GOL Linhas Aéreas Inteligentes S.A.

Interim Condensed Consolidated Financial Statements
for the period ended March 31, 2010 and review
report of Independent Accountants

Deloitte Touche Tohmatsu Auditores Independentes

GOL LINHAS AÉREAS INTELIGENTES S.A.

Interim Condensed Consolidated Financial Statements

March 31, 2010 and 2009
(In thousands of Brazilian Reais)

SPECIAL REVIEW REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
Gol Linhas Aéreas Inteligentes S.A.
São Paulo - SP - Brazil

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Gol Linhas Aéreas Inteligentes S.A.
São Paulo - SP - Brazil

1.         We have reviewed the accompanying condensed consolidated balance sheet of Gol Linhas Aéreas Inteligentes S.A. (the “Company”) and its subsidiaries as of March 31, 2010, and the related condensed consolidated statements of income, changes in shareholders’ equity and cash flows for the three-month period then ended, and other explanatory notes. Management is responsible for the preparation and fair presentation of the interim financial information in accordance with International Financial Reporting Standards - IFRS. Our responsibility is to express a conclusion on this interim financial information based on our review.

2.         Our review was conducted in accordance with specific standards established by the Brazilian Institute of Independent Auditors (IBRACON), together with the Brazilian Federal Accounting Council (CFC), and consisted, principally, of: (a) inquiries of and discussions with certain officials of the Company and its subsidiaries who have responsibility for accounting, financial and operating matters about the criteria adopted in the preparation of the interim financial statements; and (b) review of the information and subsequent events that have, or might have had, material effects on the financial position and results of operations of the Company and its subsidiaries.

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The movements in comprehensive income (loss) for the period ended on March 31, 2010 and 2009 are presented below:

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Cash flows from operating activities

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1. Corporate information

Gol Linhas Aéreas Inteligentes S.A. (“Company” or “GLAI”) is a publicly-listed company incorporated in accordance with Brazilian Corporate laws, organized on March, 12, 2004. The objective of the Company is through its operating wholly-owned subsidiary VRG Linhas Aéreas S.A. (“VRG”), to exploit (i) regular and non-regular air transportation services of passengers, cargo and mail bags, domestically or internationally, according to the concessions granted by the competent authorities; (ii) complementary activities of chartering air transportation of passengers.

GLAI is direct parent company of foreign wholly-owned subsidiaries GAC Inc. ("GAC"), Gol Finance ("Finance") and indirect of SKY Finance ("SKY") and SKY Finance II ("SKY II").

GAC was constituted on March 23, 2006 according to the bylaws of the Cayman Islands and its activity is related to the aircraft acquisition from its only shareholder GLAI, which provides a finance support for its operational activities. GAC is the parent company of SKY and SKY II, constituted on August 28, 2007 and November 30, 2009, respectively, both located in the Cayman Islands which activities are related to funds rising to finance aircraft acquisition.

Finance was constituted on March 16, 2006, according to the bylaws of the Cayman Islands and its activities are related to funds raising to finance aircraft acquisition and financing.

On April 9, 2007, the Company acquired VRG, a low-cost and low-fare airline company which operates domestic and international flights with GOL and VARIG brands offering regular and non-regular air transportation services to the main destinations in Brazil, South America and the Caribbean.

The Company’s shares are traded on the New York Stock Exchange (NYSE) and on the São Paulo Stock Exchange (BM&FBOVESPA). The Company has entered into an Agreement for Adoption of Level 2 Differentiated Corporate Governance Practices with the BM&F BOVESPA, integrating indices of Shares with Differentiated Corporate Governance – IGC and Shares with Differentiated Tag Along – ITAG, created to identify companies committed to adopting differentiated corporate governance practices.

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2. Summary of significant accounting policies

The authorization for issue of this interim condensed consolidated financial statements occurred in the Board of Directors’ meeting on May 05, 2010.

2.1 Basis of preparation

The interim condensed consolidated financial statements were prepared of the period ended on March 31, 2010 and are in accordance with the International Accounting Standards (IAS) n.34, related of condensed consolidated interim financial statements

IAS 34 requires the use of certain accounting estimative by the Management. The interim condensed consolidated financial statements were prepared based in historical cost, except for certain finance assets and liabilities which are measured at fair value.

This interim condensed consolidated financial statements do not includes all the information and disclosures required in annual consolidated financial statements related to the year ended December 31,2009, filed in March 11,2010 which was prepared in accordance of International, Financial Reporting Standards – IFRS.

2.2 Transition to IFRS

The Company has adopted IFRS for the first time in its consolidated interim financial statements for the year ended December 31, 2008, which include comparative financial statements for December 31, 2007, for filling of 20-F form on SEC (Security Exchange Commission).

As allowed by SEC and CVM and aiming to attend the information needs of the market, Company disclose its financial statements according to International Financial Report Standards

– IFRS , as issued by “International Accounting Standards Board”-IASB as in Brazilian Corporate Law, simultaneously.

The Brazilian Corporate Law is being answered by the Company thru the disclosure of its interim condensed consolidated financial statements in accordance with IFRS, instead of the information prepared according to Brazilian Generally Accepted Accounting Principles (BRGAAP), until December 31, 2009, as requested by Brazilian Security Exchange Commission (CVM) thru its instruction CVM n.457/07.

