3. 2006 Highlights
Record Project Launches of R$1.0 billion for Full Year 2006
Correspondly High Pre-Sales of R$995 Million during 2006
The backlog margin for 4Q06 was stable at 42.6%, 3.8p.p. higher when compared to
the 4Q05
In 2006, Backlog of Revenues reached R$297 million
Gafisa’s debut in the Maceio market, under the partnership with Cipesa
More recently, we closed the Acquisition of AlphaVille Urbanismo S.A.
Land reserves reached R$3.0 billion, an increase of 61% compared to 2005.
Gafisa land reserve is equivalent to three years of operations at the current level of
launches
For 2006 mortgage granted by commercial banks and CEF increased 96% and 54%,
respectively
Creation of the following management committees:
(i) Audit, (ii) Compensation, (iii) Corporate Governance; and (iv) Finance
3
4. 4Q06: Gafisa Reports 4% Growth in Launches and 86% in Pre-Sales
Launches by Region (R$ mm) Pre-Sales by Region (R$ mm)
New Markets New Markets
Rio de Janeiro Rio de Janeiro
Sao Paulo 375 379
362 4%
São Paulo
100 86% 83
90
34 60
80 204
29
46
241 236
192
128
4Q05 4Q06 4Q05 4Q06
Launches Mix Breakdown – 4Q06 Pre-Sales Mix Breakdown – 4Q06
3% 9%
HIG 30% HIG
16% 17%
MHI MHI
72% 49%
MID MID
AEL 3% AEL
45% 15%
LOT LOT
1%
27% COM COM
34%
Segmentation (Prices in R$/sq.m)
HIG – High Income: > 3,600 MHI – Middle High: 2,800 < > 3,600
MID – Middle Income: 2,000 < > 2,800 AEL – Affordable entry level: 1,800 < > 2,000 4
COM – Commercial LOT – Urbanized lots
5. 2006: Record R$1.0 billion in launches and R$995 million in Pre-sales
Launches by Region (R$ mm) Pre-Sales by Region (R$ mm)
New Markets 995
New Markets 1.005
Rio de Janeiro Rio de Janeiro 201
São Paulo 268 São Paulo
652 121% 219
54%
126 239
450
217%
186 70% 80
254 140
207 575
498 41
70 340 59
51 155 230
86
2004 2005 2006 2004 2005 2006
Launches Mix Breakdown – FY 2006 Pre-Sales Mix Breakdown – FY 2006
1%
2% 7% 14%
HIG 3% HIG
3% 15%
19%
MHI MHI
72% 65%
MID MID
42% AEL AEL
LOT LOT
36%
29%
COM COM
30%
Segmentation (Prices in R$/sq.m) Segmentation (Prices in R$/sq.m)
HIG – High Income: > 3,600 MHI – Middle High: 2,800 < > 3,600
MID – Middle Income: 2,000 < > 2,800 AEL – Affordable entry level: 1,800 < > 2,000 5
COM – Commercial LOT – Urbanized lots
6. National Expansion: Laying the Groundwork to Achieve Long-term Goals
Gafisa currently operates in 13 states and 21 markets
Gafisa’s National Foothold Recent Developments
A. Salvador (Bahia)
3rd largest City of Brazil
First projects launched under partnership with OAS
Located at AlphaVille Salvador
B. Vitoria (Espirito Santo)
One of the highest GDP per Capita of Brazil
F Oil Industry expected to drive strong demand
E Opportunities for Second-home Projects
C. Niteroi (Rio de Janeiro)
G Very attractive and under-explored market
Second most important city of Rio de Janeiro State
A Part of diversification strategy in Rio de Janeiro
D. Curitiba (Parana)
B 7th largest City of Brazil
Gafisa
Lowest unemployment rate of the country
C Construction Begins along with Launches
D
E. Belem (Para)
Second project launched under partnership with
Premium
F. Manaus (Amazonas)
Third project launched under partnership with RN
G. Maceió (Alagoas)
First projects launched under partnership with Cipesa
6
7. The 100% growth in Mortgage Granted in 2006…
… is still shy if Compared to the Potential of The Market
Mortgage Granted (R$ million) Timeline – Recent Developments in the Mortgage Market
2003 - Central Bank increases bank requirement to invest in the
CAGR 03-06 (%): 53% sector
24,0 2004 - Resolution 10.931 Improves Foreclosure regulation
2005 - Individuals get tax exempted on MBS Investments
+73%
ABN Amro, Santander and HSBC reduce Mortgage Rates to
8%p.y from 12%p.a.
2 Itaú, Bradesco, Unibanco follow suit
Santander launches 10-yr fixed mortgage rate (21%p.a.)
14,0
2006 – Bradesco, Santander and Itaú offer up to 20-yr fixed rate
at 14%p.a.
