An investment in securities involves a high degree of risk. All investors should carefully consider the following factors in addition to the other information in this investor relations website before investing in Brookfield Incorporações’s securities. In general, investing in the securities of issuers in emerging market countries, such as Brazil, involves a higher degree of risk than investing in the securities of U.S. issuers or issuers in other countries with highly developed capital markets. Brookfield Incorporações’s business, financial condition, results of operations and prospects may be materially adversely affected by any of these risks.
The risks briefly described below are those that the Company currently believes most likely may materially affect its performance.
1. Risks Relating to Brazil
>> The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as Brazilian political and economic conditions, could adversely affect the Company and the trading price of its common shares.
>> Exchange controls and restrictions on remittances abroad may adversely affect holders of Brookfield Incorporações’s common shares.
>> Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and could harm the Company’s business and the market price of its common shares.
>> Exchange rate instability may adversely affect Brookfield Incorporações’s business, financial condition and results of operations and the market price of its common shares.
>> Developments and the perception of risk in other countries, especially emerging market countries, may adversely affect the market price of Brazilian securities, including the Company’s common shares.
2. Risks Relating to Brookfield Incorporações’s Business and the Brazilian Real Estate Industry
>> Brookfield Incorporações is exposed to risks associated with the purchase, development, design, management, construction, financing and sale of real estate.
>> The timeliness of project completion and the quality of workmanship of the Company’s developments depend on certain factors that are beyond its control.
>> The scarcity of available financing and/or an increase in interest rates may adversely affect the ability or willingness of potential buyers of real estate to finance their purchases.
>> The real estate market may be subject to a liquidity crisis.
>> Brookfield Incorporações’s business is subject to the risks normally associated with providing financing.
>> A reduction in the availability of development financing may limit the Company’s ability to develop new projects.
>> Brookfield Incorporações’s future growth may require additional capital, which may not be available or, if available, may not be on terms acceptable to the Company.
>> Brookfield Incorporações’s level of indebtedness and the expenses related to such indebtedness have been adversely affecting its business, financial condition and results of operations.
>> The real estate industry in Brazil is highly competitive and the Company’s could lose its position in the market in certain circumstances.
>> The loss of its senior management, or the inability to attract and retain qualified senior management personnel, may have a material adverse effect on the Company.
>> Brookfield Incorporações’s business is subject to extensive regulation, which could increase the cost and restrict its development or otherwise adversely affect its business, financial condition and results of operations.
>> An increase in tax rates or the creation of new taxes during the period when the Company’s sales contracts are in force could materially adversely affect its business, financial condition and results of operations.
>> If Brookfield Incorporações was a passive foreign investment company for U.S. federal income tax purposes, U.S. shareholders generally would be subject to adverse U.S. federal income tax consequences.
>> The interests of its controlling shareholder may conflict with those of its other shareholders.
3. Risks Related to Brookfield Incorporações’s Common Shares
>> The relative volatility and illiquidity of the Brazilian securities markets may substantially limit investors’ ability to sell their common shares at the price and time that’s desired.
>> Substantial sales of Brookfield Incorporações’s common shares could cause the price of its common shares to decrease.
>> Brookfield Incorporações may need additional resources in the future, which may be obtained through the issuance of common shares or securities convertible into common shares, which may result in a dilution of investor shareholdings in its capital.
>> Holders of Brookfield Incorporações’s common shares may not receive any dividends or interest attributable to shareholders' equity.
>> The company is holding company and depend on distributions from its subsidiaries for cash flow.
