practices introduced by Law 11,638/07, and the pronouncements and guidelines of the CPC Accounting Pronouncements Committee. Low Income Segment

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1 Contracted sales reach a record R$ 842 million, 146% up vs. 1Q09 Launches total R$ 722 million Growth of 350% (vs. 1Q09) Gross income reaches R$ 118 million, with Gross margin of 26% São Paulo, May 13, 2010 Rossi Residencial S.A. (Bovespa: RSID3; OTC: RSRZY), one of Brazil s leading residential real estate developers, announces its results for the first quarter of 2010 (1Q10). Except where stated otherwise, the financial and operating information herein is presented in BR GAAP and in compliance with the accounting practices introduced by Law 11,638/07, and the pronouncements and guidelines of the CPC Accounting Pronouncements Committee. Launched PSV of R$ 722 million (R$ 571 million Rossi s share), 350% up on 1Q09 SOS of 25% growth for the 5th consecutive quarter Total contracted sales of R$ 842 million, 146% more than in 1Q09 (R$ 666 million Rossi s share) Operating Highlights Low Income Segment Sales velocity (SOS) record of 37.4% Launched PSV (Rossi s share) of R$ 417 million, 358% up on 1Q09, equivalent to 73% of total launches Sales from launches (Rossi s share) reached 51% of total PSV launched (Rossi s share) Total sales of R$ million (R$ million Rossi s share) Financial Highlights Gross income of R$ 118 million, with Gross margin of 25.6% Net income of R$ 28 million Net margin of 6.2% (increase of 5.5 p.p. vs. 1Q09) Page 1 of 21

2 Message from the CEO First-quarter launch volume moved up by 300% over 1Q09 to a PSV of R$ 571 million (Rossi s share) from 22 projects and 5,012 units launched. Of this total, 18 projects totaling 4,550 units and R$ 417 million (Rossi s share) were in the low income segment, underlining our strategy of expanding in this segment. All in all, we are present in 73 cities across 14 states, as well as the Federal District, and our diversified line of products ensures that our ongoing projects are appropriate to the unique characteristics of each region. As part of our new structure, we divided Brazil into 30 cells (each of which with a management unit), which, together with our growth plan, will allow us to operate in a least 120 cities nationwide. Contracted sales also performed strongly, despite the fact that the first few months of the year are normally weaker due to the vacations and the Carnival holiday, totaling R$ 666 million (Rossi s share), 136% up on the same period in Contracted sales from launches (Rossi s share) came to R$ 259 million, equivalent to 45% of total launched PSV. As a result, the sales-over-supply supply ratio (SOS) continued to improve, moving up for the fifth consecutive quarter and closing 1Q10 at 25%. On the financial front, net income amounted R$ 28 million, with net margin of 6.2%. Gross margin stood at 25.6%, a 3.3 p.p. improvement over the 22.2% posted in 1Q09. In the low income segment, we continued to invest in large-scale standardized products in order to shorten our operational cycle and reduce e our costs. We also standardized our marketing structure and sales stands throughout the entire country. In April, the federal government announced the second phase of the Minha Casa Minha Vida program, involving total investments of R$ 72 billion and the goal of delivering a further two million units within four years, continuing to reduce the country s housing deficit. With increased demand thanks to the favorable economic scenario and the government program, Caixa Econômica Federal approved R$ 21 billion in mortgage loans between January and April, 124% up on the same period last year. In 2010, it hopes to record R$ 60 billion, its highest ever figure. Heitor Cantergiani Page 2 of 21

3 Recent Events Debentures The Extraordinary Shareholders Meeting of May 5, 2010, approved the issue of 50,000 simple, nondebentures, with a real guarantee by the Company, totaling R$ 500 million, with a nominal unit convertible value of R$ 10,000, at the TR (Reference Rate) + an initial coupon of 8.75% p.a., maturing on May 1, The proceeds will be used to fund the production of residential units. Rossi Vendas Rossi Vendas sold a total of R$ 248 million in 1Q10, representing 29.4% of total contracted sales. Present in São Paulo, Rio de Janeiro, Porto Alegre, Campinas, Brasília, Espírito Santo, Campo Grande and Goiânia, Rossi Vendas continues to expand its operations in 2010 and we plan to open new regional offices in Curitiba, Belo Horizonte and Manaus in June of The Lojas Rossi Ideal stores received an average of 9,0000 visitors per quarter, equivalent to an average of 100 visits per day. Photos of the first MCMV Fair in Uberlândia/MG: Photos of the Lojas Rossi Vendas/Rossi Ideal: Page 3 of 21

