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A free translation from the Original in Portuguese

Financial Statements of the


Company and Consolidated

Multiplan Empreendimentos
Imobiliários S.A.

December 31, 2008 and 2007


with Review Report of Independent Auditors
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

Financial Statements

December 31, 2008 and 2007

Contents

Page

Report of Independent Auditors .................................................................................................. 1

Audited Financial Statements of the Company and Consolidated

Balance Sheets of the Company and Consolidated ..................................................................... 3


Statements of Operations of the Company and Consolidated ..................................................... 5
Statements of Changes in Shareholder‟s Equity of the Company .............................................. 6
Statements of cash-flow of the Company and Consolidated ...................................................... 7
Statements of Value Added of the Company and Consolidated ................................................ 8
Notes to the Financial Statements ............................................................................................... 9
(A free translation from the original in Portuguese)

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of


Multiplan Empreendimentos Imobiliários S.A.
Rio de Janeiro - RJ

1. We have audited the accompanying balance sheet of Multiplan Empreendimentos


Imobiliários S.A. and the accompanying consolidated balance sheet of Multiplan
Empreendimentos Imobiliários S.A. and its subsidiaries as of December 31, 2008, and
the related statements of operations, changes in shareholders’ equity, cash flows and
value added for the year then ended. These financial statements are the responsibility
of the Company’s Management. Our responsibility is to express an opinion on these
financial statements.

2. We conducted our audits in accordance with auditing standards generally accepted in


Brazil including: (a) the planning of our work, taking into consideration the materiality
of balances, the volume of transactions and the accounting and internal control
systems of the Company and its subsidiaries; (b) the examination, on a test basis, of
the documentary evidence and accounting records supporting the amounts and
disclosures in the financial statements; and (c) an assessment of the accounting
practices used and significant estimates made by management, as well as an
evaluation of the overall financial statement presentation.

3. In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Multiplan Empreendimentos Imobiliários S.A. and
the consolidated financial position of Multiplan Empreendimentos Imobiliários S.A. and
its subsidiaries at December 31, 2008, and the results of their operations, changes in
their shareholders’ equity, their cash flows and value added in their operations for the
year then ended , in accordance with the accounting practices adopted in Brazil.
4. We have previously audited the financial statements of Multiplan Empreendimentos
Imobiliários S.A. and the consolidated financial statements of Multiplan
Empreendimentos Imobiliários S.A. and its subsidiaries as of December 31, 2007,
comprising the balance sheets, the statements of operations, changes in shareholders’
equity and changes in financial position for the year then ended, including the statement
of cash flows as additional information, on which we issued an unqualified report dated
March 10, 2008. As mentioned in Note 3, the accounting practices adopted in Brazil
were changed as from January 1st, 2008. The financial statements for the year ended
December 31, 2007, except for the statements of changes in financial position,
presented in conjunction with the financial statements for the year ended December
31,2008, were prepared in accordance with the accounting practices adopted in Brazil
effective up to December 31, 2007 and, as allowed by CPC Technical Pronouncement
No. 13 – First-time Adoption of Law No. 11.638/07 and Provisional Measure No. 449/08,
have not been restated for comparative purposes.

Rio de Janeiro, February 27, 2009

ERNST & YOUNG


Auditores Independentes S.S.
CRC - 2SP 015.199/O-6-F-RJ
A free translation from the Original in Portuguese

MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

BALANCE SHEETS
December 31, 2008 and 2007
(In thousands of reais)

2008 2007
Company Consolidated Company Consolidated
Assets
Current:
Cash and cash equivalents (Note 4) 146,614 167,585 406,745 416,444
Accounts receivable (Note 5) 82,122 99,529 73,149 80,220
Sundry loans and advances (Note 6) 9,404 18,496 2,213 3,087
Recoverable taxes and contributions (Note 7) 16,846 20,198 8,967 11,384
Deferred income and social contribution taxes (Note 9) 38,704 38,704 18,435 18,435
Others - - 681 172
Total current assets 293,690 344,512 510,190 529,742

Noncurrent:
Long-term receivables:
Accounts receivable (Note 5) 11,388 17,762 9,259 16,106
Land and properties held for sale (Note 8) 129,457 129,457 76,810 76,810
Sundry loans and advances (Note 6) 34,011 10,328 1,568 1,569
Receivables from related parties (Note 19) 2,039 1,687 7,589 1,201
Deferred income and social contribution taxes (Note 9) 137,264 137,264 164,613 164,613
Others 1,679 3,029 407 1,431
315,838 299,527 260,246 261,730

Investments (Note 10) 140,753 22,847 110,841 48,561


Goodwill (Note 11) 51,592 - 49,435 -
Property and equipment (Note 11) 1,349,526 1,573,204 802,173 928,440
Intangibles (Note 12) 308,749 309,890 427,793 427,793
Deferred charges (Note 13) 27,087 32,757 10,418 14,148
Total noncurrent assets 2,193,545 2,238,225 1,660,906 1,680,672

Total assets 2,487,235 2,582,737 2,171,096 2,210,414


2008 2007
Company Consolidated Company Consolidated
Liabilities and shareholders’ equity
Current:
Loans and financing (Note 14) 106,006 107,360 13,843 16,333
Accounts payable 45,705 55,052 5,879 8,934
Property acquisition obligations (Note 15) 45,222 45,222 44,775 44,775
Taxes and contributions payable 18,758 25,326 4,363 9,115
Proposed dividends (Note 21) 20,084 20,084 - -
Deferred incomes (Note 20) 20,604 21,264 19,932 20,472
Acquisition of shares (Note 16) - - 46,996 46,996
Payables to related parties (Note 19) 188 23,780 1,488 1,488
Taxes paid in installments (Note 17) - 267 - 263
Clients anticipation 8,600 8,600 - -
Others 1,350 1,510 582 6,129
Total current 266,517 308,465 137,858 154,505

Noncurrent:
Loans and financing (Note 14) 128,912 128,912 20,015 21,969
Property acquisition obligations (Note 15) 90,049 90,049 77,510 77,510
Taxes paid in installments (Note 17) - 1,574 - 1,755
Provision for contingencies (Note 18) 3,155 4,571 1,705 3,363
Deferred incomes (Note 20) 67,309 105,034 59,865 75,909
Total noncurrent liabilities 289,425 330,140 159,095 180,506

Minority interest - 12,953 - 1,317

Shareholders‟ equity (Note 21)


Capital 952,747 952,747 952,747 952,747
Shares in Treasure Department (1,928) (1,928) - -
Capital reserve 958,276 958,276 932,425 932,425
Profit reserve 22,198 22,084 (11,029) (11,086)
Total shareholders‟ equity 1,931,293 1,931,179 1,874,143 1,874,086

Total liabilities and shareholders‟ equity 2,487,235 2,582,737 2,171,096 2,210,414

See accompanying notes.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

STATEMENTS OF OPERATIONS
Year ended December 31, 2008 and 2007
(In thousands of reais, except earnings (loss) per share, in reais)

2008 2007
Company Consolidated Company Consolidated
Gross revenues from sales and services
Leases 279,841 295,252 233,963 239,394
Services 64,626 66,129 52,056 52,332
Key money 20,681 21,242 18,693 18,902
Parking 18,095 67,509 11,964 38,718
Sale of properties 2,782 2,782 19,062 19,062
Others - - - 384
386,025 452,914 335,738 368,792

Taxes and contributions on sales and services (35,773) (41,683) (29,513) (32,399)

Net revenues 350,252 411,231 306,225 336,393

Operating income (expenses)


General and administrative expenses (headquarters) (71,340) (74,770) (59,400) (60,712)
General and administrative expenses (shopping malls) (43,006) (83,036) (44,751) (66,989)
Management fees (8,281) (8,281) (7,583) (7,583)
Stock-option-based remuneration expenses (1,272) (1,272) - -
Cost of properties sold (1,150) (1,150) (12,618) (12,618)
Equity in earnings of affiliates (Note 10) 14,940 7,003 12,434 8,027
Net Financial result (Note 22) 4,461 3,544 (24,966) (22,480)
Depreciation and amortization (26,358) (31,414) (21,596) (24,167)
Goodwill amortization (Note 11 and 12) (125,769) (124,708) (118,260) (117,805)
Other operating expenses (income) 810 897 2,170 2,300
Income before income and social contribution taxes 93,287 98,044 31,655 34,366

Income and social contribution taxes (Note 9) (8,316) (12,800) - (1,813)


Deferred income and social contribution taxes (Note 9) (7,081) (7,081) (11,230) (11,230)

Income before minority interest 77,890 78,163 20,425 21,323

Minority interest - (766) - (165)

Net income for the year 77,890 77,397 20,425 21,158

Earnings per share – R$ 0,53 0,14

Number of outstanding shares at year end 147,652,141 147,799,441

See accompanying notes.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY OF THE COMPANY


Year ended December 31, 2008 and 2007
(In Thousands of reais)

Capital reserve Profit reserve

Retained
Special Goodwill
Stock goodwill reserve on earnings
Treasury options reserve on issuance of Expansion (accumulated
losses) Total
Capital shares granted merger shares Legal reserve reserve

Balances at December 31, 2006 264,419 - - - 745,877 - - (31,454) 978,842

Capital increase (Note 21) 688,328 - - - - - - - 688,328


Establishment of special goodwill
reserve (Note 9) - - - 186,548 - - - - 186,548
Net income for the year - - - - - - - 20,425 20,425

Balances at December, 2007 952,747 - - 186,548 745,877 - - (11,029) 1,874,143

Adjustment from first-time


adoption of Law No. 11638/07 - - 24,579 - - - - (24,579) -
– stock options granted
Stock options granted (Note 21.g) - - 1,272 - - - - - 1,272
Repurchase of shares to be held
in treasury (Note 21.e) - (1,928) - - - - - - (1,928)
Net income for the year - - - - - - - 77,890 77,890
Destination of net income for the
year
Legal reserve (Note 21.b) - - - - - 2,114 - (2,114) -
Expansion reserve (Note 21.c) - - - - - - 20,084 (20,084) -
Proposed dividends (Note 21.f) - - - - - - - (20,084) (20,084)

Balances at December, 2008 952,747 (1,928) 25,851 186,548 745,877 2,114 20,084 - 1,931,293

See accompanying notes.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

STATEMENT OF CASH FLOWS


Year ended December 31, 2008 and 2007
(In Thousands of reais)
2008 2007
Company Consolidated Company Consolidated
Cash Flows from operations
Net income for the year 77,890 77,397 20,425 21,158
Adjustments:
Depreciation and amortization 26,358 31,414 21,596 24,167
Amortization of goodwill 125,769 124,708 118,260 117,805
Equity pickup (14,940) (7,003) (12,434) (8,027)
Stock-option-based remuneration 1,272 1,272 - -
Minority Interest - 766 - 165
Net Book value of permanent asset disposals - - (46) (46)
Apropriation of deferred income (20,681) (21,242) (18,693) (18,902)
Interest and monetary variations on loans and financing 5,842 6,087 5,704 5,705
Interest and monetary variations on property acquisition obligations 17,009 17,009 5,441 5,441
Interest and monetary variations on acquisition of shares 6,364 6,364 - -
Interest and monetary variations on sundry loans and advances (427) (427) (353) (353)
Interest and monetary variations on receivables from related parties (434) (434) (269) (269)
Deferred income and social contribution taxes 27,794 27,794 13,097 13,097
Earnings from subsidiaries not recognized previously, and capital
deficiency of subsidiaries - 437 - (791)
Net adjusted income 251,816 264,142 152,728 159,150
Variation in operating assets and liabilities:
Lands and properties (52,647) (52,647) (50,082) (50,082)
Accounts receivable (11,102) (20,965) (23,074) (36,637)
Increase of receivable taxes (7,879) (8,814) (4,672) (6,160)
Deferred taxes (20,714) (20,714) (188,980) (188,980)
Other assets (591) (1,426) 1,683 2,207
Payament of interests on loans capt from related parties - - 9 9
Accounts payable 39,826 46,118 729 3,614
Amortization of property acquisition obligations (104,023) (104,023) (103,347) (103,347)
Procurement of property acquisition obligations 100,000 100,000 165,403 165,403
Taxes and mandatory contributions payable 14,395 16,211 (160) 2,439
Assets aquisition (53,360) (53,360) (46,970) (46,970)
Installment taxes - (177) (769) (923)
Provision for contigencies 1,450 1,208 (933) (954)
Deferred revenue 28,797 51,159 41,531 58,324
Others obligations 768 (4,619) (4,750) 908
Clients antecipation 8,600 8,600 - -
Cash flows generated by (used in) operations 195,336 220,693 (61,654) (41,999)
Cash flows from investments
Increase (decrease) in loans and sundry advances (38,913) (23,447) 2,531 2,697
Increase (decrease) in receivables from related parties 5,984 (52) (5,906) 1,400
Rate receipt on loans and other advances (294) (294) (434) (434)
Increase (decrease) of investments (14,972) 32,717 (49,230) 588
Increase of property, plant and equipment (584,854) (686,757) (216,131) (336,925)
Additions to deferred charges (5,526) (8,011) (537) (3,305)
Additions to goodwill (3,218) - (49,891) -
Additions to intangibles (5,664) (6,824) (65,528) (65,528)
Cash flows generated by (used in) investing activities (647,457) (692,668) (385,126) (401,507)
Cash flows from financing activities
Decrease in loans and financing (13,586) (16,666) (200,706) (196,262)
Procurement of loans and financing 211,653 211,653 177,000 177,000
Rate payment of loans and obtained financing (2,849) (3,105) (6,166) (6,166)
(Increase) decrease in payables to related parties (1,300) 22,292 (1,165) (1,165)
Repurchase of shares to be held in treasury (1,928) (1,928) - -
Increase in capital reserves - - 186,548 186,548
Minority interest - 10,870 - 1,069
Increase of share capital - - 688,328 688,328
Cash flows generated by (used in) financing activities 191,990 223,116 843,839 849,352

Cash Flow (260,131) (248,859) 397,059 405,846


Cash at beginning 406,745 416,444 9,686 10,598
Cash at end 146,614 167,585 406,745 416,444
Changes in cash (260,131) (248,859) 397,059 405,846
See accompanying notes.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

STATEMENTS OF VALUE ADDED


Year ended December 31, 2008
(In Thousands of reais)

2008
Company Consolidated
Revenues
From sales and services 386,025 452,914
Other revenues 1,045 1,674
Allowance for doubtful accounts (1,494) (1,691)
385,576 452,897
Inputs acquired from third parties
Cost of goods and services sold (42,663) (52,389)
Energy, third-party services and others (42,917) (43,961)
(85,580) (96,350)
Gross value added 299,996 356,547

Retentions
Depreciation and amortization (152,127) (156,122)

Net value added generated by the Company 147,869 200,425

Transferred value added received


Equity pickup 14,940 7,003
Financial income 34,375 34,762
49,315 41,765
Value added to be distributed 197,184 242,190

Distribution of value added


Personnel
Direct compensation (25,269) (26,483)
Benefits (2,166) (2,450)
FGTS (federally managed Severance Pay Fund) (644) (672)
(28,079) (29,605)
Taxes, levies and contributions
Federal (51,328) (58,509)
State - (2)
Local (2,727) (7,524)
(54,055) (66,035)
Third-party capital remuneration
Interest, exchange and monetary variation (29,914) (31,218)
Rental expenses (7,246) (37,169)
(37,160) (68,387)
Dividends and interest on equity
Dividends (20,084) (20,084)
Non-controlling shareholders interest in retained earnings - (766)
Retained earnings (57,806) (57,313)
(77,890) (78,163)

Value added distributed (197,184) (242,190)

See accompanying notes.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS


December 31, 2008 and 2007
(In thousands of reais)

1. Operations

The Company was incorporated on December 30, 2005 and is engaged in real estate
related activities, including the development of and investment in real estate projects,
purchase and sale of properties, purchase and disposal of rights related to such
properties, civil construction, and construction projects. The Company also provides
engineering and related services, advisory services and assistance in real estate
projects, development, promotion, management, planning and intermediation of real
estate projects. Additionally, the Company holds investments in other companies.

After a number of acquisitions and capital reorganizations involving its subsidiaries, the
Company started holding direct and indirect interest at December 31, 2008 and 2007 in
the following enterprises:

% ownership
Beginning of December 31, December 31,
Real estate development Location operations 2008 2007

Shopping centers:
BHShopping Belo Horizonte 1979 80.0 80.0
BarraShopping Rio de Janeiro 1981 51.1 51.1
RibeirãoShopping Ribeirão Preto 1981 76.2 76.2
MorumbiShopping São Paulo 1982 65.8 65.8
ParkShopping Brasília 1983 60.0 60.0
DiamondMall Belo Horizonte 1996 90.0 90.0
Shopping Anália Franco São Paulo 1999 30.0 30.0
ParkShopping Barigui Curitiba 2003 84.0 84.0
Shopping Pátio Savassi Belo Horizonte 2004 83.8 83.8
BarraShopping Sul Porto Alegre 2008 100.0 100.0
Vila Olímpia São Paulo 2009 (*) 30.0 30.0
New York City Center Rio de Janeiro 1999 50.0 50.0
Santa Úrsula São Paulo 1999 37.5 -

Others:
Centro Empresarial Barrashopping Rio de Janeiro 2000 16.67 16.67

(*) Start-up of operations expected for November 2009.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

1. Operations (Continued)

The majority of the shopping centers are managed in accordance with a special structure
known as “Condomínio Pro Indiviso" – CPI (undivided joint property). The shopping
centers are not corporate entities, but units operated under an agreement by which the
owners (investors) share all revenues, costs and expenses. The CPI structure is an
option permitted by Brazilian legislation for a period of five years, with possibility of
renewal. Pursuant to the CPI structure, each co-investor has a participation in the entire
property, which is indivisible. On December 31, 2008, the Company holds the legal
representation and management of the shopping centers.

The commercial unit tenants generally pay the higher of a minimum monthly rent restated
annually according to the IGP-DI (General Price Index – Domestic Supply) inflation index
and a rent based on percentages of each tenant’s monthly gross sales ranging from 4%
to 8%.

Please find below a summary of the main activities involving real estate developments as
of 2007.

MorumbiShopping

On October 31, 2007, the Company acquired 0.58% of the real estate development
after its acquisition of Solução Imobiliária Ltda. for R$ 6,429. On November 21,
2007, the Company acquired 10.1% of the development held by PSS – Seguridade
Social for R$ 120,000. After these transactions, the Company has holds a 65.8%
interest in the development as a whole.

ParkShoppingBarigui

On December 18, 2007, the Company and Deneli Administração e Participações


Ltda. executed a deed involving the exchange of a 6% undivided interest of the 90%
interest held by Multiplan in all ParkShoppingBarigui stores for 94% of three
adjoining real estate properties, which were recorded as fixed asset costs.
Accordingly, as of that date, the Company has held an 84% interest in
ParkShoppingBarigui.

