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International Account ing Stantards - IFRS

Quarterly Consolidated Financial Statements

and Independent Auditor's Review ReportAs of September 30, 2010 and 2009

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Statements of income for the nine months period ended September 30, 2010 and 2009

(In thousands of Reais)Adjusted IFRS

2010 2009

NET SALE REVENUE (Note 23) 40,736,191 26,902,867

Cost of goods sold (35,774,106) (24,561,469)

GROSS INCOME 4,962,085 2,341,398

OPERATING INCOME (EXPENSE)

General and administrative expenses (1,138,476) (543,746)Selling expenses (1,926,651) (1,247,723)Financial income (expense), net (Note 25) (1,269,866) (460,896)Non-recurring expenses (Note 26) (159,439) -Other (expense) income, net 63,470 10,515

(4,430,962) (2,241,850)

NET INCOME BEFORE TAXES 531,123 99,548

Current income taxes (238,360) (58,948)Deferred income taxes (57,231) (53,517)

(295,591) (112,465)

RESULT BEFORE MINORITY INTEREST 235,532 (12,917)

Minority interest (expense) income 1,021 625

NET INCOME (LOSS) OF THE PERIOD 236,553 (12,292)

Net Income (Basic) per thousand shares reais (Note 24) 93.77 (8.79)

Statement of EBITDA (Earnings before income taxes, interest, depreciation

and amortization)

Net income before taxes 531,123 99,548Financial income (expense), net (Note 25) 1,269,866 460,896Depreciation and amortization 929,902 546,057Non-recurring expenses 159,439 -

AMOUNT OF EBITDA 2,890,330 1,106,501

The accompanying notes are an integral part of the financial statements

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Statements of income for the three months period ended September 30, 2010 and 2009

(In thousands of Reais)Adjusted IFRS

2010 2009

NET SALE REVENUE (Note 23) 14,069,599 8,379,905

Cost of goods sold (12,291,272) (7,628,471)

GROSS INCOME 1,778,327 751,434

OPERATING INCOME (EXPENSE)

General and administrative expenses (364,491) (92,027)Selling expenses (699,374) (438,340)Financial income (expense), net (Note 25) (363,072) 11,429Non-recurring expenses (Note 26) (80,722) -Other (expense) income, net 10,334 3,423

(1,497,325) (515,515)

NET INCOME BEFORE TAXES 281,002 235,919

Current income taxes (58,288) (1,433)Deferred income taxes (66,245) (49,532)

(124,533) (50,965)

RESULT BEFORE MINORITY INTEREST 156,469 184,954

Minority interest (expense) income (22,981) (444)

NET INCOME OF THE PERIOD 133,488 184,510

Net Income (Basic) per thousand shares reais (Note 24) 52.91 131.89

Statement of EBITDA (Earnings before income taxes, interest, depreciation

and amortization)

Net income before taxes 281,002 235,919Financial income (expense), net (Note 25) 363,072 (11,429)Depreciation and amortization 301,616 290,636Non-recurring expenses 80,722 -

AMOUNT OF EBITDA 1,026,412 515,126

The accompanying notes are an integral part of the financial statements

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(In thousands of Reais)

2010 2009

Cash flow from operating activities

Net income (loss) of the period 236,553 1,554Adjustments to reconcile net income to cash provided

. Depreciation and amortization 929,902 252,826

. Allowance for doubtful accounts 19,917 13,277

. Minority interest in subsidiary result (1,021) (625)

. Write-off of fixed assets 68,776 7,896

. Deferred income taxes 57,231 102,351

. Current and non-current financial charges 210,690 25,329

. Provision for contingencies (103,539) 5,193

. Adjustment of assets and liabilities to present value - 325

1,418,509 408,126

Variation in operating assets and liabilities

Increase in trade accounts receivable (826,542) (42,366)Decrease (increase) in inventories (926,587) 273,483Increase in recoverable taxes (291,563) (95,342)Increase in other current and non-current assets 19,961 (56,048)Decrease (increase) in credits with related parties 151,057 (107,465)Increase (decrease) in trade accounts payable 35,019 (285,958)Increase (decrease) in other current and non-current liabilities (610,652) 246,507Valuation adjustments to shareholders' equity (275,421) (577,883)Adjustments to first-time adoption of IFRS (27,315) -

Net cash used in operating activities (1,333,534) (236,946)

