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Second Quarter 2006Earnings Conference Call

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

2Q06 Earnings Conference CallSão Paulo August 8, 200612PM (Brasilia Time), 11AM (US-ET)Phone: +1 (973) 582-2734Code: 7617321Webcast: http://www.gafisa.com.br/ir

Second Quarter 2006 Launches

Belle Vue – Porto Alegre Paço das Águas – São Paulo Vistta Ibirapuera – São Paulo Beach Park Living - Fortaleza

Blue Land – Rio de Janeiro

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Overview of the 2Q06 and Recent Developments

Wilson Amaral – Chief Executive Officer

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Well Defined Strategy

Create the leading residential development company in Brazil based upon sales, profitability and quality

Strong revenue growth

Focus on high return

opportunities

Maintain debt policy of

40% - 60% net debt / equity

Continued geographic expansion

Our Strategy

Maintain land bank of

2-3 years of future sales

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Highlights

Launches increased 151% y-o-yLaunches increased to R$ 274.2 million in 2Q06 from R$ 109.1 million in 2Q05

Pre-Sales grew 168% y-o-yPre-sales increased to R$228.8 million in 2Q06 from R$85.3 million in 2Q05

Record-level Backlog Margin of 43.3% vs 33.1% in 2Q05Backlog of Revenues rose to R$560.7 million in 2Q06 from R$382.2 million in 2Q05

Revenues Increase 47.5% to R$ 152,5 million and Adjusted EPS up 600% to 0.21

S&P raised Gafisa’s credit ratings to BBB+ from BBBS&P have revised Gafisa’s outlook to positive

We strengthened our nationwide presence with three new partnerships in strategic markets, Alagoas, Rio Grande do Sul e Bahia.

Mortgage availability by commercial banks increased 104% in the end June of this year.

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Gafisa Reports 151% Growth in Launches and 168% in Pre-Sales

39

15412

58

35

16

2Q05 2Q06

New MarketsRio de JaneiroSão Paulo

44

134

11

46

54

94

2Q05 2Q06

New MarketsRio de JaneiroSao Paulo

Pre-Sales (R$ mm)

Pre-sales mix breakdown – 2Q06

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)

274

109 85

229

168%168%

22%

47%

22% HIG

MHI

MID

AEL

LOT

COM

151%151%

69%

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Growth Prospects of São Paulo Market

Core Market – Metropolitan Area of São Paulo

6% of Brazilian population and 10% of Brazilian GDP

São Paulo also presents one of the highest GDP per capita in Brazil

(72% higher than Brazilian average)

Over 4 million homes (approximately 8% of total homes in Brazil)

Opportunities in the metropolitan area:

The metropolitan area of Sao Paulo presents several opportunities

on the residential segment, specifically in the middle income

bracket

Despite the lower demand for luxury housing, we see some

opportunities for innovative and differentiated projects

As for the low income, we observe a huge unmet demand due to

lack of a regulatory framework

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Growth Prospects in Rio de Janeiro

Core Market - Rio de Janeiro State

3% of Brazilian population and 5% of Brazilian GDP

Rio de Janeiro also presents one of the highest GDP per capita in

Brazil (38% higher than Brazilian average)

Almost 2 million homes (approximately 4% of total homes in Brazil)

Launching of 2 billion per year

Opportunities:

Projects oriented to middle and high-income in Barra da Tijuca and

Jacarepaguá, fastest-growing region in the city

Looking for sites to develop units with prices around R$150,000

Diversifying around suburban areas of Rio de Janeiro State

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Well Defined Strategy

Develop local partnerships to leverage regional market knowledge,

legal skills, risk mitigation and entry barriers by reducing the time

for local approvals

Search new market regions that provide a sustainable growth to our

operations (growing income per capita, population growth, i.e.)

Multiple drivers of other markets mitigate growth risk

Business Owners Organizational Structure provide a totally focused

local management integrated and supported by Gafisa Corporate

Unit in SP

How Gafisa is differentiated in Developing Markets?

Strength of its brand and its track record in São Paulo and Rio de

Janeiro

Innovative project concepts

Differentiated project designs

Delivery of products on time and demand-aligned payment

conditions

Aggressive marketing strategy

Growth Prospects in New Markets

Recently signed partnerships

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Rapidly Expanding Mortgage Supply

Mortgage AvailabilityR$ billion

Sources: ABECIP, Central Bank. ¹ Total mortgage lending using savings deposits funding (channeled-lending requirement).