The resolution nº 457/07 requires the reconciliation of the equity and the net profit of financial statements of controlling company prepared in accordance with BRGAAP.

In March 31, 2010, in order to attend the Brazilian Corporate Law, Company anticipated the adoption of all the accounting pronunciations under obligation of adoption until December 31, 2010, which converges with international accounting standards. The adjustments were made retrospectively as requested by the accounting standards.

Therefore, there are no differences between the controlling company financial statements according with BRGAAP and the consolidated financial statements prepared according the IFRS.

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3. Seasonality

The Company has expectations about its revenues and the profitability of your flights reach the higher levels during the vacation period on summer and winter, in January and July respectively, and at the last week of December, during the Christmas and New Years Eve Party. In the Carnival week, there is a decrease of load factoring ratio. Because of the big portion of fixed costs, this seasonality may cause variation in the operation revenues during the quarters of the year.

4. Cash and cash equivalents

Cash and cash equivalents are composed as follows:

Since the first quarter of 2010, Company has privileged the hold of its resources on opening investment funds, according to a formal policy. Company maintains cash and cash equivalents with a number of financial institutions, does not limit its exposure to one institution in particular, and The Company holds units in conservative-profile fixed-income investment funds. The funds assets comprise government bonds and first-line private securities with low risk ratings as per the guidelines set by the Company.

The composition of the cash equivalents is as follows:

These investments have high liquidity, are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

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The restricted cash represents guarantee margin deposits related to hedge operations and BNDES and BDMG loans.

The guarantee margin deposits related to hedge exchange rate corresponds to R$ 19,211 ( R$18,820 in December 31,2009), recorded in current assets, and are deposited with the BM&FBOVESPA for future U.S. Dollars operations and, in the case of derivative operations with oil and interest, deposited with banks with which the contracts were made. These deposits are primarily invested in government securities bearing interest based on SELIC or other prime rate.

The restricted cash linked to BNDES and BDMG loans are invested in DI securities, bearing interest rate of 98.2% of CDI, and correspond to the requirement of margin deposits from counterparties. On March 31, 2010, the balance recorded in non-current assets, corresponds to R$ 32,514 R$7,264 on December 31, 2009).

6. Short terms investments

The financial assets classified as available for sale are primarily comprised of exclusive funds, debt securities (FIDC) and foreign bank deposits (time deposits). These financial assets have an average maturity of 357 days bearing interest at an average rate of 109.4% per year of CDI as of March 31, 2010.

The cash flow hedge consists of future derivative financial instruments and purchase options of U.S. Dollars recorded in equity or compensation accounts in operating income, aiming to manage the Company exposure to market and exchange rate risks, as detailed in Note 26.

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9. Deferred and recoverable taxes -- Continued

The Company and its subsidiary have IRPJ tax losses and negative basis of CSLL carry forwards in calculating taxable income that are off settable against up to 30% of the taxable income accrued each year, with no expiration date, in the following amounts:

On March 31, 2010, the tax credits resulting from accumulated IRPJ tax losses, negative basis of CSLL and temporary differences were recorded based on expectations for future taxable income of the Company and its subsidiaries, within the legal limits.

The reconciliation of the IRPJ and CSLL, calculated according to the combined statutory rate, and the amounts recorded in the statement of operations, is shown as follows:

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10. Prepaid Expenses

11. Deposits

Maintenance deposits

Under certain existing lease agreements, maintenance deposits are paid to aircraft and engine lessors that are to be applied to future maintenances deposits. The maintenance deposits paid under lease agreement transfer neither the obligation to maintain the aircraft nor the cost risk associated with the maintenance activities to the aircraft lessor. The Company maintains the right to select any third-party maintenance provider or to perform such services in-house.

These deposits are calculated based on a performance measure, such as flight hours or cycles, and are available for reimbursement to the Company upon the completion of the maintenance of the lease aircraft. Therefore, these amounts are recorded as a deposit on the balance sheet and maintenance cost is recognized when the underlying maintenance is performed, in accordance with the Company’s maintenance policy. Certain lease agreements provide that the excess deposits are not refundable to the Company. Such excess could occur if the amounts ultimately expended for the maintenance events were less than the amounts deposited. Any excess amounts held by lessor or retained by the lessor upon the expiration of the lease, which are not expected to be significant, would be recognized as additional aircraft rental expense.

Based on the foregoing analysis, management believes that the amounts reflected on the consolidated balance sheet are probable of recovery. There has been no impairment of Company’s maintenance deposits, which presented on March 31, 2010 the amount of R$ 7,307 and R$ 481,694 (R$50,429 and R$472,244 at December 31, 2009).

Additionally, the Company has reached agreements with certain lessors to replace the deposits with letters of credit and amend the lease terms to enable the Company to utilize the deposited funds to settle other amounts owed under the lease. Many of the new aircraft leases do not require maintenance deposits.

Deposits in guarantee for leasing contracts

As required by the lease agreements, the Company made deposits in guarantee for aircraft leasing companies, which are fully redeemable at the maturity dates of the lease contracts. On March 31, 2010, the balance of these deposits classified in non-current asset is R$ 266,227 (R$251,716 on December31, 2009).

