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Tempo Assist announces quarter-on-quarter Net Revenue growth of

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Tempo Assist announces quarter-on-quarter Net Revenue growth of Powered By Docstoc
					Capital Stock (06/30/11):           Tempo Assist announces quarter-on-quarter Net
Total:            156,285,611
Treasury:           6,832,458    Revenue growth of 7.5% in 2Q11 and net income grows
Outstanding:      149,453,153
                                                  32.8% in the half.

                                Financial and Operating Highlights
                                Tempo Assist’s main highlights of the quarter were:

                                           Budget Control: in 2Q11 the Company reduced its expenditures by 8.9% year-
Conference Call 2Q11:                       on-year. This reduction represents savings of R$5.1 million (page 7);
Portuguese
Date: 08/16/2011                           Consolidated Net Profit: in the half, the Company posted a 32.8% increase as
Time: 10:00am (09:00am NY)                  compared to the same period of the previous year;
Phone: +55 (11) 4688-6361
Code: Tempo
                                           Health Insurance Company: 11.1% year-on-year rise in the number of
English                                     beneficiaries, reaching 82.8 thousand (page 15);
Date: 08/16/2011
Time: 11:00am (10:00am NY)
Phone: (+1) 786-924-6977 or                Tempo Dental: launch of the new Tempo Dental brand, unifying the Prevdonto
+55 (11) 4688-6361                          and Odonto Empresas brands under a commercial identity (page 18);
Code: Tempo

                                           Stock Buy-back: 3rd Stock Buy-back Plan announced (page 27).
IR Contact
Tel: +55 (11) 4208-8025
ri@tempoassist.com.br
www.tempoassist.com.br/ri       Key Consolidated Financial Indicators
Media contact:
Máquina da Notícia
Daniela Moll
Tel.: 55 11 3147-7392
daniela.moll@maquina.inf.br

Rafael Bonalda
Tel.: 55 11 3147-7458
rafael.bonalda@maquina.inf.br


                                 *More details on non-recurring expenses and non-recurring adjustments on page 8 of this release.
Dear Shareholders,

The end of the Tempo Assist’s second quarter of 2011 marked its first three months under the administration of
its new Chief Executive Officer, Marcos Aurélio Couto. During this period, several areas of the Company were
reorganized, in order to reinforce the commercial schedule and business prospection. As part of this
reorganization, executive Vítor Ernesto Alt was hired to lead Tempo Assist Seguradora and executive Julio Cesar
Felipe was hired to lead the odonto plans unit.
Vítor Ernesto Alt, a professional with broad experience and understanding of the insurance market, is the new
CEO of Tempo Saúde Seguradora. In the last years he has served Golden Cross, Bradesco Saúde and Unibanco
Seguros, among others. Mr. Alt's greatest challenge will be replicating the growth that this business line has
posted over the since its acquisition by Tempo Assist in the coming years as well.
Julio Cesar Felipe is the new director of the odonto plans unit. The executive has more than 20 years of
experience in the insurance and health industries, having been part of companies such as Prodente, Interodonto,
Fleury and Canada Life, and an expert in corporate management by Fundação Getúlio Vargas/CEAG. He will lead
an exclusive structure to Tempo Assists odonto segment.
Additionally, the Company’s board approved a plan of geographical expansion of its commercial division (all
segments) in order to capture business opportunities beyond the cities of Rio de Janeiro and São Paulo. Still in
2011, 4 new corporate offices will be opened.
Regarding dental plans, the Company has been steadily increasing its market participation in individual plans sold
through affinity channels. It recently signed two contracts for the sale of dental plans. The first of them was
signed with a supermarket chain from the state of Minas Gerais, which now has more than 21 stores across the
State. The second one is an agreement with a national publishing house for the sale of odonto plans. In addition,
in August of this year, Tempo Assist will launch its new Tempo Dental brand, unifying all of Tempo’s dental
operations and plans under a single commercial identity.
For the Health Services business, the October, 2011 launch of the pilot Caixa Seguros Saúde health and dental
plan sales operation will mark the start of a major partnership that should substantially increase the growth of
this business segment, which represented 43% of all Tempo Assist’s operating income in the half. Moreover, the
signature of a final contract with Caixa Seguros that will formalize Tempo Assist’s 25% investment in Caixa
Seguradora Saúde is being negotiated and when concluded will represent a major strategic step of Tempo Assist
in the national health plan market.
The Assistance segment, in turn, benefited in the quarter from the reduced use of healthcare services common at
this time of the year. Months April to June show a favorable seasonality to the Assistance business due to fewer
holidays and lesser rainfall in the country, which drive use of services such as car and household assistance.
Finally, the Health Insurance Company has maintained its growth trend, having increased its client base in 11.1%
in the last 12 months. To consolidate this trajectory, the Company launched a new marketing campaign that will
strengthen awareness of the Tempo Saúde brand and publicize the various benefits offered to the users of Tempo
Assist’s healthcare plans.
Based on these factors and the Management’s confidence in the Company’s future, two major decisions were
made: (i) the end of prospection for strategic opportunities conducted by BTG Pactual S.A. and UBS Securities LLC
announced in a Material Fact on October 15, 2010. The Company believes that at this time, the best alternative
for creating value for the Company and its shareholders is organic growth through geographic expansion and the


                                                                                                                2
expansion of the strategic partnership with Caixa Seguradora S.A.; (ii) the start of Tempo Assist’s 3rd Stock Buy-
back Program, based on the premise that, given the current market conditions and the Company’s stock prices on
the São Paulo Stock Exchange, the buyback is an investment with potential to bring relevant returns for the
Company’s shareholders (more details on page 27 of this document).
The Company, therefore, continues its path in pursuit of excellence in the markets in which it operates and seeks
to strengthen its position as the company with the broadest portfolio in the delivery of health services and
assistance in the Brazilian healthcare and insurance markets.