Cash flow from investing activities

Additions to property, plant and equipment and intangible assets (1,049,015) (872,235)Net effect of the working capital of acquired company (338,119) (466)

Net cash used in investing activities (1,387,134) (872,701)

Cash flow from financing activities

Loans and financings 12,872,887 3,642,263Payments of loans and financings (12,363,105) (2,647,180)Capital increase 1,600,000 -Transaction costs for the issuing of titles and securities (55,252) -Shares acquisition of own emission (5,331) (28,530)

Net cash provided by financing activities 2,049,199 966,553

Effect of exchange variation on cash and cash equivalents 6,393 (113,271)

Net decrease in cash and cash equivalents (665,076) (256,365)Cash and cash equivalents at the beginning of the period 5,067,530 2,291,617

Cash and cash equivalents at the end of the period 4,402,454 2,035,252

The accompanying notes are an integral part of the financial statements

Statements of cash flow for the nine months period ended September 30, 2010 and 2009

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Statements of cash flows for the three months period ended September 30, 2010 and 2009

(In thousands of Reais)

2010 2009

Cash flow f rom operating activities

. Net income of the period 133,488 151,495Adjustments to reconcile net income to cash provided

. Depreciation and amortization 301,616 81,609

. Allowance for doubtful accounts 2,557 4,779

. Minority interest 22,981 444

. Write-off of fixed assets 15,985 5,276

. Deferred income taxes 66,245 65,830

. Current and non-current financial charges (93,760) 159,980

. Provision for contingencies (24,657) 4,175

. Adjustment of assets and liabilities to present value - 1,242

424,455 474,830

Variation in operating assets and liabilities

Decrease (increase) in trade accounts receivable 69,106 (18,708)Decrease (increase) in inventories (277,823) 374Increase in recoverable taxes (156,606) (35,060)Increase in other current and non-current assets (241,815) (131,075)Decrease (increase) in credits with related parties 151,248 (43,136)Decrease (Increase) in trade accounts payable (62,748) 172,013Increase in other current and non-current liabilities (14,833) 124,490Valuation adjustments to shareholders' equity (240,270) (371,889)Adjustments to first-time adoption of IFRS 145,831 -

Net cash used in operating activities (203,455) 171,839

Cash flow f rom investing activitiesAdditions to property, plant and equipment and intangible assets (358,845) (325,840)Increase in investments - (157)Net effect of the working capital of acquired company (212,572) -

Net cash used in investing activities (571,417) (325,997)

Cash flow f rom financing activities

Loans and financings 2,538,563 444,153Payments of loans and financings (877,297) (509,176)

Transaction costs for the issuing of titles and securities (18,889) -Shares acquisition of own emission (5,331) (15,504)

Net cash provided by f inancing activities 1,637,046 (80,527)

Effect of exchange variation on cash and cash equivalents 25,190 (28,721)

Net decrease in cash and cash equivalents 887,364 (263,406)Cash and cash equivalents at the beginning of the period 3,515,090 2,298,658

Cash and cash equivalents at the end of the period 4,402,454 2,035,252

The accompanying notes are an integral part of the financial statements

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Notes to the consolidated interim financial statements for the nine months period ended September 30, 2010 and 2009Expressed in thousands of Brazilian reais)

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a) Activities in Brazil

Bertin had a total of forty nine units, of which fifteen leather units located in the States of So Paulo, Maranho, Gois, Mato Grosso, Mato Grosso doEsprito Santo, Tocantins, Par, Rondnia and Minas Gerais; fifteen slaughtering plants located in the States of So Paulo, Mato Grosso, Mato GrossSul, Gois, Par, Tocantins, Bahia, Minas Gerais and Rondnia; sixcommercial units located in the States of Rio de J aneiro, Bahia, Minas Gerais, Paand Rio Grande do Sul; fourcosmetics units in the State of So Paulo and Paran; two transportation companies located in the State of So Paulo; tbeef stores located in the State of So Paulo; one by-productunit in the State of Minas Gerais; one beef jerky unit located in the State of Pernambuco;pet products unit located in the State of So Paulo and one recycling unit in the State of So Paulo.

Due to Bertins incorporation, the asset and liabilities accounts of Bertin were consolidated into the Companyas of December 29, 2009, as well as, oconsolidated financial statements as of December 31, 2009.

Operating activities

The Company owns and operates slaughte