% of
total
27.8%

2Q13
725

2Q13
723

Variance
233.4%

% of
total
99.7%

6M14
4,820

6M14
1,969

6M13
1,869

% of
total
40.9%

Variance
157.9%

6M13
1,867

% of
total
99.9%

Page 6

Second Quarter 2014

Earnings Release

GROSS PROFIT / MARGIN

Gross Profit (Figures in thousand pesos) 2Q14
Home Sales
351,121
Commercial Lot Sales
25,931
TOTAL
377,052
Gross Margin (%)
Home Sales
Commercial Lot Sales
TOTAL

2Q13
343,037
5,752
348,789

25.0%
91.5%
26.3%

25.9%
35.5%
26.0%

Variance
6M14
2.4% 708,199
350.8%
46,618
8.1% 754,817

(0.9 pp)
56.1 pp
0.3 pp

6M13
630,575
17,829
648,404

25.7%
86.4%
26.9%

25.9%
62.4%
26.3%

Variance
12.3%
161.5%
16.4%

(0.2 pp)
24.0 pp
0.6 pp

Gross Profit increased 8.1% to Ps. 377.1 million in 2Q14, from Ps. 348.8
million in 2Q13. For the first half 2014, gross profit rose 16.4% to Ps. 754.8
million, from Ps. 648.4 million in 6M13. The growth was driven by greater
sales volumes and a higher AEL sales price.
Gross Margin increased 0.3 percentage points in 2Q14 to 26.3% compared to
26.0% in 2Q13; for 6M14, gross margin grew 0.6 percentage points to 26.9%
from 26.3% in 6M13, primarily by the increase in commercial lot sales.
EBITDA / MARGIN

(Figures in thousand pesos)

SG&A
as a % of Sales

2Q14

2Q13

200,345
14.0%

183,598
13.7%

EBITDA
EBITDA Margin

185,159
12.9%

173,312
12.9%

Variance

6M14

6M13

9.1%
0.3 pp

413,695
14.8%

376,867
15.3%

9.8%
(0.5 pp)

6.8%
0.0 pp

358,750
12.8%

289,658
11.8%

23.9%
1.0 pp

Variance

Selling, General and Administrative Expenses increased 9.1% in 2Q14, and

9.8% in 6M14; however as a percentage of sales, SG&A increased just 0.3
percentage points in 2Q14 and decreased 0.5 percentage points in 6M14 as a
result of the Companys continuing efforts to control expenses.
EBITDA increased 6.8% in 2Q14 to Ps. 185.2 million, from Ps. 173.3 million in
2Q13; EBITDA margin remained flat at 12.9%, mainly due to the decrease in
gross margins on home sales. For 6M14, EBITDA increased 23.9% to Ps. 358.8
million, from Ps. 289.7 million in 6M13; and registered an EBITDA margin of
12.8%.

Page 7

Second Quarter 2014

Earnings Release

COMPREHENSIVE COST OF FINANCING

2Q14

(Figures in thousand pesos)

2Q13

Variance

Interest expense
Interest income
FX gains / losses

134,674 136,645
(1.4%)
(8,848)
(7,690)
15.1%
(23,943) 182,843 (113.1%)

NCFR

101,884

Net gain (loss) on cash flow hedges

(15,586)

311,798

6M14

6M13

271,849
(17,367)
(32,934)

262,631
3.5%
(11,911)
45.8%
27,936 (217.9%)

(67.3%) 221,549

19,226 (181.1%)

(30,704)

278,656

Variance

(20.5%)

29,809 (203.0%)

Net Income reached Ps. 38.2 million in 2Q14 and Ps.48.3 million in 6M14 as a result of the
effects described previously.
Comprehensive Income, which includes MTM gains and losses on derivatives to hedge
foreign exchange exposure on debt, decreased to Ps. (15.6) million in 2Q14 and Ps. (30.7)
million in the first half 2014.
ASSETS / LIABILITIES
Cash and cash equivalents were Ps. 1,253.6 million as of June 30, 2014.
WORKING CAPITAL
June 2014
Amount
1,711,736
2,279,196
1,244,458
1,148,161
8,030
4,079,199

