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Corporate Presentation - March 2011
 

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    Corporate Presentation - March 2011 Corporate Presentation - March 2011 Presentation Transcript

    • Corporate PresentationMarch 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 March , 2011
    • Solid Track Record of Value CreationStrong growth, value-creating transactions with a successful history in the capitalmarkets 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 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 2010 49% 15% 36% Presence 44 cities in 19 states 64 cities in 22 states 97 cities in 14 statesCompleted Projects 18 projects/phases in 2010 14 projects/phases in 2010 51 projects/phases in 2010 (2,723 units) (2,150 units) (8,021 units) 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$85,000 income segments demand 7
    • National Footprint National footprint captures both rapidly growing and large metropolitan regions Geographic Footprint Landbank Distribution vs. GDP Distribution Landbank 4Q10 GDP Distribution - 2008 ^ ^ D ^ W ^ W D E E E Z : Z E K : K ^ ^ R$ 18.1 Billion Real GDP Growth 1 8.0% 6.6% 6.9% Brand States2 Cities Legend 4.7% 19 44 3.1% 14 97 22 64 Consolidated 22 136 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 2010 Land bank PSV (R$ million) 6,723 18,054 W & ^  15,823 Z 4,586 1.6x 4,285 10,195 (4,492) 5,223 1,536 3,962 4.7x 2,930 8,245 7,576 5,729d 2,167 IPO 2006 2007 2009 2010 Net 2010 Launches Acquisitions d *Note: Tenda 2007 represents Fit + Bairro Novo 9
    • Proven Track Record of Execution Units Under Construction Projects under Construction 54,977 49,423 204 188 33,586 85 16,099 63 2007 2008 2009 2010 2007 2008 2009 2010 Units Completed Number of Engineers 25,000 920 880 674 309 399 12,894 459 241 58 10,831 61 47 8,206 186 31 513 460 3,108 386 242 2007 2008 2009 2010 2011E 2007 2008 2009 2010 Construction Architects On the Job Soma 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) ► 56 years in the Real Estate industry ► Completed more than 1,000 developments and 12 million m2 ► Awards: Valor Top Management and Top Manager of the Year 1st Top of Mind – 2010 (Millward Brown-IBOPE) ► One of the best known brands in the affordable entry-level segment ► Completed more than 9000 delivered units in 2010 1st Reference in Urban Development ► Completed more than 40 developments and 3.4 million m2 ► Awards: Best Marketing Award 2010 and Top Environmental PoliciesSource: ITCnet, Revista Marketing, Valor Econômico 11
    • SECTION 2Operating and FinancialPerformance 12
    • Launches, Contracted Sales and RevenuesHigh growth rates over the last years ...Launches (R$mm) Pre-Sales (R$mm) Net Revenues (R$mm) 1 5,300 4,492 4,006 4,196 3,721 1,596 3,248 1,433 3,022 1,970 1,287 2,578 1,361 988 2,301 741 2,236 599 445 932 300 313 617 1,740 277 237 1,627 377 60 276 300 420 238 1,204 250 1,005 995 7 2,155 193 1,974 1,988 1,913 664 1,757 1,698 1,510 1,265 1,329 1,345 1,215 1,005 995 1,004 664 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Gafisa Alphaville TendaNote:1 2011´s guidance range is from 5.0 to 5.6 billion 13
    • EBITDA, Net Income and Results to be Recognized … aligned with sustained growth in profitabilityAdjusted EBITDA1 (R$ mm) and Net Income (R$ mm) and Results to be Recognized (Backlog4)Margin (%) Margin 2 (%) (R$ mm) and Margin (%) 3 20.1% 38.9% 37.5% 540 14% 17.5% 12.8% 35.1% 35.2% 1,540 34.6% 15.0% 14.9%13.4% 12% 604 440 416 74 9.9% 9.6% 10% 1,066 340 1,015 8.1% 8% 747 6.9% 240 300 41 6% 530 528 140 110 102 92 4% 298 259 180 46 40 89 2%2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Net Income (R$ mm) Margin (%) EBITDA (R$ mm) Margin (%) -60 0% REF (R$ mm) Margin (%) 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 2011E guidance range announced by the Company between 18% and 22%4 Gross Profit 14
