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Corporate Presentation - January 2011
 

Corporate Presentation - January 2011

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    Corporate Presentation - January 2011 Corporate Presentation - January 2011 Presentation Transcript

    • Corporate PresentationJanuary 2011 1
    • Disclaimer We make forward-looking statements that are subject to risks and uncertainties. These Statements arebased on the beliefs and assumptions of our management, and on information currently available to us.Forward-looking statements include statements regarding our intent, belief or current expectations or thatof our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future resultsof operations, as well as statements preceded by, followed by, or that include the words believes, may,will, continues, expects,‘ anticipates, intends, plans, estimates or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties andassumptions because they relate to future events and therefore depend on circumstances that may or maynot occur. Our future results and shareholder values may differ materially from those expressed in orsuggested by these forward-looking statements. Many of the factors that will determine these results andvalues are beyond our ability to control or predict. 2
    • Shareholder Structure, Corporate Governance and Liquidity True corporation listed on the NYSE and the most liquid Brazilian Real Estate company GFSA3 Majority Independent Board of Directors; 100% Senior management with an average of over 20 years of experience and interests aligned with shareholders through Stock Option Plan; 80% 100% Permanent Fiscal Council, Audit, Compensation, Finance and Governance committees 100% free float;Avg. Daily Trading Volume (R$ mm) - Last 90 days1 100% tag along rights; 100% common shares (“Novo Mercado”); Full compliance with Sarbanes-Oxley; Only Brazilian real estate company listed on the NYSE. W DZs  Z  3 1. Source: Bloomberg as of January 11th, 2011
    • Solid Track Record of Value Creation Strong growth, value-creating transactions with a successful history in the capital markets 1 3,921 3,022 Net revenue (R$ mm) New Follow-on: Net Primary 1,740 proceeds of R$1.02 billion 1,204 664 R$600 mm 457 in FI-FGTS debentures (May/09) Acquisition of Follow-on: a 60% stake R$488 mm of primary R$600 mm Increase in IPO: proceeds stake from in FI-FGTS R$494 mm 60% to 80% debentures of primary (Dec/09) proceeds Equity International First Brazilian investment company in the sector to be listed in Acquisition the NYSE Acquisition of Foundation of a 60% the remaining stake 40% 1954 - 2004 2005 2006 2007 2008 2009 20101. Source: Consensus Bloomberg as of August 6th, 2010 4
    • SECTION 1Competitive Advantages 5
    • Multifaceted Residential Products in All Income SegmentsFocused on the residential market, with 3 leading brands strategically positioned inall income segmentsSegment / Income Mid and Upper-Mid Mid and Upper-Mid Affordable Entry-Level Price Unit price: > R$200 thousand Unit price: R$70 – R$500 thousand Unit price: R$50 – R$200 thousandContribution Sales 9M10 49% 15% 36% Presence 44 cities in 14 states 60 cities in 22 states 92 cities in 14 statesCompleted Projects 17 projects/phases in 2009 5 projects/phases in 2009 130 projects/phases in 2009 Characteristics Vertical Horizontal lot development Horizontal / Vertical Metropolitan areas Suburban areas Metropolitan areas and surroundings Custom projects Custom projects Standardized products 6
