Third Quarter Earnings Conference Call. Third Quarter 2006 Launches. ForestVille Salvador Olimpic São Paulo Espacio Laguna Rio de Janeiro

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1 Third Quarter 2006 Earnings Conference Call Third Quarter 2006 Launches ForestVille Salvador Olimpic São Paulo Espacio Laguna Rio de Janeiro Investor Relations Contact: Gustavo Felizzola 3Q06 Earnings Conference Call São Paulo November 13th, PM (Brasilia Time), 10AM (US-ET) Phone: +1(973) Code: Webcast: 1

2 Overview of the 3Q06 Wilson Amaral Chief Executive Officer 2

3 Highlights of The Quarter Launches increased 76% y-o-y Launches increased to R$ million in 3Q06 from R$ million in 3Q05 Pre-Sales grew 199% y-o-y Pre-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 3

4 Gafisa Reports 76% Growth in Launches and 199% in Pre-Sales Launches (R$ mm) Pre-Sales (R$ mm) New Markets Rio de Janeiro Sao Paulo % 76% New Markets Rio de Janeiro São Paulo 199% 199% Q05 3Q06 Pre-sales mix breakdown 3Q06 3Q05 3Q06 2% 6% 0% 6% HIG MHI MID 86% 56% 30% AEL LOT COM 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 COM Commercial LOT Urbanized lots 4

5 9M06: 117% Growth in Launches and 150% in Pre-Sales compared to 9M05 Launches (R$ mm) Pre-Sales (R$ mm) % % M05 9M M05 9M06 Pre-sales mix breakdown 9M06 5% 4% 4% 13% HIG MHI MID 75% 37% AEL LOT 37% COM 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 COM Commercial LOT Urbanized lots 5

6 Rapidly Expanding Mortgage Supply Increasing credit availability and new regulation supports the potential of the sector Timeline Recent Developments in the Mortgage Market (R$ billion) Central Bank increases bank requirement to invest in the sector Resolution Improves Foreclosure regulation 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, Unibanco follow suit Santander launches 10- yr fixed mortgage rate (21%p.a.) % 24.0 ³ 14, 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.) , , ,0 2,2 3,0 9,1 4,8 109% 10, ,8 3,3 96% 105% 6, E² 9M05 9M06 Mortgage by Commercial Banks¹ CEF Mortgage Loans 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 FGTS ³ 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. 6

7 Gafisa Vendas Gafisa Vendas articulates Gafisa's unique features and effectively present the product Gafisa is establishing a strategic channel to access its clients and reduce its dependence on outside brokers Gafisa Vendas operates in the State of Sao Paulo. We might extend it countrywide over next years Gafisa Vendas, more than any outside sales company, knows that price is not the only reason left for a customer to buy from Gafisa Gafisa 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. Breakdown of Gafisa s Pre-sales by Brokerage Company for 1H06 Sao Paulo 12% Rio de Janeiro 11% 11% 14% 42% Lopes Fernandez Mera Exclusiva/Del forte Abyara Others 14% 16% 33% Americas Patrimóvel Nova Marca 500 Júlio Bogoricin Others 21% 26% 7

8 We ve enhanced our National Footprint Gafisa is currently present in 13 states and 21 markets Gafisa s National Footprint 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 Oil Industry expected to drive strong demand Opportunities for Second-home Projects Gafisa D C B A C. Niteroi (Rio de Janeiro) Very attractive and under-explored market Second most important city of Rio de Janeiro State Part of diversification strategy in Rio de Janeiro D. Curitiba (Parana) 7th largest City of Brazil Lowest unemployment rate of the country Construction Begins along with Launches 8 ¹9M06

9 Acquisition of AlphaVille Urbanismo 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 Characteristics of an AlphaVille Community 1 Residential Area Parks Residential Area Business Area AlphaVille Club Business Area Residential Area Multi-family Area Golf Course 9 Note (1): Based on AlphaVille Graciosa (located in Curitiba, Paraná)

10 AlphaVille Strengthened Gafisa s Position as Market Leader Industry Leadership and Strong Brand Recognition Robust Housing Growth Professional Management and Established Organization Geographic Diversification Efficient Business Model and Strategic Land Bank World-class Shareholders and the Highest Standards of Corporate Governance 10

11 Land Bank: High growth with relatively low risk Combination of AlphaVille s sizable Land Bank with Gafisa s strategic reserves Gafisa Usable Area (sq.m) Potential Units Future Sales (R$000) % acquired by swap Sao Paulo 305,034 2, % Rio de Janeiro 345,906 2, % New Markets 817,290 4, % Gafisa Total 1,468,230 10,105 2,618 82% AlphaVille Southeast 4,926,325 9,213 1,138 93% Northeast 2, , % South 746,533 1, % Mid-West 502, % North 162, % AlphaVille Total 8,963,794 15,467 1,997 92% Gafisa + AlphaVille 10,432,024 25,572 4,615 84% ¹ As of 09/30/06 11

12 Strong Brand Also attracts the Best People Gafisa s 2007 Trainee Program had 18,000 applications throughout Brazil 20,000 15,000 10,000 13, % 14, % 25.4% 17,972 5, # of Applications 12

13 Financial and Operational Performance Duílio Calciolari Chief Financial Officer 13

14 3Q06: Operating Highlights Net Revenues (R$ mm) Gross Profit (R$ mm) 35% 133,4 21% 21% 161,5 25% 67% 67% 56,6 33,8 3Q05 Net Revenues 3Q06 3Q05 Gross Profit 3Q06 Gross Margin EBITDA¹ (R$ mm) Net Income¹ (R$ mm) 17% 28,8 18% 11% 14,6 97% 10,8 8% 156% 156% 27,7 3Q05 EBITDA 3Q06 EBITDA Margin 3Q05 Net Income 3Q06 Net Margin 14 ¹ Under new accounting policy for selling expenses.

