THE “OFFERING MEMORANDUM”) FOLLOWING THIS PAGE IS INTENDED SOLELY for (I) QUALIFIED INSTITUTIONAL BUYERS (“Qibs”) AS DEFINED in RULE 144A UNDER the U.S

IMPORTANT NOTICE

THE OFFERING MEMORANDUM (THE “OFFERING MEMORANDUM”) FOLLOWING THIS PAGE IS INTENDED SOLELY FOR (i) QUALIFIED INSTITUTIONAL BUYERS (“QIBs”) AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933 (AS AMENDED, THE “SECURITIES ACT”) AND (ii) NON-U.S. PERSONS LOCATED OUTSIDE OF THE UNITED STATES AND THAT ARE NOT ACQUIRING THE SECURITIES FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT.

IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the Offering Memorandum following this disclaimer page, and you are therefore advised to read this carefully before reading, accessing or making any other permitted use of the Offering Memorandum. In accessing the Offering Memorandum, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from us as a result of such access.

NOTHING IN THIS ELECTRONIC TRANSMISSION OR IN THE OFFERING MEMORANDUM CONSTITUTES AN OFFER OF SECURITIES IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OF THE U.S. OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE U.S. OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THE OFFERING MEMORANDUM AND THE OFFER OF THE SECURITIES ARE ONLY ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC) AND RELATED IMPLEMENTATION MEASURES IN MEMBER STATES (“QUALIFIED INVESTORS”). IN ADDITION, IN THE UNITED KINGDOM THE OFFERING MEMORANDUM IS ONLY BEING DISTRIBUTED TO PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER REFERRED TO AS “RELEVANT PERSONS”). ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS OFFERING MEMORANDUM RELATES IS AVAILABLE ONLY TO (I) IN THE UNITED KINGDOM, RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OTHER THAN THE UNITED KINGDOM, QUALIFIED INVESTORS, AND WILL BE ENGAGED IN ONLY WITH SUCH PERSONS. IN ADDITION, NO PERSON MAY COMMUNICATE OR CAUSE TO BE COMMUNICATED ANY INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY, WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (THE “FSMA”), RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE SECURITIES OTHER THAN IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO US.

THE OFFERING MEMORANDUM MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN WHOLE OR IN PART IN ANY MANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED, AND FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.

CONFIRMATION OF YOUR REPRESENTATION: in order to be eligible to view the Offering Memorandum or make an investment decision with respect to the securities, investors must either (1) be QIBs within the meaning of Rule 144A under the Securities Act or (2) be non-U.S. persons (as defined in Regulation S under the Securities Act) or have not received deliver of this electronic mail in the U.S., its territories and possessions, any state of the U.S. and the District of Columbia; and “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. The Offering Memorandum is being provided at your request and by accepting the e-mail and accessing the Offering Memorandum, you shall be deemed to have represented to us that (1) you and any customer you represent are either (a) QIBs or (b) not a U.S. person and that the electronic mail address that you gave us and to which this e-mail has been delivered is not located in the U.S. and (2) that you consent to delivery of the Offering Memorandum by electronic transmission and agree to comply with the terms, conditions and restrictions provided herein.

You are reminded that documents transmitted via this medium may be altered or changed during the process of transmission, and consequently, none of the placement agents nor any person who controls any placement agent or any of their directors, officers, employees or agents, or affiliate of any such person accepts any liability or responsibility whatsoever in respect of any changes made without knowledge of the agents.

You are reminded that the Offering Memorandum has been delivered to you on the basis that you are a person into whose possession the Offering Memorandum may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorized to, deliver this Offering Memorandum to any other person. You will not transmit the Offering Memorandum (or any copy of it or part thereof) or disclose, whether orally or in writing, any of its contents to any person except with the consent of the placement agents. CONFIDENTIAL OFFERING MEMORANDUM 29,310,345 Common Shares

T4F Entretenimento S.A. (incorporated in the Federative Republic of Brazil)

We, T4F Entretenimento S.A., and Fernando Luiz Alterio, CIE Internacional S.A. de C.V. and GIF-II Fundo de Investimento em Participações, or the selling shareholders, are offering an aggregate of 29,310,345 of our common shares to the public in Brazil, to certain qualified institutional buyers in the United States and to institutional and other investors elsewhere that are not U.S. persons. We and the selling shareholders have registered the offering of our common shares with the Brazilian Securities Commission (Comissão de Valores Mobiliários), or the CVM. No public market currently exists for our common shares. We have applied to list our common shares on the Novo Mercado segment of the São Paulo Stock Exchange (BM&FBOVESPA S.A.—Bolsa de Valores, Mercadorias e Futuros), or the BM&FBOVESPA, under the symbol “SHOW3.” The ISIN number for our common shares is BRSHOWACNOR7. The selling shareholders have granted to Banco de Investimentos Credit Suisse (Brasil) S.A. an option, exercisable upon notification to Banco BTG Pactual S.A. and Banco Bradesco BBI S.A., to place an additional 4,396,551 common shares at the offering price, representing 15.0% of the common shares initially offered hereby, to cover over-allotments, if any, for a period of up to 30 days from the date of publication in Brazil of the notice of commencement of this offering. Neither the CVM, the United States Securities and Exchange Commission, or the SEC, nor any other regulatory authority has approved or disapproved of the common shares offered hereby or passed upon or endorsed the merits of this offering or the accuracy or adequacy of this offering memorandum (or the Portuguese language prospectus used in connection with the offering of our common shares in Brazil). Any representation to the contrary is a criminal offense.

Investing in our common shares involves risks. See “Risk Factors” beginning on page 16 for a discussion of certain factors you should consider before investing in our common shares. Offer Price: R$16.00 per Common Share

The offering of our common shares has not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, or under any U.S. state securities laws. Accordingly, our common shares are being offered in the United States only to qualified institutional buyers as defined in Rule 144A under the Securities Act, or Rule 144A, and to certain non-U.S. persons in offshore transactions in reliance upon Regulation S under the Securities Act, or Regulation S, pursuant to exemptions from registration provided under the Securities Act. See “Transfer Restrictions” for a description of restrictions on transfers of our common shares. You may purchase our common shares if you comply with the registration requirements of CVM Instruction No. 325, dated January 27, 2000, as amended, and Resolution No. 2,689, dated January 26, 2000, as amended, of the Brazilian National Monetary Council (Conselho Monetário National), or the CMN. See “Market Information” for more information on the requirements of these regulations.

Payment for our common shares must be made in Brazilian reais through the Central Depository BM&FBOVESPA (Central Depositária BM&FBOVESPA), formerly the Brazilian Settlement and Custodial Company (Companhia Brasileira de Liquidação e Custódia). It is expected that our common shares will be delivered through the Central Depository BM&FBOVESPA on or about April 15, 2011.

Joint International Placement Agents and Joint Bookrunners Credit Suisse BTG Pactual Bradesco BBI The date of this confidential offering memorandum is April 11, 2011

TABLE OF CONTENTS Page Page FORWARD-LOOKING STATEMENTS ...... v INDUSTRY AND REGULATORY OVERVIEW...... 63 PRESENTATION OF FINANCIAL AND OTHER BUSINESS ...... 74 INFORMATION ...... vi MANAGEMENT ...... 101 SUMMARY ...... 1 PRINCIPAL AND SELLING SHAREHOLDERS...... 108 THE OFFERING ...... 10 RELATED-PARTY TRANSACTIONS ...... 113 SUMMARY OF FINANCIAL AND OPERATING DESCRIPTION OF CAPITAL STOCK ...... 115 INFORMATION ...... 13 DIVIDENDS AND DIVIDEND POLICY ...... 131 RISK FACTORS ...... 16 TAXATION ...... 134 USE OF PROCEEDS ...... 29 CERTAIN ERISA CONSIDERATIONS ...... 142 EXCHANGE RATES ...... 30 PLAN OF DISTRIBUTION ...... 143 MARKET INFORMATION ...... 31 TRANSFER RESTRICTIONS ...... 147 CAPITALIZATION...... 35 NOTICE TO CANADIAN RESIDENTS ...... 155 DILUTION ...... 36 LEGAL MATTERS ...... 157 SELECTED FINANCIAL AND OPERATING INDEPENDENT AUDITORS ...... 158 INFORMATION ...... 38 ENFORCEMENT OF JUDGMENTS ...... 159 MANAGEMENT’S DISCUSSION AND ANALYSIS OF INDEX TO FINANCIAL STATEMENTS ...... F-1 FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 41

In this offering memorandum, references to “T4F,” “we,” “us” and the “company” refer to T4F Entretenimento S.A., a corporation (sociedade anônima) incorporated under the laws of Brazil, and its subsidiaries, except where the context requires otherwise. References to “selling shareholders” are to Fernando Luiz Alterio, CIE Internacional S.A. de C.V., or CIE, and GIF-II Fundo de Investimento em Participações, or GIF-II. References to our “controlling shareholder” are to our founder and Chief Executive Officer, Fernando Luiz Alterio and the holding company, F.A. Comércio e Participações S.A., or F.A. Participações, in which Mr. Alterio holds an 85.0% interest and CIE Internacional S.A. de C.V. holds the remaining 15.0% interest. For more information, see “Principal and Selling Shareholders.” References to “common shares” refer to the common shares of T4F, except where the context requires otherwise.

In addition, the term “Brazil” refers to the Federative Republic of Brazil, and the phrase “Brazilian government” refers to the federal government of Brazil. The term “Central Bank” refers to the Central Bank of Brazil. All references to “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil, and all references to “U.S. dollar,” “U.S. dollars” or “US$” are to U.S. dollars, the official currency of the United States. Unless otherwise stated, all numbers included in this offering memorandum are expressed in reais. This offering memorandum contains translations of various real amounts into U.S. dollars at specified rates solely for your convenience. You should not construe these translations as representations by us that the real amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have converted the real amounts using a rate of R$1.666 to US$1.00, the U.S. dollar selling rate as of December 31, 2010 as reported by the Central Bank. See “Exchange Rates.”

The term “agents” refers to Credit Suisse Securities (USA) LLC, Bradesco Securities Inc. and BTG Pactual US Capital Corp., who will act as agents on behalf of the Brazilian underwriters to facilitate the placement of the common shares with investors outside Brazil.

You should only rely on the information contained in this offering memorandum. None of us, the selling shareholders, the Brazilian underwriters or the agents have authorized anyone to provide you with information that is different from or additional to the information that contained in this offering memorandum. If anyone provides you with different or additional information, you should not rely on it. You should assume that the information in this offering memorandum is accurate only as of the date on

1 the front cover of this offering memorandum, regardless of the time of delivery of this offering memorandum or any sale of our common shares. Our business, financial condition, results of operations and prospects may change after the date on the front cover of this offering memorandum. None of us, the selling shareholders, the Brazilian underwriters or the agents are making an offer to sell the common shares in any jurisdiction where the offer or sale is not permitted.

This offering memorandum is highly confidential, and we have prepared it for use solely in connection with the proposed offering of our common shares outside Brazil. This offering memorandum is personal to the offeree to whom it has been delivered by the Brazilian underwriters or the agents and does not constitute an offer to any other person or to the public in general to subscribe for or otherwise to acquire our common shares. Distribution of this offering memorandum to any person other than the offeree is unauthorized, and any disclosure of any of its contents without our prior written consent is prohibited. Each offeree, by accepting delivery of this offering memorandum, agrees to the foregoing and agrees to make no photocopies of this offering memorandum, in whole or in part.

This offering memorandum does not constitute an offer to sell or a solicitation of an offer to buy our common shares by any person in any jurisdiction where it is unlawful to make such an offer or solicitation. The distribution of this offering memorandum and the offer or sale of our common shares in certain jurisdictions is restricted by law. This offering memorandum may not be used for, or in connection with, and does not constitute, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstance in which such offer or solicitation is not authorised or is unlawful.

We and the selling shareholders are relying on an exemption from registration under the Securities Act for offers and sales of securities that do not involve a public offering. Our common shares offered through this offering memorandum are subject to restrictions on transferability and resale and may not be transferred or resold in the United States, except as permitted under the Securities Act and applicable U.S. state securities laws pursuant to registration or an applicable exemption. By purchasing the common shares, you will be deemed to have made the acknowledgements, representations and warranties and agreements described in “Transfer Restrictions.” You should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. In making an investment decision, you must rely on your own examination of our business and the terms of this offering, including the merits and risks involved.

You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell our common shares or possess or distribute this offering memorandum and must obtain any consent, approval or permission required for your purchase, offer or sale of our common shares under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchases, offers or sales, and none of us, the selling shareholders, the Brazilian underwriters or the agents will have any responsibility therefor.

We, the selling shareholders, the Brazilian underwriters and the agents reserve the right to reject any offer to purchase, in whole or in part, and for any reason, our common shares offered hereby. We, the selling shareholders, the Brazilian underwriters and the agents also reserve the right to sell or place less than all of our common shares offered hereby.

This offering memorandum has been prepared on the basis that any offer of our common shares in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of our common shares. Accordingly, any person making or intending to make an offer in that Relevant Member State of our common shares which are the subject of the offer contemplated in this offering memorandum may only do so in circumstances in which no obligation arises for us, the selling shareholders, or any of the Brazilian underwriters or the agents to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. None of us, the selling shareholders, or the Brazilian

ii underwriters or the agents have authorized, nor do they authorize, the making of any offer of our common shares in circumstances in which an obligation arises for us, the selling shareholders nor the Brazilian underwriters or agents to publish or supplement a prospectus for such offer. The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.”

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any of our common shares under, the offers contemplated in this offering memorandum will be deemed to have represented, warranted and agreed to and with each Brazilian underwriter, agent, us and the selling shareholders that: • it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and • in the case of any common shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the common shares acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the Brazilian underwriters or the agents has been given to the offer or resale; or (ii) where common shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those common shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this representation, the expression an “offer” in relation to any common shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any common shares to be offered so as to enable an investor to decide to purchase or subscribe for our common shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State.

This offering memorandum does not constitute an offer of common shares to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the common shares. Consequently this document is being distributed only to, and is directed at (a) persons who are outside the United Kingdom (b) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (c) high net worth entities falling within article 49(2) of the Order, and other persons to whom it may be lawfully be communicated (all such persons together being referred to as “relevant persons”). In addition, this communication is, in any event only directed at persons who are “qualified investors” pursuant to the Prospectus Directive (2003/71/EC). Any person who is not a relevant person should not act or rely on this document or any of its contents. Persons into whose possession this offering memorandum may come are required by us, the selling shareholders, the Brazilian underwriters and agents to inform themselves about and to observe such restrictions. Further information with regard to restrictions on offers, sales and deliveries of the common shares and the distribution of this offering memorandum and other offering material relating to the common shares is set out under “Transfer Restrictions.”

No representation or warranty, express or implied, is made by the Brazilian underwriters or the agents as to the accuracy or completeness of any of the information set out in this offering memorandum, and nothing contained herein is or should be relied upon as a promise or representation by the Brazilian underwriters or the agents, whether as to the past or to the future.

This offering is being made in Brazil by a prospectus, including the formulário de referência, attached thereto, in Portuguese with the same date as this offering memorandum, or the Brazilian prospectus. The Brazilian prospectus, which has been filed with the CVM, is in a format different from that of this offering

iii memorandum and contains certain information generally not included in documents such as this one. This offering is being made in the United States and elsewhere outside Brazil solely on the basis of the information contained in this offering memorandum. You should take this into account when making a decision to invest in our common shares.

In connection with this placement, Banco de Investimentos Credit Suisse (Brasil) S.A., acting through Credit Suisse (Brasil) Corretora de Títulos e Valores Mobiliários S.A., may over-allot or effect transactions with a view to supporting the market price of our common shares at a level higher than that which might otherwise prevail for a limited period. However, there is no obligation on the part of Banco de Investimentos Credit Suisse (Brasil) S.A or Credit Suisse (Brasil) Corretora de Títulos e Valores Mobiliários S.A. to undertake stabilizing actions. The stabilizing, if commenced, may be discontinued at any time. The stabilizing will be in compliance with all applicable laws, regulations and rules. See “Plan of Distribution.”

We and the selling shareholders are not, and the Brazilian underwriters and the agents are not, making any representation to any purchaser of the common shares regarding the legality of an investment in the common shares by the purchaser under any legal investment or similar laws or regulations. You should not consider any information in this offering memorandum to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in the common shares.

NOTICE TO INVESTORS

Notwithstanding anything in this document to the contrary, except as reasonably necessary to comply with applicable securities laws, you (and each of your employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the offering and all materials of any kind (including opinions or other tax analyses) that are provided to you relating to the tax treatment and tax structure. For this purpose, “tax structure” is limited to facts relevant to the U.S. federal income tax treatment of the offering.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421 B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA 421-B”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421 B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

AVAILABLE INFORMATION

To permit compliance with Rule 144A in connection with resales of our common shares, we are required to furnish upon request of a holder of a common share or of a prospective purchaser designated by such holder of a common share the information required to be delivered under Rule 144A(d)(4) if, at the time of the request, we are neither a reporting company under Section 13 or Section 15(d) of the Securities Act nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder.

iv FORWARD-LOOKING STATEMENTS

This offering memorandum includes estimates and forward-looking statements, including, without limitation, in the sections entitled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry and Regulatory Overview” and “Business.” These statements are based in large part on our current expectations and estimates of future events and trends that affect or may affect our business, financial condition, results of operations, cash flow and prospects. Several factors may adversely affect our estimates and forward-looking statements, including, but not limited to: • general economic, political and business conditions in Brazil, Argentina, Chile, and Peru, as well as other markets, such as the United States, which can affect conditions of the global live entertainment market, given that the entertainment market is highly sensitive to variations in economic fluctuations and consumers’ purchasing power; • our ability to continue to access high quality, in-demand live entertainment content at reasonable rates; • changes in public tastes in relation to entertainment; • the effectiveness of our marketing and sales efforts and our ability to implement our growth strategy in existing and new markets, including our ability to make acquisitions and integrate acquired companies into our existing operations; • our ability to implement our investment strategy, including our ability to obtain or retain control over new and existing venues, as well as to identify potential acquisition targets and regions for organic expansion; • cost increases; • technological changes and our ability to upgrade our technological systems; • the occurrence of accidents affecting our shows; • inflation in the markets in which we operate; • fluctuation in the value of the Brazilian real, the Argentine peso and the Chilean peso; • fluctuation in prevailing interest rates; • our debt levels, other financial obligations and our ability to obtain financing on reasonable terms when necessary; • changes to present and future laws and regulations, in particular the laws and regulations applicable to our business; and • other risk factors discussed under “Risk Factors.”

Statements that depend on or are related to events or future or uncertain conditions or that include the words “believe,” “could,” “anticipate,” “continue,” “expect,” “estimate,” “intend,” “will,” “may,” “assume” and other variations, as well as similar words, when used in this offering memorandum, are intended to identify forward- looking statements. Forward-looking statements include information concerning our potential or assumed future results of operations, business strategies, funding plans, competitive position, industry environment, potential growth opportunities and the effects of future regulation and of competition. Forward-looking statements and estimates speak only as of the date they are made, and none of us, the Brazilian underwriters or the agents undertakes the obligation to update or revise any forward-looking statements after we distribute this offering memorandum to reflect new information, future events or other factors.

In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this offering memorandum may not occur or be accurate, and our future results of operations and performance may differ materially from those set out herein for a number of reasons. Any such forward-looking statements and estimates are not guarantees of future performance and involve risks and uncertainties. Given such limitations, you should not rely on these forward-looking statements to make a decision to invest in our common shares.

v PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Information We maintain our books and records in reais. Our financial information contained in this offering memorandum derives from our consolidated financial statements as of and for the years ended December 31, 2008, 2009, and 2010, which have been audited by Deloitte Touche Tohmatsu Auditores Independentes as reflected in their report included elsewhere in this offering memorandum, and which consist of our audited consolidated financial statements prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

The company’s individual financial statements, which appear in the financial statements elsewhere in this offering memorandum, have been prepared in accordance with Brazilian accounting practices, or Brazilian GAAP, which are based on Law No. 6,404 of December 15, 1976, as amended, or the Brazilian Corporate Law, and the pronouncements, guidance, and interpretations issued by the Brazilian Committee of Accounting Standards (Comitê de Pronunciamentos Contábeis), or the CPC, approved by the CVM.

Market Estimates We make statements in this offering memorandum about market estimates, our competitive position and market share in, and the market size of, the Brazilian, Argentine, Chilean, Peruvian and South American live entertainment industry. We make these statements on the basis of information from sources that we believe are reliable, such as the trade publishers Pollstar, Inc., or Pollstar, the Billboard Information Group, or Billboard, the International Ticketing Association, Euromonitor, the International Monetary Fund, or IMF, and the Brazilian Census Bureau (Instituto Brasileiro de Geografia e Estatística), or IBGE, the World Health Organization, the Getúlio Vargas Foundation (Fundação Getúlio Vargas), or FGV, and the Brazilian Central Bank (Banco Central do Brasil), or Central Bank. Although we have no reason to believe any of this information is inaccurate in any material respect, none of us, the selling shareholders, the agents or the Brazilian underwriters have independently verified this information.

Rounding Some percentages and amounts included in this offering memorandum have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures that precede them.

Translation of Reais into U.S. Dollars We have translated some of the real amounts included in this offering memorandum into U.S. dollars. The exchange rate used to translate such amounts as of and for the year ended December 31, 2010 was R$1.666 to US$1.00, which was the commercial selling rate at closing for the purchase of U.S. dollars in effect on December 31, 2010 as reported by the Central Bank. The U.S. dollar equivalent information included in this offering memorandum is provided solely for your convenience and should not be construed as implying that the real amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate. See “Exchange Rates” for more detailed information regarding the translation of reais into U.S. dollars.

vi SUMMARY

This summary contains an overview of our business, competitive strengths and strategies. It does not contain all of the information that you should consider before making a decision to invest in our common shares. For a more complete understanding of our business and this offering, you should read this entire offering memorandum carefully, including the information contained in the sections entitled “Presentation of Financial and Other Information,” “ Risk Factors,” “ Selected Financial and Operating Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation” as well as our consolidated financial statements and related notes and auditor’s report, included elsewhere in this offering memorandum.

We promote a wide range of artistic, cultural and sports content, drawing upon our relationships with agents and content providers in Brazil and around the world, as well as content developed internally, such as our stock car, pick-up and BMW Mini Cooper racing series. We currently operate five of the most important entertainment venues in South America, of which four are ranked among the top 50 venues worldwide in terms of number of tickets sold in 2010, according to Pollstar.

Through our vertically-integrated business model, in addition to event promotion, we operate at all levels of the live entertainment value chain, including venue operation; ticketing; food, beverage and merchandise sales; and corporate sponsorships. As a result, we generate income from a variety of activities related to our operations.

We have accumulated significant experience in the live entertainment industry since 1983, and we have promoted approximately 4,000 events (including expositions and sporting events) in major Brazilian, Argentine, Chilean and Peruvian cities during the past three years. Our Brazilian operations represented 65% and 66% of our net operating revenue in 2009 and 2010, respectively.

Our leading position in the Brazilian and South American live entertainment industry and our business model has earned us the trust of some of the largest international providers of high-quality content. This has afforded us privileged access to the world’s best content for artistic and cultural events, which enhances our relationships with corporate sponsors and generates public interest. As a result, we are able to secure long-term corporate sponsorship agreements, of which a portion of the revenue is received on signing, and attract top musical acts, for which ticket sales are done in advance of the shows. Both of these factors decrease our capital requirements. In addition, we generate cash flow through the sale of naming rights to our venues. With the exception of Ópera Citi hall in Buenos Aires, which we own, all our venues are leased from third parties. Because our investments in fixed assets have historically been limited and our capital expenditure requirements have been low, our business model has generated significant returns on invested capital and helps us to maintain a sound financial position.

1 The tables below set forth select financial and operating information for the years indicated.

As of and for the year ended December 31, 2008 2009 2010 2010(1) (in millions of R$, except for percentages) (in millions of US$, except for percentages) Financial Information Net operating revenue...... 596.6 434.6 569.2 341.7 Event promotion ...... 372.6 248.5 355.0 213.1 Live music...... 185.8 154.3 219.2 131.6 Family events, theater and cultural expositions ...... 169.5 82.6 122.6 73.6 Sporting events...... 17.3 11.6 13.2 7.9 Ticketing; food, beverage and merchandise sales; and venue operation...... 89.6 65.3 89.9 54.0 Sponsorships...... 134.5 120.7 124.3 74.6 Event promotion ...... 122.1 101.9 101.7 61.0 Ticketing; food, beverage and merchandise sales; and venue operation...... 12.4 18.9 22.6 13.6 Net income ...... 46.9 6.0 40.3 24.2 Total assets ...... 547.9 474.2 521.8 313.2 Shareholders’ equity...... 128.3 121.1 133.3 80.0 Other Financial Information and Selected Ratios EBITDA(2)...... 100.4 46.1 95.1 57.1 EBITDA margin(3) (%) ...... 16.8% 10.6% 16.7% — Net margin(4) (%) ...... 7.9% 1.4% 7.1% — Net debt(5) ...... 113.6 91.7 29.3 17.6 Net debt / EBITDA ...... 1.1 2.0 0.3 0.3 ROE(6) (%) ...... 46.0 4.8 31.7 — ROIC(7) (%)...... 38.3 25.0 42.0 25.2 (1) Solely for the convenience of the reader, we have converted certain amounts included in this offering from reais into U.S. dollars using the exchange rate as reported by the Central Bank of R$1.666 per US$1.00 as of December 31, 2010. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for the convenience of investors and should not be construed as implying that the amounts in reais represent or could have been or could be converted into, U.S. dollars at those rates or any other rate. (2) EBITDA is a non-GAAP measure prepared by us, consisting of: net income, plus income tax and social contribution tax, net financial income (expenses), depreciation and amortization. EBITDA is not a measure defined under Brazilian GAAP or IFRS, should not be considered in isolation, does not represent cash flow for the periods indicated and should not be regarded as an alternative to cash flow or net income, or as an indicator of operational performance or liquidity. EBITDA does not have a standardized meaning and different companies may use different EBITDA definitions. Therefore our definition of EBITDA may not be comparable to the definition of EBITDA or other similar measures used by other companies. We use EBITDA to analyze our operational and financial performance, as well as a basis for administrative decisions. The use of EBITDA as an indicator of our profitability has limitations because it does not account for certain costs in connection with our business, such as financial expenses, taxes, depreciation, capital expenditures and other related expenses. We use EBITDA as a supplemental means to measure our operating performance. For a reconciliation of EBITDA to our net income, see “Summary of Financial and Operating Information.” (3) EBITDA margin is calculated by dividing EBITDA by net operating revenue.

2 (4) Net margin is calculated by dividing net income by net operating revenue. (5) Net debt is calculated by subtracting cash and cash equivalents from noncurrent and current loans and financing. For a calculation of our net debt, see “Selected Financial and Operating Information.” (6) ROE stands for return on equity, which is calculated by dividing post-tax operating profit by the average shareholders’ equity during the relevant years. Post-tax operating profit is calculated by subtracting income tax and social contribution from operating income. Average shareholders’ equity is the average of the shareholders’ equity amounts for the current period and the previous period. (7) ROIC stands for return on invested capital, which is calculated dividing post-tax operating profit by invested capital. Invested capital is calculated by adding total current assets (excluding cash and cash equivalents) and fixed assets at the end of the relevant years.

As of and for the year ended December 31, 2008 2009 2010 Event Promotion Operating Information Live music Number of events ...... 368 295 348 Total tickets sold (in thousands) ...... 1,927 1,440 1,801 Average occupancy rate (%)(1) ...... 64.2% 65.9% 66.6% Average price per ticket (in R$)(2) ...... 113.8 105.2 126.7 Family events / theater(3) Number of events ...... 1,052 661 737 Total tickets sold (in thousands) ...... 1,172 740 937 Average occupancy rate (%)(1) ...... 56.9% 55.0% 60.0% Average price per ticket (in R$)(4) ...... 145.5 133.2 145.5 (1) Average occupancy rate is calculated by dividing tickets sold by tickets available. (2) Net operating revenue from live music divided by the number of tickets sold during the relevant years. (3) Does not include net operating revenue from cultural expositions. (4) Net operating revenue from family events and theater divided by the related number of tickets sold.

Our main lines of business include: (i) event promotion; (ii) ticketing; food, beverage and merchandise sales; and venue operation; and (iii) sales of corporate sponsorships.

Event promotion. This line of business consists of ticket sales for the live entertainment events that we promote. Our event promotion business, which represented 62.4% of our net operating revenue in 2010, includes: • Live music: live productions of top international musical acts such as U2, AC/DC, Paul McCartney, Madonna, Bon Jovi, Aerosmith, Roger Waters, Pearl Jam, Rush, Red Hot Chili Peppers, Eric Clapton, the Three Tenors, Avril Lavigne and Santana, as well as top national and regional musical acts such as Roberto Carlos, Caetano Veloso, Maria Bethânia, Maria Rita, Vanessa da Mata and Victor & Leo; • Family events, theater and cultural expositions: live productions of family entertainment such as Disney on Ice, Blue Man Group, Stomp and Cirque du Soleil, among others; theatrical productions, including Portuguese- and Spanish-language versions of international hit Broadway musicals such as Mamma Mia, Phantom of the Opera, Beauty and the Beast, Miss Saigon, Les Misérables, Chicago and Cats, in addition to national productions; and cultural expositions with artistic, scientific and educational content such as the Bodies and Leonardo da Vinci expositions; and • Sporting events: production of sporting events with a focus on automobile racing, including a stock car racing series (sponsored by the Brazilian Federal Savings Bank (Caixa Economica Federal), or CEF), a pick-up racing series (the Chevrolet Montana Cup, sponsored by General Motors of Brazil), a Mini Cooper racing challenging (the BMW Mini Challenge) and, beginning in 2011, the Brands Championship (Campeonato de Marcas).

3 Ticketing; food, beverage and merchandise sales; and venue operations. Our ticketing; food, beverage and merchandise sales; and venue operations line of business represented 15.8% of our net operating revenue in 2010 and includes: • ticketing, including for all our events, as well as those of third-party providers, through which we generate revenue by charging convenience and delivery fees. Ticketing occurs through a variety of distribution channels, such as points of sale in locations frequented by our clients, our call center and online. We operate our ticketing business under the following brand names: “Tickets for Fun” in Brazil, which we launched recently as part of our strategy to expand in this segment; “Ticketek” in Argentina and “Ticketmaster” in Chile; • food, beverage and merchandise sales at our venues and in events we promote at third-party locations, generally at large shows in stadiums and indoor family events. We also offer additional services, such as buffets for private events at our venues; and • venue operation, through which we currently operate five of the most important venues in South America, four in Brazil and one in Argentina, namely Credicard Hall (São Paulo, Brazil), Citibank Hall (São Paulo, Brazil), Teatro Abril (São Paulo, Brazil), Citibank Hall (Rio de Janeiro, Brazil) and Ópera Citi (Buenos Aires, Argentina). Other than Ópera Citi, which we own, we lease our venues from third parties through long-term agreements. When our venues are not reserved for our shows, we make them available for rent for corporate and other third-party events.

Corporate sponsorships. We believe that we enjoy a distinctive competitive advantage in attracting corporate sponsors because of our high-quality and popular artistic, cultural and sporting events and our operation of some of the best venues in South America. Sales of corporate sponsorships represented 21.8% of our net operating revenue in 2010. Corporate sponsorships are favorable for us in terms of cash generation because we receive a portion of the purchase price in advance of the event and our cost of making such sales is low. Corporate sponsorship entails selling corporate sponsorships and includes the following activities: • Event marketing: we sell corporate sponsorships of live shows, in the form of both one-time and long- term sponsorship arrangements, providing exposure of the sponsors’ brand in a variety of spaces, such as in event advertising, as well as through promotional materials on the stage and on screens; and • Ticketing; food, beverage and merchandise sales; and venue operation: we sell corporate sponsorships by offering the right to display brands in our venues, which includes the sale of venue naming rights, we lease retail space for merchandise sales, and we exchange corporate sponsorships for benefits like discounts or priority in purchasing tickets to our events.

Our Strengths We believe we are well positioned to take advantage of the growing opportunities in the live entertainment industry and to continue to create value for our shareholders. Our main strengths include the following: Regional leadership in an industry with growth potential and economies of scale. We are the leading company in the live entertainment industry in South America in terms of tickets sold in 2010 according to Billboard, and we operate in an industry with growth potential, supported by the following factors: • New trends in the music industry: in recent years, the increasing prevalence of electronic distribution of music and other electronic media has made the sale of CDs and DVDs less profitable for music labels, studios and artists. According to a Pollstar study, from 2004 to 2009 the compound annual growth rate, or CAGR, of North American gross concert revenue rose 10.4%, while the CAGR for CD and DVD sales declined by 10.0%. In response, top international acts have increased the number of live performances by increasing the duration of their tours and the frequency of shows during such tours. As a result of this trend, we are increasingly promoting tours outside of the traditional Rio de Janeiro and São Paulo markets and into additional South American capitals and large cities.

4 • Increased consumption in Brazil and South America: we believe that the South American live entertainment market shows robust potential for expansion. Demand for live entertainment is influenced by levels of disposable income, which we believe will benefit from expected economic growth in the countries in which we operate as well as other factors that increase consumption in general. These factors include falling interest rates over recent years and expanding consumer credit, according to the IMF, that have positively affected certain of the countries in which we operate. From 2006 to 2009, the average growth in gross domestic product, or GDP, of Argentina, Brazil and Chile grew by 6.2%, 3.6% and 2.8%, respectively, while entertainment spending per capita, in those countries increased on average by 19.6%, 11.7% and 7.6%, respectively, during the same period, according to Euromonitor.

We believe we are well-positioned to capture a variety of opportunities arising from the demand for live entertainment generated by the above factors, which we believe will enable us to solidify our industry-leading position in Brazil and South America generally. In addition, our leadership in Brazil and South America, along with the large number of concerts and events we promote, generates synergies and economies of scale in producing our events, strengthening our bargaining position with certain suppliers and helping us to obtain more favorable prices in certain content purchases. Furthermore, our presence in Brazil and key South American countries enables us to establish a regional marketing strategy for attracting corporate sponsors that want to expand their activities in these markets, as well as to reduce our transportation and freight costs relating to the equipment needed to mount live productions.

Privileged access to large Brazilian and international content providers. We have been active in the live entertainment industry for nearly three decades, during which time we have earned access to, and the trust of, the largest Brazilian and international providers of high-quality content. This is the result of the credibility we have earned with corporate sponsors and the general public through the extensive history of shows we have promoted in Brazil and South America and the high standards of excellence in our productions, our corporate sponsorship capacities and the quality of operations at our events. Our content providers include Live Nation, one of the largest live entertainment companies in the world, with which we have signed a binding term sheet through July 2015 that gives us the exclusive right to promote the content of Live Nation’s portfolio of artists in South America (except Colombia). The binding term sheet also prohibits us from competing with Live Nation in the United States, Canada and Europe (except Spain). We also have strong relationships with other large international content providers such as Cirque du Soleil, Cameron Mackintosh, Disney, RUG—The Really Useful Group (Andrew Lloyd Webber), the William Morris Agency, CAA—Creative Artists Agency and The Agency Group, among others, which gives us access to the world’s top artistic and cultural event content. We believe our extensive experience in the entertainment industry in the countries in which we operate is a key factor in giving us privileged access to international content providers.

Our portfolio of shows has included performances of international content such as Disney on Ice, the Blue Man Group and Cirque du Soleil; acclaimed Broadway shows like Mamma Mia, Cats, Phantom of the Opera, Beauty and the Beast, Les Misérables, Chicago and Miss Saigon; concerts with national and international artists like U2, AC/DC, Paul McCartney, Madonna, Bon Jovi, Aerosmith, Roger Waters, Pearl Jam, Rush, Red Hot Chili Peppers, Eric Clapton, the Three Tenors, Avril Lavigne, Santana, Roberto Carlos, Caetano Veloso, Maria Bethânia, Maria Rita, Vanessa da Mata and Victor & Leo; and popular Brazilian theatrical productions such as A Flower of My Dear Love (A Flor do Meu Bem Querer) and Guess Who Comes to Pray (Adivinhe Quem Vem Prá Rezar), among others. With respect to sporting events, we produce large events such as a stock car racing series sponsored by the CEF, with 12 races in Brazil, a pick-up racing series (the Chevrolet Montana Cup, sponsored by General Motors of Brazil), a Mini Cooper racing challenging (the BMW Mini Challenge) and, starting in 2011, the Brands Championship and the Brazilian leg of the World Touring Car Championship, or WTCC. Given our experience in promoting a variety of cultural and sporting events, we believe we are well-positioned to adapt to new trends and tastes, with great flexibility to expand into new live entertainment areas. Together, these factors drive our market leadership.

5 Strong relationships with important corporate sponsors. We believe that our clients’ satisfaction, along with the high quality of our products and services, drive our reputation in the market and have brought us loyal corporate sponsors. These sponsors include Credicard, a Brazilian credit card company, which has been our sponsor for more than a decade, Banco Bradesco S.A. and American Express, which sponsor Cirque du Soleil productions that we promote, and Banco Citibank S.A., which holds the naming rights to three of our venues. Our corporate sponsorships generate stable revenue streams. As of December 31, 2010, we had approximately R$206.1 million in contracted corporate sponsorship and naming rights, with the longest one in effect through 2019.

Vertically-integrated model and diversified content offering. We have a vertically-integrated business model, in which we seek to profit from all revenue-generating activities associated with the promotion of live entertainment events, including: tickets; ticketing convenience fees; food, beverage and merchandise sales; and corporate sponsorships. In addition, we currently operate five of the most important venues in South America located in the cities of São Paulo and Rio de Janeiro, Brazil and Buenos Aires, Argentina. We have total control over scheduling at these venues and the flexibility to rent them out for third-party events. Our venues are among the few in South America with the technical specifications and size to put on all types of shows, including large and complex productions like Broadway musicals. We believe our vertically-integrated business model strengthens our bargaining position with our suppliers, generating synergies and economies of scale. Moreover, we offer a broad range of content, which includes live music, Broadway musical productions, national theatrical productions, family entertainment and cultural expositions and sporting events. The diversification of our content helps to reduce our business risks associated with concentrating in a single content type and in a limited number of events. We believe our vertically-integrated business model and diversified content helps to reduce our risks and increase our ability to generate revenue at all stages of the value chain in the promotion of shows.

Strong cash generation with low working capital requirements. As a result of our market credibility and the success of our shows, we have entered into long-term agreements with corporate sponsors, certain of which generate fixed cash flow with a portion of the fee are paid in advance of performances. We generally are able to sell tickets well in advance of the performance of, and the incurrence of significant costs for, many of our shows. For example, all three of U2’s Brazilian shows scheduled for April 2011 were sold out four months in advance. Long-term corporate sponsorship contracts and advance ticket sales reduce our working capital requirements and strengthen cash flow from operations. Moreover, we have not historically needed to make substantial investments in fixed assets because we rent our venues from third parties through long-term leases with terms of generally ten years (other than the Ópera Citi in Argentina, which we own).

Experienced management and shareholders specialized in the industry. Our management includes highly- trained and innovative executives with more than 20 years of experience in the live entertainment industry, who were pioneers in (i) the launch of the former Palace venue in São Paulo (currently Citibank Hall); (ii) sponsorship programs in Brazil (including naming rights for venues, theatres and sport championship series); and (iii) online tickets sales for live performances in Brazil. Our executives’ experience and know-how are demonstrated by our high-quality and distinct products and services, improvements in our attendance rates and identification of new industry trends and opportunities. To align the interests of our executives with those of shareholders, we have implemented a stock option plan and incentive-based compensation to strengthen our executives’ commitment to producing results. We also benefit from our shareholders CIE and Gávea Investimentos, or Gávea, which manages the GIF-II fund. CIE has vast experience in the live entertainment industry in Mexico and enjoys close relationships with international content providers, and Gávea is one of the largest investment fund managers in Brazil and provides us with experience in financial management and corporate governance.

6 Our Strategy We believe that the implementation of our main strategies will result in improvements in the development of our operations, maximizing shareholder value and providing long-term competitive advantages. Our strategy includes the following components: Guarantee the best Brazilian and international content. We intend to continue to increase and update our content in accordance with market trends and consumer demand by extending contract periods for successful content and seeking to present the best Brazilian and international content. We intend to use our close relationships with the principal content providers to renew and expand the content we offer by seeking to reach larger audiences and attain high levels of satisfaction, which we believe will increase attendance rates at our events.

Leverage our growth through geographic expansion. Currently, we are active in Brazil’s main cities (São Paulo, Rio de Janeiro, Curitiba, Belo Horizonte, Fortaleza, Recife, Salvador, Brasília, Porte Alegre and Campinas) as well as in Buenos Aires and Cordoba, Argentina and Santiago, Chile. We intend to increase our activity in these cities and expand into new ones. We believe there is underserved demand for live entertainment in other large cities in Brazil, Argentina and Chile in which we have not yet staged events. In 2010, our event promotion activities in the cities of São Paulo and Rio de Janeiro accounted for approximately 80% of our net operating revenue from event promotion in Brazil, and approximately 50% of our net operating revenue from event promotion in South America. We also intend to expand our activities to other countries within other South American regions that exhibit great potential for growth in demand. For example, we intend to expand our activities in Peru, principally by promoting performances in Lima, Peru’s most populous city. We believe that by leveraging our content and Portuguese- and Spanish-language translations of shows, and expanding our activities to new markets, we will be able to increase our growth, maximize our profit margin and further solidify our cash generation. Accordingly, we intend to broaden our activities and solidify our leading position in the South American live entertainment industry.

Operate the best performing arts venues and event spaces in South America. We believe that exclusive access to venues represents a barrier to entry in the entertainment industry. In addition, operating the venues ourselves allows for autonomy over scheduling and the possibility of leasing space for third-party events, which provides an important competitive advantage in promoting long-running and technically complex shows. Therefore we intend to continue leasing and operating the best venues and using our bargaining power to schedule the most attractive dates in exposition centers, stadiums and sports arenas operated by third parties in South America. Our plans may also include acquiring or building new venues in cities in which we currently operate and in new cities with potential demand for live entertainment.