4 LAUNCHES Launched PSV of R$ 722 million, 350% up on 1Q09 Launched PSV (Rossi s share) of R$ 571 million, 299% more than 1Q09 Low Income Segment Launched PSV in the low income segment accounts for 73% of total launches (Rossi s share) Contracted sales from launches (Rossi s share) of R$ 211 million, 51% of launched PSV (Rossi s share) In 1Q10, we launched 22 projects with a total PSV of R$ 722 million (vs. R$ 161 million in 1Q09), of which R$ 571 million (79%) corresponded to Rossi s share. Launches - R$ million % Q Q10 % Rossi Partners The following tables give a breakdown of our launches by income segment and state in order to emphasize our strategy of geographical and product diversification. Table 1 - Launches by Income Segment Launches in 1Q10 (R$ million) Units Total PSV Rossi PSV Residential Property Low Income Segment * Conventional Commercial Total 4, , *Low income segment: standardized projects - Villa Flora, Rossi Praças Residenciais or Rossi Ideal and properties up to R$ 160,000. Page 4 of 21

5 The graph below shows launches by segment in 1Q10: Launches by segment 1Q10 5% Low Income 23% % Conventional 72% Commercial Table 2 - Launches by State Launches in 1Q10 (R$ million) Units Total PSV Rossi PSV Amazonas Ceará Federal District Espírito Santo Goiás Mato Grosso do Sul Minas Gerais Rio Grande do Sul São Paulo (other cities) São Paulo (Metropolitan region) Total , , The following graph illustrates launches by state in 1Q10: Launches by state 1Q10 7% 8% 8% 6% 9% 3% 5% 14% 27% 14% São Paulo (other cities) Rio Grande do Sul São Paulo (RMSP) Distrito Federal Espírito Santo Goiás Minas Gerais Mato Grosso do Sul Amazonas Ceará Successful launches in 1Q10: Page 5 of 21

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7 SALES Contracted Sales of R$ 842 million, an increase of 146% vs. 1Q09 Contracted Sales (Rossi s share) of R$ 666 million, 136% up on 1Q09 SOS of 25%- 5th consecutive quarter of growth Low Income Segment Contracted Sales (Rossi s share) of 368 million, 186% up year-on-year Contracted Sales (Rossi s share) in the low income segment represent 55% of total sales Contracted sales totaled R$ 842 million in 1Q10 (R$ 666 million Rossi's share), a significant increase of 146% over 1Q09. We recorded an SOS (sales-over-supply supply ratio) of 25%, with 45% of PSV (Rossi s share) launched in the quarter already sold. The graph below shows contracted sales in 1Q10 vs. 1Q09: Contracted Sales - R$ million % Q09 1Q10 Partners % Rossi The following tables give a breakdown of sales by income segment and state: Table 3 Contracted Sales by Income Segment Contracted Sales in 1Q10 (R$ million) Units Total PSV Rossi PSV Residential Property Low Income Segment * Until R$ 200,000 From R$ 200,000 to R$ 350,000 From R$ 350,000 to R$ 500,000 Above R$ 500,000 Commercial Total 3, , *Low Income Segment: Standardizes projects - Villa Flora, Rossi Praças Residenciais or Rossi Ideal and properties of up to R$ 160,000. Page 7 of 21

8 The graph below shows saless by segment in 1Q10: Sales by segment 1Q10 9% 6% 2% Low Income More than R$ 500,000 R$ 200,000 - R$ 350,000 13% 54% R$ 350,000 - R$ 500,000 15% Commercial Properties Up to R$ 200,000 Table 4 - Contracted Sales by State Contracted Sales in 1Q10 (R$ million) Units Total PSV Rossi PSV Amazonas Ceará Federal District Espírito Santo Goiás Mato Grosso do Sul Minas Gerais Paraná Pernambuco Rio de Janeiro Rio Grande do Sul São Paulo (other cities) São Paulo (RMSP) Total The following graph illustrates sales by state in 1Q10: Sales by state 1Q10 São Paulo (RMSP) Rio Grande do Sul 4%4% 1% 4% 5% 7% 9% 10% 16% 21% 17% São Paulo (other cities) Distrito Federal Rio de Janeiro Minas Gerais Amazonas Espírito Santo Paraná Goiás Mato Grosso do Sul Pernambuco Page 8 of 21

