FIRST QUARTER 2016 EARNINGS REPORT - Amazon S3 · PREI - Portfolio Management Leasing Activity 1Q16...

Contacts in Mexico City: Contacts in New York: Francisco Martinez/ Angel Bernal Maria Barona / Juan Carlos Gomez Stolk Investor Relations Officer / Chief Financial Officer i-advize Corporate Communications, Inc. Tel: +52 (55) 5279-8107 / +52 (55) 5279-8109 Tel: +1 (212) 406-3691 / (646) 462-4517 E-mail: [email protected] / [email protected] E-mail: [email protected] / / [email protected]

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FIRSTQUARTER2016EARNINGSREPORT

MexicoCity,April21,2016–Terrafina®(“TERRA”)(BMV:TERRA13),a leadingMexicanindustrialrealestateinvestmenttrust(“FIBRA”),externallyadvised by Prudential Real Estate Investors and dedicated to the acquisition, development, leasing and management of industrial real estatepropertiesinMexico,todayannounceditsfirstquarter2016(1Q16)earningsresults.ThefiguresinthisreporthavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(“IFRS”).Figurespresentedinthisreportare presented inmillions ofMexican pesos andmillions of U.S. dollars, unless otherwise stated. Additionally, figuresmay vary due to rounding.Terrafina’sfinancialresultsincludedinthisreportareunaudited.Asaresult,thementionedfiguresinthisfinancialreportarepreliminaryfiguresandcouldbeadjustedinthefuture.Thisdocumentmayincludeforward-lookingstatementsthatmayimplyrisksanduncertainties.Termssuchas"estimate","project","plan","believe","expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers thatdeclarationsandestimatesmentioned in thisdocument,or realizedbyTerrafina’smanagement implyrisksanduncertainties thatcouldchange infunctionofvariousfactorsthatareoutofTerrafina’scontrol.FutureexpectationsreflectTerrafina’sjudgmentatthedateofthisdocument.Terrafinareservestherightorobligationtoupdatetheinformationcontainedinthisdocumentorderivedfromthisdocument.Pastorpresentperformanceisnotanindicatortoanticipatefutureperformance.

FinancialandOperatingHighlightsasofMarch31,2016

Operating

• AsofMarch31,2016,theoccupancyratewas93.3%,a6basispointincreasecomparedtothefourthquarterof2015(4Q15)anda40basispointdecrease compared to the firstquarterof2015 (1Q15).Additionally, considering signedlettersofintent(LOI),occupancyfor1Q16was94.0%.

• Annualizedaverageleasingratepersquarefootat1Q16wasUS$4.89,aUS$0.02increasecomparedto1Q15.

• Terrafinareportedatotalof30.1millionsquarefeet(msf)ofGrossLeasableArea(GLA)comprisedof209propertiesand217tenantsin1Q16.

• 1Q16leasingactivitytotaled1.8msf,ofwhich22.9%correspondedtonewleases,48.2%toleaserenewalsand28.9%toearlyrenewals.LeasingactivitywasmainlyconcentratedintheCiudadJuarez,RamosArizpe,Chihuahua,Monterrey,SanLuisPotosiandTolucamarkets.

• Totaldevelopmentsfor1Q16included202,000squarefeetofGLA,whichareexpectedtocontributeUS$0.9milliontoNetOperating Income (NOI) for the2017period. Theexpected return rate for thedevelopments that tookplace in1Q16is9.3%*.

*Expectedreturnisnotguaranteed.Finalresultsmayvary.

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Financial• 1Q16rentalrevenuesreachedUS$32.6million,a2.5%orUS$0.8milliondecreasecomparedto1Q15.Itisimportant

tomentionthat1Q16rentalrevenuesindollarsdecreasedasaresultoftheassetsalethattookplaceduring1Q15.

• 1Q16NOIwasUS$31.8million,a0.5%orUS$0.1milliondecreasecomparedto1Q15.Moreover, impliedcapratewas9.7%,consideringtheaverageshareprice for1Q16ofUS$1.63 (Ps.29.39)and2016expectedNOIofUS$133million.

• TheNOImarginfor1Q16reached87.0%,a89basispointincreasecomparedto1Q15.• 1Q16EBITDAreachedUS$28.5million,anincreaseof0.2%orUS$0.1millioncomparedto1Q15.

• TheEBITDAmarginfor1Q16was78.2%,a134basispointincreasecomparedto1Q15.• 1Q16adjustedfundsforoperations(AFFO)reachedUS$16.6million,aUS$1.8milliondecreasecomparedto1Q15.

• TheAFFOmarginfor1Q16was45.1%,a819basispointdecreasecomparedto1Q15.• 1Q16 distributions totaledUS$16.6million.Asa resultof1Q16operations,Terrafinawill distribute Ps.0.4951 per

CBFI(US$0.0273perCBFI)fordistributionscorrespondingtotheJanuary1toMarch31,2016period.

• Theannualizeddistributionof1Q16wasUS$0.1092;consideringtheaveragesharepriceforthequarterofUS$1.63(Ps.29.39),Terrafina’sdividendyieldforthequarterwas6.7%.

FiguresindollarsintheIncomeStatementwereconvertedintopesosusingtheaverageexchangeratefortheperiod;fortheBalanceSheettheexchangerateforthecloseoftheperiodwasused.(1)Millionsofsquarefeet.(2)IncludesexpansionsandBuilt-to-Suits(BTS).(3)Occupancyattheendoftheperiod.(4)Indicatestheleaserenewalrateof the leases, includesearly renewals. (5)Excludingaccrued incomeas it isanon-cash item (6)Earningsbefore interest, taxes,depreciationandamortization. (7)CertificadosBursátilesFiduciariosInmobiliarios-RealEstateInvestmentCertificates.FiguresindollarsintheBalanceSheetwereconvertedusingtheclosingexchangerateoftheperiod.(*)Revenuesandexpenseshavebeenadjustedforthecalculationoftheabovementionedmetrics.Pleaserefertothe“1Q16FinancialPerformance"and"Appendices"sectionavailableinthisdocument.Source:PREI–PortfolioManagement–FundAccounting

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FinancialHighlights

Operating Mar16 Mar15 Var. NumberofDevelopedProperties 209 196 13 GrossLeasableArea(GLA)(msf)

1 30.1 28.2 1.9 NewDevelopments2(msf) 0.25 0.49 -0.24 LandReserves(msf) 6.40 5.90 0.50 OccupancyRate3 93.3% 93.7% -40bps Avg.LeasingRent/SquareFoot(dollars) 4.89 4.87 0.02 WeightedAve.RemainingLeaseTerm(years) 3.65 3.66 -0.01

RenewalRate4 87.7% 97.4% -968bps

QuarterlyFinancial 1Q16 1Q15 Var. 1Q16 1Q15 Var.

fx 18.0667 14.9314

(millionsofpesosunlessotherwisestated) (millionsofdollarsunlessotherwisestated)

RentalRevenues5 589.0 499.0 18.0% 32.6 33.4 -2.5%OtherOperatingIncome 75.0 70.3 6.8% 4.2 4.7 -12.2%NetRevenues 675.0 553.7 21.9% 37.4 37.1 0.6%NetOperatingIncome(NOI)* 573.9 476.3 20.5% 31.8 31.9 -0.5%NOIMargin 87.0% 86.1% 89bps 87.0% 86.1% 89bpsEBITDA6* 516.1 424.1 21.7% 28.5 28.5 0.2%EBITDAMargin 78.2% 76.8% 134bps 78.2% 76.8% 134bpsFundsfromOperations(FFO)* 355.7 319.6 11.3% 19.6 21.4 -8.5%FFOMargin 53.8% 57.9% -409bps 53.8% 57.9% -409bpsAdjustedFundsfromOperations(AFFO)* 300.8 296.3 1.5% 16.6 19.9 -16.6%AFFOMargin 45.1% 53.3% -819bps 45.1% 53.3% -819bpsDistributions 300.8 296.3 1.5% 16.6 19.9 -16.6%DistributionsperCBFI7 0.4951 0.4880 1.4% 0.0273 0.0327 -16.7%

BalanceSheet Mar16 Dec15 Var. Mar16 Dec15 Var.

fx 15.1542 17.2065

(millionsofpesosunlessotherwisestated) (millionsofdollarsunlessotherwisestated)

Cash&CashEquivalents 4,454.8 4,467.9 -0.3% 256.0 259.7 -1.4%InvestmentProperties 28,906.1 28,678.7 0.8% 1,661.1 1,666.7 -0.3%LandReserves 876.6 827.2 6.0% 50.4 48.1 4.8%TotalDebt 12,276.7 12,215.6 0.5% 705.5 709.9 -0.6%NetDebt 7,821.8 7,747.8 1.0% 449.5 450.3 -0.2%