    • Strong Demand Growth in All SegmentsStrong potential demand of around R$170 billion per year, being 58% in the mid andupper mid income segment and 42% in the affordable entry-level segment Number of Families (mm) New FamiliesIncome Bracket Gafisa Potential Demand per Year per Year(Monthly) Brands (R$ bn) 2007 2030 (thousand) Above R$ 32,000 0 0.3 13 Mid and Upper-Mid Upper New Families R$ 16,000 - R$ 32,000 0.3 1.3 530 Income 43 (thousands) Potential Demand 101 R$ 8,000 - R$ 16,000 1.1 4.3 139 (R$ bn)1 R$ 4,000 - R$ 8,000 3.3 11.0 335 New Families R$ 2,000 - R$ 4,000 8.4 21.8 583 846 (thousands)Entry-LevelAffordable Potential Demand 72 (R$ bn)2 R$ 1,000 - R$ 2,000 15.5 27.6 526 Up to R$ 1,000 31.7 29.1 (113) 1,526 TOTAL 60.3 95.4 1,526Source: “O Brasil Sustentável”, FGV and Ernst & Young, 2007Notes: Gafisa: Positioned to capture growth in all1. Assumes an average ticket of R$190,0002. Assumes an average ticket of R$85,000 income segments demand 7
    • National Footprint National footprint captures both rapidly growing and large metropolitan regions Geographic Footprint Landbank Distribution vs. GDP Distribution Landbank 3Q10 GDP Distribution - 2008 ^ ^ D ^ W ^ W D E E E Z Z : E K : K ^ ^ R$ 16.6 Billion Real GDP Growth 1 8.0% 6.6% 6.9% Brand States2 Cities Legend 4.7% 14 44 3.1% 14 92 22 60 Consolidated 22 130 South Midw est Southeast Northeast NorthSource: Company and IBGENote:1. Nominal GDP growth rate per year for 2003 – 2006 adjusted by the average consumer price index (IPCA) of the period2. Does not Include Brasilia Federal District . 8
    • Strategically Located Land BankGafisa has a strategic land bank that allows for continued project launchesLand bank distribution 9M10 Land bank PSV (R$ million) W 3,676 16,551 & ^ 15,823  Z 1.6x 4,006 4,285 (2,948) 10,195 4,735 1,536 3,962 4.7x 2,930 7,576 7,810 5,729d 2,167 IPO 2006 2007 2009 9M10 Net Actual 9M10 Launches Acquisitions d *Note: Tenda 2007 represents Fit + Bairro Novo 9
    • Proven Track Record of Execution Units Under Construction Projects under Construction 50,189 211 49,423 188 33,586 85 16,099 63 2007 2008 2009 3Q10 2007 2008 2009 3Q10 Units Completed Number of Engineers E: 15,000 919 880 10,831 674 309 352 8,206 9,995 459 241 58 59 47 186 3,108 31 513 508 386 242 2007 2008 2009 9M10/2010E 2007 2008 2009 3Q10 Intern Enginners Construction Architects On the Job 10^
    • Strong Brand Recognition and Solid ReputationGafisa benefits from its strong brand recognition and solid reputation through: (i) ahigher sales speed (VSO); (ii) commanding premium prices; and (iii) easier access toasset swaps / partnershipsLeading Brands Strong Brands in Every Segment Maior Construtora do Brasil: Largest Construction 1st Company in Brazil – 2008 / 2009 (ITCnet) ► 55 years in the Real Estate industry ► Completed more than 985 developments and 11 million m2 ► Awards: Valor Top Management and Top Manager of the Year Top of Mind – 2008 (Diário do Grande ABC / 1st IBOPE) ► One of the best known brands in the affordable entry-level segment ► Completed more than 500 developments 1st Reference in Urban Development ► Completed more than 40 developments and 3.4 million m2 ► Awards: Best Social Responsibility and 2009 Top Social – Alphaville FoundationSource: ITCnet, Revista Marketing, Valor Econômico 11
    • SECTION 2Operating and FinancialPerformance 12
    • Launches, Contracted Sales and Revenues High growth rates over the last years ... Launches (R$mm) Pre-Sales (R$mm) Net Revenues (R$mm) 1 4,200 to 4,600 4,196 3,248 3,022 2,792 1,970 2,766 2,949 2,578 1,361 988 932 2,301 1,007 2,236 1,068 932 1,740 277 300 313 617 1,627 284 237 377 276 60 406 549 300 238 1,204 250 420 71,005 995 193 1,913 664 1,757 1,698 1,510 1,576 1,329 1,345 1,352 1,215 1,265 1,332 1,0041,005 995 6642006 2007 2008 2009 9M10 2006 2007 2008 2009 9M10 2006 2007 2008 2009 9M10 Gafisa Alphaville Tenda Note: 1 2010E guidance range announced by the Company 13