9 Sales Velocity (SOS) Once again, our sales-over-supply ratio, which has been growing substantially in recent quarters, did extremely well, closing 1Q10 at 25%. The graph below shows SOS growth over the last 5 quarters: 5th consecutive quarter of growth Sales velocity - SOS (%) 25% 20% 21% 23% 15% 1Q09 2Q09 3Q09 4Q09 1Q10 The following table shows SOS per quarter: Table 5 Sales over Supply - R$ million Sales over supply (SOS) Initial inventory Launches Initial Inventory + Launches Sales in the period SOS in the period Final inventory 1Q09 2Q09 3Q09 4Q09 1Q10 1,770 1,630 1,603 1,959 2, ,913 2,007 2,476 2,722 2, % 20% 21% 23% 25% 1,630 1,603 1,959 2,101 2,006 Developments under construction and concluded In 1Q10, the company delivered 7 projects and 1,551 units, with a launched PSV of R$ 443 million. Table 6 Developments under construction - R$ million Under construction Construction sites Projects under construction Units under construction Total area under construction (m 2 ) Concluded Units delivered Total area delivered (m 2 ) Dec/09 Mar/ ,762 3,173, ,223 3,243,709 Dec/09 Mar/10 32,534 34,085 3,284,774 3,501,387 Page 9 of 21

10 LAND BANK Total PSV of R$ 23.8 billion, 4% up on 4Q09 76% acquired by swaps Low Income Segment Total PSV of R$ 10.7 million in the low income segment On March 31, 2010, our land bank contained 148 sites for future developments, corresponding to a total PSV of R$ 23.8 billion, of which Rossi s share was R$ 16.0 billion (67%). We have succeeded in building a top-quality land bank in line with our strategy of geographical and product diversification by income segment. Only 24% of our land bank was acquired in cash, with the remaining having been acquired through swaps (29% through units swaps and 47% through financial swaps). We define as low income segment ent units costing up to R$ 160,000 or standardized projects (Villa Flora, Rossi Praças Residenciais and Rossi Ideal). Table 7 Land Bank - R$ million Low Up to Land Bank Income. R$ 200,000 Seg. Amazonas 189 Bahia 94 Ceará 219 Federal District 973 Espírito Santo 694 Goiás 925 Mato Grosso do Sul 45 Minas Gerais 2,253 Pernambuco 92 Rio de Janeiro 979 Rio Grande do Norte 205 Rio Grande do Sul 1,739 São Paulo (other cities) São Paulo (RMSP) 1, Total 10,659 R$ 200,000 to R$ 350,000 R$ 350,000 to R$ 500,000 Above R$ 500,000 Commercial Lots Total , ,343 1, , , ,953 3,413 2,230 1, , , , ,206 1,255 Distribution 45% 2% 21% 14% 9% 5% 3% 100% SFH = 83% Page 10 of 21

11 Land Bank Variation - Rossi s share (R$ billion) Inital landbank 1Q10 Launchs New acquisitions Final landbank 1Q10 Low Income Segment In 1Q10, we launched 18 projects comprising 4,550 units, with a total PSV of R$ 519 million (R$ 417 million Rossi s share). According to our diversification strategy, we aim to achieve a share of between 50% and 55% of this segment in Our sales velocity ratio (SOS) was 37.4% in the quarter. Low Income Segment s Share of Launched PSV (Rossi s share): CAGR of 53% 50-55% 47% 29% 13% E Construction Technology Improved agility in raising ing the building structure, and finishing, thus enabling gains in scale, optimization of efforts and cost reductions; In 2008, the engineering g department worked intensely to develop building techniques in the low income segment in order r to reduce the construction cycle and maintain Rossi s quality standards, thus raising the competitiveness of the developments. Prefabricated Building System, with a factory in Canoas and Porto Alegre, in Rio Grande do Sul, and Campinas, in São Paulo. Rossi possesses know-how in several construction technologies and applies them in accordance with the characteristics of each project in order to maximize returns for shareholders. Page 11 of 21