Increase our operating efficiency through economies of scale. The fact that we are the largest entertainment company in South America, in terms of number of tickets sold in 2010, strengthens our bargaining position, allowing us to reduce our production costs, and enables us to distribute operating costs over a larger operating platform, which provides economies of scale. In order to further reduce our costs, beginning in the second half of 2011, we intend to acquire certain of the equipment we currently rent from third parties to mount our live music concerts. We also believe we have an advantage over our competitors in acquiring content because of our broad geographic footprint and purchasing power for regional tours and operation of some of the best venues in South America. We also intend to provide our corporate sponsors with a regional marketing strategy, which will attract sponsors that want to expose their brands and products to the diverse locations in which we produce events.

Expand our ticketing and other ancillary revenues segments. We currently operate ticketing for third-party venues such as São Paulo’s SESI Theater and Belo Horizonte’s Chevrolet Hall. We intend to further expand our third-party ticketing services to other kinds of entertainment, including for sporting events and movies, among

7 others. Our strategy also includes expanding our third-party ticketing operations regionally to additional important Brazilian cities and expanding ticketing to new venues we intend to operate exclusively. Moreover, to attain our goals for growing our marketing and publicity activities, we are evaluating whether to expand our activities and acquire companies in Brazil and elsewhere in South America that focus on this segment. In this way we intend to capitalize on our pioneering branded-entertainment platforms. We believe that any such acquisitions will take into account potential synergies between us and the target companies and their levels of anticipated return.

Solidify our industry leadership through selective acquisitions. We are evaluating whether to expand the content of our artistic, cultural and sporting events by acquiring other companies in the industry in South America with high growth potential, particularly those with content offerings that present synergies with our business. We intend to use a material portion of the proceeds of the primary offering to this end, and, as such, the success of these acquisitions will have a significant effect on our future performance.

History

Opening of Citibank Hall (formerly Opening of Teatro Abril in São Paulo and Exclusive production rights contract with Live the Palace) — the first performing promotion of the first Portuguese-language Nation, the largest entertainment content arts venue in São Paulo Broadway show in Brazil, Les Misérables provider in the world

Opening of Credicard Hall São Paulo — Lease of Citibank Hall F.A. Particpações S.A. Launch of Pass Card, which permits voted the best theater in Latin America in (formerly the Metropolitan) becomes controlling MasterCard holders to use their 2009 and 2010 (Pollstar) in Rio de Janeiro shareholder. credit card as an entrance ticket

1983 1997 2000 2001 2005 2006 2007 2008 2009 2010

Acquisition of Ópera Citi Launching of in-house Acquisition of Promotion of first Tickets for Fun begins operation as (formerly Teatro Ópera) in ticketing in Brazil and Ticketek Cirque du Soleil show ticketing service for Brazil Buenos Aires Argentina, in Argentina in Brazil partnership with Ticketmaster Expansion of business into sporting events

Recent Developments On January 13, 2011, we performed a reverse stock split that reduced the number of our shares at a ratio of 4:1. After the reverse split, our capital stock consisted of 57,466,312 fully paid-in common registered, book-entry shares, without par value.

On March 22, 2011, F.A. Participaçoˇes transferred 2,011,321 common shares, representing 3.5% of our capital stock, to GIF-II pursuant to the exercise of its option to acquire our common shares. As a result, GIF-II’s participation in our capital stock increased to 23.5%. For more information, see “Principal and Selling Shareholders—Share Purchase Option Agreement.”

8 Corporate Structure The diagram below shows our simplified corporate structure. For more information about our corporate structure, principal shareholders and changes in the percentage ownership among the selling shareholders, see “Business” and “Principal and Selling Shareholders.”

CIE INTERNACIONAL S.A. GIF II FIP FERNANDO LUIZ ALTERIO DE CV (Mexico)

85.0%

F.A. COMÉRCIO E 15.0% PARTICIPAÇÕES S.A. 24.2%

33.9%

23.5% 18.4% T4F ENTRETENIMENTO S.A.

Brazil Argentina Chile United States

T4F Alimentos, Bebidase Ingressos Ltda. T4F Inversiones S.A. Ticketmaster Chile S.A. T4F USA Inc. Metropolitan Empreendimentos S.A. B.A. Inversiones S.A. T4F Chile S.A. Área Marketing Brasil Ltda. Pop Art S.A. Promaser S.A. Vicar Promoções Desportivas S.A. (75%) Clemente Lococo S.A.I.C. Ticketek Argentina S.A. T4F Entretenimientos Argentina S.A. Ticketmaster Argentina S.A.

Our headquarters are located at Rua Fidêncio Ramos, 213, suites 42, 52, 61 and 62, Itaim Bibi, in the city and state of São Paulo, Brazil, 04551-010, and our investor relations department telephone number is (+5511) 3576-1207. Our website is www.t4f.com.br. The information available on our website or that may be accessed through it, as well as information included in any marketing material published through the media and in newspaper and magazine advertisements, is not part of this offering memorandum nor incorporated herein by reference.

9 THE OFFERING

The following summary contains basic information about this offering. The summary is not intended to be complete. You should read the full text and more specified details contained elsewhere in this offering memorandum. For more information concerning our common shares, see “Description of Capital Stock.”

Issuer...... T4FEntretenimento S.A.

Selling Shareholders ...... Fernando Luiz Alterio, CIE Internacional S.A. de C.V. and GIF II Fundo de Investimento e Participações.

Brazilian Underwriters ...... Banco de Investimentos Credit Suisse (Brasil) S.A., Banco BTG Pactual S.A. and Banco Bradesco BBI S.A.

Agents ...... Credit Suisse Securities (USA) LLC, BTG Pactual US Capital Corp. and Bradesco Securities Inc.

Shares Offered ...... Weareoffering a total of 11,724,138 common shares, and the selling shareholders are offering a total of 17,586,207 common shares to: • the public in Brazil pursuant to an offering registered with the CVM in Brazil; • qualified institutional buyers, as defined under Rule 144A, in the United States, in reliance upon exemptions from registration provided and the rules thereunder; and • institutional and other investors outside the United States that are not U.S. persons, in reliance on Regulation S.

Over-allotment Option...... Theselling shareholders have granted to Banco de Investimentos Credit Suisse (Brasil) S.A. an option, exercisable upon notification to Banco BTG Pactual S.A. and Banco Bradesco BBI S.A., to place an aggregate of 4,396,551 additional common shares at the offering price, representing 15.0% of the common shares initially offered hereby, to cover over-allotments, if any, for a period of up to 30 days from the date of publication in Brazil of the notice of commencement of this offering.

Offering Price...... R$16.00 per common share.

Capital Stock ...... Ourshare capital immediately prior to this offering consists of 57,466,312 common shares. Immediately following completion of this offering, our share capital will consist of 69,190,450 common shares. For further information regarding the rights accompanying our common shares, see “Description of Capital Stock.”

Use of Proceeds ...... Weexpect to receive R$175.5 million from the primary offering based on the price per share of R$16.00, after deducting estimated underwriting fees and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of the common shares by the selling shareholders.

10 We intend to use the net proceeds from this offering for (i) acquiring venues and companies that offer synergies in Brazil (approximately 70%); (ii) constructing new venues (approximately 20%); and (iii) expanding into additional areas in South America through acquisition of promoters and ticketing operations (approximately 10%). See “Use of Proceeds.”

Lock-up Agreements ...... We,theselling shareholders, F.A. Participações, and our directors and officers, subject to certain exceptions, have agreed with the Brazilian underwriters and the agents, for a period of 180 days following the pricing date of this offering, not to issue, in our case, and not to offer, sell, contract to sell, pledge, loan, grant any option to purchase, make any short sale or otherwise dispose of, directly or indirectly, or grant any rights, file or cause to be filed a registration statement pursuant to the Securities Act or Brazilian law, in all cases with respect to any shares or any options or warrants to purchase any shares, or any securities convertible into, or exchangeable for, or that represent the right to receive shares.

Additionally, we, the selling shareholders, F.A. Participações and our directors and officers have agreed with the Brazilian underwriters and the agents, subject to certain exceptions, for a 180-day period following the pricing of this offering, not to enter into any swap or other arrangement that transfers to another party, in whole or in part, any of the economic consequences of ownership of any common shares issued by us or any securities convertible into, or exchangeable or exercisable for, any common shares issued by us, which are either held by us or them on such date, or any securities convertible into or exchangeable for our common shares.

According to the rules of the Novo Mercado, the selling shareholders, F.A. Participações and directors and our officers, subject to certain exceptions, cannot sell or offer to sell shares issued by us for the first six months after the beginning of the trading of our common shares on the Novo Mercado. After this initial period of 180 days, the selling shareholders, F.A. Participações and our directors and officers will not be entitled to sell or offer more than 40.0% of the shares that they hold for an additional six months. However, this limitation will not apply in the event of the assignment or loan of shares for the purpose of effecting market-making activities by entities registered with the BM&FBOVESPA, as long as the aggregate amount of the assignments or loans of shares does not exceed 15.0% of the total amount of our shares available in the market. See “Plan of Distribution.”

In addition, CIE and F.A. Participações have, under the terms of the T4F shareholders’ agreement, agreed not to sell their respective shares for a term of one year following the closing of this offering. For more information, see “Principal and Selling Shareholders— Shareholders’ Agreements—T4F Shareholders’ Agreement.”

11 Transfer Restrictions ...... Ourcommon shares have not been registered under the Securities Act and are subject to U.S. restrictions on transfer and resale, as described in “Transfer Restrictions.” Transfers of our common shares, including by or between residents of jurisdictions outside Brazil, may be effected only in Brazil. See “Market Information.”

Voting Rights ...... Each common share entitles its holder to one vote at any annual or extraordinary shareholders’ meetings. See “Description of Capital Stock—General—Rights of common shares.”

Dividends ...... Brazilian Corporate Law and our bylaws require us to pay a minimum mandatory dividend to our shareholders of 25.0% of our annual adjusted net income, as calculated under Brazilian Corporate Law, unless our board of directors recommends that we do not distribute dividends due to our financial condition at a particular time. We may pay dividends in the form of interest attributed to stockholders’ equity. See “Dividends and Dividend Policy.”

Trading, Settlement and Clearance . . . Payment for our common shares will be required to be made to us in reais in Brazil through the facility of the Central Depository BM&FBOVESPA, and we expect to deliver our common shares in Brazil through the facility of the Central Depository BM&FBOVESPA on or about April 15, 2011. Trades in our common shares on the BM&FBOVESPA will settle through the Central Depository BM&FBOVESPA.

Listing...... Wehave requested that our common shares be approved for listing on the Novo Mercado segment of the BM&FBOVESPA under the symbol “SHOW3.” The ISIN number for our common shares is BRSHOWACNOR7.

Risk Factors ...... Aninvestment in our common shares involves risks. See “Risk Factors” and the other information included in this offering memorandum for a discussion of factors you should consider before deciding to invest in our common shares.

Taxation ...... Dividend distributions with respect to our common shares are not currently subject to withholding of Brazilian income tax. However, payments of interest attributable to stockholders’ equity (in lieu of dividends) are subject to withholding of Brazilian income tax. For certain Brazilian and U.S. tax consequences with respect to U.S. holders of our common shares, see “Taxation.”

12 SUMMARY OF FINANCIAL AND OPERATING INFORMATION

The tables below present a summary of our consolidated financial and operating information as of and for the periods indicated. You should read this information in conjunction with our audited consolidated financial statements and related notes included elsewhere in this offering memorandum and with the sections entitled “Presentation of Financial and Other Information,” “Selected Financial and Operating Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following financial information is based on our audited consolidated financial statements and notes as of and for the years ended December 31, 2008, 2009 and 2010, which have been prepared in accordance with IFRS (consolidated), and Brazilian GAAP (individual).

We have translated some of the real amounts included in this offering memorandum into U.S. dollars. The exchange rate used to translate such amounts as of and for the year ended December 31, 2010 was R$1.666 to US$1.00, which was the commercial selling rate at closing for the purchase of U.S. dollars in effect on December 31, 2010 as reported by the Central Bank. The U.S. dollar equivalent information included in this offering memorandum is provided solely for your convenience and should not be construed as implying that the real amounts represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate. See “Exchange Rates” for more detailed information regarding the translation of reais into U.S. dollars.

Statement of Income Data

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Net operating revenue Event promotion ...... 372.6 248.5 355.0 213.1 Live music ...... 185.8 154.3 219.2 131.6 Family events, theater and cultural expositions ...... 169.5 82.6 122.6 73.6 Sports events ...... 17.3 11.6 13.2 7.9 Ticketing; food, beverage and merchandise sales; and venue operation ...... 89.6 65.3 89.9 54.0 Sponsorships ...... 134.5 120.7 124.3 74.6 Event promotion ...... 122.1 101.9 101.7 61.0 Ticketing; food and beverage sales; and venue operation...... 12.4 18.9 22.6 13.6 Net operating revenue ...... 596.6 434.6 569.2 314.7 Cost of services and sales ...... (437.4) (328.5) (403.2) (242.0) Gross profit...... 159.2 106.0 166.0 99.6 Operating expenses Selling expenses ...... (4.1) (3.5) (3.4) (2.0) General and administrative expenses ...... (68.9) (68.1) (77.2) (46.3) Management compensation ...... (6.7) (6.0) (3.5) (2.1) Other operating income, net ...... 3.9 2.6 8.2 4.9 Operating income 83.4 31.1 90.1 54.1 Financial income (expenses) ...... (23.5) (30.4) (21.9) (13.1) Income tax and social contribution ...... (13.0) 5.3 (28.0) (16.8) Net income...... 46.9 6.0 40.3 24.2

13 Balance Sheet Data As of December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Assets Current assets Cash and cash equivalents ...... 92.8 55.2 120.9 72.6 Restricted cash ...... — 2.1 6.6 4.0 Accounts receivable ...... 69.4 52.6 66.1 39.7 Inventories ...... 1.5 1.7 1.3 0.8 Recoverable taxes ...... 31.2 18.0 14.5 8.7 Advances to suppliers...... 10.2 21.5 4.9 2.9 Prepaid expenses ...... 22.4 23.7 34.7 20.8 Derivatives ...... 3.9 — — — Other receivables...... 7.2 3.4 3.0 1.8 Total current assets...... 238.6 178.1 252.0 151.3 Noncurrent assets Long-term assets: Deferred income tax and social contribution...... 115.9 113.9 92.6 55.6 Escrow deposits ...... 2.4 2.2 2.8 1.7 Prepaid expenses...... 2.1 1.0 0.6 0.4 Derivatives...... 7.8 — — — Related party receivables ...... 0.8 16.5 13.1 7.9 Property, plant and equipment ...... 38.1 24.8 23.5 14.1 Intangible assets Goodwill on acquisition of investments ...... 139.5 135.7 135.1 81.1 Other intangibles...... 2.7 2.0 2.2 1.3 Total noncurrent assets ...... 309.3 296.2 269.8 161.9 Total assets ...... 547.9 474.2 521.8 313.2 Liabilities and shareholders’ equity Current liabilities Trade payables ...... 87.7 37.9 36.5 21.9 Loans and financing ...... 60.3 61.6 19.0 11.4 Accrued payroll and related taxes...... 9.1 6.7 9.3 5.6 Share-based payments ...... — — 2.5 1.5 Taxes payable...... 22.1 15.5 17.4 10.4 Advances from clients ...... 36.4 93.8 113.3 68.0 Sponsorship—cultural incentives law ...... — 2.0 3.5 2.1 Dividends payable ...... 0.7 0.4 9.6 5.8 Related party payables ...... 1.4 — — — Provision for tax, civil, and labor contingencies ...... 2.1 5.1 7.5 4.5 Other payables ...... 3.1 0.5 0.8 0.5 Total current liabilities ...... 222.9 223.5 219.5 131.8 Noncurrent liabilities Loans and financing ...... 146.1 85.3 131.3 78.8 Provision for tax, civil and labor contingencies...... 28.8 24.9 21.9 13.1 Deferred income tax and social contribution ...... 14.7 2.9 1.4 0.8 Taxes payable...... 4.6 16.6 13.1 7.9 Advances from clients ...... 2.4 — 1.3 0.8 Total noncurrent liabilities ...... 196.6 129.6 169.0 101.4 Shareholders’ equity Capital ...... 31.5 31.5 36.5 21.9 Legal reserve ...... 5.4 5.6 7.3 4.4 Earnings retention reserve ...... 78.8 80.1 55.3 33.2 Reevaluation reserve...... 6.0 1.9 1.7 1.0 Additional dividends proposed ...... — — 27.5 16.5 Valuation adjustments to equity ...... 3.9 0.2 2.9 1.7 Equity attributable to owners of the company ...... 125.5 119.3 131.2 78.7 Non-controlling interests in equity of subsidiaries ...... 2.8 1.8 2.1 1.3 Total consolidated shareholders’ equity ...... 128.3 121.1 133.3 80.0 Total liabilities and shareholders’ equity ...... 547.9 474.2 521.8 313.2

14 EBlTDA The following table sets forth a reconciliation of our EBITDA to net income for each of the years presented:

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$, except percentages) (in millions of US$) Net income...... 46.9 6.0 40.3 24.2 (+) Income tax and social contribution ...... 13.0 (5.3) 28.0 16.8 (+) Financial income (expenses)...... 23.5 30.4 21.9 13.1 (+) Depreciation and amortization ...... 17.0 15.0 5.0 3.0 EBITDA(1) ...... 100.4 46.1 95.1 57.1 EBITDA margin (%)(2) ...... 16.8% 10.6% 16.7% — (1) EBITDA is a non-GAAP measure prepared by us, consisting of: net income, plus income tax and social contribution tax, net financial income (expenses), depreciation and amortization. EBITDA is not a measure defined under Brazilian GAAP or IFRS, should not be considered in isolation, does not represent cash flow for the periods indicated and should not be regarded as an alternative to cash flow or net income, or as an indicator of operational performance or liquidity. EBITDA does not have a standardized meaning and different companies may use different EBITDA definitions. Therefore our definition of EBITDA may not be comparable to the definition of EBITDA or other similar measures used by other companies. We use EBITDA to analyze our operational and financial performance, as well as a basis for administrative decisions. The use of EBITDA as an indicator of our profitability has limitations because it does not account for certain costs in connection with our business, such as financial expenses, taxes, depreciation, capital expenses and other related expenses. We use EBITDA as a supplemental means to measure our operating performance. (2) EBITDA margin is calculated by dividing EBITDA by net operating revenue.

Indebtedness

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Loans and financings (current) ...... 60.3 61.6 19.0 11.4 (+) Loans and financings (noncurrent) ...... 146.1 85.3 131.3 78.8 (–) Cash and cash equivalents...... 92.8 55.2 120.9 72.6 Net Debt ...... 113.6 91.7 29.3 17.6

15 RISK FACTORS

Investing in our common shares involves a high degree of risk. You should carefully consider the risks described below before making an investment decision regarding our common shares. Our business, financial condition, results of operations, cash flows and/or prospects could be adversely affected by any of these risks, among others. The market price of our common shares could decline due to the occurrence of any of these risks or other factors, and you may lose all or part of your investment. The risks described below are those that we currently believe may materially affect us. Additional risks and uncertainties not currently known to us, or those that we currently deem to be immaterial, may also materially and adversely affect our business, financial condition, results of operations, cash flow and/or prospects, and/or the price of our common shares.

For purposes of this section, when we state that a risk, uncertainty or problem may, could or will have an “adverse effect” on us or “adversely affect” us, we mean that the risk, uncertainty or problem could have an adverse effect on our business, financial condition, results of operations, cash flow and/or prospects, and/or the price of our common shares, except as otherwise indicated. You should view similar expressions in this section as having similar meaning.

Risks Relating to Us and the Entertainment Industry If we are unable to successfully forge and maintain good relationships with our content providers, we may be materially and adversely affected. We believe our relationships with providers of content, which usually consist of internationally acclaimed artistic or cultural productions, are essential to our success because high-quality content attracts corporate sponsors and generates higher levels of audience satisfaction. However, in the live entertainment industry, long- term or exclusive contracts are unusual, and therefore we cannot guarantee that our content providers will continue to supply us with current or new content. Other than our August 2008 agreement with Live Nation for the exclusive right to produce Live Nation’s content in South America (excluding Colombia) through July 2015 and our December 2010 agreement with Cirque du Soleil to promote the group’s “Varekai” show throughout South America through February 24, 2013, we do not have any exclusive agreements in place with content providers. For more information on our contracts with Live Nation and Cirque Du Soleil, see “Business— Material Agreements.”

Due to the lack of exclusive agreements in our industry, we rely heavily on maintaining close business relationships with important international content providers. Difficulties in maintaining good relationships with our content providers, or in forging good relationships with additional content providers, or the termination of existing agreements or relationships, could reduce the number of artistic and cultural events we promote, which would have a direct impact on our income and market position and could materially and adversely affect our business.

The entertainment industry is highly sensitive to unforeseeable changes in the public’s taste. We may be unable to maintain a portfolio of entertainment content that is responsive to current consumer preferences, which is a determining factor in attracting large audiences and ensuring the success of the events we promote. The live entertainment business depends significantly on producing shows attractive to the public, which in turn requires us to successfully identify and attract popular artists and other content. The shows we promote require time and investment to be produced and launched. For example, our Broadway adaptations require between eight to 12 months to be produced. For that reason, if a local adaptation of a Broadway show does not attract audiences due to a change in taste or a decline in the popularity of the show internationally, we could experience significant losses. If we are unable to quickly anticipate, identify or respond to changes in consumer preferences or if the public is not receptive to the performances we promote, demand for our artistic and cultural events may decline, which could materially and adversely affect us.

16 The entertainment market is highly sensitive to changes in the domestic and global economies, especially to changes in the economies of the countries in which we operate. Any downturns in the global economic environment or those of the countries in which we operate may materially and adversely affect us. Since entertainment is not considered an essential service, the industry’s performance is very sensitive to variations in the economy, and it is historically one of the first areas to encounter reduced demand in a stagnating economy. Any downturn in the markets in which we operate will result in a decline in both the public’s and our corporate sponsor’s purchasing power and disposable income, which could cause a reduction of both the frequency of, and revenues from, live entertainment events that we promote including possibly requiring us to reduce ticket prices for these events. Such reductions could materially and adversely affect our business.

We depend on appropriate venues for our events. The availability, if any, and high cost of live entertainment venues administered by third parties may materially and adversely affect us. When we produce shows in venues leased from third parties, whether for reasons of size or the unavailability of our own venues, the amount we pay for the venue varies depending on several factors, including competition with other parties to lease the venue and additional costs arising from the need to modify the venue for our event and then restore the venue after our event. In addition, we are party to long-term leases for each of our performance venues, and we depend on the continuity of these leases. Of those four leases, our lease for São Paulo’s Citibank Hall expired in August 2008 and we are disputing in court our ability to renew this lease and to continue to occupy this venue and to pay a lower monthly rent than that being sought by the landlord. If we lose this litigation, which we believe is probable, we may need to vacate Citibank Hall quickly, which could generate increased costs for leasing other venues and adversely affect us. For more information on the court case involving the property where Citibank Hall is located, see “Business—Legal and Administrative Proceedings.” Additionally, our lease with the owner of São Paulo’s Credicard Hall expired in January 2010 and we have brought a court action to renew this lease at a monthly rent that is lower than the rent being sought by the landlord. In addition, if we lose any lawsuit against property owners, we may not have access to a venue with sufficient space for event promotion, and we may breach contractual agreements with artists and with current corporate sponsors if we are unable to continue to stage events at these venues. The unavailability or high cost of leasing a venue and/or the loss of a venue we currently lease may materially and adversely affect us.

Unanticipated events that cause the cancellation of shows could have a material adverse effect on us. We normally schedule tours four to eight months in advance, generally pay a portion of the artists’ fees before tickets to the event go on sale and we sometimes incur costs for modifying and renting venues for certain performances. We do not obtain cancellation insurance for the majority of the shows we promote, except for performances of certain internationally renowned artists. Accordingly, if a tour is canceled by the artist or by us, or if there is an unexpected change in show dates, we are required to refund tickets sold and may incur other costs and nonrefundable expenses in the preparation and organization of these events, such as renting and installing equipment needed for the events, or suffer reputational harm, which may materially and adversely affect us.

The occurrence of an accident during a production could have a material adverse effect on us. Certain risks are inherent to the production of live shows, such as the possibility of accidents during the performance. Certain of our shows involve a large number of people and are therefore more prone to accidents, the occurrence of which could harm our image, expose us to liability for personal or property damage and reduce attendance. We cannot guarantee that our insurance coverage limits, including for fire and civil liability, are sufficient to cover damages from accidents or other incidents in or near our shows, nor can we guarantee that the indemnification received will be sufficient to pay such damages in full. In addition, we cannot guarantee that coverage will be available to us at reasonable prices in the future, or at all. The occurrence of one or more incidents or accidents may materially and adversely affect us.

17 System interruptions or crashes or failures to upgrade the technology that supports our online sales structure and other points of sale may have a material adverse effect on us. Our ticketing operations involve the intensive use of technology, and we rely significantly on the availability, integrity and reliability of our technological systems to assure sales through the Internet as well as through other channels. Ticketing systems and technology may become obsolete or inadequate and/or these systems may be subject to damage or interruptions for a variety of factors beyond our control, such as human error, fires, natural disasters, power outages, communication system failures, or hacker attacks. If we are unable to adapt to the technological changes demanded by consumers or if our systems suffer crashes, interruptions, or errors in the processing of electronic transactions, we may be materially and adversely affected.

Pandemics, interruptions or catastrophic events may have a material adverse effect on us. The existence of pandemics or contagious illnesses transmitted in public places in general may drastically reduce demand for the events we promote. For example, the H1N1 influenza spread throughout many countries worldwide and was categorized by the World Health Organization as a global pandemic. The H1N1 influenza had a substantial negative impact on our operating results for the year ended December 31, 2009, especially in relation to our events in Argentina. A variety of factors such as fear amongst the general public as a response to media coverage or governmental campaigns to reduce large gatherings of people can influence people’s behavior, causing them to avoid crowded places and, in turn, negatively affect demand for our events.

Furthermore, natural disasters may harm our business. For example, the major earthquake that shook Chile in February 2010 halted our operations in the country for almost 30 days and led to the cancellation of ticket sales, and during the Guns N’ Roses tour in 2010, torrential rains in Rio de Janeiro caused the cancellation of the show. Unforeseeable events beyond our control, including natural disasters, terrorism and wars, may interrupt our operations and those of our suppliers, negatively impacting consumer spending. Events such as these may materially and adversely affect our business.

We may encounter difficulty in expanding our business in new markets, domestically and internationally. Our growth strategy involves expanding within our current markets and to new domestic and international markets, principally in South America. Since this expansion is an important element of our growth strategy, its execution will significantly affect our future performance. We may encounter difficulties such as: • unforeseeable changes in political conditions; • difficulties in hiring qualified and affordable labor to manage our operations outside Brazil; • changes in business regulations and in investment policies; • difficulties in registering and protecting trademarks and software; • breaches in contracts by third parties; • difficulties in identifying or obtaining access to appropriate venues for our events; • problems in obtaining permits for our events; and • risks inherent to building our own venues.

If we are unable to overcome one or more of these difficulties, we may be materially and adversely affected.

We may have trouble executing our acquisition strategy. Acquiring assets or companies in the entertainment industry is an important element of our growth strategy and we expect to continue to acquire companies, products, services and technology from third parties. We intend to use a material portion of the net proceeds from the primary offering for acquisitions, and the success of these acquisitions will significantly affect our future performance.

18 We may encounter the following risks in future acquisitions: • negotiating potential acquisitions may involve significant costs; • the acquired assets or operations might not yield sufficient sales or profits to justify the investments made to acquire them; • the acquisition could be subject to antitrust analysis or proceedings by antitrust authorities in the countries in which we operate, including the Brazilian National System for the Protection of Competition (Sistema Nacional de Defesa da Concorrência); • difficulties in managing different products, technologies, businesses, operations, corporate cultures, personnel and infrastructure; • our relationship with current and new employees, sponsors, and content providers could be damaged; • the failure to identify all contingencies and technical problems, such as questions regarding the quality of the acquired company’s products, through our due diligence process; • contingencies relating to taxes, product liability, intellectual property, financial disclosure and accounting practices or internal controls; • litigation by former employees or terminated service providers; and • diversion of our management’s attention from existing operations.

These difficulties may have a material and adverse effect on us, especially in cases involving acquisition of a large company or a high number of acquisitions. Furthermore, if shares are issued in connection with future acquisitions, existing shareholders may experience dilution and profits per share may be reduced.

We may encounter increased competition in our business, which could have a material adverse effect on us. Any entrance by foreign competition into the Brazilian market or the emergence of a new or existing Brazilian company that operates in the live entertainment industry may represent a risk to our business and current market position if we are unable to compete successfully. Further, content providers that currently supply us with content may eventually directly compete against us in the countries in which we operate. Increased competition could have a material adverse effect on us. For more information on our competitors, see “Business—Competition”.

The promotion of our events and expansion of our activities depends on government permits and licenses, and we may not be able to timely obtain the necessary permits and licenses. Our live entertainment operations are subject to federal, state and municipal laws governing various aspects of an event, including the construction, operation and safety of the venues and structures installed for the shows, as well as licensing and authorization for specific types of events. The failure to comply with these regulations could subject us to penalties and cancel performances. We cannot guarantee that we will be able to timely obtain the required permits and licenses to present our shows, which would materially and adversely affect us.

In addition, constructing or modifying venues for our shows is also subject to governmental permits and licenses, and these processes may require unanticipated changes to our initial design resulting in increased costs, which could materially and adversely affect us.

Any unauthorized release of information from our databases could materially and adversely affect us. Technological advances permit the development of increasingly sophisticated methods to capture our clients’ personal data for illegal purposes, such as fraud and identity theft. In this way, our information systems are exposed to breaches by third parties attempting to use the system fraudulently to access our clients’ personal data. If our information systems are breached and there is an unauthorized release if our clients’ data, we could be exposed to lawsuits and our reputation may suffer, which could materially and adversely affect us.

19 The loss of members of our senior management or our inability to attract and retain qualified senior management personnel could have an adverse effect on us. In order to execute our business strategy as well as maintain our content offerings and relationships with corporate sponsors, we depend on the experience, relationships and reputations of our senior management team. In addition, we are actively searching for executives with experience in the entertainment industry and providing intensive training for executives hired from other backgrounds. The loss of the services of any important members of our senior management or our inability to attract, train and retain qualified personnel could have a material adverse effect on us.

The lack of quality entertainment events or artists may have a material adverse effect on the results of our operations. Our promotion of artistic and cultural events may be affected by a variety of factors, including the lack of development of new artists into stars or of new content of interest to the public. A lack of quality entertainment material may result in increased competition to hire quality artists or content, which could result in higher costs to us, or a reduced numbers of events, all of which could materially and adversely affect us.

The termination of corporate sponsorship contracts may have a material adverse effect on us. We obtain corporate sponsorships by selling rights to display brand name in our venues, including the naming rights to our venues and the permanent or one-time sponsorship of our events. If these contracts are terminated or not extended or if we cannot find corporate sponsors interested in publicizing their brands at our venues, our revenue from this line of business could be materially and adversely affected.

The laws governing the rights of certain population segments to buy discount tickets present operational complexities, increase the risk of disputes with customers and reduce our revenues. Under various Brazilian state and municipal laws, senior citizens, students and certain professors of public schools in certain states, among others, have the right to half-price tickets for artistic, cultural and sporting events. Since 2001, the percentage of students claiming the right to purchase half-price tickets has increased continuously, both through a greater number of students in Brazil and due to fraudulently issued student cards. In 2001, the monopoly over issuing student identification cards exercised by the Brazilian National Student Union (União Nacional dos Estudantes), or UNE, was dismantled. As a result, there are now a significant number of fraudulent student identification cards. Our ability to question the validity of identification cards is limited because consumers may litigate against us or complain before consumer protection authorities if we refuse to accept identification cards we believe are fraudulent. Also, compliance with multiple state and municipal laws regarding half-price tickets in the cities or states where our venues are located requires significant efforts from our management team. If the government extends the right to half-price tickets to other of our customers or decreases oversight, our operating costs and legal contingencies could increase, which may have a material adverse effect on us.

Risks Relating to Brazil In 2010, 66% of our net operating revenue was derived from our operations in Brazil. Accordingly, our business, financial condition, results of operations and cash flows depend, to a considerable extent, upon economic conditions in Brazil. Future developments in the Brazilian economy could adversely affect our business, financial condition, results of operations and cash flows and may impair our ability to proceed with our strategic plan of business.

The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as Brazilian political and economic conditions, may adversely affect us. The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes significant changes in economic policy and regulation. The Brazilian government has taken various measures to

20 control inflation and to implement political and regulatory policy aims, including, among others, changes in monetary, fiscal and tax policy, the use of price controls, currency devaluations, capital controls and limits on imports. We have no control over, nor can we foresee, any measures or policies that the Brazilian government may adopt in the future. We may be adversely affected by changes in federal, state and municipal government policies and regulations that involve or affect factors such as: • economic and social stability; • interest rates; • exchange controls and restrictions on remittances abroad; • exchange rate fluctuations; • inflation; • liquidity in domestic capital and credit markets; • expansion or contraction of the Brazilian economy, as measured by GDP growth rates; • fiscal or monetary policy and amendments to tax legislation; and • other political, diplomatic, social or economic developments in or affecting Brazil.

As an example, the Brazilian government recently increased the tax rate related to foreign investments in the Brazilian financial and capital markets (including investments made pursuant to Resolution No. 2,689) from zero to six percent, and later reduced the rate to two percent. The Tax on Foreign Exchange Transactions (Imposto sobre Operações Financeiras), or IOF/Exchange tax, applies upon conversion of foreign currency into Brazilian reais related to equity or debt investments by foreign investors on the Brazilian stock exchanges (such as the BM&FBOVESPA, where our common shares are listed) or the over-the-counter market, as well as private investment funds, Brazilian treasury notes and other fixed income securities. For further information on the IOF tax, see “Taxation—Material Brazilian Tax Considerations.”

Uncertainty over whether the Brazilian government will implement changes in policy or laws affecting these and other factors in the future, including changes in the Brazilian government resulting from the 2010 election of Dilma Rousseff as president, may contribute to economic uncertainty in Brazil and to heightened volatility of the Brazilian capital markets and securities issued abroad by Brazilian companies. Thus, such uncertainties and other future events in the Brazilian economy may result in a material adverse effect on our business, results of operations, and the market price of our common shares.

Inflation and government measures to curb inflation may contribute significantly to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and, consequently, may adversely affect the market value of our common shares. Brazil has, in the past, experienced high rates of inflation. Inflation, along with governmental measures to combat inflation and public speculation about possible future measures, has had significant negative effects on the Brazilian economy. Annual rates of inflation were historically high in Brazil prior to 1995. As measured by the Extended National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA, Brazil had annual rates of inflation of 5.9% in 2008, 4.3% in 2009 and 5.9% in 2010. The SELIC overnight lending rate (Taxa Referencial do Sistema Especial de Liquidação e Custodia) is established by the Central Bank and ranged between 19.75% and 8.75% from 2005 to 2010. On December 31, 2010 the rate was 10.75% and has recently increased to 11.67%. The lower levels of inflation experienced since 1995 may not continue and any significant increase in inflation may materially and adversely affect the market value of our common shares. For example, if Brazil experiences high levels of inflation, we may not be able to sufficiently readjust the prices of our products or services to compensate for inflationary effects on our cost structure.

21 A deterioration in general economic and market conditions or in perceptions of risk in other countries, principally in emerging countries or the United States, may have a negative impact on the Brazilian economy and our business. Economic and market conditions in other countries, including the United States and Latin American and other emerging market countries, may affect the Brazilian economy and the market for securities issued by Brazilian companies. Although economic conditions in these countries may differ significantly from those in Brazil, investors’ reactions to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. Crises in other emerging market countries could dampen investor enthusiasm for securities of Brazilian issuers, including ours, which could adversely affect the market price of our common shares. In the past, the adverse development of economic conditions in emerging markets resulted in a significant flow of funds out of the country and a decrease in the quantity of foreign capital invested in Brazil. The financial crisis that began in the United States in the third quarter of 2008 created a global recession. Changes in the prices of common shares of public companies, lack of available credit, reductions in spending, the general slowdown of the global economy, exchange rate instability and inflationary pressure may adversely affect, directly or indirectly, the Brazilian economy and securities market.

In addition, the Brazilian economy is affected by international economic and market conditions generally, especially economic conditions in the United States. Share prices on the BM&FBOVESPA, for example, have historically been sensitive to fluctuations in U.S. interest rates and the behavior of the major U.S. stock indexes. An increase in the interest rates in other countries, especially the United States, may reduce global liquidity and investors’ interest in the Brazilian capital markets, adversely affecting the market value of our common shares.

As we have activities in Brazil, Argentina, Chile and Peru, future developments in emerging countries may impact the availability of credit in the local or international markets and affect us adversely.

Exchange rate volatility may adversely affect the Brazilian economy, our business and the market price of our common shares. The Brazilian currency has depreciated periodically relative to the U.S. dollar and other hard currencies during the last four decades. Throughout this period, the Brazilian government has implemented various economic plans and adopted a number of exchange rate policies, including sudden devaluations, periodic mini- devaluations (during which the frequency of adjustments has ranged from daily to monthly), floating exchange rate systems, exchange controls and dual exchange rate markets. From time to time, there have been significant fluctuations in the exchange rate between the Brazilian currency and the U.S. dollar and other currencies. For example, the real depreciated 15.7% in 2001 and 34.3% in 2002 against the U.S. dollar. However, the real appreciated 13.4%, 9.5% and 20.7% against the U.S. dollar in 2005, 2006 and 2007, respectively. In 2008, as a result of the worsening global economic crisis, the real depreciated 24.2% against the U.S. dollar, closing at R$2.34 to US$1.00 on December 31, 2008. In 2009, the real appreciated 34.2% against the U.S. dollar, closing at R$1.74 to U.S.$1.00. In 2010, the real appreciated 9.6% against the U.S. dollar, closing at R$1.666 to US$1.00 on December 31, 2010. We cannot guarantee that the real will not again depreciate or appreciate against the U.S. dollar in the future. In addition, we cannot guarantee that any deprecation or appreciation of the real against the U.S. dollar or other currencies will not have an adverse effect on our business.

Any depreciation of the real against the U.S. dollar could create additional inflationary pressure, which might result in the Brazilian government adopting restrictive policies to combat inflation. Such eventualities could lead to increases in interest rates, which might negatively affect the Brazilian economy as a whole, as well as our results of operations and the market price of our common shares, in addition to restricting our access to international financial markets. On the other hand, future appreciation of the real against the U.S. dollar might result in the deterioration of Brazil’s current and capital accounts, as well as a weakening of Brazilian GDP growth derived from exports. Because we operate in entertainment events that are often supplied by foreign content providers, an appreciation or deprecation of the real may impact the profitability of these productions both for us or the content provider and consequently affect the flow of events held in Brazil.

22 Furthermore, certain of our royalty payment obligations for international artists were denominated in U.S. dollars, in 2010. If the U.S. dollar were to suddenly experience a severe drop in value, it might lead to an increase in the costs associated with our royalties and certain production expenses, while our revenue, which is denominated in reais, would remain unchanged. Additionally, a depreciation of the real against the U.S. dollar would cause us to have to increase ticket price to meet obligations to artists in U.S. dollars.

Risks Relating to Argentina In 2010, 20% of our net operating revenue was derived from our operations in Argentina. Accordingly, our business, financial condition, results of operations and cash flows depend, to a considerable extent, upon economic conditions in Argentina. Future developments in the Argentine economy could adversely affect our business, financial condition, results of operations and cash flows and may impair our ability to proceed with our strategic plan of business.

Argentina’s policies can affect the economy in general and as such can materially and adversely affect our business. Argentina’s government has historically exercised strong influence over the economy and financial institutions and, in particular, has maintained an extensive regulatory framework. Since December 2001 the government has promulgated a variety of wide-ranging and at times incoherent laws and regulations, which has affected the economy in general and financial institutions in particular. The laws and regulations that govern the economy may change in the future, especially in light of the fact that Argentina’s economic and political crises have still not been overcome and important structural reforms have still not been implemented. In addition, any future regulatory and policy changes relating to the economy in general may adversely affect Argentina’s social conditions, which could materially and adversely affect our business, operations and financial condition.

Continuing increases in Argentina’s inflation may have an adverse effect on its economy. After several years of stable prices within the convertibility regime, which pegged the exchange rate at one Argentine peso to one U.S. dollar, the formal devaluation of the Argentine peso in January 2002 generated pressure on the domestic market’s pricing system. This led to high inflation in 2002 before stabilizing substantially in 2003. In 2004, inflation (measured by changes in the Consumer Price Index (Indice de Precios al Consumidor), or IPC) reached 6.1% according to data published by the Instituto Nacional de Estadísticas y Censos (Argentinean Institute of Statistics and Census), or INDEC. Inflation rose again to 12.3% in 2005 according to INDEC, but fell to 9.8% in 2006. This was due in part to a variety of actions taken by the Argentina’s government to control inflation and prices for most important goods and services, which included measures to prop up prices per agreements between the government and companies in a variety of industries and markets in the private sector. In 2008, 2009 and 2010, inflation was 7.2%, 7.7%, and 10.9% respectively, according to INDEC data.

In January 2007, the INDEC modified the methods of calculating the IPC, whose base is a basket of goods and services consumed by the average Argentine family. This generated questions about the accuracy of this index and other economic data released by INDEC. Many economists, as well as the local and international press, suggested that this change in methodology was a means by which the Argentine government could mask inflation. When the INDEC adopted this change in methodology, the Argentine government also replaced many important members of the INDEC staff. These factors affected, and could in the future continue to affect, the credibility of indices published by the INDEC, such as the poverty rate, the unemployment rate, and the country’s GDP.

The return of high inflation to Argentina’s economy could harm the cost competitiveness of its exports if it is not offset by a devaluation of the peso, which could negatively affect economic activity and employment levels. Uncertainty regarding future inflation can contribute to diminished economic activity and reduced growth.

23 The volatility of inflation in Argentina makes it impossible to estimate with any certainty the extent to which activity levels and operational results of our Argentine subsidiaries may be materially and adversely affected by inflation in the future.

The Central Bank of Argentina has previously imposed restrictions on capital outflows from Argentina along with other exchange rate controls and may do so again in the future, which could prevent our Argentine subsidiaries from paying dividends or other amounts to us. In 2001 and the first half of 2002, Argentina experienced massive withdrawals over a short time period from deposit accounts in its financial system when depositors lost confidence in the government’s ability to continue to pay its external and internal debt and maintain its currency policies. This caused a liquidity crisis in Argentina’s financial system, which led the government to impose exchange rate controls and restrict withdrawals from deposit accounts.