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Judicial deposits

The judicial deposits represent, primarily, guarantees for contingent liabilities relating to labor, civil and tax claims until the resolution of the related litigations. The balance of judicial deposits recorded on March 31, 2010, of R$ 1,809 (R$26,785 at December 31, 2009 and R$19,794 on January 01st, 2009) with remote possibility of gain are presented deducting the amount of provision for contingencies, according with CVM Deliberation 489/05.

The balance of judicial deposits on March 31, 2010, registered on current assets totalize R$ 88,26 (R$81,80 at December 31, 2009).

12. Transactions with related parties

Graphic, consultancy and transportation services

VRG maintains an operating agreement with related party Breda Transportes e Serviços S.A., for passengers, baggage and employees transportation between airports, with a contractual term expiring on June 02, 2010, with a possibility to be renewed every 12 months for the same period by signing an additive instrument firmed by the parties with annual price restatement based on the General Market Price Index (IGP-M) variation.

VRG also maintains operating agreements with related parties Expresso União Ltda., Serviços Gráficos Ltda. and HK Consultoria e Participações, for passengers, baggage and employees transportation between airports, graphic services and consultancy, respectively, with a contractual maturity of 12 months without incidence of financial charges.

During the period ended March 31, 2010, VRG recognized a total expense relating to such services amounting R$ 2,776 (R$ 2,277 three month period ending at March 31, 2009). The entities mentioned above belong to the same economic group and all controlled by Comporte Participações S.A.

Operating lease

VRG is the tenant of the property located at Rua Tamoios, 246, in São Paulo – SP, owned by a related company Patrimony Administradora de Bens controlled by Comporte Participações S.A. whose lease agreement expires on April 05, 2010 and has an annual price restatement clause based on the General Market Price Index (IGP-M) variation. During the period ended March 31, 2010, VRG recognized a total expense relating to such rental amounting R$107 (R$68 for three month period ending at March 31,2009).

Unidas Rent a Car

In May, 2009, VRG entered into a commercial agreement with Unidas Rent a Car, a Brazilian car rental company, which gives Unidas' customers a 50% discount on the daily car rental charges when these customers purchase their tickets through the Company’s website. The Company’s chairman, Álvaro de Souza, is also the chairman of Unidas Rent a Car.

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Accounts payable – current liability

The accounts payable to related parties, in the amount of R$1,552 on March 31, 2010 (R$688 on December 31, 2009) are included in the suppliers’ balances and are mainly related to payment for services performed by Breda Transportes e Serviços S.A.

Key management personnel

In March 31,2010, Company was not offering after-job benefits, and there are not benefits for breach of job agreement or other long term benefits for Administration or other employees.

Profit Sharing Plan

The Company maintains a profit sharing plan and stock option plans for its employees. The employee profit sharing plan is linked to the economic and financial results measured based on the Company’s performance indicators that measure the achievements by the Company, its business units and individual performance goals. At March 31, 2010, no provision was made, due to the definition of goals for the Company to the 2010 year, which will occur only at the second semester of 2010.

Share-based payments

The Company’s Board of Directors within the scope of its functions and in conformity with the Company’s Stock Option Plan, approved a stock option plan for key senior executive officers and employees. Under this plan the stock options granted to employees cannot exceed 5% of total outstanding preferred shares. The options vest at a rate of 1/5 per year, and can be exercised up to 10 years after the grant date. The Board of Directors meetings date and the assumptions utilized to estimate the fair value of the stock purchase options using the Black-Scholes option pricing model are demonstrated below:

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Changes in the stock options as of March 31, 2010 are shown as follows:

The interval of the exercise prices and the average maturity of the outstanding options, as well as the intervals of the exercise prices for the exercisable options as of March 31, 2010, are summarized below:

For the period of three months ended in March 31,2010, the Company registered an expense with stock options in the amount of R$3,621 (R$1,444 for the period of three months ended in March 31,2009), being the contra entered in Consolidated Statements of Operations as labor expense.

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13. Earnings per share

Although, there are differences in voting rights and liquidation preferences, the Company’s preferred shares are not entitled to receive any fixed dividends. Rather, the preferred shareholders have identical rights to earnings and are entitled to receive dividends per share in the same amount of the dividends per share paid to holders of the common shares. Therefore, the Company understands that, substantially, there is no difference between preferred shares and common shares and the basic earnings (loss) per share calculation should be the same way for both shares.

Consequently, basic earnings per share are computed by dividing income by the weighted average number of all classes of shares outstanding during the period. The diluted earnings per share are computed including dilutive potential shares from the executive employee stock options using the treasury-stock method when the effect is dilutive. The effect anti-dilutive potential shares are ignored in calculating dilutive earnings per share.

At March 31, 2010, diluted earnings per share, takes into account potential future dilutive instruments related to the 2009 year stock option plan which had an exercise price of R$10.52 and R$20.65, respectively below the average market price during the period (“in-the-money”). Consequently, there is dilution related to the stock options amounting R$2,643.

As of March 31, 2010, the totals of 272.641 stock options described in Note 12 are non-dilutive (361,901 options at December 31,2009 and 364,204 stock options as of January 01st, 2009).

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Changes in the property, plant and equipment balances are as follows:

During the first quarter of 2010, Company revised the engine maintenance useful life under financial leases from 25 to 5 years based on the average estimated maintenance period of this component. The change was applied prospectively since 01st January, 2010 and the depreciation for the three month period ended March 31, 2010 increased about R$15,030.