    • EBITDA, Net Income and Results to be Recognized … aligned with sustained growth in profitabilityAdjusted EBITDA1 (R$ mm) and Net Income (R$ mm) and Results to be Recognized (Backlog4)Margin (%) Margin 2 (%) (R$ mm) and Margin (%) 18.5% to 20.5% 3 330 11.7% 12% 17.5% 38.2% 37.5% 15.0% 279 1,309 14.9% 604 19.7% 280 9.9% 35.1% 35.2% 9.6% 10% 34.6% 13.4% 75 1,066 230 8.1% 1,015 214 8% 6.9% 180 300 6% 41 130 530 550 528 110 92 4% 80 298 259 46 180 2% 30 89 2006 2007 2008 2009 9M10 2006 2007 2008 2009 9M10 2006 2007 2008 2009 9M10 -20 0% EBITDA (R$ mm) Margin (%) REF (R$ mm) Margem (%) Lucro Líquido (R$ mm) Margem (%) Tenda’s goodwill net of provisionsNotes:1 Adjusted for stock options and excluding Tenda’s goodwill net of provisions2 Net income before minority interests and non-recurring expenses3 2010E guidance range announced by the Company4 Gross Profit 14
    • Solid Balance Sheet9M10 Leverage (R$ mm) Debt Composition (R$ mm) and Rates SFH / Net Debt / Project 1,846 8.2% - 11.5% (TR) 55.6% Finance Shareholders’ Equity Working CDI + (0.7% – 4.2%) 553 Capital Debentures 527 CDI + (1.5 – 3.3%) 1,231 Investor CDI 380 Obligations Total 3,307 10.8% 3,307 Debt Maturity Schedule 1 (%) 2,076 54% 15% 33% 56% 85% 46% 67% 44% 100% Total Debt Cash Net Debt h ^ h ^ h ^ h ^ h ^Note: W & Z   Z1 Does not include investors obligations of R$380 mm 15
    • Trading Multiples Liquidation Value (R$mn) Blue Chips (3Q10) Company Gafisa Peer1 Peer2 Peer3 Peer4 Avg(1) Receivables from Sold Units 8,466 10,455 11,463 5,669 5,081 (-) Taxes (571) (706) (774) (383) (343) (-) Obligations from Sold Units (2,120) (3,022) (3,673) (1,462) (1,771) Mkt Value of Units for Sale 2,937 3,821 2,197 1,791 2,180 (-) Taxes (198) (258) (148) (121) (147) (-) Construction Obligations (790) (710) (329) (341) (986) Book Value of Land 751 2,315 2,448 1,115 687 (-) Swaps booked in Advances (94) (540) (1,756) (453) (68) (-) Payables from land acqs. (312) (557) (395) (304) (378) Other Assets 92 287 3 39 10 (-) Other liabilities (183) - - - - Cash and Equivalents 1,231 1,892 986 1,014 1,284 (-) Corporate Debt (1,461) (2,527) (1,201) (1,131) (1,012) (-) SFH and other Project Finance (1,846) (2,259) (1,785) (461) (1,148) (-) Minority Shareholders (62) (115) (399) (219) - (+) Invest. in Subsidiaries 194 134 15 - - Liquidation Value 6,035 8,209 6,653 4,754 3,389 BV Adjusted 4,959 7,876 6,012 4,015 3,102 BV 3,772 6,123 4,384 2,919 2,563 Deferred Income 1,203 1,780 1,747 1,159 540 Deferred Revenues 3,429 5,149 5,594 2,810 2,478 Deferred Costs and Expenses (2,120) (3,022) (3,673) (1,462) (1,771) Taxes (over Sales and Income) (106) (348) (173) (190) (167) Avg Stake 99% 98% 93% 95% 100% P/LV 0.87 1.41 1.40 1.61 1.17 1.40 P/BVAdj 1.06 1.47 1.55 1.91 1.28 1.55 P/BV 1.40 1.90 2.12 2.62 1.55 2.05 Market Cap 5,264 11,607 9,314 7,653 3,977 # of shares 437 1,142 426 490 269 Closing price (December 30th) 12.0 10.2 21.9 15.6 14.8 *Source: Barclays Capital Research and Companies Information / (1) Excluding Gafisa 16
    • Gafisa’s Differentiation Industry Leading Liquidity and Corporate Governance Multifaceted Residential Products in All Income Segments National Footprint Proven Track Record of Execution Strong Brand Recognition and Solid Reputation 17
    • APPENDIX ATenda and Alphaville