In connection with this exchange transaction, the Company will transfer to Deneli,
over a period of five years beginning September 28, 2007, 6% of monthly net
revenues recorded by ParkShoppingBarigui at a minimum R$ 100 for the first
twenty-four months and R$ 120 for the remaining period.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

1. Operations (Continued)

RibeirãoShopping

On December 20, 2006, the Company acquired from PSS - Seguridade Social
14,475 shares issued by SC Fundo de Investimento Imobiliário, which represent all
of its shares, which holds a 20% ownership interest in the RibeirãoShopping project
for R$ 40,000. This investment was recorded at cost on the date of acquisition. In light
of the fund’s cessation to exist, formalized in the minutes of the Annual and Special
General Meeting of Members on March 25, 2008, the investment was transferred to
fixed assets as cost of acquisition from Ribeirão Shopping enterprise.

Pátio Savassi Shopping Mall

On May 9, 2007, the Company entered into a call option agreement to buy, for
US$ 65 million, the total capital of Brazilian Realty (based in Delaware - USA),
which, together with Commander José Afonso Assunção, held 100% capital of
Indústrias Luna S.A., a company holding a 65.2% interest in Shopping Pátio
Savassi. The amount of US$ 500 thousand was paid on that date, and the amount of
US$ 15 million was deposited in guarantee on May 23, when the call option was
exercised. On July 16, 2007, the acquisition price was fully settled and the Company
took control over Shopping Pátio Savassi.

Also, as defined in the contract, the Company exercised the option to acquire a
property adjoining Shopping Mall Pátio Savassi. In connection with this option, the
Company paid an additional amount of US$ 720 thousand.

On September 13, 2007 the Company completed the acquisition of 18.61% interest
in Shopping Mall Pátio Savassi from JPL Empreendimentos, whose agreement of
intent had been signed on June 6, 2007 for total price of R$ 37,826, with a remaining
balance of R$ 188 payable until 2009.

Santa Úrsula Mall

Through capitalization of the loan agreement between the Company and Manati
Empreendimentos e Participações S.A, formalized through the Minutes of the
Extraordinary Shareholders’ Meeting held on April 25, 2008, the Company started to
hold 50% ownership interest in Manati and, consequently, 37.5% interest in Santa
Úrsula Mall. See note 10 (c) for further details.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

1. Operations (Continued)

The activities carried out by the major investees are summarized below:

a) Multiplan Administradora de Shopping Centers Ltda. - is committed to management,


administration, promotion, installation and development of shopping malls owned by
third parties, as well as the management of parking lots in the Company’s own
shopping malls.

b) SCP - Royal Green Península - On February 15, 2006, an unconsolidated


partnership (Portuguese acronym SCP) was set up by the Company and its parent
company Multiplan Planejamento e Participações S.A., for the purpose of developing
a residential real estate project named “Royal Green Península”. The Company
holds 98% of the total capital of SCP.

c) MPH Empreendimentos Imobiliários Ltda. - The Company holds 41.96% interest in


MPH Empreendimentos Imobiliários, which was incorporated on September 1st
2006 and is specifically engaged in developing, holding interest in and subsequently
exploiting a Shopping Mall located at Vila Olímpia district in the city of São Paulo,
where it holds 71.50% interest.

d) Manati Empreendimentos e Participações S.A. - Carries out commercial exploration


and management, whether directly or indirectly, of a car park and Santa Úrsula Mall,
located in the city of Ribeirão Preto, in the São Paulo State.

e) Haleiwa Empreendimentos Imobiliários S.A. - Committed to the construction and


development of real estate projects, including shopping malls, with car parking on
land located at Av. Gustavo Paiva s/n, Cruz das Almas, Maceió. Haleiwa is jointly
controlled by Multiplan Empreendimentos Imobiliários S.A and Aliansce Shopping
Centers S.A, as defined in the Shareholders’ Agreement dated May 20, 2008.

In September 2006, the Company entered into an Agreement for the Assignment of
Services Agreements with its subsidiaries Renasce – Rede Nacional de Shopping
Centers Ltda., Multiplan Administradora de Shopping Centers Ltda., CAA - Corretagem e
Consultoria Publicitária S/C Ltda., and CAA - Corretagem Imobiliária Ltda. Under this
agreement, beginning October 1, 2006, the aforementioned subsidiaries assigned and
transferred to the Company all the rights and obligations resulting from the services
agreements executed between those subsidiaries and the shopping centers.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

1. Operations (Continued)

Therefore, the Company also started to perform the following activities: (i) provision of
specialized activities related to brokerage, advertising and publicity advisory services,
commercial space for lease and/or sale (“merchandising”); (ii) provision of specialized
services related to real estate brokerage and business advisory services; e (iii) shopping
mall management.

Company Listing

On July 25, 2007 the Company obtained the CVM approval to be a listed company
and trade capital shares on the stock exchange.

On July 26, 2007 the Company concluded its Initial and Secondary Public Offering,
issuing 27,491,409 new shares, fully subscribed by new shareholders; and
shareholders 1700480 Ontario, José Isaac Peres and Maria Helena Kaminitz Peres
sold 9,448,026 shares they owned, also fully acquired by new shareholders.

Sale of primary offering of shares, without considering the exercise of the


supplemental stock option, amounted to R$ 687,285, which resulted in a cash inflow
of R$ 666,000 to the Company, net of estimated commission and expense amounts.
On August 30, 2007, 41,700 shares in the supplementary lot were negotiated for
R$ 1,043, resulting in the inflow of R$ 1,011 to the Company’s cash.

As stated in the Public Offer Prospectus, these funds will be allocated to acquisitions
of new shopping malls; continued development of projects Vila Olímpia, currently
under construction; expansion of shopping malls already within the Company
portfolio; acquisition of new land for development of new shopping malls as well as
new residential and commercial real estate development projects in areas adjacent
to those of the shopping malls within the Company portfolio; and strengthening of its
working capital. To date, the Company has allocated to settle up its debt to
GSEMREF Emerging Market Real Estate Fund L.P., described in Note 16, to said
acquisition of interest in Pátio Savassi Shopping Mall, for the acquisition of PSS –
Seguridade Social in Morumbi Shopping described in Note 15(b), for the acquisition
of a plot of land in Barra da Tijuca described in Note 15 (a), for the acquisition of
shares in Manati Empreendimentos e Participações S.A described in Note 10(d),
and the difference has been allocated in development and expansion of various
shopping malls.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08.

The financial statements were approved by the Company’s management on February 27,
2009.

The financial statements were prepared in accordance with the accounting practices
adopted in Brazil and the Brazilian Securities and Exchange Commission (CVM) rules, in
light of the accounting guidelines contained in corporation law (Law No. 6404/76), with new
provisions included, amended and repealed by Law No. 11638 of December 28, 2007 and
by Provisional Executive Act (MP) No. 449 of December 3, 2008.

The prior-year financial statements were reclassified to improve their presentation and
comparability, as follows: goodwill amortization expense reclassified to depreciation and
amortization expense, in the amount of R$ 455, in the consolidated statement of income;
management fees expense reclassified to administrative expenses – headquarters, in the
amount of R$ 1,689, in the statement of income (parent company and consolidated);
deferred income and social contribution taxes noncurrent reclassified to deferred income
and social contribution taxes current, in the amount of R$ 1,595.

Pursuant to CVM Rule No. 565 of December 17, 2008, which approved CPC
Pronouncement No. 13 – First Time Adoption of Law Nº 11638/07 and of Provisional
Executive Act No. 449/08, the Company set December 31, 2007 as the transition date for
adoption of the new accounting practices. The transition date is defined as the starting
point for the adoption of changes in the accounting practices adopted in Brazil and is the
base date on which the Company prepared its first balance sheets in light of the new
accounting provisions in 2008.

CPC No. 13 released companies from the obligation to apply the provisions set forth in
NPC 12 and CVM Rule No. 506/06 – Accounting Practices, Changes in Accounting
Estimates and Correction of Errors upon the first-time adoption of Law No. 11638/07 and
Provisional Executive Act No. 449. This rule establishes that, in addition to separately
identifying the effects of the new accounting practice adoption in the retained
earnings/accumulated losses account, companies are required to state their opening
balance sheet for the account or group of accounts relating to the oldest period for
comparison purposes, as well as other comparative amounts presented, as if the new
accounting practice had always been in use.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

The Company followed the guideline provided for in referred to CPC and reflected the
adjustments arising from the change in accounting practices against Retained Earnings as
of January 1, 2008. The financial statements for the year ended December 31, 2007,
presented in conjunction with year 2008 financial statements, were prepared in accordance
with the Brazilian accounting practices effective through December 31, 2007. As allowed
by CPC Pronouncement No. 13 – First Time Adoption of Law No. 11638/07 and MP No.
449/08, the said statements are not restated for the adjustments for purposes of
comparison between referred to years.

Changes in accounting practices taken into consideration when preparing or presenting


the financial statements for the year ended December 31, 2008 and the opening balance
sheet for January 1, 2008 were based on accounting pronouncements issued by the
Brazilian FASB (CPC) and approved by the Brazilian Securities and Exchange
Commission (CVM) and the National Association of State Boards of Accountancy, as
follows:

Conceptual Structure for Preparing and Presenting Financial Statements, approved by


CVM Rule No. 539 of March 14, 2008;

CPC 01 Impairment of Assets, approved by CVM Rule No. 527 of November 1, 2007;

CPC 03 Statement of Cash Flows, approved by CVM Rule No. 547 of August 13,
2008;

CPC 04 Intangible Assets, approved by CVM Rule No. 553 of November 12, 2008;

CPC 05 Related Party Disclosures, approved by CVM Rule No. 560 of December 11,
2008;

CPC 06 Lease Transactions, approved by CVM Rule No. 554 of November 12, 2008;

CPC 09 Statement of Added Value, approved by CVM Rule No. 557 of November 12,
2008;

CPC 10 Share-based Payment, approved by CVM Rule No. 562 of December 17,
2008;
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

CPC 12 Present Value Adjustments, approved by CVM Rule No. 564 of December 17,
2008;

CPC 13 First-time Adoption of Law No. 11638/07 and Provisional Executive Act No.
449/08, approved by CVM Rule No. 565 of December 17, 2008;

CPC 14 Financial Instruments: Recognition, Measurement and Disclosure, approved


by CVM Rule No. 566 of December 17, 2008.

OCPC-01 Property Development Entities, approved by CVM Rule No. 561 of


December 17, 2008.

The initial balance sheet as of December 31, 2007 (the transition date) was prepared
considering the exceptions required and some of the elective exemptions permitted by
CPC Pronouncement No. 13, as follows:

a) Presentation of comparative financial statements - elective exemption:

The financial statements for year 2007 are prepared based on the accounting practices
effective in 2007. As mentioned above, the option provided by CPC No. 13 for not
adjusting 2007 financial statements to the accounting standards effective for 2008 was
exercised by the Company.

b) Maintenance of balances under Deferred Charges until realization - elective exemption:

The Company partially reclassified the balances recognized in the Deferred charges
group to the Property, Plant and Equipment group, in the amount of R$ 20,539 (R$
11,870 in 2007), as they refer to expenses directly related to building, renovating and/or
expanding shopping malls, and because they meet the criteria for recognition as fixed
assets. Additionally, the Company opted for keeping the remaining balance recognized as
deferred charges through its complete amortization. As required by CPC 13, the Company
checked these balances for impairment under the terms of CPC 01 – Impairment of Assets
and did not identify any indications of impairment loss
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

c) Considerations on discount to present value - elective exemption:

The Company calculated the discount to present value based on the contractual
data of each transaction that generated monetary assets or liabilities, and also
applied the discount rates based on market assumptions existing at the transition
date. The effects on current asset and liability transactions were immaterial.

d) Recognition of share-based payment - elective exemption:

The balances of share-based payments referring to the Company’s management and


employees’ compensation and outstanding at December 31, 2008 were measured and
recognized by the Company in accordance with CPC 10, and related effects were
recorded retroactively at the beginning of the year in which such payments were granted
through the transition date.

e) Presentation of statement of value added without disclosing the prior-year amounts -


elective exemption:

The Company elected to present the statement of value added solely for the year ended
December 31, 2008.

f) Tax neutrality upon first time adoption of Law No. 11638/07 and MP No. 449/08:

The Company opted for the Transition Tax Regime (RTT) introduced by Provisional
Executive Act No. 449/08, whereby the calculations of Corporate Income Tax (IRPJ), of
Social Contribution Tax on Net Profit (CSLL), of Contribution Tax to Social Integration
Program (PIS) and of Contribution Tax to Social Security Financing (COFINS), for the
biennium 2008-2009, continue to be determined on the accounting methods and criteria
set by Law No. 6404, of December 15, 1976, effective on December 31, 2007. As a result,
deferred income taxes on the adjustments deriving from adoption of the new accounting
practices set forth by Law No. 11638/08 and MP No. 449/08 were recorded in the
Company’s financial statements where applicable, in accordance with CVM Rule No. 371.
The Company will disclose such option in its Corporate Income Tax Return (DIPJ) for
2009.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

g) Amortization of goodwill based on future profitability– elective exemption:

Goodwill based on future profitability recorded by the Company was amortized under the
straight line method through December 31, 2008.

h) Application of the first-time periodic assessment of the useful life of fixed assets –
elective exemption:

The Company already reassesses annually the estimated useful lives of its property, plant
and equipment, used in determining relevant depreciation rates.

In accordance with first-time adoption disclosure requirements of the new accounting


practices, in the following table the Company presents for current and prior year, for
comparative purposes, a brief description and the amounts corresponding to the impacts
on shareholder’s equity and P&L (Company and consolidated) referring to the changes
introduced by Law No. 11638/07 and MP No. 449/08, which are stated solely for P&L for
year 2008 given the option made by Company regarding the transition date:

a) Shareholder’s Equity

Brief Year ended December, 31


description Company Consolidated
of the
adjustments 2007 2008 2007 2008

Shareholders’ equity before the changes introduced by


Law No. 11638/07 and MP No. 449/08 1,874,143 1,957,144 1,874,086 1,957,030
Fair value measurement for share-based payments (i) (24,579) (25,851) (24,579) (25,851)
Net effects from full adoption of Law No. 11638/07 and
MP No. 449/08 (24,579) (25,851) (24,579) (25,851)
Shareholders’ equity after full adoption of Law
No. 11638/07 and MP No. 449/08 1,849,564 1,931,293 1,849,507 1,931,179

(i) Recognition of stock-option-based compensation expense, as required by CVM Rule No. 562 of December 17,
2008, which approved CPC Pronouncement No. 10 (See Note 18).
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

b) Statements of operations

Brief Year ended December, 31


description Company Consolidated
of the
adjustments 2008 2008

Net income for the year before the changes introduced by Law
No. 11638/07 and MP No. 449/08 79,162 78,669
Fair value measurement for share-based payments (i) (1,272) (1,272)
Net effects from full adoption of Law No. 11638/07 and MP
No. 449/08 (1,272) (1,272)
Net income for the year after full adoption of Law No. 11638/07
and MP No. 449/08 77,890 77,397

(i) Recognition of stock-option-based compensation expense, as required by CVM Rule No. 562 of December 17,
2008, which approved CPC Pronouncement No. 10 (See Note 18).

Additionally, on account of MP No. 449/08 requirements, the Company reclassified the


following balances in the financial statements for the years ended December 31, 2008 and
2007: (i) nonoperating income (expenses) was reclassified to the other operating income
(expenses) line; and (ii) deferred income (expenses) was reclassified to the other deferred
income (expenses) line.

2008 2007
Company Consolidated Company Consolidated

Non-operating income 65 108 1,030 1,057


Deferred Income 87,913 126,298 79,797 96,381
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

Financial Statement Consolidated

Financial Statement Consolidated include the transactions of the Company and the
following subsidiaries, whose ownership interest percentage at the balance sheet date or
merger date is summarized below:
% Ownership
2008 2007
Direct Indirect Direct Indirect
Brazilian Realty 100.00 - 100,00 -
JPL Empreendimentos Ltda. 100.00 - 100,00 -
Indústrias Luna S.A. 0.01 99.99 0,01 99,99
Solução Imobiliária Ltda. 100.00 - 100,00 -
RENASCE - Rede Nacional de Shopping Centers Ltda. (b) 99.00 - 99,00 -
County Estates Limited (a) - 99.00 - 99,00
Embassy Row Inc. (a) - 99.00 - 99,00
EMBRAPLAN - Empresa Brasileira de Planejamento Ltda.(c) 100.00 - 100,00 -
CAA Corretagem e Consultoria Publicitária S/C Ltda. (b) 99.00 - 99,00 -
Multiplan Administradora de Shopping Centers Ltda. 99.00 - 99,00 -
CAA Corretagem Imobiliária Ltda. (b) 99.61 - 99,61 -
MPH Empreendimentos Imobiliários Ltda. 41.96 - 41,96 -
MMMM Manati Empreendimentos e Participações S.A 50.00 - - -
Haleiwa Participações S.A 50.00 - - -

(a) Foreign entities.


(b) During 2007, the operation of aforementioned subsidiaries was transferred to the Company.
(c) Dormant company.

Fiscal years of subsidiaries included in the consolidation coincide with those of the parent
Company, and accounting policies were uniformly applied in the consolidated companies
and are consistent with those used in prior years.

Significant consolidation procedures are:

- Elimination of balances of assets and liabilities between the consolidated companies;


- Elimination of interest in the capital, reserves and accumulated profits and losses of
consolidated companies;
- Elimination of income and expense balances resulting from intercompany business
transactions.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

Financial Statement Consolidated (Continued)

For subsidiaries Manati Empreendimentos e Participações S.A. e Haleiwa Participações


S.A., whose shareholders’ agreements provide for shared control, the consolidated
financial statements include asset, liability and statement of income accounts in
proportion to the total ownership interest held in the referred to jointly-controlled
subsidiary based on the financial statements of the companies shown below:

Manati Empreendimentos Participações S.A.

Assets Liabilities
Current 908 Current 311

Noncurrent: 1,846

Noncurrent: Shareholders’ equity


Property and equipment 46,651 Capital 51,336
Intangibles 2,281 Accumulated losses (3,653)
48,932 47,683

Total 49,840 Total 49,840

Statements of operations

Gross revenues from sales


Leases 2,550
Others revenues 110
2,660

Taxes and contributions on sales (98)


Net revenues 2,562

General and administrative expenses (shopping malls) (4,124)


Depreciation and amortization (1,098)
Other operating expenses (268)
Financial income (expenses) 16
(5,474)

Loss before income and social contribution taxes (2,912)

Income and social contribution taxes (306)

Loss for the period (3,218)


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2. Basis of Preparation and Presentation of the Financial Statements and First Time
Adoption of Law No. 11638/07 and Provisional Executive Act No. 449/08. --
Continued

Haleiwa Empreendimentos Imobiliários S.A.