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16. Financial assets and liabilities

(*) Refers to contractual annual ratio composed by TJLP
+ 5,5 % . The effect ratio will be calculated only when the payments starts.

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16. Financial assets and liabilities – Continued

The table below presents the Company’s long term contractual payments required on itsfinancial assets and liabilities for the next 12 months from April 1st to March 31of subsequent year after March 31,2010 :

Working capital

On March 31, 2010, the Company had R$185,000 (R$160,000 at December 31,2009) of working capital lines with three financial institutions. The weighted average annual interest rate for these loans in local currency at March 31, 2010 was 12.83% (10.89% at December 2009). The loans are guaranteed by the Company and certain accounts receivable from travel agencies, as applicable.

In the period ended on March 31,2010, the Company prolongs its lines of working capital lines until 180 days.

BNDES loan - intermediated by Safra Bank

In March 2010, the Company through its wholly-owned subsidiary VRG, closed with Banco Safra a secured floating rate borrowing agreement in the amount of R$44,436 with the BNDES resources thru its indirect program “Finame Moderniza BK”. The resources will be designated to make an modernization maintenance of turbines in national specialized maintenance centers. The borrowing has a term of four years with an annual interest rate of TJLP plus 5.50% . The principal is amortized in monthly payments with a grace period of 6 months. The borrowing has as guarantee, some accounts receivable of credit cards administration’ companies.

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16. Financial assets and liabilities – Continued

BDMG loan

In February 29, 2010, the Company through its wholly-owned subsidiary VRG, closed a secured floating rate loan in the amount of R$ 20,000 with the Development Bank of Minas Gerais State (BDMG). This credit line will be used to finance a portion of the investments and operating expenses of the Company Aircraft Maintenance Center at the International Airport of Confins, in the state of Minas Gerais and the construction of the brake maintenance center located in Tancredo Neves International Airport, in Lagoa Santa, Minas Gerais State. The loan has a term of eight years with an annual interest rate of IPCA (National Price Index to Consumer) plus 6%. The principal is amortized in monthly payments during the period of 60 months and has as guarantee CDB (banks deposit certificates) with a minimum price of R$25,000.

Perpetual and senior notes

The fair values of the senior notes and perpetual bonds as of March 31, 2010, reflecting the frequent readjustment of the market quotations for these instruments, based on the exchange rate in effect on the balance sheet closing date, are as follows:

Finance leases

Future minimum lease payments non-cancelable under finance leases are denominated in US dollars with initial or remaining terms in excess of one year at March 31, 2010 and 2009 and were as follows:

The discount rate used to calculate the present value of the minimum rental payments is 5.96% on March 31, 2010 (6.64% on December 31, 2009). There is no significant difference between the present value of the minimum rental payments and the fair value of these financial liabilities.

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16. Financial assets and liabilities – Continued

The Company has extended the maturity of the financing for some of its leased aircraft to 15 years by using the SOAR structure, which is a mechanism for lengthening the period for amortizing and paying off the financing and permits calculated draw downs to be made for settlement by payment in full at the end of the lease agreement. As of March 31, 2010 the value of the drawdowns made for payment in full upon termination of the lease agreement is R$28,737 (R$24,614 as of December 31, 2009).

Restrictive covenants

The Company holds agreements that require compliance with certain financial and performance indicators (covenants) based on Interim condensed consolidated financial statements such as: (1) Net Debt/EBITDAR, (2) Current Assets/Current Liabilities, (3) EBITDA/Debt Service, (4) Short-term Debt/EBITDA, (5) Current Ratio and (6) Debt Coverage Index (DCI).

In March 31,2010, the calculation of covenants ratio resulted in 4,9x of the net debt/EBTIDA, a higher level than required by IFC agreement. However, the Management understands that the Company reaches the obligation required by the contract, when establish in its clauses that a default will occur only effectively after 30 days of a formal notification from the financial institution. This period is denominated as “Cure period”. 

By conservative matters, Administration appropriated the long term balance of this loan for the short term, in order to attend the established standard IAS 37 – Provisions, Contingent Liabilities and Contingent Assets.

The Company reached the minimum parameters established with Natixis for the ratios required at the period ended at March 31, 2010.

17. Advance Ticket Sales

At March 31, 2010, the balance of advance ticket sales of R$ 383,936 (R$561,347 at December 31, 2009) is represented by 1.787.069 tickets sold and not yet used with 85 days of average term of use (96 days in December 31, 2009).

18. Smiles deferred revenue

The obligations assumed under the frequent flyer program, (“Smiles Program”) were valued at the VRG’s acquisition date at estimated fair value. The sale of passenger tickets by the Company includes air transportation and mileage credits. The Company’s sales of miles to business partners include marketing and mileage credits. The fair value of the mileage credit component is determined based (i) on weighted-average price of passenger tickets sold by VRG parted for mileage amount necessary to issue a ticket when VRG offers mileage for flying and, (ii) on weighted-average price at which the Company sells mileage credits to business partners.