F

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CommentbyAlbertoChretin,ChiefExecutiveOfficerandChairmanoftheBoardDuringthefirstquarterof2016,Terrafinaachievedsolidoperatingresultssupportedbyastableoccupancyrateaswellas stable average leasing rent levels. Leasing activity was particularly strong in the Ciudad Juarez, Ramos Arizpe,Chihuahua,Monterrey,SanLuisPotosiandTolucamarketsasaresultofgrowingmanufacturingforexportactivitygiventheattractivenessofMexicoasadestinationformultinationalbusinessoperations.Terrafina’sleasingactivityforthefirstquarterof2016included1.8millionsquarefeetinleasingcontractscomprisedof22.9%innewcontracts,48.2%in leaserenewalsand28.9%inearlyrenewals.Additionally,theaverageannual leasingrentwasUS$4.89per square foot, aUS$0.02 increase compared to the first quarterof 2015andaUS$0.01 increasecompared to the fourth quarter of 2015. By region, average rentswere stable, with US$4.77 per square foot in theNorthernregion,US$4.92persquarefoot intheBajioregionandUS$5.18averagerentpersquarefoot intheCentralregion.For the firstquarter2016, theoccupancy ratewas93.3%,a6basispoint increasecompared to the fourthquarterof2015.Additionally,includingsignedlettersofintent,occupancyforthequarterwas94.0%.Occupancybyregionreached95.4%intheNorthernregion,86.8%intheBajioregionand95.4%intheCentralregion.Lastly,andwithrespecttothemainfinancial indicatorsforthefirstquarter,rentalrevenuesreachedUS$32.6million,NetOperating Revenue reachedUS$31.8million andOperatingMargin reached 87.0% generatingUS$16.6million inAdjustedOperating Funds. Distribution per CBFI reached Ps. 0.4951, orUS$0.0273,which represented an annualizeddistributionofPs.1.98orUS$0.1092perCBFI,anda6.7%dividendyield,consideringtheaverageCBFIpriceforthefirstquarterof2016.Sincerely,AlbertoChretin

ChiefExecutiveOfficerandPresidentoftheTechnicalCommittee

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OperatingHighlights

HighlightsbyRegion

(asofMarch31,2016) North Bajio Central Total

#Buildings 133 47 29 209

#Tenants 134 46 37 217

GLA(msf) 16.4 7.5 6.1 30.1

NewDevelopments1(msf) 0.1 0.2 0.0 0.2

LandReserves(msf) 3.0 0.1 3.3 6.4

OccupancyRate 95.4% 86.8% 95.4% 93.3%

AverageLeasingRent/SquareFoot(dollars) 4.77 4.92 5.18 4.89

AnnualizedRentalBase% 54.5% 23.5% 22.0% 100.0%

(1)IncludesexpansionsandBuilt-to-Suit(BTS).Source:PREI-PortfolioManagement

LeasingActivity 1Q16 1Q15 Var.

OperatingPortfolio(msf): Renewals 0.9 1.4 -0.5

EarlyRenewals 0.5 0.2 0.4

NewLeases 0.4 0.1 0.3

TotalSquareFeetofLeasesSigned 1.8 1.7 0.1Source:PREI-PortfolioManagement

NORTH - BajaCalifornia- Sonora- Chihuahua- Coahuila- NuevoLeón- Tamaulipas- Durango

BAJIO - SanLuisPotosí- Jalisco- Aguascalientes- Guanajuato- Querétaro

CENTRAL - EstadodeMéxico- DistritoFederal- Puebla- Tabasco

Terrafina’soperations1Q16.

30.2%

69.8%

ComposidonbyAssetTypeasof1Q16

(asa%oftotalGLA)

Distribulon Manufacturing

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OperatingHighlights(continued)OccupancyandRentsbyRegion MaturitiesandRenewalsbyRegion

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Consolidated

(AsofMarch31,2016)

OccupancyRate

Avg.LeasingRent/SquareFoot(dollars) (AsofMarch31,2016)

Maturities(numberofcontracts)

%ofTotalMaturities

Renewals(numberofcontracts)

%ofTotal

RenewalsNorth 95.4% 4.77 North 21 80.8% 18 85.7%BajaCalifornia 90.1% 4.67 BajaCalifornia 2 7.7% 0 0.0%Tijuana 90.1% 4.67 Tijuana 2 7.7% 0 0.0%

Sonora 86.3% 4.19 Sonora 0 0.0% 0 0.0%Hermosillo 86.3% 4.19 Hermosillo 0 0.0% 0 0.0%

Chihuahua 96.3% 4.94 Chihuahua 14 53.8% 13 92.9%Chihuahua 96.6% 5.39 Chihuahua 8 30.8% 8 100.0%CiudadJuarez 95.7% 4.57 CiudadJuarez 6 23.1% 5 83.3%Delicias 100.0% 5.52 Delicias 0 0.0% 0 0.0%GomezFarias 100.0% 3.34 GomezFarias 0 0.0% 0 0.0%Camargo 100.0% 3.78 Camargo 0 0.0% 0 0.0%CasasGrandes 100.0% 4.09 CasasGrandes 0 0.0% 0 0.0%

Coahuila 95.4% 4.44 Coahuila 3 11.5% 3 100.0%CiudadAcuña 100.0% 5.87 CiudadAcuña 0 0.0% 0 0.0%Monclova 100.0% 5.26 Monclova 0 0.0% 0 0.0%RamosArizpe 95.6% 4.12 RamosArizpe 2 7.7% 2 100.0%Saltillo 91.0% 5.30 Saltillo 1 3.8% 1 100.0%SanPedrodelasColinas 89.3% 1.00 SanPedrodelasColinas 0 0.0% 0 0.0%Torreon 100.0% 4.10 Torreon 0 0.0% 0 0.0%

NuevoLeon 96.2% 5.00 NuevoLeon 2 7.7% 2 100.0%Apodaca 86.8% 5.79 Apodaca 2 7.7% 1 50.0%Monterrey 99.8% 4.74 Monterrey 0 0.0% 0 0.0%

Tamaulipas 88.6% 4.52 Tamaulipas 0 0.0% 0 0.0%Reynosa 88.6% 4.52 Reynosa 0 0.0% 0 0.0%

Durango 100.0% 3.89 Durango 0 0.0% 0 0.0%Durango 100.0% 4.04 Durango 0 0.0% 0 0.0%GomezPalacio 100.0% 3.05 GomezPalacio 0 0.0% 0 0.0%

Bajio 86.8% 4.92 Bajio 2 7.7% 1 50.0%SanLuisPotosi 87.4% 4.77 SanLuisPotosi 1 3.8% 0 0.0%SanLuisPotosi 87.4% 4.77 SanLuisPotosi 1 3.8% 0 0.0%

Jalisco 100.0% 5.45 Jalisco 0 0.0% 0 0.0%Guadalajara 100.0% 5.45 Guadalajara 0 0.0% 0 0.0%

Aguascalientes 100.0% 4.55 Aguascalientes 0 0.0% 0 0.0%Aguascalientes 100.0% 4.55 Aguascalientes 0 0.0% 0 0.0%

Guanajuato 91.5% 4.94 Guanajuato 0 0.0% 0 0.0%Celaya 100.0% 5.07 Celaya 0 0.0% 0 0.0%Irapuato 86.5% 5.07 Irapuato 0 0.0% 0 0.0%Silao 92.0% 4.83 Silao 0 0.0% 0 0.0%

Queretaro 70.4% 4.89 Queretaro 1 3.8% 1 100.0%Queretaro 70.4% 4.89 Queretaro 1 3.8% 1 100.0%

Central 95.4% 5.18 Central 3 11.5% 3 100.0%EstadodeMexico 94.6% 5.35 EstadodeMexico 3 11.5% 3 100.0%CuautitlanIzcalli 98.7% 5.36 CuautitlanIzcalli 1 3.8% 1 100.0%Toluca 100.0% 5.28 Toluca 2 7.7% 2 100.0%DistritoFederal 100.0% 10.53 DistritoFederal 0 0.0% 0 0.0%Azcapotzalco 100.0% 10.53 Azcapotzalco 0 0.0% 0 0.0%

Puebla 100.0% 3.36 Puebla 0 0.0% 0 0.0%Puebla 100.0% 3.36 Puebla 0 0.0% 0 0.0%

Tabasco 100.0% 4.19 Tabasco 0 0.0% 0 0.0%Villahermosa 100.0% 4.19 Villahermosa 0 0.0% 0 0.0%

Total 93.3% 4.89 Total 26 100.0% 22 84.6%Source:PREI-PortfolioManagement

Source:PREI-PortfolioManagement

*Overthenumberofmaturedleasesinthequarter

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1Q16OperationalPerformanceCompositionbyGeographicalDiversificationThegeographicaldiversificationofTerrafina’spropertiesat1Q16(basedonGLApersquarefoot)wasmainly locatedinthenorthernregionofMexico,representing54.6%ofGLA,whilefortheBajioandCentralregions,itrepresented25.1%and20.3%,respectively.