                                                                                                                3
Tempo Assist Consolidated Results
R$Million                                           1Q11         2Q11     Var.%        2Q10        2Q11       Var.%      1H10        1H11           Var.%
Gross revenues                                       251.6       269.5        7.1%      279.2        269.5       -3.5%    482.2       521.1           8.1%
Tax                                           (11.3) (11.2)    -0.3%  (11.7) (11.2)   -3.8%  (22.0) (22.5)     2.6%
Net revenues                                  240.3 258.3       7.5% 267.5   258.3    -3.4%   460.2 498.6      8.3%
Cost of rendered services                    (175.6) (196.6) 11.9% (197.7) (196.6)    -0.6% (331.3) (372.2)  12.4%
Selling, general and administrative expenses (47.4) (44.2)     -6.8%  (49.8) (44.2) -11.3% (85.7) (91.6)       6.9%
Operational result                             17.3    17.5     1.2%   19.9   17.5 -12.3%     43.2    34.7 -19.6%
Operational margin (%)                         7.2%    6.8% -0.4 p.p.  7.4%   6.8% -0.7 p.p.  9.4%    7.0% -2.4 p.p.
Holding expenses                                      (5.9)       (8.1) 36.5%            (7.5)        (8.1)    7.5%       (20.7)       (14.1) -32.0%
Ebitda                                                11.3         9.3 -17.4%            12.4          9.3 -24.4%          22.5         20.7    -8.3%
Ebitda Margin                                         4.7%        3.6% -1.1 p.p.         4.6%         3.6% -1.0 p.p.       4.9%         4.1% -0.8 p.p.
Depreciation & amortization                           (4.1)       (4.1)    0.4%          (3.1)        (4.1)  33.7%         (6.0)        (8.2) 35.5%
Equity income                                         (0.0)        1.0      N/A          (0.0)         1.0      N/A        (0.1)         1.0      N/A
Financial result                                       4.7        (0.2)    N/A            2.6         (0.2)    N/A          4.4          4.5     1.4%
Financial revenues                                     6.4         1.6 -75.4%             4.7          1.6 -66.5%           7.8          7.9     1.1%
Financial expenses                                    (1.7)       (1.8)    7.9%          (2.1)        (1.8) -12.2%         (3.4)        (3.5)    0.8%
Income tax & social contribuition                     (5.5)       (1.9) -65.7%           (7.3)        (1.9) -74.3%        (12.8)        (7.4) -42.6%
Current                                               (5.2)        0.2      N/A          (3.8)         0.2      N/A        (9.8)        (4.9) -49.6%
Deferred                                               (0.3)      (2.1)    574.4%         (3.5)       (2.1)    -39.5%      (3.1)           (2.4)     -20.2%
Net earnings (loss)                                     6.5        4.1       -36.0%        4.6         4.1       -9.7%      8.0            10.6      32.8%


(-)Non recurring adjusts - BUs                        (2.1)       (0.8) -63.9%           (3.0)        (0.8) -74.6%         (2.2)           (2.9) 31.5%
(-)Non recurring adjusts - corporative                 0.6        (1.4)     N/A          (1.8)        (1.4) -19.3%         (2.8)           (0.9) -68.7%
Recurring Ebitda                                      12.9        11.5 -10.3%            17.1         11.5 -32.7%          27.5            24.4 -11.3%
Recurring Ebitda margin (%)                           5.4%        4.5% -0.9 p.p.         6.4%         4.5% -1.9 p.p.       6.0%            4.9% -1.1 p.p.

 *More details on non-recurring expenses and non-recurring adjustments on page 7 of this release.


Results by Segment
The tables below show the consolidation of 2Q11 results and variation in comparison to 1Q11, as well as the first half
figures.
                                               Health Services      Dental            Assistance     Health Insurance    Deduction            Total BUs
R$Million                                          2Q11             2Q11                2Q11              2Q11             2Q11                    2Q11
Net revenues                                            117.2              17.1              62.0               66.2               (4.1)              258.3
Cost of rendered services                               (91.7)             (8.3)            (42.9)             (56.0)               2.3              (196.6)
Selling, general and administrative expenses            (17.4)             (6.4)            (12.0)             (10.3)               1.8               (44.3)
Operational result                                        8.1               2.4               7.0               (0.1)               -                  17.4
Operational margin (%)                                   6.9%             13.9%             11.3%              -0.1%                -                  6.7%
(-)Non recurring adjusts                                  -                 -                 -                 (0.8)               -                  (0.8)
Recurring operating results                               8.1               2.4               7.0                0.7                -                  18.2
Recurring Operating Margin (%)                           6.9%             13.9%             11.3%               1.0%                -                  7.0%




                                                                                                                                                          4
                                               Health Services      Dental         Assistance     Health Insurance   Deduction        Total BUs
R$Million                                          1H11             1H11             1H11              1H11            1H11            1H11
Net revenues                                            217.0             37.2           121.1              131.1             (7.8)         498.6
Cost of rendered services                              (168.2)           (17.1)          (85.7)            (105.6)             4.2         (372.2)
Selling, general and administrative expenses            (32.8)           (16.0)          (25.5)             (21.0)             3.6          (91.6)
Operational result                                       16.0              4.1            10.0                4.6              -             34.7
Operational margin (%)                                   7.4%            11.0%            8.3%               3.5%              -             7.0%
(-)Non recurring adjusts                                  -               (1.9)           (0.2)              (0.8)             -             (2.9)
Recurring operating results                              16.0              6.0            10.2                5.3              -             37.5
Recurring Operating Margin (%)                           7.4%            16.1%            8.4%               4.1%              -             7.5%




Net Revenue
In 2Q11, Tempo Assist’s net revenue decreased from R$267.5 million to R$258.3 million, decreasing 3.4% year-on-
year. This variation was due to a reduction in the volume of pass-through medical costs in the Health Services
segment and the decrease of beneficiaries in the Corporate Dental Plan segment. On the other hand, the Assistance
and Insurance segments had positive growth of 6.2% and 5.0% (or R$3.6 and R$3.2 million), respectively. Net income
growth was 7.5% quarter-on-quarter, and over the previous half, Tempo Assist’s Business Segments increased more
than 8.3%, or R$38.4 million.
If we disregard the elimination of intercompany revenues at R$4.1 million in the Health Services unit, Tempo Assist
attained net revenue of R$262.4 million in 2Q11, up 7.5% over the R$244.0 million posted in the same quarter of the
previous year.
The significant increase in the first half is explained by the consolidation of Health Insurance in Tempo Assist’s results
(boosting revenue to R$131.1 million).


                                                             Net Revenue
                                                                 (in R$ million)




Note: The above charts do not consider the elimination of intercompany amounts.



                                                                                                                                                  5
Cost of Services Provided
Costs in 2Q11 remained practically stable year-on-year, while in the comparison between halves, there was an
increase that accompanied the revenue trend.
Less transfers of pass-through medical costs in the Health Services segment reduced the cost of services by 8.8%
year-on-year. In the Odonto segment, the decline in revenues previously mentioned explains the lower costs in
2Q11. In contrast, revenue growth in both the Health Insurance and Health Solutions units led to an increase of cost
of services.
During the half, the 13.6% increase in Tempo Assist’s total cost of services is mainly due to the incorporation of the
Health Insurance results. If the Insurance Company effects were not considered, total cost of services would have
fallen 3.0% or R$8.3 million. The following charts provide details of the variations in each of the Company’s units:


                                          Costs of Services Provided
                                                     (in R$ million)




Note: The above charts do not consider the elimination of intercompany amounts.




