Financial Statements

Consolidated Statements of:

As of December 31, 2017, 2016 and 2015
(thousands of Mexican pesos)

2017 2016 2015
Assets
Current assets:
  Cash, cash equivalents and restricted cash $283,849 $217,568 $212,504
  Accounts receivable 322,772 316,942 243,759
  Accounts receivable from Mayakoba Trust No. CIB/2185 23,042 9,617 2,436
  Inventory 2,441,421 2,144,968 2,007,044
  Prepayments and other accounts receivable 76,596 177,272 109,217
  Total current assets 3,147,680 2,866,367 2,574,960
Non-current assets::
  Inventory 1,802,475 1,301,560 645,593
  Prepayments and other accounts receivable 44,787 14,588 31,307
  Property, furniture and equipment 48,087 39,645 29,247
  Investments in Trust and Joint Ventures 50,477 55,912 59,712
  Other non-current assets 23,178 20,348 14,188
  Long-term receivables from sale of commercial lots 4,776 10,472 503
  Total non-current assets 1,973,780 1,442,525 780,550
Total assets $5,121,460 $4,308,892 $3,355,510
Liabilities and stockholders’ equity
Current liabilities:
  Current portion of long-term loans $80,000 $130,000 $40,000
  Obligations secured by sales of future receivable contracts 88,521 94,281 99,941
  Accounts payable to and suppliers 125,736 29,839 26,602
  Accounts payable to suppliers 188,277 196,433 167,259
  Various creditors, subcontractors and others 144,078 138,279 106,140
  Customer prepayments 92,377 77,775 56,846
  Accumulated expenses and taxes 102,294 88,303 86,226
  Income tax 7,221 4,845 4,729
  Profit sharing payables 10,282 15,456 13,448
  Total current liabilities 838,786 775,211 601,191
Non-current liabilities::
  Long-term debt 1,172,954 765,242 859,491
  Employee benefits 2,119 1,561 1,445
  Accounts payable to land suppliers 36,190 2,217 28,819
  Deferred income tax 526,418 457,482 381,557
  Total non-current liabilities 1,737,681 1,226,502 1,271,312
Total liabilities 2,576,467 2,001,713 1,872,503
Stockholders’ equity:
  Capital stock 862,281 862,281 251,357
  Reserve for share repurchase 51,942 89,680 -
  Retained earnings 1,630,770 1,355,218 1,231,650
  Total stockholders’ equity 2,544,993 2,307,179 1,483,007
Total liabilities and shareholders’ equity $5,121,460 $4,308,892 $3,355,510

For the twelve-month periods ended on December 31, 2017, 2016 and 2015
(thousands of Mexican pesos, except for earnings per share, which is stated in Mexican pesos)

2017 2016 2015
Revenue from home sales and others $3,123,384 $2,752,070 $2,568,954
Cost of homes sold and others (2,122,975) (1,865,190) (1,775,881)
Gross profit 1,000,409 886,880 793,073
SG&A (155,000) (141,200) (113,377)
Management and planning expenses (117,414) (102,206) (82,455)
Selling expenses (112,789) (97,871) (90,961)
Financial expenses (Net of capitalized interests for $68,511, $65,696 and $69,233, respectively) (83,227) (54,177) (48,095)
Interest income 15,816 9,323 4,711
Interest in Joint Ventures (5,433) (3,800) (288)
Other income 25,615 17,926 11,208
Other expenses (10,817) (15,796) (18,988)
Profit before income tax 557,160 499,079 454,828
Income taxes (117,864) (130,511) (131,415)
Consolidated and comprehensive net income $439,296 $368,568 $323,413
Weighted average number of shares outstanding 189,153,981 169,263,692 162,462,968
Earnings per share (basic and diluted) $2.32 $2.18 $1.99

As of December 31, 2017, 2016 and 2015
(Thousands of mexican pesos)

