1

Fourth Quarter 2006Earnings Conference Call

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

4Q06 Earnings Conference CallSão Paulo January 30th, 200602PM (Brasilia Time), 11AM (US-ET)Phone: +1(973) 935-8754Code: 8309316Webcast: http://www.gafisa.com.br/ir

Fourth Quarter 2006 Launches

Riviera Nice – Manaus - AM Collori – São Paulo - SP Vivance – Rio de Janeiro - RJ

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Business Update

Wilson Amaral – Chief Executive Officer

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

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4Q06: Gafisa Reports 4% Growth in Launches and 86% in Pre-Sales

128236

29

60

46

83

4Q05 4Q06

New MarketsRio de JaneiroSão Paulo

192241

90 100

8034

4Q05 4Q06

New MarketsRio de JaneiroSao Paulo

Pre-Sales by Region (R$ mm)

Launches Mix Breakdown – 4Q06

Launches by Region (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)

375362

379

16%

27%

45%

9%3% HIG

MHI

MID

AEL

LOT

COM

72%

4%

204

86%

Pre-Sales Mix Breakdown – 4Q06

17%

15%

34%

1%

3%

30% HIG

MHI

MID

AEL

LOT

COM

49%

5

155 230

57559

140

219

41

80

201

2004 2005 2006

New MarketsRio de JaneiroSão Paulo

86

340498

51

186

239

70

126

268

2004 2005 2006

New MarketsRio de JaneiroSão Paulo

54%121%

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)

19%

30%

42%

1%2% 7%HIG

MHI

MID

AEL

LOT

COM

72%

Launches Mix Breakdown – FY 2006

70%217%

Segmentation (Prices in R$/sq.m)

15%

29%36%

3%3%

14%HIG

MHI

MID

AEL

LOT

COM

65%

Pre-Sales Mix Breakdown – FY 2006

1.005

652

207

995

450

254

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)

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National Expansion: Laying the Groundwork to Achieve Long-term Goals

Gafisa currently operates in 13 states and 21 markets

Gafisa’s National Foothold

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

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

A

B

CD

EF

G

Recent Developments

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2,2 3,04,8

9,54,5

6,0

9,1

14,0

2003 2004 2005 2006

Mortgage by Commercial Banks¹ CEF Mortgage Loans

6,7

9,0

24,0

13,9

The 100% growth in Mortgage Granted in 2006…

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 employees

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

2007 – CEF board members agreed that in 2007 ~50% of the mortgage loans entitled to the FGTS resources might be channeled to the new projects

Banco do Brasil expects to enter in the housing finance market this year

CEF reduced the bureaucracy in filling for construction financing. It intends to lend R$3,5bn for this purpose.

The government intend to create a fund using FGTS resources to subsidize 2/3 of the monthly installments to homebuyer contracts’. The annual household income required will be limited to 5 minimum wages.

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, Unibanco follow 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

… is still shy if Compared to the Potential of The Market

Timeline – Recent Developments in the Mortgage Market

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 were entailed to FGTS. ³ Estimated number for 2006. From January to November period of 2006 lending volume totaled R$8,4bn.

Mortgage Granted (R$ million)

2

CAGR 03-06 (%): 53%

+73%

+54%

+34%

36%

33%

52%

60%

96%

54%

8

10%

90%

Mortgage Loans Gafisa

Pre-Sales - Financing provided by Gafisa versus Mortgage provided by Banks (%)

Decreasing Interest Rates and Development of the Mortgage Market…

…is already impacting

35%

65%

Mortgage Loans Gafisa

15%

85%

Mortgage Loans Gafisa

200620052004

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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.

Closing of the Acquisition of AlphaVille

100%112,853,538100%111,511,596Total

46.7%52,667,18147.2%52,667,181 Market Float

2.8%3,124,972 7.3%8,141,646 Treasury Stock

5.63%6,358,616--AlphaVille Shareholders

19.9%22,468,727 20.1%22,468,727 Vehicles Controlled by GP Investimentos

25.0%28,234,042 25.3%28,234,042 Vehicles Controlled by Equity International

(%)# Shares(%)# SharesShareholders

Position as of 01/08/2007 (Post-Acquisition)Position as of 12/31/2006

Gafisa’s Post-Acquisition Shareholder Structure

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Land Bank: High growth with relatively low risk

77%2,68320,77930,593,768AlphaVille Total

Gafisa

79%3,04712,9021,468,230Gafisa Total

AlphaVille

84%1,78113,70320,570,203Southeast

100%3242,2394,142.173Northeast

15%4023,2943,853,600South

100%1401,0911,635,676Mid-West

100%35453392,116North

77%1,2406,144817,290New Markets

77%5,73033,68132,061,998Gafisa + AlphaVille

% acquiredby swap

Future Sales (R$000)Potential UnitsUsable Area

(sq.m)

92%9183,938345,906Rio de Janeiro

305,034 2,820 888 53%Sao Paulo

¹ As of 09/30/06

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

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Underpinning our actions is a commitment to staying ahead with 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

Transparency, clear policies, disclosure and best practices in corporate governance

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Financial and Operational Performance

Duílio Calciolari – Chief Financial Officer

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2,8

30,512,8%

2,2%

4Q05 4Q06

EBITDA EBITDA Margin

5,6 13,9

5,8%4,3%

4Q05 4Q06

Net Income Net Margin

4Q06: Operating Highlights

36,0

67,4

28,3%

27,9%

4Q05 4Q06Gross Profit Gross Margin

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

EBITDA¹ (R$ mm) Net Income¹ (R$ mm)

128,9

238,3

4Q05 4Q06Net Revenues

84.8%84.8%

87.1%87.1%

979.2%979.2%

149.6%149.6%

¹ Under new accounting policy for selling expenses.