    • Tenda: Differentiated Platform for the Affordable Entry-Level SegmentThrough Tenda, Gafisa has a differentiated and developed platform to capture growthin the affordable entry-level segment Sales Standardized Construction Process Centrally located and well diversified portfolio Duo Tower S Garden Life ► Hybrid construction model with in-house ► Well-trained and dedicated sales force and outsourced construction capabilities helps clients with home purchasing and financing decisions ► Standardized materials ► Sales force located in areas with constant flow of people ► 4 project options in each production line ► High variety of products and branch locations to best meet client needs ► Economies of Scale 19
    • Tenda: Blue-Print Mortgage (“Crédito Associativo”) The use of Crédito Associativo reduces the Working Capital requirement & ^  d W W & & W  & ^W  W^s   W  Typical Project Cash Flow for low-income project with land acquired for cash With Crédito Associativo Commercial Launch End of construction Land Acquisition there is little WC requirement Beginning of Key Delivery construction and the company cash flow % Cash exposure over PSV already moves from negative to positive during the No. of months construction period; With a traditional financing scheme, we have to use project finance to cover the  W W negative WC, until theAssumes that the land represented 10% of the PSV and was paid for in 6 installmentsCrédito Associativo is provided by Caixa Econômica Federal (CEF) to finance low-income projects/units. delivery. 20
    • Z  d Traditional Construction Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Foundation Traditional Brick blocks Construction Method; Building and Finishing Title Process Use of Ceramic and Concrete Blocs; Collection High demand for finishing repairs; Construction Cycle lasts 10-12 months;Aluminum Molds Construction Months 1 2 3 4 5 6 7 8 Foundation Building and Finishing Construction based on Aluminum Molds Title Process Collection High constructions efficiency avoiding excessive wastes; Concrete walls done on site; Construction Cycle lasts 4-5 months; Effectiveness of the production process 21
    • Aluminum Mold Construction Method Tenda: Valle Verde Cotia, SP INCC Evolution (%) – Last 12 months (Dec. 2010E) % Dec-07 Dec-08 Dec-09 Dec-10 Consolidated INCC Materials e Equipments Labor Labor costs always tend to surpass the other INCC items 22
    • Alphaville: Differentiated Business for Residential LandCommunitiesAlphaville Concept Steady Growth Leisure Residential Area Launches (R$ mm) Area 549 420 Residential Area 312 237 111 2006 2007 2008 2009 9M10 Alphaville Commercial Area Club Commercial Residential Area Multi-family Area Pre-Sales (R$ mm) and VSO (%) Areas 49% 59% Sustainable Business Model 59% 406 60% 377 ► Partnership contracts via land swaps 300 n.a. ► Construction only after pre-sales 238 ► High sales velocity 140 ► Alphaville Foundation enables sustainable integration with the surrounding communities 2006 2007 2008 2009 9M10 23
    • APPENDIX BReal Estate Market Overview
    • Housing FinanceSystem (SFH) – FundingSources Allocation Distribution Borrowers Funding of of Sources Resources Resources CEF Investments Companies in Infrastructure Registered 8% of their Income FGTS (MCMV) Workers TR + 3% Companies SFH TR+ Private Individuals Compulsory Housing Credit TR + 6.17% Companies Market Private Savings 30% Central Bank Individuals Accounts Compulsory Deposits TR+6.17% 20%(TR+6.2%).10%(Selic) Companies Resources for Lending Private Individuals 25
    • Brazilian Savings & Loan System (SPBE) Growth in Brazilian Savings LTM Monthly Disbursements by the SBPE Z  Z  s z z s z z Brazilian savings are growing steadily, ensuring available credit for the coming years ^ & ^ /  Z z Housing Credit Sources guaranteed while new sources are under developmentSources: Brazilian Central Bank and Banco Santander 26