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The Company uses the residual method for revenue recognition of mileage credits. Under the residual method, the portion of revenue from the sale mileage credits and the mileage component of passenger ticket sales that approximates fair value is deferred and recognized as revenue when miles are redeemed and services are provided based on the weighted-average price of all miles that have been deferred. The portion of the revenue received in excess of the fair value of mileage credits sold (the “marketing premium”) is recognized in income when the related marketing services are provided and classified as cargo and other revenue.

The associated value for mileage credits which the Company estimates are not likely to be redeemed (“breakage”) is recognized as revenue. The Company calculates its breakage estimate based on historical redemption patterns.

At March 31, 2010, the Smiles deferred revenue balances are R$78,045 and R$227,631 classified in current and non-current liabilities, respectively (R$92,541 and R$221,414 at December 31, 2009 respectively).

19. Advances from customers

On June 30, 2009, the Company, through its subsidiary VRG concluded a partnership with Brazilian financial instutitions: Banco Bradesco S.A. and Banco do Brasil S.A. through an Operating Agreement for the issuance and management of credit cards in a co-branded format. Under the agreement, the Company initially received an amount of R$252,686 related to the purchase of miles from SMILES frequent flyer program, for access and use of the customer database of the program. Until March 31, 2010 the Company received as an advance of purchase of miles from the SMILES program, the amount of R$178,800 from the two financial institutions described above. The Company's expects to receive the full amount within 5 years from the date of the agreement, and also the remuneration conditioned by the right to access and use the registration database, share of the revenue from the credit cards issued by the financial institutions and participation in revenues. As of March 31, 2010, the balance recorded as advances from customers in current liabilities, relating to this agreement corresponds to R$69,428 and R$52,610 in non-current liabilities.

On November 13, 2009, the Company through its wholly-owned subsidiary VRG signed a commercial agreement with Banco Santander (Brasil) S/A with a term of 13 months in the amount of R$34,500 for the purchase of mileage credit, not exclusive, to use in their rewards programs. As of March 31, 2010, the balance recorded as advances from customers in current liabilities related to this agreement is R$29,614.

On July 27, 2009, the Company through its wholly-owned subsidiary VRG signed a commercial agreement with Travel Agency CVC Tur. (“CVC”) with a term of 6 months in the amount of R$50,000 allowing the sale of tickets to their customers of flights operated by VRG. In January 27, 2010 the agreement was amended by the term of 6 months in the amount of R$5,000 to be utilized since March 05,2010.

As of March 31, 2010, the balance recorded as advances from customers in current liabilities related to this agreement is R$2,925.

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21. Provisions

Insurance provision

Management takes out insurance coverage in amounts it considers necessary to cover any claims, in view of the nature the Company’s assets and the risks inherent in its operating activities, with due heed being paid to the limits set in the lease agreements, in compliance with provisions of the Law nº. 10.744/03. Includes provisions related to the accident of an aircraft during Gol Airlines Flight 1907 on September 29, 2006 and amounts payable for aircraft insurance.

The payments for the hull to the lessor were made by the insurance company. Management does not expect any liabilities arising from the accident involving Flight 1907 to have a material adverse effect on the financial position or results of its operations.

Return of aircraft

The aircraft return costs includes provisions for the maintenance to meet the contractual return conditions on engines held under operating leases.

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Onerous contract

As of March 31, 2010, the Company recorded a provision of R$10,567 being a total of R$3,923 classified in current liability and R$6,644 classified in non-current liability (R$10.330 in December 31,2009 ) for onerous operating lease contracts related to two non-operating Boeing 767-300 aircrafts. The provision represents the present value of the future lease payments that the Company is presently obligated to make under non-cancelable onerous operating lease contracts, less revenue expected to be earned on the lease, including estimated future sub-lease revenue, where applicable. The estimate may vary as a result of changes in the utilization of the leased premises and sub-lease arrangements where applicable. The term of the leases range from 2 to 4 years.

Litigation

At March 31, 2010, the Company and its subsidiaries are parties in judicial lawsuits and administrative proceedings, totaling 17,029 according to the following distribution: (i) 11,927 civil claims, being 1,151 administrative proceedings and (ii) 5,102 labor claims, being 82 administrative proceedings.

As a result of the Company’s normal course of operations, there are respectively, 11.927 civil claims, 1,157 labor claims and 1,233 administrative proceedings. The remainder is related to requests for recognition of succession related by obligations from the former Varig S.A. Provisions are recognized for probable losses and are reviewed based on the development of suits and the historical record of loss of civil and labor suits, based on the best current estimate.

The estimated obligations resulting from the civil and labor suits are shown as follows:

There is other processes evaluated by Management and by lawyers classified as of possible risk, in March 31,2010 in the amount of R$ 54,823 for civil claims and R$ 1,731 for labor claims (R$54,823 and R$1,731 December 31,2009) for which there is not provision recorded. The amounts remain the same, because there was no court definition related to this claims.

The Company is part of 4 labor claims in France arising from Varig S.A. debts. As of March 31, 2010, the company obtains a first judicial decision sentence, favorable to the Company. The amount related in these discussions, not provisioned, is around of R$7,227 (corresponding to € 2.1 million) and is updated until December 2009.

The Company is challenging in court the VAT (ICMS) levies on aircraft and engines imported under aircraft leases without purchase options in transactions carried out with lessors headquartered in foreign countries. The Company’s management understands that these transactions represent simple leases in view of the contractual obligation to return the assets that are the subject of the contract. Given that there is no circulation of goods, a relevant tax triggering event is not characterized.