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20,0 27,0

75,25,6%

11,3%

4,2%

2004 2005 2006

Net Income Net Margin

2006: Operating Highlights

124,5 138,8

198,1

30,4%

29,9%29,8%

2004 2005 2006

Gross Profit Gross Margin

66,0 65,0

96,613,2%

14,6%

14,1%

2004 2005 2006

Adj. EBITDA EBITDA Margin

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

EBITDA¹ (R$ mm) Net Income¹ (R$ mm)

416,9 457,0

663,8

2004 2005 2006

45.3% 42.7%

64.2% 145.2%

¹ Under new accounting policy for selling expenses.

9.6%11.5%

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Revenues Reflect Previous Years Pre-Sales

-0,2%(1,003)Other

100%663,847100%995,101Total

7%45,2443%30,490Launched in 2002

21%134,7054%39,973Launched in 2003

30%197,43415%150,029Launched in 2004

26%167,64422%219,290Launched in 2005

17%109,93056%555,292Launched in 2006

% of RevenuesRevenues% of Pre-SalesPre-SalesDevelopments

78%

58%

2006 Pre-sales x Recognized Revenues for 2006 (R$000)

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Productivity Indicators: G&A and Selling Expenses

10,0%

4,2%

4Q05 4Q06Selling Expenses / Pre-Sales

G&A / Launches (R$ mm) – 4Q06

Selling Expenses / Pre Sales (R$ mm) – 4Q06

3,5%

6,3%

4Q05 4Q06G&A / Launches

-5.8pp-5.8pp

9,3%

5,2%

2005 2006Selling Expenses / Pre-Sales

G&A / Launches (R$ mm) - 2006

Selling Expenses / Pre Sales (R$ mm) - 2006

4,7% 5,3%

2005 2006G&A / Launches

-4.1pp-4.1pp

0.7pp0.7pp

2.8pp2.8pp

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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

(16,085)(4,841)(11,244)Selling Expenses

0.13

5.8%

13,932

12.8%

30,521

28.3%

67,356

238,287

4Q06 Results under New Policy

Effect of New Accounting Practice

4Q06 Pro-forma Results under Previous PolicyIncome Statement (R$000)

0.030.17EPS(R$)

(1.3p.p)7.6%Net Margin

(3,195)17,992Net Income

(2.0p.p)14.8%EBITDA Margin

(4,841)35,362EBITDA

0.0p.p.28.3%Gross Margin

-67,356Gross Profits

-238,287Net Revenues

(51,671)(11,886)(39,785)Selling Expenses

0.73

11.3%

75,233

14.6%

96,640

29.8%

198,051

663,847

2006 Results under New Policy

Effect of New Accounting Practice

2006 Pro-forma Results under Previous PolicyIncome Statement (R$000)

0.070.80EPS(R$)

(1.2p.p)12.5%Net Margin

(7,845)83,078Net Income

(1.8p.p)16.3%EBITDA Margin

(11,886)108,526EBITDA

0.0p.p.29.8%Gross Margin

-198,051Gross Profits

-663,847Net Revenues

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Backlog Margin(new method)

Backlog of Results(new method)

… with margins of 42.6%

Currently, Gafisa has approximately R$297 million of results to be recognized

4Q06(c)

3Q06(b)

Backlog of Revenues

Costs of Units Soldto be Recognized

Backlog of Results(previous method)

Backlog Margin(previous method)

679,8

(386,1)

293,7

43.2%

795,3

339,1

42.6%

(456,3)

4Q05 (a)

436,1

(266,9)

169,2

38.8%

(c)/(b)%

17%

25%

6%

(c)/(a)%

82%

81%

84%

38,8%

43,2% 42,6%

4T05 3T06 4T06

297,4

37.4%

- -

- -

Backlog: Change in Practice increases Visibility of Gafisa’s Financials

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

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Reconciliation of Backlog

Changes in Accounting of the Backlog

RecognizedNot recognizedRecognizedLand paid under revenue swap

RecognizedNot recognizedRecognizedDevelopment costs

RecognizedRecognizedRecognizedLand Cost (cash and swap payments)

RecognizedRecognizedRecognizedConstruction Cost

Backlog of Results (new policy)

Backlog of Results (old policy)

Income Statement

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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

4Q05

30265295

26629825

1,120

Net Debt/ Equity -10%4%

4Q06

…coupled with focus on working capital management

68%

54263317

134183270

587

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Gafisa x Consensus Estimates

0.520.74-EPS(R$)

1,005870815 - 835New Projects Launched (R$000)

995758-Pre-Sales

29

8.5%

54

16.5%

109

29.8%

198

663

2006 FY ResultsFirst Call Consensus

EstimatesGuidance

(47)-Net Debt

12.3%-Net Margin

77-Net Income

15.4%16-17%EBITDA Margin

97-EBITDA

30.7%-Gross Margin

192-Gross Profits

627-Net Revenues

Source: Thomson First Call(1) Previous Accounting Practice(2) Including IPO Expenses

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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.