    • Growing Credit AvailabilityIn recent years, the credit supply for real estate financing has increased substantiallywith lower interest rates and longer tenors Interest Rates vs. Housing Financing A favorable growth trend for credit availability began in35% 160 2005, when the annual Selic was close to 20%;30% 140 12025% In 2008 the Central Bank increased the Selic from 10020% 80 11.25% to 13.75% without any impact on home financing;15% 6010% 40 According to the Central Bank, the market is expecting 5% 20 a Selic of 12.25% by the end of 2011. 0% 0 Dec- Sep- Jul- Apr- Feb- Nov- Sep- Apr- Nov- Jun- Dec- Jul- 02 03 04 05 06 06 07 08 08 09 09 10 Selic (%a.a.) Real Estate Financing (R$ billion) Real Estate Financing – Amount Funded (R$ bn) Housing Financing vs. GDP1 93 42 50 40 25 16 10 10 15 51 6 7 34 6 30 3 4 9 18 3 6 2004 2005 2006 2007 2008 2009 2010E  h^ h<  D  SBPE FGTSSource: Central Bank, IBGE and ABECIP Brazil: high growth potential for home financing1. Data from Warnock and Warnork (2008). For Brazil, consider data from 2010 E 27
    • Real Price Variation for New Units - MRSP 3 Bedrooms Real Variation (2005-10): 22% 22,38% 121,86% In 5 years, real prices have shown a 26% raise in the metropolitan area of São Paulo, mainly from small units; 10,43%Base 100 0,70% -5,79% -1,91% -3,95% This raise happened specially on the last 12 months, taking benefit from the quick post-crisis recovery; Despite the raise since 2005, this raise is still in line with the average real income raise. 2004 2005 2006 2007 2008 2009 Jan- 2010 Jun/10 Average Price SP Real Average Prices YoY 1 Bed 2 Bed 3 Bed Preços YOY Variation (YoY) Income 80% 2005 -1,93% 60% 40% 2006 -12,83% 20% 2007 7,70% 0% 2008 4,63% -20% 2009 2,50% -40%Jan-Jul/10 28,07% -60% jan/06 jul/06 jan/07 jul/07 jan/08 jul/08 jan/09 jul/09 jan/10Cumulate 26,4%Fonte: MCM Consultores – Região Metropolitana de São Paulo 28
    • Government Programs – MCMV IGovernment programs were created to reduce the significant housing deficit in the lowerincome segments Highlights Simulation of Potential Impact on Market Size ► Financing for one million houses with up to Average Unit Price: “Minha Casa, Minha Before R$23,000 in subsidies to families with income of R$80k Vida” Program up to 10x the monthly minimum wage (R$4,650) Subsidy 0 16,000 ► R$34 billion in subsidies (Federal Government, Mortgage 80,000 64,000 FGTS, BNDES) Cost (TR+) 7% 5% ► Financing of homes with a price range of Monthly installments 665 394 R$80,000 to R$130,000 Minimum monthly income 2,661 1,969 ► Interest Rates ranging from TR+5% – TR+8% Equivalent of minimum wages 6.4 4.2 ► Homebuilders can finance 100% of the property value Market Size (millions of homes) 13.4 23.4 ► No down payment and no installments during the construction period (for families with income up to 3x the minimum wage) Additional market of approx. 10 million housesSource: Market Reports 29
    • Government Programs – MCMV IIGovernment renewed MCMV program, giving more visibility to the Real Estate sector: Highlights Income distribution ► MCMV II income distribution followed the same distribution of the contracted units from MCMV I: ► Financing for two million houses up to 2014; ► R$72 billion in subsidies; # of units: 1 million 2 million ► Continued growth for the next 4 years already committed; ► General details to come up to the beginning of 2011; ► It confirms the government commitment to provide financing for entry level homebuyers. DDs / DDs / D DDs // Dt Dt DtSource: CS, UBS, CEF, Market reports 30