+54% 13,9
54% CEF re-enters to middle income market (10.9%p.a.)
HSBC offers 10-yr fixed mortgage at 12.7%p.a.
Gafisa, HSBC and Santander offer pre-approved mortgages
+34% 9,0 52% 9,1 BCB allows paycheck discount for mortgage lending to
public employees
6,7 Banks allowed to offer fixed rate mortgage with funds from
6,0 SFH (limited to 14.2% p.a.)
36%
4,5 96% 9,5
2007 – CEF board members agreed that in 2007 ~50% of the
60% mortgage loans entitled to the FGTS resources might be
33% 4,8 channeled to the new projects
3,0
2,2
Banco do Brasil expects to enter in the housing finance
market this year
2003 2004 2005 2006
CEF reduced the bureaucracy in filling for construction
financing. It intends to lend R$3,5bn for this purpose.
Mortgage by Commercial Banks¹ CEF Mortgage Loans
The government intend to create a fund using FGTS
Sources: ABECIP, Central Bank
¹ Total mortgage lending using savings deposits funding (channeled-lending requirement). resources to subsidize 2/3 of the monthly installments to
² Of the R$14 billion estimated for 2006, R$9,4 billion were entailed to FGTS. homebuyer contracts’. The annual household income
7
³ Estimated number for 2006. From January to November period of 2006 lending volume required will be limited to 5 minimum wages.
totaled R$8,4bn.
8. Decreasing Interest Rates and Development of the Mortgage Market…
…is already impacting
Pre-Sales - Financing provided by Gafisa versus Mortgage provided by Banks (%)
2004 10% 2005 15% 2006
35%
65%
90% 85%
Mortgage Loans Gafisa Mortgage Loans Gafisa Mortgage Loans Gafisa
8
9. Closing of the Acquisition of AlphaVille
On January 8th 2007, Gafisa concluded the acquisition of AlphaVille Urbanismo S.A.
AlphaVille Urbanismo is the largest and only nationwide community development company in
Brazil, with no major competitors to date.
Segment characterized by: high entry barrier; higher margins and lower cash exposure than
that of residential buildings
Gafisa acquired 60% of AlphaVille for R$198.4 million, of which R$20 million in cash and
R$178.4 million paid in 6,358,616 share
Gafisa will acquire the remaining 40% over the next five years in cash or shares, at Gafisa’s
sole discretion.
Gafisa’s Post-Acquisition Shareholder Structure
Position as of 01/08/2007 (Post-
Position as of 12/31/2006 Acquisition)
Shareholders # Shares (%) # Shares (%)
Vehicles Controlled by Equity
International 28,234,042 25.3% 28,234,042 25.0%
Vehicles Controlled by GP Investimentos 22,468,727 20.1% 22,468,727 19.9%
AlphaVille Shareholders - - 6,358,616 5.63%
Treasury Stock 8,141,646 7.3% 3,124,972 2.8%
Market Float 52,667,181 47.2% 52,667,181 46.7%
Total 111,511,596 100% 112,853,538 100%
9
10. Land Bank: High growth with relatively low risk
Combination of AlphaVille’s sizable Land Bank with Gafisa’s strategic reserves
Usable Area Future Sales % acquired
Potential Units
(sq.m) (R$000) by swap
Gafisa
Sao Paulo 305,034 2,820 888 53%
Rio de Janeiro 345,906 3,938 918 92%
New Markets 817,290 6,144 1,240 77%
Gafisa Total 1,468,230 12,902 3,047 79%
AlphaVille
Southeast 20,570,203 13,703 1,781 84%
Northeast 4,142.173 2,239 324 100%
South 3,853,600 3,294 402 15%
Mid-West 1,635,676 1,091 140 100%
North 392,116 453 35 100%
AlphaVille Total 30,593,768 20,779 2,683 77%
Gafisa + AlphaVille 32,061,998 33,681 5,730 77%
¹ As of 09/30/06 10
11. Underpinning our actions is a commitment to staying ahead with Governance
Transparency, clear policies, disclosure and best practices in corporate governance
Audit Committee (required NYSE Rule 303A.03)
(i) Reviews the integrity of the financial statements and the financial reporting process of
the Company
Compensation Committee (required NYSE Rule 303A.05)
(i) Evaluate the CEO's performance in light of goals and objectives,
(ii) Determine and recommend to company's shareholders the CEO's compensation level
Nominating and Corporate Governance Committee (required under NYSE Rule 303A.04)
(i) To develop and recommend to the board a set of corporate governance guidelines
applicable to the corporation
Finance Committee
(i) approves our corporative finance policies, follows up and examines their effectiveness
and implementation
(ii) examines our investment and financing plans and opportunities
(iii) examines the impact of the investment and financing plans in the Company’s cash flow
