Download pdf - Pdg Presentation Gold Eng

PDG Realty increases its stake in G yGoldfarb to 100%

AgendaAgenda

Deal rationale

Deal structure

Orginal MOU conversion formulaO g a OU co e s o o u a

2008 pro forma results

AppendixAppendix

*

2

Early option exercise Early option exercise -- Deal RationaleDeal Rationale

Total consolidation of Goldfarb as an operational branch for PDG Realty;

PDG Realty will increase its exposure in the low income segment;

Reduction in the “Minority Interest” line of our Income Statement;Reduction in the “Minority Interest” line of our Income Statement;

The terms from the MOU (as of 22/Nov/07) will be preserved. The future payments will continue to be calculated by the

original formula (presented later in this document);

Goldfarb´s management team continues in a long term commitment and subject to exclusivity and non-compete clauses;

Accretive valuation.

3

Early option exercise Early option exercise -- Deal StructureDeal Structure

Early exercise of the call option to acquire up to 20% of the common shares of Goldfarb Incorporações e Construções S.A.

through the issuance of PDG Realty shares and Subscription Warrants;

Company structure:

Founding partners Founding partners

Structure before early option exercise Structure after early option exercise

80% 20% 100.0% 0.0%+ call option

20% Goldfarb

Deal structure:

Both sides had 4 options (PDG Realty calls and PDG Realty early exercised its 4 calls.Founding partners puts). Each option had an specificexercise date (2009 up to 2012) related to 5% ofGoldfarb, totaling the remaining 20%.More details in the MOU dated as of 22/Nov/07.

Founding partners received 829,644 PDG shares and 4subscription bonuses class 1More details in appendix 1.

4

Early option exercise Early option exercise –– Original MOU Original MOU conversion formulaconversion formula

Originally the option could be exercised annually by any of the partners in 4 tranches (the first of which in 2009, and the last

in 2012). Formula from original Memorandum of Understanding, to be implemented in current transaction:in 2012). Formula from original Memorandum of Understanding, to be implemented in current transaction:

PDGR3 nº = (GIC NP/ PDG NP) * 65% * PDG Shares * % of GIC Shares

WhWhere:

PDGR3 no.: means the number of PDG’s shares to be issued as a result of the merger;

PDG NP: means the PDG's net profit as shown in the corporate balance sheet of December 31 of the year immediately prior to the exercise of the respective Option’s tranche;

GIC NP: means GOLDFARB’s net profit as shown in the corporate balance sheet dated December 31 of the year immediately prior to the exercise of the respective Option’s

tranche;

PDG Shares: means the number of shares representing PDG’s capital stock on December 31 of the year immediately prior to the exercise of the respective Option;

% of GIC Shares: means the percentage of GOLDFARB’s shares being sold in the tranche in question (5%).

Therefore the early exercise of the Option shall not result in any change in the Option exercise payment terms as (i) theTherefore, the early exercise of the Option shall not result in any change in the Option exercise payment terms, as (i) the

payment shall continue to be made with PDG Realty’s shares; (ii) the number of shares to be transferred shall continue to be

determined by the formula above; and (iii) the term for the subscription of PDG Realty’s shares by the partners of MP Holding

3 Ltda. shall remain unchanged, that is, it shall only take place in the following 3 fiscal years.

5

Early option exercise Early option exercise –– 2008 Results 2008 Results pro pro formaforma

Just as an exercise, below we present the consolidated pro forma results (considering 100% stake in Goldfarb) for

operational figures in 2008 and adjusted net income in 9M08:operational figures in 2008 and adjusted net income in 9M08:

Operational results:

2008200880% Goldfarb 100% Goldfarb

Launched pro rata PSV 2,611.5 2,807.0 Contracted sales pro rata 1,811.9 1,943.6

Adjusted Net Income:

9M089M0880% Goldfarb 100% Goldfarb

Adjusted Net Income 183.8 195.0 Adjusted Net Margin 21.3% 22.6%

6

Appendix 1Appendix 1

Issued shares rational: Earnings Goldfarb 9M08 (R$) 56,089,336Earnings PDG Realty 9M08 (R$) 180,449,881(a) Goldfarb / PDG Realty 31.08%(b) Multiple discount 35.00%(a) * [ 1 ‐ (b) ] = (c) 20.20%

(d) Total PDG Realty shares 146,003,148(c) * (d) = (e) 29,498,455

2008 shares to be bought 5.00%(f) 9M08 pro rata shares to be bought 3.75%Shares to be issued before adjustment (e) * (f) = 1,106,192

Threshold (1) 25%Shares issued 9M08 829,644

Subscription bonuses rational (each Series represents 10 bonuses):

Nº OF SHARES TO BE ISSUED

Beginning End

On the date of disclosure to the market of the Ninety (90) days as of the date when the

EXERCISE PERIOD

Series A To be determined according to the Company’s and Goldfarb’s net profit in 2008,with a 35% discount in relation to the Company’s net profit multiple, minus the

,

On the date of disclosure to the market of theCompany’s financial statements referring tothe fiscal year ended on December 31, 2008.

Ninety (90) days as of the date when thewarrants of this series may be exercised.

Beginning End



p y p pnumber of shares already delivered as a result of the Merger.

Series B To be determined according to the Company’s and Goldfarb’s net profit in 2009,with a 35% discount in relation to the Company’s net profit multiple.

the fiscal year ended on December 31, 2009.

Beginning End



Beginning End

Series C To be determined according to the Company’s and Goldfarb’s net profit in 2010,with a 35% discount in relation to the Company’s net profit multiple.

Series D To be determined according to the Company’s and Goldfarb’s net profit in 2011,

7

g g



g p y p ,with a 35% discount in relation to the Company’s net profit multiple.