Years ended December 31, 2010, 2009 and 2008
Notes to restated consolidated financial statements
for the years ended December 31, 2010 and 2009
(Figures in thousands of Mexican pesos (Ps.), except as otherwise indicated)
Desarrolladora Homex, S.A.B. de C.V. and its subsidiaries (the “Company”) is comprised of a group of companies engaged mainly in the promotion, design, development, construction and sale of affordable entry level and middle income residential housing. Substantially all sales are made in Mexico.
To carry out its activities, the Company engages in land acquisition, obtaining permits and licenses, designing, constructing, marketing and selling homes, obtaining individual financing for its customers and developing communities to satisfy housing needs in Mexico.
The Company participates in housing supply offers from the main housing funds in Mexico, such as the National Workers’ Housing Fund, or Instituto Nacional del Fondo de Ahorro para la Vivienda de los Trabajadores (“INFONAVIT”), the Social Security and Services Institute Public-Segment Workers’ Housing Fund, or Fondo de la Vivienda del Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (“FOVISSSTE”) and the governmental mortgage providers such as the Federal Mortgage Society, or Sociedad Hipotecaria Federal (“SHF”). Additionally, the Company participates in the market, where mortgage financing is provided by commercial banks and cash transactions.
For the years ended December 31, 2010, 2009 and 2008, revenues obtained through INFONAVIT mortgage financing accounted for 75%, 76% and 76% respectively, of the Company’s total revenues, with other sources accounting for 25%, 24% and 24%, respectively.
Homex’s operations include 140 developments in 34 cities located in 21 Mexican states, which states represent 78% of Mexico’s population, according to the Mexican Institute of Statistics, Geography and Computer Sciences, or INEGI (Instituto Nacional de Estadística, Geografía e Informática). In 2009, 19% of Homex’s revenues originated in the Mexico City Metropolitan Area, the largest city in Mexico, and 9% in the state of Jalisco. The remaining revenues were originated throughout 31 cities.
Approximately Ps. 173,272 of the Company’s 2010 revenue originated in Brazil. For its Brazilian operations, the Company participates in housing supply offers with the governmental institution Caixa Economica Federal (“Caixa”) that is similar in nature to the INFONAVIT in Mexico in that it provides financing to lower income homebuyers.
The Company’s operations are on a seasonal basis: normally, the highest volume of sales takes place in the second half of the year. Construction times of real-estate developments vary depending on the type of housing: entry-level, middle-income or upper-income.
On April 27, 2011, the Financial Director (CFO), Carlos Moctezuma Velasco, and the Administrative and Accounting Officer, Ramón Lafarga Bátiz, authorized the issuance of the Company’s restated consolidated Mexican Financial Reporting Standards (Mexican FRS ) financial statements and notes as of December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010. Those consolidated financial statements have been approved by the Audit Committee and the Board of Directors on April 27, 2011, and by the Company’s stockholders at its meeting held on April 29, 2011.