and capital structure
11
17. Changes in Accounting for Selling Expenses
Matching BRGAAP Practices with USGAAP
Differences between Previous and New Practices
BR GAAP (old BR GAAP (new
USGAAP
policy) policy)
Expensed as Expensed as Expensed as
Institutional Advertising
Incurred Incurred Incurred
Deferred and Deferred and Deferred and
recognized as the recognized as the recognized as the
Sales Stand / Showroom / Model Apartment
development development development
progresses progresses progresses
Deferred and
recognized as the Expensed as Expensed as
Project Specific Advertising
development Incurred Incurred
progresses
Expensed as Expensed as Expensed as
Sales Commissions
Incurred Incurred Incurred
17
18. Reconciliation for Changes in Accounting for Selling Expenses
Matching BRGAAP Practices with USGAAP
4Q06 Pro-forma Results Effect of New 4Q06 Results under
Income Statement (R$000) under Previous Policy Accounting Practice New Policy
Net Revenues 238,287 - 238,287
Gross Profits 67,356 - 67,356
Gross Margin 28.3% 0.0p.p. 28.3%
Selling Expenses (11,244) (4,841) (16,085)
EBITDA 35,362 (4,841) 30,521
EBITDA Margin 14.8% (2.0p.p) 12.8%
Net Income 17,992 (3,195) 13,932
Net Margin 7.6% (1.3p.p) 5.8%
EPS(R$) 0.17 0.03 0.13
2006 Pro-forma Results Effect of New 2006 Results under New
Income Statement (R$000) under Previous Policy Accounting Practice Policy
Net Revenues 663,847 - 663,847
Gross Profits 198,051 - 198,051
Gross Margin 29.8% 0.0p.p. 29.8%
Selling Expenses (39,785) (11,886) (51,671)
EBITDA 108,526 (11,886) 96,640
EBITDA Margin 16.3% (1.8p.p) 14.6%
Net Income 83,078 (7,845) 75,233
Net Margin 12.5% (1.2p.p) 11.3%
EPS(R$) 0.80 0.07 0.73
18
19. Backlog: Change in Practice increases Visibility of Gafisa’s Financials
Currently, Gafisa has approximately R$297 million of results to be recognized
Revenues and Results be Recognized (R$ mm) Backlog Margin (%)
4Q05 3Q06 4Q06 (c)/(a) (c)/(b)
(a) (b) (c) % % 43,2% 42,6%
436,1 38,8%
Backlog of Revenues 679,8 795,3 82% 17%
Costs of Units Sold
(266,9) (386,1) (456,3) 81% 25%
to be Recognized
Backlog of Results 84%
169,2 293,7 339,1 6%
(previous method)
Backlog Margin
38.8% 43.2% 42.6%
(previous method)
Backlog of Results
- - 297,4
(new method)
Backlog Margin - - 4T05 3T06 4T06
37.4%
(new method)
19
… with margins of 42.6%
20. Reconciliation of Backlog
Changes in Accounting of the Backlog
Income Statement Backlog of Results Backlog of Results
(old policy) (new policy)
Recognized Recognized
Construction Cost Recognized
Land Cost (cash and swap Recognized Recognized
Recognized
payments)
Recognized Recognized
Development costs Not recognized
Recognized Recognized
Land paid under revenue swap Not recognized
20
21. Financial Position
…coupled with focus on working capital management
(R$ million) 4Q06 3Q06 4Q05
Short Term Debt 30 225 54
Long Term Debt 265 27 263
Total Debt 295 251 317
Cash and Cash Equivalents 266 330 134
Net Debt (Net Cash) 29 (79) 183
Shareholder’s Equity 825 810 270
Total Capitalization 1,120 1,061 587
Net Debt/ Equity 4% -10% 68%
21
22. Gafisa x Consensus Estimates
First Call Consensus
Guidance Estimates 2006 FY Results
New Projects Launched (R$000) 815 - 835 870 1,005
Pre-Sales - 758 995
Net Revenues - 627 663
Gross Profits - 192 198
Gross Margin - 30.7% 29.8%
EBITDA - 97 109
EBITDA Margin 16-17% 15.4% 16.5%
Net Income - 77 54
Net Margin - 12.3% 8.5%
EPS(R$) - 0.74 0.52
Net Debt - (47) 29
Source: Thomson First Call
(1) Previous Accounting Practice
(2) Including IPO Expenses
22
23. “Safe-Harbor” Statement
We make forward-looking statements that are subject to risks and uncertainties. These statements are based 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 that of our directors or
executive officers.
Forward-looking statements also include information concerning our possible or assumed future results of
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 and assumptions because they
relate to future events and therefore depend on circumstances that may or may not occur. Our future results
and shareholder values may differ materially from those expressed in or suggested by these forward-looking
statements. Many of the factors that will determine these results and values are beyond our ability to control or
predict.
23