Furthermore, from 2001 through February of 2003, Argentina’s Central Bank restricted Argentine individuals and companies from transferring U.S. dollars out of the country without prior authorization. In 2003 and 2004, the government loosened some of these restrictions, including those requiring prior authorization from the Central Bank for transferring funds out of Argentina—in order to pay principal and interest on debt. Nonetheless, governmental controls and significant restrictions remained. In 2008 and 2009, the government imposed new restrictions on currency outflows, including outflows through certain types of operations affecting locally traded securities. Recently, the government prohibited a company from paying dividends outside of Argentina. Both existing and any future controls and restrictions of this kind may limit our ability to transfer funds generated by our Argentine operations out of the country, to pay dividends or other amounts, and to implement investments and other activities that require payment in U.S. dollars abroad.

In addition, the restrictions and requirements described above, as well as any other restrictions that may be imposed on us in the future, expose us to the risk of losses arising from the Argentine exchange rate. These restrictions may have a material adverse effect on us.

Measures by Argentina’s government to prevent social unrest during periods of political and economic volatility may have an adverse effect on our business. During the economic crisis of 2001 and 2002, Argentina suffered from social and political unrest involving riots, looting, nationwide protests, strikes and street demonstrations. Despite the current economic recovery and relative stability, social and political tensions along with high levels of poverty and unemployment remain. Future governmental policies to prevent or respond to social unrest could include expropriation, nationalization, forced renegotiation, termination of concessions or modification of existing contracts, suspension of the creditors’ rights, new tax policies (including increased royalties, taxes and retroactive tax actions), and changes in laws and policies that affect foreign commerce and investments. Such policies could destabilize the country and significantly harm the economy, which in turn could disrupt social harmony and materially and adversely affect our business.

Significant fluctuations in the value of the Argentine peso against the U.S. dollar may adversely affect the Argentine economy, which could, in turn materially and adversely affect our results of operations. After several years of stable prices within the convertibility regime, which pegged the exchange rate at one Argentine peso to one U.S. dollar the peso was formally devalued in January 2002. The devaluation of the peso had a negative impact on the ability of Argentine businesses to honor their foreign currency-denominated debt obligations, led to very high inflation initially, significantly reduced real wages, had a negative impact on businesses whose success is dependent on domestic market demand and adversely affected the government’s ability to honor its foreign debt obligations. If the Argentine peso devalues significantly, all of the negative effects on the Argentine economy related to such devaluation could recur, with material adverse consequences to us.

24 Risks Relating to Chile In 2010, 14% of our revenue was derived from our operations in Chile. Accordingly, our business, financial condition, results of operations and cash flows depend, to a considerable extent, upon economic conditions in Chile. Future developments in the Chilean economy could adversely affect our business, financial condition, results of operations and cash flows and may impair our ability to proceed with our strategic plan of business.

The Chilean government has exercised, and continues to exercise, significant influence over the Chilean economy. This involvement, as well as Chilean political and economic conditions, may adversely affect us. The Chilean government has exercised and continues to exercise a substantial influence over many aspects of the private sector and has changed monetary, fiscal, tax and other policies to influence the Chilean economy. We have no control over and cannot predict how government intervention and policies will affect the Chilean economy or, directly and indirectly, our operations and revenues. Our operations and financial condition may be adversely affected principally by changes in policies involving: (i) exchange controls and taxes; (ii) regulatory, administrative or legal changes; and (iii) other factors affecting Chile over which we have no control. In addition, our operations and financial condition may be adversely affected by factors such as: • fluctuations in exchange rates; • base interest rate fluctuations; and • other political, diplomatic, social and economic developments in or affecting Chile.

Chile’s rates of inflation, which were 3.0% in 2010, (1.4)% in 2009, and 7.2% in 2008, as measured by changes in the Chilean consumer price index, may materially and adversely affect our operations and financial condition.

The exchange rate of the Chilean peso against the U.S. dollar could fluctuate considerably, harming our financial condition. The Chilean peso has been volatile in recent years, including nominal average appreciation/(depreciation) against the U.S. dollar of 6.7% in 2004, 8.5% in 2005, (3.8)% in 2006, 6.9% in 2007, (22.0%)% in 2008, 25.8% in 2009, and 8.4% in 2010. Exchange rates between the Chilean peso against the U.S. dollar may fluctuate considerably in the future.

Risks Relating to the Offering and Our Common Shares An active and liquid trading market for our common shares may not develop. The market price of our common shares may be volatile, and investors may not be able to resell their shares for a price equal to or greater than the initial purchase price. We cannot guarantee that an active and liquid public trading market for our common shares will be developed and sustained, and if one develops, that it would be sufficiently liquid. Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

The Brazilian securities market is substantially smaller, less liquid, more concentrated and generally more volatile than the major international securities markets. For example, the BM&FBOVESPA had a total market capitalization of approximately R$2.6 trillion as of December 31, 2010 and an average daily trading volume of R$3.7 billion in 2010. By contrast, the NYSE had a total market capitalization of approximately US$13.4 trillion as of December 31, 2010 and an average daily trading volume of US$70.6 billion in 2010. The ten most actively traded stocks in terms of trading volume accounted for approximately 56.1% of all shares traded on the BM&FBOVESPA in 2010. These market characteristics may substantially limit your ability to sell our common shares at the price and time you wish and, as a consequence, could materially and adversely the market value of our common shares.

25 The initial offering price for our common shares will be determined after completion of the bookbuilding process and may not be indicative of the prices that will prevail in the open market following this offering. The actual market price of our shares may fluctuate because of several factors, including those described in these risk factors, and may be lower than the initial price you paid to purchase our common shares.

Holders of our common shares may not receive any dividends or interest attributable to shareholders’ equity. According to our bylaws, we must pay our shareholders at least 25% of our annual adjusted net income as dividends or interest attributable to shareholders’ equity, as calculated and adjusted pursuant to the Brazilian Corporate Law. We may pay interest on our shareholders’ equity up to the amount limited by law. Interim dividends and interest on our shareholders’ equity declared for each fiscal year may be attributed to our minimum obligatory dividend for the year in which it was distributed. For more information, see “Dividends and Dividend Policy.” This adjusted net income may be capitalized, used to absorb losses or otherwise retained as allowed under the Brazilian Corporate Law, and may not be made available for payment as dividends or interest attributable to shareholders’ equity. Additionally, the Brazilian Corporate Law allows a publicly traded company, as we will be, to suspend the mandatory distribution of dividends in any particular fiscal year if our board of directors informs our shareholders that such distribution would be inadvisable in view of our financial condition. If these events were to occur, the holders of our common shares may not receive dividends or interest attributable to shareholders’ equity.

Actual or anticipated sales of a significant number of our common shares after the end of the offering may adversely affect the trading price of our common shares. We, the selling shareholders, F.A. Participações, and our directors and executive officers have agreed during the period beginning on the date hereof and continuing to and including the date 180 days after the publication in Brazil of the notice of commencement of this offering, subject to certain exceptions, not to issue, offer, sell, contract to sell, pledge, loan, grant any option to purchase, make any short sale or otherwise dispose of or grant any rights or file or cause to be filed a registration statement pursuant to the Securities Act or Brazilian securities laws, in all cases with respect to any of our common shares, options or warrants to purchase any of our common shares, or any securities convertible into, or exchangeable for, or that represent the right to receive, our common shares. Further, pursuant to the T4F shareholders’ agreement, CIE and F.A. Participações have agreed not to sell their respective shares for a term of one year following the closing of the offering.

In addition, pursuant to the rules of the Novo Mercado listing segment of the BM&FBOVESPA, the controlling shareholders and the directors and officers of a listed company are subject to a lock-up period under which, for a six-month period following the closing of our initial public offering, they may not offer and/or sell their holdings of our common shares, or derivatives convertible into, or exchangeable or exercisable for, these common shares. Following this period, for an additional six-month lock-up period, these persons may not offer or sell more than 40.0% of their holdings of our common shares, or derivatives convertible into, or exchangeable or exercisable for, these common shares, as existing immediately after the initial public offering. For more information, see “The Offering—Lock-up Agreements.”

Upon the expiration of these lock-up periods, all of our common shares will be eligible for sale in the stock market in Brazil. Substantial sales or issuances of common shares in this offering, or the likelihood of such sales or issuances, could result in a decline in the market price of our common shares and in dilution to our shareholders.

We will continue to be controlled by a group of principal shareholders whose interests may conflict with the interests of our minority shareholders. Fernando Luiz Alterio, our Chief Executive Officer and our chairman of the board of directors, F.A. Participações, CIE and GIF-II are our principal shareholders. Pursuant to a shareholders’ agreement, these

26 shareholders agreed to meet prior to any shareholders’ meeting to align their votes in certain matters. For more information about our shareholders’ agreement, see “Principal and Selling Shareholders—Shareholders’ Agreements—T4F Shareholders’ Agreement.” This group of shareholders will hold, after our initial public offering, 57.64% of our voting shares, assuming the over-allotment opinion is not exercised. Our principal shareholders may take measures without the consent of our minority shareholders that could conflict with their interests or that could adversely affect our operating results. These measures include electing or dismissing the majority of our board members, controlling our management and policies, determining the outcome of almost any action requiring shareholders approval, and acting in their own interest, all of which could conflict with the interests of other shareholders. In addition, our principal shareholders may take certain actions that may be contrary to the interests of potential investors, including corporate reorganizations and conditions for the payment of dividends. The interests of our directors and officers and, in certain cases, our employees, may be closely tied to the trading price of our common shares as a result of our stock option plan and warrants. We have a stock option plan, pursuant to which we seek to motivate and retain our management and top executives and to improve commitment to long-term results and short-term performance. Because our officers and employees, and those of our subsidiaries, may receive stock options or warrants at a price that is lower than the market price, their interests could be excessively tied to short-term increases in the trading price of our common shares. This focus could adversely affect us and may not coincide with the interests of our other shareholders who have a long-term investment strategy. You will experience immediate, substantial dilution of your investment in this offering. The offer price of our common shares issued through this offering exceeds their book value. As a result, in case of liquidation of our company, investors that purchased their common shares through this offering may receive an amount that is substantially lower than the amount they invested in this offering. See “Dilution.” We may need additional funds in the future and may issue additional shares of our common stock in lieu of incurring indebtedness, which may result in a dilution of investors’ interests in our common shares. We may need to raise additional capital and may opt to obtain such capital through the public or private placement of debt securities, shares or securities convertible into our common shares. In the event that public or private financing is unavailable, or if our shareholders so decide, such additional funds may be obtained through an increase in our capital. Our bylaws allow our board of directors to vote to issue up to 400 million shares without need for specific approval by a shareholders’ meeting. In addition, our controlling shareholders and selling shareholders may vote to issue additional common shares above this limit. Any additional funds obtained by means of a capital increase may, pursuant to the Brazilian Corporate Law, exclude shareholders from exercising preemptive rights, thereby diluting investors’ participations in our common shares. Similarly, our shareholders will not be able to exercise preemptive rights if our directors, officers, and some key employees exercise the option to purchase our shares per our stock option plan. Upon completion of this offering, if all of the stock options granted under our stock option plan were exercised at a price of R$10.98, investors in our common shares would suffer an immediate dilution of shareholders’ equity per common share of R$11.26. In addition, as of the date of this offering memorandum, our management may issue a further 1,577,907 options under the current stock option plan, at a price of R$16.00 (as adjusted by the CDI rate through the date of exercise). For more information, see “Dilution.” The protections afforded to minority shareholders in Brazil are different from those in the United States and may be more difficult to enforce. Under Brazilian law, the protections afforded to minority shareholders are different from those in the United States. In particular, the legal framework and case law pertaining to disputes between shareholders and us, our directors, our officers or our controlling shareholders, if any, is less developed under Brazilian law than U.S. state law and there are different procedural requirements for bringing shareholder lawsuits, such as shareholder derivative suits, which differ from those you may be familiar with under U.S. state and other laws. There is also a substantially less active plaintiffs’ bar dedicated to the enforcement of shareholders’ rights in Brazil than in the United States. As a result, in practice it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholders than it would be for shareholders of a U.S. company.

27 Holders of our common shares may face difficulties in serving process on or enforcing judgments against us and other persons. We are a corporation (sociedade por ações) organized under the laws of Brazil, and all of our board members, executive officers and independent public accountants reside or are based outside of the United States. Most of our assets and those of these other persons are located outside of the United States. As a result, it may not be possible for you to effect service of process upon us or these other persons within the United States or other jurisdictions outside Brazil. Because judgments of U.S. courts for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if certain conditions are met, you may face greater difficulties in protecting your interests in the case of actions by us or our board of directors or executive officers than would shareholders of a U.S. corporation.

We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. holders. Based on our financial statements and current expectations regarding our income, assets and activities, including goodwill, we do not believe that we were a passive foreign investment company, or PFIC, for our most recent taxable year and do not expect to be a PFIC for 2011 or in any future year, although there can be no assurance in this regard. The determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. Specifically, for any taxable year we will be classified as a PFIC for U.S. federal income tax purposes if either (i) 75% or more of our gross income in that taxable year is passive income or (ii) the average percentage of our assets (which includes cash) by value in that taxable year which produce or are held for the production of passive income is at least 50%. A substantial portion of our balance sheet consists of cash, a passive asset for purposes of the PFIC rules. Because we have valued our goodwill based on the market value of our equity, a decrease in the price of our shares may also result in our becoming a PFIC. If we become a PFIC, U.S. Holders (as defined under “Taxation—Certain United States Federal Income Tax Considerations”) of our common shares may become subject to increased tax liabilities under U.S. federal income tax laws and regulations and will become subject to burdensome reporting requirements. See “Taxation— Certain United States Federal Income Tax Considerations—Passive Foreign Investment Company.”

28 USE OF PROCEEDS

We estimate that our net proceeds from the primary offering will be R$175.5 million, after deducting commissions, fees, and other related expenses. We will not receive any proceeds from the sale of common shares by the selling shareholders in the secondary offering, or from the shares sold by the selling shareholders pursuant to the exercise of the over-allotment option.

We intend to use net proceeds from this primary offering for: • acquiring venues and companies in Brazil in order to create synergies and consolidate our leadership in the country (approximately 70% of the net proceeds); • constructing new venues, primarily in cities lacking adequate facilities (approximately 20% of the net proceeds); and • expanding into additional areas in South America through acquisition of promoters and ticketing operations (approximately 10% of the net proceeds).

In addition to the net proceeds from this primary offering, we also have access to credit lines from certain first-class financial institutions as well as our own cash flow to invest as described above.

Our expected use of net proceeds from this offering will be influenced by the economic conditions of markets in which we operate and therefore, we may make changes that cannot be adequately forecast. Our estimated use of the net proceeds also could change depending on investment opportunities that are available to us and the anticipated returns of our projects.

29 EXCHANGE RATES

The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.

The Brazilian currency has, during the last few decades, experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. Between 2000 and 2002, the real depreciated significantly against the U.S. dollar, reaching an exchange rate of R$3.5333 per US$1.00 at the end of 2002. Between 2003 and mid-2008, the real appreciated significantly against the U.S. dollar due to the stabilization of the macro-economic environment and a strong increase in foreign investment in Brazil, with the exchange rate reaching R$1.559 per US$1.00 in August 2008. Particularly as a result of the crisis in the global financial markets from mid-2008, the real depreciated 24% against the U.S. dollar during 2008 and closed the year at R$2.337 per US$1.00. On December 31, 2009, the exchange rate was R$1.7412 per US$1.00 and on December 31, 2010, the exchange rate was R$1.666 per US$1.00.

The Central Bank has intervened occasionally to control any instability in foreign exchange rates. We cannot predict whether the Central Bank or the Brazilian government will continue to allow the real to float freely or will intervene in the exchange rate market through a currency band system or otherwise. The real may depreciate or appreciate substantially against the U.S. dollar.

The following tables present the selling rate, expressed in reais per U.S. dollar (R$/US$), for the periods indicated, as reported by the Central Bank:

Exchange Rates of Reais per US$1.00 Period - End Average(1) High Low Year ended December 31, 2006 ...... 2.138 2.177 2.371 2.059 2007 ...... 1.771 1.948 2.156 1.733 2008 ...... 2.337 1.837 2.500 1.559 2009 ...... 1.741 1.994 2.422 1.702 2010 ...... 1.666 1.759 1.881 1.655 2011 (through April 8, 2011) ...... 1.576 1.662 1.691 1.576 Month October 2010...... 1.701 1.684 1.711 1.655 November 2010 ...... 1.716 1.713 1.734 1.680 December 2010...... 1.666 1.693 1.712 1.666 January 2011 ...... 1.673 1.675 1.691 1.651 February 2011 ...... 1.661 1.668 1.678 1.661 March 2011 ...... 1.629 1.659 1.676 1.629 April 2011 (through April 8, 2011)...... 1.576 1.603 1.619 1.576 Source: Central Bank. (1) Calculated as the average of the daily exchange rates during the specific period.

Exchange rate fluctuations will affect the U.S. dollar equivalent of the trading price of our common shares in reais on the BM&FBOVESPA as well as the U.S. dollar equivalent of any distributions we make with respect to our common shares, which will be made in reais. See “Risk factors—Risks Relating to Brazil—Exchange rate volatility may adversely affect the Brazilian economy, our business and the market price of our common shares.”

30 MARKET INFORMATION

General Prior to this offering, there was no organized market for our common shares. After completion of this offering, the principal market for our common shares will be the BM&FBOVESPA.

On March 11, 2011, we entered into the Novo Mercado listing agreement with the BM&FBOVESPA, which will be effective on the date of the publication of the notice of commencement of the trading of our common shares on the BM&FBOVESPA, and we will be registered as a Novo Mercado company. On the first trading day following the effective date of our listing agreement, our common shares will be traded on the BM&FBOVESPA under the symbol “SHOW3.” We do not have any other securities outstanding apart from our common shares.

We have filed an application with the CVM for our registration as a publicly-listed company and our application is under review.

Regulation of the Brazilian Securities Market The Brazilian securities market is regulated by the CVM, which has regulatory authority over the stock exchanges and securities markets, as well as the CMN and the Central Bank, which have, among other powers, regulatory authority over brokerage firms and regulatory authority over foreign investment and foreign exchange transactions. The Brazilian securities markets are generally governed by Law No. 6,385, dated December 7, 1976, as amended, known as the Securities Market Law, and Brazilian Corporate Law as well as by rules and regulations issued by the CVM, the CMN and the Central Bank. These laws and regulations, among others, provide for disclosure requirements applicable to issuers of publicly-traded securities, criminal sanctions for insider trading and price manipulation, and protection of minority shareholders. These laws also provide for the regulation and supervision of brokerage firms and the governance of Brazilian stock exchanges.

Under Brazilian Corporate Law, a company is either publicly-listed (companhia aberta), like us, or privately held (companhia fechada). A company is publicly-listed when it has securities traded on the stock exchange or on over-the-counter markets. All publicly-listed companies must be registered with the CVM and are subject to reporting and regulatory requirements. A company registered with the CVM may trade its securities either on the BM&FBOVESPA or on the Brazilian over-the-counter market. The shares of a listed company may also be traded privately, subject to several limitations.

The over-the-counter market is divided into two categories: (i) an organized over-the-counter market, in which the transactions are supervised by self-regulating entities authorized by the CVM; and (ii) a non-organized over-the-counter market, in which the transactions are not supervised by self-regulating entities authorized by the CVM. In either case, transactions are directly traded among persons, outside of the stock exchange market, through a financial institution authorized by the CVM. The institution is required to be registered with the CVM (and in the relevant over-the-counter market), but there is no need for a special license to trade securities of a publicly-listed company on the over-the-counter market.

The trading of securities on the BM&FBOVESPA may be suspended at the request of a company in anticipation of an announcement of a material event. Trading may also be suspended by the BM&FBOVESPA or the CVM, based on or due to, among other reasons, the belief that a company has provided inadequate information regarding a material event or has provided inadequate responses to inquiries by the CVM or the BM&FBOVESPA.

Trading on Brazilian stock exchanges by non-residents of Brazil is subject to certain restrictions under the Brazilian foreign investment legislation. See “—Investment in Our Common Shares by Non-Residents of Brazil.”

31 Trading on the BM&FBOVESPA In 2000, the BM&FBOVESPA was reorganized pursuant to a memorandum of understanding executed by the Brazilian stock exchanges, and all securities traded in Brazil are now traded only on the BM&FBOVESPA, with the exception of electronically traded public debt securities and privatization auctions, which are traded on the Rio de Janeiro Stock Exchange.

Trading on the BM&FBOVESPA is conducted only by accredited brokerage firms. Trading sessions occur Monday through Friday (except holidays), from 10:00 a.m. to 5:00 p.m., or from 11:00 a.m. to 6:00 p.m. during daylight saving time in Brazil, on an electronic trading system called Megabolsa. Trading is also conducted between 5:45 p.m. and 7:00 p.m., or between 6:45 p.m. and 7:30 p.m. during daylight saving time in Brazil, in an after-market system on the Internet. This after-market trading is subject to regulatory limits on price volatility of securities traded by investors operating on the Internet. Trading of securities listed on the BM&FBOVESPA, including the special listing segments known as the Novo Mercado, Level 1 and Level 2, may also be effected outside of the traditional exchanges in the unorganized over-the-counter market.

When shareholders trade shares on the BM&FBOVESPA, settlement occurs three business days after the trade date. The delivery of and payment for shares are made through the facilities of an independent clearing house, Central Depositária BM&FBOVESPA, which is the clearing house for the transactions carried out on the BM&FBOVESPA and handles the multilateral settlement of both financial obligations and securities transactions. According to the regulations of the Central Depositária BM&FBOVESPA, financial settlement is carried out through the system for the transfer of funds of the Central Bank and the transactions involving the sale and purchase of securities are settled through the Central Depositária BM&FBOVESPA custody system. All deliveries against final payment are irrevocable.

Corporate Governance Practices and the Novo Mercado In 2000, the BM&FBOVESPA introduced three special listing segments, known as Level 1, Level 2 and the Novo Mercado, aimed at fostering a secondary market for securities issued by Brazilian companies with securities listed on the BM&FBOVESPA by prompting such companies to follow good corporate governance practices. The listing segments were designed for the trading of shares issued by companies voluntarily undertaking to abide by corporate governance practices and disclosure requirements in addition to those already imposed by applicable Brazilian law.

These rules generally increase shareholders’ rights and enhance the quality of information provided to shareholders. To become a Level 1 company, in addition to the obligations imposed by applicable law, the issuer must agree to: (i) ensure that shares of the issuer representing at least 25.0% of its total capital are effectively available for trading; (ii) adopt offering procedures that favor widespread ownership of shares whenever making a public offering; (iii) comply with minimum quarterly disclosure standards; (iv) follow stricter disclosure policies with respect to transactions made by controlling shareholders, members of its board of directors and its executive officers involving securities issued by the issuer; (v) submit any existing shareholders’ agreement and stock option plans to the BM&FBOVESPA; and (vi) make a schedule of corporate events available to shareholders.

To become a Level 2 company, in addition to the obligations imposed by applicable law, an issuer must agree to: (i) comply with all of the listing requirements for Level 1 companies; (ii) grant tag-along rights for all shareholders in connection with a transfer of control of the company offering (a) the same price paid per share of the controlling block of shares for each common share and (b) 80% of the price paid per share of the controlling block for each preferred share; (iii) grant voting rights to holders of preferred shares in connection with certain corporate restructurings and related-party transactions, such as (a) any transformation of the company into another corporate form; (b) any merger, consolidation or spin-off of the company; (c) approval of any transactions between the company and its controlling shareholder or parties related to the controlling shareholder; (d) approval of any valuation of assets to be delivered to the company in payment for shares issued in a capital increase; (e) appointment of an expert to ascertain the fair value of the company in connection with any deregistration and

32 delisting tender offer from Level 2; and (f) any changes to these voting rights, which will prevail as long as the adhesion contract to the Level 2 regulation with the BM&FBOVESPA is in effect; (iv) have a board of directors consisting of at least five members out of which a minimum of 20% of the directors must be independent and limit the term of all members to two years; (v) prepare annual financial statements (Demonstrações Financeiras Padronizadas), or DFP, in English, including cash flow statements in accordance with international accounting standards, such as U.S. GAAP or IFRS; (vi) if it elects to delist from the Level 2 segment, conduct a tender offer by the company’s controlling shareholder (the minimum price of the shares to be offered will be the economic value determined by an independent specialized firm with requisite experience); and (vii) adhere exclusively to the Market Arbitration Chamber for resolution of disputes between the company and its investors.

To be listed in the Novo Mercado, an issuer must meet all of the requirements for Level 1 and Level 2 companies and, in addition, the issuer must: (i) issue only common shares; and (ii) grant tag-along rights for all shareholders in connection with a transfer of control of the company, offering to the minority shareholders the same price paid per share of the controlling block.

Investment in Our Common Shares by Non-Residents of Brazil Investors residing outside Brazil, including institutional investors, are authorized to purchase equity instruments, including our common shares, on the BM&FBOVESPA provided that they comply with the registration requirements set forth in Resolution No. 2,689 of the CMN and CVM Instruction No. 325, dated January 27, 2000, as amended.

With certain limited exceptions, under Resolution No. 2,689, investors are permitted to carry out any type of transaction in the Brazilian financial capital markets involving a security traded on a stock, futures or organized over-the-counter market. Investments and remittances outside Brazil of gains, dividends, profits or other payments linked to our common shares are made through the foreign exchange market.

In order to become a Resolution No. 2,689 investor, an investor residing outside Brazil must: • appoint a representative in Brazil with powers to take actions relating to the investment; • appoint an authorized custodian for the investments in Brazil, which must be a financial institution duly authorized by the Central Bank and the CVM; and • through its representative, register itself as a foreign investor with the CVM and register the investment with the Central Bank.

In addition, under Normative Ruling SRF No. 568/2005, these foreign investors are required to enroll with the Federal Revenue Office (Secretaria da Receita Federal), or SRF, through their representatives.

Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading by foreign investors are generally restricted to transactions involving securities listed on the Brazilian stock exchanges or traded in organized over-the-counter markets licensed by the CVM. See “Taxation—Material Brazilian Tax Considerations—Capital Gains” for a description of certain tax benefits extended to non-Brazilian holders who qualify under Resolution No. 2,689.

Tax on Foreign Exchange Transactions—Exchange (Imposto Sobre Operações Financeiras—Câmbio) Brazilian law imposes the IOF/Exchange Tax on the conversion of reais into foreign currency and on the conversion of foreign currency into reais. Effective as of October 20, 2010, IOF/Exchange Tax for any investment made by an individual, entity, trust or organization resident or domiciled outside of Brazil for tax

33 purposes, or a Non-Resident Holder, in the Brazilian financial and capital markets was increased from zero to 2%. Accordingly, this 2% IOF/Exchange Tax is due and payable by Non-Resident Holders in connection with their investment in our common shares in this offering.

The outflow of resources from Brazil related to investments carried out by Non-Resident Holders in the Brazilian financial and capital markets remains subject to IOF/Exchange at a zero percent rate. In any case, the Brazilian government may increase the rates at any time, up to 25%, with no retroactive effect.

34 CAPITALIZATION

The following table sets forth our consolidated current and noncurrent indebtedness, shareholders’ equity and total capitalization (defined as total consolidated indebtedness (current and non-current) plus total consolidated shareholders’ equity). Our total capitalization is presented on an actual and as adjusted basis, to reflect the receipt of approximately R$175.5 million in net proceeds from the primary portion of this offering, after deducting underwriting fees and commissions, and estimated offering expenses payable by us. The information set forth below in the column heading “Actual” is derived from our consolidated financial statements as of December 31, 2010, prepared in accordance with IFRS and included elsewhere in this offering memorandum. There have been no material changes to our capitalization since December 31, 2010.

You should read this table in conjunction with “Presentation of Financial and Other Information,” “Summary Financial and Operating Information,” “Selected Financial and Operating Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included elsewhere in this offering memorandum.

Solely for the convenience of the reader, we have converted certain amounts included in this section from reais into U.S. dollars using the exchange rate as reported by the Central Bank of R$1.666 per US$1.00 as of December 31, 2010. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for the convenience of investors and should not be construed as implying that the amounts in reais represent or could have been or could be converted into, U.S. dollars at those rates or any other rate.

As of December 31, 2010 Actual As adjusted Actual As adjusted (in millions of R$) (in millions of US$) Current indebtedness ...... 19.0 19.0 11.4 11.4 Noncurrent indebtedness ...... 131.3 131.3 78.8 78.8 Shareholders’ equity(1) ...... 133.3 308.8 80.0 185.4 Total capitalization(2) ...... 283.6 459.1 170.2 275.6

(1) Includes R$2.1 million of non-controlling interests in equity of subsidiaries. (2) Total capitalization corresponds to total consolidated indebtedness (current and non-current) plus total consolidated shareholders’ equity as of December 31, 2010.

35 DILUTION

New investors in our common shares will experience immediate book value dilution after this offering, calculated as the difference between the price per common share paid by investors in this offering and our shareholders’ equity per common share immediately following this offering.

As of December 31, 2010, after giving effect to our reverse stock split that occurred on January 13, 2011 at a ratio of 4:1, our shareholders’ equity (excluding non-controlling interests in equity of subsidiaries) was R$131.2 million and our shareholders’ equity per common share was approximately R$2.28 per common share, corresponding to our shareholders’ equity divided by the total number of our issued common shares as of December 31, 2010.

After giving effect to the sale of our common shares in this primary offering at the offering price of R$16.00 per common share and after deducting commissions and fees and estimated offering expenses payable by us, our estimated shareholders’ equity as of December 31, 2010, would have been approximately R$306.7 million, representing R$4.43 per common share. Therefore, this would result in an immediate increase in shareholders’ equity value per common share of R$2.15 to existing shareholders, and an immediate dilution in shareholders’ equity value per common share, as of December 31, 2010, of 72.3% to new investors.

The following table illustrates the dilution from this primary offering.

As of December 31, 2010 (in R$, except percentages) Offering price per common share(1) ...... 16.00 Shareholders’ equity per common share as of December 31, 2010(1) ...... 2.28 Shareholders’ equity per common share as of December 31, 2010, adjusted in accordance with this offering(1) ...... 4.43 Increase in shareholders’ equity per common share for existing shareholders ...... 2.15 Dilution per common share to new investors(2) ...... 11.57 Percentage of dilution per common share to new investors(3)...... 72.3%

(1) Adjusted to reflect our reverse stock split that occurred on January 13, 2011 at a ratio of 4:1. (2) For the purpose hereof, dilution represents the difference between the price per common share paid by investors and the shareholders’ equity value per common share immediately after the completion of this offering. (3) The percentage of dilution per common share to new investors is calculated by dividing the dilution per common share to new investors by the offering price per common share.

36 Stock Option Plan We have a stock option plan that establishes the general terms and conditions for granting options for our common shares to our directors and officers and some of our key employees, as well as those of our subsidiaries.

Up to 5% of our outstanding common shares may be issued under our stock option plan. Currently, options to acquire or subscribe for 1,881,616 of our common shares have been granted. As of the date of this offering memorandum, no option has been exercised. For more information regarding our stock option plan see “Management—Stock Option Plan and Share Compensation.”

The following table illustrates the dilution resulting from this primary offering and the exercise of all the stock options granted under our stock option plan.

(in R$, except number of shares and percentages) Offering price (per common share)...... 16.00 Shareholders’ equity per common share as of December 31, 2010(1) ...... 2.28 Shareholders’ equity per common share as of December 31, 2010, adjusted for this offering and considering the granting and exercise of all the stock options under the plan(1) ...... 4.74 Increase in shareholders’ equity per common share for existing shareholders considering the offering and granting and exercise of all the options under the stock option plan . . . 2.46 Dilution per common share for new investors considering the offering and the granting and exercise of all the options under the stock option plan(2)...... 11.26 Percentage of dilution of shareholders’ equity to our new investors considering the offering and granting and exercise of all options under the stock option plan(3) ... 70.3%

(1) Adjusted to reflect our reverse stock split that occurred on January 13, 2011 at a ratio of 4:1. (2) For the purpose hereof, dilution represents the difference between the price per common share paid by investors and the shareholders’ equity value per common share immediately after the completion of the offering and the granting and exercise of all the stock options under the stock option plan. (3) The percentage of dilution per common share to new investors is calculated by dividing the dilution per common share to new investors by the offering price per common share.

37 SELECTED FINANCIAL AND OPERATING INFORMATION

The tables below present selected financial and operating information as of and for the periods indicated. You should read this information in conjunction with our audited consolidated financial statements and related notes included elsewhere in this offering memorandum and with the sections entitled “Presentation of Financial and Other Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Statement of Income Data

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Net operating revenue Event promotion...... 372.6 248.5 355.0 213.1 Live music ...... 185.8 154.3 219.2 131.6 Family events, theater and cultural expositions...... 169.5 82.6 122.6 73.6 Sports events ...... 17.3 11.6 13.2 7.9 Ticketing; food, beverage and merchandise sales; and venue operation ...... 89.6 65.3 89.9 54.0 Sponsorships...... 134.5 120.7 124.3 74.6 Event promotion ...... 122.1 101.9 101.7 61.0 Ticketing; food and beverage sales; and venue operation...... 12.4 18.9 22.6 13.6 Net operating revenue ...... 596.6 434.6 569.2 314.7 Cost of services and sales ...... (437.4) (328.5) (403.2) (242.0) Gross profit...... 159.2 106.0 166.0 99.6 Operating expenses Selling expenses...... (4.1) (3.5) (3.4) (2.0) General and administrative expenses ...... (68.9) (68.1) (77.2) (46.3) Management compensation ...... (6.7) (6.0) (3.5) (2.1) Other operating income, net...... 3.9 2.6 8.2 4.9 Operating income ...... 83.4 31.1 90.1 54.1 Financial income (expenses)...... (23.5) (30.4) (21.9) (13.1) Income tax and social contribution ...... (13.0) 5.3 (28.0) (16.8) Net income ...... 46.9 6.0 40.3 24.2

38 Balance Sheet Data

As of December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Assets Current assets Cash and cash equivalents ...... 92.8 55.2 120.9 72.6 Restricted cash...... — 2.1 6.6 4.0 Accounts receivable ...... 69.4 52.6 66.1 39.7 Inventories ...... 1.5 1.7 1.3 0.8 Recoverable taxes ...... 31.2 18.0 14.5 8.7 Advances to suppliers...... 10.2 21.5 4.9 2.9 Prepaid expenses ...... 22.4 23.7 34.7 20.8 Derivatives ...... 3.9 — — — Other receivables...... 7.2 3.4 3.0 1.8 Total current assets...... 238.6 178.1 252.0 151.3 Noncurrent assets Long-term assets: Deferred income tax and social contribution...... 115.9 113.9 92.6 55.6 Escrow deposits ...... 2.4 2.2 2.8 1.7 Prepaid expenses ...... 2.1 1.0 0.6 0.4 Derivatives...... 7.8 — — — Related party receivables ...... 0.8 16.5 13.1 7.9 Property, plant and equipment ...... 38.1 24.8 23.5 14.1 Intangible assets...... Goodwill on acquisition of investments...... 139.5 135.7 135.1 81.1 Other intangibles ...... 2.7 2.0 2.2 1.3 Total noncurrent assets ...... 309.3 296.2 269.8 161.9 Total assets ...... 547.9 474.2 521.8 313.2

Liabilities and shareholders’ equity Current liabilities Trade payables...... 87.7 37.9 36.5 21.9 Loans and financing ...... 60.3 61.6 19.0 11.4 Accrued payroll and related taxes ...... 9.1 6.7 9.3 5.6 Share-based payments ...... — — 2.5 1.5 Taxes payable...... 22.1 15.5 17.4 10.4 Advances from clients ...... 36.4 93.8 113.3 68.0 Sponsorship—cultural incentives law ...... — 2.0 3.5 2.1 Dividends payable...... 0.7 0.4 9.6 5.8 Related party payables ...... 1.4 — — — Provision for tax, civil, and labor contingencies ...... 2.1 5.1 7.5 4.5 Other payables ...... 3.1 0.5 0.8 0.5 Total current liabilities ...... 222.9 223.5 219.5 131.8 Noncurrent liabilities Loans and financing ...... 146.1 85.3 131.3 78.8 Provision for tax, civil and labor contingencies...... 28.8 24.9 21.9 13.1 Deferred income tax and social contribution ...... 14.7 2.9 1.4 0.8 Taxes payable...... 4.6 16.6 13.1 7.9 Advances from clients ...... 2.4 — 1.3 0.8 Total noncurrent liabilities...... 196.6 129.6 169.0 101.4 Shareholders’ equity Capital ...... 31.5 31.5 36.5 21.9 Legal reserve ...... 5.4 5.6 7.3 4.4 Earnings retention reserve ...... 78.8 80.1 55.3 33.2 Reevaluation reserve...... 6.0 1.9 1.7 1.0 Additional dividends proposed ...... — — 27.5 16.5 Valuation adjustments to equity ...... 3.9 0.2 2.9 1.7 Equity attributable to owners of the company ...... 125.5 119.3 131.2 78.7 Non-controlling interests in equity of subsidiaries ...... 2.8 1.8 2.1 1.3 Total consolidated shareholders’ equity ...... 128.3 121.1 133.3 80.0 Total liabilities and shareholders’ equity ...... 547.9 474.2 521.8 313.2

39 EBlTDA The following table sets forth a reconciliation of our EBITDA to net income for each of the years presented:

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$, (in millions of US$) except percentages) Net income ...... 46.9 6.0 40.3 24.2 (+) Income tax and social contribution...... 13.0 (5.3) 28.0 16.8 (+) Financial income (expenses) ...... 23.5 30.4 21.9 13.1 (+) Depreciation and amortization ...... 17.0 15.0 5.0 3.0 EBITDA(1)...... 100.4 46.1 95.1 57.1 EBITDA margin (%)(2) ...... 16.8% 10.6% 16.7% — (1) EBITDA is a non-accounting measure prepared by us, consisting of: net income, plus income tax and social contribution tax, net financial income (expenses), depreciation and amortization. EBITDA is not a measure defined under Brazilian GAAP or IFRS, should not be considered in isolation, does not represent cash flow for the periods indicated and should not be regarded as an alternative to cash flow or net income, or as an indicator of operational performance or liquidity. EBITDA does not have a standardized meaning and different companies may use different EBITDA definitions. Therefore our definition of EBITDA may not be comparable to the definition of EBITDA or other similar measures used by other companies. We use EBITDA to analyze our operational and financial performance, as well as a basis for administrative decisions. The use of EBITDA as an indicator of our profitability has limitations because it does not account for certain costs in connection with our business, such as financial expenses, taxes, depreciation, capital expenses and other related expenses. We use EBITDA as a supplemental means to measure our operating performance. (2) EBITDA margin is calculated by dividing EBITDA by net operating revenue.

Indebtedness

For the year ended December 31, 2008 2009 2010 2010 (in millions of R$) (in millions of US$) Loans and financings (current) ...... 60.3 61.6 19.0 11.4 (+) Loans and financings (noncurrent) ...... 146.1 85.3 131.3 78.8 (–) Cash and cash equivalents ...... 92.8 55.2 120.9 72.6 Net Debt ...... 113.6 91.7 29.3 17.6

40 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Forward-Looking Statements,” “Prospective Resources Summary and Other Information” and the other matters set forth in this offering memorandum. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto included elsewhere in this offering memorandum as well as the information presented under “Presentation of Financial and Other Information” and “Selected Financial and Operating Information.”

Overview We are the leading live entertainment company in South America and the third largest in the world in terms of number of tickets sold in 2010, according to Billboard. In addition, we believe we are the only diversified and vertically-integrated South American live entertainment company. In 2010, we promoted in South America four of the world’s five largest live entertainment tours, according to Pollstar. We were voted the best international independent producer, ranked among the world’s top three producers at the 2009 and 2010 Billboard Touring Awards and sold more than 2.2 and 2.9 million tickets in 2009 and 2010, respectively, including expositions and sporting events. We promote a wide range of artistic, cultural and sports content, drawing upon our relationships with agents and content providers in Brazil and around the world, as well as content developed internally, such as our stock car, pick-up and BMW Mini Cooper racing series. We currently operate five of the most important entertainment venues in South America, of which four are ranked among the top 50 venues worldwide in terms of number of tickets sold in 2010, according to Pollstar. Through our vertically-integrated business model, in addition to event promotion, we operate at all levels of the live entertainment value chain, including venue operation; ticketing; food, beverage and merchandise sales, and corporate sponsorships. As a result, we generate income from a variety of activities related to our operations.

Factors Affecting Our Results of Operations Below we analyze some of the main macroeconomic aspects that are material for our business and their effect on our results of operations and financial condition. Our financial condition and results of operations are affected by a variety of factors in the countries in which we operate, including, but not limited to: (i) the macroeconomic environment; (ii) unemployment rates; (iii) availability of credit; (iv) interest rates; (v) per capita income of the population; and (vi) exchange rates. Those factors, in addition to those described elsewhere in this offering memorandum, affect the purchasing power of our clients, our financial expenses and our investment capacity over the short- and medium-term. For further information on the factors that may materially affect us, see “Risk Factors—Risks Relating to Us and the Entertainment Industry.”

Brazilian macroeconomic environment Since entertainment is not considered an essential service, the industry’s performance is highly sensitive to variations in the broader economy and we normally experience increased demand in a growing economy. In particular, our financial condition and results of operations are influenced by the Brazilian macroeconomic environment, particularly by inflation rates, interest rates, government policies, currency exchange fluctuations and tax policies, especially to the extent that these factors influence levels of disposable income and consumer confidence. The performance of the Brazilian economy affects our revenues, costs and margins. In Brazil, inflation has remained within the Central Bank’s target from 2006 to 2010 and interest rates have shown a downward trend over the same period, according to data provided by the Central Bank, and average annual GDP growth was 3.6% in the period between 2007 and 2009, according to the IBGE. However, interest rates and inflation have risen in 2011.

41 In 2008, the inflation rate in Brazil (as measured by the IPCA) was 5.9%, which was within the Central Bank’s target range of 2.5% to 6.5%. The maintenance of low inflation rates can be attributed to the Brazilian monetary policy that resulted in raising the Special System for Settlement and Custody (Sistema Especial de Liquidação e Custódia), or SELIC rate, from 11.25% in January 2008 to 13.75% in December 2008. GDP grew 5.2% in 2008.