Assets Liabilities
Current 6 Current 8

Noncurrent:
Property and equipment 26,184
Deferred 712 Shareholders’ equity
26,896 Capital 26,894

Total 26,902 Total 26,902

Reconciliation between net assets and net income for the year ended December 31,
2008 and 2007 of company with the consolidated is as follows:

2008 2007

Shareholders’ Net income Shareholders’ Net income


equity for the year equity for the year

Company 1,931,293 77,890 1,874,143 20,425


Quotaholders’ déficit of subsidiaries (114) (56) (58) (58)
Equity in the earnings of County for the year (a) - (437) - 814
Others - - 1 (23)
Consolidated 1,931,179 77,397 1,874,086 21,158

(a) Adjustment referring to the Company‟s equity in the earnings of County not reflected on equity in the earnings of Renasce.

3. Significant Accounting Policies and Consolidation Criteria

a) Determination of profit and loss from real estate development and sale and others

For installment sale of completed units, income is recognized upon the sale of such
units irrespective of the period for receipt of the contractual amount.

Fixed interest rates set in advance are allocated to profit and loss under the accrual
method, irrespective of its receipt.

3. Significant Accounting Policies and Consolidation Criteria (Continued)


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

a) Determination of profit and loss from real estate development and sale and others
(Continued)
For sale of units not yet completed, income is recognized based on procedures and
standards set out by the Federal Accounting Board CFC Resolution No. 963 and
OCPC 01 Guidance – Property Development Entities, approved by CVM Rule
No. 561, shown below:

- The costs incurred are recorded as inventories (construction in progress) and fully
allocated to the result of operations as the units are sold. After the sale occurs, the
costs to be incurred to conclude the unit’s construction will be allocated to the result
of operations as they are incurred.
- The percentage of costs incurred of sold units, including land, is determined in
relation to the total budgeted cost and estimated through to the completion of
construction work. This rate is applied to the price of units sold and adjusted for
selling expenses and other contractual conditions. The resulting figure is recorded
as revenues and matched with accounts receivable or any advances received.

From then through to the completion of construction work, the unit’s sale price that
had not been recorded as revenues will be recognized in the result of operations as
revenues as the costs required to conclude the unit’s construction are incurred, in
relation to the total budgeted cost.

Any changes to the project execution and conditions and in estimated profitability,
including changes resulting from contractual fines and settlements that may lead to
a review in costs and revenues, are recognized in the period in which such reviews
are conducted.

- Revenues determined from sales, including monetary restatement, net of


installments already received, are recorded under accounts receivable or advances
from clients, as applicable.

The only impacts of Guidance OCPC 01 – Property Development Entities,


approved by CVM Decision No. 561 on the Company’s financial statements for the
year ended December 31, 2008 were the accounts receivable adjustment to
present value, and classification of expenses incurred in connection with the sales
stand and model apartment construction under property, plant and equipment,
which will be depreciated according to the assets’ estimated useful lives.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

a) Determination of profit and loss from real estate development and sale and others
(Continued)

Other revenues and expenses were allocated to the statement of operations on an


accrual basis.

b) Financial statements functional and reporting currency

The Company’s and its Brazilian subsidiaries’ functional currency is the Brazilian real
(R$), which is also the financial statement preparation and reporting currency for
Company and consolidated.

c) Financial instruments

Financial instruments are recognized when the Company becomes party to the
contractual provisions of said instruments. They are initially recognized at fair value
plus transaction costs directly attributable to their acquisition or issue, except for
financial assets and liabilities classified at fair value through profit or loss, when such
costs are directly charged to P&L for the year. Subsequent measurement of financial
assets and liabilities is determined by their classification at each balance sheet.

c.1) Financial assets: are classified into the following specified categories, according
to the purpose for which they have been acquired or issued:

i) Financial assets measured at fair value through profit or loss (FVTPL) at each
balance sheet date: include financial instruments held for trading and assets
initially recognized at FVTPL. They are classified as held for trading if originated
for the purpose of sale or repurchase in the short term. Interest, monetary
variation and foreign exchange gains/losses and fluctuations arising from
measurement at fair value are recognized in profit or loss, as incurred, under
Financial income or Financial expenses.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

c) Financial instruments (Continued)


ii) Held-to-maturity investments: non-derivative financial assets with fixed or
determinable payments and fixed maturities for which the Company’s
management has the positive intention and ability to hold to maturity. After their
initial recognition, they are measured at amortized cost using the effective interest
rate method. Under this method, the discount rate applied on future estimated
receivables over the financial instrument expected term results in their net book
value. Interest, monetary variation and foreign exchange gains/losses, less
impairment, if applicable, are recognized in profit or loss, as incurred, under
Financial income or Financial expenses.

iii) Loans (granted) and receivables: non-derivative financial assets with fixed or
determinable payments which, however, are not traded in an active market. After
their initial recognition, they are measured at amortized cost using the effective
interest rate method. Interest, monetary variation and foreign exchange
gains/losses, less impairment, if applicable, are recognized in profit or loss, as
incurred, under Financial income or Financial expenses.

Main financial assets recognized by the Company are: cash and cash equivalents,
short term investments, trade accounts receivable, and sundry loans and advances.

c.2) Financial liabilities: are classified into the following specified categories, according
to the nature of underlying financial instruments:
i) Financial liabilities measured at fair value through profit and loss at each
balance sheet date: financial liabilities usually traded before maturity, and liabilities
designated at fair value through P&L upon first time recognition. Interest, monetary
restatement and foreign exchange gains/loss from fair value measurement, when
applicable, are recognized in profit or loss, as incurred.

ii) Financial liabilities not measured at fair value: non derivative financial liabilities
not usually traded before maturity. They are initially measured at amortized cost
using the effective interest rate method. Interest, monetary restatement and
foreign exchange gains/loss, when applicable, are recognized in profit or loss, as
incurred.

Main financial liabilities recognized by the Company are: loans and financing and
property acquisition obligations.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

d) Cash and cash equivalents

Include cash, positive current account balances, short term investments redeemable
at any time and bearing insignificant risk of change in their market value. Short term
investments included in cash equivalents are classified as “financial assets at fair
value through P&L”. These investments by classification type are broken down in
Note 4.

e) Accounts receivable

There are stated at realizable values. An allowance for doubtful accounts is set up in
an amount considered sufficient by management to cover any losses on collection of
receivables. The breakdown of accounts receivable is stated in Note 5.

f) Land and properties held for sale

Land and properties held for sale are valued at average acquisition or construction
cost, not exceeding market value.

g) Investments

Investments in subsidiaries are valued by the equity in earnings method, based on the
subsidiaries´ balance sheet as of the same date.

h) Property and equipment

Property and equipment are recorded at acquisition, formation or construction cost,


reduced by the related accumulated depreciation, calculated by the straight-line
method at rates that consider the economic-useful life of the assets. Expenses
incurred with repair and maintenance are recorded if the economic benefits embodied
in these assets are likely to be generated and the amounts can be reliably measured,
whereas other expenses are charged to P&L directly as incurred. The recovery of
property and equipment by means of future operations is periodically monitored.

Interest and other charges in connection with financing taken out for construction in
progress are capitalized until the respective assets start operations. Depreciation
follows the same criteria applied to and is calculated over the useful life of the fixed
asset item to which they were directed.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

i) Commercial Leasing

Lease agreements are recognized in property, plant and equipment at the value of the
asset under lease and also in liabilities, as loans and financing, at the lower of the
mandatory minimum installments there under or the asset fair value. The amounts
recorded in property, plant and equipment are depreciated over the shorter of the
estimated useful life of the assets or the lease term. The implicit interest on loans and
financing recognized in liabilities is charged to P&L over the life of the contract using
the effective interest rate method. Operating lease agreements are recognized as
expense on a systematic basis, being representative of the period in which the benefit
derived from the leased asset is obtained, even if such payments are not made on the
same basis. In 2007, the Company had no financial lease agreements.

j) Intangibles

Intangible assets purchased separately are initially measured at cost and subsequently
recognized net of accumulated amortization and impairment losses, as applicable.
Goodwill on investment acquisitions and investments fully incorporated though
December 31, 2008 based on future profitability were amortized by the straight-line
method for the term provided for recovery, over a maximum five-year term,
approximately. From January 1st, 2009 they will no longer be amortized and should be
subject to annual impairment test.

Internally generated intangibles are recognized in P&L for the year when they were
generated. Intangible assets with finite useful life are amortized over their estimated
useful life and subject to an impairment test if there is any indication of impairment.
Intangible assets with an indefinite useful life are not amortized, but are subject to
annual impairment test.

k) Deferred

Deferred charges comprise costs incurred in real estate development until December
31, 2008, amortized over 5 years periods counting from the beginning of operation of
each project.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

l) Provision for impairment


Management annually tests the net book value of the assets with a view to determining
whether there are any events or changes in economic, operating or technological
circumstances that may indicate impairment loss. To date, no evidence indicating that
the net book value exceeds the recoverable amount was identified. Accordingly, no
provision for impairment loss was required.

m) Others assets and Liabilities


Liabilities are recognized in the balance sheet when the Company has a legal or
constructive obligation arising from past events, the settlement of which is expected to
result in an outflow of economic benefits. Some liabilities involve uncertainties as to
term and amount, and are estimated as incurred and recorded as a provision.
Provisions are recorded reflecting the best estimates of the risk involved.

Assets are recognized in the balance sheet when it is likely that their future economic
benefits will be generated on the Company’s behalf and their cost or value can be
safely measured.

Assets and liabilities are classified as current whenever their realization or settlement
is likely to occur during the following twelve months. Otherwise, they are recorded as
noncurrent.

n) Taxation
Revenues from sales and services are subject to the following taxes and
contributions, at the following basic tax rates:
Rate
Tax Abbreviation Company Subsidiaries

Social Contribution Tax on Gross Revenue PIS 1.65 0.65


Social Security Financing Tax on Gross Revenue COFINS 7.6 3.0
Service Tax ISS 2 % to 5% 2 % to 5%

Those charges are presented as deductions from sales in the statement of income.
Credits resulting from non-cumulative taxation of PIS/COFINS are presented as
deductions from the group of accounts of operating income and expenses in the
statement of income. Debits resulting from financial income, as well as credits
resulting from financial expenses are presented as deduction from those specific lines
in the statement of income.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

n) Taxation (Continued)
Taxation on net profit includes income and social contribution taxes. Income tax is
computed on taxable profit at a 25% whereas social contribution is computed at a 9%
tax rate on taxable profit, recognized on an accrual basis. Therefore, additions to the
book profit of expenses, temporarily nondeductible, or exclusions from revenues,
temporarily nontaxable, for computation of current taxable profit generate deferred tax
credits or debits.

As provided for in tax legislation, all companies that are part of the Multiplan Group,
which had gross annual revenue for the prior year lower than R$ 48,000 opted for the
presumed-profit method.

Advances or amounts to be offset are presented under current or noncurrent assets,


according to their expected realization.

Deferred tax credits deriving from Corporate Income Tax (IRPJ) and Social
Contribution Tax on Net Profit (CSLL) losses are recognized only to the extent that a
positive taxable base for which temporary differences may be used is likely to occur.

o) Share-based payment
The Company granted administrators and employees eligible for the program stock
purchase options that are only exercisable after specific grace periods. These options
are calculated over their respective grace periods based on their values determined
by the Black-Scholes method and on the dates the compensation programs are
granted, and are recorded in operating income under “stock-option-based
remuneration expense”, according to such options vesting periods as established in
the programs and described in Note 21.c.

The initial adjustment relating to adoption of Law No. 11638/07 was made
against retained earnings.

p) Deferred Income
Agreements for assignment of rights (malls’ technical structure assignment or key
money) are accounted for as income to be allocated, and recognized on a straight-line
basis to P&L for the year based on the rental period of the respective stores to which
they refer.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

q) Provision for contingencies


Provision for contingencies are established based on reports issued by legal counsel,
in amounts considered sufficient to cover losses and risks considered probable.
Contingencies whose risks have been considered possible are disclosed in the notes
to the financial statements.

r) Accounting estimations
Used to measure and recognize certain assets and liabilities in the Company’s and its
subsidiaries’ financial statements. These estimates were determined based on past
and current events’ experience, assumptions in respect of future events, and other
objective and subjective factors. Significant items subject to such estimates include
selection of useful lives of property, plant and equipment and intangible assets;
allowance for doubtful accounts; provision for inventory losses; provision for losses on
investments; analysis of recoverability of property, plant and equipment and intangible
assets; deferred income and social contribution taxes; the rates and terms applied in
determining the discount to present value of certain assets and liabilities (year 2008
only); provision for contingencies; fair value measurement of share-based
compensation and financial instruments (year 2008 only); and estimates for disclosure
in the sensitivity analysis table of derivative financial instruments pursuant to CVM
Instruction No. 475/08. Settlement of transactions involving these estimates may result
in amounts different from those recorded in the financial statements due to the
uncertainties inherent in the estimate process. The Company reviews its estimates
and assumptions at least on a quarterly basis.

s) Discounted to present value assets and liabilities


Noncurrent monetary assets and liabilities are discounted to present value, and so are
current monetary assets and liabilities considered to have a significant effect on the
overall financial statements. The discount to present value is calculated using
contractual cash flows and the explicit interest rate, and in certain cases the implicit
interest rate, of respective assets and liabilities. Accordingly, the implicit interest rate
of income, expenses and costs associated with therewith is discounted in order to
recognize such assets and liabilities on an accrual basis.

Such interest rates are subsequently posted to the income statement as financial
expenses or financial income using the effective interest rate method in relation to
contractual cash flows. Implicit interest rates applied were determined based on
assumptions and are deemed accounting estimations.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

3. Significant Accounting Policies and Consolidation Criteria (Continued)

t) Statements of cash flows and statements of value added

The statements of cash flows are prepared and presented in accordance with CVM
Rule No. 547 of August 13, 2008, which approved Accounting Pronouncement
CPC 03 – Statement of Cash Flows, issued from Brazilian FASB (CPC). The
statements of value added are prepared and presented in accordance with CVM Rule
No. 557 of November 12, 2008, which approved Accounting Pronouncement CPC 09
– Statement of Value Added, from CPC.

4. Cash and Cash Equivalents

2008 2007
Company Consolidated Company Consolidated

Cash and banks 22,714 26,831 5,649 15,233


Short-term investment – Bank Deposit Certificates 123,900 140,754 401,096 401,211
146,614 167,585 406,745 416,444

Investments earn average remuneration, net of taxes, of approximately 100% of CDI and may be redeemed
at any time without affecting recognized revenue.

5. Accounts Receivable
2008 2007
Company Consolidated Company Consolidated

Leases 54,164 56,719 44,246 44,979


Key money 39,070 62,014 32,914 45,586
Acknowledgment of debt (a) 2,637 2,650 3,852 3,868
Parking 2,342 - 1,076 1,081
Administration fees (b) 2,516 2,516 3,727 3,727
Sales 2,092 2,092 969 969
Advertising 473 473 1,009 1,009
Sale of properties 1,037 1,037 6,252 6,252
Others 2,040 3,211 152 661
106,371 130,712 94,197 108,132
Allowance for doubtful accounts (12,861) (13,421) (11,789) (11,806)
93,510 117,291 82,408 96,326
Noncurrent (11,388) (17,762) (9,259) (16,106)
Current 82,122 99,529 73,149 80,220

(a) Refers to balances regarding acknowledgment of debt, rent and others, which were overdue, have been
renegotiated and are to be paid in installments.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

5. Accounts Receivable (Continued)

(b) Refers to administration fees receivable by the Company and the subsidiary Multiplan Administradora, charged from
investors or shopkeepers of the shopping centers administered by them, which correspond to a percentage applied
on store rent (7% on the net income of the shopping, or 6% of the minimum rent, plus 15% on the portion exceeding
minimum rent or fixed amount), on common shopkeeper charges (5% of expenses incurred), on financial
management (variable percentage on expenses incurred in shopping center expansions) and on promotional fund
(5% of promotional fund collection).

As supplemental information, since it is not recorded in accounting records in view of the


accounting practices mentioned in Note 3a, the accounts receivable balance at
December 31, 2008 and 2007 referring to sale of units under construction of the real
estate development “Centro Profissional MorumbiShopping” and “Cristal Tower”, less
the installments already received, is broken down as follows, by year of maturity:

2008 2007

2008 - 5,863
2009 10,042 743
2010 7,394 372
2011 onwards 18,289 40
35,725 7,018

These figures receivable will be restated by the National Civil Construction Index - INCC
until the end of construction, and by the IGP-DI thereafter.

These credits mainly refer to construction in progress, to which title deeds are granted
only after settlement and/or negotiation of receivables from clients.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

6. Loans and Advances


2008 2007
Company Consolidated Company Consolidated
Current
Shopkeepers 267 267 86 86
Shopping centers Condominiums (a) 7,549 7,561 7,223 7,223
Barra Shopping Sul Association (b) 2,036 2,036 - -
Parkshopping Condominiums (c) 871 871 - -
Ribeirão Shopping Condominiums (d) 711 711 - -
Barra Shopping Condominiums (e) 700 700 - -
New York City Center Condominiums (f) 510 510 171 171
Parkshopping Barigui Condominiums (g) 382 382 339 532
Anália Franco Condominiums 125 125 - -
BH Shopping Condominiums 13 13 - -
Diamond Mall Condominiums 11 11 - -
Barra Shopping Sul Condominiums (h) 661 661 - -
Advance for suppliers 2,814 10,876 - -
Others 303 1,321 1,617 2,298
16,953 26,045 9,436 10,310
Provision for losses (a) (7,549) (7,549) (7,223) (7,223)
9,404 18,496 2,213 3,087
Noncurrent
Shopkeepers 1,220 1,220 86 86
Parkshopping Condominiums (c) 2,861 2,861 - -
Barra Shopping Sul Association (b) 2,511 2,511 - -
Barra Shopping Condominiums (e) 1,202 1,202 - -
Parkshopping Barigui Condominiums (g) 816 816 1,100 1,100
Manati Empreendimentos e Participações S.A.
(Note 19) 806 - - -
MPH Empreendimentos Imobiliários Ltda. (Note 19) 22,711 - - -
Barra Shopping Sul Condominiums (h) 381 381 - -
Haleiwa Participações S.A. (Note 19) 166 - - -
Others 1,337 1,337 382 383
34,011 10,328 1,568 1,569

(a) Prepayments to condominiums of shopping malls owned by the Group. A provision for losses was
recognized in the full amount, considering its unlikely realization.

(b) Refers to advances granted Barra Shopping Sul shopkeepers Association on total amount of R$ 4,800
to meet working capital needs The debit balance is monthly updated by 135% change in the CDI and
the amount of R$ 2,800 will be refunded in 48 monthly installments beginning January 2010 and the
amount of R$ 2.000 in 12 monthly installments beginning January 2009.

(c) Refers to advances granted to Parkshopping condominium to meet its working capital needs. The debit
balance is monthly updated by 110% change in the CDI and and will be refunded in 48 monthly
installments beginning January 2009.

