Desarrolladora Homex (HXM)

Culiacan Mexico, February 27, 2012—Desarrolladora Homex, S.A.B. de C.V. (“Homex” or “the Company”) [NYSE: HXM, BMV: HOMEX] today announced financial results for the Fourth Quarter and Full Year ended on December 31, 2011[1].

Financial Highlights

[1] Unless otherwise noted, all monetary figures are presented in thousands of Mexican pesos and in accordance with Mexican Financial Reporting Standards (MFRS). Fourth quarter and full year 2011 and 2010 figures are presented without recognizing the effects of inflation per the application of MFRS B-10 “Effects of inflation.” The symbols “Ps.” and “$” refer to Mexican pesos and “US$” refers to U.S. dollars. U.S. dollar figures in this release are presented only for the convenience of the reader and are estimated, using an exchange rate of Ps13.9787 per US$1.00. Fourth quarter and full year 2011 financial information is unaudited and subject to adjustments.
Percentage change expressed in basis points is provided for the convenience of the reader. Basis points figures may not match, due to rounding.

² The Company presents Free Cash Flow according to the Changes in Financial Position accounting methodology pursuant to Mexican Financial Reporting Standards (MFRS), which includes Non-Cash Foreign Exchange effects.

Commenting on fourth quarter and full year results, Gerardo de Nicolás, Chief Executive Officer of Homex, said:

” For Homex, 2011 was a year of adapting to challenges and opportunities, and we believe that overall, we ended the year once again well positioned for the intermediate term, both strategically and operationally. ”

“In Mexico, we were able to successfully mainstream vertical construction into our product offering. We are proud to be the first Company among our peers to successfully make this transition; and as a result, today we have the highest proportion of vertical construction in our developments. We are strategically positioned to benefit further from government incentives earmarked for homebuilders who are committed to the creation of better planned communities in Mexico, with housing developments that provide for increased density through vertical construction. Importantly, this successful transition reflects our innovative spirit of leadership, always in the vanguard of the homebuilding industry, finding and adapting to new and best practices, while continually seeking to improve our business model, ultimately for the benefit of our customers. For the year, in Mexico, we grew our housing revenues by 8.9 percent, titling 51,421 units, 91.2 percent of which were in the Affordable Entry-level segment of the market.

“In Brazil, we showed remarkable improvement in our operations, growing our collected units from 326 to 1,065 units. This improvement reflects our continuing to gain practical knowledge and a better understanding of the dynamics at work in this country, which has resulted in more efficient working capital management.

“In our Infrastructure division, we continued to work with state and federal government agencies in the execution of different building service contracts which have contributed revenues of Ps.857million or 4 percent of our total revenues for the full year 2011. More importantly, we were also assigned to build and operate over a 20-year period two Federal Penitentiaries with a value of Ps.10.6 billion, which we expect could provide Homex a permanent and reliable source of revenues. Both penitentiary projects got underway successfully late in the fourth quarter of 2011, and we expect to record our initial construction progress in revenues in the first quarter of 2012.

“Regarding cash flow generation, we feel comfortable with our achieved results although we did not reach consolidated positive cash flow for the year. In Mexico, despite the fact that we increased vertical construction from five percent as of year-end 2010 to 40 percent as of year end 2011, we were able to deliver positive cash flow generation of Ps.103 million, reflecting our ability to generate cash under a business model that by nature requires an initially higher capital investment, while at the same time carrying a longer construction cycle.The negative consolidated cash flow reported of approximately Ps.780 million is mainly driven by our operations in Brazil, which continue to carry the initial negative result from the first phases of our projects there. Nonetheless, through the changes that we have made in that country, which today are reflected in improved collections, I feel comfortable that Brazil will continue to improve its working capital cycle.

“Regarding profitability, our 2011 results continue to show stability and resiliency, reflected in our EBITDA margin of 21.6 percent, which is in line with our 2011 guidance of 21 to 22 percent.