On April 30, 2008, Brazil’s debt rating was upgraded to investment grade by the Standard & Poor’s Rating Services, or S&P, joining the group of countries deemed to be at low risk of default. On May 29, 2008, Fitch Ratings, Ltd., or Fitch, also upgraded Brazil to investment grade, and on September 22, 2009, Moody’s Investor Service Inc., or Moody’s, followed suit. Raising Brazil’s credit risk classification strengthens the favorable medium-term prospects for the Brazilian economy, reflecting the maturity of its financial institutions and political structure as well as the advances of its fiscal policies and control of public debt.

According to IBGE, in 2008, household consumption increased 5.4% in actual terms, making it the fifth consecutive year of expansion; between 2006 and 2008, the increase was 17.9%. In 2008, the level of formal employment grew 5.0% according to data from the Ministry of Work and Employment. The availability of household income and the increase in formal employment are factors that contribute to our growth.

The year 2008 was also marked by a worsening of the international financial crisis. The main impact of this crisis on the Brazilian economy was the deterioration of expectations with respect to economic activity in 2009 and, to a lesser extent, in 2010. This change in expectations, mainly as of October 2008, precipitated the elevation of costs of third-party capital, exchange rate depreciation, falling trading prices for shares listed on the BM&FBOVESPA and a retraction in industrial production.

During 2009, the Central Bank began to decrease the SELIC rate, which fell to 8.75% as of December 30, 2009; the IPCA inflation rate in 2009 was 4.3%. The real appreciated 25.3% against the U.S. dollar, reaching R$1.741, according to the Central Bank. Brazil’s International reserves increased significantly between 2006 and 2009, from US$52.8 billion in January 2006 to US$236.7 billion in December 2009, and Brazilian net public debt as a percentage of GDP decreased from 47.4% to 42.8 in December of 2006.

The average real income of Brazil’s workforce increased by 4.8% in 2010, whereas the unemployment rate was at 5.3% as of December 31, 2010, according to the IBGE. As of December 31, 2010, accumulated inflation rate as measured by IPCA (Broad Consumer Price Index) was 9.3%. As a result, the COPOM interrupted the increase in the SELIC interest rate but subsequently increased it in 2011. We remain optimistic about the macroeconomic situation and the performance of the entertainment industry and we do not believe that the new federal administration elected in October 2010 will pose any major risks to the soundness of the economy and industry fundamentals.

42 The table below shows GDP growth, inflation, interest rates, and exchange rates against the U.S. dollar for the periods indicated:

As of and for the year ended December 31, 2008 2009 2010 GDP growth(1) ...... 5.2% (0.6)% 7.5% IGP-M inflation rate(2) ...... 9.8% (1.7)% 11.3% IPCA inflation rate(3)...... 5.9% 4.3% 9.3% CDI(4)...... 12.4% 9.9% 9.8% TJLP(5)...... 6.3% 6.0% 6.0% SELIC rate(6)...... 10.8% 9.1% 13.8% Appreciation (depreciation) of the real against the U.S. dollar...... (24.2)% 34.2% 4.5% Exchange rate (end of period)—R$ per US$1.00 ...... R$2.337 R$1.741 R$1.666 Average exchange rate—R$ per US$1.00(7)...... R$1.837 R$1.995 R$1.693

(1) According to IBGE. (2) The inflation rate for the General Market Prices Index (Índice Geral de Preços de Mercado), or IGP-M, is the inflation index of general prices in the market as measured by the FGV, representing cumulative data for the year. (3) IPCA inflation is an index of prices to consumers as measured by the IBGE, representing cumulative data for the year. (4) The Interbank Deposit Rate (Certificado de Depósito Interbancário), or CDI, is the average of the rates of overnight interbank deposits in Brazil (cumulative of the last 12 months for each period). (5) Long-term interest rate (Taxa de Juros de Longo Prazo), or TJLP, published quarterly by the Central Bank (average of year). It represents the annual interest rate applied by BNDES for long-term financing (end of period). (6) The overnight lending rate (Taxa Referencial do Sistema Especial de Liquidação e Custodia), established by the Central Bank (average of year). (7) Average of the exchange rates during the year.

Financial Statements and Critical Accounting Policies Our audited consolidated financial statements as of and for the years ended December 31, 2008, 2009 and 2010 were prepared in accordance with IFRS. These consolidated financial statements include estimates related to the allowance for doubtful accounts, provision for contingencies, depreciation of fixed assets, impairment of goodwill, amortization expenses of intangible assets and deferred taxes. The critical accounting policies and estimates are those that we consider relevant to our financial condition and our operating results, which are difficult to determine, subjective and complex, often requiring estimates concerning matters that are inherently uncertain. Because they reflect subjective judgments and uncertainties, the critical accounting policies practices and estimates can lead to materially different results, depending on the assumptions and conditions adopted. For a discussion of these and other accounting practices, see note 4 to our consolidated financial statements as of and for the years ended December 31, 2008, 2009 and 2010 included elsewhere in this offering memorandum.

Revenue Revenue is recognized in accordance with the following: • Revenue from ticket sales is recognized when the events are held. • Revenue from convenience and delivery fees (ticketing) originated via the Internet, by telephone and points of sale is recognized when the ticket is sold or the delivery service is provided, respectively. • Revenue from naming right sales is recognized ratably over the term of the agreements. • Revenue from sponsorships is recognized upon compliance with, and/or discharge of, certain contractual obligations, such as, but not limited to, use of sponsor trademarks/images in media used to publicize the event, grant of exclusivity in the sponsor’s market segment, the granting of rights to use official

43 trademarks and images of the event, and the granting of the right to the purchase tickets in advance for customers of a certain sponsor. Certain sponsorship agreements provide for the delivery of services and/ or contractual rights, which are provided in different time periods over the term of the agreements, which require management to make a judgment on the portion of revenue corresponding to each agreement. • Food, beverage and merchandise sales are recognized when the goods are sold to the customers. • Revenue from leasing venues to third parties is recognized when the events are held.

Deferred Income and Social Contribution Taxes As described in International Accounting Standards, or IAS, IAS 12—Liability Method, which is equivalent to CPC 32, the liability method of accounting for income tax is used for deferred income taxes arising from temporary differences between the book value of assets and liabilities and their respective tax amounts. Deferred income tax assets are revised at the end of each annual reporting period and written down by the amount that is not realizable based on future taxable income. Deferred income tax assets and liabilities are calculated using the tax rates applicable to taxable income in the years in which those temporary differences are expected to be realized. Future taxable income may be higher or lower than estimates made when determining whether it is necessary to record a tax asset and the amount to be recorded.

Credits recognized on tax loss carry-forwards are supported by projections of taxable income, based on feasibility studies submitted annually to our board of directors. These studies consider our history of profitability and the prospects of maintaining our profitability, which permit us to estimate credit recovery in future years. Other credits based on temporary differences, especially the provision for contingent tax liabilities, and the allowance for losses, were recognized in accordance with their expected realization.

Acquisition of Subsidiaries—Goodwill In our consolidated financial statements, business acquisitions are accounted for under the acquisition method. The consideration paid for the acquisition is measured at fair value, which is calculated as the sum of the fair values of the transferred assets and liabilities as of the date of acquisition.

In conformity with Brazilian accounting practices effective prior to the enactment of Law 11638/07, the acquisition of a business is accounted for based on its equity value, plus goodwill. The difference between the amount paid and the acquired subsidiary’s equity is accounted for as goodwill, which is based on expected future earnings of the acquired business. When we identify changes in circumstances that indicate impairment of goodwill, we constitute a reserve to reflect the recoverable value of those assets.

In compliance with CVM Instructions 319/99 and 349/99, when we merged our direct shareholder ADTSPE Empreendimentos e Participações S.A., or ADTSPE, into us in June 2007, the balance of goodwill that was originally recorded by ADTSPE was written off by means of a provision recorded by ADTSPE. In accordance with prevailing tax regulations, this provision is only deductible for tax purposes after the merger of the companies and is based on the expected generation of operating profits. Therefore, we recorded an asset related to deferred income tax and social contribution arising from the merger.

Beginning on January 1, 2008, goodwill ceased to be amortizable for accounting purposes and began being tested for impairment, as prescribed by CVM Resolution 527/07, which approved CPC Technical Pronouncement 1—Impairment of Assets. We adopted the option granted by IFRS 1—First-time Adoption of International Financial Reporting Standards and did not adjust goodwill for acquisitions carried out prior to January 1, 2008, and maintained such acquisitions at their book value on the transition date.

44 Derivatives We measure our derivatives at fair market value at the end of the reporting period, which is based principally on the fair market value as quoted on exchange markets. Extreme volatility of currency and interest rate markets in Brazil has caused, in certain periods, significant changes in future exchange and interest rates over very short periods of time, producing significant changes in the market value of swap and other financial instruments in the short term. The fair value at any settlement date may differ significantly from amounts registered in our financial statements.

Provision for Contingencies We record provisions for contingencies in our balance sheet in the amount of the probable loss arising from a dispute or as a result of past events and adjust for inflation. In each case, the amount of probable loss is determined on a best estimate basis, following reasonable assessments of risk made by our outside legal counsel, as well as in accordance with management’s judgment. We continuously review the estimates and assumptions underlying our provisions for contingencies based on new developments and circumstances, such as court decisions and changes in applicable legislation that could materially and adversely affect our results of operations and shareholders’ equity. While our management believes our current provisions for contingencies are adequate, the outcome of judicial proceedings may involve amounts that could differ from our estimates, given that determining them is an inherently subjective process. For further information on legal and administrative proceedings, see “Business—Legal and Administrative Proceedings.”

In the cases of certain acquired companies, we include indemnification clauses whereby liabilities arising prior to the date of acquisition remain the obligation of the sellers. As such, we do not constitute provisions for those contingencies. However, with respect to the indemnification obligations owed to us by CIE, we have constituted a provision for contingencies and have recognized amounts due thereunder as related party receivables.

Description of our principal financial statement line items Net Operating Revenue Our revenues primarily derive from: (i) the sale of tickets for the events we promote; (ii) convenience and delivery fees from our ticketing operations; (iii) food, beverage and merchandise sales; (iv) leasing of our venues to third parties; and (v) corporate sponsorships, including the sale of naming rights to the venues we operate.

Costs of Services and Sales Our costs of services and sales mainly consist of: (i) fees and royalties paid to the artists and shows we promote; (ii) costs associated with the realization and production of concerts, events and shows, which includes property and equipment rentals and the cost of personnel and third-party services; (iii) the cost of the food, beverages and merchandise sold at our shows; and (iv) depreciation and amortization.

Operating Expenses Our operating expenses consist primarily of: (i) selling expenses, which include costs related to commissions and certain marketing expenses; (ii) general and administrative expenses, such as personnel, leases, travel expenses and communications; and (iii) management compensation.

45 Financial income (expenses) Our financial income (expenses) is composed of our financial expenses and revenues, as well as exchange rate variations on foreign currency-denominated revenue and payment obligations. Our financial expenses consist primarily of interest on our debentures. Our financial revenues consist primarily of income on financial investments, which are typically linked to the CDI rate, meaning not clear and that vary in accordance with the amount of invested funds and applicable interest rates.

Current and deferred income tax and social contribution Current and deferred income tax and social contribution are assessed on our net income. We determine our taxable net income in accordance with the real profit regime, which may reach, on aggregate, the maximum tax rate of 34% of our taxable income, being: (i) income tax, paid at the rate of 15% on the taxable income for the year; (ii) addition to income tax, accruing on the portion of taxable income exceeding R$240,000 per year, at the rate of 10%; (iii) social contribution on net income, paid at the rate of 9%; and (iv) deferred income tax and social contribution, recorded at the rates above on temporary differences, tax loss and negative basis for social contribution tax.

Results of Operations for the Years Ended December 31, 2008, 2009 and 2010 Our results of operations are affected principally by: (i) changes in the prices and volume of tickets sold, which is a product of the number of events we promote and our attendance rates; (ii) the amount of revenue derived from those events; and (iii) sponsorships. Our results are also affected to a lesser extent by the effects of fluctuations in exchange rates and inflation.

The end of 2008 was marked by a worsening international financial crisis that negatively affected the Brazilian, Argentine and Chilean economies and the economic outlook of the general population. Consequently, there was a substantial decrease in consumer confidence, which negatively affected spending on entertainment, and a deterioration in the level of business confidence, which decreased spending by businesses on sponsorship and marketing. These two factors influenced the decision by certain Brazilian and international artists to postpone or cancel their tours, resulting in a decline in events promoted in 2009. Consequently, we experienced reductions in the number and price of tickets sold, which negatively impacted both our event promotion and our ticketing; food, beverage and merchandise sales; and venue operation segments, and revenue from corporate sponsorships.

We were also negatively impacted by the H1N1 influenza pandemic in 2009. During our peak months of June and July, the outbreak of the virus drove down attendance levels as consumers feared attending events with large crowds. For example, we were forced to close Ópera Citi in Buenos Aires for two weeks.

46 The table below shows a summary of our statement of income for the years indicated and the variations between those years and as a percentage of net operating revenue.

For the year ended December 31, Variation % of net % of net % of net operating operating operating 2008 revenue 2009 revenue 2010 revenue 2008/2009 2009/2010 (in millions of R$, except percentages) Net operating revenue Event promotion ...... 372.6 62.4% 248.5 57.2% 355.0 62.4% (33.3)% 42.8% Live music ...... 185.8 31.1% 154.3 35.5% 219.2 38.5% (16.9)% 42.0% Family events, theater and cultural expositions ...... 169.5 28.4% 82.6 19.0% 122.6 21.5% (51.3)% 48.4% Sports events ...... 17.3 2.9% 11.6 2.7% 13.2 2.3% (32.8)% 14.1% Ticketing; food, beverage and merchandise sales; and venue operation.... 89.6 15.0% 65.3 15.0% 89.9 15.8% (27.1)% 37.7% Sponsorships ...... 134.5 22.5% 120.7 27.8% 124.3 21.8% (10.2)% 2.9% Event promotion .... 122.1 20.4% 101.9 23.9% 101.7 17.9% (16.6)% (0.2)% Ticketing; food and beverage sales; and venue operation. . . 12.4 2.1% 18.9 4.3% 22.6 4.0% 52.6% 19.9% Net operating revenue ...... 596.6 100.0% 434.6 100.0% 569.2 100.0% (27.2)% 31.0% Cost of services and sales ..... (437.4) (73.3)% (328.5) (75.6)% (403.2) (70.8)% (24.9)% 22.7% Gross profit...... 159.2 26.7% 106.0 24.4% 166.0 29.2% (33.4)% 56.5% Operating expenses Selling expenses...... (4.1) (0.7)% (3.5) (0.8)% (3.4) (0.6)% (15.8)% (2.9)% General and administrative expenses...... (68.9) (11.5)% (68.1) (15.7)% (77.2) (13.6)% (1.2)% 13.5% Management compensation ...... (6.7) (1.1)% (6.0) (1.4)% (3.5) (0.6)% (11.5)% (41.4)% Other operating income, net...... 3.9 0.7% 2.6 0.6% 8.2 1.4% (34.3)% 219.0% Operating income ...... 83.4 14.0% 31.1 7.1% 90.1 15.8% (62.8)% 189.7% Financial income (expenses) . . . (23.5) (3.9)% (30.4) (7.0)% (21.9) (3.9)% 29.3% (27.9)% Income tax and social contribution ...... (13.0) (2.2)% 5.3 1.2% (28.0) (4.9)% (141.1)% (628.3)% Net income...... 46.9 7.9% 6.0 1.4% 40.3 7.1% (87.2)% 571.7%

47 Year Ended December 31, 2009 Compared to Year Ended December 31, 2010 Net operating revenue Our net operating revenue increased by 31.0%, from R$434.6 million in 2009 to R$596.2 million in 2010. This increase was primarily the result of higher net revenues generated by our event promotion and ticketing; food, beverage and merchandise sales; and venue operation segments, as described below.

The tables below show (i) a breakdown of our net operating revenue for the years indicated and the variations among those years and as a percentage of net operating revenue and (ii) certain operating information relating to net operating revenue for those years and the variations among those years.

For the year ended December 31, Variation % of net % of net operating operating 2009 revenue 2010 revenue 2009/2010 (in millions of R$, except percentages) Event promotion...... 248.5 57.2% 355.0 62.4% 42.8% Live music ...... 154.3 35.5% 219.2 38.5% 42.0% Family events, theater and cultural expositions...... 82.6 19.0% 122.6 21.5% 48.4% Sports events ...... 11.6 2.7% 13.2 2.3% 14.1% Ticketing; food, beverage and merchandise sales; and venue operation ...... 65.3 15.0% 89.9 15.8% 37.7% Sponsorships...... 120.7 27.8% 124.3 21.8% 2.9% Event promotion ...... 101.9 23.4% 101.7 17.9% (0.2)% Ticketing; food and beverage sales; and venue operation...... 18.9 4.3% 22.6 4.0% 19.9% Net operating revenue ...... 434.6 100.0% 569.2 100.0% 31.0%

As of and for the year ended December 31, Variation 2009 2010 2009/2010 Operating Information Live music Number of events ...... 295 348 18.0% Total tickets sold (in thousands)...... 1,440 1,801 25.0% Average occupancy rate (%)(1) ...... 65.9% 66.6% 1.0% Average price per ticket (in R$)(2) ...... 105.2 126.7 24.4% Family events / theater(3) Number of events ...... 661 737 11.5% Total tickets sold (in thousands)...... 740 937 26.6% Average occupancy rate (%) ...... 55.0% 60.0% 9.1% Average price per ticket (in R$)(4) ...... 133.2 145.5 9.3% (1) Average occupancy rate is calculated by dividing tickets sold by tickets available. (2) Operating revenue from live music divided by the number of tickets sold. (3) Does not include cultural expositions. (4) Operating revenue from family events and theater divided by the number of tickets sold.

Event promotion Our net operating revenue from event promotion increased by 42.8%, from R$248.5 million in 2009 to R$355.0 million in 2010, due to increases in each of our event promotion sub-segments, as described below: • Live music: Net operating revenue from live music increased 42.0%, from R$154.3 million in 2009 to R$219.2 million in 2010. This increase was due to an 18.0% increase in the number of shows we promoted, from 295 in 2009 to 348 in 2010, including the number of shows held at large stadiums, which

48 increased 17.2%, from 29 in 2009 to 34 in 2010. As a result, we sold more tickets, from 1.4 million sold in 2009 to 1.8 million sold in 2010, representing a 28.6% increase. Tickets available for sale increased by 23.8%, from 2.2 million in 2009 to 2.7 million in 2010. Further, average ticket prices for our live music events increased by 20.4%, from R$105.2 in 2009 to R$126.7 in 2010. The increase in the number of tickets sold and in average ticket price in 2010 was mainly due to (i) the recovery of the Brazilian economy, which was adversely affected in 2009 by the global financial crisis leading to a decrease in the number of, and demand for, shows and corporate events in 2009 and (ii) the cancellation or postponement of shows in 2009 because of the H1N1 influenza. Average occupancy rates remained stable, increasing less than 1.0%, from 65.9% in 2009 to 66.6% in 2010.

• Family events, theater, and cultural expositions: Net operating revenue from family events, theater and cultural expositions increased by 48.4%, from R$82.6 million in 2009 to R$122.6 million in 2010, mainly due to the 79.7% increase in the number of Cirque du Soleil shows that we promoted, from 138 in 2009 to 248 in 2010. This increase resulted from a more robust tour schedule in 2010, which included stops in the main cities of Brazil (São Paulo, Rio de Janeiro and Porto Alegre); in Buenos Aires, Argentina; Santiago, Chile; and Lima, Peru. By comparison, in 2009, Cirque du Soleil appeared only in Brazil’s smaller markets (namely, the Northeast region and the cities of Brasília, Belo Horizonte and Curitiba). Further, average ticket prices for our family events and theater events also increased 9.3%, from R$132.9 in 2009 to R$145.5 in 2010.

• Sporting events: Net operating revenue from sporting events increased by 14.1%, from R$11.6 million in 2009 to R$13.2 million in 2010, due primarily to the recovery in sales of hospitality centers in 2010 as compared to 2009, as well as the introduction of the Mini Cooper Challenge in 2010. The main revenue from sporting events comes from sponsorships, which represented 64.8% of revenue for these events in 2010. This revenue is recorded in our sponsorship segment, and not under event promotion, as discussed below.

Ticketing; food, beverage and merchandise sales and venue operation Our net operating revenue from our ticketing; food, beverage and merchandise sales; and venue operation segment increased by 37.7%, from R$65.3 million in 2009 to R$89.9 million in 2010, mainly due to the 49.6% increase in revenue from ticketing as a result of the increase in tickets sold in 2010 for our own and third-party events. Furthermore, food and beverage sales increased by 21.6% as a result of the increase in attendance at our events. Revenue from venue operation increased 9.6% from 2009 to 2010 as a result of the increase in leasing of our venues to third parties.

Sponsorships Our net operating revenue from sponsorships increased by 2.9%, from R$120.7 million in 2009 to R$124.3 million in 2010, for the reasons described below: • Event promotion: Sponsorship revenue from event promotion decreased by 0.2%, from R$101.9 million in 2009 to R$101.7 million in 2010, due to the cancellation of festivals in Argentina and shows in Chile, the latter due to the earthquake in Chile of February 2010. These cancellations resulted in decreases of 18.7% and 21.4%, respectively, in sponsorship revenue from event promotion from those countries. That decrease was partially offset by an increase in sponsorship revenue from event promotion in Brazil of 9.4%, which included an increase of 19.6% in sponsorship revenue from our promotion of sporting events. • Ticketing; food, beverage and merchandise sales; and venue operation: Sponsorship revenue from our ticketing; food, beverage and merchandise sales; and venue operation segment increased by 19.9%, from R$18.9 million in 2009 to R$22.6 million in 2010, mainly due to the signing of new sponsorship contracts in response to the economic recovery in 2010.

49 Cost of Services and Sales Our cost of services and sales increased by 22.7%, from R$328.5 million in 2009 to R$403.2 million in 2010, mainly due to the increased number of events we promoted in 2010, as discussed above. The increased number of events we promoted led to a 27.1% increase in the costs of services and sales from event promotion, from R$274.0 million in 2009 to R$348.3 million in 2010. Cost of services and sales from ticketing; food, beverage and merchandise sales; and venue operation remained relatively stable, increasing by 0.7%, from R$54.5 million in 2009 to R$54.9 million in 2010. As a percentage of net operating revenue, cost of services and sales decreased 4.8 percentage points, from 75.6% in 2009 to 70.8% in 2010.

The table below shows a breakdown by operational segment of our cost of services and sales for the years indicated and the variations among them. We do not allocate any expenses to cost of sales of our sponsorship segment.

For the year ended December 31, Variation 2009 2010 2009/2010 (in millions of R$, except percentages) Event promotion ...... (274.0) (348.3) 27.1% Operations...... (54.5) (54.9) 0.7% Total cost of services and sales...... (328.5) (403.2) 22.7%

The table below shows a breakdown by line item of our cost of services and sales for the years indicated and the variations among them.

For the year ended December 31, Variation 2009 2010 2009/2010 (in millions of Rs, except percentages) Fees and royalties ...... (126.3) (158.1) 25.2% Property and equipment rentals ...... (36.4) (50.3) 38.2% Cost of personnel and third-party services ...... (82.0) (124.3) 51.6% Cost of food, beverage and merchandise sold ...... (5.6) (6.4) 13.6% Depreciation and amortization ...... (13.6) (4.2) (69.5)% Other costs ...... (64.6) (59.9) (7.2)% Total cost of services and sales ...... (328.5) (403.2) 22.7%

Fees and royalties Our costs for fees and royalties consist of payments made to the artists we promote and to the rights holders of theatrical family and exhibition content. Costs for fees and royalties increased by 25.2%, from R$126.3 million in 2009 to R$158.1 million in 2010, primarily due to the increased number of events, mainly involving international shows and tours, as well as more Cirque du Soleil shows, as described above.

Property and equipment rentals Costs for property and equipment rentals increased by 38.2%, from R$36.4 million in 2009 to R$50.3 million in 2010, due to the increased number of events at third-party venues, including large concerts in stadiums, and Cirque du Soleil shows, as described above.

Cost of personnel and third-party services Cost of personnel and third-party services increased by 51.6%, from R$82.0 million in 2009 to R$124.3 million in 2010, due to the increased number of events, principally the large stadium concerts and Cirque du Soleil performances, which required us to outsource additional labor.

50 Cost of food, beverage and merchandise sold The cost of food, beverage and merchandise sold increased by 13.6%, from R$5.6 million in 2009 to R$6.4 million in 2010. The increase in the number of events and the increase in the number of spectators at our events led to higher number of units sold, which increased our cost of food, beverage and merchandise sold.

Depreciation and amortization Depreciation and amortization decreased by 69.5%, from R$13.6 million in 2009 to R$4.2 million in 2010, mainly as a result of having fully depreciated certain improvements on third-party properties in 2009.

Other costs Other costs decreased by 7.2%, from R$64.6 million in 2009 to R$59.9 million in 2010, principally as a result of producing shows of shorter duration and less complexity, which have lower pre-production costs, and the cancellation of festivals in Argentina.

Gross Profit As a result of the above-mentioned factors, our gross profit increased by 56.5%, from R$106.0 million in 2009 to R$166.0 million in 2010. Our gross margin increased 4.8 percentage points, from 24.4% in 2009 to 29.2% in 2010.

Operating Expenses Operating expenses remained relatively stable, increasing 1.1%, from R$75.0 million in 2009 to R$75.8 million in 2010. As a percentage of net operating revenue, operating expenses decreased 3.9 percentage points, from 17.2% in 2009 to 13.5% in 2010. The increase was mainly due to an increase in general and administrative expenses, which accounts for a material portion of our operating expenses. General and administrative expenses increased principally as a result of an increase in salaries deriving from an increased payout of profit-sharing bonuses as a result of our improved results in 2010. Also contributing was an increase in salaries resulting from a new collective bargaining agreement, which is negotiated annually and based mainly on prevailing inflation rates. The increase in general and administrative expenses was partially offset by an increase in other operating income, principally due to the sale of certain fixed assets in Argentina in 2010.

Operating Income As a result of the above-mentioned factors, operating income increased by 189.7%, from R$31.1 million in 2009 to R$90.1 million in 2010. As a percentage of net operating revenue, our operating income increased 8.7 percentage points, from 7.1% in 2009 to 15.8% in 2010.

Financial Income (expenses) Financial expenses decreased by 27.9%, from R$30.4 million in 2009 to R$21.9 million in 2010. The decrease was a result of: (i) a 72.0% decrease in financial expenses, from R$78.3 million in 2009 to R$22.0 million in 2010, principally as a result of our refinancing of the loan with Banco Citibank N.A.—Filial Brasileira, or Citibank, with the net proceeds of the Bradesco debentures and discharging of the swap contract, which was partially offset by (ii) an increase in net foreign exchange and inflation loss, from a R$42.3 million gain in 2009 to a R$7.5 million loss in 2010, which was the result of less oscillation in the real/dollar exchange rate, which led to reduced gains from the swap contract, and other exchange rate variations. For further information on the Citibank loan, Bradesco debentures and the swap contract, see “—Indebtedness,” below.

51 Income Tax and Social Contribution Income tax and social contribution increased by R$33.3 million, from a credit of R$5.3 million in 2009 to an expense of R$28.0 million in 2010. This increase was a result of: (i) an increase in current taxes of 27.2%, from R$6.6 million in 2009 to R$8.4 million in 2010, due to an increase in taxable income in certain of our subsidiaries, particularly in Chile and Vicar Promoções Desportivas S.A., or Vicar, that we could not offset with our other losses due to applicable tax regulations in Brazil; and (ii) an increase of R$31.5 million in deferred taxes, from a credit of R$11.9 million in 2009 to an expense of R$19.6 million in 2010, due to the increased use of tax credits associated with our goodwill booked on acquisitions.

Net Income As a result of the above-mentioned factors, net income increased by 571.7%, from R$6.0 million in 2009 to R$40.3 million in 2010. Our net margin increased 5.7 percentage points, from 1.4% in 2009 to 7.1% in 2010.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2009 Net Operating Revenue Our net operating revenue decreased by 27.2%, from R$596.6 million in 2008 to R$434.6 million in 2009. This decrease primarily resulted from a reduction in our event promotion and ticketing; food, beverage and merchandise sales; and venue operation segments, as described below.

For the year ended December 31, Variation % of net % of net operating operating 2008 revenue 2009 revenue 2008/2009 (in millions of R$, except percentages) Event promotion ...... 372.6 62.4% 248.5 57.2% (33.3)% Live music ...... 185.8 31.1% 154.3 35.5% (16.9)% Family events, theater and cultural expositions ...... 169.5 28.4% 82.6 19.0% (51.3)% Sports events ...... 17.3 2.9% 11.6 2.7% (32.8)% Ticketing; food, beverage and merchandise sales; and venue operation ...... 89.6 15.0% 65.3 15.0% (27.1)% Sponsorships...... 134.5 22.5% 120.7 27.8% (10.2)% Event promotion ...... 122.1 20.4% 101.9 23.4% (16.6)% Ticketing; food and beverage sales; and venue operation...... 12.4 2.1% 18.9 4.3% 52.6% Net operating revenue ...... 596.6 100.0% 434.6 100.0% (27.2)%

52 For the year ended December 31, Variation 2008 2009 2008/2009 Operating Information Event promotion Live music Number of events ...... 368 295 (19.8)% Total tickets sold (in thousands)...... 1,927 1,440 (25.3)% Average occupancy rate(1) ...... 64.2% 65.9% 2.7% Average price per ticket (in R$)(2) ...... 113.8 105.2 (7.6)% Family events / theater(3)...... Number of events ...... 1,052 661 (37.2)% Total tickets sold (in thousands)...... 1,172 740 (36.9)% Average occupancy rate(1) ...... 56.9% 55.0% (3.3)% Average price per ticket (in R$)(4) ...... 145.5 133.2 (8.5)% (1) Average occupancy rate is calculated by dividing tickets sold by tickets available, (2) Operating revenue from live music divided by the related number of tickets sold. (3) Does not include operating information from cultural expositions. (4) Operating revenue from family events / theater divided by the related number of tickets sold.

Event promotion Our net operating revenue from event promotion decreased by 33.3%, from R$372.6 million in 2008 to R$248.5 million in 2009, due to a decrease in net operating revenue across our three operating sub-segments, as described below: • Live music: Net operating revenue from live music decreased by 16.9%, from R$185.8 million in 2008 to R$154.3 million in 2009. This decrease was mainly due to the 2008 international financial crisis, the negative effects of which principally affected us in 2009 in the countries in which we operate, and the H1N1 influenza, which obligated us to cancel certain live music events in 2009. As a result, we experienced a 19.8% reduction in the number of events we promoted, from 368 shows in 2008 to 295 in 2009 and we sold 487,000 fewer tickets in 2009, when compared to 2008. Further, average ticket prices decreased by 7.6% from R$113.8 in 2008 to R$105.2 in 2009. • Family events, theater, and cultural expositions: Net operating revenue from family events, theater and cultural expositions decreased by 51.3%, from R$169.5 million in 2008 to R$82.6 million in 2009, principally as a result of the H1N1 influenza, which negatively affected attendance at our theatrical performances, and a shorter Cirque du Soleil tour that visited smaller venues in 2009 than in 2008. Consequently, we sold 432,000 fewer tickets for family events and theater productions in 2009 than in 2008. Further, average ticket prices decreased by 8.5%, from R$145.5 to R$133.2. • Sporting events: Net operating revenue from sporting events decreased by 32.8%, from R$17.3 million in 2008 to R$11.6 million in 2009, due to the reduction in hospitality centers sales in 2009 as a direct result of the global financial crisis, which reduced client demand for these services. The main revenue from sporting events comes from sponsorships, which represented 63.7% of revenue for these events in 2009. This revenue is not recorded under event promotion, but rather under sponsorships, as discussed below.

53 Sponsorships Our net operating revenue from sponsorship sales decreased by 10.2%, from R$134.5 million in 2008 to R$120.7 million in 2009, for the reasons described below: • Event promotion: Sponsorship revenue from event promotion decreased 16.6%, from R$122.1 million in 2008 to R$101.9 million in 2009, due principally to the reduction in the number of concerts and family and theater events promoted in 2009 compared to 2008, which was exacerbated by the significantly reduced sponsorship of our principal clients due to the financial crisis. We experienced an increase of 1.5% in sponsorship revenue from our promotion of sporting events in 2009 compared to 2008. • Ticketing; food, beverage and merchandise sales and venue operation: Sponsorship revenue from our ticketing; food, beverage and merchandise sales and venue operation segment increased by 52.6%, from R$12.4 million in 2008 to R$18.9 million in 2009, mainly due to variable payments we received from Citibank as compensation for the “Citibank preferred method of payment” and pre-sales in our outdoor events pursuant to a contract we entered into with Citibank in 2009.

Cost of Services and Sales Our cost of services and sales decreased by 24.9%, from R$437.4 million in 2008 to R$328.5 million in 2009, mainly due to the fewer number of events we promoted in 2009, as described above. The reduced number of events we promoted led to a 26.9% decrease in the costs of services and sales from event promotion, from R$375.0 million in 2008 to R$274.0 million in 2009. Cost of services and sales from ticketing; food, beverage and merchandise sales; and venue operation decreased by 12.7%, from R$62.4 million in 2008 to R$54.5 million in 2009. As a percentage of net operating revenue, cost of services and sales increased 2.3 percentage points, from 73.3% in 2008 to 75.6% in 2009.

For the year ended December 31, Variation 2008 2009 2008/2009 (in millions of R$, except percentages) Event promotion ...... (375.0) (274.0) (26.9)% Operations ...... (62.4) (54.5) (12.7)% Total cost of services and sales ...... (437.4) (328.5) (24.9)%

The table below shows a breakdown by line item of our cost of services and sales for the years indicated and the variations among them.

For the year ended December 31, Variation 2008 2009 2008/2009 (in millions of R$, except percentages) Fees and royalties ...... (126.2) (126.3) 0.1% Property and equipment rentals ...... (44.3) (36.4) (18.0)% Cost of personnel and third-party services ...... (167.6) (82.0) (51.1)% Cost of food, beverage and merchandise sold ...... (7.8) (5.6) (28.0)% Depreciation and amortization ...... (15.8) (13.6) (13.9)% Other costs ...... (75.7) (64.6) (14.7)% Total cost of services and sales ...... (437.4) (328.5) (24.9)%

54 Fees and royalties Costs for fees and royalties remained stable, increasing 0.1%, from R$126.2 million in 2008 to R$126.3 million in 2009, due to an increase in costs associated with the Cirque du Soleil tour and resumption of Broadway productions in Argentina in 2009, which was offset by a decrease in costs related to the fewer number of events we promoted in 2009 as a result of the financial crisis.

Property and equipment rentals Costs for property and equipment rentals decreased by 18.0%, from R$44.3 million in 2008 to R$36.4 million in 2009, due to the decreased number of events at third-party venues, including large concerts at stadiums, and Cirque du Soleil shows, as described above.

Costs of personnel and third-party services Cost of personnel and third-party services decreased by 51.1%, from R$167.6 million in 2008 to R$82.0 million in 2009, due to the decreased number of events, principally the large stadium concerts and Cirque du Soleil performances, which required us to outsource less labor.

Cost of food, beverage and merchandise sold The cost of food, beverage and merchandise sold decreased by 28.0%, from R$7.8 million in 2008 to R$5.6 million in 2009, due to the decrease in the number of events and number of spectators who attended our events and the corresponding reduction in food, beverage and merchandise sold.

Depreciation and amortization Depreciation and amortization decreased by 13.9%, from R$15.8 million in 2008 to R$13.6 million in 2009, mainly due to a decrease in the residual value of our depreciable assets.

Other costs Other costs decreased by 14.7%, from R$75.7 million in 2008 to R$64.6 million in 2009, principally as a result of the decreased number of events in 2009.

Gross Profit As a result of the above-mentioned factors, our gross profit decreased by 33.4%, from R$159.2 million in 2008 to R$106.0 million in 2009. Our gross margin decreased 2.3 percentage points, from 26.7% in 2008 to 24.4% in 2009.

Operating Expenses Operating expenses remained relatively stable, decreasing 1.1%, from R$75.8 million in 2008 to R$75.0 million in 2009. As a percentage of net operating revenue, operating expenses increased 4.5 percentage points, from 12.7% in 2008 to 17.2% in 2009. The increase was mainly due to a slight decrease in general and administrative expenses, which accounts for a material portion of our operating expenses. General and administrative expenses decreased principally as a result of a reduction in salaries deriving from a lower payment of profit-sharing bonuses in 2009. The decrease in general and administrative expenses was accompanied by slight decreases in selling expenses, management compensation and other operating expenses, all which decreased as a result of the impact of the crisis in 2009.

55 Operating Income As a result of the above-mentioned factors, operating income decreased by 62.8%, from R$83.4 million in 2008 to R$31.1 million in 2009. As a percentage of net operating revenue, our operating income decreased 6.9 percentage points, from 14.0% in 2008 to 7.1% in 2009.

Financial Income (expenses) Financial expenses increased by 29.3%, from R$23.5 million in 2008 to R$30.4 million in 2009. The increase was a result of: (i) a 293.5% increase in financial expenses, from R$19.9 million in 2008 to R$78.3 million in 2009, principally as a result of losses related to the U.S. dollar-denominated Citibank loan due to the strength of the U.S. dollar against the real at the beginning of 2009, when we made the interest payments on the loan, and (ii) a 90.2% decrease in financial income, from R$56.4 million in 2008 to R$5.6 million in 2009, due to a decrease in earnings from investments in marketable securities from our cash account, primarily as a result of diminished cash generation in 2009. These two changes were partially offset by an increase of R$102.4 million in net foreign exchange and inflation gain, from a R$60.0 million loss in 2008 to a R$42.3 million gain in 2009, principally due to gains from our swap agreement with Citibank as a result of the exchange rate movements mentioned above.

Income Tax and Social Contribution Income tax and social contribution decreased by R$18.3 million, from an expense of R$13.0 million in 2008 to a credit of R$5.3 million in 2009. This decrease was a result of: (i) a decrease in current taxes of 50.1%, from R$13.2 million in 2008 to R$6.6 million in 2009, due to a decrease in taxable income in 2009; and (ii) an increase of R$11.7 million in deferred tax credits, from a credit of R$0.3 million in 2008 to a credit of R$11.9 million in 2009. The increase in deferred tax credits was due to (i) an increase in temporarily non-deductible items related to costs for the production of events for which we have made provisions but not yet incurred, and (ii) effects of currency fluctuations in the real and U.S. dollar, which arise as a result of anticipated exchange rate losses on future payments for the Citibank loan and for which we have made provisions but not yet incurred.

Net Income As a result of the above-mentioned factors, net income decreased 87.2%, from R$46.9 million in 2008 to R$6.0 million in 2009. Our net margin decreased 6.5 percentage points, from 7.9% in 2008 to 1.4% in 2009.

Liquidity and Capital Resources Financial Capacity As of December 31, 2010, we had current liabilities of R$219.5 million compared with current assets of R$252.0 million. In 2010, we generated EBITDA of R$95.1 million, and our net debt as of December 31, 2010 was R$29.3 million, resulting in net debt/EBITDA ratio of 0.3.

Further, we believe we have a favorable debt profile, with 87.3% and 12.7% in noncurrent and current debt, respectively. We have complied with, and are currently in compliance with, all our obligations with respect to our financial commitments and related contracts.

Further, as of December 31, 2010, our total liabilities were 2.5 times our shareholders’ equity. Total liabilities were basically composed of: (i) R$150.3 million in financial obligations related to our outstanding debentures; (ii) R$114.6 million in advances from clients, which is made up of advanced receipt of revenue deriving from sponsorship obligations, luxury suite rentals, leasing of space in our venues, merchandising fees and ticket sales; and (iii) R$68.4 million from trade and tax payables.

56 As of December 31, 2008 and 2009, our current liabilities were R$223.5 million and R$222.9 million, respectively, and our current assets were R$178.1 million and R$238.6 million, respectively. In 2008 and 2009, we generated EBITDA of R$46.1 million and R$100.4 million, respectively, and had net debt of 2.0 and 1.1 times our EBITDA, respectively. In 2009 and 2008, our debt profile was composed of 58.7% and 70.8%, respectively, in noncurrent debt. Our current debt as of December 31, 2009 and 2008 was 41.3% and 29.2%, respectively for our total debt.

In light of our liquidity position, cash flow generation and our anticipated proceeds from the primary offering, we believe we have sufficient liquidity to cover our projected capital expenditures and investments, operating expenses, debt service obligations and other amounts to be paid in the coming years. We cannot guarantee, however, that we will not need additional liquidity and capital to fund our business and operations in the future.

Sources and Uses of Funds Our principal source of funds is our cash flow generation, which we derive principally from ticket sales and sponsorship contracts and naming rights. As a substantial portion of these cash flows are generally received in advance of the events, we typically rely on this funding to meet the costs and expenses of promoting the event, our principal use of funds. Our funds are also used to meet our monthly lease obligations for the leased venues we operate. We do not typically rely on financing from third-parties, but have accessed the capital markets in the past to fund our operations and growth plans.

When we look to fund investments in noncurrent assets, we verify the most advantageous financing options, whether through the use of third-party or our funds. This decision is mainly based on an analysis of the cost of the third-party funds versus our anticipated return on invested capital.

57 Cash Flow Analysis The following table summarizes our cash flows for the years ended December 31, 2008, 2009 and 2010.