(d) Refers to advances granted to Ribeirão Shopping condominium to meet working capital needs. The
debit balance is monthly updated by 110% change in the CDI and will be refunded in 12 monthly
installments beginning January 2009.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

6. Loans and Advances (Continued)


(e) Refers to advances granted to Barra Shopping condominium to meet working capital needs. The debit
balance is monthly updated by 135% change in the CDI and will be refunded in 36 monthly installments
beginning January 2009.

(f) Refers to advances granted to New york City Center condominium to meet working capital needs. The
debit balance is monthly updated by 105% change in the CDI and will be refunded in 24 monthly
installments beginning January 2008.

(g) Refers to advances granted to Parkshopping Barigui condominium to meet working capital needs. The
debit balance is monthly updated by IGP-DI +12% per year and will be refunded in 60 monthly
installments beginning March 2007.

(h) Refers to advances granted to Barra Shopping Sul condominium to meet working capital needs. The
debit balance is monthly updated by 135% change in the CDI and will be refunded in 24 monthly
installments beginning January 2009.

7. Recoverable Taxes and Contributions

2008 2007
Company Consolidated Company Consolidated

Recoverable Income Tax - IR 8,126 10,127 3,268 4,407


Recoverable Social Contribution Tax – CSLL 949 1,717 598 1,330
IOF overpaid 1,274 1,274 1,274 1,274
IRRF on short-term investments 6,028 6,154 2,755 2,814
IRRF on services rendered 378 380 366 366
Recoverable PIS 20 358 176 510
Recoverable COFINS - 94 205 308
PIS, COFINS e CSLL on services rendered - - 296 323
Other 71 94 29 52
16,846 20,198 8,967 11,384

8. Land and Properties Held for Sale


2008 2008
Company and Company and
consolidated consolidated

Land (a) 127,156 73,255


Built properties 1,533 3,555
Properties under construction 768 -
129,457 76,810

(a) See Note 15.


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

9. Income Tax and Social Contribution

Deferred Income and Social Contribution Taxes


2008 2007
Company and Company and
consolidated consolidated

Provision for contingencies 16,978 14,656


Allowance for doubtful accounts (a) 12,282 10,420
Provision for losses on advances on charges (a) 7,549 7,223
Result from real estate projects (b) 89 (5,730)
Annual provision bond 7,969 -
Goodwill at merged company (c) 430,060 511,807
Accumulated fiscal losses and negative basis for social contribution 42,626 -

Deferred tax credit base 517,553 538,375


Deferred income tax (25%) 129,388 134,594
Deferred social contribution tax (9%) 46,580 48,454
175,968 183,048
Current 38,704 18,435
Noncurrent 137,264 164,613

Deferred income and social contribution taxes will be realized as follows:

2008 2007
Company and Company and
consolidated consolidated

2009 - 29,938
2010 58,943 41,165
2011 69,982 43,036
2012 onwards 8,339 50,474
137,264 164,613

a) The balance in the provision for credits for bad debts used for calculating the consolidated fiscal credit had net value in
the amount of R$ 581, registered as a write-off to the results of future periods.

b) According to the tax criterion, the result of the sale of real estate units is determined based on the financial realization
of revenues (cash basis) and costs are determined by applying a percentage on revenues recorded until then, and
such percentage corresponds to that of total estimated cost in relation to total estimated revenues.

c) The goodwill recorded in Bertolino’s balance sheet, company merged in 2007 deriving from Multiplan capital
participation acquisition in the amount of R$ 550,330 and based on the investment’s expected future profitability, will
be amortized by Multiplan premised on said expectations over a term of 4 years and 8 months. In consonance with
CVM Instruction No. 349, Bertolino set up a provision for net equity make-whole before its merger in the amount of
R$ 363,218, corresponding to the difference between the goodwill amount and the tax benefit deriving from the related
amortization. This caused Multiplan to absorb only the assets relating to the goodwill amortization tax-deductible
benefit, in the amount of R$ 186,548. The referred provision will be reversed in proportion of the goodwill amortization
by Multiplan, thus not affecting the result of its operations.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

9. Income Tax and Social Contribution (Continued)

Reconciliation of income and social contribution tax expense

Reconciliation of the income and social contribution tax expense calculated at the
applicable combined statutory rates and the corresponding amounts posted to the
statement of income is as follows:

Consolidated
2008 2007
Calculation under taxable income methods
Income before income and social contribution taxes 98,044 34,366

Additions
Provisions 3,046 3,484
Amortization of goodwill 13,062 5,568
Nondeductible expenses 17,228 6,724
Effect of subsidiaries’ IRPJ base eliminated upon consolidation 5,591 1,426
Effect of subsidiaries' IRPJ base relating to minority interest 766 165
Tax loss incurred by the parent company for which no provision
for deferred income tax was established - 9,704
Result from real estate projects 5,816 -
Others - 33
45,509 27,104
Exclusions
Equity in the earnings of County for the year (494) (795)
Result from equity equivalence (16,188) (12,434)
Realization of goodwill from merged company (81,744) (38,523)
Result from real estate projects - (5,730)
Others (88) -
(98,514) (57,482)
Tax profit 45,039 3,988
Compensation of tax loss and social contribution tax loss (10,785) -
Tax calculation base 34,254 3,988

Income tax (8,563) (997)


Social contribution (3,083) (359)
(11,646) (1,356)
Taxable profits computed as a percentage of gross sales (1,154) (457)
Effect of Income tax on the result (12,800) (1,813)
Effect of deferred income tax on the result (7,081) (11,230)
Income tax and social contribution in the statement of operations (19,881) (13,043)

10. Investments in Subsidiaries


Information on subsidiaries:
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

2008 2007

Net income Shareholders Net income


Number of % Capital Shareholders’ (loss) for the ’ (loss) for the
Subsidiaries units ownership equity year Equity year

CAA Corretagem e Consultoria


Publicitária S/C Ltda, 5,000 99.00 50 306 (33) 339 (125)
RENASCE – Rede Nacional de Shopping
Centers Ltda. 45,000 99.00 450 4,690 (485) 5,175 (325)
CAA Corretagem Imobiliária Ltda. 154,477 99.61 1,544 (115) (57) 58 (115)
MPH Empreendimentos Imobiliários Ltda. (a) 839 41.96 22,000 22,000 - 2,000 -
Multiplan Admin. Shopping Center 20,000 99.00 20 3,055 1,582 1,473 1,110
Brazilian Realty 11,081,059 99.99 39,525 48,071 6,257 41,811 1,554
JPL Empreendimentos 9,309,858 100.00 9,310 13,972 2,408 11,564 446
Indústrias Luna S.A. 7 0.01 37,000 48,071 6,257 41,799 -
Solução Imobiliária Ltda. 1,715,000 100.00 1,715 1,545 239 1,306 61
SCP – Royal Green Península - 98.00 51,582 23,046 6,731 9,013 8,070
SC Fundo de Investimento Imobiliário
Ltda. - - - - - 39,475 (525)
Manati Empreendimentos e Participações
S.A. (b) 21,442,694 50.00 25,668 47,683 (3,218) - -
Haleiwa Participações S.A. (b) 29,893,268 50.00 13,446 26,894 - - -

(a) This Company was incorporated in February 2007.


(b) The equity in earnings of affiliates covers the period beginning when these investments were acquired by the
Company during the second semester of 2008.

The Company maintains shareholders agreements related to all jointly-controlled Manati Empreendimentos e
Participações S.A. and Haleiwa Participações S.A. In relation to resolutions about administration of the
jointly-controlled subsidiaries. the Company holds a seat in the Board of Directors and/or Executive Board,
participating proactively in all strategic business decisions.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

10. Investments in Subsidiaries (Continued)


Investments of the Company:

At December Acquisition of Revenue of Equity in At December


Subsidiaries 31, 2007 investment Disposals shares subsidiaries 31, 2008

CAA Corretagem e Consultoria Publicitária S/C Ltda. 336 - - - (33) 303


RENASCE – Rede Nacional de Shopping Centers - - -
Ltda. 5,124 (481) 4,643
SCP – Royal Green Península 8,833 7,157 - - 6,595 22,585
Multiplan Admin. Shopping Center 1,461 - - - 1,564 3,025
MPH Empreendimentos Imobiliários Ltda. 839 8,393 - - - 9,232
Brazilian Realty LLC 41,811 - - - 6,255 48,066
JPL Empreendimentos Ltda. 11,564 - - - 2,408 13,972
Indústrias Luna S.A. 4 - - - 1 5
Solução Imobiliária Ltda. 1,306 - - - 239 1,545
Manati Empreendimentos e Participações S.A. (d) - 25,450 - - (1,608) 23,842
Haleiwa Participações S.A. (e) - 13,447 - - - 13,447
SC Fundos de Investimentos Imobiliários (a) 39,475 - (43,507) 4,032 - -
Others 88 - - - - 88
110,841 54,447 (43,507) 4,032 14,940 140,753

Investments of the Consolidated:

At December 31, Revenue of Equity in At December 31,


Subsidiaries 2007 Acquisition Disposals shares subsidiaries 2008

Cost
SCP – Royal Green Península 8,833 7,157 - - 6,595 22,585
SC Fundos de Investimentos Imobiliários (a) 39,475 - (43,507) 4,032 - -
Others 253 - (399) - 408 262
48,561 7,157 (43,906) 4,032 7,003 22,847
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

10. Investments in Subsidiaries (Continued)


Investments of the Company:

Subsidiaries At December 31, Acquisition Dividends Revenue of Exchange Equity in At December


2006 Received shares variation subsidiaries 31, 2007

CAA Corretagem e Consultoria Publicitária S/C Ltda. 460 - - - - (124) 336


RENASCE – Rede Nacional de Shopping Centers Ltda. 6,697 - (1,100) - - (473) 5,124
CAA Corretagem Imobiliária Ltda. 57 - - - - (57) -
SCP – Royal Green Península 924 - - - - 7,909 8,833
Multiplan Admin. Shopping Center 954 - (592) - - 1,099 1,461
SC Fundos de Investimentos Imobiliários 40,000 - - (525) - - 39,475
MPH Empreendimentos Imobiliários Ltda - 839 - - - - 839
Brazilian Realty LLC. (b) - 40,257 - - (2,016) 3,570 41,811
JPL Empreendimentos Ltda. (b) - 11,118 - - - 446 11,564
Industrias Luna S.A. (b) - 4 - - - - 4
Solução Imobiliária Ltda. (c) - 1,245 - - - 61 1,306
Others 85 - - - - 3 88
49,177 53,463 (1,692) (525) (2,016) 12,434 110,841

Investments of the consolidated:

At December 31, Revenue of Equity in At December


Subsidiaries 2006 Disposals shares subsidiaries 31, 2007

Cost
SCP – Royal Green Península 924 - - 7,909 8,833
SC Fundos de Investimentos Imobiliários 40,000 - (525) - 39,475
Others 198 (63) - 118 253
41,122 (63) (525) 8,027 48,561
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS – (Continued)


December 31, 2008
(In thousands of reais)

10. Investments in Subsidiaries (Continued)

(a) On December 20, 2006, by way of a Real Estate Investment Fund Shares’ Purchase and Sale
Agreement and other Covenants, the Company purchased from PSS – Seguridade Social 100%
of the 14,475 shares issued by SC Fundo de Investimento Imobiliário a real estate investment
fund that holds 20% interest in RibeirãoShopping venture, for R$ 40,000. This investment was
stated at cost on the acquisition date. Since referred to fund ceased to exist as formally approved
as per the minutes of the Shareholders’ Annual and Special General Meeting held on March 25,
2008, this investment was transferred to fixed assets as acquisition cost in connection with
RibeirãoShopping venture.

(b) As mentioned in Note 1, on July 16, 2007 the Company acquired the total capital of Brazilian
Realty. a company that holds 100% capital of Luna, which in turn, held 65.19% of Shopping Pátio
Savassi. The amount paid in this operation was R$ 124,134 and goodwill amounted to R$
46,438 based on future profitability (Note 12) and to R$ 37,434 for the fair value of assets (Note
11). On September 13, 2007, the Company acquired the total capital of JPL Empreendimentos, a
company that holds 100% capital of Cilpar, which, in turn holds an 18.61% interest in Shopping
Pátio Savassi. The amount paid in this operation was R$ 37,826, and goodwill amounted to
R$ 15,912 based on future profitability (Note 12) and to R$ 10,796 for the fair value of assets
(Note 11).

(c) As mentioned in Note 1, on October 31, 2007 the Company acquired for R$ 6,429 the total units
representing the capital of Solução Imobiliária Ltda., which holds a 0.58% interest in
MorumbiShopping and goodwill amounted to R$ 3,524 based on future profitability (Note 12) and
to R$ 1,660 for the fair value of assets (Note 11).

(d) On February 7, 2008 the Company entered into a loan agreement with Manati Empreendimentos
e Participações S.A. by means of which it lent to the latter the amount of R$ 23,806. On February
13, 2008, the parties entered into an amendment to this loan agreement based on which the loan
amount was increased by R$ 500. According to the minutes of the Extraordinary General
Meeting (EGM) held on April 25, 2008. Manati repaid to Multiplan the total amount borrowed,
through conversion of this total loan amount into capital contribution in Manati with the
subscription, by Multiplan, of 21,442,694 new registered common shares of Manati, which holds
a 75% interest in Shopping Santa Úrsula. The amount paid in this acquisition was R$ 28,668 and
goodwill on the transaction, amounting to R$ 3,218, which is supported by the assets market
value (Note 11).

(e) On May 20, 2008, the Company acquired ownership interest of 50% in Haleiwa
Empreendimentos Imobiliários S.A., for R$ 50 (in reais). The Extraordinary Shareholders’
Meeting of June 23, 2008, decided to increase capital of Haleiwa from R$ 1 to R$ 29,893,
through issue of 26,892,266 registered common shares, namely: (a) 13,446,134 shares
subscribed and paid by Multiplan in the amount of R$ 13,446, through capitalization of credits
held receivable from the company resulting from loan agreement and advances for future capital
increase made on May 28, 2008 and June 2, 2008, for the acquisition of the land described in the
business purpose of Haleiwa; (b) 1,500,000 shares subscribed but not yet paid by Multiplan.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

11. Property and Equipment


Annual
depreciation
rates 2008 2007
(%) Company Consolidated Company Consolidated
Cost
Land - 313,092 379,277 175,137 202,037
Improvements 2a4 1,022,013 1,087,553 633,683 680,881
Accumulated depreciation (138,415) (147,373) (115,256) (121,816)
Net 883,598 940,180 518,427 559,065
Installations 2 a 10 88,122 95,629 74,956 80,012
Accumulated depreciation (31,678) (34,295) (26,153) (27,996)
Net 56,444 61,334 48,803 52,016
Machinery, equipment, furniture and 10
fixtures 8,135 12,041 2,670 4,387
Accumulated depreciation (2,100) (3,763) (945) (1,672)
Net 6,035 8,278 1,725 2,715
Other 10 a 20 3,271 4,078 4,358 6,351
Accumulated depreciation (1,050) (1,304) (1,358) (2,784)
Net 2,221 2,774 3,000 3,567
Construction in progress - 88,136 129,769 55,081 59,605
Fair value of assets 1,349,526 1,521,612 802,173 879,005
Brazilian Realty LLC
Land - 10,106 - 10,106
Improvements - 27,324 - 27,324
Accumulated amortization - (1,129) - (355)
Net - 36,301 - 37,075
Indústrias Luna S.A.
Land - 1 - 1
Improvements - 3 - 3
Accumulated amortization - - - -
Net - 4 - 4
JPL Empreendimentos Ltda.
Land - 2,915 - 2,915
Improvements - 7,881 - 7,881
Accumulated amortization - (317) - (94)
Net - 10,479 - 10,702
Solução Imobiliária Ltda.
Land - 398 - 398
Improvements - 1,262 - 1,262
Accumulated amortization - (42) - (6)
Net - 1,618 - 1,654
Manati
Land - 837 - -
Improvements - 2,381 - -
Accumulated amortization - (28) - -
Net - 3,190 - -

Net (a) - 51,592 - 49,435


1,349,526 1,573,204 802,173 928,440
a) As described in Note 10 (b), (c) and (d), goodwill deriving from the difference between market and book values of the assets of acquired investments, has
been amortized as the related assets are realized by the subsidiaries, either by depreciation or write-off as a result of asset disposal. For consolidation
purposes, and in accordance with article 26 of CVM Instruction No. 247/96, goodwill resulting from the difference between market and book values of assets
has been classified in the account used by the parent company to record the related asset, under property, plant and equipment.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

11. Property and Equipment (Continued)

The Company reviewed the economic useful life of shopping malls and eventually of
depreciation rates as of August 31, 2008 based on the assessment report on remaining
useful life prepared by a specialized company for all shopping malls. Based on such
review, depreciation expenses decreased by R$ 2,832 for 2008, in relation to year 2007.

12. Intangible Assets

Intangible assets comprise car parking use rights goodwill recorded by the Company
upon the acquisition of new investments during 2007 and 2008, with part of these
investments being later merged.