                                                                                                                    6
General and Administrative Expenses


R$Million                                1Q11      2Q11      Var.%     2Q10      2Q11      Var.%     1H10      1H11      Var.%
Segments SG&A                             (47.4)    (44.2)     -6.8%    (49.8)    (44.2)    -11.3%    (85.7)    (91.6)      6.9%
   Personnel                              (21.2)    (22.7)      6.9%    (25.7)    (22.7)    -11.7%    (47.5)    (43.9)     -7.6%
   General and administrative             (13.1)    (13.8)      5.3%    (13.5)    (13.8)      2.4%    (22.3)    (26.9)     20.5%
   Sales                                  (11.4)     (5.1)    -55.0%    (11.0)     (5.1)    -53.3%    (14.8)    (16.6)     12.0%
   Taxes and fees                          (0.1)     (0.1)    111.3%     (0.0)     (0.1)    161.0%     (0.1)     (0.2)     28.2%
   Other operating revenues (expenses)     (1.6)     (2.5)     53.7%      0.4      (2.5)      N/A      (0.9)     (4.0)    340.0%


(-) Non recurring adjusts                  (2.1)     (0.8)    -63.9%     (3.0)     (0.8)    -74.6%     (3.5)     (2.9)    -19.1%
    Non-recurring layoffs                  (0.6)      -      -100.0%     (0.9)      -      -100.0%     (0.9)     (0.6)    -38.6%
    Sales expenses in Affinity channel     (1.5)      -      -100.0%      -         -         N/A       -        (1.5)       N/A
    Previous quarters                       -         -         N/A       0.2       -      -100.0%     (1.7)      -      -100.0%
    Write-offs                              -         -         N/A      (0.8)      -      -100.0%     (0.8)      -      -100.0%
    Marketing (Tempo Saúde Campaign)        -        (0.8)      N/A      (1.5)     (0.8)    -50.3%     (0.2)     (0.8)    337.4%


(=) BUs Recurring SG&A                    (45.3)    (43.5)     -4.1%    (46.8)    (43.5)     -7.2%    (82.2)    (88.8)      8.0%


Corporate SG&A                             (5.9)     (8.1)     35.7%     (7.5)     (8.1)      6.8%    (20.7)    (14.0)    -32.3%
   Personnel                               (3.0)     (4.5)     49.2%     (5.2)     (4.5)    -14.8%    (12.1)     (7.5)    -38.1%
   General and administrative              (2.1)     (2.8)     31.1%     (2.3)     (2.8)     22.2%     (8.3)     (4.9)    -41.0%
   Sales                                   (0.0)     (0.0)    -74.3%     (0.0)     (0.0)    -97.9%     (0.1)     (0.0)    -95.7%
   Taxes and fees                           -         -         N/A      (0.0)      -      -100.0%     (0.1)      -      -100.0%
   Other operating revenues (expenses)     (0.8)     (0.8)     -0.6%      0.0      (0.8)      N/A      (0.1)     (1.6)   1411.7%


Non-recurring adjusts                       0.6      (1.4)      N/A      (1.8)     (1.4)    -19.3%     (2.6)     (0.9)    -67.0%
   Stock option                             0.7      (0.9)      N/A      (0.9)     (0.9)     -2.1%     (1.5)     (0.2)    -85.2%
   M&A                                      -         -         N/A       -         -         N/A      (0.2)      -      -100.0%
   Executive Search                         -        (0.5)      N/A       -        (0.5)      N/A       -        (0.5)       N/A
   Non-recurring rescissions               (0.1)      -      -100.0%     (0.1)      -      -100.0%     (0.1)     (0.1)     -9.6%
   Others                                   -         -         N/A      (0.8)      -      -100.0%     (0.8)      -      -100.0%


(=) Corporate recurring SG&A               (6.5)     (6.6)      2.2%     (5.8)     (6.6)     14.8%    (18.0)    (13.1)    -27.3%


Total SG&A                                (53.4)    (52.3)     -2.0%    (57.4)    (52.3)     -8.9%   (106.4)   (105.6)     -0.7%


Segments and Corporate SG&A               (51.8)    (50.1)     -3.3%    (52.6)    (50.1)     -4.8%   (100.2)   (101.9)      1.7%



General and Administrative Expenses (business lines): These are the operating expenses for each segment, not
including corporate expenses (expenses of the holding company). General and administrative expenses for the
business lines fell 8.9% year-on-year, with significant reductions in personnel, general and administrative and
commercial costs.
Holding Company Expenses (Corporate): These expenses refer to the corporate expenses of Tempo Assist, shared by
all business lines. Examples include Legal, Financial, Investor Relations, Internal Control and Human Resources.




                                                                                                                                 7
Non-Recurring Adjustments
These are expenses that the Company’s management believes to be one-off and should not be recurring in the
Company’s results. The referred adjustments for 2Q11 are shown below:
R$Million                           Health Service   Health Insurance    Dental   Assistance   Corporate     Consolidated
(-)Non recurring adjusts (EBITDA)              -                 (0.8)        -           -          (1.4)           (2.2)
    Executive Search                           -                  -           -           -          (0.5)           (0.5)
    Marketing                                  -                 (0.8)        -           -           -              (0.8)
    Stock options                              -                  -           -           -          (0.9)           (0.9)



Executive Search: refer to expenses with the hiring of executives incurred during 2Q11.
Marketing (Health Insurance Campaign): costs related to the launch of a new incentive and brand-building campaign
for the Health Insurance brand directed at distribution partners and customers.
Stock options: expense (with no impact on the Company's cash) derived from the stock option plan for the
Company's management. The accounting practice has been defined under Law no. 11,638/07.


Recurring Operating Income
Details by business segment of the Company's Recurring Operating Income are given below:


                                        Recurring Operating Result
                                              (% share per Business Unit)




                                                                                                                        8
                                 Recurring Operating Result and Margin
                                                (in R$ million and %)




Financial Result
The 2Q11 financial result was -0.2 million, a variation as compared with previous quarters mainly due to the financial
restatement of acquisition amount of Unibanco Health Insurance Company, recorded as a reversal of Financial
Revenues.

       R$Million                                   1Q10       2Q10        3Q10     4Q10      1Q11      2Q11
          Financial revenues                            3,2        4,7      4,6      11,9       6,4       1,6
          Financial expenses                          (1,4)       (2,1)    (1,3)     (3,8)     (1,7)     (1,8)
       Financial results                               1,8         2,6      3,3       8,2       4,7      (0,2)



Income Tax, Social Contribution and Net Income
Income Tax and Social Contribution in 2Q11 totaled R$1.9 million. The quarter-on-quarter/year-on-year decrease
(R$5.5 million and R$7.3 million, respectively) is mainly due to the financial update for the acquisition value of the
Unibanco Health Insurance Company. Due to all financial information presented above, the Company’s net profit
reached R$4.1 million in 2Q11, with a negative variation of 9.7% over the R$4.6 million profit in 2Q10.

       R$Million                                   1Q10       2Q10        3Q10     4Q10      1Q11      2Q11
       Earnings before tax                             8,9        11,9     18,7      14,7      11,9       6,0
       (+) Income tax                                 (6,0)       (3,8)    (4,4)     (4,4)     (5,2)      0,2
       (+) Deferred income tax                         0,5        (3,5)    (2,0)     (2,0)     (0,3)     (2,1)
       Net earnings                                    3,4         4,6     12,3       8,3       6,5       4,1




                                                                                                                    9
CAPEX
In 2Q11, Tempo Assist invested (“CAPEX”) R$1.1 million, as per the table below:
R$Million               1Q10      2Q10      3Q10       4Q10         2010          1Q11          2Q11        1H10      1H11
Software                   2.1        1.2       3.0        1.1           7.4           0.1            0.5       3.3      0.6
IT Equipments              -          0.3       0.7        1.3           2.3           0.9            0.6       0.3      1.5
Buildings                  -          0.4       0.4        0.5           1.3           0.1            0.0       0.4      0.1
Furniture & Equipment      -          -         -          0.1           0.1           0.0            0.0       -        0.0
Other                      0.1        -         0.1        -             0.2           -              -         0.1      -
Total                      2.2        1.9       4.2        3.1          11.4           1.1            1.1       4.1      2.2




Cash Position
At the end of 2Q11, the Company had total cash at R$ 176.6 million, or 12.6% higher year-on-year (disregarding
acquisitions payments). Additionally, in June of 2011 the Company concluded the payment of the remaining R$49.5
million relative to the acquisition of Unibanco Health Insurance as shown in the table below.

