Gafisa S.A.

Sandro Gamba - Chief Executive Officer, Gafisa Andre Bergstein - Chief Financial Officer and Investor Relations Officer, Gafisa Rodrigo Osmo - Chief Executive Officer, Tenda Felipe Cohen - Chief Financial Officer and Investor Relations Officer, Tenda

Daniel Malheiros - Banco Votorantim Fred Mendes - HSBC Guilherme Capparelli - Citibank Luiz Mauricio Garcia - Banco Bradesco Enrico Trotta - Itau BBA Gustavo Cambauva - BTG Pactual Daniel Gasparete - Merrill Lynch Marcelo Motta - JP Morgan

Thank you very much for coming today. Gafisa finished 2015 with positive results due to improvements throughout the last year of the productive cycles for this business units and started off 2016 confidently its operating and strategic capacity to face up to the changes of the year.

In 2015, the consolidated net income total R$74.4 million, thus resulting the loss of R$42.5 million recorded the year before. The Gafisa segment during the quarter with a net income of BRL$44.1 million and the Tenda segment reported a net income of BRL$30.3 million.

The results achieved in the year are in line with our strategy, which was to improve our operating performance and increase the level of profitability even at this difficult moment. We must therefore underline the good performance of the projects of Gafisa and Tenda that presented in the year with the adjusted gross margin totaling 33.9% in the fourth quarter and closing this year at 34.6%.

In 2015, the Gafisa segment confirmed the stability of its results with an adjusted gross margin of 13% and the Tenda segment with the consolidation of its new business model and the consequent increase in expectations results closing year with an adjusted gross margin of 30.6%. The Gafisa segment in this last quarter accounted for the launch of five project and phases, a total of BRL300 million and closing the year with BRL996.3 million in new launches.

The net contracted sales were BRL245 million in the fourth quarter, totaling BRL914.8 million in the year, that was up 12.8% higher than 2014. One of the great challenges that we have with the sale of remaining units, about 69.2% of the net sales were inventory projects, which has the importance of the diversification of product portfolio of the Gafisa segment.

In parallel, the Gafisa segment also devoted special attention to the development of new product always seeking to attain a comfortable level of speed of sales. The SoS of the Gafisa segment totaled 31.1% in 2013.

With an expansion of 26.1% over the previous year. The quarter was also characterized by a good delivery volume with eight projects phases delivered and accounting for BRL1 billion in PSV contributed for the good generation of operating cash.

In 2015, 22 projects phases were delivered or BRL22.4 billion in PSV. The transfer volume was BRL763 million of showing good level of control and efficiency as an effect of this operating performance, the adjusted group income in the fourth quarter was BRL127.8 million and year-to-date, the adjusted gross margin was 36.9%.

The net results for the period was positive BRL13.8 million and impacted by the greater of AlphaVille, but also the lower of revenue or the segments because of the period sales mix in the 12 months of 2015, the net results of the Gafisa segment totaled BRL44 million. Last year also represented a double step to the consolidation of the conductor cycle of the Gafisa segment.

From the operating point of view, we close 2015 with 28 ongoing projects, all of them on-time, Gafisa commitments with our clients. The better levels of management both operational and financial allowed the Gafisa segment to maintain the profitability of its project.

And it is interesting to note that in 2016, if we continue to have the scenario economic with low level of trust, a drop in the real income of families and greater restrictions to credit that becomes more probably to have a longer time to revert the macroeconomic condition. And this will delay our expectations to resume the real estate market.

So we will keep in 2016, a conservative position and balance out new products in the market and give those greater priority for those better more liquids. Now I would like to ask Felipe Cohen who is going to talk about Tenda.

Thank you, Andre. Good morning to you all.

Regarding Tenda, 2015 was characterized. Going back to other segment to profitability and the final delivery of the legacy projects.

The consolidation of the new business model allow Tenda to present excellent operating and financial results with the net profit reaching BRL30.3 million compared to the last of BRL109.4 million in 2014. With the expansion of the operation in the fourth quarter 2015, the Tenda segment totaled BRL302.6 million in launches encompassing nine project and phases.

In the year, Tenda totaled BRL1.1 billion in launches. The result was 77.6% higher than 2014.

The next contracted sales also surpassed BRL1 billion, a significant growth of 156.6% compared to 2014, a reflection of this good operating moment and positive context to the economic segment. The accrued or accumulated SoS was 53% well above the SoS or 32.3% in 2014.

Another important factor for Tenda with the delivery of the last four legacy projects, allowing us to concentrate assets and development of new business model. In the year, Tenda delivered 21 project phases and a PSV of BRL802 million.