“For 2012, we feel confident that we are well positioned for continued, profitable growth as we have done our homework in every division, while shoring our financial resources with the successful issuance of US$400 million in bonds due in 2020, which also provides us with a more flexible balance sheet and significant improvement in our debt maturities. Overall, we feel confident in the quality and attractiveness of our product portfolio both in Mexico and Brazil; we are very pleased with the excellent work that we have performed in migrating into vertical construction and in our ongoing strategies to improve working capital management. We are encouraged by the opportunities we continue to see in under-served housing markets throughout the regions that we are operating in today, and the proven applicability of our business model in such markets with similar economic characteristics as Mexico. ”

Homex had operations in 34 cities and 21 states across Mexico and in three cities and two states in Brazil, as of December 31, 2011.

Titled volume. During the fourth quarter of 2011, titled home volume totaled 15,345 homes, an increase of 29.5 percent compared to the fourth quarter of 2010, driven by 32.0 percent quarter -over-quarter growth in the Affordable Entry-level (AEL) collected units in Mexico, in line with the Company’s continued strategy of increased focus on the Affordable Entry-Level segment of the housing market, its core business.

During the fourth quarter of 2011, homes sold in the Affordable Entry-level segment in Mexico accounted for 13,605 or 88.7 percent of total titled volume compared to 10,309 or 87.0 percent for the same period in the previous year. Middle income volume in the fourth quarter of 2011 decreased 6.3 percent to 1,442 homes from 1,539 homes during the fourth quarter of 2010, in line with the Company’s proactive strategy of reducing its exposure to the middle income segment, in response to the reduction in available mortgage financing in this segment. Middle income volume represented 9.4 percent of total titled volume during the fourth quarter of 2011, a decrease of 359 basis points when compared to 13.0 percent that the volume in this segment represented during the fourth quarter of 2010.

During the fourth quarter of 2011, the Company’s Affordable Entry-Level homes titled in Brazil totaled 298 units. It is worth noting that during the 2010 fourth quarter the Company did not record any titled homes from its international division. This result evidences significantly improved collection performance in Brazil compared to the same period in the previous year. During the recent quarter, homes titled in Brazil represented 1.9 percent of Homex total volume.

For the full year 2011, titled volume totaled 52,486 homes, an 18.4 percent increase from the 44,347 units titled during 2010. Affordable entry-level volume in Mexico increased by 21.9 percent in 2011 representing 91.2 percent of total titled volume. Middle-income titled volume decreased 25.5 percent compared to 2010 levels reflecting the Company’s strategy to reduce its exposure to the high-middle income segment and concentrate its product offering at a price where MIL homes can be readily financed through co-financing mortgage programs and in view of continued mortgage financing constraints through commercial banks and sofoles. The Company has continued to concentrate on increasing its market share in its core business (the Affordable Entry-level segment) where mortgage financing availability is strongly supported by INFONAVIT and FOVISSSTE, as well as state housing funds.For the full year 2011, the Company’s homes titled in Brazil totaled 1,065 units or 2.0 percent of total titled units during the year, a 226.7 percent increase from the 326 units titled or 0.7 percent of total titled units during 2010.

The average price for all titled homes during the fourth quarter of 2011 was Ps.409 thousand, a decrease of 8.8 percent when compared to the fourth quarter of 2010. Homex’ average price decrease was mainly driven by an 18.7 percent decline in middle-income home prices as a result of Homex’ strategy to concentrate its product offering at a price where homes can be financed through co-financing programs within INFONAVIT and FOVISSSTE. During the quarter, the average price for the Affordable Entry-level segment was stable at Ps.344 thousand, a 2.0 percent increase when compared with Ps.338 thousand in the year ago period. Homex’ average price reflects the Company’s strategy to actively respond to demand trends, mortgage availability, and market opportunities in Mexico.

For the Fourth Quarter of 2011, the average price for homes titled in Brazil was Ps.664 thousand. The Company has continued to concentrate on a product offering affordable for families who earn between 3 to 6 times minimum wage, therefore taking full advantage of the government support through the mortgage program Minha Casa Minha Vida administered by the Caixa.

For the full year 2011, the average price for all Homex titled homes was Ps.391 thousand, a decrease of 6.1 percent when compared to 2010. The decline was mainly driven by a 12.5 percent decrease in the middle-income segment, following mortgage financing trends, where the Company’s clients are mostly financed through co-financing programs.