    • Efficiency Gains under “MCMV” ProgramTenda contracted 22,914 units through September and has close to 8,000 units underCEF analysis d  h DDs / D t   & Dt Dt dKd > h K & W W d  DDs dKd > Y Y Y Y dKd > h & ^ d W h DDs Y Y Y dKd > 31
    • CEF Real Estate FinancingCaixa Econômica Federal has reached historical records of real estate financing, andis responsible for 73% of the market contracts Housing Financing Contracts (R$ bn) CEF vs. Market – Financing of New Units (‘000 units) 1,084 982 97 897 61 603 503 515 47 425 443 141 936 326 251 312 23 267 276 13 15 223 132 47 92 167 6 9 118 5 38 55 29 177 176 145 187 88 94 39 17 51 2003 2004 2005 2006 2007 2008 2009 Up to Nov 2003 2004 2005 2006 2007 2008 2009 Out/2010 10 Financing (R$ bn) Financing Amount (000) Caixa - Others Caixa - MCMV Market MCMV Contracts Units (‘000) Inventory of Received Proposals (‘000 units) Projects 6,459 188 3,966 1.048 3,219 17 212 149 1,868 814 42 311 33 110 656 140 96 102 495 1 114 193 60 10 15 364 57 149 130 33 96 8 50 78 651 27 95 481 22 394 8 53 52 75 12 30 20 36 24 25 26 191 8 Y Y Y Y Y Y ^ E Jun-09 Sep-09 Dec-09 Apr-10 Nov-10 0 a 3 MW 3 a 6 MW 6 a 10 MW ^D ^D ^D 32Source: Caixa Econômica Federal
    • APPENDIX COperating and FinancialHighlights 33
    • Main Financial and Operational Highlights 3Q10 vs. 9M10 vs. Operating and Financial Highlights (R$ million) 3Q10 3Q09 9M10 9M09 3Q09 (%) 9M09 (%) Launches 1.237 514 140% 2.949 1.301 127% Launches, units 6.210 3.333 86% 14.491 6.552 121% Contracted sales 1.018 800 27,3% 2.766 2.194 26,0% Contracted sales, units 5.082 5.545 -8% 14.811 15.540 -5% Contracted sales from Launches 579 288 101% 1.650 629 163% Contracted sales from Launches - % 46,8% 56,0% -922 bps 56,0% 48,3% 764 bps Net revenues 957 877 9% 2.792 2.125 31% Adjusted Gross profit (w/o capitalized interest) 310 277 12% 856 640 34% Adjusted Gross margin (w/o capitalized interest) 32,3% 31,6% 77 bps 30,7% 30,1% 53 bps Adjusted EBITDA (1) 197 174 13% 550 362 52% Adjusted EBITDA margin (1) 20,6% 19,8% 77 bps 19,7% 17,0% 265 bps Adjusted Net profit (2) 133 89 50% 326 227 44% Adjusted Net margin (2) 13,9% 10,1% 378 bps 11,7% 10,7% 102 bps Net profit 117 64 83% 279 158 76% EPS (R$/share) 0,27 0,24 11% 0,65 0,61 7% Number of shares (000 final) 430.910 261.017 65% 430.910 261.017 65% Revenues to be recognized 3.429 2.905 18% 3.429 2.905 18% REF margin (3) 38,2% 35,0% 322 bps 38,2% 35,0% 322 bps Net debt and Investor obligations 2.076 1.732 20% 2.076 1.732 20% Cash and availabilities 1.231 1.100 12% 1.231 1.100 12% (Net debt + Obligations) / (Equity + Minorities) 55,6% 74,1% -1850 bps 55,6% 74,1% -1850 bps (1) Adjusted for stock option plans expenses (non-cash) and Tenda goodw ill net of provisions. 34
    • Ratings and Balance Sheet R$ 000 3Q10 3Q09 2Q10 LIABILITIES AND SHAREHOLDERS EQUITY ASSETS 3Q10 3Q09 2Q10 Curre nt As s e ts Cur re nt Liabilitie s Cash and cash equivalents 570.718 948.350 1.136.765 Loans and f inancing 789.331 570.307 825.382 Restricted cash in guarantee to Debentures 214.561 80.781 123.608 loans and resctricted credits 660.425 151.337 669.619 Obligations f or purchase of Receivables f rom clients 2.727.930 1.718.110 2.470.944 land and advances f rom clients 460.470 488.935 466.078 Properties f or sale 1.447.266 1.376.236 1.446.760 Materials and service suppliers 292.444 194.302 244.545 Other accounts receivable 155.795 93.722 141.740 Taxes and contributions 234.394 132.216 154.983 Def erred selling expenses 38.028 7.205 20.592 prof it sharing 69.594 61.206 73.057 Def erred taxes - 13.099 - Provision f or