1

Third Quarter 2006Earnings Conference Call

Investor Relations Contact:Gustavo Felizzolair@gafisa.com.br

3Q06 Earnings Conference CallSão Paulo November 13th, 200613PM (Brasilia Time), 10AM (US-ET)Phone: +1(973) 935-8893Code: 8013391Webcast: http://www.gafisa.com.br/ir

Third Quarter 2006 Launches

ForestVille – Salvador Olimpic – São Paulo Espacio Laguna – Rio de Janeiro

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Overview of the 3Q06

Wilson Amaral – Chief Executive Officer

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Highlights of The Quarter

Launches increased 76% y-o-yLaunches increased to R$ 194.0 million in 3Q06 from R$ 110.3 million in 3Q05

Pre-Sales grew 199% y-o-yPre-sales increased to R$235.3 million in 3Q06 from R$78.6 million in 3Q05

The backlog margin for 3Q06 was stable at 43% compared to previous quarter and 10.5p.p. higher when compared to the 3Q05

In 3Q06, Backlog of Revenues rose to R$293.7 million from R$115.2 million in 3Q05

Revenues Increase 21% to R$ 161,5 million and EPS up 109% to 0.27

YTD Mortgages provided by commercial banks and CEF increased 105% and 96%, respectively

Gafisa Vendas, our internal sales division, was created

New partnership with Espirito Santo-based developer Proeng

Entrance in three new markets: Salvador (Bahia), Curitiba (Paraná) and Niteroi (Rio de Janeiro)

With a record number of candidates (18,000), in September 30th was ended the application period for Gafisa’s 2007 Trainees Program

More recently, the Acquisition of AlphaVille Urbanismo

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Gafisa Reports 76% Growth in Launches and 199% in Pre-Sales

28

11331

64

19

59

3Q05 3Q06

New MarketsRio de JaneiroSão Paulo

86 101

25

26

67

3Q05 3Q06

New MarketsRio de JaneiroSao Paulo

Pre-Sales (R$ mm)

Pre-sales mix breakdown – 3Q06

Launches (R$ mm)

HIG – High Income: > 3,600 MHI – Middle High: 2,800 < > 3,600MID – Middle Income: 2,000 < > 2,800 AEL – Affordable entry level: 1,800 < > 2,000 COM – Commercial LOT – Urbanized lots

Segmentation (Prices in R$/sq.m)

194

110

79

235

199%199%

6%

30%

56%

2% 6% 0% HIG

MHI

MID

AEL

LOT

COM

76%76%

86%

5

389 388 377

207

652 630

290

2001 2002 2003 2004 2005 9M05 9M06

117%293 333 325

254

450

246

617

2001 2002 2003 2004 2005 9M05 9M06

Launches (R$ mm) Pre-Sales (R$ mm)

150%

HIG – High Income: > 3,600 MHI – Middle High: 2,800 < > 3,600MID – Middle Income: 2,000 < > 2,800 AEL – Affordable entry level: 1,800 < > 2,000 COM – Commercial LOT – Urbanized lots

Segmentation (Prices in R$/sq.m)

13%

37%

37%

5% 4% 4%HIG

MHI

MID

AEL

LOT

COM

75%

9M06: 117% Growth in Launches and 150% in Pre-Sales compared to 9M05

Pre-sales mix breakdown – 9M06

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Rapidly Expanding Mortgage Supply

2,2 3,04,8

10,0

3,36,7

4,56,0

9,1

14,0

5,8

11,4

2003 2004 2005 2006E 9M05 9M06

Mortgage by Commercial Banks¹ CEF Mortgage Loans

2006 – Bradesco, Santander and Itaú offer up to 20-yr fixed rate at 14%p.a.

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

BCB allows paycheck discount for mortgage lending to public employess

Banks allowed to offer fixed rate mortgage with funds from SFH (limited to 14.2% p.a.)

Sources: ABECIP, Central Bank ¹ Total mortgage lending using savings deposits funding (channeled-lending requirement). ² Of the R$ 14 billion estimated for 2006, R$ 9,4 billion will be entailed to FGTS³ The required monthly household income for 75% of CEF resources is limited to 5 minimum wages. It represents 86% of the total resources from FGTS.

105%

96%

54%

109%

24.0

13.9

9.0

6.7

9.1

18.1

Timeline – Recent Developments in the Mortgage Market (R$ billion)

2005 - Individuals get tax exempted on MBS Investments

ABN Amro, Santander and HSBC reduce Mortgage Rates to 8%p.y from 12%p.a.

Itaú, Bradesco, Unibancofollow suit

Santander launches 10-yr fixed mortgage rate (21%p.a.)