    • Solid Balance Sheet2010 Leverage (R$ mm) Debt Composition (R$ mm) and Rates SFH / Project 1,957 8.2% - 12.0% (TR) 53% Net Debt / 65.3% Finance Shareholders’ Equity Working Capital 664 CDI + (0.7% – 4.2%) Debentures 669 CDI + (1.5 – 1.9%) 47% 1,201 Investor Obligations 380 CDI Total 3,670 11.8% 3,670 Debt Maturity Schedule 1 (%) 2,469 34% 32% 52% 52% 68% 66% 48% 48% 100% h  h  h  h   Total Debt Cash Net Debt W & Z   ZNote:1 Does not include investors obligations of R$380 mm 15
    • Trading Multiples Liquidation Value (R$mn) Blue Chips (4Q10) Company Gafisa Peer1 Peer2 Peer3 Peer4 Avg(1) Receivables from Sold Units 9.226 11.319 11.905 6.242 5.558 (-) Taxes (623) (764) (804) (421) (375) (-) Obligations from Sold Units (2.423) (3.043) (4.079) (1.685) (1.962) Mkt Value of Units for Sale 3.295 4.174 3.905 2.876 2.364 (-) Taxes (222) (282) (264) (194) (160) (-) Construction Obligations (884) (567) (1.149) (1.072) (1.022) Book Value of Land 838 2.443 2.210 1.249 681 (-) Swaps booked in Advances (86) (744) (1.826) (550) (82) (-) Payables from land acqs. (354) (445) (465) (338) (368) Other Assets 105 502 2 38 10 (-) Other liabilities (144) - - - - Cash and Equivalents 1.201 1.787 1.155 1.167 970 (-) Corporate Debt (1.713) (1.654) (1.493) (1.157) (979) (-) SFH and other Project Finance (1.957) (4.044) (1.948) (782) (1.131) (-) Minority Shareholders (76) (93) (434) (236) - (+) Invest. in Subsidiaries 194 57 6 - - Liquidation Value 6.377 8.646 6.721 5.138 3.502 BV Adjusted 5.222 7.791 5.860 4.062 3.133 BV 3.827 6.104 4.328 2.913 2.532 Deferred Income 1.417 1.708 1.658 1.219 601 Deferred Revenues 3.963 5.095 5.920 3.114 2.748 Deferred Costs and Expenses (2.423) (3.043) (4.079) (1.685) (1.962) Taxes (over Sales and Income) (123) (344) (184) (210) (185) Avg Stake 98% 99% 92% 94% 100% P/LV 0,74 1,26 1,01 1,28 1,12 1,14 P/BVAdj 0,90 1,40 1,15 1,62 1,26 1,34 P/BV 1,23 1,79 1,56 2,26 1,55 1,79 Market Cap 4.722 10.922 6.767 6.588 3.932 # of shares 440 1.142 426 490 269 Closing price 10,7 9,6 15,9 13,4 14,6 Avg Daily Trdn Volume (US$ mn) 63,6 57,7 72,0 36,5 23,7 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-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 741 Residential Area 420 312 237 111 2006 2007 2008 2009 2010 Alphaville Commercial Area Club Commercial Residential Area Multi-family Area Pre-Sales (R$ mm) and VSO (%) 59% Areas 59% 599 Sustainable Business Model 59% 60% ► Partnership contracts via land swaps 377 n.a. 300 ► Construction only after pre-sales 238 ► High sales velocity 140 ► Alphaville Foundation enables sustainable integration with the surrounding communities 2006 2007 2008 2009 2010 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 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 zKz Brazilian savings are growing steadily, ensuring available credit for the coming years ^ & ^ /  Z z Housing Credit Sources guaranteed while new sources are under development Sources: 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 in 35% 160 2005, when the annual Selic was close to 20%; 30% 140 120 25% 100 In 2008 the Central Bank increased the Selic from 20% 80 11.25% to 13.75% without any impact on home financing; 15% 60 10% 40 According to the Central Bank, the market is expecting 5% 20 0% 0 a Selic of 12.25% by the end of 2011. Dec- Sep- Jul- Apr- Jan- Oct- Aug- Apr- Oct- May- Nov- Jun- Dec- 02 03 04 05 06 06 07 08 08 09 09 10 10 Selic (%a.a.) Real Estate Financing (R$ billion) Real Estate Financing – Amount Funded (R$ bn) Housing Financing vs. GDP1 79 22 50 40 25 16 10 10 15 57 6 7 34 6 30 3 4 9 18 3 6 2004 2005 2006 2007 2008 2009 2010  h^ h<  D  SBPE FGTS Brazil: high growth potential for home financingSource: Central Bank, IBGE and ABECIP1. 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