                   R$ Million                                    2Q10      2Q11          ∆ R$          ∆%
                   Cash and Equivalents                            19.2          6.4         (12.9)    -66.9%
                   Short term investments                         137.6        170.3         32.6      23.7%
                   Subtotal                                       156.9        176.6         19.8      12.6%
                   Provision for acquisition payment               45.7          -           (45.7) -100.0%
                   Total                                          202.6        176.6         (25.9)    -12.8%




                                                                                                                             10
Overview of Segment Results
In 2Q11, gross income for the Health Services segment was up 6.2%, despite the 5.9% year-on-year decline in net
revenue due to reduced pass-through of medical costs. Operating margin, in turn, increased 1.3 percentage points
from 5.6% to 6.9%.
Quarter-on-quarter, net sales increased 17.5%, reaching R$117.2 million. Gross profit and operating income followed
the net revenue, growing 9.1% and 2.5% respectively. IN the half, even though net revenues fell 8.4%, gross profit
and operating income grew by 2.2% and 0.9% as compared to the same period of the previous year, respectively.


Health Services Operating Highlights:
R$Million                                      1Q11     2Q11   Var.%    2Q10      2Q11   Var.%    1H10    1H11      Var.%
Beneficiaries (in Millions)                     1.58     1.59      0.5%   1.60     1.59     -1.1%   1.60    1.59      -1.1%
Net revenues                                    99.8    117.2     17.5% 124.5     117.2     -5.9% 236.9 217.0         -8.4%
Cost of rendered services                      (76.4)   (91.7)    20.0% (100.5)   (91.7)    -8.8% (189.1) (168.2)    -11.1%
Gross profit                                    23.4     25.5      9.1%   24.0     25.5      6.2%   47.8    48.8       2.2%
Gross margin (%)                               23.4%    21.7% - 1.7 p.p. 19.3%    21.7% 2.5 p.p. 20.2% 22.5%        2.3 p.p.
Selling, general and administrative expenses   (15.5)   (17.4)    12.5% (17.0)    (17.4)     2.0% (31.9) (32.8)        2.9%
Operational result                               7.9      8.1      2.5%    6.9      8.1     16.6%   15.9    16.0       0.9%
Operating margin (%)                            7.9%     6.9% - 1.0 p.p.  5.6%     6.9% 1.3 p.p.    6.7%    7.4%    0.7 p.p.
(-) Non recurring adjusts                        -        -         N/A   (1.8)     -         N/A   (1.6)    -          N/A
Recurring operating results                      7.9      8.1      2.5%    8.7      8.1     -6.9%   17.5    16.0      -8.4%
Recurring operating margin (%)                  7.9%     6.9% - 1.0 p.p.  7.0%     6.9% - 0.1 p.p.  7.4%    7.4%    0.0 p.p.



Beneficiaries
2Q11 remained stable quarter-on-quarter, up 0.5%, or about 8,000 lives. Thus, the stability over previous periods has
been maintained.
The numbers below do not include homecare lives, as this segment has a different average ticket and a small number
of patients compared with the other services offered at Health Services segment.




                                                                                                                         11
                                                Beneficiaries
                                                      (in million)




Net Revenue
In 2Q11, net revenue totaled R$117.2 million, 5.9% down year-on-year. The higher variation occurred due to the
R$6.6 million reduction in medical transfers derived from the rental service network that pass through revenues
from this business segment, but with no impact on operating results. Quarter-on-quarter, the unit’s net revenue
grew 17.5%.
The Health Services segment’s revenue consists of:
   1) Fee for post-payment healthcare plan administration service, fee for providing back office services and fees
      for medical network rental;
   2) Reimbursement of medical costs related to the network rental service and healthcare plans in the post-
      payment mode;
   3) Homecare services revenue.


                                                Net Revenue
                                                     (in R$ million)




                                                                                                               12
Cost of Services Provided
The Cost of Services Provided in the Health Services segment includes both the payment to network providers
associated with the rental service as well as network costs associated with the Homecare division. However, the cost
of services of the network rental service cannot be seen as loss ratio (Medical Loss Ratio), as they are fully passed on
to the clients. The comparison between the second quarter of years 2011 and 2010 shows a reduction of 8.8%. In the
evolution between halves, unit costs decreased by 11.1% as shown below:


                                         Costs of Provided Services
                                                     (in R$ million)




Recurring General and Administrative Expenses
In 2Q11, the Health Services segment had general and administrative expenses of R$17.4 million, 2.0% higher year-
on-year. Considering the adjustments with non-recurring expenses, general and administrative expenses were 13.7%
higher year-on-year.
R$Million                                 1Q11      2Q11      Var.%     2Q10      2Q11      Var.%     1H10      1H11      Var.%
SG&A                                       (15.5)    (17.4)     12.5%    (17.0)    (17.4)      2.0%    (31.9)    (32.8)      2.9%
   Personnel                                (9.8)    (10.8)      9.5%    (10.5)    (10.8)      2.5%    (20.8)    (20.6)     -0.9%
   General and administrative               (5.5)     (5.9)      6.4%     (3.3)     (5.9)     76.9%     (8.4)    (11.4)     35.8%
   Sales                                    (1.0)     (0.1)    -89.0%     (1.8)     (0.1)    -94.2%     (3.2)     (1.1)    -66.4%
   Taxes and fees                           (0.0)     (0.1)     91.4%     (0.1)     (0.1)     -2.4%     (0.1)     (0.1)    -31.7%
   Other operating revenues (expenses)       0.9      (0.6)       N/A     (1.3)     (0.6)    -55.7%      0.6       0.3     -50.5%

     (-)Non recurring adjusts                -         -         N/A      (1.8)      -      -100.0%     (1.6)      -      -100.0%
(=) Total recurring SG&A                   (15.5)    (17.4)    12.5%     (15.3)    (17.4)     13.7%    (30.3)    (32.8)      8.4%



Recurring Operating Income and Margin
The Health Services segment ended the 2Q11 with a recurring operating income at R$8.1 million, 6.9% lower than
the results observed in the same quarter of 2010 at R$8.7 million. The recurring operating margin, in turn, fell 0.1
percentage points to 6.9. In the first half, growth was -8.4%, falling to R$16.0 million, with operating margin of 7.4%.
The recurring operating margin did not change over the comparison between halves.