2008 2007
Annual Company
amortization and
rates (%) Company Consolidated consolidated

Goodwill at merged company (a)


Bozano 307,067 307,067 307,067
Accumulated amortization 20 (188,457) (188,457) (127,046)

Realejo 86,611 86,611 86,611


Accumulated amortization 20 (34,645) (34,645) (17,322)

Multishopping 169,849 169,849 169,857


Accumulated amortization 20 (85,754) (85,754) (51,789)
254,671 254,671 367,378
Goodwill upon acquisition of ownership interest (b)
Brazilian Realty LLC 46,434 46,434 46,088
Accumulated amortization 20 (13,232) (13,232) (4,244)

Indústrias Luna S.A. 4 4 4


Accumulated amortization 20 - - -

JPL Empreendimentos Ltda. 15,912 15,912 15,912


Accumulated amortization 20 (3,329) (3,329) (792)

Solução Imobiliária Ltda. 3,524 3,524 3,524


Accumulated amortization 14 (554) (554) (77)
48,759 48,759 60,415
Copyright Sistems
Software License (c) 5.095 5,095 -
Others 224 1,365 -
5,319 6,460 -
308,749 309,890 427,793
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

12. Intangible Assets (Continued)

a) The goodwill recorded upon the merger of subsidiaries results from the following
operations: (i) On February 24, 2006, the Company acquired all the shares of Bozano
Simonsen Centros Comerciais S.A and Realejo Participações S.A. These investments
were acquired for R$ 447,756 and R$ 114,086, respectively, and goodwill was
recorded in the amount of R$ 307,067 and R$ 86,611, respectively in relation to the
book value of the referred companies as of that date; (ii) On June 22, 2006, the
Company acquired all the shares of Multishopping Empreendimento Imobiliário S.A.
held by GSEMREF Emerging Market Real Estate Fund L.P, for R$ 247,514 as well as
the shares held by shareholders Joaquim Olímpio Sodré and Manoel Joaquim
Rodrigues Mendes for R$ 16,587, and goodwill was recorded in the amount of R$
158,931 and R$ 10,478, respectively, in relation to the book value of Multishopping as
of that date. In addition, on July 8, 2006 the Company acquired the shares of
Multishopping Empreendimento Imobiliário S.A. held by shareholders Ana Paula
Peres and Daniela Peres, for R$ 900, resulting in goodwill of R$ 448. The referred to
goodwill was based on expected future profitability of these investments.

b) As mentioned in Note 10 (b) and (c), as a result of new investments acquired in 2007,
the Company recorded goodwill based on future profitability in the total amount of R$
65,874, which has been amortized considering the term, extent and rate of results
estimated in the report prepared by independent experts, not exceeding ten years.

c) Aimed to strengthen its internal control system while sustaining a well structured
growth strategy, the Company started implementing SAP R/3 System. To enable
implementation, the Company executed a service agreement in the amount of
R$ 3,300 with IBM Brasil – Indústria, Máquinas e Serviços Ltda. on June 30, 2008.
Additionally, the Company entered into two software licensing and maintenance
agreements with SAP Brasil Ltda., both dated June 24, 2008, whereby SAP granted
the Company a non-exclusive software license for an indefinite period of time. The
license purchase amount was set at R$ 1,795.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

13. Deferred Charges


Annual rates
of amortization December 31, 2008 December 31, 2007
(%) Company Consolidated Company Consolidated

Parkshopping Barigui 20 3,965 3,965 3,953 3,953


Accumulated amortization (3,962) (3,962) (3,238) (3,238)
Net 3 3 715 715
Expansion – Morumbishopping 20 186 186 186 186
Accumulated amortization (59) (59) (64) (64)
Net 127 127 122 122
Other pre-operating expenses with
shopping malls 10 7,309 11,385 3,118 7,194
Accumulated amortization (8) (3,650) - (2,828)
Net 7,301 7,735 3,118 4,366
Other pre-operating expenses 338 1,064 1,509 1,749
Accumulated amortization (298) (479) (298) (483)
Net 40 585 1,211 1,266
Barrashopping Sul (a) - 16,695 16,695 5,252 5,252
Vila Olímpia - 4,691 - 2,427
Real estate projects 2,921 2,921 - -
27,087 32,757 10,418 14,148

(a) In 2005, initial works for the construction of BarraShopping Sul started which was opened in November 2008.

14. Loans and Financing


Average
annual 2008 2007
Index interest rate Company Consolidated Company Consolidated
Current
TJLP e
BNDES (a) UMBNDES 5.2% 14,040 15,394 13,817 16,307
Bradesco (d) CDI 135% CDI 82,361 82,361 - -
Real (b) - TR + 10% 8,518 8,518 - -
CDI + 0.79% 100% CDI +
Banco IBM (e) per year 0.79% per year 1,061 1,061 - -
Companhia Real de Distribuição (f) - - 26 26 26 26
106,006 107,360 13,843 16,333
Noncurrent
TJLP e
BNDES UMBNDES 5.2% 5,754 5,754 19,144 21,098
Real (b) - TR + 10% 110,721 110,721 - -
Itaú (c) - TR + 10% 7,558 7,558 - -
CDI + 0.79% 100% CDI +
Banco IBM (e) per year 0.79%per year 4,034 4,034 - -
Companhia Real de Distribuição (f) - 845 845 871 871
128,912 128,912 20,015 21,969
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

14. Loans and Financing (Continued)

Noncurrent loans and financing mature as follows:


2008 2007
Company Consolidated Company Consolidated

2009 - - 13,536 15,490


2010 23,743 23,743 4,275 4,275
2011 20,808 20,808 1,413 1,413
2012 onwards 84,361 84,361 791 791
128,912 128,912 20,015 21,969

(a) Loans and financing with BNDES, obtained for the construction of shopping malls MorumbiShopping, on may 2005
ParkShopping Barigui on December 2002 and Shopping Pátio Savassi on may 2003, are guaranteed by mortgage of the
related properties, recorded under property and equipment for R$ 76,553 (R$ 66,504 on 2007), guarantees provided by
directors or surety furnished by parent company Multiplan Planejamento. Participações e Administração S.A. The average
yearly interest rate on loans and financing is 5.2%.

(b) On September 30, 2008, the Company entered into a financing agreement with Banco ABN AMRO Real S.A. to build a
shopping mall located in Porto Alegre area in the amount of R$ 122,000, of which R$ 119,000 have been released to date.
This financing bears 10% interest p.a. plus the variation in the Referential Rate (TR), and it is amortizable in 84 monthly
consecutive installments, the first of which maturing July 10, 2009. This effective interest rate contractually provided for
should be renegotiated from the 13th month as from the first release or last adjustment and annually, as the case may be, if
either of the following conditions materializes: (a) pricing (interest rate + TR) lower than 0.95% of the average CDI for the
last 12 months; or (b) pricing (interest rate + TR) higher than 105% of the average CDI for the last 12 months.

(c) On May 28, 2008, the Company and the other Shopping Anália Franco venturers entered into a credit facility
agreement with Banco Itaú S.A. to renovate and expand the respective real property in the total amount of R$ 45.000. The
amount released to date corresponds to R$ 25,193, of which 30% are under the Company’s responsibility. This facility
bears 10% interest p.a. plus TR and is amortizable in 71 monthly consecutive installments, the first of which maturing
January 15, 2010. As collateral for this debt, the Company assigned Shopping Center Jardim Anália Franco in trust to
Banco Itaú. Additionally, the Company assigned in trust to Banco Itaú receivables deriving from Shopping Jardim Anália
Franco lease agreement, corresponding to 120% of the monthly installments falling due from the agreement date.

(d) In October and December 2008, the Company executed three unsecured credit certificates with Banco Bradesco in the
total amount of R$ 80,000 to strengthen its cash management, as follows:
Inicial Date Final Date Amount Interest Rate
10/9/2008 4/7/2009 30,000 135.5% CDI
10/15/2008 10/9/2009 40,000 135% CDI
12/5/2008 11/30/2009 10,000 132.9% CDI
Principal and interest amounts relating to these agreements will be fully amortized on their maturity dates.
(e) As mentioned in Note 12.c, the Company executed a service agreement with IBM Brasil – Indústria. Máquinas e
Serviços Ltda., on June 30, 2008, and entered into two software licensing and maintenance agreements with SAP Brasil
Ltda., both dated June 24, 2008. Pursuant to the 1st Addendum to the respective agreements, executed in July 2008, the
amount of services related therewith was the subject of lease financing by the Company to Banco IBM S.A. whereby the
Company assigned to Banco IBM S.A the obligation to pay for the services under such conditions as established in the
agreements. As consideration therefore, the Company will refund Banco IBM for all amounts spent in connection with the
implementation, in 48 monthly successive installments of approximately 2.1% of the total cost plus accrued DI-Over rate
daily variation, the first installment falling due in March 2009. To date, total amount under lease is R$ 5,095.

(f) The balance payable to Companhia Real de Distribuição relates to the intercompany loan agreement with subsidiary
Multishopping for the beginning of construction of BarraShopping Sul, payable in 516 monthly tranches of R$ 2, as from
the hipermarket inauguration date in November 1998, with no indexation.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

15. Property Acquisition Obligations


2008 2007
Company and Company and
consolidated consolidated
Currente
Land Barra (a) 20,956 -
PSS – Seguridade Social (b) 19,133 17,393
Land Morumbi (c) 2,550 2,550
Coroa Alta – Land Anhanguera (d) 2,008 8,032
Valenpride Sociedade Anônima (e) 306 7,106
Companhia Brasileira de Distribuição (f) - 2,804
Fundação Sistel de Seguridade Social (g) - 1,828
Coroa Alta Emp.Imob.Ltda (h) - 2,158
Land Chácara Santo Amaro (i) - 1,935
Others 269 969
45,222 44,775
Noncurrent
Land Barra (a) 26,195 -
PSS – Seguridade Social (b) 63,854 75,502
Coroa Alta – Land Anhanguera (d) - 2,008
90,049 77,510
(a) With the public title registration dated March 11, 2008, the Company acquired a plot of land located in Barra da Tijuca - Rio de
Janeiro, destined for the construction of a shopping mall and other integrated structures. The value of the acquisition was
R$ 100,000, to be settled in the following manner: (a) R$ 40,000 upon the act of signing the public title for purchase and sale; (b) R$
60,000, in 36 equal monthly installments, plus interest in the amount of 12% per annum, with the first installment being due 30 days
after the signing date of the public title.

(b) In December, 2006, the Company acquired from PSS, the total number shares issued by SC Fundo de Investimento Imobiliário, for
R$ 40,000, from which R$ 16,000 were to be paid up front. in 60 monthly and consecutive installments of R$ 494, already including
annual interest of 9% by French amortization method, plus monthly monetary restatement according to the variation of National
Consumer Price Index (IPCA), the first of which was falling due on January 20, 2007 and the remaining, on the same day of
subsequent months. Additionally, the Company acquired from PSS 10,1% of ownership interest in MorumbiShopping for R$ 120,000.
The amount of R$ 48,000 was paid on the deed date and the remaining balance will be settled in seventy-two consecutive monthly
installments, plus annual interest of 7% based on the French amortization method and adjustments for the IPCA variation.

(c) In December 2006, the Company entered into an irrevocable private agreement with several individuals and legal entities for sale and
purchase of two plots of land in São Paulo for R$ 19,800, of which R$ 4,000 were paid upon execution of the agreement and R$
13,250 on February 20, 2007. The amount of R$ 2,550 will be paid through assignment of the units under construction of “Centro
Empresarial MorumbiShopping”. The Company also acquired four plots of land adjacent to the venture for R$ 2,694, already fully
paid.

(d) On April, 2007, the Company executed four purchase and sale deeds concerning tracts of land located in the city of Ribeirão
Preto/SP for the total amount of R$ 15,998, payable as follows: in relation to three deeds, the Company paid the total amount of R$
425 in the act, and the remaining balance will be amortized in 23 no-interest-bearing, monthly of R$ 471, as to the fourth deed, the
Company paid R$ 123 in the act, R$ 255 within 30 days from the agreement execution date, and the remaining balance amortized in
22 no-interest-bearing, monthly the amount of R$ 198.

(e) In January 2007, the Company acquired the land located in Chácara Santo Antônio/SP for R$ 11,750, with the amount of R$ 2,200
being paid virtually on demand. R$ 4,356 upon title transfer, and the remaining amount of R$ 5,194 being payable in 17 installments
of R$ 306 beginning April 2007.

(f) Acquisition of a store located at ParkShopping Brasília mall for R$ 9,100 in April 2003, of which R$ 686 paid upon the agreement
execution and the remainder payable in 60 monthly installments due as from December 2003, plus 12% interest p.a.

(g) In March 2004, merged subsidiaries Multishopping, Bozano and Realejo acquired from Sistel 7.5% of its interest in BHShopping
(BHS) for R$ 32,877, of which R$ 12,524 paid cash and the remaining balance payable in 48 monthly, equal and consecutive
installments of R$ 424 each from April 2004 on, as annually adjusted by reference to the variation in the National Consumer Price
Index plus 8% interest p.a. This balance was fully settled on March 17, 2008.

(h) In January 2007, the Company acquired 50% of land where Barrashopping Sul is currently being built in Porto Alegre, for the amount
of R$ 16,183, of which R$ 2,158 paid cash upon the title deed signature and R$ 14,025 in 13 monthly, equal and consecutive
installments of R$ 1,079 each, the first one maturing on February 20, 2007; the balance was fully settled on February 19, 2008.

(i)
15. Property Acquisition Obligations (Continued)
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

(j) In April 2007, the Company acquired from several individuals 93.75% of the land located in Chácara Santo Antônio district, city of São
Paulo, for R$ 5,980, of which R$ 110 paid cash. A balance of R$ 1,000 was paid 90 days thereafter; R$ 1,000 in 120 days, bearing
0.5% interest per month, and the remainder, in the amount of R$ 3,870, in 6 monthly installments of R$ 645, bearing 0.5% interest
per month.

Noncurrent property acquisition obligations mature as follows:

2008 2007
Company and Company and
consolidated consolidated

2009 - 19,400
2010 40,089 17,392
2011 24,372 17,392
2012 13,350 12,170
2013 12,238 11,156
90,049 77,510
16. Acquisition of Shares

The balance payable to GSEMREF Emerging Market Real Estate Fund L.P. refers to the
acquisition, in June 2006, of all shares of Multishopping that it owned. The purchase
amount was R$ 247,514, from which R$ 160,000 were paid up front, and the remaining
amount was divided into two installments, the first of which totaled R$ 42,454, payable
one year after the agreement date; and the second, totaling R$ 45,060, payable in two
years, both being subject to restatement by General Market Price Index (IGP-M).
GSEMREF assigned the rights to Banco Itaú BBA S.A. and the balance was settled on
July 4, 2008.

17. Taxes Paid in Installments


Consolidated
2008 2007
Current
Tax assessments (a) 267 263
267 263
Noncurrent
Tax assessments (a) 1,574 1,755
1,574 1,755

(a) Refers to tax delinquency notices received in July 2003 resulting from underpayment of income and social
contribution taxes in 1999. The subsidiaries Multishopping and Renasce opted to participate in the installment
payment plan of Law No. 10684/2003. and the amount of the obligation was divided into 180 monthly installments
beginning in July 2003. In addition, subsidiary Renasce opted to participate in the installment payment plan of the
debt referring to the tax claim of the National Institute of Social Security – INSS, due to lack of payment of INSS on
third party labor, which was secured by the bank guarantee contract with Banco ABC Brasil S.A. up to 2004. The
installment payment is restated by the Long-term Interest Rate – TJLP.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

18. Contingencies

2008 2007
Company Consolidated Company Consolidated

PIS and COFINS (a) 12,920 13,793 12,920 13.803


Deposit in court (12,920) (13,793) (12,974) (13,847)
INSS - 63 - 63
Deposit in court - (63) - -
Civil contingencies (c) 5,129 5,167 364 364
Deposit in court (3,554) (3,554) - -
Labor contingencies 354 516 157 225
Deposit in court (30) (41) - -
Provision for PIS and COFINS (b) 1,064 1,064 1,064 1,064
Provision for IOF (b) 175 1,402 174 1,691
Tax contingencies 17 17 - -
3,155 4,571 1,705 3,363

Provisions for contingencies were established to cover probable losses in administrative and legal
proceedings related to tax and labor issues, with expectation of probable losses, in an amount considered
sufficient by Company Management, based on the legal advice and assessment, as follows:

(a) In 1999, the Company started to question in court PIS and COFINS levy on the terms of Law 9718 of
1998. The payments related to COFINS have been calculated according to ruling legislation and
deposited in court.

(b) The provisions for PIS, COFINS and IOF result from financial transactions with related parties until
December 2006. As from 2007, the Company has been paying IOF normally.

(c) In March 2008, based on the opinion of its legal advisors, the Company established a provision for
contingencies, amounting to R$ 3,228, and made a judicial deposit in the same amount. Such provision
consists of claims for damages filed by relatives of victims of a homicide on the premises of Cinema V
at Morumbi Shopping. The remaining balance of the provisions for civil claims consists of various minor
value claims filed against the shopping malls in which the Company holds equity interest.

In addition to the above proceedings the Company is defendant in several other civil
proceedings assessed by the legal advisors as involving possible losses estimated at
R$ 23,095 ( R$ 18,002 on 2007).

Taxes and social contributions determined and paid by the Company and your
subsidiaries are subject to review by the tax authorities for different statute barring
periods.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

19. Transactions and Balances with Related Parties

Amounts Amounts
receivable Sundry loans and advances payable – Financial
Company noncurrent current noncurrent current income

RENASCE – Rede Nacional de Shopping Centers Ltda. 1 - - - -


JPL Empreendimentos Ltda. 25 25 - 188 -
CAA – Corretagem Imobiliária Ltda. 196 7 - - 34
MPH Empreend. Imob. Ltda. - 14 22,711 - -
Multiplan Admin. Shopping Center 8 4 - - -
WP Empreendimentos Participações Ltda. 1,687 - - - 330
Manati Empreendimentos e Participações S.A. - 48 806 - -
Brazilian Realty 73 73 - - -
Solução Imobiliária Ltda. 49 5 - - -
Haleiwa - - 166 - -
Total at December 31, 2008 2,039 176 23,683 188 364

Amounts Amounts
receivable payable
Consolidated noncurrent current

Helfer Comércio e Participações Ltda. - 8,581


Plaza Shopping Trust SPCO Ltda. - 15,034
WP Empreendimentos Participações Ltda. 1,687 -
Others - 165
Total at December 31, 2008 1,687 23,780
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

19. Transactions and Balances with Related Parties (Continued)


Sundry loans Amounts Administrative
Amounts receivable and advances payable – Dividends and Financial
Company current noncurrent current current payable expenses income

Multiplan Planejamento Participações e Administração


Ltda. 12 - 1 - - 2,345 -
RENASCE – Rede Nacional de Shopping Centers Ltda. 1 - - - - 178 9
JPL Empreendimentos Ltda - - - 1,488 - - 15
Cilpar – Cil Participações Ltda. - 478 - - - - -
CAA – Corretagem Imobiliária Ltda - 156 7 - - - 21
Indústrias Luna S.A. - 1,675 - - - - 51
MPH Empreend. Imob. Ltda - 4,079 4 - - - -
Divertplan Comércio e Indústria Ltda. - - 1 - - - -
Multiplan Admin. Shopping Center - - 6 - - - -
WP Empreendimentos Participações Ltda. - 1,201 - - - - -
Individual - - - - 183 - -
Others 12 - - - - - 3
Total at December 31, 2007 25 7,589 19 1,488 183 2,523 99

Sundry loans Amounts


Amounts receivable and advances payable Dividends Financial
Consolidated currente noncurrente current current payable expenses

Multiplan Planejamento Participações e Administração Ltda. 12 - 4 - - -


Divertplan Comércio e Indústria Ltda. - - 1 - - -
G.W. do Brasil S.A. - - - - - 4
WP Empreendimentos Participações Ltda. - 1,201 - - - -
G.D. Empreendimentos Imobiliários S.A. 12 - - - - -
JPL Empreendimentos Ltda - - - 1,488 - -
Individual - - - - 183 -
Total at December 31, 2007 24 1,201 5 1,488 183 4
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

19. Transactions and Balances with Related Parties (Continued)

The balance receivable from WP Empreendimentos Participações Ltda, refers to


advances granted to pay the portion attributed to it of maintenance costs of land owned
by the Company together with the referred to related party, monetarily restated by
reference to IGP-DI variation plus 12% p.y. Due to the delay in project Campo Grande,
the term for receiving these advances was extended and the balance reclassified to
noncurrent portion.

During the year ended December 31, 2008 the company made several advances to its
subsidiary MPH Empreendimentos Imobiliários, in a total amount of R$ 22,711 (R$ 4,079
on 2007), for the purpose of financing the costs of the construction of the Vila Olímpia
project, in which MPH held a 71.5% share. These amounts are not being updated, and the
Company expects that the related balance will be capitalized in the future.