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21. Provisions – Continued

Litigation -- Continued

The estimated aggregate value of lawsuits filed refers to non chargeable taxation of ICMS on import operation is R$211,256 at March 31, 2010 (R$210,164 at December 31, 2009), monetarily adjusted and not including charges in arrears. Management, based on the assessment of the cases by its legal advisors and supported by case laws favorable to taxpayers from the High Court (STJ) and the Supreme Federal Court (STF) handed down in the second quarter of 2007, understands that it is unlikely for the Company to have losses on these lawsuits. Therefore, there no records of provision about this judicial process.

Although the results of these proceedings cannot be anticipated, the final judgment of these actions will not have a material effect on the Company’s financial position, operating income and cash flow, according to management’s opinion supported by its outside legal advisors.

22. Shareholders’ equity

As of March 31, 2010, the capital of the Company is comprised of 265,339,700 fully paid-up shares being 133,199,658 common shares and 132,140,042 preferred shares. The Investment Fund Asas is the Company’s controlling fund which is equally controlled by Constantino de Oliveira Júnior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino.

The following table sets forth the ownership and the percentage of the Company’s voting (common) and non-voting (preferred) shares as of March 31, 2010 and 2009:

The authorized capital in March 31,2010 is R$4 billion. Each common share entitles its holder to one vote at the Company’s shareholder meetings. The outstanding preferred shares have no class designation, are not convertible into any other security and are non-voting, except under the limited circumstances provided under Brazilian law. Upon liquidation, holders of preferred shares are entitled to receive distributions prior to the holders of common shares. In addition, the São Paulo Stock Exchange – Bovespa Level 2 of Differentiated Corporate Governance Practices provides for the granting of voting rights to holders of preferred shares in connection with certain matters, including corporate restructurings, mergers and related party transactions.

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22. Shareholders’ equity -- Continued

As of March 11, 2010, the Board of Directors authorized the capital increase of R$185,839 (correspondent at the same amount of dividends of year ended at December 31, 2009) conditioned to the private issue of 7,622,584 shares, being 3,833,077 common and 3,789,507 preferred, all nominative, scriptures, with no nominal value. The price of issued common and preferred shares was fixed at R$24.38 by common and preferred share, fixed based on quotation of company issued shares at Bolsa de Valores, Mercadorias e Futuros (BMF Bovespa) on the date of March 11,2010, after the closing of business.

The shares quotation of Gol Linhas Aéreas Inteligentes S.A. in March 31,2010 on BOVESPA was R$22.30 and U$12.39 at New York Stock Excange – NYSE. The equity value per share at March 31,2010 is R$10.05 (R$10.71 in December 31,2009 and R$6.45 in January 01st,2009).

Treasury shares

The Board of Directors at the meeting held on December 9, 2009, approved the cancellation of 1,119,775 preferred shares in Treasury shares, at the amount of R$ 29,293 recorded against the capital reserves account. As of 31 March 2010, the Company has 454,425 held as Treasury shares, amounting R$11,887 with a market value of R$ 10,134 (R$11,887 in shares with market value of R$11,851 in December31,2009 and R$ 41,180 in shares with market value of R$15,600 in January 1^st,2009).

Deferred Remuneration

For the period ended on March 31,2010 the Company recorded an expense with share base remuneration in the amount of R$3,621 (R$1,444 for the period ended in March 31,2009) with counterparties in Consolidated Statements of Operation as labor cost, as described in Note n.12.

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23. Sales Revenue

a) The sales net revenue for the period is as follows:

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25. Commitments

The Company has a purchase contract with Boeing for acquisition of aircraft, and at March 31, 2010, the Company has 86 firm orders and 40 purchase options granted with non-onerous term. Up to one year, the Company made pre-delivery deposits for 13 aircraft, which have a schedule for delivery until August 2012 and the other with a term exceeding 18 months. These advances for aircraft acquisition were being financed by financings denominated Pre-delivery Facility I and II, with maturities in February 2010 and December 2010 respectively, as described in Note 16. The firm orders have an approximate value of R$10,783,408 (US$6 billion) based on the aircraft list price (which excludes contractual manufacturer discounts), including estimated amounts for contractual price escalations and pre-delivery deposits. Aircraft purchase commitments financed with long-term financing guaranteed by the U.S. Ex-Im Bank corresponds to approximately 85% of the total acquisition cost. Other agents finance the acquisition at or above this percentage reaching 100%.

The Company has been making payments for pre-delivery deposits of aircraft using combined resources of: Company’s own capital, borrowings, cash generated by operations, short and medium-term working capital and financings to the supplier.

The following table provides a summary of the Company’s principal payments under aircraft purchase commitments for the next years:

The Company leases its entire fleet under a combination of operating and finance leases. At March 31, 2010, the total fleet was 126 aircraft, of which 91 were operating leases and 35 were recorded as finance leases. The Company’s has 29 finance leases aircraft with bargain purchase options. During the period ended on March 31, 2010, two aircraft under finance leases were delivered and three 737-300 and two 737-800 aircraft were returned. At March 31, 2010, there were five 737-300 aircraft which were in the process of being returned.