For the year ended December 31, Variation 2008 2009 2010 2008/2009 2009/2010 (in thousands of R$, except percentages) Cash flows from operating activities Net income for the year...... 46.9 6.0 40.3 (87.3)% 571.7% Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization ...... 17.0 15.0 5.0 (11.7)% (66.9)% Net book value of property, plant and equipment written-off ..... 0.8 1.9 2.9 143.1% 53.9% Deferred income tax and social contribution ...... (0.3) (11.9) 19.6 4597.6% — Loans and financing costs and exchange differences on balances with subsidiaries, financing, loans and taxes payable ...... 31.1 9.8 17.2 (68.4)% 75.1% Shared-based payments ...... — — 2.5 — — Provision for tax, civil and labor contingencies...... (3.4) (2.2) (0.3) (35.5)% (88.0)% Recognition (reversal) of allowance for doubtful accounts ...... 1.2 1.6 0.6 30.4% (59.6)% Decrease (increase) in operating assets and liabilities:...... Related parties ...... (2.1) 15.3 (15.4) — — Inventories...... 0.5 (0.2) 0.4 — — Recoverable taxes...... (20.9) 13.3 2.6 — (88.0)% Advances to suppliers ...... (5.7) (11.3) 16.3 98.0% — Other receivables ...... (5.4) 3.1 0.1 — (95.5)% Escrow deposits ...... (0.6) 0.2 (0.6) — — Prepaid expenses ...... (2.1) (0.3) (11.8) (88.0)% 4563.2% Trade payables ...... 41.4 (49.7) 0.1 — — Taxes payable ...... 6.3 (7.5) (0.6) — (92.1)% Accrued payroll and related taxes ...... 2.8 (2.4) 2.7 — — Advances from clients ...... (80.0) 54.9 21.9 — (60.1)% Other payables ...... (1.9) (3.7) (2.4) 91.9% (35.5)% Net cash provided by (used in) operating activities ...... 25.8 32.0 101.2 24.1% 216.2%

Cash flows from investing activities Net cash received from sale of subsidiary Motivare S.A...... 1.6 1.5 — (3.4)% — Write-off of goodwill of subsidiaries B.A. Inversiones S.A. and T4F Inversiones S.A. arising from corporate restructuring due to payment of Pop Art and Ticketek...... 1.6 0.5 — (67.2)% — Purchase of property, plant and equipment and intangible assets ...... (6.8) (6.5) (7.1) (3.9)% 7.9% Net cash provided by (used in) investing activities ...... (3.7) (4.5) (7.1) 22.2% 56.0%

Cash flows from financing activities Related parties ...... 0.5 (0.7) 3.4 — — Payment of dividends ...... (3.6) (2.7) (21.5) (25.6)% 703.9% Loans and financing ...... — 1.6 — — — Acquisition of new share of subsidiary Vicar ...... (5.0) (7.2) — 43.5% — Issuance of debentures ...... — — 150.0 — — Repayment of loans, financing and swaps...... (32.9) (55.7) (146.9) 69.2% 163.7% Interest payments on loans, financing and swaps...... (11.5) (14.7) (16.8) 28.3% 12.9% Net cash provided by (used in) financing activities ...... (52.5) (79.5) (31.8) 51.4% (60.0)% Exchange differences on cash and cash equivalents ...... 1.5 14.4 3.4 883.4% (76.2)% Increase (decrease) in cash and cash equivalents ...... (28.9) (37.6) 65.8 29.9% —

58 Net cash provided by (used in) operating activities In 2010, net cash generated by operating activities increased by 216.2%, from R$32.0 million in 2009 to R$101.2 million in 2010. This increase resulted principally from: (i) an increase in net income across the years of 571.7%, from R$6.0 million in 2009 to R$40.3 million in 2010; (ii) an increase in cash provided from deferred taxes of R$31.5 million, from a tax gain of R$11.9 million in 2009 to a tax loss of R$19.6 million in 2010, due to increased utilization of fiscal credits associated with our goodwill on acquisitions; and (iii) an increase in cash provided from advances to suppliers of R$27.6 million, from a use of cash of R$11.3 million in 2009 to a generation of cash of R$16.3 million in 2010, which resulted from an increased amount of pre-paid royalty obligations paid to our artists in 2009 compared to 2010, due to the higher number of shows we promoted at the beginning of 2010 than the beginning of 2011. These were partially offset by (i) an increase in cash used for prepaid expenses of R$11.5 million, from R$0.3 million in 2009 to R$11.8 million in 2010, which was related to theater performances of longer duration and scope to be performed in 2011 compared to 2010 and the corresponding related increase in expenses therefrom; and (ii) an decrease in cash provided from advances from clients of 60.1%, from R$54.9 million in 2009 to R$21.9 million in 2010 due to the shorter Cirque du Soleil season for 2011, compared to 2011, and the corresponding decrease in the amount of pre-paid ticket purchase from our customers, which was partially offset by the advanced ticket sale of tickets in 2010 for the U2 concerts to be performed in April 2011.

In 2009, net cash generated by operating activities increased by 24.1%, from R$25.8 million in 2008 to R$32.0 million in 2009. The increase was a result of: (i) an increase in cash provided from recoverable taxes of R$34.2 million, from a loss of R$20.9 million in 2008 to a gain of R$13.3 million in 2009, due to an internal review of our recoverable taxes which we conducted at the end of 2008 and which generated tax credits that we subsequently used in 2009; and (ii) an increase of cash provided from advances from clients of R$134.9 million, from a loss of R$80.0 million in 2008 to a gain of R$54.9 million in 2009, due to advance ticket purchases in connection with Cirque du Soleil performances for 2010, which were longer in duration and scope than we those presented in 2009. This was partially offset by a decrease in: (i) net income of 87.3%, from R$46.9 million in 2008 to R$6.0 million in 2009, due to the factors discussed above; and (ii) an decrease in cash provided from trade payables of R$91.0 million, from a generation of cash of R$41.4 million in 2008 to a use of cash of R$49.7 million in 2009, due to the 11 shows of Madonna that we promoted in December 2008 and whose costs were only effectively paid in 2009.

Net cash provided by (used in) investment activities In 2010, net cash used in investment activities increased by 56.0%, from R$4.5 million in 2009 to R$7.1 million in 2010. This increase resulted from an increase in investments in our ticketing systems and sporting events in Brazil, as well as an increase in property investments in Argentina. In 2009, our net cash used in investment activities increased by 22.2%, from R$3.7 million in 2008, principally due to a write-off in goodwill arising from the corporate restructuring of our Argentine operations, B.A. Inversiones S.A. and T4F Inversiones S.A. In both 2008 and 2009, we continued to receive cash payments from the purchaser of our former subsidiary Motivare S.A., which partially offset the increases in cash used in investment activities in 2009 and 2010.

Net cash provided by (used in) financing activities In 2010, net cash used in financing activities decreased by 60.0%, from R$79.5 million in 2009 to R$31.8 million in 2010. This decrease resulted principally from our receipt of cash proceeds from our issuance of debentures in March 2010, which was partially offset by costs associated with refinancing the Citibank loan and the payment of dividends in 2010. In 2009, net cash used in financing activities increased 51.4%, from R$52.5 million in 2008 to R$79.5 million in 2009. This increase was primarily the result of an acquisition in 2009 of an additional 20.0% interest in Vicar Promoções Desportivas S.A. and increased cash that we used in 2009 to pay the interest and principal of our loan with Citibank, when compared to amounts paid in 2008.

59 Capital Expenditures In 2010, our capital expenditures were R$7.1 million, which we primarily spent in the maintenance of our venue and leasehold improvements. Over the next two years, we intend to invest in the acquisition and/or construction of new venues, the acquisition of companies that offer synergies with our business and the purchase of certain of the equipment we currently rent from third parties to mount our live music concerts.

Indebtedness As of December 31, 2008, 2009 and 2010, we had R$206.3 million, R$146.9 million and R$150.3 million, respectively, in total debt, consisting exclusively of loans and financings.

Currently, we have just one outstanding debt obligation, the Bradesco debentures, as described below. As of December 31, 2010, 12.7% and 87.3% of this debt corresponded to current and noncurrent obligations, respectively.

From time to time we enter into stand-by letters of credit to guarantee our payment of royalties to certain international artists. As of the date of this offering memorandum, we have US$28.0 million and R$6.6 million in contingent obligations for which we would be required to reimburse the banks if payments were made under our letters of credit.

We are not contractually limited from taking on new debt or paying dividends, unless we were to breach the terms of the Bradesco debenture. Additionally, we have strong relationships with financial institutions operating in Brazil, which we believe would agree to provide additional credit to us, if necessary.

Bradesco debentures On March 19, 2010, we issued R$150 million in non-convertible, floating rate debentures through Banco Bradesco BBI, which is one of the international placement agents for this issuance of common shares. The debentures bear an annual interest rate equal to the CDI rate plus a spread that varies from 1.47% to 2.09% over the life of the debentures, paid quarterly beginning in June 2010. Principal is payable in eight consecutive semi- annual installments of R$18.75 million, with the first due in September 2011 and the last upon maturity, in March 2015. As of December 31, 2010, the aggregate principal amount outstanding under the debentures was R$150.3 million.

The debentures are secured by: (i) a pledge of all of our common shares held by the controlling and selling shareholders; (ii) a pledge of existing and current receivables arising from our sponsorship contracts in effect as of the date we issued these debentures; and (iii) a pledge of existing and future receivables arising from all of the credit and debit card transactions for those credit card companies that promote our events. Bradesco will release the lien on the shares that are being sold by the selling shareholders in this offering, but will maintain its pledge over the remaining shares. The Bradesco debentures, unlike the Citibank loan described below, do not contain negative covenants.

Proceeds from the debentures were used to discharge indebtedness relating to the loan and swap with Banco Citibank S.A., which is described below.

Citibank loan and swap agreements In May 2007, ADTSPE Empreendimentos e Participações S.A., borrowed US$100 million from Citibank in connection with our corporate reorganization. The loan and swap bore an annual interest rate of 6.95% per year and semi-annual payments of principal, with a maturity in May 2012. After we acquired ADTSPE on June 30, 2007, we assumed the loan. In order to hedge the exchange rate risk of this loan obligation, we simultaneously entered into a swap arrangement with Citibank that resulted in an effective interest rate equal to the CDI rate plus a spread that varied from 0.75% to 2.75 over the life of the loan. On April 7, 2010, we discharged the loan and swap agreements with the proceeds from the Bradesco debenture.

60 Contractual Obligations The table below summarizes the maturity profile of our material contractual and financial obligations as of December 31, 2010 affecting our liquidity.

Maturities per period Total maturity Less than 1 year 1-3 years 3-5 years Over 5 years (in millions of R$) Financial indebtedness ...... 150.3 19.0 112.5 18.8 — Lease agreements ...... 23.9 2.2 5.3 7.8 8.6 Commercial obligations ...... 104.9 52.2 52.7 — — Tax payables financing (REFIS)(1) ...... 10.8 0.5 2.2 2.2 5.9 Total...... 289.9 74.0 172.6 28.7 14.5

(1) CIE, our former controlling shareholder, undertook to indemnify us for the tax payables financing. See “Business—Legal and Administrative Proceedings—Tax Payables Financing” and “Related-Party Transactions—Shareholders’ Agreement.”

Investments and Divestments In August 2008, we sold our 50% plus one share interest in Motivare S.A. to its other shareholder, Alain Soly Levi. In June 2009, we increased our stake in Vicar Promoções Desportivas S.A., our subsidiary responsible for publicizing, promoting and organizing sporting events, by an additional 20%, such that we currently hold 75% of its capital stock.

We intend to incur additional capital expenditures associated with the acquisition and construction of major venues, companies that would bring synergies to our business and the purchase of equipment used during our shows. For 2011 and 2012, we are estimating capital expenditures of R$310.0 million, which we intend to pay for using the net proceeds from this primary offering and cash flow from our operations. During 2010 and 2009, we invested R$7.1 million and R$6.4 million, respectively, in our operations.

Off-Balance Sheet Arrangements As of December 31, 2010 we had the following arrangements, which are considered off-balance sheet arrangements pursuant to CVM Instruction 480: • Leasing agreements: we had R$23.9 million in monthly lease payment obligations to be incurred in the future when they become due pursuant to the terms of the lease contracts, as follows: (i) R$2.2 million due less than one year; (ii) R$5.3 million due within one to three years; (iii) R$7.8 million due within three to five years; and (iv) R$8.6 million due after five years. • Stand-by letter of credit: we entered into a US$28.0 million stand-by letter of credit to guarantee our payment obligations to certain international artists; • Letter of surety: we entered into a R$6.6 million surety letter to guarantee our payment obligations under certain of our lease agreements and legal proceedings; and • Corporate sponsorship contracts: we had R$206.1 million in corporate sponsorship and naming rights payments that we anticipate receiving in the future, which had not yet been recorded in our results but will be so recorded when we promote our events and deliver our sponsorship services.

Qualitative and Quantitative Information About Market Risks We are exposed to market risks arising from the ordinary course of our business primarily involving adverse changes in exchange rates, interest rates and inflation rate fluctuations.

61 Exchange Rate Risk A portion of our sales is denominated in Argentine pesos and Chilean pesos. Therefore, we are exposed to exchange variation risks that may have a direct effect on our revenue and margins. As of December 31, 2010, we estimate that an increase (decrease) of 10.0% of the Argentine peso with respect to the Brazilian real, our reporting currency, would increase (decrease) our net revenue by R$2.0 million (R$1.6 million) As of December 31, 2010, we estimate that an increase (decrease) of 10.0% of the Chilean peso with respect to the Brazilian real, would increase (decrease) our net revenue by R$6.4 million (R$4.3 million).

Furthermore, certain of our royalty payment obligations for international artists are denominated in U.S. dollars. In order to reduce this exposure to exchange rate variation, we use hedge instruments to protect against exchange rate risk for certain of such obligations. We do not enter into any hedge, swap or other derivative instrument for speculative purposes.

The table below sets forth the breakdown of our net operating revenue by country.

For the year ended December 31, % of net % of net % of net operating operating operating 2008 revenue 2009 revenue 2010 revenue (in millions of R$) Brazil ...... 354.1 59.3% 282.4 65.0% 375.5 66.0% Argentina ...... 156.6 26.2% 109.3 25.2% 113.4 20.0% Chile(1)...... 86.0 14.4% 42.8 9.9% 80.4 14.1% Total ...... 596.6 100.0% 434.6 100.0% 569.2 100.0%

(1) Results from our Peruvian operations are recorded in the financial results of our Chilean subsidiaries.

Interest Rate Risk Exposure to interest rates and inflation rates subjects us to risks of losses or gains from fluctuations in interest rates earned or charged on our financial assets and liabilities. We are exposed to floating interest rates involving variations in the CDI rate charged on our debentures. Financial investment interest rates are for the most part linked to the variation of the CDI rate. As of December 31, 2010, we estimate that an increase (decrease) of 10.0% in interest rates, would increase (decrease) our financial expenses by R$1.0 million.

Inflation Rate Risk Inflation rate fluctuations in countries in which we operate may affect our revenue and margins as well as negatively affect the economies of those countries. Because entertainment is not considered an essential service, the industry’s performance is very sensitive to variations in the broader economy. Any downturn in the markets in which we operate will result in a decline in both the public’s and our corporate sponsor’s purchasing power and disposable income, which could cause a reduction of both the frequency of, and revenues from, live entertainment events. Such reductions may negatively impact our results of operations. For further information on inflation rate risk, see “—Factors affecting our results of operations—Brazilian macroeconomic environment,” “Risk Factors—Risks Relating to Brazil,” “Risk Factors—Risks Relating to Argentina” and “Risk Factors—Risks Relating to Chile.”

Liquidity Risk We finance our operations with our own and with third-party capital. We constantly monitor our liquidity risk based on our cash flow and our levels of indebtedness.

62 INDUSTRY AND REGULATORY OVERVIEW

Industry Overview The live entertainment industry encompasses a wide variety of activities and is composed of (i) content providers; (ii) event promoters; (iii) parking and venue operators; (iv) food, beverage and merchandise sellers; and (v) ticketing providers. The entertainment industry promotes a wide variety of events, principally live music, theater performances, cultural exhibits and sporting events. There is a large variety in the demographic composition and preferences of a given audience in accordance with the type of event.

The Live Entertainment Industry Structure

Corporate Sponsorships Sales Venue Operation, Artists’ Food, Beverage and Agents Event Promotion Ticketing Services Including Parking managers Merchandise Sales General Public Services Content Providers Event Promoters

Content providers may be subdivided into the artists’ managers and the agents who represent and negotiate on behalf of the artists in return for commissions on the various associated revenues. In turn, event promoters perform different functions, each with its own specific drivers of value: • event promotion: participants in this sector are responsible for organizing and promoting an event. The revenue driver for this segment is the difference between total ticket revenue and the cost of promoting and hiring the artist; • ticketing: participants in this sector are responsible for administering ticket sales, whether over the Internet, at physical points of sale or ticket offices, through call centers or otherwise. The main sources of revenue from ticketing are convenience and delivery fees, as well as commissions collected on events produced by third parties; • food, beverage and merchandise sales: these generate auxiliary revenue for live entertainment events; • venue operation, including parking services: these include the actual operation of a venue, including the lighting, video, sound, parking and other attendant services. Operators’ profits come from renting out the venue, selling luxury boxes and parking fees, less the costs of operation. • corporate sponsorships sales: this includes the promotion of our corporate sponsors’ brands at one or more links in the live entertainment sector value chain. Many companies promote their brands at musical, sporting and cultural events and, more recently, at events promoting social or environmental responsibility. Sponsorships are central to the economic feasibility of an event, and sometimes the decision on whether to promote an event is influenced by the opportunity to work with a given sponsor. Revenue from sponsorship revenue may be realized in different stages of the live entertainment value chain, including: food, beverage and merchandise sales, venue operation, and parking.

The South American Live Entertainment Market The South American live entertainment market has been expanding faster than the overall global average since 2000, according to Euromonitor. In Brazil, per capita spending on entertainment increased 39.4%, from US$125 in 2006 to US$174 in 2009, representing nearly US$34 billion in total spending. In this same period, Argentina saw a 71.1% increase to US$383, while Chile experienced a 24.7% increase to US$130. Worldwide, global spending on entertainment over the same period increased 10.5% to an estimated US$406, representing US$2.4 trillion in total spending, according to Euromonitor.

The South American live entertainment market differs from markets in more developed countries. In more mature markets, larger companies like Live Nation, AEG Live and Disney typically have sufficient resources to manage both content and event promotion. In developing markets, both local and international content providers

63 generally do not have the operational scale or physical presence to promote their own content. Therefore, content providers generally seek to develop relationships and partnerships with local event promoters that have a proven track record and the financial resources to produce quality events on an economically feasible scale. These relationships and partnerships give a content provider access to markets with high potential returns, and in exchange, the local event promoter receives access to quality content for which there is generally unmet demand.

Most entertainment companies operate venues in large cities and are able to attract large audiences. Government spending can also influence the location of these companies—for example, cities that want to improve the arts and the cultural life of their residents may provide financial or other incentives to create or relocate a company.

However, the demographics of a given audience as well as its preferences vary depending on the type of content being offered. For example, consumers at sporting events are generally male and younger compared to those who attend arts events.

Principal Types of Live Entertainment Events There are several general categories of live entertainment events, which include (i) live music; (ii) family events, theater and cultural expositions; and (iii) sporting events. Worldwide, the top 20 event promoters sold nearly 53 million tickets with an aggregate value of more than US$3.4 billion in 2010, according to Billboard. The table below displays ticket sales for the top ten event promoters companies in the industry, ranked by total tickets sold (in millions) in 2010.

Live Nation 24.7

AEG Live 11.9

2.1

C3 Presenters 1.6

Evenko 1.2

3A Entertainment 1.1

JAM Productions 1.1

MCD 1.0

Chugg Entertainment 0.9

Evenpro/Water Brothers 0.9

Source: Billboard

Live Music The live music segment includes the promotion and production of the event. Generally, an artist will be represented by an agent, who in turn contacts promoters to negotiate a tour. In certain cases, however, promoters will contact an agent or the artist directly. The compensation structure for artists can vary significantly. For instance, some contracts offer guaranteed base compensation, a percentage of box office revenue, a percentage of profits from the event or some combination thereof. Promoters may reimburse artists for production expenses, such as sound and lighting.

In recent years, there has been a significant shift in how artists are compensated. The primary sources of revenue for the music industry are tours, recorded music sales and royalties. The North American live music industry, however, has seen tour revenue comprise an increasing portion of total entertainment spending while recorded music sales have fallen. In 2004, recorded music brought in five times the total revenue of tours,

64 according to Pollstar. But by 2009, recorded music revenue was just under twice the total revenue from tours. Over the last six years, tour revenue experienced an average annual growth of 10.4%, while music sales fell by an average annual rate of 10.0%. As such, tours have become essential to artists, who face pressure to increase their number of live appearances in order to offset slumping revenues from music sales. We believe this trend is in part correlated to the increased availability of music on the Internet.

The chart below highlights the shifts in revenue from recorded North American music sales and tours.

Total Recorded Music Revenues vs. Total Revenues with Tickets Sold in North America

(US$ billion)

13.6 13.0 12.4 11.2

9.2 8.0

4.6 4.2 3.6 3.9 2.8 3.1

2004 2005 2006 2007 2008 2009

Source: Pollstar

In 2009, for top artists like U2, Bruce Springsteen, Britney Spears, AC/DC and the Jonas Brothers, tour revenue represented the biggest portion of their tours and album sales revenue.

2009 Top Music Acts –Sales Breakdown

(US$ million) 020406080100120140

Bruce Springsteen

Britney Spears

AC/DC Album Sales

Jonas Brothers Tour Gross

Source: Billboard

In many cases, our sponsors are seeking to integrate and associate their brands with the event around it. Known as a “brand experience,” our live music events are a sought-after way to accomplish this.

65 Principal South American venues We operate in markets of varying sizes. The table below lists the principal venues in South America.

Location Venue São Paulo, Brazil...... Credicard Hall, Citibank Hall, Via Funchal, Espaço das Américas and HSBC Brasil Rio de Janeiro, Brazil...... Citibank Hall, Canecão, Circo Voador, Olimpo and Vivo Rio Brasília, Brazil...... Marina Hall Curitiba, Brazil ...... Curitiba Máster Hall, Hellooch and Via Rebouças Salvador, Brazil...... Bahia Café Hall, Pax Hall and Concha Acústica Fortaleza, Brazil ...... Siará Hall Belo Horizonte, Brazil ...... Lapa Multshow, Chevrolet Hall and Mega Space Florianópolis, Brazil...... Floripa Music Hall Recife, Brazil ...... Chevrolet Hall Porto Alegre, Brazil ...... Bourbon Country and Pepsi On Stage João Pessoa, Brazil ...... Spazio Buenos Aires, Argentina ...... Obras Sanitarias; Teatro Opera Luna Park, Lola Menbrives and Gran Rex Santiago, Chile ...... Movistar Arena and Teatro Caupolican

Family Events and Theater The theatrical category includes producing existing musicals and dramatic works, as well as developing new pieces. Musical producers typically acquire the rights to a given show for three to four years in exchange for royalties paid to the rights holders. The promoter is responsible for ticketing, staffing the event and creating the event’s publicity as well as compensating rights holders, which are reimbursed later along with the ticketing expenses. Since musicals generally require larger investments of time and money than dramatic productions, they are more likely to become tours.

In North America over the last nine years, revenue from Broadway productions has grown at an average annual rate of approximately 4.9%, as shown in the chart below.

Total Revenues -Broadway Productions in North America

(US$ million) 1,020 939 938 943 862 771 769 721 666 643

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Broadway League.

In Brazil, most musicals are international musicals are targeted to families. The popularity of this segment has gained momentum in part because these international productions have been brought to Brazil, including Les Misérables, The Phantom of the Opera, Beauty and the Beast, Miss Saigon and Chicago.

Due to the expansion of this category and an increasingly demanding public, the number of venues capable of accommodating these types of shows, including existing venues that have been remodeled, has increased.

66 Principal theaters in South America The table below lists the principal theaters in South America.

Location Venue São Paulo, Brazil...... Teatro Abril, Teatro Municipal de São Paulo, Teatro Alfa, Teatro Cultura Artística, Teatro Maria Della Costa, Teatro Procópio Ferreira, Teatro Ruth Escobar, Teatro Sérgio Cardoso and Teatro Bradesco Rio de Janeiro, Brazil...... Teatro Carlos Gomes, Teatro Odylo Costa Filho, Teatro do Leblon, Teatro do Rio de Janeiro and Teatro Oi Casagrande Brasília, Brazil...... Teatro Nacional Cláudio Santoro Curitiba, Brazil ...... Teatro Guairá, Ópera de Arame, Teatro Regina Vogue, Teatro Lala Schneider, Teatro Regional Calil Haddad—Maringá, Teatro Fernanda Montenegro, Teatro Paulo Autran, Teatro do Sesc, Teatro HSBC and Teatro Positivo Salvador, Brazil...... Teatro Castro Alves Fortaleza, Brazil ...... Theatro José de Alencar Maceió, Brazil ...... Teatro Deodoro Manaus, Brazil...... Teatro Amazonas Belém, Brazil ...... Theatro da Paz Belo Horizonte, Brazil ...... Minascentro and Palácio das Artes Florianópolis, Brazil...... Teatro Ademir Rosa Recife, Brazil ...... Teatro Guararapes, Teatro do Parque Porto Alegre, Brazil ...... Auditório Araújo Vianna, Teatro Sesi—Porto Alegre and Teatro do Bourbon Country Buenos Aires, Argentina ...... Centro Cultural General San Martín, Teatro del Otro Lado, Teatro La Voltereta, Teatro Maipo, Teatro Nacional Cervantes, Teatro San Martín, Teatro Opera Citi, Teatro Colon, Gran Rex Santiago, Chile ...... Teatro Caupolican

Cultural Events These types of events typically display the work of Brazilian and international artists, who exhibit paintings, sculptures, photos, and other work. In contrast to our other entertainment segments, the success of cultural events depends more on the public’s access to the event, particularly if it occurs throughout the city in areas such as parks and metro stations. This segment is also more price-sensitive and average ticket prices tend to be lower. The city of São Paulo is the main cultural center in Brazil and approximately R$700 million is spent annually to rent event space for cultural events, according to SPTuris, São Paulo’s tourism board. São Paulo has hosted some of the most important exhibits in South America over the past few years, including Painted Bodies (Corpos Pintados), Water at the Oca in Ibirapuera Park (Água na Oca), Bodies and exhibits featuring the work of Leonardo da Vinci, Auguste Rodin, Monet and Picasso.

Sporting Events This segment generally involves promoting and producing specialized automotive events like motorcycle, truck and auto races, among others. Among sporting events, automotive events in particular have grown substantially. The sport has become more popular with fans, which has generated increased demand for events. This parallels the experience in Europe and Asia, where new racetracks have been constructed in recent years. The principal global events are Formula 1, NASCAR and the Indy Racing League. We believe this segment shows great potential for development in Brazil, particularly given the expansion of sports marketing.

67 The principal sport in Brazil is soccer, but other sports like volleyball, basketball, tennis and futsal (an indoor version of soccer) have received considerable amounts of sponsorship and are starting to gain market momentum. Brazil has hosted a variety of international competitions, such as the Grand Prix of Brazil Formula 1, the São Paulo Indy 300, the global Beach Volleyball championship and international marathons, among others.

Event sponsorship is one of the most important drivers of growth in this segment.

Competition in Each Category Live Music, Family Events and Theater The South American live entertainment market is fragmented with respect to the number of participants operating in each level of the production of events, but the market is relatively consolidated in terms of quality content providers and venue operators. We believe, however, no other company in the sector has a vertically- integrated business model with the quantity of quality content that we offer. Accordingly, there are different local niche competitors at each stage of our business, including event promotion, event production, ticketing services, venue operation, and food, beverage and merchandise sales, but no competitor that operates along all levels of the value chain. In addition to us, the principal promoters in South America in live music, family events and theater are: (i) Dell’Arte Soluções Culturais; (ii) Artplan; (iii) Dream Factory (part of the Artplan group); (iv) 360º Below the Line; (v) Divina Comédia; and (vi) Aventura Produções.

While there are smaller local and regional competitors, we believe that we are one of the largest producers of theater and family entertainment events in South America, as a result of our significant investment in this segment.

Sporting Events We face competition in this area from (i) T’ai Produções e Eventos, which produced Superkite, part of the World Kitesurfing Circuit; (ii) SPIRIDON—Promoções e Eventos, which produced a stage of the Triathlon World Cup; (iii) Dunas Race, which operates for a rallycar race event known as Rally dos Sertões; (iv) YESCOM, which produced events such as the South American Tennis Open and the Davis Cup; (v) Koch Tavares, the company responsible for the addition of beach volleyball to the 1996 Atlanta Olympics; (vi) Maric Eventos, which promotes the São Paulo Open international tennis tournament; and (vii) Latin Sports, which produces a variety of sporting and speaking events as well as providing consultation services.

68 Overview of the Live Entertainment Market in South America and Opportunities for Growth In 2009, the population of South America consisted of an estimated 386 million people, according to the IMF. This market represents vast potential for the live entertainment industry, and the region’s high rates of economic growth underscore the opportunity. GDP grew an average of 13% per year, from US$1.986 trillion in 2006 to US$2.854 trillion in 2009, according to IMF estimates. For Brazil, Argentina and Chile, which together account for nearly 80% of the region’s GDP, entertainment spending is significantly lower than in more developed economies such as the United States and the United Kingdom, as highlighted by the table below.

Expenditure with Entertainment Over Disposable Income (2009)

Brasil GDP per capita (US$ ‘000) 8.1 Population (million) 191.5 Average Population Age 30.5 10.8% Argentina 8.5% 8.9% GDP per capita (US$ ‘000) 7.6 Population (million) 40.1 Average Population Age 32.7 3.3% 2.3% Chile GDP per capita (US$ ‘000) 9.5 0.4% Population (million) 17.0 Average Population Age 33.2

Peru GDP per capita (US$ ‘000) 4.4 Population (million) 29.1 Average Population Age 26.4

Source: Euromonitor; The World Factbook 2009

Further, the data below suggests that as the region’s GDP per capita increases, entertainment spending will comprise an increasingly larger percentage of disposable income. There is a positive correlation between GDP per capita and entertainment spending as a percentage of disposable income, as illustrated by the chart below.

Entertainment Expenditure as a Percentage of Disposable Income versus GDP Per Capita in 2009

12.0%

United Kingdom Japan 10.0%

Spain Argentina New Zealand USA 8.0% France Portugal Greece 6.0% Croatia Italy Israel

Income 4.0% Brazil

Mexico Chile 2.0% China India Colombia Venezuela Peru 0.0%

Entertainment asPercentage Expenditure a of Disposable 0 10,000 20,000 30,000 40,000 50,000

GDP Per Capita in 2009 (US$) Source: Euromonitor

69 GDP per capita in developing countries has, at times, grown faster than developed countries. In Brazil for example, monthly per capita household income (measured each October), grew at an average annual rate of 5.1% from R$551 in 2004 to R$706 in 2009, while family consumption grew at an average annual rate of 6.1%. At the same time, the rate of unemployment in Brazil’s metropolitan regions, where many live entertainment events take place, fell from 10.5% in 2004 to 6.1% in 2010 (measured each October). As a result, Brazil has experienced demographic shifts in the classes with the least purchasing power, particularly between 2003 and 2008. The table below highlights these changes as well as the shifts in the lower class (known in Brazil as classes D and E), the middle class (known in Brazil as class C) and the upper class (known in Brazil as classes A and B).

Monthly Per Capita Income Demographic Shift - Percentage of Unemployment Rate (%) (R$ in real terms) Population by Social Class

8% A and B 11% 690 706 10.5% 638 656 9.6% 9.8% 37% 584 8.7% C 50% 551 7.5% 7.5% 6.1% D 27% 24% E 28% 15%

2003 2009 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 2010

Source: IBGE; FGV

Competitive Barriers to Entry to the Live Entertainment Industry We are the leading live entertainment company in South America and the third largest in the world in terms of number of tickets sold in 2010, according to Billboard. In addition, we believe we are the only diversified and vertically-integrated South American live entertainment company. We promoted four of the five largest tours in 2010 in South America, according to Pollstar. We were voted the best international independent producer, ranked among the top three global producers at the 2009 and 2010 Billboard Touring Awards and sold more than 2.3 and 2.9 million tickets in 2009 and 2010, respectively, including expositions and sporting events. For entertainment consumers, the main elements that differentiate live entertainment event promoters are: • the quality and popularity of the shows; • the ease of purchasing tickets at sales locations, over the phone, through the Internet and through other channels; • publicity; • ticket price, although we have seen a growing willingness to pay higher prices for the events with the most attractive content; • geographic accessibility; and • quality of infrastructure, such as parking facilities, bars and restaurants, and sight lines, among others.

We believe there are strong barriers for new event promoters wishing to enter the market and deliver these services in South America, despite the fact that the market is less developed compared to the United States. These barriers include: • contacts with content providers and access to high quality content: The largest and best known South American entertainment companies have amassed a variety of commercial contacts around the world with suppliers of quality artistic content. Furthermore, large companies have greater bargaining power when negotiating with suppliers, and therefore attract more popular artists with more international exposure; • long-term agreements and relationships with sponsors: Due to the increasing importance of event sponsorship to the economic viability of an event, established long-term agreements with large sponsors are crucial;

70 • high fixed investment costs: Companies with their own audiovisual equipment, recording structures and venues have an important competitive advantage; • need to ensure long-term demand: Ensuring the success of venues and events requires filling seats, which in turn demands deep knowledge of the market and the public’s cultural trends; and • established market reputation and credibility: Market recognition and credibility are critical to the process of sourcing suppliers, negotiating with high-profile artists and establishing long-term contracts with sponsors.

Regulatory We make every effort to comply with applicable law at all of our events and obtain all required licenses, permits and authorizations. Below is a summary of the principal laws and regulations applicable to us in the countries in which we operate.

Brazil We are subject to various regulations at the state, federal and municipal levels governing various aspects of an event, including the construction, operation and safety of the venues and the structures used for shows. We also must obtain licenses and authorizations for certain shows. Failure to comply can lead to fines or jeopardize the realization of an event. As of the date of this offering memorandum, all our venues are properly licensed.

Half-price tickets We must guarantee certain customers, generally students, half-price tickets to cultural and leisure events. This right is granted by federal, state and municipal laws. The beneficiaries include, but are not limited to: students (pursuant to Law No. 7,844/92 in the state of São Paulo); public school teachers (pursuant to Law No. 10,858/2001 in the state of São Paulo), senior citizens (pursuant to Federal Law No. 10,741/2003) and people under 21 years of age (pursuant to Law No. 33,364/00 in the state of Rio de Janeiro).

Accordingly, we research requirements in each locale in order to ensure compliance. There is currently debate about the need to limit the number of half-price tickets available as compared to the total number of tickets available per event, which was prompted by instances of fraud, particularly with fraudulent student identification cards, and the economic cost to the promoters as a result of a high number of people purchasing tickets under these laws.

As of the date of this offering memorandum we are in full compliance with these obligations.

Royalties Under Federal Brazilian Law No. 5,988/73 and Law No. 9,610/98, people, companies and groups must pay royalties to the Central Office for Collection and Distribution (Escritório Central de Arrecadação e Distribuição), or ECAD, for public music performances. The ECAD oversees many forms of public music, including music played in theaters, at public events, in bars, clubs, stores, shopping centers, offices, gyms and on planes, among others. It also includes radio and television broadcasts and music made available on the Internet.

A portion of the royalty is retained by the ECAD and its member associations, and the rest is forwarded to the rights holders associated with the work. The nature of the musical performance can affect how the royalty is distributed amongst the rights holders. We comply with this obligation.

Non-Brazilian artist withholdings When we hire a non-Brazilian artist, we are required to withhold some of that artist’s compensation under Brazilian Federal Law No. 3,857/60 and Law No. 6,533/78. The withholding is then distributed to corresponding Brazilian unions benefiting the artist’s respective field. We comply with this law.

71 Cultural incentives law Certain of our shows are eligible for benefits under Law No. 8,313/91, the Rouanet Cultural Incentive Law (Lei Rouanet de Incentivo a Cultura), or Rouanet Law, supports projects through the National Program to Aid Culture (Programa Nacional de Apoio à Cultura), or PRONAC, which offers tax incentives to those who sponsor or invest in cultural events preapproved by the Ministry of Culture (Ministério da Cultura) related to preserving and protecting Brazil’s cultural heritage. PRONAC has three groups that administer cultural funding, the National Fund for Culture (Fundo Nacional da Cultura), the Investment Fund for Culture and the Arts (Fundo de Investimento Cultural e Artístico), and the Cultural Projects Incentives (Incentivos a Projetos Culturais).

For the cultural event producer, the sponsors (people or companies) and the Ministry of Culture form a partnership. Once the project is approved by the Ministry of Culture, the money donated to or invested in the event may be deducted from the taxes of the donor or investor. For companies taxed on a net profit basis, 40% donation and 30% of an investment is deductible. When we operate such an event, we highlight contributors by promoting and publicizing their brands.

Lastly, in contrast to the normal tax treatment for these types of donations, the cultural organization pays no federal taxes on benefits received under the Rouanet Law as long as we comply with its terms.

Health regulations We supply food and beverages to the general public in our venues and are subject to health and sanitation rules promulgated by the Federal Brazilian government, and which are enforced at the local and state level. As of the date of this offering memorandum, our establishments were in good standing with their respective health agencies.

Argentina Events in Argentina require authorizations and licenses pursuant to, for instance, the Authorization and Verification Code No. 33,266 (Código de Habilitaciones y Verificaciones), or the Necessary and Urgent Decree No. 2/2010 (Decreto de Necesidad y Urgencia Nro. 2/2010). We comply with the applicable laws at all our events, ensuring that we have obtained all necessary licenses, permits and authorizations.

In addition to those authorizations and licenses, the following laws are applicable to our activities. • Our subsidiary Clemente Lococo S.A., which operates Ópera Citi, is exempt from all municipal taxes in the city of Buenos Aires under Law No. 156, except for municipal taxes with respect to vehicles. In addition, Ópera Citi was declared a cultural heritage site and is exempt from property taxes. • Theatrical events are exempt from sales tax under Argentine Law No. 23,349 and Law No. 24,800. • The city of La Plata Ordinance No. 10,764 exempts events held at the city of La Plata Stadium from paying a public event tax (Derechos de Espectáculos Públicos).

Chile Approval from health and other local authorities is required prior to large events with respect to sanitation, environmental and safety regulations. Plans for the event must be sent to the Regional Ministerial Health Secretary (Secretaría Regional Ministerial de Salud), or SERMI, and the local fire department at least 15 business days prior to the event. The SERMI will certify compliance with applicable health regulations, including Decree No. 1580 of 1946 and Decree No. 1580 of 1946. Five days before the event, SERMI will report on whether the event is in compliance with applicable regulations and inform event organizers of any modifications required.

72 Though large events are subject to regional and municipal rules, which may vary, in most cases a project must also be presented to regional authorities. The project’s promoters should report on (i) who is organizing the event; (ii) where and when it will take place; (iii) expected attendance; (iv) when ticket sales will begin; (v) the amount of food or alcohol expected to be sold and any licenses necessary, if applicable; and (vii) any special safety measures required, as evaluated by a risk prevention export, if applicable. When the application is submitted, it must also include authorizations from the health authorities, police, local government, and regional government entities. These approvals are necessary prior to the event.

While ticket sales are subject to sales tax in Chile, under Law No. 825 and others, revenue from artistic, scientific, cultural, theatrical, music, dance, poetry, and musical events may be exempt from the tax if sponsored by the Ministry of Education (Ministerio de Educación). To qualify for these benefits, the events must not be presented in conjunction with other events that do not qualify for this exemption.

Portions of donations to educational institutions, communities, museums, libraries, corporations and foundations whose sole purpose is the research, development and promotion of culture and art, are tax deductible under Law No. 18.985/90. This law permits corporate donors to deduct 50% of eligible donations from their income taxes. The remaining balance may be deducted as an expense in certain cases. Tax deductions are subject to monthly limits as well as an annual limit of 2% of such year’s taxable income.

Environmental In Brazil, our activities are not subject to specific environmental licenses, and we do not adhere to any particular international environmental preservation standards. However, our Stock Car sporting event division attempts to implement social and environmental responsibility policies during the entire season, which include neutralizing carbon emissions, refining the oil used in races; and adopting renewable ethanol as the official fuel. There are also programs to combat noise pollution, which are important to our activities. We also attempt to segregate our trash in order to divert some of the waste we generate from landfills.

In Argentina, we must meet noise restrictions at our shows and other events, and in Chile, we must obtain permits at the local level and from the Ministry of Health regarding noise levels and health, environmental and safety standards. The spaces we operate in are designed to meet the legal requirements and therefore we do not incur any additional costs on this account.

73 BUSINESS

Our leading position in the Brazilian and South American live entertainment industry and our business model has earned us the trust of some of the largest international providers of high-quality content. This has afforded us privileged access to the world’s best content for artistic and cultural events, which enhances our relationships with corporate sponsors and generates public interest. As a result, we are able to secure long-term corporate sponsorship agreements, of which a portion of the revenue is received on signing, and attract top musical acts, for which ticket sales are done in advance of the shows. Both of these factors decrease our capital requirements. In addition, we generate cash flow through the sale of naming rights to our venues. With the exception of Ópera Citi hall in Buenos Aires which we own, all our venues are leased from third parties. Because our investments in fixed assets have historically been limited and our capital expenditure requirements are low, our business model has generated significant returns on invested capital and helps us to maintain a sound financial position.