The amount payable to JPL Empreendimentos refers to the acquisition of an 18.61%


interest in Shopping Pátio Savassi.

During the year ended December 31, 2008 the Company made advances to Manati
Empreendimentos e Participações S.A. of R$ 806, which has ownership interest of 75%
in Santa Úrsula Mall, in order to pay debts of the condominium. The Company expects to
use this balance for capitalization purposes.

The balances payable to Helfer Comércio e Participações Ltda. and Plaza Shopping
Trust SPCO Ltda. (consolidated) refer to advances made by these companies to
subsidiary MPH Empreendimentos Imobiliários for future capitalization purposes, in order
to finance Vila Olímpia venture works, in which MPH holds interest of 71.5%.

On September 14, 2007, the Company entered into Loan Agreements with subsidiaries
Indústrias Luna S.A and Cilpar – Cil Participações Ltda. in the total amounts of R$ 1,624
and R$ 464, respectively, which were adjusted by reference to CDI plus 0.45% p.a., and
amortized on May 21, 2008.

20. Deferred Income


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

2008 2007
Company Consolidated Company Consolidated

Revenue related to assignment of rights 86,362 125,679 79,193 96,125


Unallocated costs of sales (195) (1,127) (1,195) (1,543)
Other revenues 1,746 1,746 1,799 1,799
87,913 126,298 79,797 96,381
Current 20,604 21,264 19,932 20,472
Noncurrent 67,309 105,034 59,865 75,909

21. Shareholders’ Equity

a) Capital

The Company was incorporated on December 30, 2005 as a limited liability company,
and its capital is represented by 56,314,157 quotas of interest worth R$ 1.00 each.

Under the 2nd Amendment to the Articles of Association dated February 15, 2006,
Company members unanimously decided to increase Company capital in R$ 3,991,
comprising (i) 153,877 units of interest of CAA – Corretagem Imobiliária Ltda.,
corresponding to 99.61% of the capital of that company; and (ii) rights related to 98%
equity interest in a Silent Partnership which is in charge of developing the residential
real estate project denominated “Royal Green Península”.

The quotaholders’ meeting held on March 15, 2006 approved the transformation of the
Company into a corporation, and the 60,306,216 quotas were converted to common
shares with no par value. In the same meeting was also approved a capital increase in
R$ 99,990, with issue of 12,633,087 new common shares with no par value.

At the Special General Meeting held on June 22, 2006, the shareholders approved the
Company’s capital increase to R$ 264,419, through issue and subscription of
47,327,029 new shares, of which 19,328,517 common and 27,998,512 preferred
shares. The subscription price was set at R$ 17,96 totaling R$ 850,001, out of which
R$ 104,124 earmarked for capital and R$ 745,877 in the form of premium for share
issuance. Preferred shares are entitled to vote, except for election of the Company
management members, and are assigned priority rights to capital reimbursement, at
no premium.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

21. Shareholders’ Equity (Continued)

a) Capital (Continued)

On the same date, the acquisition by Bertolino, (actual 1700480 Ontário Inc.) of
8,351,829 common shares of the Company owned by shareholders of CAA –
Corretores Associados Ltda. and Eduardo Peres, became effective.

As mentioned in Note 1, as a result of the public issuance of 27,491,409 primary


shares and 41.700 secondary shares on July 31 and August 30, 2007 respectively,
the Company’s capital increased by R$ 688,328.

At December 31, 2008, the parent company’s capital is represented by 147,799,441


common and preferred, registered and book entry shares, with no par value.
distributed as follows:

Number of
Shareholder shares

Multiplan Planejamento. Participações e Administração S.A. 56,587,470


1700480 Ontário Inc. 51,281,214
José Isaac Peres 2,247,782
Maria Helena Kaminitz Peres 650,878
Shares outstanding 36,812,935
Board of Directors and Officers 71,862
Total of shares outstanding 147,652,141
Shares in Treasure Department in 2008 147,300
147,799,441

b) Legal Reserve

Legal reserve is determined based on 5% of net profit as prescribed by prevailing


legislation and the Company’s bylaws, capped at 20% of capital.

c) Expansion Reserve
In accordance with provisions set forth in the Company’s bylaws, the remaining
portion of net profit after absorption of accumulated losses, establishment of legal
reserve and distribution of dividends was earmarked for expansion reserve, which is
intended to secure funds for new investments in capital expenditures, current capital.
and expanded corporate activities.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

21. Shareholders’ Equity (Continued)

d) Special Goodwill Reserve - Merger

As explained in Notes 9, upon Bertolino’s merger into the Company, the goodwill
recorded on Bertolino’s balance sheet deriving from the purchase of Multiplan capital
participation, net of provision for net equity make-whole, was recorded on the
Company’s books, after said merger, under a specific asset account – deferred
income and social contribution taxes, as per contra to special goodwill reserve upon
merger, pursuant to the provisions set forth in article 6°, paragraph 1° of CVM
Instruction No. 319. This goodwill will be amortized by Multiplan premised on the
expected future profitability that gave rise to it, over a term of 5 years.

e) Treasury Shares

On October 13, 2008, BM&FBOVESPA authorized the Company to repurchase


shares of its own issue, under the terms of Announcement No. 051/2008-DP and
CVM Instruction No. 10.

The Company has then decided to invest funds available in the repurchase of shares
in order to maximize shareholder’s value. Therefore, to date the Company
purchased 147,300 common shares, reducing its outstanding shares percentage
to 24.91% at December 31, 2008. The shares were purchased at a weighted average
cost of R$ 13,08 at a minimum cost of R$ 9,80, and a maximum cost of R$ 14,15
(amounts in Reais). The share market value calculated by reference to the last price
quotation before year end was R$ 12,31 (amount in Reais).

As required by the aforementioned Announcement, the Company shall recompose its


minimum outstanding share percentage (25%) on or before May 11, 2010.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

21. Shareholders’ Equity (Continued)

f) Dividends

As per the Company’s bylaws, the minimum mandatory dividend corresponds to 25%
of net profit, as adjusted pursuant to the Brazilian legislation.

The Company’s Board of Directors will submit for the Annual General Meeting
approval a proposed dividend distribution of R$ 20,084 thousand, corresponding to
R$ 0,14 per share.

2008

Net profit for the year 77,890


Absorbed accumulated losses (35,608)
42,282
Allocation to legal reserve (2,114)
Adjusted net profit 40,168

Mandatory minimum dividends 10,042


Complementary dividends 10,042
Total proposed dividends 20,084
Destination (%) 50%

g) Stock options plan

The Extraordinary Shareholders’ Meeting of July 6, 2007, approved the terms and
conditions of the Company’s Stock Options Plan to become effective from this date,
for Company’s administrators, employees and service providers. The Plan is
administered by the Company’s board of directors.

The Stock Option Plan is limited to a maximum amount of options resulting in a


dilution of 7% of the Company’ capital on the date of creation of each Annual
Program. The dilution consists of the percentage represented by the number of shares
backing the option, and the total number of shares issued by the Company.

The Stock Option Plan beneficiaries are allowed to exercise their options in a four
years’ time from the date of granting. Vesting period will be of up to two years, with
releases of 33.4% as from the second anniversary, 33.3% as from the third
anniversary, and 33.3% as from the fourth anniversary.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

21. Shareholders’ Equity (Continued)

g) Stock options plan (Continued)

Shares price shall be based on average quotation on the São Paulo Stock Exchange
(Bovespa) of the Company’s shares of the same class and type for the 20 (twenty)
days immediately before option granting date, weighted by trading volume, monetarily
restated by reference to the Amplified National Consumer Price Index (IPCA) variation
published by the Brazilian Institute of Geography and Statistics (IBGE), or by any
other index determined by the Board of Directors, until effective option exercise date.

Three stock option distributions were made in 2007 and 2008, which observe the
maximum limit of 7% provided for by the plan, as summarized below:

(a) Program 1 - On July 6, 2007, the Company’s Board of Directors approved the 1st
Stock Options Plan for purchase of 1,497,773 shares, which may be exercised
after 180 days as from the first public offering of shares made by the Company.
Despite the aforementioned Plan’s general provisions, the option exercise price is
of R$ 9,80 restated by reference to IPCA variation, published by IBGE, or another
index chosen by the Board of Directors.

(b) Program 2 - On November 21, 2007, the Company’s Board of Directors approved
the 2nd Stock Options Plan for purchase of 114,000 shares. Out of this total,
16,000 shares were granted to an employee who left the Company before the
minimum term to exercise the option.

(c) Program 3 - On June 4, 2008, the Company’s Board of Directors approved the
3rd Stock Options Plan for purchase of 1,003,400 shares. Out of this total, 27,900
shares were granted to an employee who left the Company before the minimum
term to exercise the option.

The distributions in (b) and (c) follow the parameters defined by the Stock Options
Plan described above.

To date, none of the options granted has been exercised, which involve a total of
2,571,273 shares or 1.74% of total shares at December 31, 2008.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

21. Shareholders’ Equity (Continued)

g) Stock options plan (Continued)

The vesting period to exercise the options is as follows:


% of options
released for Maximum
Vesting period as from granting exercise number of shares

Program 1
180 days after the Initial Public Offering – 01/26/08 100% 1,497,773

Program 2
As from the second anniversary – 11/21/09 33.4% 32,732
As from the third anniversary – 11/21/10 33.3% 32,634
As from the fourth anniversary – 11/21/11 33.3% 32,634

Program 3
As from the second anniversary – 06/04/10 33.4% 325,817
As from the third anniversary – 06/04/11 33.3% 324,842
As from the fourth anniversary – 06/04/12 33.3% 324,842

The average weighted fair value of call options at December 31, 2008, described
below. was estimated using the Black-Scholes options pricing model, assuming an
estimated volatility of 48.88%, weighted average risk free rate of 12.5% and 3-year
maturity to the first program and 5 years to the second and third programs.

Weighted average fair value


of options

Program 1 16,40
Program 2 7,95
Program 3 7,57

Share-based payments outstanding at December 31, 2008 were measured and


recognized by the Company in accordance with CPC 10, and related effects were
recorded retroactively at the beginning of the year in which such payments were
granted through the transition date. Related effects on shareholders’ equity and P&L
based on the options’ fair value on the granting date are as follows:

Income Shareholders equity


First-time Adoption of Law No. 11638/07 24,579 24,579
2008 1,272 25,851
2009 2,041 27,892
2010 2,041 29,933
2011 2,025 31,958
2012 769 32,727
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

22. Financial Income (Expenses), Net

2008 2007
Company Consolidated Company Consolidated

Income from short-term investments 25,425 25,650 18,044 18,066


Interest on loans and financing (2,799) (2,799) (12,996) (13,101)
Interest on loans property 259 259 - -
Bank fees and other charges (3,841) (4,091) (3,963) (4,200)
Foreign exchange fluctuations - (442) (2,016) 815
Monetary variations (Assets) 1,702 1,729 - -
Monetary variations (liabilities) (15,599) (16,049) (2,456) (2,451)
Fines and interest on tax violations (214) (336) - -
Fine and interest on rental 1,795 1,861 1,180 1,183
Revenue of Shares 3,303 3,303 - -
Interest on loans 1,738 1,782 941 908
Interest on property acquisition
obligations (7,356) (7,371) - -
Bank fees (106) (106) (23,700) (23,700)
Discounts obtained 154 154 - -
Total 4,461 3,544 (24,966) (22,480)

23. Financial Instruments and Risk Management

In accordance with the provisions set forth by CVM Rule No. 566 of December 17, 2008,
which approved Accounting Pronouncement CPC 14, the Company measured its
financial instruments.

The amounts recorded in the asset and liability accounts as financial instruments are
restated as contractually provided for at December 31, 2008 and correspond,
approximately to their market value. These amounts are substantially represented by
cash and cash equivalents trade accounts receivable, sundry loans and advances, loans
and financing, and property acquisition liabilities. The amounts recorded are equivalent to
market values.

The Company’s major financial instruments are as follows:


i) Cash and cash equivalents – stated at market value, which is equivalent to their book
value;

ii) Trade accounts receivable and sundry loans and advances – classified as financial
assets held to maturity and accounted for at their contractual amounts, which are
equivalent to market value.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

23. Financial Instruments and Risk Management -- Continuation

iii) Property acquisition liabilities and loans and financing – classified as financial
liabilities held to maturity and accounted for at their contractual amounts. The market
values of these liabilities are equivalent to their book values.

Risk factors

The main risk factors to which the subsidiary companies are exposed are the following:

(i) Interest rate risk

Interest rate risk refers to:

- Possibility of variation in the fair value of their financings at fixed rates, if such
rates do not reflect current market conditions. While constantly monitoring these
indexes, to the present date the Company does not have any need to take out
hedges against interest rate risks.

- Possibility of unfavorable change in interest rates, which would result in increase


in financial expenses as a consequence of the debt portion under variable interest
rates. At December 31, 2008 the Company and its subsidiaries invested their
financial resources mainly in Interbank Deposit Certificates (CDI), which
significantly reduces this risk.

- Inability to obtain financing in the event that the real estate market presents
unfavorable conditions, not allowing absorption of such costs.

(ii) Credit risk related to service rendering

This risk is related to the possibility of the Company and its subsidiaries posting
losses resulting from difficulties in collecting amounts referring to rents, property
sales, key money, administration fees and brokerage commissions. This type of risk
is substantially reduced owing to the possibility of repossession of rented stores as
well as sold properties, which historically have been renegotiated with third parties
on a profitable basis.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

23. Financial Instruments and Risk Management -- Continuation

(iii) Credit risk

The risk is related to the possibility of the Company and its subsidiaries posting
losses resulting from difficulties in realizing short-term financial investments. The risk
inherent to such financial instruments is minimized by keeping such investments with
highly-rated banks.

In accordance with CVM Rule No. 550 of October 17, 2008, which provides for
disclosure of information about derivative financial instruments in notes to financial
statements, the Company informs that it does not have any policy on the use of
derivative financial instruments. Accordingly, no risks arising from possible exposure
associated with these instruments were identified.

Sensitivity analysis

In order to check the financial asset and liability indexes to which the Company is
exposed at December 31, 2008 for sensitivity, 5 different scenarios were defined and
an analysis of sensitivity to fluctuations in these instruments’ indexes was prepared.
Based on FOCUS report dated December 26, 2008, CDI, IGP-DI, and IPCA indexes
were projected for year 2009 – set as the probable scenario - from which decreasing
and increasing variations of 25% and 50%. Respectively, were calculated.

Financial assets and Liabilities indexes:

Probable
Index 50% decrease 25% decrease scenario 25% increase 50% increase
CDI 5.72% 8.58% 11.44% 14.30% 17.16%
IGP-DI 2.69% 4.04% 5.38% 6.73% 8.07%
IPCA 2.43% 3.65% 4.86% 6.08% 7.29%
UMBNDES -1.83% -1.22% -2.44% -3.05% -3.66%
TJLP 4.69% 3.13% 6.25% 7.81% 9.38%

Financial assets:

Gross financial income was calculated for each scenario as at December 31, 2008,
based on one-year projection and not taking into consideration any tax levies on
earnings. The Interbank Deposit Certificate (CDI) index was checked for sensitivity at
each scenario.
23. Financial Instruments and Risk Management -- Continuation
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

Financial Income Projection – 2009:

Company:

Remuneration December 50% 25% Probable 25% 50%


rate 31, 2008 Decrease Decrease scenario Increase Increase

Cash and Cash Equivalents


Cash and Banks N/A 22,714 N/A N/A N/A N/A N/A
Short -Term Investments 100% CDI 123,900 7,087 10,631 14,174 17,718 21,261
146,614 7,087 10,631 14,174 17,718 21,261

Accounts Receivable

Trade Accounts Receivable – Leases IGP-DI 46,527 1,252 1,877 2,503 3,129 3,755

Trade Accounts Receivable – Key Money IGP-DI 36,044 970 1,454 1,939 2,424 2,909
Trade Accounts Receivable –sales of
properties IGP-DI 1,037 28 42 56 70 84
Others Trade Accounts Receivable N/A 9,902 N/A N/A N/A N/A N/A
93,510 2,250 3,373 4,498 5,623 6,748

Sundry Loans and Advances


Barra Shopping Sul Association 135% CDI 4,547 351 527 702 878 1,053
Parkshopping Condominium 110% CDI 3,732 235 352 470 587 704
Ribeirão Shopping Condominium 110% CDI 711 45 67 89 112 134
Barra Shopping Condominium 135% CDI 1,902 147 220 294 367 441
New York City Center Condominium 105% CDI 510 31 46 61 77 92
IGP-DI + 12%
Parkshopping Barigui Condominium per year 1,198 192 176 208 224 240
Barra Shopping Sul Condominium 135% CDI 1,042 80 121 161 201 241
Others Sundry Loans and Advances N/A 29,773 N/A N/A N/A N/A N/A
43,415 1,081 1,509 1,985 2,446 2,905

TOTAL 283,539 10,418 15,513 20,657 25,787 30,914

23. Financial Instruments and Risk Management -- Continuation

Consolidated:
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

Remuneration December 50% 25% Probable 25% 50%


rate 31, 2008 Decrease Decrease scenario Increase Increase

Cash and Cash Equivalents


Cash and Banks N/A 26,831 N/A N/A N/A N/A N/A
Short –Term Investments 100% CDI 140,754 8,051 12,077 16,102 20,128 24,153
167,585 8,051 12,077 16,102 20,128 24,153

Accounts Receivable

Trade Accounts Receivable – Leases IGP-DI 49,081 1,317 1,975 2,634 3,292 3,951

Trade Accounts Receivable – Key Money IGP-DI 58,988 1,575 2,363 3,151 3,938 4,726
Trade Accounts Receivable –sales of
properties IGP-DI 1,037 28 42 56 70 84
Others Trade Accounts Receivable N/A 8,185 N/A N/A N/A N/A N/A
117,291 2,920 4,380 5,841 7,300 8,761

Sundry Loans and Advances


Barra Shopping Sul Association 135% CDI 4,547 351 527 702 878 1,053
Parkshopping Condominium 110% CDI 3,732 235 352 470 587 704
Ribeirão Shopping Condominium 110% CDI 711 45 67 89 112 134
Barra Shopping Condominium 135% CDI 1,902 147 220 294 367 441
New York City Center Condominium 105% CDI 510 31 46 61 77 92
IGP-DI
Parkshopping Barigui Condominium +12%per year 1,198 192 176 208 224 240
Barra Shopping Sul Condominium 135% CDI 1,042 80 121 161 201 241
Others Sundry Loans and Advances N/A 15,182 N/A N/A N/A N/A N/A
28,824 1,081 1,509 1,985 2,446 2,905

TOTAL 313,700 12,052 17,966 23,928 29,874 35,819


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

23. Financial Instruments and Risk Management -- Continuation

Financial liabilities:

Gross financial expense was calculated for each scenario as at December 31, 2008, based
on the indexes’ one-year projection and not taking into consideration any tax levies and the
maturities flow of each contract scheduled for 2009. The indexes were checked for sensitivity
at each scenario.