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25. Commitments -- Continued

a) Operating leases

The Company leases aircraft in operation, airport terminal space, other airport facilities, office space and other equipment with initial lease term expiration dates ranging from 2010 to 2021. Future minimum lease payments under non-cancelable operating leases are denominated in US dollars. Such leases with initial or remaining terms in excess of one year at March 31, 2010 and 2009 were as follows:

b) Sale-leaseback transactions

During 2006 the Company had gains on the sale-leaseback transactions for eight Boeing 737-800 Next Generation aircraft. The net deferred gain on the sale-leaseback transactions in the amount of R$58,347 is being deferred in proportion to the monthly payments of their respective operating leases over the contractual term of 124 months. On March 31, 2010, the balances classified as other current and non-current liabilities are R$7,172 and R$27,860 respectively (R$7,172 and R$29,653 at December 31, 2009). For the years ended March 31, 2010 and 2009, the total gains recognized in profit or loss were R$8,910.

During 2007, 2008 and 2009, the Company had losses on the sale-leaseback transactions for nine Boeing 737-800 Next Generation aircraft. The net deferred losses on the sale-leaseback transactions in the amount of R$86,715 is being deferred in proportion to the monthly payments of their respective operating leases over the contractual term of 120 months. On March 31, 2010, the balances classified as current and non-current prepaid expenses are R$9,373 e R$61,230, respectively (R$9,373 e R$63,574 at December 31, 2009). For the period ended March 31, 2010 and 20099, the total losses recognized in profit or loss were R$2,343.

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26. Financial instruments and concentration of risk

The Company and its subsidiaries are exposed to market risks as a result of its operations and consider as more relevant risks the effects of changes in the price of fuel, exchange rate, interest rate risks and credit risks.

The goal of the risk management program of the Company aims to protect against sudden increase of the costs linked to market prices that could affect the Company’s competitiveness in a given period. These risks are managed through use of financial instruments for protection available in the financial market such as swaps, future contracts, exchange options and fuel options. The operations that involve fuel and interest are contracted with international banks classified as low risk (average rating of A+ according to Moody’s and Fitch) and the operations that involve foreign currency are negotiated on BM&FBOVESPA. The use of these instruments is oriented by a formal policy of risk management which is under the guidance of its executive officers, Risk Policies Committee and Board of Directors. The Company’s Risk Management Policy establishes controls and limits, as well as other tracking techniques, chiefly mathematical models adopted to constantly monitor exposures, in addition to expressly prohibiting the carrying out of speculative operations involving derivative instruments. The derivative financial instruments are only used for hedge purposes. Additionally, the Company does not conduct any type of operation involving leverage.

Historically, the Company does not contract protection for all of its exposure to fuel consumption, to foreign exchange and interest exposure and is, therefore, subject to the portion of the risks arising from market fluctuations. The portion of the exposure being protected is determined quarterly in line with the strategies determined in the Risk Policies Committee and are monitored periodically, and can reach the totality of the exposure.

The Financial Risk Committee recommends for approval of the Board of Directors long term programs of contracting derivative financial instruments to protect the Company against possible changes in the market price relating to risk of fuel, exchange rates and interest rates during the period of 12 months on a rolling basis allowing, such to be extended if some predetermined prices are reached.

The Company adopts for a large portion of its derivatives financial instruments the hedge accounting method according to the parameters described in the IAS 39. All derivative financial instruments contracted with the purpose of protection are formally identified through documentation on the acquisition to allow it to fit with the requirements needed to use the hedge accounting method. The Company classified the derivative financial instruments used for protection as “cash-flow hedge” and recognizes, based on the criteria for hedge accounting described in CPC14, the changes in fair value of effective derivatives financial instruments under shareholders’ equity until the object of the hedge achieves its maturity.

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26. Financial instruments and concentration of risk -- Continued

The IAS 39 also requires proof of the effectiveness, prospective and retrospective, of the derivative financial instruments to contain the changes of the expenses protected. The Company estimates the effectiveness based on statistical correlation methods or by the proportion of the variation of gains and losses in fair value of derivatives instruments used as hedge and the variation of the costs of the protected object. The results of effective hedges are booked as a reduction or increase in the operational cost (with exception of interest rate hedge results), and the results of hedges that are not effective are recognized as a financial income or expense of the period. Ineffective hedges occur when the variation in the value of the derivatives is not between 80% and 125% of the variation in the price of the object of hedge. When the protected object is consumed and the respective derivative financial instrument is settled, the unrealized gains or losses booked in shareholders’ equity are recognized in the income statement. In the case of the derivative financial instruments designated for hedging interest rates, the values of gains or losses with liquidation of these instruments are recorded in income or expense.

The Company also contracts derivative financial instruments which are not designated as hedge, in other words, such do not use the criteria for hedge accounting. These contracts are derivatives of interest swap-lock that are used to protect the exposure denominated in Libor rates on operation of aircraft leases. For these derivatives instruments, the change in fair value is recognized directly as financial income or expense of the period.

The market fair value of swaps is estimated based on the method of discounted cash-flow and the fair value of options is estimated using the Black & Scholes method (adapted to commodities options in the case of oil).