12 Construction Method Prefabricated Building System: Used in the construction of large-scale projects; Prefabricated section factory (Canoas RS) Construction Method Conventional Masonry: Page 12 of 21

13 FINANCIAL PERFORMANCE Gross income reaches R$ 118 million, with gross margin of 25.6% Net income reaches R$ 28 million, with net margin of 6.2% Net Revenue Revenue from properties sales and services was R$ 461 million in 1Q10, up from 69.5% from 1Q09, despite the heavy rainfall which hampered the progress of certain projects during the period. In accordance with market practices, the variation in the IGP-M, INCC and pre-fixed interest on accounts receivable from clients is recognized as revenue from property sales. This line increased over 1Q09, due to the higher variation in the INCC and IGPM indexes. Cost of Property and Services Sold The cost of properties and services sold climbed by 61%, from R$ 211 million in 1Q09 to R$ 343 million in 1Q10. Financial charges arising from production financing and corporate debt whose funds are used in production, either through land acquisitions or project construction, are capitalized under inventories and recognized proportionally to the number of units sold. Selling and Administrative Expenses Administrative expenses totaled R$ 36 million, a 40% nominal growth compared to the R$ 25 million in 1Q09. Net revenues decreased by 1.6 p.p, from 9.3% in 1Q09 to 7.7% in 1Q10. We are gradually strengthening our teams to endure the growth of our launching and sales goals in 2010 and 2011, without affecting our margins, given the expected growth of revenues recognized. Selling expenses posted a bigger reduction of 1.9 p.p. from 10,3% in 1Q09 to 8.4% of net revenues in 1Q10. The table below shows a decline in expenses as a percentage of net revenue, contracted sales and launches: Table 8 - Operating Expenses - R$ million Operating Expenses Administrative Selling Administrative/Net Revenue Selling/Net Revenue Administrative/Contracted Sales (% Rossi) Selling/Contracted Sales (%Rossi) Administrative/Launches (% Rossi) Selling/Launches (%Rossi) 1Q10 1Q09 Var % % 7.7% 9.3% -1.6 p.p. 8.4% 10.3% -1.9 p.p. 5.2% 2.8% -2.4 p.p. 5.7% 3.1% -2.5p.p. 6.6% 1.9% -4.7 p.p. 7.2% 2.1% -5.0 p.p. Page 13 of 21

14 Net Income Net income increased by 1447% %, from R$ 1.8 million in 1Q09 to R$ 28 million in 1Q10, while the net margin reached 6.2%, 5.5 p.p growth over 1Q09. Balance Sheet Cash Position Represented by the balance of the cash, banks, short-term term financial investments and marketable securities accounts. The company closed 1Q10 with a cash position of R$ million. Accounts Receivable Accounts receivable from clients totaled R$ 1.8 million in 1Q10. We should emphasize that we conduct a rigorous, pre-sale analysis of customer creditworthiness and therefore invariably pass on healthy credit portfolios to the banks. Inventories On March 31, 2010, the total number of units for sale at market value totaled R$ 2.0 billion (Rossi s share). The table below shows the distribution of our inventory by income segment and conclusion period. Time for key delivery Income segment Low Income Segment Until R$ 200,000 From R$ 200,100 to R$ 350,000 From R$ 350,100 to R$ 500,000 Above R$ 500,100 Commercial Total % Ready < 6 months 7-12 months months > 25 months Total , % 10% 12% 41% 35% 100% The table below shows our marketable properties and sites for future projects. Table 9 Inventory - R$ million Marketplace properties Current: 1Q10 4Q09 Units build Units under construction Sites for future projects Total Noncurrent: Sites for future projects Total ,084 1,038 Page 14 of 21