Santander offer 20-year fixed rate mortgage

Gafisa, HSBC and Santander offer pre-approved mortgages

CEF expects to channel R$10.3 billion to the housing sector using funds from FGTS/FAT

Bradesco plans to triple mortgage lending activity this year to nearly R$2 billion. Itaúexpects to lend R$1.4 billion in 2006

The term was up to 20 years from 15 years last year

ABECIP raises commercial banks lending estimates to R$10 billion from R$7 billion bringing total financing (including CEF) to more than R$20 billion

Central Bank may allow paycheck discount for mortgage lending

Central Bank may allow Commercial Bank to lend at fixed rate using funds from Savings accounts

2,2 3,04,8

10,0

2,04,1

4,5

6,0

9,1

10,3

2,9

5,3

2003 2004 2005 2006E 1H05 1H06

Mortgage by Commercial Banks¹ CEF Mortgage Loans

104%

83%

13%

109%

20,3

13,9

9,0

6,7

4,9

9,4

Recent Developments

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Land Bank representing 2-3 years of future sales

Potential Units by Income Segment

Land Bank

São Paulo

Rio deJaneiro

OtherCities

Total

%

Land Bank

846

604

638

2,089

Future Sales(R$ mm)

67%

90%

92%

84%

%acquiredby swapHigh Middle Lots &

Com

336

1,032

444

1,812

23%

2,118

1,080

2,115

5,313

68%

8

418

270

696

9%

AEL

-

-

-

-

0%

São Paulo

Rio de Janeiro

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Financial and Operational Performance

Duílio Calciolari – Chief Financial Officer

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2,8

21,1

14%

3%

2Q05 2Q06

Adj. Net Income Net Margin

Operating Highlights

33,2

39,5

32%26%

2Q05 2Q06Gross Profit Gross Margin

15,319,1

13%15%

2Q05 2Q06

Adj. EBITDA EBITDA Margin

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

Adj. EBITDA (R$ mm) Adj. Net Income (R$ mm)

103,4

152,5

2Q05 2Q06Net Revenues

48%48% 19%19%

25%25%

661%661%

13

15

4251

2027

9

34

12%12%

4%6%

4%

12%

8%

2001 2002 2003 2004 2005 1H05 1H06¹

Adj. Net Income Net Margin

Operating Highlights

67

114142

124 139

68 75

32%

26%28%

27%

32%34%

34%

2001 2002 2003 2004 2005 1H05 1H06

Gross Profit Gross Margin

26

64

8466 65

36 38

19% 19%

14% 13%

17%

14%13%

2001 2002 2003 2004 2005 1H05 1H06¹

Adj. EBITDA EBITDA Margin

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

EBITDA (R$ mm) Net Income (R$ mm)

197

334440 436

494

212285

2001 2002 2003 2004 2005 1H05 1H06

34%

9.6%

8%

265%

¹ Adjusted EBITDA ¹ Adjusted Net Income

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Despite the strong results in pre-sales, we’re still recognizing previous years revenues

Launched in 2006

Launched in 2005

Launched in 2004

Launched in 2003

Launched in 2002

Others

Developments Pre-Sales

143,699

48,347

16,557

13,832

6,436

na

Pre-sales x Recognized revenues (R$000)

% of Pre-Sales

63%

21%

7%

6%

3%

na

16,042

44,542

33,951

36,963

8,240

12,809

Revenues % of Revenues

11%

29%

22%

24%

5%

8%

152,547 100%Total

84%

59%

228,870 100%

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Strong Pre-sales performance will positively impact future earnings

… with margins record high margins of 43.3%

Currently, Gafisa has approximately R$243 million of results to be recognized (a 91% growth compared to 2Q05)…

2Q05(a)

1Q06(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

473,4

(278,9)

194,5

41.1%

383,2

126,9

33.1%

Note:1 Includes only land and construction costs

(256,3)

2Q06 (c)

560,7

(317,8)

242,8

43.3%

(c)/(b)%

18%

14%

25%

(c)/(a)%

46%

24%

91%

33,1%

41,1%43,3%

2Q05 1Q06 2Q06

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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) 2Q06

85191276

423(147)806

1,082

1Q06

86199285

481(196)788

1,073

…coupled with focus on working capital management

Net Debt/ Equity -18% -25%

2Q05

38102140

11921321

461

7%

In order to optimize its working capital, Gafisa has been demanding new product from banks:

Gafisa and Banco HSBC offer pre-approved mortgage in Santo Andre (Sao Paulo)

Gafisa and Banco Santander Banespa Launches No-paperwork mortgage in Rio de Janeiro

Gafisa and Banco Santander Banespa offer mortgage with discount on rent during construction period

More recently, Gafisa’s Board approved a R$100 million securitization of Receivables from clients

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Our Goals for 2006

► Launching growth guidance for 2006 of 25-28% in nominal currency terms

► EBITDA margin for FY06 of 16-17% (as % of Net Revenues)

Continued Growth Pace

Margin Expansion

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Gafisa: Premier Growth Opportunity

Professional Managementand

Established Organization

Industry Leadership and Strong Brand Recognition

GeographicDiversification

World-class Shareholdersand the Highest Standards of Corporate Governance

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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.