Our Strengths We believe we are well positioned to take advantage of the growing opportunities in the live entertainment industry and to continue to create value for our shareholders. Our main strengths include the following: Regional leadership in an industry with growth potential and economies of scale. We are the leading company in the live entertainment industry in South America in terms of tickets sold in 2010, and we operate in an industry with growth potential, supported by the following factors: • New trends in the music industry: in recent years, the increasing prevalence of electronic distribution of music and other electronic media has made the sale of CDs and DVDs less profitable for music labels, studios and artists. According to a Pollstar study, from 2004 to 2009 the compound annual growth rate, or CAGR, of North American gross concert revenue rose 10.4%, while the CAGR for CD and DVD sales declined by 10.0%. In response, top international acts have increased the number of live performances by

74 increasing the duration of their tours and the frequency of shows during such tours. As a result of this trend, we are increasingly promoting tours outside of the traditional Rio de Janeiro and São Paulo markets and into additional South American capitals and large cities. • Increased consumption in Brazil and South America: we believe that the South American live entertainment market shows robust potential for expansion. Demand for live entertainment is influenced by levels of disposable income, which we believe will benefit from expected economic growth in the countries in which we operate as well as other factors that increase consumption in general. These factors include falling interest rates over recent years and expanding consumer credit, according to the IMF, that have positively affected certain of the countries in which we operate. From 2006 to 2009, the average growth in gross domestic product, or GDP, of Argentina, Brazil and Chile grew by 6.1%, 3.6% and 2.8%, respectively, while entertainment spending per capita, in those countries increased on average by 19.6%, 11.7% and 7.6%, respectively, during the same period, according to Euromonitor. We believe we are well-positioned to capture a variety of opportunities arising from the demand for live entertainment generated by the above factors, which we believe will enable us to solidify our industry-leading position in Brazil and South America generally. In addition, our leadership in Brazil and South America, along with the large number of concerts and events we promote, generates synergies and economies of scale in producing our events, strengthening our bargaining position with certain suppliers and helping us to obtain more favorable prices in certain content purchases. Furthermore, our presence in Brazil and key South American countries enables us to establish a regional marketing strategy for attracting corporate sponsors that want to expand their activities in these markets, as well as to reduce our transportation and freight costs relating to the equipment needed to mount live productions. Privileged access to large Brazilian and international content providers. We have been active in the live entertainment industry for nearly three decades, during which time we have earned access to, and the trust of, the largest Brazilian and international providers of high-quality content. This is the result of the credibility we have earned with corporate sponsors and the general public through the extensive history of shows we have promoted in Brazil and South America and the high standards of excellence in our productions, our corporate sponsorship capacities and the quality of operations at our events. Our content providers include Live Nation, one of the largest live entertainment companies in the world, with which we have signed an agreement through July 2015 that gives us the exclusive right to promote the content of Live Nation’s portfolio of artists in South America (except Colombia). The agreement also prohibits us from competing with Live Nation in the United States, Canada and Europe (except Spain). We also have strong relationships with other large international content providers such as Cirque du Soleil, Cameron Mackintosh, Disney, RUG—The Really Useful Group (Andrew Lloyd Webber), the William Morris Agency, CAA—Creative Artists Agency and The Agency Group, among others, which gives us access to the world’s top artistic and cultural event content. We believe our extensive experience in the entertainment industry in the countries in which we operate is a key factor in giving us privileged access to international content providers. Our portfolio of shows has included performances of international content such as Disney on Ice, the Blue Man Group and Cirque du Soleil; acclaimed Broadway shows like Mamma Mia, Cats, Phantom of the Opera, Beauty and the Beast, Les Misérables, Chicago and Miss Saigon; concerts with national and international artists like U2, AC/DC, Paul McCartney, Madonna, Bon Jovi, Aerosmith, Roger Waters, Pearl Jam, Rush, Red Hot Chili Peppers, Eric Clapton, the Three Tenors, Avril Lavigne, Santana, Roberto Carlos, Caetano Veloso, Maria Bethânia, Maria Rita, Vanessa da Mata and Victor & Leo; and popular Brazilian theatrical productions such as A Flower of My Dear Love (A Flor do Meu Bem Querer) and Guess Who Comes to Pray (Adivinhe Quem Vem Prá Rezar), among others. With respect to sporting events, we produce large events such as a stock car racing series sponsored by the CEF, with 12 races in Brazil, a pick-up racing series (the Chevrolet Montana Cup, sponsored by General Motors of Brazil), a Mini Cooper racing challenging (the BMW Mini Challenge) and, starting in 2011, the Brands Championship and the Brazilian leg of the World Touring Car Championship-WTCC. Given our experience in promoting a variety of cultural and sporting events, we believe we are well-positioned to adapt to new trends and tastes, with great flexibility to expand into new live entertainment areas. Together, these factors drive our market leadership.

75 Strong relationships with important corporate sponsors. We believe that our clients’ satisfaction, along with the high quality of our products and services, drive our reputation in the market and have brought us loyal corporate sponsors. These sponsors include Credicard a Brazilian credit card company, which has been our sponsor for more than a decade, Banco Bradesco S.A. and American Express, which sponsor Cirque du Soleil productions that we promote, and Banco Citibank S.A., which holds the naming rights to three of our venues. Our corporate sponsorships generate stable revenue streams. As of December 31, 2010, we had approximately R$206.1 million in contracted corporate sponsorship and naming rights, the longest one in effect through 2019.

Vertically-integrated model and diversified content offering. We have a vertically-integrated business model, in which we seek to profit from all revenue-generating activities associated with the promotion of live entertainment events, including: tickets; ticketing convenience fees; food, beverage and merchandise sales; and corporate sponsorships. In addition, we currently operate five of the most important venues in South America located in the cities of São Paulo and Rio de Janeiro, Brazil and Buenos Aires, Argentina. We have total control over scheduling at these venues and the flexibility to rent them out for third-party events. Our venues are among the few in South America with the technical specifications and size to put on all types of shows, including large and complex productions like Broadway musicals. We believe our vertically-integrated business model strengthens our bargaining position with our suppliers, generating synergies and economies of scale. Moreover, we offer a broad range of content, which includes live music, Broadway musical productions, national theatrical productions, family entertainment and cultural expositions and sporting events. The diversification of our content helps to reduce the risks associated with concentrating in a single content type and in a limited number of events. We believe our vertically-integrated business model and diversified content helps to reduce our risks and increase our ability to generate revenue at all stages of the value chain in the promotion of shows.

Strong cash generation with low working capital requirements. As a result of our market credibility and the success of our shows, we have entered into long-term agreements with corporate sponsors, certain of which generate fixed cash flow a portion of the fee are paid in advance of performances. We generally are able to sell tickets well in advance of the performance of, and the incurrence of significant costs for, many of our shows. For example, all three of U2’s Brazilian shows scheduled for April 2011 were sold out four months in advance. Long-term corporate sponsorship contracts and advance ticket sales reduce our working capital requirements and strengthen cash flow from operations. Moreover, we have not historically needed to make substantial investments in fixed assets because we rent our venues from third parties through long-term leases with terms averaging ten years (other than the Ópera Citi in Argentina, which we own).

Experienced management and shareholders specialized in the industry. Our management includes highly- trained and innovative executives with more than 20 years of experience in the live entertainment industry, who were pioneers in (i) the launch of the former Palace venue in São Paulo (currently Citibank Hall); (ii) sponsorship programs in Brazil (including naming rights for venues, theatres and sport championship series); and (iii) online tickets sales for live performances in Brazil. Our executives’ experience and know-how are demonstrated by our high-quality and distinct products and services, improvements in our attendance rates and identification of new industry trends and opportunities. To align the interests of our executives with those of shareholders, we have implemented a stock option plan and incentive-based compensation to strengthen our executives’ commitment to producing results. We also benefit from our shareholders CIE and Gávea Investimentos, or Gávea, which manages the GIF-II fund. CIE has vast experience in the live entertainment industry in Mexico and enjoys close relationships with international content providers, and Gávea is one of the largest investment fund managers in Brazil and provides us with us experience in financial management and corporate governance.

Our Strategy We believe that the implementation of our main strategies will result in improvements in the development of our operations, maximizing shareholder value and providing long-term competitive advantages. Our strategy includes the following components: Guarantee the best Brazilian and international content. We intend to continue to increase and update our content in accordance with market trends and consumer demand by extending contract periods for successful content and seeking to present the best Brazilian and international content. We intend to use our close

76 relationships with the principal content providers to renew and expand the content we offer by seeking to reach larger audiences and attain high levels of satisfaction, which we believe will increase attendance rates at our events. Leverage our growth through geographic expansion. Currently, we are active in Brazil’s main cities (São Paulo, Rio de Janeiro, Curitiba, Belo Horizonte, Fortaleza, Recife, Salvador, Brasília, Porte Alegre and Campinas) as well as in Buenos Aires and Cordoba, Argentina and Santiago, Chile. We intend to increase our activity in these cities and expand into new ones. We believe there is underserved demand for live entertainment in other large cities in Brazil, Argentina and Chile in which we have not yet staged events. In 2010, our event promotion activities in the cities of São Paulo and Rio de Janeiro accounted for approximately 80% of our net operating revenue from event promotion in Brazil, and approximately 50% of our net operating revenue from event promotion in South America. We also intend to expand our activities to other countries within other South American regions that exhibit great potential for growth in demand. For example, we intend to expand our activities in Peru, principally by promoting performances in Lima, Peru’s most populous city. We believe that by leveraging our content and Portuguese- and Spanish-language translations of shows, and expanding our activities to new markets, we will be able to increase our growth, maximize our profit margin and further solidify our cash generation. Accordingly, we intend to broaden our activities and solidify our leading position in the South American live entertainment industry. Operate the best performing arts venues and event spaces in South America. We believe that exclusive access to venues represents a barrier to entry in the entertainment industry. In addition, operating the venues ourselves allows for autonomy over scheduling and the possibility of leasing space for third-party events, which provides an important competitive advantage in promoting long-running and technically complex shows. Therefore we intend to continue leasing and operating the best venues and using our bargaining power to schedule the most attractive dates in exposition centers, stadiums and sports arenas operated by third parties in South America. Our plans may also include acquiring or building new venues in cities in which we currently operate and in new cities with potential demand for live entertainment. Increase our operating efficiency through economies of scale. The fact that we are the largest entertainment company in South America, in terms of number of tickets sold in 2010, strengthens our bargaining position, allowing us to reduce our production costs, and enables us to distribute operating costs over a larger operating platform, which provides economies of scale. In order to further reduce our costs, beginning in the second half of 2011, we intend to acquire certain of the equipment we currently rent from third parties to mount our live music concerts. We also believe we have an advantage over our competitors in acquiring content because of our broad geographic footprint and purchasing power for regional tours and operation of some of the best venues in South America. We also intend to provide our corporate sponsors with a regional marketing strategy, which will attract sponsors that want to expose their brands and products to the diverse locations in which we produce events. Expand our ticketing and other ancillary revenues segments. We currently operate ticketing for third-party venues such as São Paulo’s SESI Theater and Belo Horizonte’s Chevrolet Hall. We intend to further expand our third-party ticketing services to other kinds of entertainment, including for sporting events and movies, among others. Our strategy also includes expanding our third-party ticketing operations regionally to additional important Brazilian cities and expanding ticketing to new venues we intend to operate exclusively. Moreover, to attain our goals for growing our marketing and publicity activities, we are evaluating whether to expand our activities and acquire companies in Brazil and elsewhere in South America that focus on this segment. In this way we intend to capitalize on our pioneering branded-entertainment platforms. We believe that any such acquisitions will take into account potential synergies between us and the target companies and their levels of return. Solidify our industry leadership through selective acquisitions. We are evaluating whether to expand the content of our artistic, cultural and sporting events by acquiring other companies in the industry in South America with high growth potential, particularly those with content offerings that present synergies with our business. We intend to use a material portion of the proceeds of the primary offering to this end, and, as such, the success of these acquisitions will have a significant effect on our future performance.

77 History We began operations in 1983, when our founder and controlling shareholder, Fernando Luiz Alterio, opened the Palace (currently Citibank Hall), São Paulo’s first modern entertainment venue. In March 1999, CIE, one of the leading entertainment companies in Latin America and based out of Mexico, acquired majority control of us. In 2007, Fernando Luiz Alterio re-acquired control from CIE and altered our name to T4F Entretenimento S.A. For more information on our shareholders Fernando Luiz Alterio and CIE, see “Principal and Selling Shareholders.”

Below is a timeline that sets forth other notable events in our corporate history.

1983 1997 2000 2001 2005 2006 2007 2008 2009 2010

Acquisition of Ópera Citi Launching of in-house Acquisition of Promotion of first Tickets for Fun begins operation as (formerly TeatroÓpera) in ticketing in Brazil and Ticketek Cirque du Soleil show ticketing service for Brazil Buenos Aires Argentina, in Argentina in Brazil partnership with Ticketmaster Expansion of business into sporting events

On March 22, 2011, F.A. Participações transferred 2,011,321 common shares representing 3.5% of our capital stock to GIF-II due to the exercise of its option to acquire our common shares. As a result, GIF-II’s participation in our capital stock increased to 23.5%. For more information, see “Principal and Selling Shareholders—Share Purchase Option Agreement.”

78 Corporate Structure The following chart sets forth our ownership structure as of the date of this offering memorandum. The percentages represent the participation in the voting and total capital of the companies:

CIE INTERNACIONALS.A. DE CV GIF II FIP(1) FERNANDO LUIZ ALTERIO (Mexico)

85.0% F.A. COMÉRCIO E 15.0% PARTICIPAÇÕES S.A.(1)

24.2% 0.01% 33.9% 0.01% 23.5% T4F ENTRETENIMENTO 18.4% S.A.

99.9% 99.9% 75.0% 58.9% 95.0% 100.0% T4F ALIMENTOS, METROPOLITAN VICAR PROMOÇÕES T4F INVERSIONES S.A. 5.0% BA INVERSIONES S.A. BEBIDAS E EMPREENDIMENTOS T4F USA INC. DESPORTIVAS S.A. (Argentina) (Argentina) INGRESSOS LTDA. S.A. 41.07%

0.01% 99.9% 95.0% POP ART S.A.. 5.0%

95.0% CLEMENTE 5.0% ÁREA MARKETING LOCOCO S.A. BRASIL LTDA.

5.0% TICKETEK 95.0% ARGENTINA S.A.

T4F 95.0% 5.0% ENTRETENIMIENTOS ARGENTINA S.A. 0.7%

95.0% TICKETMASTER 5.0% ARGENTINA S.A.

99.3% 99.3% T4F CHILE S.A.

TICKETMASTER 0.6% 99.0% CHILE S.A. 1.0% PROMASER S.A.

Our Business Our main lines of business include (i) event promotion; (ii) ticketing; food, beverage and merchandise sales; and venue operation; and (iii) sales of corporate sponsorships.

Event promotion In this operating segment, we promote and sell tickets for shows and events, including: (i) live music performances; (ii) family events, theater and cultural expositions and (iii) sporting events, as described below. Our event promotion segment represented 62.4% of our net operating revenue in 2010 and includes:

Live music Overview We promote and produce a wide variety of live music events in Brazil, Argentina and Chile, and have established a history of high ticket sales and solid operational results. As with other parts of our business, we promote our live music events in a vertically integrated manner in order to maximize our results and mitigate financial risks. To the extent we are able to generate revenue at various points along the value chain of our vertically integrated business platform, we believe we are less susceptible to fluctuations in any single business area. Our past live music productions include: • in Brazil, U2, Bon Jovi, Madonna, AC/DC, Ozzy Osbourne, Kiss, Oasis, Roger Waters, Aerosmith, the Three Tenors, Rush, Red Hot Chili Peppers, Eric Clapton, Pearl Jam, Avril Lavigne, Santana, Roberto Carlos, Caetano Veloso, Maria Bethânia, Djavan and Marisa Monte; and • in Argentina and Chile, U2, Madonna, the Jonas Brothers, Aerosmith, Red Hot Chili Peppers, Pearl Jam, Oasis, Santana, Paul McCartney, Sodastereo, Los Fabulosos Cadillacs and Andrés Calamaro.

79 In São Paulo and Rio de Janeiro, Brazil, most musical events that we promote with an expected audience of up to 8,000 people take place at venues that we operate, which provides us scheduling flexibility for contracting the artist as part of a tour and increases our ability to use all levels of the value chain in our vertically integrated business platform. In Chile, we do not operate any venues and therefore always contract with third-parties to rent venues.

However when we need to produce larger-scale shows, which generally feature audiences of up to 35,000, we rent third-party venues with sufficient capacity, such as the Morumbi soccer stadium or the Palestra Itália soccer stadium in São Paulo, Brazil, the Praça da Apoteose and the Maracanã Stadium in Rio de Janeiro, Brazil, the River Plate and the Vellez Stadiums in Buenos Aires, Argentina and the Nacional Stadium in Santiago, Chile.

We pay the artists we contract for our shows a portion of either the net ticket sales or the net results from the shows they perform (in some cases with a guaranteed minimum) or a fixed amount per show (as a performance fee). Generally transportation costs for the equipment and the artist are included in the compensation we pay.

The table below presents a breakdown of our live music events.

As of and for the year ended December 31, 2008 2009 2010 Operating Information Live music Number of events ...... 368 295 348 Total tickets sold (in thousands) ...... 1,927 1,440 1,801 Average occupancy rate (%)(1) ...... 64.2% 65.9% 66.6% Average price per ticket(2) ...... 113.8 105.2 126.7 (1) Average occupancy rate is calculated by dividing tickets sold by tickets available. (2) Operating revenue from live music divided by the related number of tickets sold.

Contracting, production and execution The process of producing concerts and tours for Brazilian and international music icons begins with negotiations between us and the artists’ managers and agents with respect to dates, venues and pricing. Our booking department is responsible for contracting and negotiating the amount to be paid to the artists and scheduling performance dates. The artists’ fees may be negotiated as (i) a portion of the net profit from the event, with or without a guaranteed minimum; (ii) a percentage of net ticketing revenue, with or without a guaranteed minimum; or (iii) a fixed fee. Gross-up payment for withholding taxes on these fee payments are negotiated with each artist.

Once negotiated, we begin the process of event production, which typically requires that we suitably modify the venue, including customizing lighting, sizing the area, modifying stages and contracting other third-party services. Certain of the bigger international artists, such as Madonna and U2, bring their own staging and lighting equipment and crews. In addition to the artist’s fee, we also incur costs for lodging, transporting cargo and equipment and other services required to put on the show. In addition, we are responsible for obtaining licenses and authorizations for the events and visas for the artists.

We market tickets for the events we promote through a variety of channels, including newspapers, magazines, television, the Internet and other mass media, and sell them through our ticketing services, as described below.

We have a specialized team that takes care of the technical and operational details of our events, including large-scale events.

80 Family events Overview We produce internationally-renowned family events in Brazil, Argentina and Chile for all age groups. We have privileged access to the world’s top international producers including Cirque du Soleil, Disney on Ice, Blue Man Group, Slava’s Snowshow and Stomp, among others. These family events are based on performances and shows from a broad spectrum of countries and nationalities, which affords our audience the opportunity to enjoy a variety of influences and cultures.

For family events, we pay royalties and fees to content providers who supply us with the content, sets, costumes and performers. These events are produced both in our own venues and those of third parties. Over the last three years, almost two million people have paid to see one of our family events. Our principal shows in this area have been: • Disney on Ice, which ran in 2007, 2008, and 2010 in São Paulo, Rio de Janeiro and Belo Horizonte, Brazil; • Slava’s Snowshow, which ran in 2007 and 2010 in São Paulo, Rio de Janeiro and Porto Alegre, Brazil; • Stomp, which ran in 2004 and 2010 in São Paulo, Rio de Janeiro, Porto Alegre and Curitiba, Brazil and Buenos Aires, Argentina; and • Cirque du Soleil’s shows, including Saltimbanco in 2006 in São Paulo and Rio de Janeiro, Brazil; Alegria in 2007 and 2008 in six regional Brazilian capitals, as well as Buenos Aires, Argentina and Santiago, Chile; and Quidam in 2009 and 2010 in nine regional Brazilian capitals, as well as Buenos Aires, Argentina, Santiago, Chile and Lima, Peru.

The table below presents a breakdown of our family and theater events.

As of and for the year ended December 31, 2008 2009 2010 Operating Information Family events / theater(1) Number of events ...... 1,052 661 737 Total tickets sold (in thousands) ...... 1,172 740 937 Average occupancy rate (%)(2) ...... 56.9% 55.0% 60.0% Average price per ticket (in R$)(3) ...... 145.5 133.2 145.5 (1) Does not include cultural expositions. (2) Average occupancy rate is calculated by dividing tickets sold by tickets available. (3) Operating revenue from family events and theater divided by the number of related tickets sold.

Contracting, production and execution The process of producing family events is similar to that of live music events. We begin by contacting the companies that hold the rights to the events to determine the specific event needs, including scheduling and royalty negotiations. Since certain of these performances involve highly innovative performances and special effects, they may require particular specifications in seeking spaces and scheduling for setting up the events.

Royalties and fees are typically payable weekly on a per performance basis for a pre-negotiated number of performances. As with live music performances, we are also responsible for all costs incurred for lodging, transporting cargo and equipment, in addition to other services needed for the particular event.

81 Theater Overview In Brazil and Argentina, we promote internationally renowned Broadway musicals translated and adapted to Portuguese and Spanish, respectively. To ensure the success of the musicals we promote, we aim to bring Broadway’s newest shows to Brazil and Argentina. We sold over 851,000 tickets from 2008 to 2010; and since 1999, we have produced more than 2,000 musical performances, including: • Les Misérables, which ran in 2001 in Brazil and in 2000 in Argentina; • Beauty and the Beast, which ran in 2002 and 2009 in Brazil and in 2010 Argentina; • Chicago, which ran in 2004 in Brazil; • Miss Saigon, which ran in 2007 and 2008 in Brazil; • The Phantom of the Opera, which ran in 2005, 2006 and 2007 in Brazil and in 2009 in Argentina; • Cats, which ran in 2010 in Brazil; and • Mamma Mia!, which is currently showing in Brazil.

Most of our Broadway productions in Brazil and Argentina were presented at the Teatro Abril in São Paulo, which we lease on a long-term basis, and Teatro Ópera Citi in Buenos Aires, which we own. Presenting these shows in our venues gives us complete control over scheduling and increases our ability to use all levels of the value chain in our vertically integrated business platform. The last season of Cats in Rio de Janeiro and Cabaret in Argentina were produced in third-party venues.

In addition, we produce national Brazilian theatrical productions in third-party venues, including: • The Flower of My Dear Love (A Flor do meu Bem Querer), which ran in 2003 and 2004; • Mademoiselle Chanel at the Fundação Armando Alvarez Penteado Theater, which ran between 2004 and 2007; • When Nietzsche Cried (Quando Nietzsche Chorou) at the Teatro Imprensa, which ran in 2006 and 2007; • Guess Who is Coming to Pray (Adivinhe Quem Vem Para Rezar) at the Procópio Ferreira theater, which ran in 2005; • The Gronholm Method (O Método Gronholm) at the Teatro Leblon, which ran in 2008; • Here Comes the Flood (Aí Vem o Dilúvio) at the Teatro Ópera, which ran in 2000 and 2001; and • The Kiss of the Spiderwoman (O Beijo da Mulher Aranha) at the Jardel Filho theater, which ran in 2000 and 2001.

Contracting, production and execution Theater. Our process for producing theatrical events begins when our production team contacts the theater groups to discuss dates, venues and prices. Theatrical events are staged at locations that have sufficient capacity and meet the operational requirements of the show. We normally pay a lump sum fee to the artists (including actors, directors and others) in addition to monthly royalty payments paid to rights holders.

Broadway musicals. We maintain close relationships with Broadway’s principal musical producers, including Cameron Mackintosh, Disney and RUG—The Really Useful Group, which facilitates our access to the high quality musical performances that we produce. Staging Broadway shows generally involves more money, time, and effort than the adapted pieces we produce (such as the Witches of Eastwick (As Bruxas de Eastwick), to

82 be presented in 2011, and Sweet Charity) and take approximately eight to 12 months to develop and produce. First, we must acquire the licensing rights, which give us the right to produce a particular musical for a period ranging from three to five years. In some instances we must pay a portion of that royalty in advance of the performance of the musical. We then work with the creative director of the theater at which the piece is to be produced to determine a production schedule, which allows for the contracting of actors, rehearsals and costume and set design and creation. Next, auditions are held for the cast, whose singing, dancing and acting abilities are tested extensively. When that process is complete, set and costume design commences. Finally, the show is presented to the public.

Theatrical productions of Broadway musicals are normally staged at the Teatro Abril in São Paulo, Brazil and at the Ópera Citi in Buenos Aires, Argentina. Both facilities meet the requirements generally established in the licensing contracts.

Cultural expositions Overview We have promoted cultural, artistic, scientific, and educational expositions in Brazil, Argentina, and Chile since 2005. We produced the following events at exposition centers we rented from third parties: • Painted Bodies (Corpos Pintados) at São Paulo’s Oca Auditorium in Ibirapuera Park, which ran in 2005; • Leonardo da Vinci at São Paulo’s Oca Auditorium in Ibirapuera Park, which ran in 2007; and • Bodies (Corpos) at the São Paulo’s Oca Auditorium in Ibirapuera Park and in Brasilia’s Park Shopping Auditorium, which ran in 2007 and 2010.

We believe the supply of cultural expositions in the cities in which we are active is insufficient considering their size, economic development and cultural demand. Because we believe this is an underserved market, we intend to expand our cultural expositions.

Contracting, production and execution Generally, we do not produce our own events in this category. The principal content providers in this segment are Premier Exhibitions, Inc., Evergreen Exhibitions, S2BN Entertainment Corporation, the American Museum of Natural History in New York, and Grande Exhibitions. The productions are adaptations of original content, which permits the rights holder to establish guidelines for the production and handling of important elements such as translation and sourcing of subcontractors. Because they are long-running events for which we do not have our own venues, the planning process is typically longer and more involved than other events we promote. We pay a percentage of ticket sales as royalties for these exhibitions.

Sporting events Overview Through our subsidiary, Vicar S.A., or Vicar, we produce automotive racing events in Brazil. Our primary events in this category include: • the Caixa Stock Car Cup sponsored by the CEF, a stock car racing event which we believe is Brazil’s leading motorsport event and one of the most popular in the world;

83 • the Chevrolet Montana Cup sponsored by General Motors of Brazil, a pick-up truck racing event which is considered a feeder league into the Caixa Stock Car Cup; • the Mini Challenge sponsored by BMW, our acclaimed Mini-Cooper competition; and • starting in 2011, the Brands Championship.

Automotive sporting events represent a growing sub-segment in the live entertainment market, and we intend to expand our business in this area. Corporate sponsorships accounted for 64.8% of our net operating revenue in the sporting event category in 2010. Other revenue in this segment comes from ticket sales, hospitality centers and luxury box leases.

Contracting, production and execution Organizing sporting events begins when the races are scheduled. The process of producing sporting events encompasses: (i) organizing the race; (ii) making the necessary arrangements, including leasing the venue and required equipment for the event, contracting service providers and preparing the luxury boxes; and (iii) selling tickets, which are sold through our ticketing services. The main races are broadcast live over a national television network, so we must select dates and times in conjunction with the Brazilian Motorsport Confederation, (Confederação Brasileira de Automobilismo) and the television network broadcasting the event.

Ticketing; food, beverage and merchandise sales; and venue operations Our ticketing; food, beverage and merchandise sales; and venue operations represented 15.8% of our net operating revenue in 2010 and includes: • ticketing, in which we generate ticket sales for all of our events, as well as for third-party events; • food, beverages and merchandise sales, both at our own venues and for third-party venues, generally at large stadium performances and family shows in smaller event spaces; and • venue operation, in which we currently operate five of the most important venues in South America, including four in Brazil and one in Argentina.

Ticketing Overview We operate in the electronic ticketing industry under the Tickets for Fun brand in Brazil, the Ticketek brand in Argentina, and the Ticketmaster brand and structure in Chile as part of our vertically integrated business model. Our system offers the public the convenience of purchasing tickets over the Internet, by phone or at our strategically-located physical points of sale. We charge a convenience fee and, as applicable, a delivery fee for these services.

In addition to ticketing at our own events, we ticket events run by third parties. In both cases, we charge convenience and delivery fees. Currently, we have long-term contracts to operate ticketing services for events at: • SESI Theater in São Paulo, Brazil; • TAM Museum in São Carlos, Brazil; • Chevrolet Hall in Belo Horizonte, Brazil;

We also have long-term contracts to perform ticketing for large events, such as: • Skol Sensation; • the Brazilian Volleyball Confederation;

84 • Brahma’s luxury boxes at large rodeos like Barretos and Americana; and • Casacor, Festival Planeta Terra, and the Paraty Literary Festival.

Our computerized ticket sales system is an efficient tool to gather information and generate an information database on our ticket purchasers. We use this database to distribute marketing about upcoming events in accordance with the tastes of each purchaser, as well to offer products and services related to live entertainment.

Ticket production For events we promote, selling tickets for our own events starts with confirmation of the event. Once confirmed, the booking team gathers the important details (including a seating map, prices by zone, the advance sales and sales periods, the date and time of the event, and age ratings, among other things) of the event to the ticketing department. With this information in hand, the ticketing department configures the seating map in the sales system, formats the information to be included on the ticket (such as the sponsor’s logo, age rating, gate opening time), and clears the event for sale through our sales channels.

For third-party events, the process begins with commercial discussions (including setting fee and ticket prices and signing the contract) between us and the third-party promoter with producers. Once the contract is finalized, the process of entering the event into the sales system follows the same procedure as described above.

Ticket handling and design Our fulfillment department is responsible for the graphic layout of paper tickets and for implementing fraud prevention security features into our tickets. This department is also responsible ordering blank tickets, monitoring the paper inventory, providing tickets to the sales channels, and for delivering tickets when requested.

Sales channels Once the events are confirmed and announced, we begin selling tickets through our various sales channels (Internet, call centers and strategic physical locations). Except for sales at the official event ticket office located at the venues, we collect a convenience fee, which is typically 20% of the ticket’s face value.

Our tickets are sold through the following sales channels: • over the Internet through our websites • in Brazil at www.ticketsforfun.com.br; • in Argentina at www.ticketek.com.ar; • in Chile at www.ticketmaster.cl; • at box offices at our own arenas or those leased from third parties; • through a call center; and • at shopping centers, theaters and bookstores, among others.

At the time of sale, the client selects the event, the seat, the type of ticket (such as full price, discount, or a partner promotion) and the form of payment. The client has the option of paying for tickets with a credit card. If we have a partnership with the customer’s credit card company, the customer may use the card for admission to the event, instead of receiving a physical ticket. For sales through our automated systems or by credit card, the client receives an email confirmation of the details of the ticket purchase.

When a client buys through an automated channel and selects a delivery option, the system tags the transaction as completed but not printed. Those tickets are either delivered by mail or may be picked up by the

85 client directly at the box office window on the day of the event. If mailed, we use a shipping company for delivery. For tickets that are delivered, we charge a delivery fee, which varies depending on the form and place of delivery. We also charge a fee for tickets picked-up at our box offices.

When we provide ticketing services for third parties, we complete the ticketing services upon transferring the ticket sales revenue received less our negotiated commission rate.

Food, beverage and merchandise sales We sell food, beverage and merchandise at events we produce in our venues, as well as at our events produced in third-parties’ venues, principally large stadium events. We also offer catering services at our venues through outsourced companies.

Food and beverage sales As soon as an event is confirmed, we begin our production process and structure food and beverage sale operations. This process takes into account the locale and the configuration of the event (whether standing, seated, or mixed). We then examine existing inventory, and, if needed, our supply department gets quotes from specialized suppliers. For important inventory like beer and soda, we have pre-established commercial agreements for discounted prices.

Once we have created the menu and made our purchases, we begin preparing for the event. The food and beverage supervisor prepares lists detailing the quantities of each item to be produced by the kitchen staff. On the day of the event, this staff obtains the necessary items and follows our recipes for preparing the food.

The final products are packaged and labeled with an expiration date, the name of the product and the preparer. These products are stored until food and beverage sales begin.

Merchandise sales A process similar to that described above occurs in the merchandising department, which is responsible for selecting the merchandise to be sold at the event. The production process begins with the merchandising department selecting the events and the types of merchandise to be sold at an event, which generally includes family events, theatrical productions and large-scale live music events. In certain cases, such as when required by the holders of the rights to the event, we must sell pre-determined items. In those cases, we choose certain prefabricated articles in conjunction with the content producer. In certain events, our creative and merchandising departments create the merchandising articles and ask our procurement department to purchase material for a prototype. The prototype is then sent to the rights holder, and once both sides are satisfied, the final specifications are set.

Once the final product is approved, our team estimates, based on a projected sales report, the quantity to be sold and produces or buys a given number of the merchandise. On the day of the event, the team oversees the preparation, display and sale of the products.

Venue operation Overview We operate five of the most important venues in South America, all of which we lease, with the exception of Ópera Citi, which we own. Our lease renewal of leases for two of the venues, Credicard Hall and São Paulo’s Citibank Hall, is currently subject to litigation, which may result in our losing the ability to operate these venues. For more information, see Risk Factors—Risks Relating to Us and the Entertainment Industry—We depend on appropriate venues for our events. The availability, if any, and high cost of live entertainment venues administered by third parties may adversely affect us,” and “Business—Legal and Administrative Proceedings.”

86 The table below sets forth some of the key characteristics of the venues we currently operate, followed below by a description of each.

Venues Citibank Hall—São Citibank Hall—Rio Credicard Hall Paulo Teatro Abril de Janeiro Ópera Citi Rio de Janeiro, Buenos Aires, Location ...... SãoPaulo, Brazil São Paulo, Brazil São Paulo, Brazil Brazil Argentina Opening year ...... 1999 1983 2001 1994 1936 Capacity ...... 7,000 3,098 1,530 8,432 2,000 Lease agreement expiration ...... January 2010 August 2008 December 2019 March 2012 — Naming rights expiration ...... September 2019 February 2012 April 2011 February 2012 January 2013

• Credicard Hall: opened in São Paulo in 1999, was the number one venue in Brazil in terms of tickets sold in 2010, according to Pollstar, and maintained a usage rate of 48% during 2010. Our naming rights contract with Banco Citicard S.A., owners of the Credicard name and a wholly-owned subsidiary of Banco Citibank S.A., runs through September 28, 2019. We are currently involved in a legal dispute with respect to the proposed rent in connection with this property’s lease renewal which may, if we lose this litigation, result in our having to pay a higher monthly rental retroactively and possibly to lose this venue. • Citibank Hall São Paulo (formerly the “Palace”): opened in São Paulo in 1983 and had a usage rate of 47% in 2010. Our naming rights contract with Banco Citibank S.A. runs through February 29, 2012. We are currently involved in a legal dispute with respect to this property’s lease renewal, as the landlord did not opt to extend the lease and requested that we vacate this venue. If we lose this litigation, we may have to vacate this venue and pay a retroactive higher rent. • Teatro Abril: opened in São Paulo in 2001 and is designed for musical performances. The theater had an occupancy rate of 59% in 2010. We believe its architecture and high ceilings, its location in the center of the largest city in South America and the advantages we reap by controlling the length of production runs constitute a high barrier to entry for any competitors wishing to produce musical performances. Our lease for the property runs through December 14, 2019. Our naming rights contract with Editora Abril S.A. runs through April 2, 2011, and we are currently negotiating its renewal. • Citibank Hall Rio de Janeiro: opened in Rio de Janeiro in 1994 and had a usage rate of 30% in 2010. Our lease expires on March 31, 2012, but we are in the process of negotiating the renewal of this contract. Our naming rights contract with Banco Citibank S.A. runs through February 29, 2012. • Ópera Citi: opened in Buenos Aires, Argentina in 1936 and had a usage rate of 30% in 2010. When we purchased this venue in 1997, it was known as Teatro Ópera. We are unaware of any liens on the property or any challenges to our ownership. Our naming rights contract with Citibank N.A. runs through January 31, 2013.

Though we do not currently operate a venue in Chile, we have nonetheless implemented our vertically- integrated business for events held at third-party venues. For instance, we are responsible for food, beverage and merchandise sales, parking, and advertising for the events we produce in Chile.

For the dates our venues have no scheduled performances, we rent them for third-party events that do not compete with the scheduling of our own events. In 2010, we rented our Brazilian venues for third-party events 179 times. We also sell access to exclusive luxury boxes and suites, which afford spectators greater comfort and convenience. We have 32 suites in Credicard Hall and 14 suites in Citibank Hall Rio de Janeiro.

Venue operations also represent an opportunity for our sponsors to exhibit their brands at multiple venues in exclusive, comfortable and personalized environments.

87 Event production For events we promote at our venues, the venue manager determines how many service providers are needed to handle the event after reviewing a ticket sales report. We have contracts with firms specializing in sound and lighting, security, janitorial services, parking, reception, and fire and medical services. This enables us to outsource these services without the need to renegotiate a contract every time we hold an event and provides us with bargaining power in obtaining more favorable prices. Sound and lighting suppliers source the equipment and install it based on the technical requirements for the event. This process is monitored by our stage crew. Two hours before the doors open, the venue manager meets with the staff and summarizes the event and other information relevant information. The security supervisor positions staff in strategic locations, erects barriers if necessary and controls the opening of the doors along with the venue manager.

For third-party events at our venues, the process begins by signing a short-term rental agreement between us and the company producing the event. The production process is largely similar to the production process as described above.

Sponsorships We believe we enjoy a distinctive competitive advantage in attracting corporate sponsors because of our high-quality and popular artistic, cultural and sporting events and operation of some of the best venues in South America. Sales of corporate sponsorships represented 21.8% of our net operating revenue in 2010. In terms of cash generation, corporate sponsorships are extremely favorable for us because a portion is received in advance of the performance and the marginal cost of offering such service is low.

Event promotion The live music, family, theatrical, and cultural events we promote are excellent opportunities for our sponsors to expose their brands to their customers. Because we operate some of the best venues in South America and offer the best content available in the market, we consistently attract important Brazilian and international sponsors. Our sponsorship programs display a sponsor’s brands in a variety of formats depending on the level of investment and integration the sponsor would like for its brand at the event. We offer the following types of sponsorship packages: • the primary sponsor of each event is characterized as such and is usually identified as the “presenter” of the show or event in advertisements and the media; • co-sponsors are characterized by secondary exposure of their brands in our event media, which may occur in different ways in accordance with the level of investment (co-sponsor and cultural sponsor). Examples include exhibiting the brand at the event locations or distributing print material associating their name with the content, among others; and • the option to market products and brands at booths or through other marketing strategies to bring their product to their customers.

Our sporting events represent another excellent opportunity for our sponsors to expose their brands to their customers. Our stock car races, sponsored previously by Nextel and currently by the CEF, pick-up racing series, sponsored by General Motors of Brazil, and our mini-challenge, sponsored by BMW, are examples of the level of corporate sponsorships our events are able to attract. Other sponsors include tire manufacturer Goodyear and popular Brazilian tourism promoter Bahiatursa. We renew contracts with sponsors of sporting events annually.

In addition, these races are televised live by SPORTV and the Globo network, which is considered the largest broadcast network in Brazil.

88 Ticketing; food, beverage and merchandise sales; and venue operation In this segment, we offer corporate sponsors various ways to exhibit their products, including the sale of naming rights for our venues, use of our suites and luxury boxes, use of space to exhibit products and sponsorships linked to certain benefits like discounts and priority in purchasing tickets for our events. Under the naming rights contracts, we receive a fixed monthly payment for the naming rights. For more information on our current naming rights sponsors and the terms of those agreements, see “—Our Business—Ticketing; food, beverage and merchandise sales; and venue operations—Venue operation.”

Property, Plant and Equipment As of December 31, 2010, our property, plant and equipment consisted principally of land; fixtures and leasehold improvements; furniture and fixtures; machinery and equipment; data processing equipment; and vehicles, as set forth in the table below.

As of December 31, 2010 Accumulated Residual Cost(1) Depreciation Value (in thousands of R$) Land ...... 448 — 448 Fixtures and leasehold improvements ...... 98,874 (90,975) 7,899 Furniture and fixtures ...... 7,737 (4,079) 3,658 Machinery and equipment ...... 14,880 (6,610) 8,270 Data processing equipment ...... 8,640 (5,593) 3,048 Vehicles...... 527 (397) 129 Total ...... 131,106 (107,654) 23,452

(1) The cost basis of certain of our property, plant and equipment (with the exception of land and vehicles) is based on an appraisal report of January 2006. The revalued assets have been depreciated from thereon on a straight-line basis in accordance with their new useful lives, with the exception of constructions, installations and leasehold improvements, which are depreciated based on the term of their leases. For further information on our property, plant and equipment, and the appraisal report, see note 16 to our consolidated financial statements included elsewhere in this offering memorandum.

89 Human Resources Employees As of December 31, 2010, we had 621 employees. The table below shows our personnel breakdown for the periods indicated.

As of the year ended December 31, 2008 2009 2010 By function Administration ...... 230 202 207 Artistic...... 93 78 74 Venue operations...... 179 161 120 Ticketing...... 293 234 220 Total ...... 795 675 621 By geographic location Brazil ...... 507 447 428 Argentina ...... 254 191 156 Chile ...... 34 37 37 Total ...... 795 675 621

During 2010, we had 1,058 third-party contractors working for us. The table below shows a breakdown of this third-party personnel for the periods indicated.

As of the year ended December 31, 2008 2009 2010 By function Administration ...... 23 24 27 Venue operations...... 860 922 1,031 Total ...... 883 946 1,058 By geographic location Brazil ...... 357 388 442 Argentina ...... 483 523 579 Chile ...... 43 35 37 Total ...... 883 946 1,058

The table below shows our personnel turnover rates for the periods indicated.

As of the year ended December 31, 2008 2009 2010 (in percentages) Brazil ...... 39.7 23.7 37.8 Argentina ...... 54.3 24.3 19.2 Chile ...... 15.1 19.4 26.3

Unions Our employees are represented by three unions in São Paulo: the City of São Paulo Regional Entertainment Hall Artists and Technicians Union (Sindicato dos Empregados em Casas de Diversões de São Paulo e Região); the State of São Paulo Entertainment Event Artists and Technicians Union (Sindicato dos Artistas e Técnicos em Espetáculos de Diversões do Estado de São Paulo); and our sporting events-related workers are represented by

90 the State of São Paulo Sports Clubs, Sports Federations and Confederations and Gyms Employees Union (Sindicato dos Empregados de Clubes Esportivos e em Federações, Confederações e Academias Esportivas no Estado de São Paulo). In Rio de Janeiro, our employees are represented by the City of Rio de Janeiro Entertainment Venues and Tourism and Real Estate Companies Employees Union (Sindicato dos Empregados em Casas de Diversões, em Empresas de Turismo e em Empresas de Compra, Venda, Locação e Administração de Imóveis do Município do Rio de Janeiro). We believe that we maintain good relationships with our employees and their unions, and we have never experienced strikes, work stoppages or disruptions at our facilities. Our collective bargaining agreements are renegotiated annually and salary increases are determined by a series of factors, but principally the inflation rate.

Compensation policy Our compensation policy is based on market practice and legal requirements and was approved by our board of directors, and includes a fixed salary and variable bonus based on our performance. We also offer health insurance, life insurance, dental discounts and meal and transportation vouchers to our employees. In 2010, we paid approximately R$1.9 million for medical insurance, R$135,000 for life insurance, and R$1.7 million in meal and transport vouchers. For executive officers and key employees we pay for parking, a cell phone and paid health insurance. For more information on the compensation policy for our management, see “Management— Management Compensation.”

Employees’ stock option plan We offer a stock option plan to our directors, executive officers, and key employees. Eligible employees must be working for us at the time of their exercise. The options are exercisable for three years from the vesting date. The exercise price is determined by our board of directors based on the amount paid by GIF-II for investments in our company. As of the date of this offering memorandum, we have granted options representing a total of 1,881,616 shares. For more information on our stock option plan, see “Management—Stock Option Plan and Share Compensation.”

Competition The South American live entertainment market is fragmented, with a number of participants operating in each market segment of event production, although the market is relatively consolidated in terms of high-quality content providers and venue operators. We believe, however, no other company in the sector has a vertically- integrated business model with the quantity of high-quality content that we offer. Accordingly, there are different local niche competitors operating at each stage of our business, including event promotion, event production, ticketing services, venue operation, and food, beverage and merchandise sales, but no single competitor that operates along all levels of the value chain. For further information, see “Industry and Regulatory Overview— Competition in Each Category.”