2003 - Central Bank increases bank requirement to invest in the sector

2004 - Resolution 10.931 Improves Foreclosure regulation

Increasing credit availability and new regulation supports the potential of the sector

²

³

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Gafisa is establishing a strategic channel to access its clients and reduce its dependence on outside brokersGafisa Vendas operates in the State of Sao Paulo. We might extend it countrywide over next yearsGafisa Vendas, more than any outside sales company, knows that price is not the only reason left for a customer to buy from GafisaGafisa Vendas focus on:

i) Launches – Gafisa Vendas shares the Sales Stands creating a healthy competition between our own sales force and outside brokers

ii) Inventory – Gafisa Vendas has a team focused on inventory with an additional reward depending on the performance of such products

iii) Web-Sales – Gafisa Vendas has an internet-dedicated sales team as it represents an alternative source of sales with lower cost

Gafisa’s recent experience in 2005 with a dedicated sales force in Rio de Janeiro was very successful.

42%

21%

14%

11%

12%

LopesFernandez MeraExclusiva/Del forteAbyaraOthers

Gafisa Vendas

Gafisa Vendas articulates Gafisa's unique features and effectively present the product

33%

26%

16%

14%

11%

AmericasPatrimóvelNova Marca 500Júlio BogoricinOthers

Breakdown of Gafisa’s Pre-sales by Brokerage Company for 1H06

Sao Paulo Rio de Janeiro

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We’ve enhanced our National Footprint

Gafisa is currently present in 13 states and 21 markets

¹ 9M06

Gafisa’s National Footprint

Gafisa

A. Salvador (Bahia)3rd largest City of BrazilFirst projects launched under partnership with OASLocated at AlphaVille Salvador

B. Vitoria (Espirito Santo)One of the highest GDP per Capita of BrazilOil Industry expected to drive strong demandOpportunities for Second-home Projects

C. Niteroi (Rio de Janeiro)Very attractive and under-explored marketSecond most important city of Rio de Janeiro StatePart of diversification strategy in Rio de Janeiro

D. Curitiba (Parana)7th largest City of BrazilLowest unemployment rate of the countryConstruction Begins along with Launches

A

B

CD

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Acquisition of AlphaVille Urbanismo

Residential Area Parks

Business Area

Multi-family Area

AlphaVille Club

Golf Course

Business Area Residential Area

Residential Area

Characteristics of an AlphaVille Community1

Note (1): Based on AlphaVille Graciosa (located in Curitiba, Paraná)

AlphaVille Urbanismo is the largest and only nationwide community development company in Brazil, with no

major competitors to date.

The Company transforms large rural acreage into urbanized lots, developing all required infrastructure

(water, sewage, electricity, roads), as well as facilities such as sports club, high-rise monitored fences, for

subsequent sale

AlphaVille’s residential communities (lots) are targeted at upper and upper-middle class families in the

outskirts of metropolitan regions throughout Brazil

AlphaVille does not get involved in the construction of the houses, which is done by the buyers

Segment characterized by high entry barrier; higher margins and lower cash exposure than that of residential

buildings

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AlphaVille Strengthened Gafisa’s Position as Market Leader

GeographicDiversification

World-class Shareholdersand the Highest

Standards of Corporate Governance

Efficient Business Modeland Strategic Land Bank

Robust Housing Growth

Industry Leadership and Strong Brand Recognition

Professional Managementand

Established Organization

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Land Bank: High growth with relatively low risk

92%1,99715,4678,963,794AlphaVille Total

Gafisa

82%2,61810,1051,468,230Gafisa Total

AlphaVille

93%1,1389,2134,926,325Southeast

100%5673,4612,626.057Northeast

100%1551,430746,533South

27%105926502,757Mid-West

100%32438162,121North

85%9294,607817,290New Markets

84%4,61525,57210,432,024Gafisa + AlphaVille

% acquiredby swap

Future Sales (R$000)Potential UnitsUsable Area

(sq.m)

91%7642,985345,906Rio de Janeiro

305,034 2,513 926 59%Sao Paulo

¹ As of 09/30/06

Combination of AlphaVille’s sizable Land Bank with Gafisa’s strategic reserves

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13,215 14,32917,972

5,000

10,000

15,000

20,000

2005 2006 2007# of Applications

8.4%8.4%

Strong Brand Also attracts the Best People

Gafisa’s 2007 Trainee Program had 18,000 applications throughout Brazil

25.4%25.4%

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Financial and Operational Performance

Duílio Calciolari – Chief Financial Officer

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14,6

28,818%

11%

3Q05 3Q06

EBITDA EBITDA Margin

10,8

27,7

17%

8%

3Q05 3Q06

Net Income Net Margin

3Q06: Operating Highlights

33,8

56,625%

35%

3Q05 3Q06Gross Profit Gross Margin

Net Revenues (R$ mm) Gross Profit (R$ mm)

EBITDA¹ (R$ mm) Net Income¹ (R$ mm)

133,4161,5

3Q05 3Q06Net Revenues

21%21% 67%67%

97%97%156%156%

¹ Under new accounting policy for selling expenses.