For the full year 2011, the average price for homes titled in Brazil was stable at Ps.562 thousand when compared with Ps.532 thousand during 2010.

*Annual Minimum Wage
The Company categorized its titled homes during the quarter according to the price ranges presented above

Mortgage financing* . For the fourth quarter of 2011, 30.0 percent of the Company’s titled homes were financed through INFONAVIT. At the same time, Homex has continued to increase its participation in FOVISSSTE’s mortgage program, and, as a result, financing from FOVISSSTE represented 28.0 percent of total titled units. During the quarter, titled units in Brazil, which are financed through the Caixa, represented 1.9 percent. Importantly, the Company has found alternative sources of financing for low income customers through state housing funds as well as financing for the affordable -entry level with commercial banks. During the quarter 40.1 percent of Homex’ customers were financed by commercial banks and other state housing funds.

*Sources of mortgage financing according to homes titled during the period.

On an accumulated basis as of December 31, 2011, 50 percent of the Company’s titled units were financed through INFONAVIT. Units titled through FOVISSSTE represented 21 percent while other sources of financing including commercial banks and other state housing funds represented 27 percent as a result of the Company’s strategy to pursue opportunities with state housing funds and commercial banks to originate mortgage financing opportunities for its affordable entry-level clients. Titled units through the Caixa in Brazil represented 2.1 percent of all mortgages financed through Homex in 2011.

Financial Results

Revenues increased 6.0 percent in the fourth quarter of 2011 to Ps.6,430 million from Ps.6,065 million in the same period of 2010. Total housing revenues (including the Company’s operations in Brazil) in the fourth quarter of 2011 grew 18.1 percent compared to the same period of 2010, mainly driven by a growth of 34.6 percent to Ps.4,684 million in the Company’s Affordable Entry-level segment in its Mexico Division, reflecting the Company’s focus on the lower income housing segment. In Mexico, Homex benefits from continued and solid financing through INFONAVIT and FOVISSSTE as well as from CONAVI’s subsidy program where the Company is strategically positioned as the subsidy program prioritizes customers who acquire a vertical unit. As of December 31, 2011 Homex vertical product offering under construction represented 40 percent of total units.

During the fourth quarter of 2011, middle income level revenues decreased 23.8 percent to Ps.1,394 million from Ps.1,831 million in the year ago period as a result of the Company’s taking proactive measures to reduce its exposure to this sector and to increase its participation in the Affordable Entry-level market and low middle income segment in light of reduced mortgage financing availability through commercial banks and sofoles.

Reflecting the Company’s continued improvement in its first international endeavor at Brazil, Homex registered revenue of Ps.198 million during the quarter compared with Ps.896 thousand during the year ago period.

During the fourth quarter of 2011, other revenues were mainly attributable to the Company’s Infrastructure Division (without including revenues from the Federal Penitentiaries project) where the Company has different signed contracts with state and federal governments. These revenues decreased 79.5 percent, as expected, during the fourth quarter of 2011 to Ps.154 million from Ps.752 million during the year ago period. The decline derives from the fact that during the year ago period 63 percent of the Company’s total revenue from the Infrastructure Division was recorded during the fourth quarter, while during 4Q11 the Company only completed the last phase of the 2011 ongoing contract and had not yet begun the new signed contract with federal and state governments which has started as of 1Q12.

During the quarter the Company did not register any revenue from the construction of the Penitentiaries projects, as the Certificates of Construction Advance or “CAPS” were not approved on a timely basis. The advance on the construction of the projects was booked as construction in progress inventory during the quarter. The Company expects to recognize revenues from this work in the first quarter of 2012

During the fourth quarter of 2011, as a percentage of total revenues, Homex’ Housing Mexico Division represented 94.5 percent, where the Affordable Entry-Level represented 72.9 percent compared to 57.4 percent in the year ago period.
The middle income segment decreased to 21.7 percent during the recent quarter from 30.2 percent in the fourth quarter of 2010. Importantly, Brazil represented 3.1 percent of the fourth quarter 2011 total revenues, while during the year ago period the Company did not recognize any revenues from its operations in Brazil.Other revenues represented 2.4 percent of total revenues during the fourth quarter of 2011 from 12.4 percent during 4Q10, driven by lower revenue recognition of the Company’s infrastructure division.