15 About Rossi Completing its 30 th Anniversary in 2010, with operations in 73 Brazilian cities, Rossi is one of Brazil s leading real estate developers. The Company operates in different real estate segmentss and has in its portfolio, several sales successess in different income segments. Rossi is listed on the Novo Mercado segment of the São Paulo Stock Exchange, and is traded under the ticker BM&FBovespa: RSID3 and OTC: RSRZY. For more information, please access our website Page 15 of 21

16 Main Operating Indicators Table 1 Main indicators All Segments Low Income Segment Launches (R$ million) 1Q10 1Q09 Var. 1Q10 1Q09 Var. Projects launched Usable area launched (000 m 2 ) Units launched Launched PSV - 100% Launched PSV - % Rossi Average launch sales price per m 2 (R$) Sales (R$ million) , ,515 1Q , ,202 1Q09 144% 294% 378% 350% 299% 14% Var , ,104 1Q % % % % % 1,975 6% 1Q09 Var. Units sold Contracted sales 100% Contracted sales - % Rossi Usable area sold (000 m 2 ) Launches contracted sales - 100% Launches contracted sales - % Rossi Launches sales (units) SOS (sales over supply) 4,733 1, % 3, % % % % % 211 2, % 1,935 25% 23% 2.1p.p 1, % % % % % % % Land Bank (R$ billion) Potential PSV - 100% Potential PSV - % Rossi Number of sites % Swap Inventory (R$ million) Inventory at market value 1Q10 4Q09 Var % % % 76% 76% 0.0 p.p. 1Q10 4Q09 Var. 2, % Page 16 of 21

17 Main Financial Indicators Financial Indicators (R$ million) 1Q10 1Q09 Var. Net Operating Revenue Gross Income Gross Margin Operating Income Operating Margin Adjusted EBITDA Adjusted EBITDA Margin (%) Net Income for the period Net Margin Earnings per share (R$) % 28.7% % 11.0% % 17.5% % 9.6% % 76% 1.9 p.p. 151% 5.7 p.p. 110% 4.6 p.p % 3.5 p.p. 126% Unearned Results (R$ million) Unearned revenue Unearned results Backlog Gross Margin 1Q10 4Q09 Var. 2,153 2,061 4% % 27.4% 29.9% -2.5p.p. Balance (R$ million) 1Q10 4Q09 Var. Net Debt Cash position Shareholders Equity Total Assets Net Debt /Shareholders Equity Net Debt SFH / Shareholders Equity ,339 4, % -13.5% ,283 2, % -16.9% 73% -9% 3% 53% 7.2 p.p. 3.5 p.p. Page 17 of 21

18 Income Statement - R$ 000 1Q10 1Q09 Chg. Gross Operating Revenues Net Operating Revenue Cost of Property and Services Gross Income Gross Margin Operating Expenses Administrative Profit Sharing Selling Projects research and development Depreciation and amortization Earnings before financial result Financial Results Financial Revenues Financial Expenses Operating Income (Loss) Operating Margin Provision for income tax and social contrib. Deferred income tax Net Income (Loss) Net Margin ( ) ,6% (82.113) (35.625) (952) (38.643) (4.933) (1.960) (9.543) ,7% (3.930) (12.379) ,2% ( ) ,2% (59.941) (25.358) (1.017) (28.001) (5.017) (548) (4.024) ,4% (2.604) ,7% 69,5% 62,3% 94,9% 3,3 p.p. 37,0% 40% -6% 38% -2% 258% 7723,7% 176,3% 155% 137% 1086,2% 8,3 p.p. 51% -1948% 1446,6% 5,5 p.p. Page 18 of 21

19 Balance Sheet - R$ 0000 ASSETS CURRENT Cash and equivalents Tradeble notes Accounts receivable from clients Tradeble properties Other assets Total Current Asset NON CURRENT LONG TERM Aplicações Financeiras Accounts receivable from clients Judicial deposits Tradeble properties Deferred income tax and social contrib. Total Long Term Fixed Intangible Total non current TOTAL ASSETS 1Q10 LIABILITIES AND SHAREHOLDER S EQUITY CURRENT 1Q Construction financing real estate credit Loans working capital Suppliers Accounts payable to land site acquisition Salaries and payroll charges Taxes and contributions payable Debentures Dividends payable Profit sharing payable Advances from clients Deferred taxes and contributions Other accounts payable Total Current NON CURRENT Construction financing real estate credit Loans working capital Accounts payable to land site acquisition Debentures Taxes and contributions payable Provisions Provision for guarantees Deferred taxes and contributions Total do não circulante SHAREHOLDERS EQUITY Capital stock Treasury stock Capital reserve Legal reserve Retained earnings reserve Accrued earnings (24.274) ( ) Total Shareholders Equity TOTAL LIABILITIES Page 19 of 21