Since 2013 when we started our new model Glendis has carried out the launch of 51 projects totaling BRL$2 billion. Of those total Tenda has delivered BRL 783 million, encompassing 19 project phases.

It is worthwhile noting that all the projects launched in 2013 the first year of the new model have been concluded and delivered within term and regarding the 2014 we still must conclude in the next few months on three projects. The good operating performance of the Tenda segment positively impacted its financial result.

In the fourth quarter the adjusted gross income was 61.9% with an adjusted gross margin of 29.9% in the year. The adjusted gross results of Tenda was BRL260 million and the adjusted gross margin 30.6%.

In this quarter the financial result of the segment was especially impact by the non-recurring expense of BRL22 million related to the adjustment in the accounting balance of accounts receivable and an increase to the provision of receivables which referred to projects before 2012. Plus the net income of the quarter was negative about BRL30 million.

In a year the net income was BRL30.3 million compared to a net loss of a BRL109.4 in 2014 because of the consolidation and operating and financial improvement. For the year Tenda will continue to grow intensifying launches of that blank slottages to have a good speed for always based on the good measure of the market, consistent improved with it results which come from the new model consolidates our trust in our business plans for 2016.

Now I would like to give the floor back to Andre.

Thank you Felipe. In consolidated terms Gafisa and Tenda launched BRL2.1 billion in a year, launches of BRL682.9 million in the fourth quarter.

Net sales totaled BRL482 million in the quarter, BRL1.9 billion in the year. The adjusted gross income of the quarter was a BRL189.3 million a margin of BRL33.9.

In the year the adjusted gross result was BRL792.8 margin of BRL34.6, higher than the 2014 result. Most important in our current economic severity of the company continues to seek more stability and structure.

During the fourth quarter 2015 SG&A expenses were BRL94.4 in a year to date these expenses were BRL344 million, BRL4.2 lower than 2014. As a result, of these initiatives the consolidated net income in 2015 was BRL74.4 million well above the net loss of BRL242.5 million registered or recorded in 2014.

At the end of the year the net debt stockholders equity ratio was 46.6% lowest level for 2015. The operating cash generation was on the fourth quarter BRL165.6 million, BRL257 million in the year.

The company closed the fourth quarter with a cash generation of a BRL128 million. The good cash performance and the maintenance of the lower level of leverage shows that the company has had good capital discipline and allows us to improve and strengthen operating and financial cycles, guaranteeing greater firmness and comfort vis-a-vis the challenges of 2016.

The Gafisa segment was as consistent and balanced, the improvement of the level of its employer's capital and Tenda will be ready to increase as a volume of its new projects anchored on the good results which come from the new model. The company will continue to work based on its capital discipline and its guidelines are always profitability and the generation of value for the shareholder.

Thank you very much and we're now ready for questions.

Good morning and thank you. I have two questions, I would like to understand the impact of BRL22 million in more detail please.

And secondly, you said, AlphaVille was very strong in the quarter. Well, why is it?

So why was this increase of the income or revenue of AlphaVille. Why did this occur?

Well this is Felipe. I'll give you in greater detail about the non-recurring adjustment of BRL22 million.

This quarter we have had two events that caused this impact BRL11 million had to do with adjustments in the accounting balance of the receivables. We have with arrangement in the company which historically was causing difference between the accounting balance and financial balance and we have corrected this and this implies in making an adjustment.

So that the balance would converge to the same number. This impact affected to revenue of the company with a reduction of 1.6% in the gross margin.

The another adjustment of BRL11 million was because of an increase of the provision of the receivables portfolio of projects before 2012. So these are negative projects and we put this into other operating expenses.

So we wanted to import some prudence to do this provision, and these receivables will be received over a long time. In practice, we were still working with the portfolio receivables of BRL19 million and the work is still undergoing and perhaps in the future we might need to build some or to have some extra provision.

Andre will talk about AlphaVille.

Good morning Daniel . There are three main items.

One, the evolution of the projects for the last quarter was stronger, vis-à-vis the case that occurred in the previous quarters. This brought in greater revenue, I'm not sure whether you've seen [indiscernible] magazine today, Alpha has had the best speed of sales in our history and there have been launches in the first quarter where we were waiting for some license so but its work started.

So it started off with strong sales and this also contributed to a better revenue and also we had a good sale of inventory and with our good building progress things were good. So these three points led to the fact that the interim revenue improved.

Thank you Andre.

Good morning. I have two questions.