GeographicDistributionbyRegionandState

1Q16 asa%ofTotalGLA1Q16 1Q15 asa%ofTotalGLA1Q15

North 16.43 54.6% 15.79 55.9%BajaCalifornia 1.13 3.8% 1.13 4.0%Tijuana 1.13 3.8% 1.13 4.0%

Sonora 0.28 0.9% 0.28 1.0%Hermosillo 0.28 0.9% 0.28 1.0%

Chihuahua 9.61 31.9% 9.41 33.3%Chihuahua 4.13 13.7% 4.13 14.6%CiudadJuarez 5.00 16.6% 4.80 17.0%Delicias 0.29 1.0% 0.29 1.0%GomezFarias 0.08 0.3% 0.08 0.3%Camargo 0.02 0.1% 0.02 0.1%CasasGrandes 0.09 0.3% 0.09 0.3%

Coahuila 3.43 11.4% 3.38 12.0%CiudadAcuña 0.24 0.8% 0.24 0.9%Monclova 0.34 1.1% 0.34 1.2%RamosArizpe 1.94 6.5% 1.89 6.7%Saltillo 0.62 2.1% 0.62 2.2%SanPedrodelasColinas 0.15 0.5% 0.15 0.5%Torreon 0.13 0.4% 0.13 0.5%

NuevoLeon 1.16 3.9% 0.77 2.7%Apodaca 0.32 1.1% 0.00 0.0%CiénegadeFlores 0.00 0.0% 0.00 0.0%Monterrey 0.84 2.8% 0.77 2.7%

Tamaulipas 0.34 1.1% 0.34 1.2%Reynosa 0.34 1.1% 0.34 1.2%

Durango 0.46 1.5% 0.46 1.6%Durango 0.40 1.3% 0.40 1.4%GomezPalacio 0.07 0.2% 0.07 0.2%

Bajio 7.55 25.1% 6.45 22.9%SanLuisPotosi 2.75 9.1% 1.89 6.7%SanLuisPotosi 2.75 9.1% 1.89 6.7%

Jalisco 1.29 4.3% 1.29 4.6%Guadalajara 1.29 4.3% 1.29 4.6%

Aguascalientes 0.75 2.5% 0.75 2.6%Aguascalientes 0.75 2.5% 0.75 2.6%

Guanajuato 0.78 2.6% 0.54 1.9%Celaya 0.12 0.4% 0.12 0.4%Irapuato 0.24 0.8% 0.00 0.0%Silao 0.42 1.4% 0.42 1.5%

Queretaro 1.98 6.6% 1.98 7.0%Queretaro 1.98 6.6% 1.98 7.0%

Central 6.12 20.3% 6.00 21.2%EstadodeMexico 5.26 17.5% 5.14 18.2%CuautitlanIzcalli 4.12 13.7% 4.00 14.2%Huehuetoca 0.23 0.8% 0.23 0.8%Lerma 0.00 0.0% 0.00 0.0%Toluca 0.91 3.0% 0.91 3.2%

DistritoFederal 0.02 0.1% 0.02 0.1%Azcapotzalco 0.02 0.1% 0.02 0.1%

Puebla 0.18 0.6% 0.18 0.7%Puebla 0.18 0.6% 0.18 0.7%

Tabasco 0.65 2.2% 0.65 2.3%Tabasco 0.65 2.2% 0.65 2.3%

Total 30.09 100.0% 28.24 100.0%TotalGrossLeasableArea/millionsquarefeet.Potentialleasableareaoflandreservesarenotincluded.


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CompositionbyAssetTypeAttheendofthefirstquarter2016,30.2%ofTerrafina’stotalportfolioconsistedofdistributionandlogisticspropertiesand69.8%weremanufacturingproperties.

CompositionbySectorAsofMarch31,2016,tenantdiversificationbyindustrialsectorwasasfollows:

IndustrialSectorDiversification

1Q16 1Q15 Var.

Automotive 30.4% 27.2% 312bps

Industrialproperties 19.5% 20.4% -92bps

Consumergoods 18.7% 17.4% 123bps

LogisticsandTrade 9.8% 10.9% -112bps

Aviation 9.4% 10.1% -74bps

Non-durableconsumergoods 6.1% 6.6% -48bps

Electronics 6.2% 7.3% -107bps

Total 100.0% 100.0%


30.4%

19.5%18.7%

9.8%

9.4%6.1%6.2%

DiversificadonbySectorasof1Q16(asa%ofleasedGLA)

AutomolveIndustrialproperlesConsumergoodsLogislcsandTradeAvialonNon-durableconsumergoodsElectronics

CompositionbyAssetType

1Q16 1Q15 Var.

Distribution 30.2% 30.3% -6bps

Manufacturing 69.8% 69.7% 6bpsSource:PREI-PortfolioManagement

30.2%

69.8%

ComposidonbyAssetTypeasof1Q16

(asa%oftotalGLA)

Distribulon Manufacturing

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TopClients’CompositionTerrafina’stenantbase lease industrialpropertiesthroughoutseveralofMexico’smaincities.For1Q16,Terrafina’stopclient,top10clientsandtop20clients,represented4.5%,22.5%and34.4%oftotalrevenues,respectively.

TopClients

(asofMarch31,2016) LeasedSquareFeet(millions)

%TotalGLA %TotalRevenues

TopClient 1.24 4.4% 4.5%

Top10Clients 6.19 22.1% 22.5%

Top20Clients 9.56 34.1% 34.4%Source:PREI-PortfolioManagement

Occupancy1Q16occupancyratewas93.3%,a6basispoint increasecomparedto4Q15.Additionally, includingsignedLOIsforthequarter,occupancyratewas94.0%.Itisimportanttomentionthatoccupancyratemetricspresentedinthisreportonlyshowthequarterlyclosingrate.For1Q16,Terrafina’s leasingactivityreached1.8msf,ofwhich22.9%correspondedtonewleasingcontracts(includingexpansions),48.2%forcontractrenewalsand28.9%forearlyrenewals.

LeasingactivitymainlytookplaceintheCiudadJuarez,RamosArizpe,Chihuahua,Monterrey,SanLuisPotosiandTolucamarkets.Inadditiontothisleasingactivity,TerrafinasignedLOIsforanadditional210,000squarefeet.

LeaseMaturitiesTerrafinahad217 leasing contracts at the endof 1Q16 The leasing characteristics of these contracts have an averagematurity of three to five years for logistics and distribution properties and of five to seven years for manufacturingproperties.Annualaveragematurities(asapercentageofannualbaserents)remainatlevelsof9%to20%forthenextfiveyears.

93.3%

6.0%0.7%

Occupancyasof1Q16(as%ofTotalGLA)

LeasedGLAVacantGLASignedLeoersofIntent

1Q16 1Q15 Var.

LeasedGLA 93.3% 93.7% -40bps

VacantGLA 6.0% 6.3% -29bps

SignedLettersofIntent 0.7% 0.8% -6bps

Total 100.0% 100.0% Source:PREI-PortfolioManagement

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ThefollowingtableshowsTerrafina’sleasingmaturityscheduleforthecomingyears:

Annual

BaseRent(millionsofdollars)

%ofTotalOccupiedSq.Ft(millions) %ofTotal

2016 12.2 8.9% 2.70 9.6%2017 18.4 13.4% 3.81 13.6%2018 17.9 13.1% 3.66 13.0%2019 27.2 19.9% 5.65 20.1%2020 27.5 20.0% 5.46 19.4%Thereafter 34.0 24.8% 6.79 24.2%Source:PREI–PortfolioManagement

CapitalDeploymentNewDevelopmentsIn1Q16,Terrafina signed202,000square feet innewcontracts.Thesenewdevelopmentsweredistributedas follows:21.4%inthenorthernregion78.6%intheBajioregion.It is importanttonotethatthesenewdevelopmentswillcontributeUS$0.9millionto2017NOI,witha9.3%estimateddevelopmentyield,consideringthetotalexpectedinvestmentforUS$10.2million

((1)NetOperatingIncomeforthenexttwelvemonths.(2)ProformaNOIdividedbythetotalexpectedinvestment.Proformafiguresarenotaguaranteeoffutureresults.(3)Beforefeesandtaxes.Source:PREI-PortfolioManagement

January-March2016

SquareFeet(millions)TotalExpectedInvestment

(millionsofpesos)

TotalExpectedInvestment3

(millionsofdollars)

CostperSquareFeet

(dollars)

%PayingRentby

EndofthePeriod

North 0.04 26.2 1.5 35.11 0.0%

Bajio 0.16 149.0 8.6 54.31 0.0%

Central 0.00 0.0 0.0 0.00 0.0%

Total 0.20 175.3 10.2 50.20 0.0%

ProformaNOI1(millionsofdollars) 0.9

EstimatedStabilizedYield2 9.3%

ProjectsUnderDevelopment 1Q16 1Q15

DevelopedProperties 99.2% 97.8%

PropertiesUnderDevelopment 0.8% 2.2%

Total 100.0% 100.0%


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CapitalExpenditures(CAPEX)Terrafina’s CAPEX is classified as those recurring expenses that took place based on upcoming leasingmaturities andpropertyimprovements.Themaingoaloftheseexpensesistherenewalofleasingcontractsaswellastheimprovementof property conditions taking into account tenant requirements. Terrafina expects to apply CAPEX towards vacantpropertiesaswellastowardsthedevelopmentofnewGLAbymeansofexpansionsand/ornewdevelopments.