                                                                                                                              13
Recurring Operating Result and Margin
           (in R$ million and %)




                                        14
Operating Highlights of the Period:
In line with the other quarters, the Tempo Assist’s Health Insurance once again grew 5.0% in net income year-on-
year from R$63.0 million to R$66.2 million. Total membership bordered 83 thousand, a 11.1% growth over the
balance ended June 30, 2010. In the quarter, the unit launched a new sales incentive and brand-building campaign
costs for the Tempo Health Insurance brand targeting partners and customers at a cost of R$0.8 million. Thus, the
recurring operating income reached R$0.7 million, 74.5% lower year-on-year. In the half, operating income was at a
disadvantage as compared to the same period of the previous year because the Insurance company was only aquired
in the second half of 2010.
R$Million                                      1Q11   2Q11   Var.%      2Q10        2Q11      Var.%        1H10      1H11      Var.%
Beneficiaries (in thousands)                    80.8   82.8     2.5%        74.5      82.8        11.1%      74.5      82.8        11.1%
Net revenues                                    64.9   66.2     1.9%        63.0      66.2         5.0%      63.0     131.1      108.1%
Cost of rendered services                      (49.6) (56.0)   13.0%       (52.0)    (56.0)        7.6%     (52.0)   (105.6)     102.9%
Gross profit                                    15.3   10.2 -33.7%          11.0      10.2        -7.3%      11.0      25.5      132.5%
Gross margin (%)                               23.6% 15.4% - 8.3 p.p.      17.4%     15.4%    - 2.0 p.p.    17.4%     19.5%      2.0 p.p.
Selling, general and administrative expenses   (10.7) (10.3)     -4%        (9.6)    (10.3)        6.4%      (9.6)    (21.0)     117.7%
Operational result                               4.6   (0.1)     N/A         1.3      (0.1)         N/A       1.3       4.6      238.9%
Operating margin (%)                            7.1% -0.1% - 7.2 p.p.       2.1%     -0.1%    - 2.2 p.p.     2.1%      3.5%      1.3 p.p.
(-) Non recurring adjusts                        -     (0.8)     N/A        (1.4)     (0.8)      -43.9%      (1.4)     (0.8)      -43.9%
Recurring operating results                      4.6    0.7 -85.1%           2.7       0.7       -74.5%       2.7       5.3        96.8%
Recurring operating margin (%)                  7.1% 1.0% - 6.1 p.p.        4.3%      1.0%    - 3.2 p.p.     4.3%      4.1%    - 0.2 p.p.



                                                        Beneficiaries
                                                          (in thousands)




Revenue and Cost of Services Provided
Revenues from prepaid plans are the premiums received over the quarter, while post-payment revenues consist of
plan administration fees and the reimbursement of calculated costs (pass through transfer of cost of services).



                                                                                                                                     15
In the post-payment segment there is no loss ratio, as service costs are passed on to the customer. In the
prepayment segment, the services costs are the loss ratio of the Health Insurance Company. Its ratio, which reached
82.2% this quarter, is shown in the table below.

       R$MM                                                Pre-paid                  Post-paid                   Total
       Beneficiaries (in thousands)                                      73.5                      9.3                82.8
       Gross Revenues                                                    58.8                      7.9                66.7
       Taxes                                                             (0.4)                    (0.1)               (0.5)
       Net Revenues                                                      58.4                      7.8                66.2
       Cost of rendered services                                        (48.3)                    (7.7)              (56.0)
       Loss Ratio (%)                                                   82.2%                      -                   -
       Gross Profit                                                      10.1                      0.1                10.2



                                  Gross Revenue and Historical Loss Ratio
                                                   (in R$ million and %)




Recurring General and Administrative Expenses
In 2Q11, the Health Insurance unit had general and administrative expenses at R$10.3 million, ranging from 6.4%
year-on-year. Considering the non-recurring marketing adjustments mentioned in this document, the unit had
recurring general and administrative expenses at R$9.5 million, or 14.7% higher than the same period last year.
R$Million                                1Q11       2Q11        Var.%      2Q10      2Q11      Var.%      1H10     1H11       Var.%
SG&A                                      (10.7)       (10.3)     -4.3%      (9.6)    (10.3)     6.4%      (9.6)    (21.0) 117.7%
   Personnel                               (0.0)        (1.2)   3986.6%      (1.2)     (1.2)    -1.3%      (1.2)     (1.2)   1.2%
   General and administrative              (3.3)        (5.2)     59.8%      (4.1)     (5.2)    26.5%      (4.1)     (8.5) 105.6%
   Sales                                   (7.2)        (4.1)    -42.6%      (6.5)     (4.1)   -36.8%      (6.5)    (11.3) 73.4%
   Taxes and fees                           -            -          N/A       -         -         N/A       -         -       N/A
   Other operating revenues (expenses)     (0.2)         0.3        N/A       2.2       0.3    -87.9%       2.2       0.0 -98.1%

     (-)Non recurring adjusts               -           (0.8)       N/A      (1.4)     (0.8)   -43.9%      (1.4)     (0.8) -43.9%
(=) Total recurring SG&A                   (8.3)        (9.5)    -11.4%      (8.3)     (9.5)    14.7%      (8.3)    (20.2) 144.2%




                                                                                                                                 16
Recurring Operating Income and Recurring Operating Margin
In 2Q11, the Insurer’s operating income was R$0.7 million and a margin of -1.0% in the period. In the first half, the
recurring operating result of the unit rose 96.8% to R$5.3 million.



                                   Recurring Operating Result and Margin
                                                   (in R$ million and %)




                                                                                                                  17
Overview of Segment Results
In 2Q11, the net revenues of Tempo Assist’s dental plans unit grew almost 300.0% in recurring operating income as a
result of reduced personnel and selling expenses. On the other hand, this business line saw a 27.2% year-on-year
decrease in net revenue.
This variation can be explained by the decrease of the corporate clients portfolio in 2010, when the unit went
through extensive migration and system integration efforts.
Additionally, as noted in the 2Q10 results release, the cost of the dental unit in the 1Q10 was not impacted by the
revision in the appropriation of overhead costs to the business units, which was only adjusted in 2Q10. Therefore,
general and administrative expenses are better analyzed by comparing figures for the half.