    • Demographic Data – Poverty and Income Improving constantly Percentage of Poor households Monthly Income per Capta (%) 1981 1990 2001 2009 Var (%) (R$) 1981 1990 2001 2009 Var (%) Southeast 20.2 23.8 18.1 9.0 -55% Southeast 439 582 620 838 191% South 28.5 31.0 19.6 8.7 -70% South 417 541 419 493 118% Northeast 60.1 63.5 51.1 32.3 -46% Northeast 244 264 312 443 182% North 33.0 32.3 38.0 25.6 -23% North 483 541 670 872 181% Mid-West 29.8 27.2 20.5 9.4 -69% Mid-West 620 654 722 848 137% Brazil 33.4 36.0 28.1 16.4 -51% Brazil 468 511 571 706 151% Strong and constant improvement has allowed Brazilian population to enlarge it´s active work force and to grow older Demographic Results – Age Distribution 1980 2000 2020e 27% between 35% between 42% between age 30-60 age 30-60 age 30-60 D t D t D tSource: IBGE – Projeção da População Brasileira IPEA – Ipeadata 29
    • 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 30
    • 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$72 billion in subsidies; # of units: 1 million 2 million ► Continued growth for the next 4 years already committed; ► General details to come up to the beginning of 2011; ► It confirms the government commitment to provide financing for entry level homebuyers. DDs / DDs / D DDs // Dt Dt DtSource: CS, UBS, CEF, Market reports 31
    • Efficiency Gains under “MCMV” ProgramTenda contracted 22,288 units in 2010 and transferred 2,865 units to CEF on the 4Q10 d  h DDs / D t   & Dt Dt dKd > h  &  W h DDs Y Y Y Y dKd > d W h DDs Y Y Y Y dKd > 32
    • CEF Real Estate FinancingCaixa Econômica Federal has reached historical records of real estate financing, andis responsible for 76% of the market contracts Housing Financing Contracts (R$ bn) CEF vs. Market – Financing of New Units (‘000 units) 947 1,231 186 76 603 897 141 47 503 515 661 425 443 312 267 276 326 223 251 23 47 92 167 13 15 118 132 6 9 38 55 5 29 177 176 187 88 94 145 100 39 17 2003 2004 2005 2006 2007 2008 2009 2010 2003 2004 2005 2006 2007 2008 2009 2010 Caixa - Others Caixa - MCMV Market Financing (R$ bn) Financing Amount (000) MCMV Contracts Units (‘000) Inventory of Received Proposals (‘000 units) 374 Projects 6,459 72 3,966 1.048 3,219 112 212 1,868 814 188 17 656 311 149 495 140 42 33 114 364 193 96 110 1 149 60 10 191 33 96 57 78 651 27 8 130 95 481 22 394 8 53 52 75 191 8 12 30 20 24 25 26 Y Y Y Y Y Y Y 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 33Source: Caixa Econômica Federal
    • APPENDIX COperating and FinancialHighlights 34
    • Main Financial and Operational Highlights 4Q10 vs. 2010 vs. Operating and Financial Highlights (R$ million) 4Q10 4Q09 2010 2009 4Q09 (%) 2009 (%) Launches 1,543 1,000 54% 4,492 2,301 95% Launches, units 7,742 4,258 82% 22,233 10,810 106% Contracted sales 1,241 1,054 17.7% 4,006 3,248 23.3% Contracted sales, units 5,933 6,413 -7% 20,744 21,952 -6% Contracted sales from Launches 678 268 154% 2,672 1,439 86% Contracted sales from Launches - % 44.0% 26.7% 1722 bps 59.5% 62.5% -303 bps Net revenues 929 898 3% 3,721 3,022 23% Adjusted Gross profit (w/o capitalized interest) 336 311 8% 1,225 973 26% Adjusted Gross margin (w/o capitalized interest) 36.1% 34.7% 148 bps 32.9% 32.2% 73 bps Adjusted EBITDA (1) 198 168 18% 747 530 41% Adjusted EBITDA margin (1) 21.3% 18.7% 260 bps 20.1% 17.5% 255 bps Adjusted Net profit (2) 148 58 154% 475 157 202% Adjusted Net margin (2) 16.0% 6.5% 949 bps 12.8% 5.2% 755 bps Net profit 137 48 189% 416 102 309% EPS (R$/share) 0.32 0.14 123% 0.97 0.31 217% Number of shares (000 final) 430,910 333,554 29% 430,910 333,554 29% Revenues to be recognized 3,963 3,025 31% 3,963 3,025 31% REF margin (3) 38.9% 35.2% 363 bps 38.9% 35.2% 363 bps Net debt and Investor obligations 2,469 1,998 24% 2,469 1,998 24% Cash and availabilities 1,201 1,424 -16% 1,201 1,424 -16% (Net debt + Obligations) / (Equity + Minorities) 65.3% 83.8% -1855 bps 65.3% 83.8% -1855 bps (1) Adjusted for stock option plans expenses (non-cash) and Tenda goodw ill net of provisions. 35