For the full year 2011, revenues increased 10.5 percent to Ps.21,717 million from Ps.19,652 million in 2010, slightly below the Company’s yearly guidance of 12 to 14 percent. Total housing revenues (including the Company’s operations in Brazil) in 2011 increased 11.2 percent, mainly driven by a 26.2 percent growth within the Affordable Entry-Level segment from the Company’s Mexico Division, mainly from volume growth within the segment, confirming Homex’ focus on organic growth in Mexico in attractive home markets that provide continued growth opportunities. The Middle-income segment represented 15.5 percent of total revenues in 2011 compared to 26.3 percent in 2010 as a result of Homex taking proactive measures to reduce its exposure to the segment. Revenues from Brazil represented 2.8 percent during 2011 compared to 0.9 percent during 2010, reflecting Homex’ improved operations and gained experience in the country, thus confirming its ability to successfully replicate its housing business model in the lower income housing segment in countries with inherent housing demand.

Gross profit margin decreased to 21.2 percent in the fourth quarter of 2011 from 32.1 percent in the same quarter of last year principally due to the capitalization of Comprehensive Financing Cost (CFC), as the Company recorded a higher non-cash foreign exchange loss during the recent period. Pursuant to MFRS D-6, since 2007 the Company has been required to capitalize a portion of its CFC, which includes interest expense, exchange gains and losses, and monetary position gains and losses, and to apply capitalized CFC to the cost of sales as the related inventory is titled in future periods.

During the fourth quarter of 2011, the Company registered a non-cash foreign exchange loss, of Ps.126.4 million, caused by the 12.9 percent year-over-year depreciation of the Mexican peso against the U.S. dollar, compared to a non-cash foreign exchange gain of Ps.22.0 million recorded during the same period of last year. At the same time, capitalized interest expense was Ps.375.4 million during the fourth quarter of 2011 compared to Ps.245.1 million in the fourth quarter of 2010.

On a pro-forma basis (without considering the application of MFRS D-6 in 2010 and 2011), Homex’ gross margin for the quarter would have been 29.0 percent as compared to 35.8 percent during the same period last year. The margin decline reflects Homex’ product mix change, where the company has decreased its exposure to the middle income segment from 30.2 percent of total revenues as of 4Q10 to 21.7 percent during the recent period, reflected as well in the average price for all homes titled which decreased to Ps.404 thousand during 4Q11 from Ps.448 thousand in the year ago period. At the same time, during the quarter the Company also incurred additional COGS related to license and permits to adapt its projects to new density requirements and standards in relation to the Company’s migration to more vertical construction.

For the twelve months ended December 31, 2011, gross profit decreased 5.2 percent to Ps.5,618 million from Ps.5,925 million in 2010. As a percentage of total revenues, gross profit decreased 428 bps to 25.9 percent during 2011 when compared to 30.1 percent in 2010. On a pro forma basis (without considering the application of MFRS D-6 in 2010 and 2011) Homex’ gross margin for the year was 32.1 percent, compared to 34.0 percent in the same period of last year, mainly driven by Homex’ product mix change where middle income segment revenue contribution decreased from 26.3 percent during 2010 to 15.5 percent as of December 31, 2011. At the same time the lower margin reflects Homex’ lower average price for all homes titled in Mexico which decreased from Ps.416 thousand as of December 31, 2010 to Ps.388 thousand as of December 31, 2011 and the additional incurred COGS during the last quarter of the year.

Selling, General and Administrative Expenses (SG&A) as a percentage of total revenues for the fourth quarter of 2011 decreased 619 bps to 11.0 percent from 17.2 percent for the fourth quarter of 2010. The decrease on SG&A was mainly a result of the Company’s continued efficiencies generated from the ongoing re-structuring of administrative personnel in both Mexico and Brazil, as well as from improved collections in Brazil.

