OPERATING & FINANCIAL PERFORMANCE

OPERATING INDICATORS
(Units)	2011	2010	Change
PORT TERMINALS
Quay Operations	1.001.875	938.924	6,7%
Quay Operations	781.523	742.681	5,2%
Empty Containers	220.352	196.243	12,3%
Storage Operations	179.202	182.900	-2,0%
VEHICLES TERMINAL
Vehicles Handled	205.603	154.211	33,3%
LOGISTICS
Storage Operations	74.632	67.848	10,0%

OPERATING INDICATORS

The economic expansion in developing countries gave impetus to cargo flow through at the largest port in Brazil, making the volume operated in the Santos Brasil port terminals exceed its historic mark of 1 million containers handled in the year, a 6.7% increase in relation to 2010.

This performance, which represents approximately twice the expansion in Brazilian GDP (Gross Domestic Product) in 2011, was possible as a result of the substantial advances in operating efficiency made by the Company in its main terminal, Tecon Santos.

The annual performance could have been even better had the second semester of 2011 not been affected by the drop in sugar shipments, the main export cargo from the terminals, which presents a concentration in shipments in the second semester. The volatility of the exchange rate also caused uncertainty, which reduced imports slightly in the second half of the year.

The full-empty container mix registered 78% full in the yearly accumulated result, with good performance of long haul full containers in the course of the year, with a 3.4% increase in 2011.

The volume of containers stored at Santos Brasil port terminals in 2011 presented a 2.0% reduction in comparison with 2010 due to the reduced rate of withholding of import containers landed for storage at Tecon Santos, which decreased from 52% in 2010 to 47% in 2011.

Vehicles handling registered at the Vehicles Terminal was 33.3% higher in relation to 2010. This performance was influenced by exports and imports, which increased 38% and 26%, respectively.

Santos Brasil Logística's bonded storage operations increased 10.0% in relation to 2010 due to the increased market share in the Port of Santos and more integrated logistics services based in São Bernardo do Campo and Jaguaré distribution centers. The services offered comprise the cargo reception in port terminals, passing through CLIAs (Industrial & Logistics Customs Centers) and distribution centers until the road container transport and fractioned cargo distribution.

ECONOMIC-FINANCIAL RESULTS

GROSS SERVICE REVENUE
(R$ million)	2011	2010	Change
PORT TERMINALS	997,5	787,2	26,7%
Quay Operations	581,2	515,2	12,8%
Storage Operations	416,3	272,0	53,1%
VEHICLES TERMINAL	65,1	30,6	112,7%
LOGISTICS	216,1	165,5	30,6%
Consolidated	1.278,7	982,7	30,1%

GROSS REVENUE

In the port terminal segment, gross revenue from quay operating services rose 12.8% in 2011. This performance, higher than the increase in operating volumes, is basically due to contract readjustments with shipping companies.

Revenue from storage operations grew by an expressive 53.1% over the period, in excess of the variation in stored container volume. This difference is due to readjustments in the price of storage services at Tecon Santos and longer dwell time (storage time) of stored containers, which increased from 15.4 days in 2010 to 16.4 days in 2011, positively influencing turnover.

With 112.7% growth in 2011, revenue from the Vehicles Terminal was the main highlight of the year amongst the Company's business segments. This performance was achieved as a result of the following factors: (i) substantial growth in handling; (ii) extended storage time; and (iii) annual price readjustment.

In the logistics segment, gross revenue rose 30.6% in comparison with the previous year. Factors contributing to this result: (i) growth in cargo volume stored at the CLIAs in the Port of Santos; (ii) the Company's commercial efforts to increase integrated logistics services with the aim of serving customers that use the port; (iii) expansion of services with the Distribution Center and road transport; and (iv) readjustments in service prices.

NET REVENUE

In 2011, the consolidated net revenue totaled R$1,124.7 million, compared with R$865.5 million in 2010, a significant increase of 29.9%, in line with the growth in gross revenue.

COST OF SERVICES RENDERED

PORT TERMINALS

Handling costs (casual labor force, TUP-channel fee and other variable costs): the 5.9% growth in relation to 2010 is the result of the evolution in container handling in quay operations.

Personnel costs: 25.5% increase observed, due to the following factors: (i) increase in permanent staff number as a result of the greater demand planned aimed for increased productivity and capacity; and (ii) wage readjustment granted to employees, subject to union negotiations.

Leasing & infrastructure: the R$10.4 million increase recorded in 2011 is the result of contract readjustments set forth in the respective concession contracts and of the change in the minimum handling quantity at Tecon Imbituba. As already announced by the Company, this terminal is committed to handling a minimum of 65,000 containers in its first year of activity, 150,000 in the second year, 280,000 in the third year and 360,000 as from the fourth year of activities, in which the contract started in April 2008.