Projected Financial Expenses – 2009:


Company:

Remuneration December 31, 50% 25% Probable 25% 50%


rate 2008 Decrease Decrease scenario Increase Increase

Loans and financing


Bradesco 135%CDI 82,361 6,360 9,540 12,720 15,900 19,080
TJLP and
BNDES - Parkshopping Barigui UMBNDES 11,439 (97) (65) (130) (162) (195)
BNDES – Morumbi Shopping TJLP 8,355 392 261 522 653 783
Real N/A 119,239 N/A N/A N/A N/A N/A
Itaú N/A 7,558 N/A N/A N/A N/A N/A
Banco IBM CDI + 0.79% p.y 5,095 332 477 623 769 915
Cia Real de Distribuição N/A 871 N/A N/A N/A N/A N/A
234,918 6,987 10,213 13,735 17,160 20,583

Property acquisition obligation


Land Morumbi N/A 2,550 N/A N/A N/A N/A N/A
PSS – Seguridade Social IPCA + 9% 82,987 9,485 10,494 11,502 12,510 13,519
Valenpride Sociedade Anônima N/A 306 N/A N/A N/A N/A N/A
Coroa Alta – Land Anhanguera N/A 2,008 N/A N/A N/A N/A N/A
Land Barra N/A 47,151 N/A N/A N/A N/A N/A
Others N/A 269 N/A N/A N/A N/A N/A
135,271 9,485 10,494 11,502 12,510 13,519

TOTAL 370,189 16,472 20,707 25,237 29,670 34,102


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

23. Financial Instruments and Risk Management -- Continuation


Consolidated:

Remuneration December 31, 50% 25% Probable 25% 50%


rate 2008 Decrease Decrease scenario Increase Increase

Loans and financing

Bradesco 135%CDI 82,361 6,360 9,540 12,720 15,900 19,080


TJLP and
BNDES - Parkshopping Barigui UMBNDES 11,439 (97) (65) (130) (162) (195)

BNDES – Morumbi Shopping TJLP 8,356 392 261 522 653 783

BNDES – Pátio Savassi TJLP 1,353 63 42 85 106 127

Real N/A 119,239 N/A N/A N/A N/A N/A

Itaú N/A 7,558 N/A N/A N/A N/A N/A

Banco IBM CDI + 0.79% p.y. 5,095 332 477 623 769 915

Cia Real de Distribuição N/A 871 N/A N/A N/A N/A N/A

236,272 7,050 10,255 13,820 17,266 20,710

Property acquisition obligation

Land Morumbi N/A 2,550 N/A N/A N/A N/A N/A

PSS – Seguridade Social IPCA + 9% 82,987 9,485 10,494 11,502 12,510 13,519

Valenpride Sociedade Anônima N/A 306 N/A N/A N/A N/A N/A

Coroa Alta – Land Anhanguera N/A 2,008 N/A N/A N/A N/A N/A

Land Barra N/A 47,151 N/A N/A N/A N/A N/A

Others N/A 269 N/A N/A N/A N/A N/A

135,271 9,485 10,494 11,502 12,510 13,519

TOTAL 371,543 16,535 20,749 25,322 29,776 34,229


MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

24. Administrative Funds

The Company is in charge of management of funds of investors for the following shopping
malls: BarraShopping, MorumbiShopping, BHShopping, DiamondMall, ParkShopping,
RibeirãoShopping, New York City Center, Shopping Anália Franco, BarraShopping Sul,
ParkShopping Barigui, Shopping Pátio Savassi and Shopping Santa Úrsula. The company
manages funds comprising advances from said investors and rents received from
shopkeepers at the shopping malls, which are deposited in bank accounts of the Company
in the name of the investment, to finance the expansion and the operating expenses of the
shopping malls.

At December 31, 2008, the balance of administrative funds amounted to R$ 7,749


(R$10,598 in 2007), which is not presented in the consolidated financial statements
because it does not representing rights or obligations of the subsidiary.

25. Management Fees

The Company is managed by a Board of Directors and an Executive Board. In the year
ended 2008, these administrators’ compensation, recorded under management fees
expenses totaled R$ 8,281 (R$ 7,583 in the same prior-year period), which is deemed a
short term benefit.

As described in Note 21.c, the Company shareholders approved a stock option plan for
the Company’s administrators and employees.

At December 31, 2008 the Company provides no other benefits to its administrators.
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.

NOTES TO FINANCIAL STATEMENTS (Continued)


December 31, 2008
(In thousands of reais)

26. Insurance

The CPI (undivided joint properties) rules governing the shopping malls in which the
subsidiary Multishopping holds ownership interest maintain insurance policies at levels
which Management considers adequate to cover any risk associated with asset liability or
claims. Management maintains insurance coverage for civil liability, loss of profits and
miscellaneous losses.

The scope of our independent auditors does not include expressing an opinion on
insurance cover sufficiency, which was determined and considered adequate by
management.

27. Subsequent event

In addition to the repurchase of shares described in note 21 (e), between January 01, 2009
and February 27, 2009, the Company acquired 192,700 common shares, reducing its
outstanding shares percentage to 24.55%. The shares were purchased at a weighted
average cost of R$ 13.98, at a minimum cost of R$ 12.50, and a maximum cost of R$
14.71 (amounts in Reais).
MESSAGE FROM THE CEO
Dear Shareholders,

We are extremely pleased to bring you Multiplan‟s results for 2008. Despite the unstable economic
scenario in the second half of the year, our Company performed impressively - gross revenue was R$
452.9 million compared to R$ 368.8 million in 2007, up 23%, and net revenue was R$ 411.2 million, 22%
higher than the R$ 336.4 million in 2007.
In 2008, we invested substantially in our assets. A few of our shopping centers underwent large-
scale modifications to provide our clients with greater comfort and to adapt to changing market trends. We
also restructured our company, opened a new head office in São Paulo and hired staff to ensure greater
control over our projects and developments, thereby guaranteeing better operating results.
The efforts to consolidate our shopping centers‟ leadership in their respective cities were responsible
for maintaining the high occupancy rates in our portfolio in 2008 and the significant growth in sales of our
developments, which came to R$ 5.1 billion – 18.7% up on 2007, whereas the domestic retail sector grew
by 9.1% in the same period, according to the Brazilian Institute of Geography and Statistics (IBGE).
Other highlights of 2008 include the acquisition of Santa Úrsula in Ribeirão Preto, further
consolidating Multiplan‟s position in the city where it already owns RibeirãoShopping, and the
construction of BarraShoppingSul in Porto Alegre. This 100% Multiplan-owned development was opened
on November 18 as the largest shopping center in the south region of Brazil and the second largest in our
portfolio in terms of total Gross Leasable Area (GLA), with 68,187 m², and 215 stores, of which 35 are
new to Porto Alegre. The shopping center is an astounding success among the public, with 2 million
visitors and sales of R$55 million in December, which represents 7% of the total sales in our portfolio that
month. The BarraShoppingSul, follows the Company‟s line of mixed-use projects, will be connected by a
ramp to the Cristal Tower complex on the same site. In just six months, 69% of the office space had been
sold. The Company plans to build a hotel and two residential buildings at the site in the future.
The Company invested R$ 333.7 million in the development of new shopping centers in 2008,
225% more than in 2007, mainly in BarraShoppingSul and Shopping Vila Olímpia, under construction in
São Paulo and expected to be opened in 2009. We also substantially increased our investments in
expansions last year, investing R$ 124.3 million, a tenfold increase over the R$ 11.4 million in 2007. This
increase was in response to the demand for new stores, which led the company to invest in seven new
expansions in five shopping centers in its portfolio. Of these, three were opened last year: ParkShopping
(Federal District), ParkShoppingBarigüi (Paraná) and RibeirãoShopping (São Paulo) (1st phase), which
raised our total GLA by 16% to 484,373 m², and Multiplan‟s share of GLA by 23%.
To achieve these numbers and continue as the benchmark in the shopping center segment, the
Company is making all-out efforts to ensure the most appropriate store mix for each of our developments.
We invested R$47 million in renovations in 2008, 104% more than in 2007, which brought us returns in
the form of awards, honors and higher revenues. The quality of our portfolio in terms of financial value is
evident from the appraisal conducted by Jones Lang LaSalle, which estimated the value of our shopping
centers at R$9.6 billion. Note that Multiplan‟s interest in these developments is 68%. We value
maintaining frequent contact with our shareholders and hope to further strengthen this partnership in 2009.

Cordially,
José Isaac Peres
CEO, Multiplan
COMPANY OVERVIEW
Multiplan began operations 34 years ago in the real estate sector and, since the 1980s, has
been in the shopping center segment. The company also constructed Brazil‟s first regional
shopping centers such as BH Shopping in Belo Horizonte, RibeirãoShopping in Ribeirão
Preto, BarraShopping in Rio de Janeiro and MorumbiShopping in São Paulo. Taking a long-
term vision, it attracted pension funds to invest in the sector, which made its shopping centers
a safe and profitable investment. As a strategic measure, the Company also operates in
residential and commercial real estate development, which generates synergies with its
shopping center operations by capitalizing on the appreciation of the land around the shopping
centers. As of December 31, 2008, Multiplan administered 12 own shopping centers, with
total Gross Leasable Area (GLA) of 484,373 m², 3,046 stores and estimated annual traffic of
146 million consumers, placing it among Brazil‟s largest shopping center operators, according
to the Brazilian Shopping Centers Association (ABRASCE). Multiplan currently holds
controlling interest in 10 of the 12 shopping centers in its portfolio, excluding those under
development or construction.
Shopping Centers State Multiplan % Total GLA No. of Stores
In operation
BH Shopping MG 80.0% 36,895 m² 295
RibeirãoShopping SP 76.2% 46,221 m² 232
BarraShopping RJ 51.1% 69,501 m² 583
MorumbiShopping SP 65.8% 54,988 m² 481
ParkShopping DF 59.1% 43,210 m² 271
DiamondMall BH 90.0% 20,809 m² 228
New York City Center RJ 50.0% 22,068 m² 39
Shopping AnáliaFranco SP 30.0% 39,310 m² 236
ParkShoppingBarigüi PR 84.0% 42,968 m² 195
Pátio Savassi BH 83.8% 16,172 m² 127
Shopping Santa Úrsula SP 37.5% 24,043 m² 114
BarraShopping Sul RS 100.0% 68,187 m² 245
Total of Portfolio in operation 68.2% 484,373 m² 3046
CORPORATE STRUCTURE (Direct interest)

Free Float
Treasury
22.50% Maria Helena 30.73% ON
Kaminitz Peres 24.91% Total 0.12% ON
0.54% ON 0.10% Total
Multiplan Planejamento, 0.44% Total
Participações e 100.00%
47.23% ON
Administração S.A.
38.29%Total
19.43% ON Ontario Teachers’
77.50% 100.00% PN 1700480 Ontario Inc.
1.88% ON Pension Plan
34.70% Total
1.52% Total
Jose Isaac Peres
CAA
1.00% 99.00%
Corretagem e Consultoria
Publicitária Ltda.
Multiplan
99.00% 99.61% CAA
Administradora de
Shopping Centers Ltda. Corretagem Imobiliária Ltda.
Shopping Centers %
41.96% MPH
Embraplan 1
100.00% BarraShopping 51.07% Empreend. Imobiliários Ltda.
Empresa Brasileira
de Planejamento Ltda. BarraShoppingSul 100.0%
BH Shopping 80.00% 100.00%
DiamondMall 90.00% Solução Imobiliária Ltda.
2.00% MorumbiShopping 65.78%
98.00% New York City Center 50.00% 100.00%
SCP Royal Green
ParkShopping 59.07% Brazil Realty
ParkShoppingBarigüi 84.00%
Pátio Savassi 83.81% 99.99%
0.01%
RibeirãoShopping 76.17% Indústria Luna S/A
Renasce 99.00% ShoppingAnáliaFranco 30.00%
Rede Nacional de Shopping Vila Olímpia¹ 30.00% 100.00%
Shopping Centers Ltda. Shopping Maceió² 50.00% JPL
Shopping Santa Úrsula 37.50%
50.00%
¹ Under construction Manati Empreendimentos 2
² Under approval

50.00% Haleiwa 3
¹ MPH Empreend. Imobiliários: Special Purpose Entity (SPE) from Shopping VilaOlímpia.
² Manati Empreendimentos: Special Purpose Entity (SPE) from Shopping Santa Úrsula
³ Haleiwa: Special Purpose Entity (SPE) from Shopping Maceió

On October 13, 2008, BM&FBOVESPA authorized the Company to repurchase shares of its
own issue, under the terms of Announcement No. 051/2008-DP and CVM Instruction No. 10.

The Company has then decided to invest funds available in the repurchase of shares in order to
maximize shareholder‟s value. Therefore, to date the Company purchased 147,300 common
shares, reducing its outstanding shares percentage to 24.91% at December 31, 2008.
GROWTH STRATEGY
Multiplan, aiming to bring higher returns to its shareholders, always have seek to expand its
portfolio. From 2004 to 2008 its GLA increased 141%; and considering its projects under
development it can achieve 378,051 m², an increase of 254% since 2004.

378 m²
254% 73 m²

26 m²
123 m²

107 m² 2 m²

2004 2005 2006 2007 2008 Future*


Growth in own GLA (in „000) * Excluding projects under development

Investments in shopping center development and expansion grew by more than 35 times, from
R$13.0 million in 2004 to R$458.0 million in 2008. Between 2007 and 2008, development
grew by 225% on account of the two new malls - BarraShoppingSul in Porto Alegre, launched
in 2007 and opened in 2008, and Shopping Villa Olímpia, launched in 2007 and scheduled for
opening in 2009. Investments in expansion grew tenfold between 2007 and 2008 to meet the
demand for new stores and for the construction of seven expansions in five shopping centers
in its portfolio, in keeping with the market trend. Of the seven expansions, three were opened
in the last quarter of 2008: ParkShopingBarigüi Expansão Gourmet, RibeirãoShopping
Expansão 1st phase (SP) and ParkShopping Expansão Fashion. The other four expansions -
Shopping Anália Franco (SP), ParkShopping (DF), RibeirãoShopping 2nd phase (SP) and BH
Shopping (MG) – are in currently in progress.

124,314
333,704
4020%
2437%
225%

998%

102,646
25,900
15,100 11,431
8,100 300 800 4,900

2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Investments in shopping centers (in R$‟000) Investments in expansions (in R$‟000)


SHOPPING CENTERS UNDER DEVELOPMENT
BarraShoppingSul, the largest shopping center in south Brazil, was opened on November, 18,
2008. Located in Porto Alegre, it opened with GLA of 68,187 m², a mere 1,314 m² less than
the GLA of the Company‟s largest mall, BarraShopping, opened in 1981 and has already
undergone six expansions. Shopping Vila Olímpia, currently under construction, is the next to
be opened, in the last quarter of 2009. This year, the priority will be on new projects under
development, characterized by the lowest risk, highest return, speedy approvals from the
municipal government, and credit lines that do not jeopardize the project to be developed.

Shopping Centers under Development/awaiting Approval $1.000


Project Opening GLA MTE % (constr.) MTE Capex Key Money NOI 3rd Year
Shopping VilaOlímpia Nov/09 29,538 m² 42.0% 93,910 21,191 10,959
Shopping Maceió To be disclosed 27,582 m² 50.0% 67,299 8,203 10,893
Total 57,120 m² 45.9% 161,209 29,394 21,582

The major part of expansion at RibeirãoShopping and two other expansions were delivered in
the last quarter of 2008. The following table lists the five expansions under development,
totaling 600 new stores in the Company‟s portfolio, a 20% growth. These expansions were an
absolute success - the table shows that 77% of the stores were rented at the end of 2008.

Expansions (R$’000)
MTE % MTE Capex Key NOI 3rd Stores
Projects Opening GLA
(constr.) Capex Invested Money Year Leased
RibeirãoShopping Exp. ¹ May09 7,067 m² 76.2% 43,975 61.5% 2,378 3,787 78%
Shopping AnáliaFranco Exp. Jul/09 11,871 m² 30.0% 18,839 44.6% 4,093 3,965 90%
ParkShopping Exp. Frontal Oct/09 8,571 m² 62.5% 78,791 16.1% 6,944 8,659 96%
BH Shopping Exp. Mar/10 10,972 m² 80.0% 118,976 32.9% 12,366 12,315 85%
ParkShoppingBarigüi Exp. II May/10 8,010 m² 100.0% 49,411 4.9% 18,032 9,323 36%
Total 46,491 m² 65.3% 309,992 28.9% 43,814 38,049 77%
¹ The last phase will add only 429m². The previous phase began on 11/27/2008

In addition to the five expansions under development, four more will be implemented in the
coming years.

Projects to be detailed
Projects % GLA Own GLA Launch Opening
BarraShopping Exp. VII 4,894 m² 51.1% 2,499 m² Jul/09 Nov/10
ParkShopping Exp. Gourmet 1,327 m² 60.0% 796 m² Mar/10 Sep/11
DiamondMall Exp. II ¹ 5,299 m² 100.0% 5,299 m² Jan/10 Mar/11
BarraShopping Sul Exp. I 21,638 m² 100.0% 21,638 m² Apr/13 Dec/14
Total 33,158 m² 91.2% 30,232 m²
¹ Multiplan will have 100% interest during construction due to the land swap.
FINANCIAL PERFORMANCE

Evolution of Gross Revenue

Gross revenue grew by 251%, from R$128.9 million in 2004 to R$ 452.9 million in 2008, and
by 23% between 2007 and 2008. In addition to rent, which accounted for 65.3% of gross
revenue, service and parking revenues contributed to 29.4% of the total.
Real Estate Sales
23%
251% 0.6%
452,914 Minimum
368,792 83.2%
Parking Revenue Rent
276,487
14.9% 65,3%
154,170 Key Money
128,950
4.7%
Service Revenue Merchandising
2004 2005 2006 2007 2008
14.6% 12.9%
Overage
3.8%
Evolution of Gross Revenue (in R$‟000) Breakdown of Gross Revenue in 2008

Rent
Rent revenue grew 23.3% from 2007 to 2008, reaching R$295.3 million, thanks to the organic
growth of our shopping centers, the acquisitions in recent years and the opening of
BarraShoppingSul in the last quarter of 2008.