The derivative financial instruments were recorded in the following accounts in the balance sheet:

The relevant information relating to the main risks that affect the Company operations are detailed as follows:

a) Fuel price risk

One of the main market risks that the airlines companies face is the price of aircraft fuel whose variations are tied to fluctuations in the price of oil and the fuel represent a significant portion of airlines companies’ costs. Because of this exposure, the Company manages this risk by using strategies of contracting derivative financial instruments that aims to provide protection against sudden and significant increases in the price of oil, thus ensuring the competitiveness of the Company.

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26. Financial instruments and concentration of risk -- Continued

Aircraft fuel consumed in the period ended March 31, 2010 and 2009 represented 36.1% and 31.6% of the Company’s operating costs of service, respectively.

Because of the jet fuel traded in commodity exchanges has lower liquidity, the Company acquires derivatives of crude oil to protect against oscillation of aircraft fuel price. Historically, oil prices have been highly correlated to aviation fuel prices, which make oil derivatives effective in offsetting the prices of aviation fuel, so as to provide immediate protection. The hedged item of fuel is the operational expenses with aircraft fuel. The contracts of derivative for fuel hedge are done in Nymex and over the Counter markets with the following financial institutions: Barclays, British Petroleum, Citibank, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley.

On March 31, 2009, there were no financial assets linked to margin deposits for contracting derivative instruments for fuel hedge.

a) Fuel price risk (Continued)

The following is a summary of the Company’s oil derivative contracts designated for hedge of aircraft fuel (in thousands, except as otherwise indicated):

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b) Foreign currency risk

Risk of exchange rate is the risk related to unexpected variation, in a favorable or unfavorable way, of the expenses and/or revenues whose values are tied to the fluctuations in foreign currencies. The Company’s exposure to foreign currencies is mainly related to operating activities and investments in foreign subsidiaries. The Company’s revenue is generated in Brazilian reais, except for a small portion in Argentine Pesos, Aruban Florin Bolivian Bolivianos, Chilean Pesos, Colombian Pesos, Paraguayan Guaranis, Uruguayan Pesos and Venezuelan Bolivares from flights between Brazil, Argentina, Aruba, Bolivia, Chile, Colombia, Paraguay, Uruguay and Venezuela. However, the Company has a significant portion of its liabilities exposed to changes in the exchange rate of U.S. dollars, particularly those related to aircraft leasing and instruments for raising funds for financing aircrafts acquisitions, requiring contracting derivative financial instruments to mitigate this risk. The main expenses accounts that are hedged due to exchange rate exposure are: jetfuel, leasing, maintenance, insurance and international IT services.

The contracts of derivative financial instruments for U.S. dollar hedge are performed with BM&FBOVESPA using exclusive investments funds which are used as vehicles for contracting risk coverage as described in the Company’s Risk Management Policy.

The value of financial assets linked to margin deposits on March 31, 2010 is R$19,211 represented by CDB’s (Bank Certificate Deposits) of first tier banks.

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26. Financial instruments and concentration of risk -- Continued

The Company’s current and future currency exchange exposure at March 31, 2010 and 2009 are as set forth below:

b) Foreign currency risk

The following is a summary of Company’s foreign currency derivative contracts designated for hedge of U.S. dollar (in thousands, except as otherwise indicated):

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The following table demonstrates the notional value of the derivatives designated as hedge contracted by the Company to protect the future expenses denominated in U.S. dollar and the average rate contracted for each period, as of March 31, 2010:

c) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily for trade receivables, cash and cash equivalents, including bank deposits, financial assets classified as available for sale assets, and derivative financial instruments. The credit risk of accounts receivable is minimized because it is substantially represented by accounts receivable of the largest credit card operators. The derivative financial instruments are made with counterparties that have high ratings according to the assessment by Moody’s and Fitch (an average rate of A+) or the instruments are contracted in the stock exchange of futures and commodities (BM&FBOVESPA). In addition, the Company assesses the risks of counterparties and diversifies its exposure. The Company's management believes that the risk of not receiving the amounts owed by their counterparts in derivative transactions is not significant.

d) Interest rate risk

The Company results are affected by fluctuations in international interest rates because of the impacts of such changes in expenses with leasing. On March 31, 2010 the Company has derivative financial instruments of interest swap-lock to protect against oscillation of interest rates on aircraft leasing.

The interest rate hedge operations are performed through contracts with first tier financial institutions. At March 31, 2010, the Company has open contracts with the following financial institutions: Calyon, Citibank and Merrill Lynch.

The Company had no financial assets linked to margin deposits as of March 31, 2010.

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d) Interest rate risk – continued

The following is a summary of Company’s interest rate derivative contracts not designed as hedge (in thousands, except as otherwise indicated):

The Company results are affected by fluctuations in interest rates applied to Brazil, on financial investments, short term investments, obligations in Reais, assets and liabilities indexed by US Dollar. This fluctuation causes impacts on market value of financial instruments, bonds and on remuneration of cash and cash equivalents.  

e) Sensitivity Analysis Demonstration of the Financial Instruments

The following table demonstrates the sensitivity of financial instruments to a reasonably possible change in fuel prices, with all other variables held constant, on income before tax and equity:

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The following table demonstrates the sensitivity to a reasonably possible change in the U.S. dollar exchange rate, with all other variables held constant, of the Company’s profit before tax (due to changes in the fair value of monetary assets and liabilities) and the Company’s equity (due to changes in the fair value of forward exchange contracts).