20 Glossary Cash Burn Variation in the net debt, less capital increases and dividends paid. EBITDA Net income before the financial result, income tax and social contribution on net income, depreciation, amortization and financial charges associated with the cost of properties sold. EBITDA is not a measure of financial al performance recognized by generally accepted accounting practices in Brazil (BR- GAAP), nor should it be regarded in isolation, or as an alternative to net income, as a measure of operating performance, or as an alternative to operating cash flow, or as a measure of liquidity. EBITDA does not have a standardized definition and Rossi s definition of EBITDA may differ from those used by other companies. Adjusted EBITDA Net income before the financial result, income tax and social contribution on net income, depreciation, amortization, financial charges associated with the cost of properties sold, expenses from share offerings, expenses from the stock option plan and other non-operating expenses. Adjusted EBITDA is not a measure of financial performance recognized by generally accepted accounting practices in Brazil (BR-GAAP), nor should it be regarded in isolation, or as an alternative to net income, as a measure of operating performance, or as an alternative to operating cash flow, or as a measure of liquidity. Adjusted EBITDA does not have a standardized definition and Rossi s s definition of adjusted EBITDA may differ from those used by other companies. IGP-M General Market Price Index, published by the Getúlio Vargas Foundation (FGV). INCC National Construction Cost Index, measured by the Getúlio Vargas Foundation (FGV). Land Bank Land bank for future projects, acquired in cash or swaps. Backlog Gross Margin Equivalent to Unearned Results divided by Unearned Revenue to be recognized in future periods. PoC Method Under Brazilian GAAP, real estate development revenues, costs and related expenses are recognized using the percentage-of-completion completion ( PoC ) method of accounting by measuring progress towards completion in terms of actual costs incurred versus total budgeted expenditures for each stage of a development. Swap A system in which we grant the land-owner a certain number of units to be built on the land or a percentage of the proceeds from the sale of units in such development in exchange for the land. By acquiring land through this system, we intend to reduce our cash requirements and increase our returns. Unearned Revenues Unearned revenues correspond to sales contracts whit revenues to be recognized in the future, as the construction develops and not at the signing of the contract. Therefore, our unearned revenues represents revenues that will be incurred in future periods from past sales. SFH Funds Funds from SFH are originated from the Governance Severance Indemnity Fund for Employees (FGTS) and from savings accounts deposits. Banks are required to invest 65% of the total savings accounts balance in the housing sector, either to final customers or developers, at lower interest rates than the private market. CFC Resolution 963/03 and POC (Percentage of Completion) Method Revenue, as well as costs and expenses from real estate development, is recognized throughout the project s construction period in line with the costs incurred, in accordance with CFC Resolution 963/03. Unearned results As a result of the Percentage of Completion Method of recognizing revenues, we recognize revenues and expenses over a multi-year period for each residential unit we sell. Our unearned results represents revenues minus costs that will be incurred in future periods from past sales. Economic Segment - Standardizedd - Villa Flora, Rossi Praças Residenciais and Rossi Ideal, and properties of up to R$ 160,000. ROE Return on equity, a percentage financial indicator that measures a company s capacity to add value to itself using its own funds Page 20 of 21

21 Contracted Sales Contracted sales are the aggregate amount of sales resulting from all agreements for the sale of units entered into during a certain period, including new units and units in inventory. Contracted sales will be recorded as revenue as construction progresses (PoC method). There is no definition of "contracted sales'' under Brazilian GAAP. PSV Potential Sales Value. Launched PSV Potential sales value corresponds to the total potential value obtained by the company from the sale of all the units from a given development launched at a certain price. Rossi s PSV The potential sales value obtained or to be obtained by Rossi from the sale of all the units from a given development launched at a certain predetermined price, proportional to its share of the undertaking. SOS Sales over supply. Page 21 of 21