For the full year 2011, total SG&A as a percentage of total revenues, decreased 236 bps to 12.8 percent from 15 percent for full year 2010. The decrease in SG&A for the full year 2011 is mainly derived from efficiencies generated during the year from the ongoing re-structuring of administrative personnel in both Mexico and Brazil

Operating income . During the fourth quarter of 2011, operating income decreased 27.8 percent to Ps.654 million from Ps.907 million during the same period of 2010, mainly due to the capitalization of CFC as explained in the Gross Profit discusion, above. Operating income as a percentage of revenues was 10.2 percent in the fourth quarter of 2011 compared to 15.0 percent during 2010, the lower margin is mainly driven by a higher capitalization of CFC. On a pro-forma basis (without considering the application of MFRS D-6 in 2010 and 2011) Homex’ operating margin for the fourth quarter of 2011 was 18.0 percent compared to 18.7 percent during the same period of last year. The lower margin during the recent quarter mainly results from the Company’s product mix change where Homex has decreased its exposure to the middle income segment, a lower average price as previously explained and the additional incurred COGS in relation to license and permits to align projects to vertical construction.

In 2011, operating income decreased 3.6 percent to Ps.2,837 million compared to Ps.2,944 million in 2010. On a pro-forma basis (without considering the application of MFRS D-6 in 2010 and 2011), operating income increased 13.4 percent to Ps.4,200 million during 2011 from Ps.3,703 million during the year ago period. Homex’ operating margin in 2011 improved 50 bps to 19.3 percent from 18.8 percent in 2010. The year-over-year improvement is mainly driven by lower SG&A expenses during 2011 as previously explained in the SG&A discussion.

Net comprehensive financing cost (CFC) during the fourth quarter of 2011 was Ps.3.5 million compared to Ps.117.6 million during the fourth quarter of 2010. The lower cost of financing during the fourth quarter of 2011 reflects lower interest expense in the period.

As a percentage of revenues, net comprehensive financing cost was 0.1 percent in the fourth quarter of 2011 versus 1.9 percent in the fourth quarter of 2010. The main drivers of this result were the following:

For the full year 2011, net comprehensive financing cost as a percentage of revenues remained stable at 1.6 percent, compared to 1.6 percent during 2010.In absolute terms, net comprehensive financing cost increased to Ps. 340.3 million from Ps.314.7 million in 2010, mainly driven by the recognition of a foreign exchange loss of Ps.198.1 million during the full year 2011, compared to a loss of Ps.137.5 million during the previous year.

Foreign exchange exposure and currency derivatives. As of December 31, 2011, Homex’ U.S. Dollar denominated debt mainly relates to the issuance of two bonds, a US$250 million bond issued in 2005 and a US$250 million bond issued in 2009, each with a single principal payment due at maturity in 2015 and 2019, respectively. Regarding its 2015 US$250 million bond, the Company has an interest -only swap that aims to effectively minimize the exchange risk in the dollar denominated interest payments for the 2012-2014 period. Regarding its 2019 US$250 million bond, Homex has entered into a principal -only swap at an exchange rate of 12.93 pesos per dollar until maturity; and for coupon payments, the Company has entered into an interest -only swap for the next three years at an effective exchange rate of 11.67 pesos per dollar, considering TIIE (Mexico’s reference floating rate) at 4.95 percent. During the fourth quarter of 2011, the mark-to-market value of the principal amount of the Company’s 2015 bond was negative for approximately Ps.126.4 million as recognized in the results of operations; the principal -only swap instrument in connection with the US$250 million 2019 bond had a negative mark-to-market value of approximately Ps.12.2 million, as recognized on the balance sheet as of Decemer 31, 2011.

Adjusted EBITDA during the fourth quarter of 2011 increased 12.2 percent to Ps.1,349 million from Ps.1,203 million reported in the same period, last year. As a percentage of sales, adjusted EBITDA during 4Q11 improved 116 bps to 21.0 percent, compared to 19.8 percent in the same period last year.

Adjusted EBITDA margin for the full year 2011 remained stable at 21.6 percent compared to 21.4 percent during 2010, in line with the Company’s yearly guidance of 21 to 22 percent.