15

15

4251

2027 23

60

12% 12%

4%6%

8%

14%

7%

2001 2002 2003 2004 2005 9M05 9M06¹

Net Income Adj. Net Income Net Margin

9M06: Operating Highlights

67

114142

124 139

100131

31%34%

34% 32%

27%28%

31%

2001 2002 2003 2004 2005 9M05 9M06

Gross Profit Gross Margin

26

64

8466 65

5666

19% 19%

14% 13%

16%17%

13%

2001 2002 2003 2004 2005 9M05 9M06¹

Adj. EBITDA EBITDA Margin

Net Revenues (R$ mm) Gross Profit (R$ mm)

EBITDA¹ (R$ mm) Net Income¹ (R$ mm)

197

334440 436

494

326426

2001 2002 2003 2004 2005 9M05 9M06

30%

29%

18%

164%

¹ Under new accounting policy for selling expenses.

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Revenues Reflect Previous Years Pre-Sales

2%9,823NANAOthers

100%425,560100%616,542Total

9%37,1124%24,887Launched in 2002

29%123,1956%34,728Launched in 2003

23%99,0527%40,894Launched in 2004

25%107,62628%174,369Launched in 2005

11%48,75155%341,664Launched in 2006

% of RevenuesRevenues% of Pre-SalesPre-SalesDevelopments

83%

63%

9M06 Pre-sales x Recognized Revenues (R$000)

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Changes in Accounting for Selling Expenses

Matching BRGAAP Practices with USGAAP

Expensed as Incurred

Expensed as Incurred

Expensed as IncurredSales Commissions

Expensed as Incurred

Expensed as Incurred

Deferred and recognized as the

development progresses

Project Specific Advertising

Deferred and recognized as the

development progresses

Deferred and recognized as the

development progresses

Deferred and recognized as the

development progresses

Sales Stand / Showroom / Model Apartment

Expensed as Incurred

Expensed as Incurred

Expensed as IncurredInstitutional Advertising

USGAAPBR GAAP (new policy)

BR GAAP (old policy)

Differences between Previous and New Practices

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Reconciliation for Changes in Accounting for Selling Expenses

Matching BRGAAP Practices with USGAAP

(15,874)(5,889)(9,985)Selling Expenses

Balance Sheet Items (R$000)

1,348,111

809,802

20,979

15,505

0.27

17.1%

27,667

17.8%

28,802

35.1%

56,646

161,542

3Q06 Results under New Policy

Effect of New Accounting Practice

3Q06 Pro-forma Results under Previous PolicyIncome Statement (R$000)

(41,713)1,389,824Total Assets

(29,607)839,408Shareholders’ Equity

(12,106)33,085Deferred Taxes

(41,713)57,219Deferred Selling Expenses

0.030.30EPS(R$)

(2.3p.p)19.4%Net Margin

(3,692)31,359Net Income

(3.7p.p)21.5%EBITDA Margin

(5,889)34,691EBITDA

0.0p.p.35.1%Gross Margin

-56,646Gross Profits

-161,542Net Revenues

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Strong Pre-sales performance is Positively Impacted Backlogs

… with margins of 43.2%

Currently, Gafisa has approximately R$294 million of results to be recognized (a 155% growth compared to 3Q05)…

3Q06(a)

2Q06(b)

Revenues and Results be Recognized (R$ mm) Backlog Margin (%)

Sales to be Recognized

Costs of Units Soldto be Recognized 1

Results to beRecognized

Margin to beRecognized

560,7

(317,8)

242,9

43.3%

679,8

293,7

43.2%

Note:1 Includes only land and construction costs

(386,1)

3Q05 (c)

352,7

(237,5)

115,2

32.7%

(c)/(b)%

21%

22%

21%

(c)/(a)%

93%

63%

155%

43.2%43.3%

32.7%

3Q05 2Q06 3Q06

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Strong Financial Position…

Short Term DebtLong Term Debt Total Debt

Cash and Cash Equivalents Net Debt (Net Cash)Shareholder’s Equity

Total Capitalization

(R$ million) 3Q06

22527

251

330(79)810

1,061

3Q05

85191276

423(147)784

1,060

Net Debt/ Equity -10% -19%

2Q06

…coupled with focus on working capital management

26%

5493

146

6581312

458

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Working Capital Management is One of Gafisa’s Priorities

Recent Financial Initiatives

Gafisa is Demanding New Products from Commercial Banks in order to Boost its SalesGafisa and HSBC announced the launch of a new real estate development with an

innovative credit system - the “Pre-approved” mortgageThen, Santander Offered the No-Paperwork mortgage financing to Gafisa’s clients

Issuance of New Debt in order to optimize Capital StructureIssuance of R$ 240 million in Debentures to recall higher cost debtLower cost of debt is expected to generate savings of more than R$ 4 millionGenerates flexibility as it frees up more than R$150 million in collateralized

receivables

SecuritizationIncrease demand for alternative sources of funding Sale of up to R$ 60 million of post-completion receivablesThe proceeds from the sale of the securitized credits will be reinvested in Gafisa’s

regular operations

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“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.