Rent Revenue/Shopping
2008 2007 Chg. %
Center (R$ '000)
BHShopping 39,930 36,755 ▲8.6% 264% 23%

RibeirãoShopping 22,630 14,972 ▲51.1% 295,252


BarraShopping 56,545 50,773 ▲11.4%
239,394
MorumbiShopping 67,518 52,031 ▲29.8%
ParkShopping 21,638 19,101 ▲13.3% 193,079
DiamondMall 24,035 20,711 ▲16.1%
New York City Center 5,473 5,067 ▲8.0%
81,160 91,740
Shopping AnáliaFranco 13,341 11,928 ▲11.8%
ParkShoppingBarigüi 23,942 22,791 ▲5.1%
Pátio Savassi 13,478 5,245 ▲156.9%
Shopping SantaÚrsula 1,275 - -
2004 2005 2006 2007 2008
BarraShoppingSul 5,447 20 -
Portfolio Total 295,252 239,394 ▲23.3%
Evolution of Leasing Revenue (in R$‟000)

The shopping centers‟ occupancy rate has historically been above 90%, closing the year of
2008 with 96.6%. Excluding BarraShoppingSul (opened on November 18, 2008) and
Shopping Santa Úrsula (acquired in April 2008 and is undergoing a change in the mix), the
occupancy rate would be even higher, achieving 98.2%.
98.2%

97.4%

96.6%
96.1%
95.4% 96.0%

2004 2005 2006 2007 2008

Evolution of occupancy rate (*Excluding Shopping Santa Úrsula and BarraShoppingSul)

Services
Service revenue has grown considerably over the years - 77% between 2004 and 2008. The
growth was the result of the increase in project launches, which generates more brokerage
fees, the successful lease of new space resulting from expansions and new shopping centers
launched, transfer fees relating to the changes in the store mix at shopping centers and the
management fees charged on the growing income of shopping centers.

77%
26% 66,129

52,332
46,360 44,744
37,320

2004 2005 2006 2007 2008


Evolution of service revenue (in R$‟000)
Key Money
Revenue from key money more than tripled between 2004 and 2008, growing from R$6.5
million to R$21.2 million, mainly due to the new expansions and to new tenants renting our
shopping centers.

12%
227%
21,242
18,902

13,606

6,500 6,680

2004 2005 2006 2007 2008


Evolution of key money revenue (in R$‟000)

Parking services
The net result from parking services (revenue less expenses) grew more than 12 times in the
past five years, thanks to Multiplan implementing a system for charging parking fees in
shopping centers that did not charge them earlier, and the increase in average ticket, arising
from a costlier price list compatible with the greater amount of time clients spent in the
network‟s malls on account of the complete mix of stores and services offered. In 2008, two
more shopping centers started charging parking fees: ParkShopping Barigüi in Curitiba, and
Shopping Anália Franco in São Paulo. Of the 12 shopping centers currently in operation, 9
charge parking fees.

37,589
1120%
102%

18,594

9,422

3,080 2,860

2004 2005 2006 2007 2008


Evolution of net parking revenue (in R$‟000)
Shopping Center Expenses
Multiplan‟s efficiency becomes evident from a comparison of the growth in gross revenue
(251%) and the increase in mall expenses (177%) between 2004 and 2008, when several
expansions were made and shopping centers were opened and acquired. This performance is
reflected in the Net Operating Income (NOI) and the high NOI margin of 84% in 2008. NOI,
which is operating income less shopping center expenses and parking expenses, is one of the
indicators of the company‟s financial situation.

279,725
300, 000 86. 0%

83.8%
84.0%
84. 0%

250, 000

211,122
82. 0%

200, 000

81.8%
169,631 80. 0%

78.1%
150, 000

78. 0%

77.3%
100, 000

73,870
65,080
76. 0%

50, 000

74. 0%

- 72. 0%

2004 2005 2006 2007 2008

Growth of NOI (R$‟000) and NOI Margin (%) (in R$‟000)


NOI Calculation 2004 2005 2006 2007 2008
Rent 81,160 91,740 193,079 239,394 295,252
Parking Result 3,080 2,860 9,422 18,594 37,589
Operational Result 84,240 94,600 202,501 257,988 332,841
Shopping Expenses (19,160) (20,730) (32,870) (46,866) (53,116)
NOI 65,080 73,870 169,631 211,122 279,725
NOI Margin 77.3% 78.1% 83.8% 81.8% 84.0%

General and Administrative Expenses


The year 2008 was marked by several positive factors that increased general and
administrative (G&A) expenses to R$83.1 million. These include investments in development
of new shopping centers, expansions, real estate developments, and future projects on one of
the largest land banks in the market. A strategic investment in marketing was fundamental for
leveraging the developments launched. Another important factor was the increase in
headcount, with the Company bringing in executives with specialist knowledge, as required by
the capital markets. These professionals, working together with Multiplan‟s executives who
have more than 20 years of experience, form a competitive and differentiated synergy in the
shopping center segment. The Company also invested in a new and bigger branch office in
São Paulo with better infrastructure to meet the demands of the growing number of projects
under development in the region. Yet another factor was the new ERP system, whose
implementation began in the third quarter of 2008 and will integrate all the shopping centers to
the head office. As in any ERP system, training is essential, and Multiplan is making all
efforts to train its employees and ensure that the system is fully operational in 2009.
PERFORMANCE INDICATORS

Adjusted Funds from Operations (FFO) and Adjusted Net Income


Adjusted net income grew significantly over the years. Net income should be adjusted for the
goodwill resulting from the acquisitions made since 2006 and the IPO expenses in 2007 in
order to arrive at the correct number. Another method to analyze the financial results of
Multiplan‟s operations is by using the adjusted FFO ratio (net income plus depreciation and
amortization), which is an estimate of the Company‟s operational cash flow.

19% 909% 20%


1454% 209,185
240,599
176,007
200,174

101,867 119,378

23,790 23,850 33,700


13,460

2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Evolution of adjusted net income (in R$‟000) Evolution of adjusted FFO (in R$‟000)

FFO & Net Income Calculation 2004 2005 2006 2007 2008
Net Income 13,460 23,790 (32,190) 21,158 77,397
Amortization - - 83,446 117,805 124,708
Diferred Taxes - - - - 7,081
Non-recurring expenses¹ - - 50,611 37,044 -
Adjusted Income 13,460 23,790 101,867 176,007 209,185
Depreciation 10,390 9,910 17,511 24,167 31,414
Adjusted FFO 23,850 33,700 119,378 200,174 240,599
¹ Refers to IPO costs

Adjusted EBITDA
19% Multiplan ended 2008 with
354% 250,621
EBITDA of R$250 million.
212,163
EBITDA is a financial indicator
143,804 used to understand the Company‟s
performance before deducting taxes,
75,040 interest, non-recurring expenses,
55,200
amortization and depreciation, as
explained below.
2004 2005 2006 2007 2008
Evolution of adjusted EBITDA (in R$‟000)
EBITDA Calculation (R$'000) 2004 2005 2006 2007 2008
Net Income 13,460 23,790 (32,190) 21,158 77,397
Tax Income and Social Contribution 15,990 24,020 13,618 1,813 12,800
Financial result 6,180 3,180 3,078 (1,220) (3,544)
Depreciation 10,390 9,910 17,511 24,167 31,414
Participation of the minority stockholders 9,700 15,790 8,053 165 766
Amortization - - 83,446 117,805 124,708
Non-recurring expenses¹ - - 50,611 37,044 -
Diferred Taxes - - - - 7,081
Adjusted EBITDA 55,720 76,690 144,128 200,933 250,621
EBITDA Margin 48.4% 55.5% 57.0% 59.7% 60.9%
¹ Refers to IPO costs

FINANCIAL PERFORMANCE

Capital Markets and Dividends


Multiplan‟s shares (MULT3) ended 2008 at R$ 12.31, losing 41.9% in the year, while the São
Paulo Stock Exchange Index (Ibovespa) dropped 41.2% to reach 37,550 points on December
31, 2008. Despite the decline, the Company‟s shares were one of the best performers among
the publicly-held real estate companies. Average daily trading volume of Multiplan‟s shares
was R$ 2.5 million in 2008, compared to the Bovespa‟s (São Paulo Stock Exchange) R$ 5.5
billion.

Valorização MULT3 e IBOV


Base - 30/12/2007
20%

0%

-20%

-40%

-60%
MULT3 IBOV
-80%

The Company did not pay dividends for the year 2007 due to the accumulated loss in 31 st
December of 2007. For 2008, the Company‟s Board of Directors will submit for the Annual General Meeting
approval a proposed dividend distribution of R$ 20.1 million.
CORPORATE GOVERNANCE

Investor Relations
Multiplan is committed to constantly improving its Corporate Governance practices through
transparency in information, equal treatment of all investors, and efficient and professional
management. In 2008, the company invested in its Investor Relations team by hiring new
professionals to better serve the market and also redesigned its website - an important
communication tool containing the latest information about the company. The Company held
meetings with investors and analysts in Brazil and abroad, in addition to conference calls,
telephone calls, emails and contacts through its website (www.multiplan.com.br). The IR team
also participated in two meetings with capital market analysts (Apimec meetings) in Rio de
Janeiro and São Paulo. Multiplan will continue to invest in improving its relationship with the
markets by pursuing fresh alternatives and differentiated communication tools.

Board of Directors
Multiplan‟s Board of Directors is a collective decision-making body composed of seven
members and is responsible for defining and monitoring the implementation of the general
business policies, including the long-term strategy. Its duties include appointing, and
supervising the activities of, Multiplan's executive officers and indicating the independent
auditors, pursuant to Brazilian company law.
According to Multiplan‟s Bylaws, the Board of Directors ordinarily meets once every quarter
and extraordinarily whenever necessary. All the decisions of the Board are taken by majority
vote of the members present at any meeting that has been duly called and held.
The Board of Directors consists of one independent member and two representatives of the
Ontario Teachers Pension Fund, which, through its subsidiary, Cadillac Fairview, owns 35%
of Multiplan‟s shares. Cadillac Fairview is one of the largest investors, owners and managers
of commercial real estate in North America, having developed shopping centers and
commercial properties in the USA and Canada for over 50 years. With a portfolio valued at
US$16 billion, Cadillac Fairview and its affiliates hold and manage over 83 properties,
including such landmark projects in Canada as the Toronto Eaton Centre, Sherway Gardens,
Toronto-Dominion Centre, Carrefour Laval, Chinook Centre and Vancouver´s Pacific Centre.

Board of Executive Officers


It consists of five members and its main duty is to oversee the daily management as well as the
implementation of the general business policies and guidelines established by the Board of
Directors. Executive officers are elected by the Board of Directors for a unified term of two
years, with the possibility of reelection, and may be removed from office anytime.
According to the Company‟s Bylaws, the Board of Executive Officers may consist of at least 2
and at most 10 members. At present, the Board consists of one Chief Executive Officer, one
Vice Chief Executive Officer, one Chief Development Officer, one Investor Relations Officer
and one Director.
HUMAN RESOURCES

The company has a long-term strategic commitment to recruiting and retaining the best
professionals in the market. In 2008, it absorbed several interns in its staff and hired highly

qualified fresh professionals, who will have the opportunity to work with and learn from the
most experienced executives in the shopping center and real estate development sector, with
extensive knowledge of these two areas. Multiplan values and invests in its employees,
offering opportunities within the organization, besides providing courses, lectures and
training. The result is a solid and committed team, which is reflected in the quality of work.

CORPORATE RESPONSIBILITY

Multiplan and its developments organize diverse initiatives to benefit people living around the
shopping centers, as well as employees, employees of outsourcers and tenants. Shopping
centers frequently lend space to charities to sell their products, as well as promote and
encourage donations, beneficiary events and educational campaigns. The company‟s concern
for the impact of its developments on the environment has led it to seek new technologies and
equipment to reduce the consumption of natural resources such as water and energy, besides
adopting recycling and waste treatment programs. The shopping centers comply with all the
environmental laws and are implementing policies to broaden their environmental
responsibility.

Social

Santo Antônio Convent – Multiplan is one of the sponsors of the cultural project called
"Restoration and Revitalization of the Santo Antônio Convent Architecture Complex – 400
years of history". Rio de Janeiro's Santo Antônio church and convent, together with the
Church of the Third Order of St. Francis of Penance, a jewel of Baroque art in Brazil, make up
the architecture complex of the remains of Morro de São Antônio. Located at Largo da
Carioca, it is under the aegis of the National Artistic and Historical Heritage Institute (IPHAN)
since 1938. The architectural and artistic purity of these impressive buildings, as well as their
original Franciscan style, are being restored thanks to historical, artistic, archeological and
iconographic research. In addition, the public can learn more about their history through two
museums, exposition and multimedia halls, which will be implemented as part of the
revitalization of this area in the center of Rio de Janeiro.

Education – The main objective of Rio de Janeiro BarraShopping‟s RepensaRH is to


encourage personal and professional development. Through voluntary and awareness activities
relating to education, training, health, and quality of life, the project values self-esteem and
citizenship. One of the most successful initiatives is EstudaRH, a program that offers basic and
high school courses not only to the employees of BarraShopping but also to those of tenants
and outsourcers. Classes are held at the BarraShopping Socio-cultural Space, which comprises
two fully equipped classrooms with capacity for up to 40 students. The courses use Roberto
Marinho Foundation‟s Telecurso 2000 coursebooks and are recognized by the federal Ministry
of Education. Certificates are given by the Center for Fast Track Studies of the Rio de Janeiro
State Education Ministry. Students completing these courses are given priority in the shopping
malls‟ promotions and recruiting processes. RepensaRH received an award from the
International Council of Shopping Centers 2008 in the category of „marketing/community
services‟.

Accessibility – In December 2008, BarraShopping received the “Certificado Acessibilidade


Nota 10” in the gold category at a ceremony held by the Committee for the Defense of People
with Special Needs at the Rio de Janeiro State Legislature. To win this certification in the gold
category, it is necessary to comply with several accessibility criteria, including the installation
of ramps, adapted restrooms, lifts with operators or Braille panels, appropriate furniture,
priority service, automatic doors, tactile flooring and dedicated parking spaces. BarraShopping
also has telephones for the hearing/speech impaired and a changing room for special children.

‘Natal do Bem’ Christmas campaign – Since 2005, Shopping Pátio Savassi in Belo
Horizonte has been organizing the Natal do Bem campaign, which includes donation of toys to
underprivileged children in the Morro do Papagaio community adjacent to the shopping
center, and other institutions in the Belo Horizonte metropolitan region. In four years, 32,800
toys had been donated to 123 institutions, such as day care centers, schools and hospitals, and
volunteer social services (Servas), through joint efforts with the government and private
entities.

Bom de nota, Bom de bola – In partnership with the NGO Associação Pró-Esporte e Cultura,
RibeirãoShopping has launched the „Bom de nota, Bom de bola‟ (Good at studies, good at
sport) project for 200 children aged between 7 and 13, in the neighboring Conjunto
Habitacional João Rossi. Participation in sports activities is related to academic performance,
discipline and class attendance.

Big Meetings Project - Launched in May 2003 by Shopping Anália Franco in partnership
with Rádio Eldorado, the Big Meetings project consists of free monthly concerts by leading
names in Brazilian popular music (música popular brasileira). The project is aimed at
increasing the shopping center‟s traffic and sales, strengthening its relationship with
consumers and positioning it as a stage for social and cultural interaction, besides
consumption. The project gained a charity aspect since 2005, when it started encouraging
clients to donate 1 kg of non-perishable food items while attending these concerts. Over 10
tonnes of food items have been collected and donated to institutions and underprivileged
communities around the shopping center.
Housing – In 2008, when Porto Alegre‟s BarraShoppingSul was inaugurated, Multiplan made
a series of improvements in the city. It was responsible for constructing houses with basic
sanitation, paved roads, a school and a health center in the Vila Novo district to house about
800 families that lived in areas of risk around the shopping center. The Campos de Cristal
Municipal Primary School has 42 teachers serving 480 students, and features an IT laboratory,
music classes, reinforcement classes (in the afternoon for morning students and vice versa), a
library and a sports court. Besides functioning as an open school throughout the year, Campos
do Cristal serves as a meeting point for the community, bringing together the local families.
Multiplan has also made a series of improvements in the access roads to the shopping center
and has built a 2.5 km cycle way in front of BarraShoppingSul

Socio-environmental Transformation Center – In partnership with the Porto Alegre town


hall and the NGO Solidariedade, Multiplan has invested in creating the Socio-environmental
Transformation Center in the Cristal district. This Center houses a recycling center and
provides professional training to the local population, especially those without regular housing
and with income less than three minimum wages and are vulnerable to social and
environmental risk. The Center also offers workers a series of courses in environmental
education, entrepreneurship and citizenship. The first students completing the general
assistant program in November 2008 began working at BarraShoppingSul‟s tenants or
outsourced service providers.

Environment

Energy savings – The New York City Center (NYCC) in Rio de Janeiro is considered a
model of intelligent energy use. The architectural project – a large open area with a height of
35m and white canvas cover of 5,400m² - favors natural light and ventilation and obviates the
need for air-conditioning. The canvas cover prevents radiation but provides clarity and lights
up the ambience. The shopping center lights are turned on only at the end of the day through
sensors. NYCC‟s

parking lot walls are painted white to favor internal lighting. On hot days, water sprinklers are
used to make humidify the air and to freshen up the place. All these measures represent
savings of around 20% in energy costs compared to a shopping center with a traditional
design.
Adoption of gardens – BHShopping has adopted close to 67,000 m² of green areas in its
surroundings, and is responsible for the gardening, maintenance, cleaning and conservation
services. The areas adopted include the Marcelo Góes Menecucci Sobrinho Square in front of
it, and the BR 356 highway clover that inspired Multiplan‟s logo. In 2007, BH Shopping won
the Cidade Jardim Regional Centro Sul award from the Belo Horizonte town hall for the
conservation of the Marcelo Góes Square.
AWARDS AND HONORS

Valor 1000 Award


In 2008, Multiplan won the eighth edition of the Valor 1000 Award from the Valor
Econômico newspaper in the Construction and Engineering category. The annual publication
Valor 1000 lists Brazil‟s 1000 largest companies in terms of net revenue and selects the best in
25 sectors based on balance sheet data. The survey is conducted by the newspaper in
partnership with the School of Business of the Getúlio Vargas Foundation in São Paulo, and
Serasa.
Marketing Best 20 years
Multiplan‟s communication program in the past two decades was honored by the Marketing
Best‟s 20 Years‟ Special Edition. The award is in recognition of the company‟s history of
creative and excellent shopping center campaigns. Marketing Best is organized by Editora
Referência, which specializes in marketing and advertising, the Getúlio Vargas Foundation
School of Business Administration and Madia Mundo Marketing.
Awards in the shopping center sector
Multiplan has won seven awards, two in the “gold” category and five in the “silver” category,
from the International Council of Shopping Centers (Latin America) – Latin American‟s most
important awards in the sector – and two awards from the Brazilian Association of Shopping
Centers in the “Management Excellence" and “Expansion Excellence” categories at the 10th
International Shopping Center Congress held in September 2008 in São Paulo. The company
also won the “Excellence in Management” award in 2002, 2004 and 2006 at the biennial
event.

ACKNOWLEDGEMENTS

We would like to thank our shareholders, clients, partners, tenants, suppliers and financial
institutions for their support and trust in the Company. Our special thanks go to our partner
Cadillac Fairview and our employees for their efforts, dedication and commitment, all of
which made the excellent results recorded in 2008 possible.

Rio de Janeiro, March 25, 2008.


The Management