Operating Highlights:
R$Million                                      1Q11 2Q11      Var.%    2Q10 2Q11        Var.%        1H10   1H11    Var.%
Beneficiaries (in million)                     682.7 666.4        -2.4% 801.2 666.4        -16.8%    801.2 666.4     -16.8%
Net revenues                                    20.2  17.1       -15.3% 23.4    17.1       -27.2%     51.8   37.2    -28.1%
Cost of rendered services                       (8.8) (8.3)       -6.2%   (9.6) (8.3)      -13.9%    (20.0) (17.1)   -14.6%
Loss Ratio (%)                                 42.4% 47.2%      4.7 p.p. 39.8% 47.2%      7.4 p.p.   37.5% 44.6%    7.1 p.p.
Gross profit                                    11.3   8.8       -22.5% 13.8     8.8       -36.4%     31.7   20.1    -36.6%
Gross margin (%)                               56.2% 51.5%    - 4.7 p.p. 58.9% 51.5%    - 7.5 p.p.   61.3% 22.8% - 38.5 p.p.
Selling, general and administrative expenses    (9.6) (6.4)      -33.4% (14.4)  (6.4)      -55.4%    (22.2) (16.0)   -27.8%
Operational result                               1.7   2.4        38.8%   (0.5)  2.4          N/A      9.5    4.1    -57.1%
Operating margin (%)                            8.5% 13.9%      5.4 p.p. -2.3% 13.9%          N/A    18.4% 11.0% - 7.4 p.p.
(-) Non recurring adjusts                       (1.9)  -            N/A   (1.1)  -       -100.0%       0.7   (1.9)      N/A
Recurring operating results                      3.6   2.4       -34.6%    0.6   2.4      296.8%       8.8    6.0    -32.0%
Recurring operating margin (%)                 18.0% 13.9%    - 4.1 p.p. 2.6% 13.9%     11.4 p.p.    17.1% 6.8% - 10.3 p.p.



Beneficiaries
The dental plans segment saw a 2.4% reduction of total beneficiaries of its portfolio in 2Q11 compared with the
previous quarter. The quarter-on-quarter 8.2% drop in the number of beneficiaries in corporate dental plans was
partially offset by the growth of the affinity segment, which rose from 412 thousand to 418 thousand beneficiaries, a
1.5% increase.
The portfolio of beneficiaries sold through affinity channels, grew 33.3% in 2Q11 over 2Q10. The company's strategic
focus is to expand its commercial activities through affinity partnerships, as well as improve our relationship with
brokers to distribute dental plans to corporate clients, encouraging cross-selling plans with Tempo Assist’s Health
insruance.




                                                                                                                         18
                                                  Beneficiaries
                                                    (in thousands)




Net Revenue
In 2Q11, the unit’s net income decreased by 27.2% over the same period in 2010, primarily due to the decline in the
number of corporate lives.



                                                   Net Revenue
                                                     (in R$ million)




Cost of Services Provided
Comparing the second quarters of 2011 and 2010, the cost of services decreased by 13.9%, but the loss ratio grew by
7.4 percentage points, reaching 47.2%. In comparison with the previous quarter, the unit`s total cost of services fell
6.2%, from R$8.8 million to R$8.3 million and loss ratio increased by 4.7 percentage points. In the half, the reduction
was 14.6%, at R$17.1 million.




                                                                                                                    19
                                          Costs of Provided Services
                                                     (in R$ million)




Recurring General and Administrative Expenses
As mentioned in previous releases, it is important to note that 2Q10 contains adjustments in the allocation of
expenses between the Odonto segment and the holding company. These adjustments correct the year’s result and,
thus, it is more appropriate to compare results by half instead of quarter. However in the half annual comparison,
due to operational efficiency programs introduced during the period, general and administrative expenses fell 27.8%
over the first half of 2010, from R$22.2 million to R$16.0 million. Considering the non-recurring unit adjustments, the
reduction was 24.0%, as shown in the table below:


R$Million                                  1Q11 2Q11         Var.%     2Q10 2Q11        Var.%     1H10     1H11     Var.%
SG&A                                         (9.6)   (6.4)    -33.4%   (14.4)   (6.4)    -55.4%   (22.2)   (16.0)    -27.8%
   Personnel                                 (2.7)   (2.5)     -5.2%    (4.8)   (2.5)    -47.1%    (6.7)    (5.2)    -22.1%
   General and Administrative                (1.2)   (0.8)    -29.8%    (5.0)   (0.8)    -83.1%    (4.7)    (2.0)    -56.9%
   Sales                                     (3.1)   (0.8)    -74.9%    (2.5)   (0.8)    -68.2%    (4.8)    (3.9)    -17.6%
   Taxes and Fees                            (0.0)   (0.0)     74.0%     0.0    (0.0)       N/A     0.0     (0.0)       N/A
   Other operating revenues (expenses)       (2.6)   (2.2)    -14.2%    (2.1)   (2.2)      3.4%    (6.0)    (4.8)    -20.5%

     (-)Non recurring adjusts                (1.9)    -      -100.0%    (1.1)    -      -100.0%    (3.6)    (1.9)    -47.2%
(=) Total recurring SG&A                     (7.7)   (6.4)    -16.7%   (13.2)   (6.4)    -51.5%   (18.5)   (14.1)    -24.0%



Recurring Operating Income and Margin
The Odonto segment had recurring operating income at -R$2.4 million in 2Q11, with operating margin at 13.9% in
the period. In the quarter, the unit`s recurring operating result decreased 32.0%, as per the graphs below.




                                                                                                                        20
Recurring Operating Result and Margin
           (in R$ million and %)




                                        21
Overview of Assistance Segment Results
In 2Q11, the Assistance unit’s net revenue grew 6.2% in the year-on-year comparison, from R$58.3 million to R$62.0
million. The use of services also increased and this led to a loss ratio of 62.4%, 7.7 percentage points above the same
period last year. This revenue increase was focused on a few customers with poor claims records, which drove an
increase in the loss ratio over the period. However, there are ongoing initiatives both in terms of contractual
adjustments and operational execution to control the loss ratio.



Operating Highlights:
R$Million                                      1Q11     2Q11    Var.%       2Q10     2Q11    Var.%      1H10     1H11    Var.%
Net Revenues                                    59.2     62.0       4.7%     58.3     62.0      6.2%    110.4    121.1      9.7%
Cost of Rendered Services                      (42.7)   (42.9)      0.4%    (35.5)   (42.9)    20.8%    (70.1)   (85.7)    22.1%
Loss Ratio (%)                                 65.2%    62.4% - 2.8 p.p.    54.6%    62.4% 7.7 p.p.     57.2%    63.7% 6.5 p.p.
Gross Profit                                    16.4     19.0      15.8%     22.8     19.0    -16.5%     40.3     35.5    -11.9%
Gross Margin (%)                               27.8%    30.7% 2.9 p.p.      39.1%    30.7% - 8.4 p.p.   36.5%    29.3% - 7.2 p.p.
Selling, General and Administrative Expenses   (13.4)   (12.0)    -10.5%    (10.6)   (12.0)    13.2%    (23.8)   (25.5)     7.0%
Operating Results                                3.0      7.0    133.1%      12.2      7.0    -42.4%     16.5     10.0    -39.1%
Operating Margin (%)                            5.1%    11.3% 6.2 p.p.      20.9%    11.3% - 9.6 p.p.   14.9%     8.3% - 6.6 p.p.
(-)Non recurring Adjustments                    (0.2)     -    - 1.0 p.p.     1.3      -    -100.0%       0.1     (0.2)      N/A
Recurring Operating Results                      3.2      7.0    119.5%      10.9      7.0    -35.8%     16.4     10.2    -37.6%
Operating Margin (%)                            5.4%    11.3% 5.9 p.p.      18.7%    11.3% - 7.4 p.p.   14.8%     8.4% - 6.4 p.p.