Additionally,itisimportanttoconsiderthatCAPEXintendedforexpansionsandnewdevelopmentsarenotfinancedwithTerrafina’soperatingcashflowandthereforedonotpassthroughtheincomestatement.

Capitalexpendituresaccountsarecomprisedasfollows:1) TenantimprovementsresourcesaswellasrecurringmaintenanceCAPEX.2) Brokerandadministratorfees.3) CAPEXfornewdevelopments,whichduetotheirnature,aregenerallycapitalized.In1Q16,Terrafina’stotalCAPEXinvestmentwasUS$8.9million.CAPEXbreakdownisshowninthefollowingtable:

1Q16 1Q16

(millionsofpesos)

(millionsofdollars)

TenantImprovements&RecurringCAPEX 40.4 2.2LeasingCommissions 20.4 1.1DevelopmentCAPEX1 100.5 5.6

TotalCapitalExpenditures 161.3 8.9MaintenanceexpensesforvacantpropertiesareincludedintheTenantImprovements&RecurringCAPEXfigures.(1)CAPEXforexpansions/newdevelopments.


LandReservesTerrafina’slandreserveasofMarch31,2016wascomprisedof11landreserveproperties,whichaccountedfor6.4msfofpotentialGLAforthedevelopmentoffutureindustrialassets.AsofMarch31,2016,Terrafina’slandreservesdistributionwasasfollows:

AsofMarch31,2016

SquareFeet

(millions)

LandatCost

(millionsofpesos)

LandatCost

(millionsofdollars)

AppraisalValue

(millionsofpesos)

MarketValue

(millionsofdollars)

North 3.0 474.6 27.6 441.6 25.7Bajio 0.1 12.3 0.7 11.0 0.6Central 3.3 639.1 37.1 374.6 21.8TotalLandPortfolio 6.4 1,126.0 65.4 827.2 48.1

Source:PREI-PortfolioManagementandFundAccounting

12

1Q16FinancialPerformanceFinancialResultsandCalculationsTerrafina’s1Q16financialresultsarepresentedinMexicanpesosandU.S.dollars.Figuresontheincomestatementforeach period were converted to dollars using the average exchange rate for 1Q16, while for the balance sheet, theexchangerateatthecloseofMarch31,2016wasapplied.Terrafina has in place best accounting practices for measuring the FIBRA’s (REIT) performance results by providingrelevant metrics to the financial community. Throughout the following financial performance section, additionalcalculations are available. It is important to note that these metrics must not be considered individually to evaluateTerrafina’sresults.ItisrecommendedtousethemincombinationwithotherInternationalFinancialReportingStandardsmetricstomeasuretheCompany’sperformance.Terrafina presents in this earnings report additional metrics such as Net Operating Income (NOI), Earnings BeforeInterests, Taxes, Depreciation and Amortization (EBITDA), Funds from Operations (FFO), and Adjusted Funds fromOperations(AFFO).Eachbreakdowncalculationisavailableinthisdocument.

Inaddition,TerrafinarecommendsreviewingtheAppendicesasareferenceoftheintegrationofdifferentitemsof

Terrafina’sfinancialstatement.Thisinformationisavailableinthelastsectionofthisdocument.

Pastperformanceisnotaguaranteeorreliableindicatoroffutureresults.

13

RentalRevenuesIn1Q16,TerrafinaregisteredUS$32.6millioninrentalrevenues,a2.5%orUS$0.8milliondecreasecomparedto1Q15.Itisimportanttomentionthat1Q16rentalrevenuesindollarsdecreasedasaresultoftheassetsalethattookplaceduring1Q15.Rentalrevenuesdonotincludeaccruedrevenues,astheseareanon-cashitem.OtherOperatingIncomeIn1Q16,otheroperatingincometotaledUS$4.2million,a12.2%orUS$0.6milliondecreasecomparedto1Q15.Other operating income mainly stems from leasing contract deposits and refunds from triple-net leases. ExpensesreimbursabletoTerrafinamainlyincludedelectricity,propertytaxes,insurancecostsandmaintenanceactivities.

NetrevenuesreachedUS$37.4millionin1Q16,anincreaseofUS$0.2million,or0.6%comparedto1Q15.

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%

(millionsofpesos) 0 (millionsofdollars) 0

RentalRevenue 589.0 499.0 18.0% 32.6 33.4 -2.5%

AccruedIncome1 11.0 -15.5 - 0.6 -1.0 -

OtherOperatingRevenues 75.0 70.3 6.8% 4.2 4.7 -12.2%

ReimbursableExpensesasRevenues2 69.8 53.6 30.3% 3.9 3.6 7.5%

ReimbursableTenantImprovements 5.1 3.8 33.7% 0.3 0.3 0.0%

Othernon-cashincome 0.1 12.9 -99.0% 0.0 0.9 -99.1%

NetRevenue 675.0 553.7 21.9% 37.4 37.1 0.6%(1)Straightlinerentadjustment;non-cashitem.(2)TriplenetleasesexpensesreimbursedtoTerrafinafromitstenants.

Source:PREI-FundAccounting

Foradditionalinformationregardingtherevenuebreakdownusedtocalculateadditionalmetricspresentedinthisearningsreport,pleaserefertoAppendix1inthelastsectionofthisdocument.

RealEstateExpensesIn1Q16,realestateexpensestotaledUS$10.1million,anincreaseofUS$2.2million,or26.9%comparedto1Q15.Theseexpensesweremainlyduetorepairsandmaintenance,utilitycosts,commissionsandtaxandinsuranceexpenses.It is important todifferentiatebetweenexpenses thataredirectly related to theoperationand for industrialportfoliomaintenance,asthesearetheonesusedintheNOIcalculation.

Theremainderoftheaccountsincludedinrealestateexpensesareconsiderednon-recurringexpensesandareusedtocalculateEBITDAandAFFO.

Foradditionalinformationregardingtherealestateexpensesbreakdown,pleaserefertoAppendix2inthelastsectionofthisdocument.

14

NetOperatingIncome(NOI)In1Q16NOItotaledUS$31.8million,a0.5%orUS$0.1milliondecreasecomparedwith1Q15.NOImarginincreased89basispointsreaching87.0%comparedto86.1%in1Q15.ThefollowingtabledisplaysthecalculationofNOIfor1Q16:

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


RentalRevenues1 589.0 499.0 18.0% 32.6 33.4 -2.5%

OtherOperatingincome2 69.8 53.6 30.3% 3.9 3.6 7.5%

NetRevenuesforNOICalculation 658.8 552.6 19.2% 36.5 37.0 -1.5%

RepairandMaintenance -7.7 -16.6 -53.8% -0.4 -1.1 -62.0%

PropertyTaxes -49.2 -33.8 45.5% -2.7 -2.3 19.2%

PropertyManagementFees -14.9 -10.9 36.8% -0.8 -0.7 12.2%

Electricity -5.0 -6.9 -27.9% -0.3 -0.5 -39.5%

PropertyInsurance -2.2 -2.7 -20.1% -0.1 -0.2 -39.0%

Security -2.9 -2.2 34.1% -0.2 -0.1 9.8%

OtherOperationalExpenses -3.0 -3.1 -1.9% -0.2 -0.2 0.0%

RealEstateOperatingExpensesforNOICalculation

-84.9 -76.2 11.4% -4.7 -5.1 -7.8%

NetOperatingIncome3 573.9 476.3 20.5% 31.8 31.9 -0.5%

NOIMargin 87.0% 86.1% 89bps 87.0% 86.1% 89bps

(1)Excludesaccruedincomefromstraightlinerentadjustmentsasitisanon-cashitem.(2)Excludestenantimprovementsreimbursementswhichareincludedin

AFFO'(3)Theincomecalculationgeneratedbytheoperationoftheproperty,independentofexternalfactorssuchasfinancingandincometaxes.NOIistheresultofNetRevenues(includesrentalincomeandtriplenetleasesexpensesreimbursements)minusRealEstateOperatingExpenses(costsincurredduringtheoperationandmaintenanceoftheindustrialportfolio).Source:PREI-FundAccounting

FeesandAdministrativeExpenses(G&A)G&Ain1Q16totaledUS$3.7million,a73.6%,orUS$10.2milliondecreasecomparedto1Q15.