Land reserve. As a result of Homex’ rapid migration to higher density projects, with vertical construction as of December

31, 2011 representing approximately 40 percent of total homes under construction, since 3Q11, the Company has started to use a new density standard in order to appropriately estimate the equivalence of the Company’s land reserve into units for the Affordable Entry-Level in Mexico. Currently, the estimated density for 40 percent of Homex’ Affordable -Entry projects has increased to 70 homes, from 50 homes per hectare. Thus, the Company considers its land reserve to be equivalent to 439,210 homes, of which 407,064 are reserved for Affordable Entry-level homes, including land reserved for Homex’ Brazilian operations, and 32,146 for homes at a price point above Ps.601 thousand, as well as land reserved for the Company’s tourism division. Homex’ land inventory value as of December 31, 2011, was Ps.11.4 billion (US$816.1 million) . The Company now estimates that its current land bank, considering this new density standard, covers 6.4 years of future operations.

During the fourth quarter of 2011, Homex acquired additional land in Mexico for approximately Ps.749 million, in line with the Company’s conservative land bank replacement policy.

During 2011, Homex continued to follow a conservative replacement strategy for land bank acquisitions, thus minimizing investments. For the full year 2011, the Company invested approximately Ps.900 million for land acquisitions, below its 2011 land acquisition budget of approximately Ps.1,700 million, including land in Mexico and Brazil.

Liquidity. During the fourth quarter of 2011, Homex’ debt position, on a quarterly basis, increased by 7.2 percent or Ps.1.0 billion to Ps.15,364 million from Ps.14,337 million as of September 30, 2011. Of this increase, Ps.320.5 million is related to the depreciation of the Mexican Peso against the US dollar, and thus does not represent additional debt. As of December 31, 2011, Homex’ weighted average debt maturity was 3.5 years, with 55 percent of the Company’s debt maturing between 2015 and 2019. The Company had net debt of Ps.11,127 million as of December 31, 2011, including the effects of the depreciation of the Mexican peso relative to the U.S. dollar.

On a yearly basis, Homex total debt increased from Ps.12,921 million or Ps. 2,443 million, out of which Ps. 1,333 million do not represent additional debt as this increase is related to the depreciation of the Mexican Peso against the US dollar. Year-over-Year, net debt adjusted by non cash FX effects increased by Ps. 851 million.

As of December 31, 2011, the Company had the following liquidity ratios:

¹ Profoma using the exchange rate as of September 30, 2011. During the quarter the Company registered Ps.320.5 million of additional debt due to the its US dollar denominated debt which is recorded according to the exchange rate of the Mexican Peso to US dollars for the period.

As a result of the 12.9 percent depreciation of the Mexican Peso against the US dollar, the Company registered a higher capitalization of Comprehensive Financing Cost (CFC) during 2011, mainly driven by a non-cash effect of the FX loss, which virtually increased the inventory. For your convenience we present the breakdown of our inventory and capitalization of CFC to show total inventory adjusted by this effect.

The Company’s Working Capital Cycle (WCC) was 645 days compared to 652 days during 4Q10, the improvement was mainly driven by a 25 days decrease in inventory. On a sequential basis, WCC decreased 18 days from 663 days as of September 30, 2011.

During 4Q11, and as a result of the 12.9 percent depreciation of the Mexican Peso against the US dollar, the Company’s Changes in Financial Position (which according to Mexican Financial Reporting Standards has historically been presented as Free Cash Flow), reflect the booking of non-cash items due to the mark-to-market of the Company’s Principal -Only Swap coverage instrument, as well as from the capitalization of the FX loss registered in the inventory as previously disclosed above. On an annual basis, as of December 31, 2011 the Company had a total non-cash impact of Ps.1.2 billion out of Ps.1.9 billion negative result of the Company’s Changes in Financial Position as of December 31, 2011.