So first, I would like to go back to Daniel's question. These BRL11 million are they distinct things as a 100%.

I'm not quite sure right. I have not quite understood, does this refer two of the post keys and what is the margin?

What is the impact of the gross margin, which you are estimating after the second quarter? I'm sorry I can't hear him very well or where there be an increase of interest.

Do you have any calculation what the impact on gross margin would be?

Hello Fred going back to the adjustment in practice, the BRL11 billion of the receivables portfolio, it encompasses all of our portfolio of receivables, regarding old projects. So what I said was the BRL90 million is although, we have lowered this balance, therefore we have made a provision.

We still have BRL90 as the balance and we are trying to see what the probability of receiving this will be. At the moment, we have no prediction whether there is a possible loss here.

This is why we have opted to do the provision of BRL11 million, whilst we continue with our work. It’s similar to what we do with the question of the Legal Department the traditional deposit last year in 2015.

For our understanding is that is the way the balance much reflect reality must show quality and reflect the numbers of the company and we have a proactive position to be always reviewing and finding gaps or potentials that exist. Regarding the gross margin just to remind you that the transition, the new program Minha Casa Minha Vida three starts was valid as from January.

So everything bought as from January, it is mandatory they will be in within the criteria of the new program, but up until April. We have a period of transition, so projects contracted until December of 2015 are transferred up until 1st of April.

The company has the option of fitting them into the program two or three, because transfers done as from may will be in the Minha Casa Minha Vida program three. And on the one hand there has been an increase of the cap of the price, which is good for our inventory and our legacy projects, because it generates more liquidity.

Because we have the two projects of legacy that we have in the inventory, which did not fit into the program. But in the Minha Casa Minha Vida, number three, the plan to have access to this money.

So we will increase the speed of sales of these projects. But on the other hand, as you have said, within the Minha Casa Minha Vida three, there has been an increase of the interest rate.

So in practice the potential or the financing capacity of our client in a way is curtailed and because of this increase and this is reflected in the pricing capacity of the company. We are working the prospect for the year, I think we will keep a level that we have been showing already for a year and a half between 28% and 30%.

I think since the second quarter of 2014 and we have already solved a lot of the legacy problems, in this last quarter more than 90% of problems - we had a good - without these two the adverse FX. Thank you.

Good morning. The volume of deliveries, what are you expecting for 2016 both Tenda and Gafisa.

I think EUR3.2 million this year and do you have an estimate of contract terminations. Thank you.

This is Andre speaking. Good morning, Guilherme.

To talk about deliveries, we had a good loss of deliveries about 5,000 units this year and good PSV in the last quarter 1B, and residential units. For the next year we have the estimates for a little lower risk, but throughout the year as we close and finish our projects we will be able to do a project prediction but less than 2015.

Regarding the contract termination it's difficult to say the markets is - the payment capacity is difficult. Last year we had more termination than in 2014, we will be taking steps and giving the clients the possibility of changing a unit for units of a lesser value, but in terms of volume it's difficult to say.

We've had it is less volume of delivery to have less contract devaluation. But also the question of the risk position of the client.

If we are doing a transfer, it's much more a question of which perception and commitment with the clients are willing to make. So let's just play by it, it's natural.

Very often, you come out correlating. We have had a large volume of deliveries in 2015 and 2016 we will try and keep a high level the official cycle or the productive cycle of Tenda, projects last from 12 months to 14 months and this is an important point.

During the sale the transfer is not made every delivery of key, the transfer is when the sale is, so the entry of cash into the company depends on the progress of the work.

Good morning, I would like to know about this beginning of the year for two segments sales and et cetera, compared to last year and what your expectations are and regarding transitions and receivable and in the Gafisa segments, will we have anything besides what you've mentioned, positions that were already being put aside of regarding the delay and also the contract termination. [indiscernible].

Good morning Mauricio, the first question, well for the absorption of terminations, January was very poor and now in our February carnival we ended the year very badly with the economic scenario, we have felt that after carnival things will begun to improve, coming back to at a level more similar to February of last year. What we feel is that if interest continues and campaigns have brought in buyers online and brought about interest, this has not diminished, but the conversion rate in January for example was weaker.

People have taken much longer to decide regarding the contract termination its mush as same as last year, there has not been an improvement or a worsening of the seasonality. December is always low , clearly it starts things pick up at the beginning of the year.

In the first quarter there were more contract terminations than in the last quarter. Regarding provision, the contentious ones, we had a year where we had concentrated ones and the contentious ones in Gafisa its BRL190 million, we have already taken several steps to reduce that both at source.