ThefollowingtableshowstotalG&A:

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


ExternalAdvisorFees1 -35.5 -28.8 23.4% -2.0 -1.9 6.1%

ProfessionalandConsultingServices -6.6 -11.5 -42.6% -0.4 -0.8 -42.7%

Payroll,Admin.FeesandOtherExpenses -21.9 -169.3 -87.1% -1.2 -11.2 -89.1%

TotalG&A2 -64.0 -209.5 -69.5% -3.7 -13.8 -73.6%

(1)GeneralandAdministrativeExpenses(2)PLAAdministradoraIndustrial,S.deR.L.deC.V.,isaMexicanaffiliateofPREI,andAdvisorasper

theAdvisoryContract.


EarningsBeforeInterest,Taxes,DepreciationandAmortization(EBITDA)In1Q16,EBITDAreachedUS$28.5million,anincreaseofUS$0.1million,or0.2%,comparedto1Q15.EBITDAmarginfor1Q16was78.2%,a134basispointincreasecomparedtothepreviousyear.

15

ThefollowingshowstheEBITDAcalculationfor1Q16:

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


RentalRevenues1 589.0 499.0 18.0% 32.6 33.4 -2.5%

OtherOperatingincome2 69.8 53.6 30.3% 3.9 3.6 7.5%

RealEstateExpensesforEBITDACalculation -88.5 -80.7 9.6% -4.9 -5.4 -9.3%

RealEstateOperatingExpensesforNOICalculation -84.9 -76.2 11.4% -4.7 -5.1 -7.8%

Advertising -0.8 -0.5 61.8% 0.0 0.0 16.8%

Admin.PropertyInsuranceExpenses -0.9 -0.8 9.2% -0.1 -0.1 -11.6%

OtherAdmin.RealEstateExpenses -1.8 -3.1 -41.3% -0.1 -0.2 -51.4%

FeesandAdmin.Expenses -54.3 -47.8 13.6% -3.0 -3.2 -3.4%

ExternalAdvisorFees -35.5 -28.8 23.4% -2.0 -1.9 6.1%

Legal,Admin.andOtherProfessionalFees -10.9 -12.6 -13.4% -0.6 -0.8 -28.4%

TrusteeFees -1.5 -1.4 8.0% -0.1 -0.1 -9.6%

Payroll -5.6 -4.0 39.0% -0.3 -0.3 17.4%

OtherExpenses -0.7 -0.9 -24.5% 0.0 -0.1 -34.3%

EBITDA3 516.1 424.1 25.0% 28.5 28.5 0.2%

EBITDAMargin 78.2% 76.8% 134bps 78.2% 76.8% 134bps(1)Excludesaccruedincomefromstraightlinerentadjustmentsasitisanon-cashitem.(2)ExcludestenantimprovementsreimbursementswhichisincludedinAFFOcalculation.(3)Earningsbeforeinterest,taxes,depreciationandamortizationSource:PREI-FundAccounting

ForadditionalinformationregardingthecommissionsandadministrativeexpensesbreakdownusedforthecalculationofEBITDAandAFFO,pleaserefertoAppendix4locatedinthelastsectionofthisdocument.

FinancingCostsIn1Q16,financingcoststotaledUS$9.7million,anincreaseof39.0%orUS$2.7millioncomparedto1Q15.

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


InterestPaid -160.7 -107.4 49.6% -8.9 -7.2 23.6%

BorrowingExpenses

-15.4 -1.6 865.4% -0.9 -0.1 766.4%

Recurring -0.3 -1.6 - 0.0 -0.1 -

NonRecurring -15.1 0.0 - -0.8 0.0 -

InterestIncome 0.7 4.5 -84.9% 0.0 0.3 -87.5%

Total -175.4 -104.5 67.9% -9.7 -7.0 39.0%Source:PREI-FundAccounting

16

FundsfromOperations(FFO)/AdjustedFundsfromOperations(AFFO)In1Q16,Terrafina’sFFOdecreasedbyUS$1.8million,or8.5%comparedto1Q15,reachingUS$19.6million.FFOMarginwas53.8%,a410basispointdecreasecomparedto1Q15.Additionally,TerrafinareportedanAFFOofUS$16.6million,adecreaseofUS$3.3million,or16.6%comparedto1Q15.AFFOmarginwas45.1%,adecreaseof819basispointsversus1Q15.

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


EBITDA 516.1 424.1 21.7% 28.5 28.5 0.2%FinanceCost1 -160.3 -104.5 53.4% -8.9 -7.0 26.9%FundsfromOperations(FFO) 355.7 319.6 11.3% 19.6 21.5 -8.5%FFOMargin 53.8% 57.9% -410bps 53.8% 57.9% -410bpsTenantImprovements -30.2 -10.4 190.0% -1.7 -0.7 146.0%LeasingCommissions -20.4 -8.0 154.3% -1.1 -0.6 104.3%OtherNonRecurringExpenses3 -4.3 -4.9 -11.0% -0.2 -0.3 -30.0%AdjustedFundsfromOperations(AFFO) 300.8 296.3 1.5% 16.6 19.9 -16.6%AFFOMargin 45.1% 53.3% -819bps 45.1% 53.3% -819bps(1)NetOperationalInterestExpensescomprisedbyinterestpaid,recurringborrowingexpensesandinterestincome.(2)Relatedexpensestoacquisitions,legalandother.Source:PREI-FundAccounting

ComprehensiveIncomeComprehensiveIncomefor1Q16reachedUS$31.5million,comparedtotheUS$40.7millionin1Q15.

ThefollowingtablepresentsthecalculationofComprehensiveIncomefor1Q16:

1Q16 1Q15 Var.% 1Q16 1Q15 Var.%


NetRevenues 657.7 553.7 18.8% 36.4 37.1 -1.8%

RealEstateExpenses -182.7 -118.9 53.7% -10.1 -8.0 27.4%

FeesandOtherExpenses -64.0 -209.5 -69.5% -3.6 -13.8 -74.1%

Gain(Loss)fromSalesofRealEstateProperties 0.0 -0.3 - 0.0 0.0 -

NetIncome(Loss)fromFairValueAdjustmentonInvestmentProperties 9.8 -29.8 - 0.6 -2.0 -NetIncome(Loss)fromFairValueAdjustmentonDerivativeFinancialInstruments

0.0 -0.5 - 0.0 0.0 -

NetIncome(Loss)fromFairValueAdjustmentonBorrowings 76.9 54.1 42.1% 4.3 3.6 18.7%

NetIncome(Loss)fromFairValueAdjustmentonBankInvestment 0.0 8.9 - 0.0 0.6 -

ForeignExchangeGain(loss) -3.4 -98.7 -96.6% -0.2 -6.6 -97.0%

OperatingProfit 494.3 159.1 210.8% 27.3 10.9 150.8%

FinancialIncome 0.7 4.5 -84.9% 0.0 0.3 -87.6%

FinancialExpenses -176.1 -109.0 61.6% -9.8 -7.3 33.8%

NetFinancialCost -175.4 -104.5 67.9% -9.7 -7.0 39.0%

ShareofProfitfromEquityAccountedInvestments 17.3 0.0 - 1.0 0.0 -

NetProfit(Loss) 336.2 54.6 516.2% 18.6 4.2 342.1%

ItemsReclassifiedafterNetProfit(Loss)-CurrencyTranslationAdjustments 233.8 545.5 -57.1% 12.9 36.5 -64.6%

ComprehensiveIncome 569.9 600.1 -5.0% 31.5 40.7 -22.6%Source:PREI-FundAccounting

17

DistributionsperCBFIsIn1Q16,TerrafinadistributedUS$16.6million,orUS$0.0273perCBFI.Terrafina’s1Q16,4Q15,1Q15distributionsarepresentedinthefollowingtable:

(millionsofpesosunlessotherwisestated) 1Q16 4Q15 1Q15 Var.4

TotalOutstandingCBFIs1(millionsofCBFIs) 607.5 607.2 607.2 0.1%

CBFIPrice2 29.39 29.56 31.52 -6.8%

Distributions 300.8 275.7 296.3 1.5%

DistributionsPerCBFI 0.4951 0.4541 0.4880 1.4%

FXRateUSD/MXN(averageclosingperiod) 18.07 16.75 14.93 21.0%

Distributions(milliondollars) 16.6 16.5 19.9 -16.7%

DistributionsPerCBFI(dollars) 0.0273 0.0271 0.0327 -16.6%

AnnualizedDistributionYield3 6.7% 6.1% 6.2% 54bps(1)Terrafinapaid4,723,291CBFIstoitsexternaladvisorasaresultofanincentivefee.NumberofCBFIsattheendofeachperiod.334,187CBFIswereaddedaspartofTerrafina´scompensationplan.(2)Averageclosingpricefortheperiod.(3)AnnualizeddistributionpersharedividedbytheaverageCBFIpriceofthequarter.Quarterlydistributionyieldcalculation

hasbeenannualized.(4)1Q16comparedto1Q15.


