Accounts receivable and debt

On December 31, 2010, the Company had a total of R$ 12.2 billion in accounts receivable. This is a 25.5% increase over 2009. The figure considers the sum of sales contracts signed and also amounts not yet included in the balance sheet. From this amount, 15.2% relate to units delivered, and 84.8% relate to units under construction. The average term for realization of accounts receivable is 2.4 years.

Cyrela has recorded no significant losses in the realization of these assets. Receivables from units under construction are a guarantee of production financings granted for the construction of the respective projects.

The gross debt amounted to R$ 3.4 billion on December 31, 2010. This is a 31.2% increase in comparison to 2009, when gross debt amounted to R$ 2.6 billion. The balance of domestic currency financing, which is entirely related to construction financing by the Housing Financial System (SFH), amounted to 57.1% of the total debts, increased 63.6% in the year because of the higher contracting of financing of construction in progress and new construction started in 2010. This financing is remunerated at rates between 8.5% and 12.5% per year, in addition to the Brazilian reference rate TR, with an average weighted rate of TR + 10.5% per year and maturity between 2010 and 2018.

The balance of loans in domestic currency, amounting to 41.4% of the total debt, increased 6.9% over the R$ 1.3 billion registered as of December 31, 2009. The balance of loans relates to the four issuances of debentures which were made in April 2007, January 2008, September 2009, and October 2010, and also to the long-term credit facilities granted by local financial institutions, with balance of R$ 202.5 million as of December, 2010. The average remuneration of these credit facilities is CDI (Interbank Deposit Certificates), plus 0.81% per year, and the payment will be made in annual installments along four years.

The balance of loans in foreign currency amounted to R$ 50 million on December 31, 2010, which amounts to 1.5% of the total debt. These is also the balance of US$ 30 million subject to the Libor variation and interest rates at 4.3% per year, to be matured in June, 2012.

Financing modality (R$ mil)

On 12/31/2010

On 12/31/2009

% Variation

Financing - domestic currency

1,947,737

1,190,338

63.6%

Loans - domestic currency

1,414,390

1,322,826

6.9%

Loans - foreign currency

49,961

87,060

-42.6%

Subtotal

3,412,088

2,600,224

31.2%

Interest - domestic currency

28,699

29,955

-4.2%

Interest - foreign currency

14

477

-97.1%

Subtotal

28,713

30,432

-5.6%

Total

3,440,801

2,630,656

30.8%