Insured Items
The number of insured items increased 1.9% in 2Q11, compared with the first quarter of 2011. Over 2Q10, the
number of insured items fell 6.3%. Currently the portfolio of items in this segment is comprised of: 67% persons, 18%
household and 15% Auto.
The chart below shows the historical evolution and also the percentage of insured items in 2Q11:




                                                                                                                              22
                                Insured items and items opening in 2Q11
                                                 (in R$ million and %)



                                                                                             15%


                                                                                                   18%
                                                                                  67%




Net Revenue
Net income at the end of 2Q11 reached R$62.0 million, representing an increase of 6.2% over the net income of
2Q10. In the half, revenues reached R$121.1 million, or 9.7% higher than the same period last year.


                                                Net Revenue
                                                   (in R$ million)




Cost of Services Provided and Loss Ratio
In 2Q11, loss ratio increased 7.7 percentage points over the same period of 2010. As mentioned earlier, this growth
rate was driven by a few customers with poor performance.




                                                                                                                23
                                         Costs of Provided Services
                                                    (in R$ million)




                                Gross Revenue and Historical Loss Ratio
                                                 (in R$ million and %)




Recurring General and Administrative Expenses
In 2Q11, general and administrative expenses in the Assistance segment totaled R$12.0 million, an increase of 13.2%
year-on-year. Quarter-on-quarter, expenses decreased 10.5%. Considering the unit’s non-recurring expenses, general
and administrative expenses increased 1.2%, from R$11.9 million in 2Q10, as shown in the following table:
R$Million                                 1Q11      2Q11     Var.%       2Q10     2Q11     Var.%     1H10     1H11     Var.%
SG&A                                       (13.4)   (12.0)    -10.5%     (10.6)   (12.0)     13.2%   (23.8)   (25.5)      7.0%
   Personnel                                (8.7)    (8.2)     -5.4%      (9.2)    (8.2)    -10.9%   (18.9)   (16.9)    -10.4%
   General and Administrative               (5.0)    (3.7)    -25.3%      (2.9)    (3.7)     27.9%    (6.9)    (8.7)     24.9%
   Sales                                    (0.1)    (0.1)     -8.0%      (0.2)    (0.1)    -26.3%    (0.3)    (0.2)    -12.7%
   Taxes and Fees                           (0.0)    (0.0)    219.8%      (0.0)    (0.0)    186.7%    (0.0)    (0.0)     17.3%
   Other operating revenues (expenses)       0.3      0.0     -89.7%       1.7      0.0     -98.0%     2.3      0.4     -84.3%

     (-)Non recurring adjusts               (0.2)     -      -100.0%       1.3      -      -100.0%     0.1     (0.2)      N/A
(=) Total recurring SG&A                   (13.3)   (12.0)     -9.2%     (11.9)   (12.0)      1.2%   (23.9)   (25.3)     5.8%

                                                                                                                           24
Recurring Operating Income and Recurring Operating Margin
In 2Q11, the Assistance segment had a recurring operating profit of R$ 7.0 million, 35.8% lower than the same period
of 2010. The recurring business margin fell 7.4 percentage points to 11.3% and this result is directly affected by the
increased loss ratio in the same period.


                                   Recurring Operating Result and Margin
                                                   (in R$ million and %)




                                                                                                                   25
Capital Stock and Stock Option Plan
The Company's capital, which amounts to R$534.1 million on June 30 2011, is divided into 156.3 million shares, as
per the chart below. Tempo Assist has 6.8 million treasury shares and 14.4 million stock purchase options granted to
executives from the Company. Thus, the total shares of the Company, considering the dilution derived from the stock
option plan, adds up to 163.9 million shares.
                                    Distribution of Social Capital on April 04, 2011
                                                                             Number of shares
                   Total Shares                                                          156,285,611
                   (-) Treasury shares                                                     6,832,458
                   Total shares outstanding                                              149,453,153
                   (+) Unexercised stock Options                                          14,442,939
                   Fully Diluted                                                         163,896,092


At the Extraordinary General Meeting held on April 04 2011, Tempo Assist approved its new option plan to purchase
shares for employees and members of the management team. This plan aims to attract and retain executives of the
Company as well as providing a greater alignment of interests between employees and shareholders.
The plan provides that the Company may grant options to purchase shares up to a maximum of 14% of the total
shares of its capital stock on April 28 2011, excluding treasury shares and considering the dilution effect of this
granting and the grants under the first option plan, as detailed below.
                                                    Stock Option Plan
                                                                             Number of shares
                   Total shares outstanding                                              149,453,153
                   Stock Option plan                                                      24,329,583
                   (a) Stocks Granted                                                     15,314,743
                   (b) Stocks already issued                                                 871,804
                   Current dilution: (a) - (b)                                            14,442,939

                                                 Exercise price of options


                   Strike price in 01/15/2007                                                 R$ 2.34
                   Monetary correction until 04/28/2011                            IGP-M + 6% per y.
                   Monetary correction after 04/28/2011                              IPCA + 3% per y.




                                                                                                                 26
End of Agreement with BTG Pactual and UBS for evaluation of strategic opportunities
The Company announced today through Relevant Fact that Banco BTG Pactual S.A. and UBS Securities LLC concluded
their analysis of strategic opportunities for Tempo Assist and the Board of Directors decided that at this time, the
best alternative for creating value for the Company and its shareholders is organic growth through geographic
expansion and the expansion of the strategic partnership with Caixa Seguradora S.A..



3rd Release of a New Stock Buy-back Program
Based on the assumptions outlined in the analysis of strategic opportunities led by banks above and also in the belief
that the values for which the Company's shares have been traded does not reflect this potential, the Company also
announces on this date its 3rd Stock Buy-back Program, to hold the shares in treasury or for later sale or cancellation
without reduction of the capital stock. Up to 8,796,102 common Company-issued shares will be purchased in a
maximum period of 365 days, ending on August 11, 2012.
The intermediary institutions will be Morgan Stanley Corretora de Títulos e Valores Mobiliários S.A. and BTG Pactual
Corretora de Títulos e Valores Mobiliários S.A., and the purchase price will be paid using funds in Capital and Profit
Reserves of the Company and/or its subsidiaries. The decision to cancel or sell the shares held in treasury will be
made at an opportune time and communicated to the market. Currently, the Company has 6,832,458 shares of its
issue held by its subsidiary Tempo Saúde Seguradora S.A.




                                                                                                                    27
Health Services    Tempo Assist’s segment that provides back office services and network rentals to insurance
Segment            companies, self-management practices and group medicine, in addition to homecare services
                   and health plans in the post-payment mode. It has over 20 years of leadership experience in the
                   administration of health plans, with the most comprehensive platform of solutions in this
                   segment in Brazil. Gama Saúde, which manages a network with more than 35 thousand
                   providers, offers network services rentals and post-paid plans. In addition to offering health
                   insurance plans, Tempo Assist also works with specialized services through its brands Tempo
                   CRC and Med-Lar.