TotalDebtAsofMarch31,2016,Terrafina’s totaldebtreachedUS$705.5million.TheaveragecostofTerrafina’s long-termdebt,whichisU.S.dollar-denominated,was4.98%.Additionally,itisimportanttomentionthatTerrafina’sloanssetatvariableinterestratesarehedgedwithinterestratecapsandfixedrateoptions.

(asofMarch31,2016)

Currency millionsofpesos

millionsofdollars

InterestRate

Terms Maturity ExtensionOption

LongTermDebt

Citibank1 Dollars 0.0 0.0 Libor+2.40% InterestOnly Aug2018 Aug2019

GEREM2,3 Dollars 4,753.2 273.2 Libor+3.75%Interest+Principal Sep2018 Sep2020

MetLife4 Dollars 388.1 22.3 5.09%Interest+Principal Nov2016 -

SeniorNotes Dollars 7,135.3 410.0 5.3% InterestOnly Nov2022 -

TotalDebt 12,276.7 705.5

NetCash 4,454.8 256.0

NetDebt 7,821.8 449.5 (1)Unsecuredsyndicatedloanfacilitywithsevenbanks.(2)Securedsyndicatedloanfacilitywithfourbanks.(3)One-yearinterestonlygraceperiod.4)DebtassumedfromportfolioacquisitionclosedinNovember2015.Source:PREI-FundAccountingandCapitalMarkets

38.7%

61.3%

InterestRateBreakdown(asofMarch31,2016)

VariableRate FixedRate

18

The following tables showTerrafina’s leverage anddebt service coverage as ofMarch 31, 2016 andbasedonprojectionsforthenextsixquarters:

Leverage(LTV) (asofMarch31,2016)

(millionsofpesos)

(millionsofdollars)

TotalAssets 34,176.4 1,964.0

TotalDebt 12,276.7 705.5

Loan-to-Value(LTV)1 35.9%

(1)TotalDebtdividedbyTotalAssetsasdefinedbytheNationalSecuritiesandBankingCommission(CNBV)Source:PREI-FundAccountingandCapitalMarkets

DebtServiceCoverageRatio(DSCR)

period (millionsofpesos) (millionsofdollars)

Cash&CashEquivalents March31,2016 4,454.8 259.7

RecoverableTaxes Σnext6quarters 353.2 20.5

EBIT1afterdistributions Σnext6quarters 1,154.2 67.1

AvailableCreditLine March31,2016 6,525.6 379.2

period (millonesdepesos) (millonesdedólares)

InterestPayments Σnext6quarters 935.1 54.3

PrincipalPayments Σnext6quarters 577.6 33.6

RecurringCAPEX Σnext6quarters 278.2 16.2

DevelopmentExpenses Σnext6quarters 95.5 5.6

DebtServiceCoverageRatio

(DSCR)2 6.6x

(1)EarningsBeforeInterestandTaxes

(2)(Cash&CashEquivalents+RecoverableTaxes+EBITAfterDistributions+AvailableCreditLine)/(Interest

Payments+PrincipalPayments+RecurringCAPEX+DevelopmentExpenses)

Source:PREI-FundAccountingandCapitalMarkets

Moreover,TerrafinadisclosesitsdebtcovenantsrelatedtotheUS$425millionbondissuance,whichisinfullcomplianceasofMarch31,2016asisshowninthefollowingtable:

(asofMarch31,2016)

TerrafinaBond

Covenants

Loan-to-Value(LTV)1 37.8% ≤60%

DebtServiceCoverageRatio(DSCR)2 2.2x ≥1.5x

SecuredDebttoGrossAssetsLimitation 15.0% ≤40%

UnencumberedAssetstoUnsecuredDebtLimitation 448% ≥150%

(1)TotalDebtdividedbyTotalAssets.(2)(NetIncome/Loss+InterestonDebt+UnrealizedGain/Lossoffairvaluechanges)/

(allinterestandprincipalpaymentsonDebt)

Source:PREI-CapitalMarkets

19

AnalystCoverageThefollowingisalistofbanksandinstitutionsthatregularlypublishresearchreportsonTerrafina:- Barclays- BBVABancomer- BofAML- BTGPactual- BX+- CitiBanamex- CreditSuisse- GBM- HSBC- Interacciones- Invex- ItaúBBA- JPMorgan- Monex- MorganStanley- NAUSecurities- Scotiabank- Vector

20

AboutTerrafinaTerrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease andmanage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically locatedwarehousesandotherlightmanufacturingpropertiesthroughouttheCentral,BajioandNorthernregionsofMexico.Itisinternallymanagedbyhighlyqualifiedindustryspecialists,andexternallyadvisedbyPREI.Terrafina owns 220 real estate properties, including 209 developed industrial facilities with a collective GLA ofapproximately30.1millionsquarefeetand11landreserveparcels,designedtopreservetheorganicgrowthcapabilityoftheportfolio.Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stabledistributionsandcapitalappreciations.Terrafinaaimstoachievethisobjective throughasuccessfulperformanceof itsindustrialrealestateandcomplementaryproperties,strategicacquisitions,accesstoahighlevelofinstitutionalsupport,andtoitsmanagementandcorporategovernancestructure.Formoreinformation,pleasevisitwww.terrafina.mxAboutPrudentialRealEstateInvestorsPrudentialRealEstateInvestorsistheglobalrealestateinvestmentbusinessofPrudentialFinancial,Inc.(NYSE:PRU),andoperates as Pramerica Real Estate Investors inmarkets outside of theAmericas, Korea and Japan. Redefining the realestate investing landscapesince1970,PREIhasprofessionals in18cities in theAmericas,EuropeandAsiaPacificwithdeep local knowledge and expertise, and gross assets under management of $63.7 billion ($47.1 billion net) as ofDecember31,2015.PREI’stenuredteamofferstoitsglobalclientbaseabroadrangeofrealestateinvestmentvehiclesthat span the risk-return spectrum across core, core plus, value-add, debt, securities, and specialized investmentstrategies.Formoreinformation,www.prei.comAboutPrudentialFinancial,Inc.PrudentialFinancial,Inc.(NYSE:PRU),afinancialservicesleaderwithmorethan$1trillionofassetsundermanagementasof December 31, 2015, has operations in theUnited States, Asia, Europe, and Latin America. Prudential’s diverse andtalented employees are committed to helping individual and institutional customers grow and protect their wealththroughavarietyofproductsandservices, includinglife insurance,annuities,retirement-relatedservices,mutualfundsandinvestmentmanagement.IntheU.S.,Prudential’siconicRocksymbolhasstoodforstrength,stability,expertiseandinnovationformorethanacentury.Formoreinformation,pleasevisitwww.news.prudential.comForwardLookingStatementsThisdocumentmayincludeforward-lookingstatementsthatmayimplyrisksanduncertainties.Termssuchas"estimate","project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed asprevisionsorestimates.Terrafinawarnsreadersthatdeclarationsandestimatesmentionedinthisdocument,orrealizedbyTerrafina’smanagementimplyrisksanduncertaintiesthatcouldchangeinfunctionofvariousfactorsthatareoutofTerrafina’scontrol.FutureexpectationsreflectTerrafina’sjudgmentatthedateofthisdocument.Terrafinareservestherightorobligationtoupdatetheinformationcontainedinthisdocumentorderivedfromthisdocument.Pastorpresentperformanceisnotanindicatortoanticipatefutureperformance.