(Figures in thousand pesos)

Trade Accounts Receivable
Inventory (Work in Progress)
Inventory (Land Reserves)
Suppliers
Customer Advances
Working Capital
LTM Sales
LTM Cost of Goods Sold

$
$

5,762,860
4,127,111

Days
108
201
110
101
1
317

March 2014
Amount
Days
1,874,333
120
2,222,745
199
1,064,953
95
1,100,063
99
8,624
1
4,053,344
316
5,670,893
4,063,407

As of June 30 2014, Javer maintained its working capital cycle at the same level as in 1Q14,
as a result of better collections.

Page 8

Second Quarter 2014

Earnings Release

FREE CASH FLOW

(Figures in thousand pesos)

2Q14

2Q13

6M14

6M13

EBITDA
(+) Land included in COGS
(+-) Changes in Working Capital
Cash Interest
Cash Taxes
Land CAPEX
Equipment CAPEX
Free Cash Flow

185,159
102,005
17,575
(104,967)
(11,610)
(190,981)
(3,128)
(5,947)

173,312
122,166
98,189
(102,024)
(49,578)
(98,802)
(1,971)
141,292

358,750
209,637
101,913
(208,849)
(54,897)
(439,344)
(5,755)
(38,545)

289,658
213,636
48,961
(207,344)
(79,748)
(206,342)
(5,344)
53,477

Javer reported a slightly negative free cash flow of Ps. 5.9 million in 2Q14 and Ps. 38.5
million in 6M14, as the acquisitions of land continued to flow and the Company continues
with an accelerated construction of homes to prepare the pipeline for the second half of
the year.
DEVELOPMENT PIPELINE

Home Starts
Home Completions
Homes Titled
Available Finished Home Inventory
Homes under active development (incl. AFHI)
Total Land Reserves

1Q12
4,989
4,264
4,438
2,383
7,690
128,071

2Q12
3,320
3,692
4,483
1,592
6,869
127,487

3Q12
3,597
3,935
4,161
1,366
6,886
122,962

4Q12
2,364
4,569
4,452
1,483
6,013
117,804

1Q13
2,671
3,386
3,811
1,058
6,444
113,998

2Q13
3,280
3,688
4,311
435
6,103
109,703

3Q13
3,021
4,090
4,227
298
5,530
105,531

4Q13
3,944
4,937
5,039
196
5,189
94,061

1Q14
6,079
4,333
4,418
111
7,212
90,855

2Q14
5,605
5,805
4,602
1,314
8,215
94,965

Home Starts grew 70.9% to 5,605 in 2Q14, compared to 3,280 in 2Q13, reflecting the
ramp-up in construction activity at the Companys developments derived from the
increase in the 2014 Federal budget for subsidies.
Home Completions in 2Q14 increased 57.4% to 5,805 from 3,688 in 2Q13, in line with the
Companys construction spend during the quarter.
Finished Home Inventory increased to 1,314 units as of June 30, 2014, from 111 units
reported as of March 31, 2014, as the high level of home starts during 1Q14 began to flow
into Javers available inventory.

Page 9

Second Quarter 2014

Earnings Release

LAND RESERVES
As of June 30, 2014, the Companys total land bank reached approximately 94,965 units,
of which approximately 60% were owned land reserves and 40% were held through land
trust agreements.

Page 10

Second Quarter 2014

Earnings Release

DEBT AND DERIVATIVES EXPOSURE

Short Term Debt (Figures in thousand pesos)
Notes Payable to Financial Institutions
Current Portion of Long Term Debt
TOTAL

Derivatives
113,258
113,258

Long Term Debt (Figures in thousand pesos)

High Yield Bond
Capital Leases
Less Current Portion
TOTAL

3,765,593
61,173
113,258
3,713,508

TOTAL DEBT
CASH AND CASH EQUIVALENTS
MTM DERIVATIVE POSITION
NET DEBT

3,826,766
1,253,598
121,625
2,451,543

TOTAL DEBT** / LTM EBITDA

NET DEBT / LTM EBITDA
LTM EBITDA / LTM INTEREST EXPENSE
** Total debt= Total Debt - MTM Derivative Position

4.29
2.84
1.72

FMV
Coupon Swaps (TIIE)
Coupon Swaps (Fix)
Principal Hedges (Forwards)
Embedded derivatives asset
TOTAL

Ps.
Ps.
Ps.