Health Insurance   Former Unibanco Saúde Seguradora, acquired by Tempo Assist in April 2010. This acquisition
Segment            marked Tempo Assist’s entry in the segment of health insurance market for small businesses,
                   offering health plans in the form pre-payment plans and also in post-payment mode.

Odonto Segment     A segment which is active in dental plans under the Tempo Dental brand through operators
                   Odonto Empresas and Prevdonto, being the fourth largest dental company in Brazil. It is
                   comprised of the merged operations of Odonto Empresas, Fleming Odontologia, Gama Odonto
                   and Oraltech, as well as the acquisition of several client portfolios. The unit also has sales
                   partnerships with credit card companies, retailers, consumer and financial companies, which
                   allows the distribution of services and benefits to its partners’ entire customer base. It is
                   recognized as being a pioneer in the partnership distribution channel. The Odonto segment has
                   operations throughout Brazil, benefiting from its large network of service providers that today
                   amounts to approximately 10 thousand dentists.

Assistance         Tempo Assist operates 24/7 providing specialized Assistance services under the brand Tempo
Segment            USS. With more than 15 years of experience, the company is a partner of the leading insurance
                   companies and automobile manufacturers, offering a complete portfolio of auto assistance (tow
                   truck, car reservation, etc.), household (plumber, locksmith, electrician, etc.), and persons
                   (traveling, funeral, pharmacy and nutrition), among others. As in the dental plans segment,
                   Tempo USS had affinity partnerships developed (such as the agreement with Hipercard in April
                   2010) and direct marketing channel services (such as "Tempo Direto", a channel which uses
                   online sales and call center vouchers to market assistance services) in order to offer their
                   services and meet the needs of a wide number of consumers.

IBNR               Provision for Incurred but Not Reported Events: provision for the payment of events that have
                   already occurred but have not been reported, based on actuarial technical notes.

Loss Ratio         Represents the total loss ratio over the gross revenues accrued during the period.



                                                                                                              28
Tempo Assist Consolidated Balance Sheet
                                                             Tempo Consolidated Balance Sheet
                                        March 31, 2010      March 31, 2011                                                  March 31, 2010      March 31, 2011
ASSET                                            567,942            533,810    LIABILITY                                             567,942             533,810
Current                                          429,254            380,721    Current Liabilities                                   231,356             178,113
Current Assets                                    19,215              6,364    Risk Provisions                                           -                   -
Cash and Cash Equivalents                        137,641            170,284    Technical Provision                                    32,915              31,619
Accounts Receivable                              138,732            111,086    Suppliers                                              25,572              28,043
Allowance for doubtful accounts                  (57,076)           (40,851)   Pass through payable                                   40,203              31,715
Rembursable expenses receivable                   64,379             49,870    Related Parties                                           -                   -
Medical Inventories                                1,881              1,784    Leasing Contracts                                         750                 374
Taxes and social security recoverable             54,677             68,586    Income and social contribution taxes                   23,025              19,394
Deffered Taxes                                       -                  -      Other taxes and contributions                          30,347              35,706
Dividends receivable from USS                        -                  -      Bank Loans                                                -                   -
Tax Credit/Other Assets                           69,806             13,598    Payroll                                                17,083              12,588
                                                                               Subsidiary acquisition - accounts payable              46,110               1,579
                                                                               Client Advance                                          3,901               2,718
                                                                               Other accounts payable                                 11,450              14,376

Non-current assets                                27,917             47,684    Non-current Liabilities                                60,113              49,729
Deffered Taxes LT                                 17,745             21,108    Provision for contingencies, net                       55,749              47,699
Fiscal credit                                      5,079                  0    Subsidiary acquisition, Accounts payable                1,225                 -
Other assets                                       5,093             26,567    Other Liabilities                                       1,181                 200
Related parties                                      -                  -      Leasing Contracts                                         597                 151
Others Receivable                                    -                    8    Provisions for other liabilities                        1,325               1,614
                                                                               Technical Provi sion                                       36                   64

                                                                               Shareholders´ Equity                                  276,473             305,968
Fixed Assets                                     110,771            105,405    Capital Stock                                         534,067             534,067
Advances for investment acquisition                    96                 96   Advance for Future Capital Increase                       -                   -
Investments                                          -                  -      Capital Reserve                                        13,462              11,780
Fixed Assets                                       9,886             10,943    Treasury Shares acquired by parent company            (36,942)            (36,943)
Intangible assets                                100,789             94,366    Acummulated Profit (Loss)                            (234,114)           (202,936)




                                                                                                                                                             29
Tempo Assist Consolidated Income Statement
                                                            Tempo Consolidated Financial Statements
                                                                                                      1Q10             1Q11
Gross revenues                                                                                           279,188          269,539
Pass trought                                                                                                 89,433           83,364
    Expenses related to health plan administration                                                           87,126           79,912
    Expenses related to specialized assistance services                                                       2,307            3,452
Revenues from specialized assistance service                                                                 62,716           65,352
Revenues from health plan administration                                                                     15,445           14,657
Revenues from dental plan administration / health insurance                                                  88,035           84,253
Revenues from homecare services                                                                              23,559           21,912
Variation of the risk provision for dental plan administration                                                  -                -
Deductions from gross revenues                                                                           (11,694)         (11,249)
    Tax                                                                                                  (11,694)         (11,249)
Net revenues                                                                                             267,494          258,290
Cost of rendered services                                                                               (197,729)        (196,609)
Pass trought                                                                                             (85,367)         (76,872)
    Expenses related to health plan administration                                                       (85,367)         (76,872)
    Expenses related to specialized assistance services                                                         -                -
Costs from specialized assistance service                                                                (39,457)         (47,146)
PIS and COFINS credit from specialized services provided                                                      5,385            5,817
Costs from dental plan administration / health insurance                                                 (63,937)         (65,877)
PEONA (plan claims incurred but not reported)                                                                 2,288            1,600
Costs from homecare services                                                                             (16,642)         (14,130)
Gross profit                                                                                                 69,765           61,681
Operating expenses                                                                                       (60,483)         (55,428)
Selling, general and administrative expenses                                                             (55,830)         (51,984)
  Personnel                                                                                              (30,932)         (27,145)
  General and administrative expenses                                                                    (15,768)         (16,590)
  Sales                                                                                                  (11,051)             (5,145)
  Taxes and fees                                                                                                (73)            (129)
  Other revenues (expenses) operational                                                                       1,245           (2,887)
  Provision                                                                                                    749               (89)
Depreciation & amortization                                                                                  (3,054)          (4,084)
Amortization of goodwill                                                                                        -                -
Equity income                                                                                                   (35)            990
    Impairment                                                                                                  -                -
    Other operating revenues (expenses), net                                                                 (1,563)            (349)
Net operational loss before financial result                                                                  9,282            6,253
Financial result                                                                                              2,613             (239)
    Financial revenues                                                                                        4,666            1,563
    Financial expenses                                                                                       (2,054)          (1,802)
Income tax & social contribuition                                                                            (7,323)          (1,884)
    Current                                                                                                  (3,810)            243
    Deferred                                                                                                 (3,513)          (2,127)
Net earnings (loss)                                                                                           4,572            4,130




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