For the full year 2011, and excluding the non-cash FX effects, the Company generated a negative Free Cash Flow of Ps.780 million. Importantly, for the year, Homex’ Mexico Division generated a positive Free Cash Flow of Ps.103 million which reflects the Company’s ability to align its business model to vertical construction, creating better planned communities and an improved product offering for its clients while, at the same time generating positive Free Cash Flow.

The negative Free Cash Flow generation for the year is mainly explained by a negative cash flow from the Company’s operations in Brazil; nonetheless it is worth noting the important improvement that the Company has made in its operations at Brazil, and therefore the negative result reflects the initial negative carry from the first phases of its projects at the country.

In addition, during the quarter, the Company had a negative impact from the initiation of the Federal Penitentiaries project where Homex recognized approximately Ps.105 million in its construction -in-progress inventory. Additionally, during the year the Company acquired Ps.900 million of land, below its land acquisition budget for the year.

2012 GUIDANCE:

Recent Business Developments

Homex Executed Successful Placement of Private Offering of U.S.$400 million 9.750% Senior Notes due 2020

Homex completed on February 7, 2012 a private offering of U.S.$400 million of 9.750% Senior Notes due 2020 (the “Senior Notes”) . The Company intends to use the proceeds of the offering to repay principally existing short-term indebtedness, or approximately 32 percent of its total outstanding debt.

The successful placement of the Senior Notes, reaffirms investors’ recognition of Homex’ strong position in the homebuilding sector in México and Brazil, and reflects the market’s confidence in the Company’s new projects in relation to its infrastructure division, as well as Mexico’s positive housing outlook. The issuance of the Senior Notes strengthens the Company’s balance sheet, extending the average maturity of its debt obligations from an average of 3.6 years to an average of 5.5 years while maintaining healthy financial ratios.

To protect the Company from the Foreign Exchange risk the Company entered into a principal -only swap to hedge the foreign exchange risk associated with the principal amount of this debt at a rate of Ps.12.88 per U.S. dollar through 2020. For more information please see the Offering Material in the Company’s web site.

Desarrolladora Homex, S.A.B. de C.V. [NYSE: HXM, BMV: HOMEX] is a leading, vertically integrated home- development company focused on affordable entry-level and middle-income housing in Mexico and Brazil. It is one of the largest Mexican homebuilders based on its revenues and one of the most geographically diverse homebuilders in the country.

Founded in Culiacan, Sinaloa in 1989, Homex continues expanding operations across Mexico and at the same time the Company has replicated its business model at three cities in Brazil. Homex’ dynamic nature has allowed the Company to identify, respond and adapt to market opportunities, supported by a solid operative and administrative team as well as by an effective and efficient use of its IT and construction systems which has been the cornerstone for its growth.

In 2010, Homex consolidated its Mexico operations merging the Affordable Entry-level and middle income segments into the Mexico Division. In addition, during 2010, the Infrastructure Division was launched, focused on building services contracts with the federal and state government. As a result of this re-organization, today Homex is formed by four divisions: Mexico Division, International Division, Infrastructure Division and Tourism Division.

For additional corporate information, please visit the Company’s web site at: www.homex.com.mx. Additional information for Homex' holders of US Dollar denominated bonds is also available on the Company’s Investor Relations portal at http://www.homex.com.mx/ri/index.htm.

Desarrolladora Homex, S.A.B. de C.V. quarterly reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward -looking and subject to risks and uncertainties. Forward -looking statements involve inherent risks and uncertainties. We caution investors that a number of important factors can cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward -looking statements. These factors include economic and political conditions and government policies in Mexico or elsewhere, including changes in housing and mortgage policies, inflation rates, exchange rates, regulatory developments, customer demand and competition. For those statements, the Company claims the protection of the safe harbor for forward -looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our filings with the Securities and Exchange Commission.

Attached is the unaudited Consolidated Financial Information of Desarrolladora Homex, S.A.B. de C.V. for the three and twelve month periods ended December 31, 2011 and 2010, which includes the Consolidated Balance Sheets as of December 31, 2011 and 2010, and the Consolidated Statements of Income for the three- and twelve-month periods ended December 31, 2011 and 2010 and the and Consolidated Statement of Changes in Financial Position for the twelve-month period ended December 31, 2011 and 2010.