127,850
(20,964)
(292)
15,031
121,625

Ps.

FMV
(US$)
9,834
(1,613)
(22)
8,199

Debt Maturity Profile

3,683

113

18

10

2014

2015

2016

2017

2021

As of June 30, 2014, Javer continued to possess available credit facility lines in excess of
Ps. 888.4 million. These credit lines could be used at any time as long as Javer is in
compliance with its bond covenants.
Javer maintained derivative positions to hedge the Companys currency exposure related
to the 2021 High Yield Bond coupons. As of June 30, 2014 the weighted hedge was 4.5
years and Javer will include additional hedges to be in line with its hedging strategy. The
Company also holds a derivate position to hedge 100% of the coupon and the remaining
principal amount of the 2014 Notes due on August 4, 2014.
As of June 30, 2014, the Company possessed US$ 23 million in available credit lines from
derivative counterparties to finance any potential negative carrying values of the
Companys derivative contracts.
As of June 30, 2014, Total Debt / LTM EBITDA reached 4.29x; Net Debt to EBITDA was
2.84x; EBITDA interest coverage reached 1.72x.

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Second Quarter 2014

Earnings Release

About Javer:
Servicios Corporativos Javer S.A.P.I. de C.V. is one of the largest privately-owned housing
development companies in Mexico, specializing in the construction of low-income, middle
income and residential housing in the Northern region of Mexico. The Company, which is
headquartered the city of Monterrey, in the state of Nuevo Leon, began operations in
1973. Javer is the second-largest supplier of Infonavit homes in the country, the largest
supplier of Infonavit loans in the state of Nuevo Leon and Jalisco with a 16.3% and 17.7%
market share, respectively. The Company operates in the states of Nuevo Leon,
Aguascalientes, Tamaulipas, Jalisco, Queretaro and State of Mexico.
During 2013, the Company reported revenues of Ps. 5,421.5 million and sold a total of
17,388 units.
Disclaimer:
This press release may include forward-looking statements. These forward-looking
statements include, without limitation, those regarding Javers future financial position
and results of operations, the Companys strategy, plans, objectives, goals and targets,
future developments in the markets in which Javer participates or are seeking to
participate or anticipated regulatory changes in the markets in which Javer operates or
intends to operate.
Javer cautions potential investors that forward looking statements are not guarantees of
future performance and are based on numerous assumptions and that Javers actual
results of operations, including the Companys financial condition and liquidity and the
development of the Mexican mortgage finance industry, may differ materially from the
forward-looking statements contained in this press release. In addition, even if Javers
results of operations are consistent with the forward-looking statements contained in this
press release, those results or developments may not be indicative of results or
developments in subsequent periods.
Important factors that could cause these differences include, but are not limited to: risks
related to Javers competitive position; risks related to Javers business and Companys
strategy, Javers expectations about growth in demand for its products and services and to
the Companys business operations, financial condition and results of operations; access
to funding sources, and the cost of the funding; changes in regulatory, administrative,
political, fiscal or economic conditions, including fluctuations in interest rates and growth
or diminution of the Mexican real estate and/or home mortgage market; increases in
customer default rates; risks associated with market demand for and liquidity of the
notes; foreign currency exchange fluctuations relative to the U.S. Dollar against the
Mexican Peso; and risks related to Mexicos social, political or economic environment.