21

ConferenceCall

(BMV:TERRA13)Cordiallyinvitesyoutoparticipateinits

FirstQuarter2016Results

Friday,April22,201611:00a.m.EasternTime10:00a.m.CentralTime

PresentingforTerrafina:

AlbertoChretin,ChiefExecutiveOfficerAngelBernal,ChiefFinancialOfficer

***

Toaccessthecall,pleasedial:fromwithintheU.S.1-800-311-9404fromoutsidetheU.S.1-334-323-7224

ConferenceIDNumber:34974

AudioWebcastLink:https://www.webcaster4.com/Webcast/Page/1111/14286

ConferenceReplay

WillbeprovidedforyourcallDial1-877-919-4059or1-334-323-0140tolisten

Passcode:83277357

22

AppendixAppendix1–RevenuesTerrafina’srevenuesaremainlyclassifiedasrentalrevenuesandotheroperatingreimbursablerevenues.Additionally,thereareaccountingrevenuesthatmustberegisteredaccordingwithIFRS;howevertheseareconsiderednon-cashitemsandthereforeareexcludedinsomecalculations.ReimbursabletenantimprovementsareincludedinthetenantimprovementexpensesfortheAFFOcalculation.

1Q16 1Q15 1Q16 1Q15

(millionsofpesos) (millionsofdollars)

NOIcalculation RentalRevenue 589.0 499.0 32.6 33.4

NonCash AccruedIncome1 11.0 -15.5 0.6 -1.0

OtherOperatingRevenues 75.0 70.3 4.2 4.7

NOIcalculation ReimbursableExpensesasRevenues2 69.8 53.6 3.9 3.6

AFFOcalculation ReimbursableTenantImprovements 5.1 3.8 0.3 0.3

NonCash Othernon-cashincome 0.1 12.9 0.0 0.9

NetRevenue 675.0 553.7 37.4 37.1

(1)Straightlinerentadjustment.(2)TriplenetleasesexpensesreimbursedtoTerrafinafromitstenants.


23

Appendix2–RealEstateExpensesReal estate expenses are comprised of recurring figures relatedwith the operation (used for theNetOperating Profitcalculation) as well as non-recurring figures used for metric calculations such as Earnings Before Interests, Taxes,DepreciationandAmortization(EBITDA),FundsfromOperations(FFO),AdjustedFundsfromOperations(AFFO).Thefollowingtablepresentstherealestateexpenses’breakdown,whichareusedforthecalculationofseveralmetrics.

RealEstateExpenses

1Q16 1Q15 1Q16 1Q15


RepairandMaintenance -43.0 -30.8 -2.4 -2.1

NOIcalculation Recurring -7.7 -16.6 -0.4 -1.1

AFFOcalculation NonRecurring -35.3 -14.2 -2.0 -0.9

PropertyTaxes -57.9 -36.3 -3.2 -2.5

NOIcalculation Operating -49.2 -33.8 -2.7 -2.3

NonCash NonOperating -8.6 -2.5 -0.5 -0.2

NOIcalculation PropertyManagementFees -14.9 -10.9 -0.8 -0.7

NOIcalculation Electricity -5.0 -6.9 -0.3 -0.5

AFFOcalculation BrokersFees -20.4 -8.0 -1.1 -0.6

PropertyInsurance -3.1 -3.5 -0.2 -0.2

NOIcalculation Operating -2.2 -2.7 -0.1 -0.2EBITDA

calculation Administrative -0.9 -0.8 -0.1 -0.1

NOIcalculation Security -2.9 -2.2 -0.2 -0.1EBITDA

calculationAdvertising -0.8 -0.5 0.0 0.0

OtherExpenses -18.6 -6.2 -1.1 -0.4

NOIcalculation OperationalRelated -3.0 -3.1 -0.2 -0.2

NonCash NonOperationalRelated -13.7 0.0 -0.8 0.0EBITDA

calculationAdministrative -1.8 -3.1 -0.1 -0.2

NonCash BadDebtExpense -16.1 -13.4 -0.9 -0.9

TotalRealEstateExpenses -182.7 -118.9 -10.1 -8.0


24

Appendix3–FeesandAdministrativeExpensesFeesandadministrativeexpenses include figuresused formetric calculations suchasEarningsbefore Interests, Taxes,DepreciationandAmortization(EBITDA),FundsfromOperations(FFO),AdjustedFundsfromOperations(AFFO).Terrafina’sfeesandadministrativeexpensesbreakdownisavailableinthefollowingtableandindicatesthefiguresusedforthecalculationofthesemetrics:

FeesandAdministrativeExpenses

1Q16 1Q15 1Q16 1Q15


EBITDAcalculation ExternalAdvisorFees -35.5 -28.8 -2.0 -1.9

LegalFees -2.6 -6.9 -0.1 -0.5

EBITDAcalculation Recurring -0.2 -3.2 0.0 -0.2


OtherProfessionalFees -4.0 -3.2 -0.2 -0.2

EBITDAcalculation Recurring -2.0 -2.0 -0.1 -0.1


AdministrativeFees -14.0 -19.0 -0.8 -1.3

EBITDAcalculation Recurring -8.6 -7.4 -0.5 -0.5NonOperational

related NonRecurring1 -5.4 -11.6 -0.3 -0.8

EBITDAcalculation Payroll -5.6 -4.0 -0.3 -0.3

EBITDAcalculation TrusteeFees -1.5 -1.4 -0.1 -0.1

EBITDAcalculation OtherExpenses -0.7 -0.9 0.0 -0.1

NonCash PerformanceFee 0.0 -145.4 0.0 -9.6

TotalFeesandAdmin.Expenses -64.0 -209.5 -3.6 -13.8

(1)Nonoperationalrelatedadministrativefees;1Q15expensesrelatedtoassetsaletransaction

activities.


25

Appendix4–ReconciliationReconciliationofNetProfit(Loss)toFFO,EBITDAandNOI

1Q16 1Q15 1Q16 1Q15


ComprehensiveIncome(Loss) 569.9 600.1 31.5 40.2Add(deduct)CurrencyTranslationAdjustment: CurrencyTranslationAdjustment -233.8 -545.5 -12.9 -36.5

Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses 15.1 0.0 0.8 0.0

Add(deduct)Non-CashAdjustment: ForeignExchangeAdjustments 3.4 98.7 0.2 6.6FairValueAdjustmentonBankInvestment 0.0 -8.9 0.0 -0.6FairValueAdjustmentonBorrowings -76.9 -54.1 -4.3 -3.6FairValueAdjustmentonDerivativeFinancialInstruments 0.0 0.5 0.0 0.0FairValueAdjustmentonInvestmentProperties -9.8 29.8 -0.5 2.0SalesofRealEstatePropertiesAdjustment 0.0 0.3 0.0 0.0

Add(deduct)ExpensesAdjustment: NonRecurringRepairandMaintenance 35.3 14.2 2.0 1.0NonOperatingPropertyTaxes 8.6 2.5 0.5 0.2BrokersFees 20.4 8.0 1.1 0.5BadDebtExpense 16.1 13.4 0.9 0.9TransactionExpenses 13.7 0.0 0.8 0.0NonRecurringLegalFees 2.4 3.6 0.1 0.2NonRecurringOtherProfessionalFees 1.9 1.3 0.1 0.1

Add(deduct)RevenuesAdjustment: AccruedIncome -11.0 15.5 -0.6 1.0OtherNon-CashIncome -0.1 -12.9 0.0 -0.9ReimbursableTenantImprovements -5.1 -3.8 -0.3 -0.3

Add(deduct)NonOperationalAdministrativeFees NonOperationalAdministrativeFees 5.4 11.6 0.3 0.8IncentiveFee 0.0 145.4 0.0 9.7

FFO 355.7 319.6 19.6 21.4Add(deduct)CostofFinancingAdjustment: InterestPaid 160.7 107.4 8.9 7.2RecurringBorrowingExpenses 0.3 1.6 0.0 0.1InterestIncome -0.7 -4.5 0.0 -0.3EBITDA 516.1 424.1 28.5 28.5

Add(deduct)ExpensesAdjustment: ExternalAdvisorFees 35.5 28.8 2.0 1.9RecurringLegalFees 0.2 3.2 0.0 0.2RecurringOtherProfessionalFees 2.0 2.0 0.1 0.1AdministrativeFees 8.6 7.4 0.5 0.5Payroll 5.6 4.0 0.3 0.3TrusteeFees 1.5 1.4 0.1 0.1OtherExpenses 0.7 0.9 0.0 0.1Advertising 0.8 0.5 0.0 0.0AdministrativePropertyinsurance 0.9 0.8 0.1 0.1OtherAdministrativeExpenses 1.8 3.1 0.1 0.2

NOI 573.9 476.3 31.8 31.9Add(deduct)ExpensesAdjustment: RecurringRepairandMaintenance 7.7 16.6 0.4 1.1OperatingPropertyTaxes 49.2 33.8 2.7 2.3PropertyManagementFees 14.9 10.9 0.8 0.7Electricity 5.0 6.9 0.3 0.5OperatingPropertyInsurance 2.2 2.7 0.1 0.2Security 2.9 2.2 0.2 0.1OtherOperationalExpenses 3.0 3.1 0.2 0.2