I will say what has caused delay of building, we don't have that dilemma on the labor side, control of workers and of the sub contracted people, we have controlled only labor and the documents and et cetera. and we have seen that with time that we're generating effective consequences and the less complaints about this.

And we also have taken steps regarding possible agreements to reduce the backlog which was not going to bring a huge reduction this year, but medium-term we hope this will be a relevant reduction to bring us to more normal level which is inherent to our market. From the contract termination point of view, we made an additional provision of about BRL5 million you know about BRL10 million, it’s not really termination, but it's positive balances, but it's different, is above the price would go up and even with some contract termination we had a sales booked for higher price, now it didn’t.

So we are trying to reflect this more realistically way. Now talking about tender and the prospects for 2016, first it's important to say that this particular moment in our country it requires prudence, there is a risk in the transfer too that the budgets of the government might cause an impact and further on they will have restrictions of credits regarding a financial institutions for individuals and the model has been presenting [symboling] (Ph) we trust our new model and we believe that it will be a winning model in the context of Minha Casa Minha Vida.

So we think there is room to believe in some growth close to a level which will bring adequate remuneration to the shareholder. We have started off well.

In the end of 2015, we had an adverse occurrence, the bank strike, but we manage to get all the delays with an excellent month of December. We were going to close the last quarter and that this quarter we've got BRL270 million.

So December was very strong. So the January and February had a level similar to December.

So prospect at the moment is not to present any slowdown with the sales speed but during 2015 Tenda had a level of 20% SoS in all quarters, regarding contract termination. Tenda also has been and having a drop quarter-over-quarter, but with the increase of credits restriction of individuals, the banks also have changed some procedures.

So whilst before just the simple approval qualified the client, nowadays some client have to go through interview at the bank branch and then after the bank approval et cetera, et cetera. In fact, there is a change of procedure, which could bring about an increase of the terminations.

So when we examine quarter-by-quarter there is a slight increase, but we feel, it still being adequate. So we think it will be from 10% to 15%.

I would like to follow-up. Regarding the criterion that you mentioned was the provision for termination.

Does it has to do with the loss of the expected price because it is now difficult to sell for the original price. Do you think it’s that or?

Yes. It is Mauricio.

Well, we have to use history to reflect the product to see what we can do in the future. We use historical base of what has happen to reflect on the cost you balances.

Thank you.

Good morning Andre. Good morning Felipe.

I think I have two very quick questions. We have seen once again Tenda is very strong and buying land.

When we see Tenda's land bank, we imagine Tenda with the launch of BRL1 billion or whatever and they've had four years of good purchases. Now in 2016, what can we expect regarding land purchase, especially in Tenda.

And also what should we see in the payment of Tenda in 2016. And a follow-up of Luiz Mauricio question.

The provision of the termination, have you been carrying out this debate with orders where have you talked to other companies. And there is not yet much agreement regarding these provisions of contract terminations.

Whether this is going to be done now or next quarter or is there any agreement about this?

Regarding Tenda’s land bank, in fact this last quarter, we had an excellent performance in terms of acquisition. We brought important plots of land and key places like Sao Paulo city.

So annualized increase of the land bank half of the purchases were in Sao Paulo, where we show the best performance and contribution and the result of the company, because this increases our future prospects. The important point to be taken into account, we already have BRL4.7 million in land banks, but we have to breakdown what is land bank of short to medium term and what is long-term.

So in Tenda, the land development - well we generally concentrate on the short and medium term. So we still feel that there are normal to additional acquisition during 2015 to fulfill our goal of land bank for short to medium-term.

Regarding cash generation, differently from what we have said since 2014 where we predicted to have a cash flow in 2015 because the repurchase of that and also the increase of the operations scale for 2016. We have a different relation we are already at a sound level more than BRL2 billion in launches of sales, and we intend to find space to grow.

During 2016, we already had a more equal land back there are sale opportunities. but the model as cash generative we hope that they'll be a different scenario in 2016, where we no longer have cash burn.

Andre will answer the other question.

Obviously this is a thing which is being discussed greatly, the potential effect of the contracts terminations and price reductions, I think that the rule although has to be logical based on history, because when you establish a criterion you have to follow it and if the market improves you'll have a positive effect. If it doesn't it'll be negative effect.

We are actually go into the best way to go to establish a rule based on past numbers. And then from then on you adjusting according to the movement of the markets, up or down.

It depends very much on what the market is going to do and I think this is a constant analysis that you will have to make. You will have to establish the criterion, as soon as that is done and people will see whether that makes sense then it will become a rule and we will reflect and consider this quarter-to-quarter, but at the moment things are difficult because of the market.