Capital stock Stock repurchase reserve Retained earning Total
Balances at the beginning of 2015 $251,357 - $1,046,744 1,298,101
   Dividends paid - - (138,507) (138,507)
  Comprehensive income - - 323,413 323,413
Balances as of December 31, 2015 251,357 - 1,231,650 1,483,007
  Increase in capital stock 610,924 100,000 (100,000) 610,924
  Stock repurchase - (10,320) - (10,320)
  Dividends paid - - (145,000) (145,000)
  Comprehensive income - - 368,568 368,568
Balances as of December 31, 2016 862,281 89,680 1,355,218 2,307,179
  Increase in capital stock - - - -
  Stock repurchase - (37,738) - (37,738)
  Dividends paid - - (163,744) (163,744)
  Comprehensive income - - 439,296 439,296
Balances as of December 31, 2017 $862,281 $51,942 $1,630,770 $2,544,993

As of December 31, 2017, 2016 and 2015
(thousands of Mexican pesos)

2017 2016 2015
Cash flows from operating activities:
Consolidated and comprehensive net income $439,296 $368,568 $323,413
Adjustments for:
Income taxes recognized in results 117,864 130,511 131,415
Depreciation and amortization 19,002 15,004 12,822
Asset retirement 658 521 1,034
Interests in Joint Ventures 5,433 3,800 288
Capitalized costs to inventory 68,318 63,850 69,233
Financial costs recognized in results 67,605 43,817 38,409
Amortization of debt issuance expenses 15,622 10,360 9,686
Interest income (15,816) (9,323) (4,711)
717,982 627,108 581,589
Variations in working capital:
(Increase) decrease in accounts receivable (13,558) (90,333) 82,808
(Increase) in inventory (797,173) (762,206) (302,852)
Decrease (increase) in other current assets 82,369 (36,241) (46,556)
Increase (decrease) in suppliers 121,713 (24,030) 32,976
Increase (decrease) in various creditors, subcontractors and others 5,799 32,139 (4,716)
Increase (decrease) in prepayments to clients 14,602 20,929 (76,809)
Increase in accumulated taxes and expenses 13,991 2,193 18,368
(Decrease) increase in employee profit sharing (5,174) 2,008 5,075
Increase in employee benefits 558 116 360
Income tax paid (46,551) (54,586) (43,829)
Interest collected 15,816 9,323 4,711
Net cash flows from (used in) operating activities 110,374 (273,580) 251,125
Cash flows from investing activities:
Acquisition of property, furniture and equipment (19,543) (21,081) (14,345)
Investments in Trusts and Joint Ventureso - - (50,000)
Advance payments for property and equipment (11,784) (15,095) (17,908)
Acquisition of other assets (11,497) (11,002) (6,701)
Net cash flows used in investment activities (42,824) (47,178) (88,954)
Cash flows from financing activities:
Increase in bank financing 1,956,354 1,494,902 1,667,194
Increase in capital stock - 610,924 -
Proceeds from the issuance of local notes 500,000 - -
Obligations for sale of future collection rights contracts 205,578 230,116 205,506
Cash payments of local notes (200,000) - (105,000)
Stock repurchase (39,976) (10,320) -
Sale of treasury shares 2,238 - -
Decrease in bank financing (1,889,507) (1,499,171) (1,552,171)
Payment of obligations for sale of future collection rights contracts (211,338) (235,776) (140,565)
Debt issuance expenses (24,758) (10,341) (2,887)
Dividend payments (163,744) (145,000) (138,507)
Interest paid (136,116) (109,512) (117,328)
Net cash flows from (used in) financing activities (1,269) 325,822 (183,758)
Net increase (decrease) in cash, cash equivalents and restricted cash 66,281 5,064 (21,587)
Cash, cash equivalents and restricted cash at beginning of the period 217,568 212,504 234,091
Cash, cash equivalents and restricted cash at end of the period $283,849 $217,568 $212,504