15 9M06: Operating Highlights Net Revenues (R$ mm) Gross Profit (R$ mm) 34% 34% 32% 27% 28% 31% 31% % % M05 9M M05 9M06 Gross Profit Gross Margin EBITDA¹ (R$ mm) Net Income¹ (R$ mm) 14% 13% 26 19% 19% % % 56 17% 18% 66 16% 8% 15 12% 42 12% 51 4% % % 7% M05 9M06¹ Adj. EBITDA EBITDA Margin M05 9M06¹ Net Income Adj. Net Income Net Margin 15 ¹ Under new accounting policy for selling expenses.

16 Revenues Reflect Previous Years Pre-Sales 9M06 Pre-sales x Recognized Revenues (R$000) Developments Pre-Sales % of Pre-Sales Revenues % of Revenues Launched in ,664 55% 83% 48,751 11% Launched in ,369 28% 107,626 25% Launched in ,894 7% 99,052 23% Launched in ,728 6% 123,195 29% 63% Launched in ,887 4% 37,112 9% Others NA NA 9,823 2% Total 616, % 425, % 16

17 Changes in Accounting for Selling Expenses Matching BRGAAP Practices with USGAAP Differences between Previous and New Practices BR GAAP (old policy) BR GAAP (new policy) USGAAP Institutional Advertising Expensed as Incurred Expensed as Incurred Expensed as Incurred Sales Stand / Showroom / Model Apartment Deferred and recognized as the development progresses Deferred and recognized as the development progresses Deferred and recognized as the development progresses Project Specific Advertising Deferred and recognized as the development progresses Expensed as Incurred Expensed as Incurred Sales Commissions Expensed as Incurred Expensed as Incurred Expensed as Incurred 17

18 Reconciliation for Changes in Accounting for Selling Expenses Matching BRGAAP Practices with USGAAP Income Statement (R$000) 3Q06 Pro-forma Results under Previous Policy Effect of New Accounting Practice 3Q06 Results under New Policy Net Revenues 161, ,542 Gross Profits 56,646-56,646 Gross Margin 35.1% 0.0p.p. 35.1% Selling Expenses (9,985) (5,889) (15,874) EBITDA 34,691 (5,889) 28,802 EBITDA Margin 21.5% (3.7p.p) 17.8% Net Income 31,359 (3,692) 27,667 Net Margin 19.4% (2.3p.p) 17.1% EPS(R$) Balance Sheet Items (R$000) Deferred Selling Expenses 57,219 (41,713) 15,505 Deferred Taxes 33,085 (12,106) 20,979 Shareholders Equity 839,408 (29,607) 809,802 Total Assets 1,389,824 (41,713) 1,348,111 18

19 Strong Pre-sales performance is Positively Impacted Backlogs Currently, Gafisa has approximately R$294 million of results to be recognized (a 155% growth compared to 3Q05) Revenues and Results be Recognized (R$ mm) Backlog Margin (%) 43.3% 43.2% 3Q06 (a) 2Q06 (b) 3Q05 (c) (c)/(a) % (c)/(b) % Sales to be Recognized 679,8 560,7 352,7 93% 21% 32.7% Costs of Units Sold to be Recognized 1 (386,1) (317,8) (237,5) 63% 22% Results to be Recognized 293,7 242,9 115,2 155% 21% Margin to be Recognized 43.2% 43.3% 32.7% Note: 1 Includes only land and construction costs 3Q05 2Q06 3Q06 with margins of 43.2% 19

20 Strong Financial Position coupled with focus on working capital management (R$ million) 3Q06 2Q06 3Q05 Short Term Debt Long Term Debt Total Debt Cash and Cash Equivalents Net Debt (Net Cash) Shareholder s Equity Total Capitalization 330 (79) 810 1, (147) 784 1, Net Debt/ Equity -10% -19% 26% 20

21 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 Sales Gafisa and HSBC announced the launch of a new real estate development with an innovative credit system - the Pre-approved mortgage Then, Santander Offered the No-Paperwork mortgage financing to Gafisa s clients Issuance of New Debt in order to optimize Capital Structure Issuance of R$ 240 million in Debentures to recall higher cost debt Lower cost of debt is expected to generate savings of more than R$ 4 million Generates flexibility as it frees up more than R$150 million in collateralized receivables Securitization Increase demand for alternative sources of funding Sale of up to R$ 60 million of post-completion receivables The proceeds from the sale of the securitized credits will be reinvested in Gafisa s regular operations 21

22 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. 22