Seasonality Our operations are concentrated in large cities. As a result, we see a reduction in activity when school is not in session because people commonly leave the cities for other parts of the country. Moreover, January and February have less activity, particularly in Brazil, due to the New Year and Carnival holidays and the summer school break. In recent years, however, the Cirque du Soleil season during these months has provided a counterweight to this trend. In addition, during June, July and August, we typically do not promote international tours, since most artists are touring in Europe. Accordingly, our revenue from these types of shows drops significantly in these months. Our sporting events are not seasonal because there are a variety of events year round. Demand for a given event can be seasonal based on the audience to whom it is directed. For instance, shows oriented towards children see higher attendance during school breaks.

91 Intellectual Property Trademarks We have registered, or applied to register, our trademarks with local authorities. Below are the procedures for the principal countries in which we operate.

Brazil In Brazil, trademark ownership is acquired through registration with and approval by the Brazilian National Industrial Property Institute (Instituto Nacional de Propriedade Industrial), or Brazilian INPI, which provides a trademark holder the exclusive use of the trademark in Brazil for a period of ten years, renewable for successive 10-year periods.

We and our subsidiaries have 31 trademarks registered or with registration applications before the Brazilian INPI. Our main trademarks are Time for Fun, T4F, and Tickets for Fun.

Argentina Argentina also concedes a 10-year period of exclusivity, which begins when the Argentine National Intellectual Property Institute (Instituto Nacional de la Propriedad Industrial), or Argentine INPI, grants the registration. The granting of trademarks is based on the date of submission, with those who apply first receiving priority. During the approval process, however, others may use the trademark.

Previously, Argentine law established a system conferring brand registration only upon attaining registration. Even before the current law came into effect, however, courts had ruled that use of a trademark, even if unregistered, could confer rights depending on length of use, legitimate use, good faith and brand awareness among others. Currently, registration of a trademark provides the owner the right to prevent third parties from using it.

We and our subsidiaries have approximately 70 trademarks registered or with registration applications before the Argentine INPI.

Chile Under Chilean law, intellectual property may be used exclusively if properly registered with the competent authority, the Chilean National Intellectual Property Institute (Instituto Nacional de Propiedad Intelectual), or INPI. During the registration period, however, a third party may oppose the registration by asserting a “superior claim” to the right. If successful, the third party could be granted priority in the registration.

We and our subsidiaries have approximately 16 trademarks registered or with registration applications before the INPI.

Domains As of December 31, 2010, we owned the following principal domain names: (i) t4f.com.br, (ii) ticketek.com.br, (iii) tickets4fun.com.br, (iv) ticketsforfun.com.br, (v) time4fun.com.br, (vi) timeforfun.com.br, (vii) t4f.cl, (viii) timeforfun.cl, (ix) ticketsforfun.cl, (x) ticketforfun.cl, (xi) tickets4fun.cl, (xii) t4f.com.ar, (xiii) ticketsforfun.com.ar, (xiv) tickets4fun.com.ar and (xv) time4fun.com.br. Information contained in these websites is not incorporated by reference and should not be considered part of this offering memorandum.

92 Software Our ticketing operations involve the intensive use of technology, and we rely significantly on the availability, integrity and reliability of our technological systems to assure sales through the Internet as well as through other channels. We have computer software licenses required for the operation of our business, including Softix entertainment ticketing software. The Softix license is valid until February 2012 and is renewable for an additional two years. Ticketing systems and technology may become obsolete or inadequate and/or these systems may be subject to damage or interruptions for a variety of factors beyond our control. See “Risk Factors—Risks Relating to Us and the Entertainment Industry—System interruptions or crashes or failures to upgrade the technology that supports our online sales structure and other points of sale may have an adverse effect on us.”

Insurance We are insured by various well-known insurance companies, including Tókio Marine Brasil Seguradora S.A. and Alianz Seguros, against all risks that we believe are inherent to our business. We believe that our insurance coverage is adequate and consistent with the usual practices adopted by other companies operating in the live entertainment industry. We cannot guarantee that the coverage set forth in our insurance policies will be sufficient to protect us from all losses and damages that may occur. If our insurance coverage should prove to be insufficient, we do not believe the need to supplement the amount we receive to cover loss and damages would adversely affect our business. We have general civil liability coverage for property and personal damages, including pain and suffering caused to third parties for claims arising from our operations. We have comprehensive business insurance covering fire, explosions, electrical damage, flooding, third-party goods in our possession and plane crashes, among other events at our establishments. We also have lost profit insurance, which indemnifies us for losses suffered as a result of an interruption or disturbance in our business. The risks covered by our insurance vary greatly depending on our events, but do not generally cover epidemics, wars, physiological or psychological problems experienced by the artist, politico-religious persecution or terrorist acts, among others, as consistent with market practice.

We have also obtained directors’ and officers’ insurance with a policy that covers an aggregate of R$20 exposure. This covers situations when management is responsible for payments resulting from final court orders, arbitral awards or as authorized by the insurer in accordance with the terms of the policy. However, illicit or illegal acts are excluded from coverage. In addition, for the policy to cover claims related to a public stock offering, the offering documents must be submitted for review and additional premiums are charged. This policy coverage is aimed at supporting decisions taken by our management that they judge to be in our best interest.

We do not anticipate any difficulty in renewing any of our insurance policies, and we believe that our coverage is reasonable in terms of amount and compatible with the industry standards in Brazil, Argentina and Chile.

Material Agreements Our material agreements are comprised of lease agreements for our venues, naming rights agreements, sponsorship contracts, contracts with our content suppliers and agreements for the organization and production of concerts in the ordinary course of our business.

Lease Agreements for our Venues The lease agreements for our venues are generally entered into for periods of at least five years and include a mandatory renewal clause if certain requirements are met. In the event of early termination, we will be charged an amount equal to three months of the prevailing rent as of the date of termination. For more information on all venue lease agreements, see “—Our business—Ticketing; food, beverage and merchandise sales; and venue operations—Venue operation.” The lease agreements for two of our São Paulo venues, Citibank Hall and Credicard Hall, have expired and we have brought lawsuits seeking to require their mandatory renewal. We

93 believe we are unlikely to prevail in the Citibank Hall lawsuit but are likely to prevail in the Credicard Hall case, but in each case, we may face retroactive rental increases. For more information on those law suits, see “—Legal and Administrative Proceedings,” and “Risk Factors—Risks Relating to the Entertainment Industry—We depend on appropriate venues for our events. The availability, if any, and high cost of live entertainment venues administered by third parties may adversely affect us.”

Naming Rights Agreements Our naming rights agreements establish the terms and conditions on which sponsors will have the right to name a given venue or sporting event as a way of promoting their brands. We have sold the naming rights to all five of our current venues. We also enter into contracts in which our partners buy the right to name the sporting events we promote through our subsidiary Vicar. This includes the Chevrolet Montana Cup, pursuant to a two-season naming rights contract with General Motors do Brasil Ltda. and the Caixa Stock Car Cup pursuant to the naming rights contract with the CEF for the 2010 through 2012 seasons. Except for sporting event naming rights contracts, the terms of these contracts vary from three to ten years. As of December 31, 2010, we had contracts for R$52.9 million of naming rights revenues that will be recorded in the future.

Sponsorship Contracts Under our sponsorship contracts, we sell the right for a company to display its name or brand at the events we promote, whether through printed material (such as use of the company logo on tickets) at the site itself or in the media included in event advertisements. Sponsorship contracts generally average two years and represent an important source of revenue for our activities. As of December 31, 2010, we had contracts with a total of R$153.2 million of potential sponsorship revenues.

We have signed a contract with Citibank that provides Citibank clients, through 2012, exclusive rights to purchase tickets before they become available to the general public, as well as other preferred benefits (such as exclusive box office lines, discounts and preferred parking). We also promote Citibank and display its logos at certain events. We executed an agreement with MasterCard Brasil Soluções de Pagamento Ltda. which grants Mastercard credit and debit card holders the ability to use their cards to access all shows in lieu of paper tickets. We also have an agreement with telecom company Oi to sponsor our international shows, as well as agreements with Bradesco and American Express to sponsor Cirque du Soleil through 2012.

For our sporting events, we sign specific contracts with companies that wish to become official suppliers of the events we organize. Pursuant to those agreements, they promise to supply a variety of products to participants, such as tires, lubricants and fuel.

Content Supplier Agreements In the live entertainment market, it is unusual to enter into long-term contracts with content providers on an exclusive basis. Instead, we rely on our relationships to enter into on a per-show basis. We do, however, have an agreement with Live Nation with a term through July 31, 2015, effective August 1, 2008 that (i) grants us the exclusive right to promote Live Nation’s content in South America (except Colombia), and prohibits them from competing with us in such countries; and (ii) prohibits us from promoting shows with Live Nation’s competitors (such as AEG and JAM) and from promoting shows in the United States, Europe (except Spain) and Canada. We also have a contract providing rights of first refusal for certain shows with Cirque du Soleil, which has provided content for us for the past five years.

To obtain quality content for our musical producers, we enter into licensing contracts with successful international musical producers for theatrical presentations such as Mamma Mia!, The Phantom of the Opera, Cats and The Witches of Eastwick. The licenses under these contracts are generally valid for two to five years.

94 Leases of Space Within Our Venues These agreements typically involve temporarily renting out spaces within our venues for private events or our suites and luxury boxes. We generally rent the suites, luxury boxes or spaces within our venues for a defined period to companies during all artistic and cultural events open to the general public. The term of contracts for space within our venues average two days and represent an important source of revenue for our business.

Agreements With Third-party Venues Large concerts for bands like Aerosmith, Metallica and Coldplay, due to their large capacity requirements, require us to lease large venues like the Palestra Itália soccer stadium and Morumbi soccer stadium in São Paulo from third parties. These contracts permit us to sell food, beverages and merchandise within the leased space.

Agreements With Artists We enter into contracts with Brazilian and international artists for the production of our shows. Fees and other conditions of these contracts are negotiated with the artists, taking into account a variety of commercial and market factors. The artists receive either a lump sum and/or a variable amount based on the revenue or profit of the shows. As a general rule, we retain the exclusive right to revenues from ticketing services and related promotional activities.

However, in some cases we may sign contracts to co-produce an event, leaving our co-producer to organize the show, provide sound and lighting equipment, oversee the event’s media and publicity efforts and provide accommodation and transportation for the artists and their entourages. We, in turn, sign the artist, plan the tour, and provide a venue and ticketing services for the show.

Indemnification by our Former Controlling Shareholder We have entered into an agreement with our former controlling shareholder (and currently among our principal shareholders) CIE, under which CIE agreed to indemnify us for certain contingencies. For more information, see “Related-Party Transactions—Shareholders’ Agreement.”

Shareholders’ Agreements Relating to Vicar The Vicar shareholders’ agreement On February 23, 2006, we and Carlos Alberto Col entered into a shareholders’ agreement, as amended on June 10, 2009, governing our relationship as shareholders of Vicar and providing for rights of first refusal, tag-along and drag-along rights, as well as for a share purchase option. The Vicar shareholders’ agreement has a term of 20 years, automatically renewable for additional 20-year periods. We have the right to appoint all three of Vicar’s executive officers.

The Vicar shareholders’ agreement provides the parties thereto, and ABCDEFH Participações, or ABC, with a right of first refusal with respect to sale of common shares of Vicar by the parties thereto or ABC, exercisable ratably and under the same terms and conditions applying to such sale. Under the Vicar shareholders’ agreement, the parties thereto are also entitled to participate in any sale of shares of Vicar by the other shareholders to a third party and sell their shares of Vicar ratably and under the same terms and conditions (tag-along right). Should we sell our controlling interest in Vicar, Mr. Col will not be able to exercise the right of first refusal and we will have the right to demand that Mr. Col sell his shares of Vicar at the same price and conditions applicable to such sale (drag-along right) as long as the price is not lower than what Mr. Col would be entitled to under his sale option, discussed below.

Additionally, the Vicar shareholders’ agreement provides each of Mr. Col and us with an option to sell shares of Vicar to the other party, exercisable every year from December 31 to January 31 or if Mr. Col votes

95 against: (i) a merger, spin off or incorporation of shares; (ii) the issuance of convertible bonds; (iii) investments by Vicar exceeding 50% of its EBITDA; (iv) an unjustified capital increase; and (iv) the issuance of preferred shares or shares convertible into preferred shares (sale option). The Vicar shareholders’ agreement sets out a formula to calculate the option sale price, which is based in part on EBITDA and net current assets.

The Vicar shareholders’ agreement also prohibits Mr. Col from competing with Vicar in motorsports-related activities for five years after leaving Vicar. Any controversy or dispute arising from the Vicar shareholders’ agreement will be resolved and settled by arbitration in Brazil, under the rules of the Brazilian-Canadian Chamber of Commerce.

The ABC Vicar shareholders’ agreement On May 25, 2006, we, ABC (formerly Upside Consultaria de Negocios Ltda.) and, as intervening parties Vicar and Mr. Col, entered into a shareholders’ agreement, as amended on October 10, 2007, governing our relationship as shareholders of Vicar and providing for rights of first refusal, share purchase options and tag-along and drag-along rights in relation to the common shares of Vicar. The ABC Vicar shareholders’ agreement has a term of 20 years, automatically renewable for additional 20-year periods.

The ABC Vicar shareholders’ agreement provides the shareholder parties thereto with a right of first refusal with respect to any sale of the common shares of Vicar, exercisable ratably and under the same terms and conditions applying to such sale. With respect to the right of first refusal applicable to sales by ABC, we will have priority in exercise of such right and, if we do not choose to exercise such right, Mr. Col will be able to exercise such right. The right of first refusal, however, is not applicable to sales made to affiliates of the selling party so long as the affiliate agrees in writing to be bound by the terms of the ABC Vicar shareholders’ agreement and such affiliate does not compete, directly or indirectly, with Vicar unless expressly authorized by us.

Should we sell our direct controlling interest in Vicar, (i) ABC will be entitled to (a) exercise its right of first refusal described above or (b) participate in any such sale to a third party and sell its common shares ratably and under the same terms and conditions as us (tag-along right); or (ii) in the event that ABC does not exercise its right of first refusal or tag-along right, we will have the right (under threat of a R$5,000 per day penalty should ABC not take all actions necessary to realize the drag-along sale within 30 days of receiving notification) to require ABC to sell its common shares, at the same price and payment conditions offered by the third party (drag-along right). Should a sale of us result in an indirect change of control, (i) ABC will not be entitled to exercise its right of first refusal or tag-along right; and (ii) we will be entitled to exercise our drag-along right. Should we not exercise our drag-along right, ABC will have the option to exercise the sale option described below.

ABC will have the option to sell, and we will have the obligation to purchase, common shares of Vicar held by ABC if there is an unjustified capital increase. In addition, this option may be exercised if ABC votes against (i) an investment by Vicar exceeding 50% of its EBITDA, or (ii) a merger, spin off or incorporation of shares (sale option). The ABC Vicar shareholders’ agreement sets out a formula to calculate the sale price, which is based in part on EBIDA and net current assets.

Any controversy or dispute arising from the Vicar shareholders’ agreement will be resolved and settled by arbitration in Brazil, under the Rules of the Brazilian-Canadian Chamber of Commerce.

Pop Art. S.A. Share Purchase Agreement On June 9, 2006, T4F Inversiones S.A., or T4F Inversiones, purchased shares representing 51.01% of the capital stock of Pop Art. S.A, or Pop Art, from Roberto Costa and Pablo Feijoo. Pop Art is one of our subsidiaries responsible for promoting our shows in Argentina. On May 14, 2007, T4F Inversiones purchased the

96 remaining shares from Messrs. Costa and Feijoo and two other minority partners in exchange for cash and, in the case of Mr. Costa, shares representing 5% of the capital stock of T4F Inversiones. The share purchase agreement contained, among other obligations, a non-compete obligation applicable to the sellers and a put option in favor of Mr. Costa with respect to his 5% holding in T4F Inversiones with an exercise price equal to the greater of US$3.5 million or a calculation based on T4F Inversiones’ EBITDA, exercisable only if Mr. Costa continued to provide services to T4F Inversiones for five years following the purchase date. As a result of ensuing disputes due, in our belief, to Mr. Costa’s failure to comply with his non-compete obligation under the share purchase agreement, Mr. Costa refused to accept the 5% stake in T4F Inversiones due to him. We and Mr. Costa sought mediation in October 2009 pursuant to Argentine Law No. 24,573, which ended without settlement in November 2009. Argentine Law No. 24,573 requires the parties to negotiate through mediation prior to the commencement of any judicial lawsuit. In the context of this dispute, Mr. Costa also brought a labor proceeding against us. For information regarding the labor proceeding brought by Mr. Costa, see “—Legal and Administrative Proceedings.”

Legal and Administrative Proceedings We are party to various labor, civil and tax legal and administrative proceedings. Pursuant to the opinion of internal and external counsel, we determine the amount provisioned based on an evaluation of the likelihood of loss, classified as probable, possible or remote. Provisions are made for those losses deemed probable and also for potential cases that have not yet been brought, but where such provisioning is prudent given the experience of our management in similar situations. Although we maintain provisions for losses that may result from such proceedings, the amount provisioned may be different from any actual resulting loss.

As of December 31, 2010, we were a party to approximately 800 legal and administrative proceedings, representing a total estimated loss of approximately R$100.8 million. Of that amount, R$14.7 million relates to cases for which, based on the opinion of counsel, we have classified the risk of loss as probable. We have set aside contingency provisions of R$29.4 million. We have made no provision for cases in which, based on the opinion of counsel, we have classified the risk of loss as possible (approximately R$83.3 million) or remote (approximately R$4.8 million).

The table below sets forth the consolidated position of our provisions as of December 31, 2010.

As of December 31, 2010 (in millions of R$) Labor proceedings ...... 14.8 Civil proceedings ...... 7.7 Tax proceedings ...... 6.9 Total ...... 29.4

Labor Proceedings As of December 31, 2010, we were party to approximately 158 labor proceedings, representing a total estimated loss of approximately R$10.6 million. Of that amount, R$4.1 million relates to cases in which, based on the opinion of counsel, we have classified the risk of loss as probable. We have set aside contingency provisions of R$14.8 million, of which: (i) R$4.1 million related to 42 proceedings with a probable chance of loss and (ii) R$10.7 million related to potential cases that have not yet been brought, but where such provisioning is prudent given the experience of our management in similar situations. We also deposited approximately R$410,000 with the appropriate court to guarantee such proceedings. We have made no provision for cases in which, in the opinion of counsel, we have classified the risk of loss as possible (82 proceedings involving approximately R$5.4 million) or remote (34 proceedings involving approximately R$1.0 million). In general terms, labor claims relate to disputes regarding overtime, severance, liability involving outsourced service providers, and certain union disputes regarding the implementation of collective workplace rules, among others.

97 We are a defendant in a labor claim filed by Sergio Tadeu Leal, a former outsourced service provider. The plaintiff seeks to void a service contract executed between us and Mr. Leal, recognize an employment relationship and award severance payments. The trial court ruled against us, and, as of the date of this offering memorandum, the case was in the sentencing phase awaiting a determination as to the amount of damages. We have appealed the decision, which, as of the date of this offering memorandum, was pending before the Brazilian Supreme Labor Court (Tribunal Superior Trabalhista). As of December 31, 2010, the total amount at issue was R$1.6 million. Based on the opinion of counsel, we believe the chance of loss in this claim is probable.

We are defendants in a labor claim filed by Roberto Costa, a former employee and shareholder of Pop Art S.A., our wholly-owned subsidiary. The plaintiff seeks the collection of back pay that he alleges he is owed as a result of discrepancies in the variable and fixed compensation he received during 2007, 2008 and 2009, in addition to labor fines. As of the date of this offering memorandum, the case was in the trial phase. As of December 31, 2010, the total amount at issue was R$2.8 million. Based on the opinion of counsel, we believe the chance of loss in this claim is possible and have not recorded a provision. For more information, see “Pop Art S.A. Share Purchase Agreement.”

Civil Proceedings As of December 31, 2010, we were party to approximately 495 civil proceedings, representing a total estimated loss of approximately R$58.3 million. Of that amount, R$7.7 million relates to 58 proceedings in which, based on the opinion of counsel, we have classified the risk of loss as probable and for which we have set aside contingency provisions in the same amount. We have made no provisions for cases in which, based on the opinion of counsel, we have classified the risk of loss as possible (380 proceedings involving approximately R$51.3 million) or remote (57 proceedings involving approximately R$300,000). Most of these civil proceedings involve claims by our clients based on a consumer right.

We are co-defendants in a civil lawsuit filed by the professional soccer team, Clube Atlético Mineiro. Clube Atlético Mineiro is seeking fines and damages for an alleged breach of contract. According to Clube Atlético Mineiro, we and the co-defendants breached our contractual obligation to negotiate with Clube Atlético Mineiro to sign an investment contract. As of December 31, 2010 the total amount at issue was R$83.5 million. Based on the opinion of counsel, we classified the chance of loss in this claim as possible. However, on February 21, 2011, the case was dismissed. In doing so, the court acknowledged the lack of an agreement between the parties and rejected the penalty clause in the agreement to negotiate. As of the date of this offering memorandum, we were waiting to see if the plaintiff will file an appeal. Under terms of an agreement signed with CIE, CIE will assume all liability and expenses related to this case. For more information on the indemnification agreement with CIE, see “Related-Party Transactions.”

We are plaintiffs in a lawsuit that we have filed against Galaxy Brasil Ltda., or Galaxy, in October 2004 in connection with a dispute arising as the result of the termination of a sponsorship contract. Galaxy counterclaimed, alleging trademark violations and seeking that we cease using Galaxy’s trademark. We lost both our original lawsuit and part of the counterclaim. Both parties appealed the decision, which required us to pay Galaxy five percent of our net sales from July 30, 2003 to July 24, 2005, subject to adjustment for inflation, interest and additional fees. As of the date of this offering memorandum, the case is pending before the appellate court. As of December 30, 2010, the total amount at issue was R$8.7 million with respect to our original claim, and R$1.3 million with respect to the counterclaim. Based on the opinion of counsel, we believe the chance of loss in this claim is possible and have not recorded a provision.

We are plaintiffs in a claim that we have filed against the Associação Brasileira de Educação e Assistência. We are seeking to renew the lease of the property where Citibank Hall (São Paulo) is located. We are seeking an eight-year renewal, backdated to September 2008. The defendant, which owns the property, opposed the renewal of the lease because of future construction plans for the location. As of the date of this offering memorandum, the case is in the trial phase. An unsuccessful outcome may require us to find another venue and attempt to

98 renegotiate with our naming rights and corporate sponsors. Even if successful, in addition to counsel’s fees and court costs, we may be subject to a retroactive adjustment of the monthly rent paid since 2008, which our counsel estimates to be a total amount of R$536,500. Based on the opinion of counsel, we believe that the chance of our loss in this claim is probable. We have established a R$233,700 provision for this contingency.

We are plaintiffs in a claim that we filed against Horácio Sabino Coimbra–Comércio e Participações Ltda. We are seeking to renew the lease of the property where Credicard Hall (São Paulo) is located. We are seeking a 12-year renewal, backdated to January 2010. The defendant, which owns the property, agrees with our renewal of the lease but does not agree with the proposed monthly rental. As of the date of this offering memorandum, the case is in the trial phase. Though we do not believe there is a risk of losing the venue, our counsel estimates that we will be subject to R$5.0 million in retroactive lease payment increases, commencing on January 1, 2010. Based on the opinion of counsel, we believe that the chance of loss in this claim is remote. We have recorded a provision of R$5.2 million for retroactive rent payment.

We are defendants in several claims brought by the Federal Prosecutor’s office (Ministério Público)ofthe states of São Paulo, Rio de Janeiro and Pernambuco, challenging our charging of convenience and delivery fees for our ticketing services and asking for us to refund such fees, including interest and fines thereto. The claim brought in the state of Rio de Janeiro does not impact us, since the Federal Prosecutor’s office challenges the charge of a convenience fee for purchases directly at the official box office, a practice which we currently do not engage. The claim brought in the state of Pernambuco challenges the convenience and delivery fees we charged for the Cirque du Soleil Quidam tour in Olinda from June to August 2009. All of the cases are in the trial phase. If we are unsuccessful, we may have to pay significant restitution and may no longer be able to charge such fees for our ticketing services in these states. Based on the opinion of counsel, we believe that the chance of loss for these claims is possible, and have not recorded a provision.

We are defendants in a civil claim filed by the Federal Prosecutor’s office of the state of Bahia seeking fines and refunds for elementary school students who were charged full price for tickets for Cirque du Soleil shows and other shows in Bahia instead of the 50% discounted price applicable to most students. We have presented our defense and have appealed a preliminary injunction requiring us to allow elementary school students to purchase half-price tickets. As of the date of this offering memorandum, the case was in the trial phase. As of December 31, 2010, the amount in controversy was R$124,000. Based on the opinion of counsel, we believe that the chance of loss is possible, and have not recorded a provision.

We are co-defendants in a civil claim filed by the São Paulo State Union for Students (União Estadual dos Estudantes de São Paulo), which is seeking to ensure that we sell discounted student tickets at all points of sale and is asking for fines and refunds for students who were charged full price for tickets at the 53rd Barretos Festival where we provided ticketing services. We presented our defense and asked to be excused from the lawsuit, asserting that our co-defendants bear responsibility in this case. That claim was denied, and both parties have appealed that preliminary ruling. As of the date of this offering memorandum, the case was awaiting trial. As of December 31, 2010, the amount in controversy was R$700,000. Based on the opinion of counsel, we believe that the chance of loss is possible.

Tax Proceedings As of December 31, 2010, we were party to approximately 147 legal and administrative tax proceedings, totaling approximately R$31.2 million. Of that amount, R$1.0 million relates to 11 cases for which, based on the opinion of counsel, we have classified the risk of loss as probable. We have made no provisions for cases for which, based on the opinion of counsel, we have classified the risk of loss as possible (102 cases involving approximately R$26.6 million) or remote (34 cases involving approximately R$3.6 million).

We are defendants in three tax claims filed by the Brazilian tax authorities of the state of São Paulo (Secretaria da Receita Federal de São Paulo).

99 The first case involves: (i) our deduction of depreciation and amortization charges in 2004; (ii) discrepancies during 2006 and 2007 between our declared corporate income tax and social contribution obligations and those reported by us in our Statement of Charges and Federal Tax Credits (Declaração de Débitos e Créditos Tributários Federais); and (iii) insufficient withholding of corporate income tax and social contributions in 2005.

In the second case, the tax authorities are challenging corporate income tax and social contribution calculations of Ocesa Mercury Entretenimento Ltda., or Ocesa, a company that merged with and into us. The tax authorities claim that Ocesa carried forward tax losses in excess of the 30% allowable limit in the calculation of its corporate income tax and social contribution obligations for certain years.

The third case, brought in July 2010, alleges that we did not pay taxes for contracts involving royalties, technical services and administrative services, all of which are subject to a technology tax.

As of the date of this offering memorandum, all three cases were in the trial phase. As of December 31, 2010, the total amount at issue in the three cases was R$8.0 million, R$3.3 million and R$2.3 million, respectively. Based on the opinion of counsel, we estimate the chances of loss as possible in all three cases, and have not recorded a provision for these cases.

We are defendants in a tax claim filed by the City of São Paulo. We are disputing the imposition of a 10% service tax (Imposto Sobre Serviços), or ISS, on entertainment services, which the city increased from the previous rate of 5%. We believe this increase is contrary to law. Furthermore, the city is claiming that ISS is due on unsold and free tickets, in addition to the ISS due on tickets sold, an interpretation we are challenging. As of the date of this offering memorandum, the case was in the trial phase. As of December 30, 2010, the total amount at issue was R$1.7 million. Based on the opinion of counsel, we estimate chances of loss as possible, and have not recorded a provision.

The city of São Paulo is also requiring us to pay ISS on services related to an event we produced for the Imperial Circus of China. The city is claiming the event was an acrobatics show, not a circus. Circus performances, at that time, were not subject to ISS.

Similar to the tax claims brought by the city of São Paulo, we are defendants in two cases brought against us by the city of Rio de Janeiro Treasury Secretary (Secretaria da Fazenda do Municipio do Rio de Janeiro) regarding ISS. The first case asserts that the tax is due on free tickets and in instances where we sublease suites and event spaces to third parties. It also asserts we issued tickets without previous authorization. We are challenging the claims. The second case asserts the tax is due on unsold tickets from portions of the period between April 2001 to July 2005. In addition, the second claim asserts taxes are due on ticket-related services for portions of the period between September 2001 to November 2005. As of December 31, 2010, the total amount at issue was R$1.5 million in the first case and R$1.6 million in the second. Based on the opinion of our outside legal counsel, we estimate chances of loss in both cases as possible.

Tax Payables Financing As of December 31, 2010, we had R$10.8 million (R$13.0 million as of December 31, 2009 less a waiver of 70% of the penalties and 30% of the interests) in tax payables as per the installment payment plan for payment in 120 months prescribed under Law No. 11,941/2009, resulting from corporate income tax and social security debts and other tax obligations from 1997 to 2003 that we agreed to pay under the government-sponsored repayment plan called Tax Recovery Program (Programa de Recuperação Fiscal), or REFIS.

100 MANAGEMENT

Pursuant to our bylaws, we are managed by a board of directors (Conselho de Administração) and a board of executive officers (Diretoria). Our bylaws provide for the establishment of a fiscal council upon request of our shareholders.

Board of Directors Our board of directors is responsible for defining our general business policies and overall guidelines, including our long-term strategies, and for controlling and monitoring our performance. The duties of our board of directors include, among other things, electing, removing and supervising our executive officers. Our board of directors has a minimum of five and a maximum of nine members. It is currently comprised of five sitting members. Our board of directors meets every other month or whenever convened by two members upon prior written notice sent at least five days before the proposed meeting and outlining the suggested agenda.

Under Brazilian Corporate Law, each director must hold at least one of our common shares and is elected by the holders of our common shares at the annual shareholders’ meeting (Assembléia Geral Ordinária). Under our bylaws, our board of directors must approve any acquisition or sale of fixed assets, including our holdings in other companies, whose value exceeds R$20 million whether in one operation or a series of operations over any 12 month period. The board of directors must also approve the creation of any lien on our assets and those of our affiliates and subsidiaries, including our holdings in other companies. Guarantees not exceeding R$20 million in favor of third parties may, however, be executed if approved by our board of directors. We must also be authorized by our board of directors to guarantee obligations or loans of more than R$20 million to our affiliates and subsidiaries. Under Brazilian Corporate Law, a director is prohibited from (i) voting on any matter in which such director has a conflict of interest with us, and (ii) borrowing funds or assets from us without prior authorization from our shareholders or from our board of directors, provided that any such transactions must be entered into under arms-length conditions. See “Description of Capital Stock—Registration of Common Shares—Shareholders’ Meetings” and “Description of Capital Stock—Board of Directors—Conflict of Interest.”

Pursuant to the regulations of the Novo Mercado listing segment, at least 20% of the members of our board of directors must be independent directors. An independent director must: (i) have no relationship with our company, except for the director’s share participation; (ii) not be a controlling shareholder, nor be a spouse, sibling or any relative up to the second degree of our controlling shareholders, or within the last three years, have had any relationship with any corporation or organization related to our controlling shareholders (excluding persons related to public schools and/or research institutions); (iii) not have been, within the last three years, our employee or officer, or an employee or officer of our controlling shareholders or any entity controlled by our company; (iv) not be our direct or indirect supplier or client to an extent that it could compromise such director’s independence; (v) not be an employee or officer of any company or organization that is offering services and/or products to, or soliciting services and/or products from, our company; (vi) not be the spouse, sibling or any relative up to the second degree of any of our directors or officers; and (vii) not receive any remuneration from us other than as a director or shareholder. Currently, one of our directors are independent.

Pursuant to Brazilian Corporate Law, shareholders of a publicly traded company who together have held common shares representing at least 15% of the total capital stock of such company for at least three months are entitled to appoint one member of the board of directors.

The members of our board of directors serve a two-year term and may be re-elected. Our bylaws do not provide for a mandatory retirement age for our directors.

101 The following table sets forth the name, age and position for each current member of our board of directors, whom were all re-elected for a two-year term on January 13, 2011, followed by a brief biographical profile of each member:

Name Age Position Fernando Luiz Alterio...... 58 Chairman and Chief Executive Officer Luciano Nogueira Neto...... 56 Vice-Chairman Luis Alejandro Soberón Kuri...... 49 Director Piero Paolo Picchioni Minardi...... 49 Director Maurizio Mauro ...... 60 Director

Directors’ Biographical Information Below is a brief summary of the business and educational experience of our directors: Fernando Luiz Alterio. Mr. Alterio holds a degree in Business Administration from Fundação Getulio Vargas. He worked in the financial industry for a number of years, and was the founder of the Palace (currently Citibank Hall) in 1982, which was São Paulo’s first modern entertainment venue. Between 1987 and 1997 he served in several capacities, including as vice-chairman of Usina de Barra, a sugarcane company. He was responsible for introducing the business model for venue naming rights to Brazil with the launch of Credicard Hall in 1998. Mr. Aterio began partnering with CIE in 1999 for the promotion of events in South America. In June 2002, Mr. Alterio was appointed our board member and, in May 2007, he was appointed our chairman. Mr. Alterio currently is our controlling shareholder and also serves as the chairman of our board of directors and our Chief Executive Officer.

Luciano Nogueira Neto. Mr. Nogueira Neto holds a degree in Business Administration from Fundação Getulio Vargas, as well as a law degree from the Universidade de São Paulo. After completing his master’s degree in Agribusiness for Development at Imperial College, he subsequently worked at Palace Promoções Ltda. and Lojas Pernambucanas as a strategic planning manager. Mr. Nogueira Neto joined us in 2007 and has been a member of our board of directors since 2008.

Luis Alejandro Soberón Kuri. Mr. Soberón holds a degree in Business Administration from Universidade Iberoamericana. He is the founder of CIE, was appointed its general manager in 2006 and currently serves as its chairman and chief executive officer. Mr. Soberón is a former member of the board of directors of Teléfonos de México S.A.B de C.V. and is a current a member of the board of directors for the Banco Nacional de México S.A., Grupo Aeroportuario do Sudeste S.A.B. de C.V. and América Movil S.A.B. de C.V. Mr. Soberón has been a member of our board of directors since 2007 and has been appointed by CIE pursuant to our shareholders’ agreement.

Piero Paolo Picchioni Minardi. Mr. Minardi holds a degree in Mining Engineering from Escola Politécnica da Universidade de São Paulo and an MBA from Institut Europeén d’Administration des Affaires, in France. He has over 17 years of experience in business consulting, finance (mergers and acquisitions) and private equity. Mr. Minardi was a senior associate at McKinsey & Co. from 1990 to 1993, worked in the investment bank department of Banco Pactual from 1995 to 1996, was the director of mergers and acquisitions at Grupo Bunge from 1996 to 1999, and held other prominent positions at Baring Private Equity Partners and AIG Capital Partners from 1999 to 2001. He served as a senior manager at Darby Overseas from 2001 to 2006. He is currently the managing partner of GIF-II and has been a member of our board of directors since May 2007. He was appointed by GIF-II pursuant to the T4F shareholders’ agreement.

Maurizio Mauro. Mr. Mauro holds a degree in Business Administration from Fundação Getulio Vargas and a master’s degree in Corporate Finance from Universidade de São Paulo. He is currently a professor at IBMEC. From 2001 to 2006 he served as Grupo Abril’s Chief Executive Officer, where he led their operational and financial recovery. Mr. Mauro previously served as President of Booz Allen Hamilton in Brazil, where he worked for 14 years. He is or has served as a member of the board of directors for several companies including,

102 Tecnisa, Dufry South America, Banco Pine, Tivit, Droga Raia and Hive Comunicação. He serves as an advisor for the Universidad de San Andrés in Buenos Aires, Argentina, INSEAD Brasil National Council and the admission committee of IBMEC. Mr. Mauro has served as our independent director since 2008.

Board of Executive Officers Our executive officers are responsible for our day-to-day management. Their individual responsibilities are established by our bylaws and our board of directors. Under our bylaws, we must have a minimum of three and a maximum of seven officers that are elected by the board of directors for a two-year term. Any officer may be removed by the board of directors before the expiration of his/her term. It is currently comprised of six members. The following table sets forth the name, age and position for each of our executive officers, who were each re-appointed to serve a two-year term on January 13, 2011: Name Age Position Fernando Luiz Alterio...... 58 Chief Executive Officer Grace Cury de Almeida Gonçalves Tourinho...... 45 General Officer—Brazil Orlando Viscardi Neto ...... 39 Chief Financial and Investor Relations Officer Alexandre Faria Fernandes ...... 37 Chief Operating Officer Flavio Fernandes ...... 41 International Affairs Officer Stephanie Mayorkis Betenson ...... 40 Chief Content Officer

Executive Officers’ Biographical Information Below is a brief summary of the business and educational experience of our executive officers: Fernando Luiz Alterio. See “—Directors’ Biographical Information.” Grace Cury de Almeida Goncalves Tourinho. Ms. Tourinho holds a degree in Economics from the Faculdade Católica de Salvador and an MBA from IBMEC. Her previous business experience includes working at PriceWaterhouseCooper in Brazil and Portugal from 1986 to 1994, as well as OPP Petroquimica/Braskem, a company in the Odebrecht group, from 1996 to 1998. From 1998 to 2005, Ms. Tourinho worked at Companhia de Bebidas das Americas AmBev, or AmBev. She served as a controller for Kimberly Clark Brazil from 2005 to 2008. From 2008 until March of 2011, Ms. Tourinho served as our Chief Financial and Investor Relations Officer. She is currently our General Officer for Brazil. Orlando Viscardi Neto. Mr. Viscardi holds a Business Administration degree and a postgraduate Business Administration and Finance degree (lato sensu) from the Fundação Getúlio Vargas. He has also pursued coursework at Columbia University in the United States and at Universidad de Desarrollo in Chile. He worked for wholesale and investment banks, including Banco InterAtlântico (from 1996 to 1997), Banco Bilbao Vizcaya Argentaria (from 1997 to 1999) and Citibank, both in Brasil and in the U.S. (from 1999 to 2006), in mergers and acquisitions and capital markets. At Citigroup, he advised Brazilian companies on listings and global ADR offerings on the NYSE. From 2006 until August 2009, he was the Chief Financial Investor Relations Officer for Rodobens Negócios Imobiliários S.A. He also served as a consultant in corporate finance and investor relations for Brazil and Chile at FTA Financial (Brazil) since July 2010. Since March 2011, he has been our Chief Financial and Investor Relations Officer. Alexandre Faria Fernandes. Mr. Fernandes holds a degree in Marketing from the Pontíficia Universidade Católica do Rio de Janeiro and a master’s degree in Marketing from Universidade Candido Mendes. He also holds an executive MBA from Insper-SP and an MBA from the Darden School of Business at the University of Virginia. His business experience includes working at PRO 2 Comunição e Eventos from 1994 to 1998. From 1998 to 1999, he worked as an artistic manager at Estilo e Performance, where he created events and marketing campaigns. From 1999 to 2000, Mr. Fernandes was responsible for sponsorship and marketing projects at Mercury Productions. In 2000, Mr. Fernandes began his career with us working in our marketing and artistic

103 departments, subsequently having responsibility in our advertising, press relations, post sale, international, and special projects areas from 2001 to 2003. Mr. Fernandes is currently our Chief Operating Officer in charge of Brazilian and international shows, including Cirque du Soleil, family shows, special projects and sporting events, among others.

Flavio Fernandes. Mr. Fernandes holds a degree in Mechanical Engineering from the Faculdade de Engenharia Industrial. He also received an executive MBA after completing coursework at the University of California, Berkeley and Columbia University. He served as the Brazilian and Venezuelan sales director and distribution director for Companhia de Bebidas das Americas-AmBev from 1994 to 2006. He has also served as AmBev’s general manager for Paraguay and Ecuador. In May of 2007, Mr. Fernandes founded BiO2 Sustentabilidade, where he is also a partner. From 2007 to 2008, he oversaw sales and marketing at Imbra and formed part of a team chosen by GP Investimentos. From 2009 to 2010, he was a business director at Gafisa S.A. Since January 2011, Mr. Fernandes has worked as our International Affairs Officer.

Stephanie Mayorkis Betenson. Ms. Mayorkis received a degree in Business Administration from Universidade Santa Ursula in Rio de Janeiro in 1997 and received an MBA from Fundação Getúlio Vargas in 2001. She developed her professional career in sales at Lojas Americanas S.A. from 1995 to 1997 and in marketing at Playcenter S.A. from 1998 to 2000. She has served as our ticketing general manager, special projects officer and theater and expositions officer since 2001. From 2008 to 2009, she was involved in production activities for her own business, while continuing to serve as our theater and expositions officer. Since February 2011, she has been our Chief Content Officer.

Ownership Interests in Our Common Shares Pursuant to Brazilian Corporate Law, each of the members of our board of directors is required to hold at least one share issued by us.

The table below indicates the number of shares issued by us held directly by members of our board of directors as of December 31, 2010:

Common Board of Directors(1) Shares Fernando Luiz Alterio(2) ...... 13,918,341 Luciano Nogueira Neto...... 1 Luis Alejandro Soberón Kuri...... 1 Piero Paolo Picchioni Minardi...... 1 Maurizio Mauro ...... 1 Total...... 13,918,345

(1) Except for Fernando Luiz Alterio, members of our board of executive officers do not hold any of our common shares. (2) In addition to shares directly held, Fernando Luiz Alterio holds an 85.0% interest in F.A. Participações, which holds 19,469,586 of our common shares. See “Principal and Selling Shareholders.”

Family Relationships Among our Directors and Executive Officers There is no family relationship among the members of our board of directors and board of executive officers.

Management Compensation Our management compensation policies are designed to attract, retain and motivate our managers and align their interests with our medium and long-term goals.

104 Our directors only receive fixed compensation, with the exception of one member who receives variable stock options equal to 5.3% of that director’s total compensation. Our executive officers receive both fixed and variable compensation. Fixed compensation includes their monthly salary as well as benefits such as health and life insurance, and variable compensation includes a bonus structure and stock options. For our executive officers, fixed compensation represents approximately 40% of their total compensation, and variable compensation represents the other 60%. These percentages can fluctuate as a result of our operating results. For our management, performance indicators encompass our operational and financial goals, which are set yearly when we create our budget. The variable compensation is tied directly to these operational and financial goals, which include our EBITDA, cash flows and revenues.