Thank you Felipe and thank you Andre.

A question here regarding Tenda's inventories. Felipe has already mentioned this.

When I look at the growth of the legacy inventory in the Minha Casa Minha Vida and outside it. Felipe said that there was something outside but outside Minha Casa Minha Vida, it's worse and the legacy inside the program have lowered it very little.

So why is there some additional difficulties, is there one particular market or in fact could you tell us what is happening with this legacy that has lowered very little? Thank you.

The inventory the negative inventory so we have those inside Minha Casa Minha Vida outside, it is expected that the inventory inside the program should have a greater liquidity because of access to financing. In the specific case in the number out lies is impacted project which is suspended.

We have BRL45 million in legacy inventory in the Minha Casa Minha Vida which we're still trying to legalize and continue with this building. So this causes a distortion when you analyze the variation of the inventories.

This was not found and outside the Minha Casa Minha Vida we have a BRL100 million of inventory and this has been significantly reduced during the last quarter and in fact now it becomes more and more difficult. The inventory that remains this is more difficult and less liquidity.

The good news for 2016 is the new Minha Vida Minha Casa is at number three. As I have said before, the two main legacy projects doesn’t have inventory but not in the program now become part of the Minha Casa Minha Vida.

And so in the first quarter we will have this changed in classification, but it will help to dilute the sale of this legacy inventory.

This BRL55 million that you mentioned that is not a legacy what is spending, will you be able to normalize this business perhaps now in 2016 or not, is it a difficult problem to solve?

No, we have no way to predict, we have been working on this, the question of legalization, it was project launched in 2011, 2010 or before and which in 2012 was suspended because of this question of legalization. So what we have been working on is to regulate the project and to be concluded.

But it is difficult to give you any outlook, we don't know how long it's going to take to legalize it.

Thank you.

Hello good morning. Question is to Tenda.

I would like to know a bit more about the competition among the low income. There are other aggressive players in a metropolitan area like Sao Paulo or other places.

We have seen people directing idle capacity to this segment. So, what have you got to say about the competition in this segment?

Competition hasn't increased and we have noticed that many of them that were more first focused on Bracket-1, [Faixa 1] (Ph), now have begun to focus more on the Bracket-2 and Bracket-3 but more emphasis is on the one. So in brackets, well in the markets where we compete up to a year ago, we practically had no competition in the purchase of land.

We have come up to get these people now though, because on the one hand this land is more competitive and secondly availability of land for Bracket-2 was increased. In the East side of the city we used to buy land in [indiscernible] which two years ago was the largest dominated by people of higher income.

But that the good pieces of land will come up against the higher income bracket. The market is much larger than supply, recently an article listed Sao Paulo was talking about everything for low income and in the city of Sao Paulo.

In the last three years including Brackets-1, Brackets-2, Brackets-3, Sao Paolo produced eight units which is ridiculous and just for Sao Paolo and [indiscernible]. So from client demand, we have not suffered too much, we have bought some units for prospecting.

Thank you.

Good morning. Two quick questions.

I would like to know about expense level I think and I would like to know what you are expecting as spin-off potential. You said you’re working on credit but I would like to know little bit about this economic scenario.

What you are expecting for the next quarter?

Good morning, Marcelo. To talk about sales expenses, last quarter, we had a greater expense, but that was because of greater concentration of budgets not during the last quarter, but at the end of the third quarter, so in September in the last year, ended the year with 77% of the budget, because of greater sales expenses.

Looking to this year, we know that the market is difficult, so we’ll have more campaign, but we have had a decrease 14% of gross sales. So a greater effort is being made, of course, you see on the streets, on TV, a much greater effort is made to bring in the client, but the things are well controlled and the ratio between expenses and sales is reduced to 2015 and the spinoff, it is in fact what is happening.

We have been working and between 2014 and 2015 we have carried out many actions to separate things, we have the operating and administrative sectors separated. And also now we have to think of a capital structure and credit obviously, it is taking more time because of the market, but we don’t have a deadline.

So we’ll do things slowly, which is good and we think that this is the way to go, which is best for the companies probably and deal with the lack of synergy et cetera, et cetera. But we don’t have anything new to tell you today.

Thank you.

I would like to thank you very much for tuning into our call and very good questions and we are available to answer any more questions. And I would like to thank the teams at Tenda and Gafisa.

So I think we have had a good year and I think we have stood out well. This shows the collaboration of all our employees.

So thank you very much. So that’s it.

Thank you and have good day.