Page 12

Second Quarter 2014

Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Balance Sheets
As of June 30, 2014 and December 31, 2013
(In thousands of Mexican pesos (Ps.))
Assets
Current assets:
Cash and cash equivalents
Trade receivables net
Inventories (Note 1)
Prepaid expenses
Other current assets
Total current assets
Trade receivables
Land held for future development
Improvements, machinery and equipment net
Derivative financial instruments (Note 3)
Other non-current assets
Total
Liabilities and stockholders equity
Current liabilities:Current portion of long-term debt (Note 2)
Trade accounts payable and other liabilities
Due to related parties
Advances from customers
Income taxes payable
Interest payable
Total current liabilities
Long-term debt (Note 2)
Real estate liabilities
Employee retirement obligations
Deferred income taxes
Total liabilities
Commitments and contingencies
Stockholders equity:
Capital stock
Retained earnings
Valuation of derivative financial instruments (Note 3)
Cumulative actuarial gain/(loss)
Total stockholders equity
Total

June 30,
2014

December 31,
2013

Ps. 1,253,598
1,676,524
2,279,196
117,505
240,389
5,567,212
35,212
1,244,458
222,840
121,625
96,789
Ps. 7,288,136

Ps. 1,309,469
1,809,176
2,219,763
95,293
245,457
5,679,158
42,255
1,008,796
221,201
126,787
86,256
Ps. 7,164,453

Ps. 113,257
1,132,642
8,689
8,030

Ps.

107,208
1,369,826
3,713,508
184,874
39,608
842,795
6,150,611

111,663
1,064,635
9,457
5,200
17,799
107,787
1,316,541
3,681,313
188,989
36,388
821,261
6,044,492

734,806
339,486
64,517
(1,284)
1,137,525
Ps. 7,288,136

734,806
291,218
95,221
(1,284)
1,119,961
Ps. 7,164,453

The accompanying notes are part of the consolidated financial statements.

Page 13

Second Quarter 2014

Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the three and six month periods ended June 30, 2014 and 2013
(In thousands of Mexican pesos (Ps.))

Revenues
Costs
Gross profit
Selling and administrative expenses
Other expenses net
Net comprehensive financing result
Income before income taxes
Income taxes
Net income
Other comprehensive loss item:
Net (loss) gain on cash flow hedges
Total comprehensive (loss) income

2Q 2014

2Q 2013

6M 2014

6M 2013

Ps. 1,433,797
1,056,745

Ps. 1,341,830
993,041

Ps. 2,804,456
2,049,639

Ps. 2,463,086
1,814,682

377,052
200,345
(4)
101,884
74,827
36,592
38,235

348,789
183,598
(16)
311,798
(146,591)
(40,362)
(106,229)

754,817
413,695
(445)
221,549
120,018
71,750
48,268

648,404
376,867
(651)
278,656
(6,468)
16,225
(22,693)

(15,586)
Ps.22,649

19,226
Ps.(87,003)

(30,704)
Ps. 17,564

The accompanying notes are part of the consolidated financial statements.

Page 14

(29,809)
Ps. (52,502)

Second Quarter 2014

Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Changes in Stockholders Equity
For the six months ended June 30, 2014
(In thousands of Mexican pesos (Ps.))

Capital
Stock
Balance as of December 31,
2013
Comprehensive income

Ps. 734,806

Balance as of June 30, 2014

Ps. 734,806

Retained
Earnings
(Accumulated
Deficit)
Ps.

291,218

48,268
Ps. 339,486

Valuation of
Derivative
Financial
Instruments
Ps. 95,221
(30,704)
Ps. 64,517

Cumulative
actuarial
gain/(loss)

Total
Stockholders
Equity

Ps.(1,284)

Ps. 1,119,961

Ps. (1,284)

17,564
Ps. 1,137,525

The accompanying notes are part of the consolidated financial statements.

Page 15

Second Quarter 2014

Earnings Release

Servicios Corporativos Javer, S.A.P.I de C.V. and Subsidiaries

Consolidated Statements of Cash Flows
For the six months period ended June 30, 2014 and 2013
(In thousands of Mexican pesos (Ps.))