    • Ratings and Balance Sheet LIABILITIES AND SHAREHOLDERS EQUITY 4Q10 4Q09 3Q10 Current Liabilities 4Q10 4Q09 3Q10ASSETS Loans and financing 797,903 678,312 789,331Current Assets Debentures 26,532 122,377 214,561Cash and cash equivalents 256,382 292,940 259,396 Obligations for purchase of land and advances fromMarket Securities 944,766 1,131,113 971,747 clients 420,199 475,409 460,470Receivables from clients 3,158,074 2,008,464 2,727,930 Materials and service suppliers 190,461 194,331 292,444Properties for sale 1,568,986 1,332,374 1,447,266 Taxes and contributions 243,050 177,392 234,394Other accounts receivable 178,305 108,791 155,795 Taxes, payroll charges and profit sharing 72,153 61,320 69,594Deferred selling expenses 2,482 6,633 38,028 Provision for contingencies 14,155 11,266 8,001Prepaid expenses 18,734 12,133 16,423 Dividends 102,767 54,279 52,287 6,127,729 4,892,448 5,616,585 Other 149,952 205,657 171,417Long-term Assets 2,017,172 1,980,343 2,292,499Receivables from clients 2,113,314 1,768,182 2,411,275 Long-term LiabilitiesProperties for sale 498,180 416,083 388,649Deferred taxes 337,804 281,288 367,788 Loans and financings 612,275 525,443 371,843Other 181,721 117,546 252,324 Debentures 1,853,399 1,796,000 1,551,407 Obligations for purchase of land 177,860 146,401 177,412 3,131,019 2,583,099 3,420,036 Deferred taxes 424,409 376,550 483,373Property, plant and equipment 80,852 56,476 63,825 Provision for contingencies 124,537 110,073 126,327Intangible assets 209,954 204,686 209,687 Other 556,233 417,718 575,702 290,806 261,162 273,512 3,748,713 3,372,185 3,286,064Total Assets 9,549,554 7,736,709 9,310,133 Shareholders Equity Capital 2,729,198 1,627,275 2,729,187 Treasury shares -1,731 -1,731 -1,731 Corporate Rating FITCH Moody’s S&P Capital reserves 295,879 318,439 251,489 National Scale Revenue reserves 698,889 381,651 422,373 Rating A- A1 A Retained earnings/accumulated losses 0 0 278,687 Minority Shareholders 61,434 58,547 51,565 Perspective Stable Stable Stable 3,783,669 0 2,384,181 0 3,731,570 0 Last update September/2010 September/2010 October/2010 9,549,554 7,736,709 9,310,133 Liabilities and Shareholders Equity 36
    • ^ ^ (R$000) 4Q10 4Q09 3Q10 2010 2009 Consolidated Selling expenses 76,243 73,277 53,887 242,564 226,621 G&A expenses 64,894 60,298 59,317 236,754 233,129 SG&A 141,137 133,575 113,204 479,318 459,749 Selling expenses / Launches 4.9% 7.3% 4.4% 5.4% 9.8% G&A expenses / Launches 4.2% 6.0% 4.8% 5.3% 10.1% SG&A / Launches 9.1% 13.4% 9.2% 10.7% 20.0% Selling expenses / Sales 6.1% 7.0% 5.3% 6.1% 7.0% G&A expenses / Sales 5.2% 5.7% 5.8% 5.9% 7.2% SG&A / Sales 11.4% 12.7% 11.1% 12.0% 14.2% Selling expenses / Net revenue 8.2% 8.2% 5.6% 6.5% 7.5% G&A expenses / Net revenue 7.0% 6.7% 6.2% 6.4% 7.7% SG&A / Net revenue 15.2% 14.9% 11.8% 12.9% 15.2%60% Acquisition of SG&A Expenses / Net Revenue G&A Expenses / Net Revenue Tenda 25.4% 100% 13.5% Incorporation of Tenda 18.9% 10.6% 10.3% 16.9% 17.3% 15.7% 15.2% 14.9% 15.2% 8.4% 8.4% 12.9% 8.0% 12.0% 12.5% 11.8% 7.0% 6.6% 6.7% 6.3% 5.9% 6.2% 37
    • 2011 Guidance We expect an adjusted EBTIDA margin for the full year of between 18% and 22%. This year we are alsogiving the breakdown between the first and second half, since we expect some important changes on theoperational side, mainly related to: 1. lower revenue resulting from fewer launches in 2009, compared to 2008 (2009: R$2.3 billion; 2008 R$4.2 billion), ensuing impact on the diluting of fixed costs; 2. Delivery of lower margin products by Tenda and by Gafisa 3. Possible discounts on units that are ready but unsold, relating to launches in 2008 and earlier years. The guidance figures for 2011 are as follows: Launches EBITDA Margin Net Debt/Equity (%) - Guidance 2011 (R$ million) (%) EoP Minimum 5,000 18.0% Average 5,300 20.0% Maximum 5,600 22.0% < 60% EBITDA Margin (%) 1H11 2H11 2011 Guidance 2011 Minimum 13.0% 20.0% 18.0% Average 15.0% 22.0% 20.0% Maximum 17.0% 24.0% 22.0% 38
    • 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% 39