Add(deduct)RevenuesAdjustment:

OtherNon-CashIncome 0.1 12.9 0.0 0.9AccruedIncome 11.0 -15.5 0.6 -1.0ReimbursableTenantImprovements 5.1 3.8 0.3 0.3

NetRevenue 675.0 553.7 37.4 37.1

26

ReconciliationofNetProfit(Loss)toAFFO 1Q16 1Q15 1Q16 1Q15


ComprehensiveIncome(Loss) 569.9 600.1 31.5 40.2Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses -233.8 -545.5 -12.9 -36.5

Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses 15.1 0.0 0.8 0.0

Add(deduct)Non-CashAdjustment: ForeignExchangeAdjustments 3.4 98.7 0.2 6.6FairValueAdjustmentonBankInvestment 0.0 -8.9 0.0 -0.6FairValueAdjustmentonBorrowings -76.9 -54.1 -4.3 -3.6FairValueAdjustmentonDerivativeFinancialInstruments 0.0 0.5 0.0 0.0FairValueAdjustmentonInvestmentProperties -9.8 29.8 -0.5 2.0SalesofRealEstatePropertiesAdjustment 0.0 0.3 0.0 0.0

Add(deduct)ExpensesAdjustment: NonOperatingPropertyTaxes 8.6 2.5 0.5 0.2BadDebtExpense 16.1 13.4 0.9 0.9TransactionExpenses 13.7 0.0 0.8 0.0

Add(deduct)RevenuesAdjustment: AccruedIncome -11.0 15.5 -0.6 1.0OtherNon-CashIncome -0.1 -12.9 0.0 -0.9

Add(deduct)NonOperationalAdministrativeFees NonAdministrativeFees 5.4 11.6 0.3 0.8IncentiveFee 0.0 145.4 0.0 9.7

AFFO 300.8 296.3 16.6 19.9

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Appendix5-CapRateCalculationTerrafinasubtractscashandlandreservesbookvalueforthecapratecalculation.Inthefollowingtable,thecapratecalculationisshownassumingaCBFIquarterlyaveragepriceofPs.29.39andanaverageexchangeratefor1Q16ofPs.18.0667.

ImpliedCapRate

QuarterlyAveragePrice(dollars)¹ 1.63

(x)CBFIs(millionshares) 607.5

(=)MarketCapitalization 988.3

(+)TotalDebt 705.5

(-)Cash 256.0

(=)EnterpriseValue 1,437.8

(-)Landreserve 65.4

(=)ImpliedOperatingRealEstateValue 1,372.4

NetOperatingIncome(NOI)2016e 133.0

ImpliedCapRate 9.7%

Figuresexpressedinmillionsofdollarsunlessotherwisestated.

(1)1Q16averagesharepriceofPs.29.39;andaverageexchangerateofPs.18.0667.

28

FinancialStatements

IncomeStatement

1Q16 1Q15

(thousandsofpesos)

Rentalrevenues

$599,934 $483,476

Otheroperatingincome

57,789 70,269

Realestateoperatingexpenses

(182,732) (118,853)

Feesandotherexpenses

(63,962) (209,538)

Realizedgainfromdisposalofinvestmentproperties

- (272)

Netgain(loss)fromfairvalueadjustmentoninvestmentproperties

9,752 (29,811)

Netgain(loss)fromfairvalueadjustmentonborrowings

76,896 54,108

Net(loss)gainunrealizedfromfairvalueonderivativefinancialinstruments

27 (468)

NetIncome(loss)fromfairvalueadjustmentonbankinvestments

- 8,901

Foreignexchange(loss)gain

(3,436) (98,732)

Operatingprofit 494,268 159,080

Financeincome

679 4,489

Financecost

(176,126) (108,988)

Financecost-net (175,447) (104,499)

Shareofprofitfromequityaccountedinvestments

17,254 -

NetProfitfortheperiod 336,075 54,581

Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss-currencytranslationdifferences

233,762 545,494

TotalComprehensiveincomefortheperiod 569,837 600,075

29

FinancialStatements

BalanceSheet Mar-31-16 Dec-31-15(thousandsofpesos)

Assets Non-currentassets

Investmentproperties $28,906,052 $28,476,842(Cost:31/03/2016-Ps.27,934,385;31/12/2015-Ps.27,727,490)

Investmentsaccountedusingequitymethod 119,200

100,945Derivativefinancialinstruments 42

15

Currentassets Otherassets 75,051 92,760Recoverabletaxes 353,179 329,704Prepaidexpenses 7,430 9,912Acquisitionprepayment 4,224 4,177Deferredchargesandaccruedincome 123,846 111,894Accountsreceivable 72,831 66,472(Netofallowancefordoubtfulaccounts:31/03/2016-Ps.124,089;31/12/2015-Ps.107,294)

Restrictedcash 59,705 58,043

Cashandcashequivalents 4,454,832 4,467,863

Totalassets 34,176,392 33,718,627

NetassetsattributabletoInvestors

Contributions,net 15,227,911 15,227,911Retainedearnings 261,556 201,212Currencytranslationadjustment 5,753,210 5,519,448

Totalnetassets(NetEquity) 21,242,677 20,948,571

Liabilities Non-currentliabilities Borrowings 11,793,832 11,783,091(Cost:31/03/2016-$12,054,158;31/12/2015-$12,012,740)

Tenantdeposits 136,070 139,562Accountspayable 49,783 31,654Currentliabilities Tradeandotherpayables 393,253 323,483Borrowings 482,840

432,536

(Cost:31/03/2016-Ps.482,840,30/09/2015-Ps.385,706)

Tenantdeposits 77,937 59,730

Totalliabilities(excludingnetassetsattributabletotheInvestors)

12,933,715 12,770,056

Totalnetassetsandliabilities 34,176,392 33,718,627

30

FinancialStatements

CashFlowStatement Mar-16

(thousandsofpesos)

Cashflowsfromoperatingactivities(Loss)profitfortheperiod $336,075

Adjustments:Netloss(gain)unrealizedfromfairvalueadjustmentoninvestmentproperties (9,752)

Netloss(gain)unrealizedfromfairvalueadjustmentonborrowings (9,752)Netloss(gain)unrealizedfromfairvalueadjustmentonderivativefinancialinstruments (76,896)Realizedgainfromdisposalofinvestmentproperties (27)

Baddebtexpense 16,149

Interestexpense 160,681

Interestincomeonbankaccounts (679)

Shareofprofitfromequityaccountedinvestments (17,254)

Decrease(increase)deferredrentsreceivable (17,254)

Decrease(increase)inrestrictedcash (11,952)

Decrease(increase)inaccountsreceivable (1,662)

Decrease(increase)inrecoverabletaxes (22,508)

Decrease(increase)inprepaidexpenses (23,475)

Decrease(increase)inotherassets 2,482

Decrease(increase)intenantdeposits 17,709

(Decrease)inaccountspayable 87,899

Netcash(usedin)generatedfromoperatingactivities 471,505

CashflowsfrominvestingactivitiesImprovementsofinvestmentproperties (100,541)

Proceedsfromdispositionsofinvestmentproperties -

Interestincomeonbankaccounts 679

Investmentsinjointventure (193)

Netcash(usedin)generatedfrominvestingactivities (100,055)

CashflowsfromfinancingactivitiesPrincipalpaymentsonborrowings (2,033)

Interestexpense (160,681)

Distributionstoinvestors (275,731)

ProceedsfromCBFI,netofissuingcost -

Netcash(usedin)generatedfromfinancingactivities (438,445)

Net(decrease)incashandcashequivalents (67,042)

Cashandcashequivalentsatthebeginningoftheperiod 4,467,863

Exchangeeffectsoncashandcashequivalents 54,011

Cashandcashequivalentsattheendoftheperiod $4,454,832

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FinancialStatements AttributabletoInvestors

StatementofChangesinEquity Netcontributions

Currencytranslationadjustment

Retainedearnings Netassets

(thousandsofpesos) BalanceatJanuary1,2016 $15,227,911 $5,519,448 $201,212 $20,948,571DistributionstoInvestors - - (275,731) (275,731)ComprehensiveIncome Netlossoftheperiod - - 336,075 336,075OtherComprehensiveIncome CurrencyTranslation - 3,017,572 - 3,017,572TotalComprehensive(loss)income - 233,762 336,075 569,837

NetAssetsasofMarch31,2016 $15,227,911 $5,753,210 $261,556 $21,242,677

FIRST QUARTER 2016 EARNINGS REPORT - Amazon S3 · PREI - Portfolio Management Leasing Activity 1Q16...

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