Operating activities:
Income (Loss) before income taxes
Items related to investing activities:
Depreciation and amortization
Unrealized exchange gain
Items related to financing activities:
Effects of valuation of derivative financial instruments
Interest expense
(Increase) decrease in:
Trade receivables net
Inventories
Other current assets
Prepaid expenses
Increase (decrease) in:
Trade accounts payable
Due to related parties
Advances from customers
Other liabilities
Net cash provided by operating activities
Investing activities:
Improvements, machinery and equipment
Other assets
Net cash (used in) provided by investing activities
Financing activities:
Payment Proceeds from borrowings
Proceeds from long-term debt
Payments of long-term debt
Proceeds of combined derivative financial instruments
Interest paid
Net cash provided by (used in) financing activities
Effects of exchange gains or losses on cash and cash equivalents
Cash:
Net increase in cash
Cash at beginning of year
Cash at end of year

June 30,
2014

June 30,
2013

Ps. 120,018

Ps. (6,468)

17,628
(16,373)

18,120
21,215

(15,231)
254,481
360,523

25,952
250,720
309,539

139,694
(293,621)
(63,146)
(32,744)

(77,345)
136,594
(97,484)
(26,096)

27,434
(767)
2,830
35,856
176,059

(34,375)
1,542
12,407
42,383
267,164

(5,755)

(5,344)
(1,000)
(6,344)

(5,755)

(208,849)
(222,630)
(3,545)

591,691
(27,291)
10,925
(218,269)
357,056
17,445

(55,871)
1,309,469

635,322
416,907

Ps. 1,253,598

Ps. 1,052,229

(13,781)

The accompanying notes are part of the consolidated financial statements.

Page 16

Second Quarter 2014

Earnings Release

Servicios Corporativos Javer, S.A.P.I. de C.V. and Subsidiaries

Notes to Consolidated Financial Statements
As of June 30, 2014 and December 31, 2013
(In thousands of Mexican pesos (Ps.))

Inventories

Land under development

Housing units under construction
Urbanization and related equipment

As of
June 30,
2014
Ps. 672,672
573,312
1,033,212
Ps. 2,279,196

As of
December 31,
2013
Ps. 833,790
282,997
1,102,976
Ps. 2,219,763

As of
June 30,
2014
Ps. 2,675,652
384,503
623,173
82,265

As of
December 31,
2013
Ps. 2,645,616
386,180
625,105
82,677

11,218

17,105

3,843

3,886

16,144

14,358

27,760

14,574

2,207

3,475

Long-term debt

Senior Notes US$210 million refinanced 2021

Senior Notes US$30 million 2021
Senior Notes US$50 million 2021
Remaining original Senior Notes US$210 million - 2014
Capital lease agreements to acquire molds, bearing annual
fixed interest rates of 12.34%, with various maturities
through 2015.
Capital lease agreements to acquire trucks bearing annual fixed
interest rate of 12.07%, with various maturities through 2016.
Capital lease agreements to acquire vehicles, bearing annual
fixed interest rate of 10.31 %, with various maturities
through 2017.
Capital lease agreements to acquire computers, bearing annual
fixed interest rate of 7.05%, whit various maturities through
2016.
Loan to pay suppliers bearing fixed interest rate of 11.80%,
with various maturities through 2015.
Less Current portion
Long-term debt

3,826,765
(113,257)
Ps. 3,713,508

3,792,976
(111,663)
Ps. 3,681,313

As of June 30, 2014, long-term debt maturities were as follows:

2015
2016
2017
April 6, 2021

Ps.18,030
10,228
1,922
3,683,328
Ps. 3,713,508

Page 17

Second Quarter 2014

Earnings Release

Derivative financial instruments

The Company designated the combined derivative financial instruments as cash flow hedges. The
fair value of the Companys derivative financial instruments as of June 30, 2014 was $121,625 as
further detailed below (notional amounts in millions):
Instrument
Combined derivative financial instruments
Forwards
Embedded derivatives asset

Type of
hedge
Cash flow
Cash flow

Notional
US$277
US$6

June 30,
2014
Ps.106,886
(292)
15,031
Ps.121,625

Total asset

* * * * *

Page 18