GFASY Gafisa SA (PK)

Consolidated Pre-Sales

Fourth-quarter 2014 consolidated pre-sales totaled R$303.9 million, an increase of 31.7% compared to 3Q14. In the quarter, sales from launches represented 49.5% of the total, while sales from inventory comprised the remaining 50.5%.

Full year 2014 consolidated pre-sales totaled R$1,207 million, a decrease of 17% compared with the previous year. Sales from launches accounted for 43% of the total.

Table 2. Gafisa Group Pre-Sales (R$ thousand)

Consolidates Sales over Supply (SoS)

Consolidated sales over supply reached 8.9% in the 4Q14, up from 6.7% in the previous quarter. The consolidated speed of sales of fourth quarter launches reached 11.8%. SoS for 2014 launches was 31.7%.

Table 3. Gafisa Group Sales over Supply (SoS)

Delivered Projects

During the fourth quarter, the Company delivered 15 projects/phases encompassing 3,036 units (1,412 Gafisa units and 1,624 units from the Tenda segment), totaling R$726.2 million. The delivery date is based on the “Delivery Meeting” that takes place with customers, and not physical completion, which is prior to the Delivery Meeting.

For the year, 53 projects/phases and 10,070 units were delivered, amounting to R$2.3 billion.

Inventory (Properties for Sale)

In the fourth quarter, consolidated inventory at market value decreased R$85.2 million to R$3.1 billion. Of 4Q14 sales, approximately 50.5% were from inventory, comprising R$119.5 million from Gafisa and R$33.9 million from Tenda.

The market value of Gafisa inventory, which represents 73.5% of total inventory, was R$2.3 billion at the end of 4Q14, compared to R$2.5 billion at the end of 3Q14. Tenda’s inventory was R$828.7 million at the end of 4Q14, compared to R$712.4 million at the end of the 3Q14.

Table 4. Inventory at Market Value 4Q14 x 3Q14 (R$)

GAFISA SEGMENT

Gafisa Launches

The Gafisa segment did not launch any projects in the fourth quarter. As previously anticipated with the revision of the full year guidance, while projects were approved and met necessary launch conditions, the Company determined that prevailing market conditions did not meet the parameters required for product placement. As such, launches were postponed to 2015, when we expect a more positive scenario, thereby allowing for more profitable projects.

Accordingly, full year 2014 launches for the Gafisa segment reached R$1,023 million, which is slightly below the guidance range of R$1,100-R$1,200 million. This result includes the impact of the cancellation of a project launched in 1Q14.

Gafisa Pre-Sales

Gafisa segment 4Q14 gross pre-sales totaled R$262.2 million. Dissolutions reached R$84.9 million and net pre-sales totaled R$177.3 million. During the year, net sales totaled R$811.0 million.

Due to the absence of launches in the quarter, the Company focused its efforts on the sale of existing units. Approximately 54.2% of net sales for the period related to projects launched before 2012, resulting in reduction in the average age of the segment’s inventory.

Out of the 852 Gafisa segment units cancelled and returned to inventory during the year, 68.2% were resold in the same period.

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Table 7. Cancelled PSV Tenda Segment (R$ thousand and % over Gross Sales per Model)

All new projects under the Tenda brand are being developed in phases, in which all pre-sales are contingent on the ability to pass mortgages onto financial institutions. During 4Q14, 1,066 units, representing R$142.4 million in net pre-sales, were transferred to financial institutions. In the FY2014, 5,522 units were transferred, reaching R$715.7 million.

Tenda Delivered Projects

In 4Q14, Tenda delivered 7 projects/phases and 1,624 units, representing R$206.2 million in PSV, being 560 units and R$81.2 million in PSV relating to the New Model. In the full year 2014, 30 projects/phases were delivered representing 6,264 units, totaling R$650.4 million in PSV, with the New Model accounting for 1,700 units and R$213.8 million in PSV.

About Gafisa

Gafisa is a leading diversified national homebuilder serving all demographic segments of the Brazilian market. Established 60 years ago, we have completed and sold more than 1,100 developments and built more than 12 million square meters of housing, more than any other residential development company in Brazil. Recognized as one of the foremost professionally managed homebuilders, "Gafisa" is also one of the most respected and best-known brands in the real estate market, recognized among potential homebuyers, brokers, lenders, landowners, competitors, and investors for its quality, consistency, and professionalism. Our pre-eminent brands include Tenda, serving the affordable/entry-level housing segment, Gafisa and a stake in Alphaville, which offer a variety of residential options to the mid- to higher-income segments. Gafisa S.A. is traded on the Novo Mercado of the BM&FBOVESPA (BOVESPA:GFSA3) and on the New York Stock Exchange (NYSE:GFA).

This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Gafisa. These are merely projections and, as such, are based exclusively on the expectations of management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors; therefore, they are subject to change without prior notice.

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