contingencies 8.001 10.512 6.312 Prepaid expenses 16.423 13.522 15.283 Dividends 52.287 26.106 52.287 5.616.585 4.321.581 5.901.703 Def erred taxes - 52.375 - Long-te rm As s e ts Other 171.417 181.312 217.569 Receivables f rom clients 2.411.275 1.662.300 2.075.161 2.292.499 1.798.052 2.163.821 Properties f or sale 388.649 386.196 407.792 Long-te r m Liabilitie s Def erred taxes 367.788 250.846 311.693 Loans and f inancings 371.843 636.639 352.181 Other 177.182 52.140 131.035 Debentures 1.551.407 1.244.000 1.748.000 land 177.412 147.168 176.084 3.344.894 2.351.482 2.925.681 Def erred taxes 483.373 322.870 484.453 Investments 194.207 195.088 194.871 Provision f or contingencies 51.185 59.509 52.670 Property, plant and equipment 63.825 53.698 59.659 Other 568.945 362.843 521.211 Intangible assets 15.480 9.690 16.280 Def erred income on acquisition 6.757 12.499 8.045 273.512 258.476 270.810 0 Unearned income f rom partial sale of investment 11.594 0 3.210.922 2.797.122 3.342.644 Total As s e ts 9.234.991 6.931.539 9.098.194 M inor ity Share holde rs 51.565 552.889 46.316Corporate Rating FITCH Moody’s S&P Share holde r s EquityNational Scale Capital 2.729.187 1.233.897 2.712.899 Treasury shares (1.731) (18.050) (1.731)Rating A- A1 A Capital reserves 251.489 190.585 290.507Perspective Stable Stable Stable Revenue reserves 422.373 218.827 381.651 losses 278.687 158.217 162.087Last update September/2010 September/2010 October/2010 3.680.005 0 1.783.476 0 3.545.413 0 9.234.991 Liabilitie s and Shar e holde rs Equity 6.931.539 9.098.194 35
    • Why Cash Burn should change to positive in 2011? Cash burn continue high mainly due to Tenda’s units launched and sold mainly in 2007 and 2008 thatare being built using it’s own capital, instead of the mechanism of Blue-Print mortgages (CréditoAssociativo); Going forward, Tenda is gradually increasing the use of Associative Credit over current sales (thatalready reached 62% in the 3Q10), contributing to reduce the Working Capital needs; From now until June/11, Tenda will transfer approximately 7,000 units that did not contracted Blue-Printmortgage, meaning that the invested money will return to Company’s cash. Tenda is delivering units that did not contracted Blue-Print mortgage in the past. Tenda’s unit sales by type of finance Tenda’s Transferred of Concluded Units to CEF - Pipeline 9,505 11,576 15,871 9,733 3,039 2,922 2,236 2,075 757 D Y 3Q10 4Q10E 1Q11E 2Q11E  W D  d & W & Bank Mortgage 36
    • ^ ^(R$000) 3Q10 3Q09 2Q10 3Q10 x 3Q09 3Q10 x 2Q10Consolidated Selling expens es 53,887 55,556 61,140 -3% -12% G&A expens es 59,317 57,601 55,125 3% 8% SG&A 113,204 113,157 116,265 0% -3% Selling expens es / Launches 4.4% 10.8% 6.1% -644 bps -171 bps G&A expens es / Launches 4.8% 11.2% 5.5% -640 bps -67 bps SG&A / Launches 9.2% 22.0% 11.5% -1285 bps -238 bps Selling expens es / Sales 5.3% 6.9% 6.9% -165 bps -158 bps G&A expens es / Sales 5.8% 7.2% 6.2% -137 bps -37 bps SG&A / Sales 11.1% 14.1% 13.1% -303 bps -195 bps Selling expens es / Net revenue 5.6% 6.3% 6.6% -70 bps -96 bps G&A expens es / Net revenue 6.2% 6.6% 5.9% -37 bps 25 bps SG&A / Net revenue 11.8% 12.9% 12.5% -107 bps -71 bps SG&A Expenses / Net Revenue G&A Expenses / Net Revenue60% Acquisition of Tenda 25.4% 13.5% 100% Incorporation of Tenda 18.9% 10.6% 10.3% 16.9% 17.3% 15.7% 15.2% 14.9% 8.4% 8.4% 12.9% 8.0% 12.0% 12.5% 11.8% 6.6% 6.7% 6.3% 5.9% 6.2% 37
    • d W   D> Launch Start Construction h D D D D D D D D Sales 30% 60% 70% 80% 87% 94% 100% % Costs - 2,5% 15% 35% 65% 85% 100% Revenues - 1,5% 10,5% 28% 57% 80% 100% Collections(cumulative) 1% 4% 9% 11% 18% 25% 85% 100% 38