Depreciation and amortization: an increase of 13.6% was recorded due to the commissioning of new quay line at Tecon Imbituba and to the operations with the new equipment.

Other costs: the other costs registered a 62.2% increase over the year due to maintenance expenditure, which were R$15.7 million higher than the investment made in the previous year, a result of the Company's search for increased productivity.

VEHICLES TERMINAL

The increase in costs was basically due to the greater number of vehicles handled in 2011.

LOGISTICS

Fuel & freight: the 26.0% increase in 2011, compared with 2010, was primarily due to: (i) the increase in the handling of cargo storage operations and the rendering of shipping and distribution services; and (ii) the readjustment of prices charged by outsourcers in the provision of road shipping services.

Personnel costs: the 38.2% increase in the year-to-year comparison is the result of wage readjustment pursuant to class collective bargaining and the increase in permanent staff members in 2011 to help attend to new customers at the Jaguaré Distribution Center.

Depreciation & Amortization: the 36.6% increase is explained by investments made in new equipment, purchased to meet the increased demand.

Other costs: the reduction recorded is the result of non-recurring expenditure incurred in 2010, which was not incurred in 2011, amongst which are expenses from repairs to the CLIA Alemoa cargo warehouse because of a fire that occurred in October 2010.

OPERATING EXPENSES
(R$ million)	2011	2010	Change
PORT TERMINALS
Sales	16,8	13,2	27,3%
General & Administrative	43,9	40,3	8,9%
Total	60,7	53,5	13,3%
VEHICLES TERMINAL
Sales	-	-	-
General & Administrative	0,3	0,1	200,0%
Total	0,3	0,1	200,0%
LOGISTICS
Sale	14,1	10,0	41,0%
General & Administrative	13,2	10,7	23,4%
Total	27,3	20,7	31,9%
CORPORATE
General & Administrative	47,8	47,3	1,1%
Depreciation & Amortization	15,6	16,5	-5,5%
Total	63,4	63,8	-0,6%
Consolidated	151,7	138,1	9,8%

CONSOLIDATED OPERATING EXPENSES TOTALED R$151.7 MILLION IN 2011, 9.8% UP ON THE
PREVIOUS YEAR.

OPERATING EXPENSES

In the port terminal segment, the increased storage revenue raised commissioning costs incurred with freight forwarders (calculated over storage invoicing). In the case of general expenditure, wage readjustments inflated personnel expenditure and service provision contracts were readjusted as per contract specifications.

The Vehicles Terminal recorded a 200% increase in costs due to the greater service demand in 2011, which led to a large increase in operated volume.

In logistics, expenditure was equally inflated by the increase in forwarder commissioning costs, a consequence of the increase in operations and invoicing and of the wage readjustments granted as a result of class bargaining agreements.

The increase observed in corporate expenditure was primarily caused by the recognition as expenses of intangible assets to the amount of R$3.5 million corresponding to the land occupation projects of the Prainha area and the Road Complex in Imbituba. These projects are subject to analysis and approval by public sector authorities and if approved the Company is entitled to reimbursement of any outlay made.

EBITDA & EBITDA MARGIN
(R$ million)	2011	Margin	2010	Margin	Change	Change Margi
Port Terminals	430,1	48,6%	324,1	46,4%	32,7%	2,2 p.p.
Vehicles Terminal	34,6	63,1%	13,0	49,9%	166,2%	13,2 p.p.
Logistics	40,0	21,6%	20,3	14,4%	97,0%	7,2 p.p.
Corporate	(47,8)	-	(47,3)	-	-	-
Consolidated	456,9	40,6%	310,1	35,8%	47,3%	4,8 p.p.

O Terminal de Veículos movimentou 33,3% a mais em 2011.

NET INCOME
(R$ million)	2011	2010	Change
EBITDA	456.9	310.1	47.3%
Depreciation & Amortization	(110.4)	(100.5)	9.9%
EBIT	346.5	209.6	65.3%
Financial Result	(47.0)	(3.2)	-
Corporate Income Tax (IRPJ) / Social Contribution on Net Income (CSLL)	(53.2)	(95.2)	-44.1%
Minority Stockholders	0.2	0.8	-
Net Income	246.6	112.0	120.2%

NET INCOME

In 2011, Santos Brasil's net income rose 120.2%, positively influenced by the increase in the Company's operating result and the incorporation of Tecon Santos by Santos Brasil Participações S/A.

The better operating result is a consequence, primarily, of an increase in net revenue in container and vehicle terminal segments which results from the market share gains in these activities as a result of the Company's significant operating productivity. Therefore, the net income was positively affected and the net margin reached 22% in 2011, 9.0 percentage points more than the previous year.