The tables below set forth the compensation of the members of our board of directors and board of executive officers for 2009 and 2010:

2010 Board of Directors Executive officers Total (in thousands of R$, unless otherwise indicated) Number of members (average for the year) ...... 2.42 7.42 9.84 Fixed annual compensation ...... 246.0 2,858.1 3,104.1 Other benefits...... 35.4 391.9 427.3 Cash bonus ...... — 393.2 393.2 Stock based compensation...... 4.1 2,414.4 2,418.4 Total ...... 285.5 6,057.6 6,343.0

2010 Board of Directors Executive Officers (in thousands of R$, unless otherwise indicated) Number of members (average for the year) ...... 2.42 7.42 Highest individual annual compensation ...... 178.2 2,058.4 Lowest individual annual compensation...... 72.9 96.6 Average individual annual compensation...... 118.0 816.4

2009 Board of Directors Executive officers Total (in thousands of R$, unless otherwise indicated) Number of members (average for the year) ...... 3.0 10.83 13.83 Fixed annual compensation ...... 288.0 4,083.3 4,371.3 Other benefits...... 33.4 306.7 340.1 Cash bonus ...... — 1,598.2 1,598.2 Stock based compensation...... — — — Total ...... 321.4 5,988.2 6,309.6

2009 Board of Directors Executive Officers (in thousands of R$, unless otherwise indicated) Number of members (average for the year) ...... 3.0 10.83 Highest individual annual compensation ...... 176.6 2,823.6 Lowest individual annual compensation...... 72.6 63.7 Average individual annual compensation...... 107.1 552.8

105 The table below set forth the compensation of the members of our board of directors and board of executive officers we have budgeted for 2011, which is subject to change during the year:

2011 Board of Directors Executive officers Total (in thousands of R$) Fixed annual compensation ...... 229.1 5,230.4 5,459.5 Other benefits...... 49.7 641.5 691.2 Cash bonus ...... — 2,822.1 2,822.1 Stock based compensation...... 2.6 456.6 459.1 Total 281.4 9,150.6 9,431.9

Management Insurance Our management is covered by a directors’ and officers’ liability policy offered by Liberty Seguros S.A., which policy covers an aggregate of R$20 million of exposure. These policies covers situations when management is responsible for payments resulting from final court orders, arbitral awards or as authorized by the insurer in accordance with the term of the policy. However, illicit or illegal acts are excluded from coverage. In addition, for the policy to cover claims related to a public stock offering, the offering documents must be submitted for review and additional premiums are charged. This policy coverage is aimed to support decisions taken by our management that they judge to be in our best interest.

Stock Option Plan and Share Compensation At an extraordinary shareholders’ meeting held on September 28, 2007, our shareholders approved a stock option plan with a four-year term for our management, key employee and service provider beneficiaries. This plan limits the aggregate number of stock options that may be granted to 5% of our capital stock outstanding at any one time over its term. As of the date of this offering memorandum, 1,881,616 shares have been granted. The objectives of the plan re to: (i) stimulate the expansion, success and achievement of our corporate purpose; (ii) align management’s interests with those of our shareholders; and (iii) allow us to attract and retain managers and employees.

The plan is administered by our board of directors, which may delegate responsibility to a committee created to administer the plan. The board of directors or the appointed committee, as the case may be, is responsible for defining, in accordance with the terms of the stock option plan, the following: • creating and executing the general norms for acquiring shares pursuant to the plan, as well as interpreting the plan’s rules; • establishing performance goals for our managers, key employees and service providers, in order to set objective criteria for electing beneficiaries; • electing plan beneficiaries on a discretionary basis and authorizing the grant of options pursuant to the plan, establishing all conditions for purchasing the shares granted as well as modifying such conditions as necessary to comply with prevailing laws, standards or regulations; and • issuing new shares within the limits of our authorized capital stock to effect the exercise of the option.

106 The table below provides an overview of the stock options granted to the members of our Board of Directors and Board of Executive Officers pursuant to this plan. As of December 31, 2010 Board of Directors Executive Officers(5) Unvested options Number of options ...... 25,131 523,611 Vesting period(1) ...... 25%perannum 25% per annum Exercise period ...... 3years from vesting 3 years from vesting Transfer restriction period...... 1year from exercise 1 year from exercise Average exercise price (in R$ per option)(2)(3) ...... 16.4 10.98 Fair value of option (in R$ per option)(4) ...... 16.4 10.96 Vested options Number of options ...... 25,131 1,115,519 Exercise period ...... 3years from vesting 3 years from vesting Transfer restriction period...... 1year from exercise 1 year from exercise Average exercise price (in R$ per option)(2)(3) ...... 16.4 10.98 Fair value of option (in R$ per option)(4) ...... 0.16 1.40 to 1.52 (1) We granted options pursuant to our stock option plan in September 2007, October 2007, July 2008, February 2010, March 2010 and January 2011. (2) Represents the weighted average exercise price of the options. (3) The exercise price of some of the options will be adjusted by the CDI rate until their exercise date. (4) Calculated using the Black-Scholes option pricing model assuming a sale price per share equal to R$16.50, a standard deviation of 32.1% and a risk-free return of 12.1%. (5) A total of 192,223 options have been granted to non-executive officers under the plan and are not reflected on this table. The terms, exercise price, vesting period and any transfer restrictions are established individually for each beneficiary pursuant to a stock option contract signed with such beneficiary. The exercise price for the options granted and outstanding as of the dates of this offering memorandum is R$10.98 per common share. For certain of these options, the exercise price is adjusted by the CDI rate applied through the date of the respective exercise. The minimum exercise price for options to be granted in the future will be set at the initial offering price of our common shares in this offering, adjusted for inflation by the IGP-M index or such other index as our board of directors decides. The exercise period is three years after each tranche vests. We structure our grants under the plan into annual tranches with various vesting periods which is intended to align our employee’s interests with our company’s interest over different time periods, encouraging grant recipients to work to increase the value of our shares over the short-, medium- and long-term. If a beneficiary retires or chooses to cease working for us, (i) all unvested options as of the date of the employee’s withdrawal terminate immediately and (ii) vested options as of such time will remain exercisable for 30 days following the date of the employee’s withdrawal, after which they will automatically terminate. If a beneficiary is dismissed without just cause or in the absence of any violation of his or her responsibilities as a manager, (i) unvested options as of the date of such dismissal will automatically terminate and (ii) vested but unexercised options as of the date of such dismissal will be exercisable for 30 days after the date of such dismissal, after which they will automatically terminate. If a beneficiary is dismissed for just cause or for the violation of his or her responsibilities as a manager, all unvested and vested options as of the date of such dismissal will automatically terminate. If a beneficiary becomes permanently disabled, (i) unvested options as of the date of such permanent disability will automatically become vested and exercisable in accordance with the terms of the beneficiary’s stock option plan and (ii) vested options as of the date of such permanent disability will be exercisable in accordance with the terms set forth in the beneficiary’s stock option plan. The options granted under our stock option plan, whether vested or unvested, are personal and non-transferable, except through inheritance on a participant’s death. In case of death, (i) unvested options as of such time will automatically become vested and exercisable, but will automatically terminate if they have not been exercised within one year of the beneficiary’s death and (ii) vested options as of such time will remain exercisable for one year after the beneficiary’s death, after which they will automatically terminate.

107 PRINCIPAL AND SELLING SHAREHOLDERS

Principal Shareholders The table below sets forth certain information of our common shares as of the date of this offering memorandum and immediately after this offering by each of our shareholders owning 5% or more of our common stock, the selling shareholders and by our management.

Before the offering After the offering(1) Shareholder Number of Shares (%) Number of Shares (%) F.A. Comércio e Participações S.A.(2)...... 19,469,585 33.9% 19,469,585 28.1% Fernando Luiz Alterio ...... 13,918,341 24.2% 6,444,203 9.31% GIF-II Fundo de Investimentos em Participações(3) ...... 13,504,582 23.5% 9,371,823 13.5% CIE Internacional S.A. de C.V...... 10,573,800 18.4% 4,594,490 6.6% Management(4) ...... 4 — 4 — Free Float ...... — — 29,310,345 42.4% Total ...... 67,466,312 100% 69,190,450 100%

(1) Without considering the exercise of the over-allotment option. (2) Fernando Luiz Alterio (our chairman and Chief Executive Officer) and CIE Internacional S.A. de C.V. hold 85.0% and 15%, respectively, of F.A. Comércio e Participações S.A. (3) The GIF-II Fundo de Investimentos em Participações holds 13,504,582 shares, or 23.5% of our capital stock. GIF-II Fundo de Investimento em Participações is managed by GIF Gestão de Investimentos e Participações Ltda., which is responsible for investment and divestiture decisions, as well as voting or advice about voting in our general meetings. (4) Not including Fernando Luiz Alterio.

FA Comércio e Participações S.A. FA Comércio e Participações S.A. is a corporation (sociedade por ações) organized under the laws of Brazil and is a holding company for two of our controlling shareholders, Fernando Luiz Alterio, and CIE, with 85.0% and 15.0%, respectively, of the outstanding shares of FA Comércio e Participações S.A.

GIF-II Fundo de Investimentos em Participações GIF-II Fundo de Investimentos em Participações is a private equity fund organized under the laws of Brazil and is managed by GIF Gestão de Investimentos e Participações Ltda., which directs for the fund’s investment strategy and voting decisions at our shareholder meetings. The fund currently holds 23.5% of our common shares.

CIE Internacional S.A. de C.V. CIE Internacional S.A. de C.V. is a corporation (sociedade anónima) organized under the laws of Mexico and controlled by Corporación Interamericana de Entretenimiento S.A.B. de C.V., a public company listed on the Mexican Stock Exchange. CIE is one of the leading entertainment companies in Latin America and was our controlling shareholder until May 2007.

Fernando Luiz Alterio Fernando Luiz Alterio is our chairman and Chief Executive Officer. For more information on Mr. Alterio, see “Management—Board of Directors.”

108 Shareholders’ Agreements F.A. Participações Shareholders’ Agreement On May 14, 2007, our shareholders CIE and Fernando Luiz Alterio and, as intervening parties, F.A. Participações and GIF-II, entered into a shareholders’ agreement, as amended on January 22, 2011, governing the relationship of CIE and Fernando Luiz Alterio as shareholders of F.A. Participações and providing for non-compete and exclusivity obligations applicable to CIE and Fernando Luiz Alterio, a right to publicly offer our common shares held by F.A. Participações, as well as certain sales, purchase and exchange rights between CIE and Fernando Luiz Alterio with respect to our common shares and the common shares of F.A. Participações. The F.A. Participações shareholders’ agreement has a term of 15 years from its date of execution, automatically renewable for additional 5-year periods. All of our common shares held by CIE or Fernando Luiz Alterio as a result of any transfer, sale or exchange pursuant to the F.A. Participações shareholders’ agreement will remain subject to the T4F shareholders’ agreement.

Exclusivity and non-competition The F.A. Participações shareholders’ agreement requires Fernando Luiz Alterio to engage in business activities and make investments in the entertainment and event promotion industries exclusively through our company, and prohibits Fernando Luiz Alterio from, directly or indirectly, except through our company: (i) promoting, sponsoring or producing shows or events; (ii) providing consulting services; (iii) entering into agreements or joint ventures; (iv) investing in the capital stock of other companies; or (v) otherwise exploring business opportunities or other activities, in each case, in the entertainment and event promotion industries in Brazil. The foregoing does not prohibit Fernando Luiz Alterio from engaging or investing in, or managing, communication, marketing or publicity businesses so long as such activities do not involve the sale of corporate sponsorships.

The F.A. Participações shareholders’ agreement also requires CIE to engage in business activities and make investments in the entertainment and event promotion industries in Brazil exclusively through our company and prohibits CIE from, directly or indirectly, except through our company: (i) promoting, sponsoring or producing shows or events; (ii) providing consulting services; (iii) entering into agreements or joint ventures; (iv) investing in the capital stock of companies; or (v) or otherwise exploring business opportunities or other activities, in each case, in the entertainment and even promotion industries in Brazil.

Management and voting Pursuant to the F.A. Participações shareholders’ agreement, F.A. Participações will be managed by a board of directors of three to five members, providing CIE with the right to appoint one board member for so long as CIE remains a holder of at least 5% of the capital stock of F.A. Participações.

CIE’s tag-along and exchange rights The F.A. Participações shareholders’ agreement provides that, prior to the completion of this offering, Fernando Luiz Alterio will have the right, subject to CIE’s tag-along and exchange rights described below, to sell all or part of the common shares held by him in F.A. Participações. Should Fernando Luiz Alterio sell a controlling interest in F.A. Participações, CIE will be entitled to (i) participate in any such sale to a third party and sell all of its common shares of F.A. Participações under the same terms and conditions as Fernando Luiz Alterio or (ii) to exchange the shares it holds in F.A. Participações for a percentage of our common shares equal to the percentage of common shares CIE holds in F.A. Participações at such time, to be carried out by means of a corporate reorganization to be agreed to in good faith between CIE and Fernando Luiz Alterio. CIE will have the right, but not the obligation, to sell our common shares held by it in this offering.

Public offering The F.A. Participações shareholders’ agreement provides that Fernando Luiz Alterio will have the exclusive right to cause F.A. Participações to sell all or part of the common shares it holds in us by means of a public

109 offering of our common shares. Fernando Luiz Alterio will have the sole right to define the terms and conditions of the offer and CIE will be obligated to vote in favor of, and to complete all actions necessary for, the offering as requested by Fernando Luiz Alterio.

Exchange rights and call option in favor of CIE Upon completion of this offering and after our legal proceeding with Clube Atlético Mineiro (for more information, see “Business—Legal and Administrative Proceedings—Civil Proceedings”) is terminated, CIE will have the right, subject to Fernando Luiz Alterio’s purchase option described below, to exchange all of the common shares held by it in F.A. Participações for a percentage of our common shares held by F.A. Participações equal to the indirect equity participation CIE holds in us through F.A. Participações immediately prior to such exchange (provided however that such exchange shall be limited to the delivery to CIE of common shares representing no more than 5.6% of our capital stock). Should CIE exercise the exchange option described above, Fernando Luiz Alterio will have the option to purchase, and CIE the obligation to sell, all of the shares proposed to be so exchanged at a price per common share equal to the 30-day volume-weighted average trading price of our common shares during the 30-day period prior to the date of Fernando Luiz Alterio’s exercise of such option.

In addition, upon completion of this offering, the F.A. Participações shareholders’ agreement provides CIE with the option to purchase, and Fernando Luiz Alterio the obligation to sell, during the six-month period commencing on the date that our common shares begin trading on the BM&FBOVESPA, a number of shares held by Fernando Luiz Alterio in F.A. Participações such that CIE can increase its participation in F.A. Participações to up to 47.5% of the capital stock of F.A. Participações, at a price per common share based on the net assets of F.A. Participações as of the date of exercise of the call option, plus the greater of (i) the initial offering price in this offering and (ii) the 30-day (or less, if applicable) volume-weighted average trading price of our common shares prior to the date of such exercise, to be adjusted for the number of our common shares outstanding and the participation of F.A. Participações in our capital stock. Such option will terminate if CIE holds, for whatever reason, 47.5% or more of the capital stock of F.A. Participações.

The F.A. Participações shareholders’ agreement further provides that for a period of up to 30 days after the second anniversary of CIE’s exercise of the purchase option described above, CIE will have the right to request that Fernando Luiz Alterio purchase from CIE the common shares of F.A. Participações purchased by CIE by means of such call option, at a price per common share based on the net assets of F.A. Participações as of such date, plus the 30-day period (or lesser, if applicable) volume-weighted average trading price of our common shares prior to such date, to be adjusted for the number of our common shares outstanding and the participation of F.A. Participações in our capital stock. Should Fernando Luiz Alterio not purchase such shares within 90 days of CIE’s request, CIE will have the right to exchange the shares it holds in F.A. Participações for a percentage of our common shares equal to the percentage of common shares CIE holds in F.A. Participações at such time, to be carried out by means of a corporate reorganization to be agreed to in good faith between CIE and Fernando Luiz Alterio.

Restrictions on exercise of exchange rights and sale of F.A. Participações by CIE The F.A. Participações shareholders’ agreement provides that for so long as the legal proceeding involving our company and the soccer club Atlético Mineiro remains pending (for more information, see “Business—Legal and Administrative Proceedings”), for which CIE has assumed certain indemnification obligations (for more information, see “Related-Party Transactions”), CIE will be prohibited from (i) disposing or otherwise transferring any of the common shares it holds in F.A. Participações and (ii) exercising the exchange rights described above; provided, however, that such prohibition will not apply to any common shares acquired by CIE by means of the purchase option described above nor to any of our common shares held directly by CIE.

110 Any controversy or dispute arising from the shareholders’ agreement will be resolved and settled by arbitration in Brazil, according to the rules of the Brazilian-Canadian Chamber of Commerce.

T4F Shareholders’ Agreement On May 14, 2007, our shareholders F.A. Participações, CIE, GIF-II and Fernando Luiz Alterio entered into a shareholders’ agreement, as amended on April 30, 2009, January 22, 2011 and March 22, 2011, which provides for voting obligations with respect to our management, change of control provisions, rights of first refusal and tag-along and drag-along rights. The T4F shareholders’ agreement has a term of 20 years from its date of execution, automatically renewable for additional 20-year periods.

Management and voting The T4F shareholders’ agreement regulates our joint management by the controlling shareholders and selling shareholders, whereby Fernando Luiz Alterio, CIE and GIF-II are required to convene prior to, and coordinate their votes at, any of our shareholders’ or board of directors’ meetings. The T4F shareholders’ agreement sets forth that any decision relating to the following items will be made by the parties based on a majority vote of our common shares held directly or indirectly by them, subject to the qualification described below: (i) changes to our bylaws relating to our corporate purpose or minimum dividend; (ii) reductions in capital stock or issuance of common shares or other securities; (iii) any asset acquisition not contemplated in the approved annual budget that exceeds R$25.0 million; (iv) creation of any guarantees in excess of R$30.0 million; (v) any merger, acquisition, spin-off, incorporation or corporate restructuring; (vi) only transactions with related parties; (vii) management compensation that exceeds the value approved in the annual approved compensation plan by more than 5%; (viii) filing any voluntary bankruptcy proceeding or related petitions; (ix) dissolution or liquidation, including the sale of all or substantially all of our assets; and (x) the hiring and termination of our independent auditors. With respect to items (i), (v) (in this case only for transaction exceeding ten percent of our shareholders’ equity and involving a third party), (viii) and (ix), any such vote will also require the favorable vote of GIF-II for so long as GIF-II holds at least 5% of our capital stock. If such matters have not been voted on prior to a shareholders’ or board of directors’ meeting, such item will be excluded from the meeting’s agenda and the meeting will be suspended until resolution by the shareholders on the subject.

The T4F shareholders’ agreement also provides that, upon completion of this offering, the parties may appoint directors to our board of directors as follows: (i) if GIF-II owns directly or indirectly (a) 15% to 20% of our capital stock, it will be entitled to appoint two directors; (b) 5% to 15%, it will be entitled to appoint one director; and (c) less than 5%, it will not be entitled to appoint a director; and (ii) if CIE owns directly or indirectly (a) more than 10% of our capital stock, it will be entitled to appoint one director; and (b) less than 10%, it will not be entitled to appoint a director. The shareholders’ agreement provides that our chief executive officer will be appointed by F.A. Participações and our chief financial officer will be appointed by GIF-II, as long as GIF-II holds at least 15% of our common shares from candidates identified by F.A. Participações. F.A. Participações’ would be entitled to veto up to two of GIF II’s nominations for Chief Financial Officer.

The T4F shareholders’ agreement further provides that the parties will always vote to elect individuals appointed by F.A. Participações (or Fernando Luiz Alterio) to fill the majority of positions on our board of directors, even if such an election would prevent other parties from electing their representatives. Accordingly, if the parties’ votes are not sufficient to elect all representatives of the parties under the terms of the agreement as described above, the following order of election will be observed: the first to be elected will be representatives of Fernando Alterio, such that they compose the majority of the board of directors; the second to be elected will be representative(s) of GIF-II; and the last to be elected will be the representative of CIE, to the extent that CIE and GIF-II are entitled to elect board members under the agreement.

Rights of first refusal, tag-along rights, drag-along rights The T4F shareholders’ agreement provides each of the parties thereto with a right of first refusal with respect to any sale of our common shares, exercisable ratably and under the same terms and conditions applying

111 to such sale. Under the agreement, the parties thereto are also entitled to participate in any sale of our common shares by the other shareholders to a third party and sell their common shares ratably and under the same terms and conditions (tag-along right). The right of first refusal and tag-along right, however, are not applicable to sales made (i) to affiliates of the selling party or (ii) through the BM&FBOVESPA although (in the case of (ii), the selling party must provide prior notice of the proposed sale to the other parties). Additionally, the T4F shareholders’ agreement provides F.A. Participações and GIF-II with the right to require CIE to sell its common shares, at the same price and payment conditions offered to them by the third party, in the event that CIE does not exercise its right of first refusal or tag-along right (drag-along right). F.A. Participações and CIE have also agreed not to sell or otherwise transfer their common shares for a period of one year following the completion of this offering.

Dispute resolution Any controversy or dispute arising from the shareholders’ agreement will be resolved and settled by arbitration in Brazil, according to the rules of Brazilian-Canadian Chamber of Commerce.

Share Purchase Option Agreement On May 10, 2007, we and our shareholders F.A. Participações and GIF-II and, as intervening parties, Fernando Luiz Alterio and A.D.T.S.P.E. Empreendimentos e Participações S.A., entered into a share purchase option agreement, as amended on September 30, 2008 and on March 22, 2011, by means of which F.A. Participações transferred to GIF-II 2,011,321 common shares representing 3.5% of our capital stock, for a purchase price of R$1.00 on March 22, 2011.

112 RELATED-PARTY TRANSACTIONS All of our related-party transactions are carried out at arm’s-length and in accordance with ordinary market practices. We adhere to rules established by Brazilian Corporate Law in addition to our own internal corporate process for the approval of related-party transactions. Pursuant to Brazilian Corporate Law, our directors and executive officers are prohibited from (i) using any asset of the company in detriment of the company without compensation, (ii) receiving, by reason of their position, any type of direct or indirect benefit from third parties, and (iii) participating in any transaction, or resolution with respect thereto taken by management, in which they have a conflict of interest. Conflicts of interest arise in transactions that are not carried out at arm’s-length with related parties and certain other transactions that could possibly be detrimental to us. Pursuant to our bylaws, our board of directors must approve at a board of directors’ meeting any transaction or series of transactions involving any directly or indirectly related party, which include (i) any of our controlling shareholders, and (ii) any person (including relatives of such person to the third degree) or corporation that directly or indirectly hold any shares in our capital stock or in the capital stock of any of our subsidiaries. We will also adhere to all disclosure requirements as a result of the listing of our shares on the Novo Mercado segment of BM&FBOVESPA. Below is a description of our transactions with related parties.

Service Agreements On February 2, 2009, we entered into a two-year services agreement with LNNF Assesssoria Ltda., or LNNF, a company controlled by Luciano Nogueira Neto, a member of our board of directors. Under this agreement, LNNF has provided general consulting services to us in connection with the Cirque du Soleil Quidam show. As of the date of this offering memorandum, we had paid LNNF R$78,800 for these consulting services. This agreement was terminated in February 2011. On January 2, 2008, we executed a management and services agreement with our subsidiary Vicar, in which we hold a 75% interest together with the minority holders, ABCDEFGH Participaçoes, S.A. and Mr. Carlos Alberto Col, which hold the remaining 15% and 10%, respectively. Under this agreement, we provide general and administrative services, including auditing services provided by our independent auditors that we deem necessary for Vicar. Vicar is responsible for paying us the portion of general and administrative expenses that we incur in the performance of those services, calculated on a cost basis. The agreement does not have a termination date and may be terminated by either party upon 30 days’ prior written notice. During 2010, we received approximately R$612,000 for these services.

Lease Agreements On July 1, 2009, we entered into a rent-free lease agreement with NAC Assessoria S.S., or NAC, a company controlled by Fernando Luiz Alterio, our chairman of the board, Chief Executive Officer and controlling shareholder. Under this agreement, NAC has the right to use, free of charge, the office where our corporate headquarters are located, as its registered address and for mailing purposes. This agreement will terminate in March 2012.

Share Purchase Agreement On May 14, 2007, we, Fernando Luiz Alterio, F.A. Participações and CIE entered into a share purchase agreement for the sale of CIE’s controlling interest in us to Fernando Luiz Alterio and F.A. Participações. As part of that agreement, CIE and Fernando Luiz Alterio have agreed to certain indemnification obligations, with CIE responsible for 100% of any losses arising from events or facts existing prior to December 1, 2000 and CIE and Fernando Luiz Alterio responsible for 85% and 15%, respectively, of losses arising from events or facts existing between December 1, 2000 and May 14, 2007, to the extent that any such losses exceed an aggregate of US$5.0 million, in any case provided that a notification is delivered to the indemnifying party in accordance with the terms and conditions of the share purchase agreement. As of December 31, 2010, CIE had outstanding indemnification payment obligations with respect to them and us in the amount of R$12.2 million and Fernando Luiz Alterio did not have any outstanding payment obligations pursuant to this agreement. In addition, we offset dividends payable in May 2010 to CIE in the amount of R$3.2 million in partial satisfaction of their indemnification obligations to us.

113 Guarantee Agreements In the ordinary course of our business, certain of our directors, including Fernando Luiz Alterio and Luciano Nogueira Neto, guarantee to certain of our lease obligations, without receiving any compensation.

In addition, our controlling shareholders and selling shareholders have pledged all of their common shares in our company as collateral for the Bradesco debentures. Bradesco has agreed to release its lien on those shares that are being sold in this offering, but will maintain the lien on the remaining shares that continue to be held by our controlling shareholders and selling shareholders. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness— Bradesco Debentures.”

114 DESCRIPTION OF CAPITAL STOCK

Set forth below is a brief discussion of certain significant provisions of our bylaws, Brazilian Corporate Law, CVM regulations, and the listing rules of the Novo Mercado segment of the BM&FBOVESPA relating to our capital stock, management, periodic information disclosure and other corporate matters. This is a descriptive summary, and therefore may not contain all of the information that may be important to you.

General We are a corporation, or sociedade por ações de capital aberto, organized in accordance with Brazilian law. Our corporate headquarters are located in the city of São Paulo, in the State of São Paulo. We are a public corporation registered with the CVM.

The main trading market for the shares to be issued in this offering will be BM&FBOVESPA. On March 11, 2011, we entered into the Novo Mercado Participation Agreement (Contrato de Participação no Novo Mercado) with BM&FBOVESPA, or Participation Agreement, requiring us to comply with special corporate governance and disclosure requirements for admission to the Novo Mercado listing segment. This agreement will enter into effect as of the date of the publication of the Announcement of Commencement of the Offering (Anúncio de Início da Oferta) and trading on our common shares will commence on the first day after such announcement, under the symbol “SHOW3.”

Capital Stock As of December 31, 2010, our capital stock was R$49.5 million, fully paid-in and divided into 229,865,248 common registered, book-entry shares, without par value. Our capital stock may be increased to up to 400 million shares by a board of directions’ decision. Our shareholders must approve any capital increase above the authorized amount. Pursuant to the rules of the Novo Mercado segment of the BM&FBOVESPA, our capital stock must consist exclusively of common shares.

On December 30, 2010, F.A. Participações approved a reduction of its corporate capital and agreed to transfer 7,826,912 and 1,379,191 of our common shares held by F.A. Participações to Fernando Luiz Alterio and CIE Internacional, respectively. The transfer of such shares to Fernando Luiz Alterio and CIE Internacional was implemented on March 15, 2010, after the 30-day period for objection of creditors of F.A. Participações pursuant to the Brazilian Corporate Law lapsed.

We subsequently performed a reverse stock split that reduced the number of our shares at a ratio of 4:1 on January 13, 2011. After the reverse split, our capital stock consisted of 57,466,312 fully paid-in common registered, book-entry shares, without par value.

115 History The table below presents the price paid by our management and principal shareholders to acquire our common shares in the last five years, considering that no options have been exercised pursuant to our stock options plan to date.

Number of Common Date Transaction Shares Price per Common Share (R$) April 27, 2006 Capital increase 6,582,505 new shares(1) R$0.01, considering a capital increase of R$65,825.05 March 31, 2007 Transfer of our shares held by Musiarte 719,350 Not Applicable(4) Comércio e Participações Ltda. to F.A. Participações, due to its merger into F.A. Participações April 20, 2007 Sale of Fernando Luiz Alterio’s shares 28,243,672 R$0.067, considering a total sale price of to F.A. Participações R$1.9 million May 4, 2007 Integration of capital by F.A. Participações in 28,963,022 R$0.089, considering total sale price of ADTSPE (which was later merged into us) R$2.6 million May 14, 2007 Capital increase 36,778,439 new shares(2) R$2.74672, considering a capital increase of R$101.0 million May 31, 2007 Capital increase/ratification(3) 36,778,439 new shares(2) R$2.75895, considering a capital increase of R$101.5 million October 3, 2008 Capital reduction of F.A. Participações of R$7.1 24,365,717 shares R$0.2924, considering the capital reduction million through which Fernando Luiz Alterio of R$7.1 million became our direct shareholder December 30, 2010 Capital reduction of F.A. Participações of 7,826,912 shares R$2.1881, considering the capital reduction R$20.1 million, with an increase in direct delivered to Fernando of R$20.1 million. participation of Fernando Luiz Alterio and Luiz Alterio and CIE in our capital. 1,379,191 shares delivered to CIE. March 22, 2011 Sale of common shares from F.A. 2,011,321 R$0.000000497, considering a total purchase Participações to GIF-II pursuant to the share price of R$1.00. purchase option.(5)

(1) Our share capital as of December 31, 2005 was R$29,380,769.24. On April 27, 2006, Fernando Luiz Alterio subscribed to our shares, increasing our share capital to R$29,446,594.29, divided into 193,086,809 common shares with no par value. (2) CIE subscribed for our shares by conferring shares of companies in Argentina, increasing our share capital to R$130.5 million divided into 229,865,248 common shares with no par value. (3) Re-ratification of the capital increase described in footnote (2), increasing our share capital to R$130.9 million, divided into 229,865,248 common shares with no par value. (4) Musiarte Comércio e Participações Ltda. was also controlled by Luiz Fernando Alterio. The shareholders’ equity of Musiarte Comércio e Participações Ltda. at the time was at R$1.1 million. (5) On May 10, 2007, we and our shareholders F.A. Participações and GIF-II and, as intervening parties, Fernando Luiz Alterio and A.D.T.S.P.E. Empreendimentos e Participações S.A., entered into a share purchase option agreement, as amended on September 30, 2008 and on March 22, 2011, by means of which F.A. Participações transferred to GIF-II 2,011,321 common shares representing 3.5% of our capital stock, for a purchase price of R$1.00.

Rights of Common Shares Each of our common shares entitles its holder to one vote at our annual or special shareholders’ meetings. Pursuant to the rules of the Novo Mercado, our capital stock must be comprised exclusively of common shares. Holders of our common shares are entitled to dividends or other distributions made with respect to our common shares in proportion to their share of the amount of the dividend or distribution. In addition, upon our liquidation and after payment of all our liabilities, our shareholders are entitled to receive any remaining assets as capital reimbursement ratably in accordance with their respective participation in the total amount of our issued and outstanding shares. Our shareholders have the right, but not the obligation, to subscribe to our future capital increases.

116 Registration of Common Shares Our common shares are held in book-entry form with Banco Bradesco S.A. Transfer of our shares is carried out by means of an entry by Banco Bradesco S.A. in its accounting system, debiting from the depositing shareholders’ account and crediting the buyers’ account, upon a written order of the transferor or a judicial authorization or order.

Stock Option Plans On September 28, 2007, our board of directors approved our first stock option plan and on January 13, 2011 voted to implement the plan. For more information, see “Management—Stock Option Plan and Share Compensation.”

Shareholders’ Meetings At our shareholders’ meetings, our shareholders have the authority to take any action relating to our corporate purpose and to adopt such resolutions as they deem necessary. Shareholders at the annual shareholders’ meeting have the exclusive right to approve our financial statements and to determine the allocation of our net income and the payment of dividends with respect to the fiscal year ended immediately prior to the shareholders’ meeting. The election of our directors typically takes place at the annual shareholders’ meeting, although under Brazilian Corporate Law it may also occur at a special shareholders’ meeting. Members of the fiscal council, if created, may be elected at any shareholders’ meeting.

An extraordinary shareholders’ meeting may be held at any time, including concurrently with the annual shareholders’ meeting. Under Brazilian Corporate Law, the following actions, among others, may be taken only at a shareholders’ meeting: • amendment to our bylaws; • election and dismissal of the members of our board of directors; • approval of interim financial statements and our audited financial statements on an annual basis; • suspension of the exercise of a shareholder’s rights in the event of noncompliance with Brazilian Corporate Law or our bylaws; • approval of the valuation of assets offered by a shareholder to us as payment for the subscription of shares of our common shares; • approval of issuance of shares in excess of the limit of our authorized capital; • determination of the compensation of our executive officers, board of directors and fiscal council, if and when created; • approval of any transaction involving our transformation into a limited liability company, consolidation, merger or spin-off; • approval of any transaction involving our dissolution or liquidation, the appointment and dismissal of the respective liquidator and the official review of the reports prepared by it; • authorization of issuance of debentures by us, except for issuances which our board of directors has been authorized to decide pursuant to a previous decision of our shareholders; • authorization to delist from the Novo Mercado; • appointment of a specialized firm to prepare a valuation report with respect to the fair value of our common shares in the event we become a private company or delist from the Novo Mercado; • approval of stock option plans for our directors, executive officers and certain key employees, or those of our subsidiaries or controlled companies, or for individuals rendering services to us or to our direct or indirect subsidiaries or to our controlled companies; and • performance of other actions provided for by law and our bylaws.

117 Under Brazilian Corporate Law, neither our bylaws nor actions taken at a shareholders’ meeting may deprive a shareholder of any of the following rights: • the right to participate in our ratable distribution of profits; • in the event of our liquidation, the right to participate in the distribution ratably in accordance with their respective participation in the total amount of our issued and outstanding common shares; • the right to monitor our management, in accordance with applicable law; • the preemptive rights to subscribe for shares, convertible debentures or warrants, except in some specific circumstances under Brazilian law described in “—Preemptive Rights;” and • the right to withdraw from our company in the events provided in Brazilian Corporate Law, such as described in “—Withdrawal Rights and Redemption—Withdrawal (Appraisal) Rights.”

Quorum As a general rule, Brazilian Corporate Law provides that a quorum for purposes of a shareholders’ meeting consists of shareholders representing no less than 25% of our capital stock with the right to vote, and on second call, consisting of any number of shareholders with the right to vote. When the purpose of a shareholders’ meeting is to amend our bylaws, a quorum consists of shareholders representing at least two thirds of our issued and outstanding capital on the first call, and any percentage on the second call.

Generally, the affirmative vote of shareholders representing at least the majority of our issued and outstanding common shares present at a shareholders’ meeting in person, or represented by a proxy, is required to approve any proposed action, with abstentions not taken into account. However, our bylaws provide that approval of a specialized firm to prepare a valuation report of the fair value of our common shares requires the affirmative vote of a majority of the holders of our outstanding shares who are present at a shareholders’ meeting. A quorum at such meeting consists of at least 20% of the holders of our outstanding shares on the first call, and any percentage of these shareholders, on the second call.

In addition, under a shareholders’ agreement, entered into on May 14, 2007 and amended on April 30, 2009 and on January 22, 2011, our shareholders agreed to discuss and approve the following actions prior to being submitted to a shareholders’ meeting:

Notice of Our Shareholders’ Meetings Brazilian Corporate Law sets forth that notices for all shareholders’ meetings must be published on three different dates in the Diário Oficial do Estado de São Paulo, and in another widely circulated newspaper, currently the newspaper Valor Econômico. The first notice must be published no later than 15 days prior to the date of the meeting; the second, no later than eight days. However, in certain circumstances, at the request of any shareholder and after hearing us, the CVM may require that the first notice be published 30 days in advance of the shareholders’ meeting.

Location of Our Shareholders’ Meetings Our shareholders’ meetings take place at our headquarters in the city of São Paulo, State of São Paulo. Brazilian Corporate Law allows our shareholders to hold meetings outside our headquarters in the event of force majeure, provided that the meetings are held in the city of São Paulo and the relevant notice contains a clear indication of the place where the meeting will occur.

118 Who May Call Our Shareholders’ Meetings In addition to our board of directors, shareholders’ meetings may be called by: • any shareholder, if our directors fail to call a shareholders’ meeting within 60 days after the date they were required to do so under applicable law and our bylaws; • shareholders holding at least 5% of our capital stock, if our directors fail to call a meeting within eight days after receipt of a justified request to call the meeting by those shareholders indicating the proposed agenda; • shareholders holding at least 5% of our shares if our directors fail to call a meeting within eight days after receipt of a request to call the meeting for the creation of the fiscal council; and • our fiscal council, if one is created, if the board of directors fails to call an annual shareholders’ meeting within one calendar month after the date it was required to do so under applicable law. The fiscal council, if created, may also call a special shareholders’ meeting if it believes that there are important or urgent matters to be addressed.

Conditions for Admission to Our Shareholders’ Meetings Shareholders attending a shareholders’ meeting must produce evidence of their status as shareholders and evidence that they hold the shares they intend to vote.

A shareholder may be represented at a shareholders’ meeting by a proxy appointed less than a year before the meeting, which proxy must be a shareholder, a corporate officer, a lawyer or a financial institution. An investment fund must be represented by its investment fund officer.

Shareholders are responsible and liable before us for the consistency, full content, authenticity, veracity and accuracy of the data and documents submitted to obtain the digital certificate, throughout its term of validity, and we are not liable for any difference and incompatibility that may exist as well as for any improper use and/or use by a non-authorized representative.

Board of Directors Our board of directors is the main deliberative body responsible for determining the direction of our business operations, including our long-term strategy. Our board of directors consists of five to nine members. Our bylaws outline the general attributes of our board of directors.

Meetings of our board of directors generally take place every other month, or more frequently, as necessary. Decisions of the board of directors are made by an affirmative vote of the majority of its members present in a meeting. In accordance with Brazilian Corporate Law, a member of the board of directors is prohibited from voting in any meeting, or participating in any business operation or activity, in which such member has a conflict of interest with the company.

Election of Members of Our Board of Directors According to the regulations of the Novo Mercado, at least 20% of the members of our board of directors must be independent directors, meaning that none of these directors: (1) has any direct link to the company, except as a shareholder; (2) is a controlling shareholder, spouse or at least second-degree relative of a controlling shareholder, nor is currently nor has been linked to a company or a related entity that is owned by a controlling shareholder in the last three years; (3) has been an employee or director of the company, of a controlling shareholder or of an entity controlled by the company in the last three years; (4) has been a supplier or purchaser, directly or indirectly, of services and/or products of the company to a degree that would compromise its independence; (5) has been an employee or manager of a company or entity that offered or requested services

119 and/or products of the company; (6) is a spouse or at least second-degree relative of any manager of the company; and (7) has received any compensation from the company beyond payment for service as a director (dividends from share ownership are excluded from this restriction).

Brazilian Corporate Law permits the adoption of cumulative voting upon a request by shareholders representing at least 10% of our voting capital, according to which each share receives a number of votes corresponding to the number of members of the board of directors. The shareholders holding, individually or jointly, at least 15% of our common shares are entitled to vote separately to appoint one director. As prescribed by CVM Instruction 282 dated June 26, 1998, the threshold to trigger cumulative voting rights may vary from 5% to 10% of the total voting capital stock. Taking into consideration our current capital, shareholders representing 5% of our voting capital stock may request the adoption of cumulative voting to elect the members of our board of directors. If cumulative voting is not requested, our directors will be elected by the majority vote of the holders of our common shares, in person or represented by a proxy. Our directors are elected by our shareholders at an annual shareholders meeting for a two-year term.

According to Brazilian Corporate Law, each director must hold, at least, one of our shares.

Conflicts of Interest Brazilian Corporate Law prohibits a director from: • performing any charitable act at our expense, except for such reasonable charitable acts for the benefit of our employees or of the community in which we participate, upon approval by the board of directors; • receiving, by virtue of his or her position, any direct or indirect personal benefit from third parties without authorization in our bylaws or in a shareholders’ meeting; • taking part in a corporate transaction in which he or she has an interest that conflicts with our interests or in the deliberations undertaken by our directors on the matter; • borrowing money or property from us or use our property, services or credit for his or her own benefit or for the benefit of a company or third party in which he or she has an interest, without the prior approval at a shareholders’ meetings or of our board of directors; • taking advantage of any commercial opportunity for his or her own benefit or for the benefit of a third party at the expense of the company when he or she learned of such opportunity through his or her position as a director; • neglecting to protect of our rights by failing to disclose a business opportunity in our interests with a view to exploiting the opportunity for personal gain, or for the benefit of a third party; and • acquiring, in order to resell for profit, a good or right that is essential to our business operations, or that we intend to acquire for ourselves.

The compensation of our directors is determined by our shareholders at the annual shareholders’ meeting that approves the previous fiscal year’s financial statements.

Board of Executive Officers Our executive officers are our legal representatives, and are principally responsible for our day-to-day management and for implementing the policies and general guidelines established by our board of directors.

According to Brazilian Corporate Law, all of our officers must be residents of Brazil and may or may not be our shareholders. In addition, a maximum of one-third of our directors may also serve as our officers.

Our executive officers are elected at a meeting of our board of directors for a two-year term, reelection being permitted. Our board of directors may elect to remove officers at any time.

120 According to our bylaws, our board of executive officers may be composed of, at least two and up to seven members. In accordance with the Novo Mercado regulations, prior to taking office our officers are required to execute an instrument of adherence to the rules and regulations of the Novo Mercado.

Fiscal Council Brazilian Corporate Law requires our fiscal council to be independent from management and our external independent auditors. The primary responsibility of the fiscal council is to review our management’s activities and financial statements and to report their findings to shareholders.

Our fiscal council is a non-permanent body that, according to our bylaws, can be formed with three members, and an equal number of alternates, who must all be residents of Brazil, regardless of whether they are shareholders.

Our fiscal council is required to be appointed at a shareholders’ meeting upon the request of shareholders representing at least 10% of our outstanding common shares, and its term ends at the first annual shareholders meeting following its creation. The request to install a fiscal council, while insufficient for calling a shareholders’ meeting itself, can be submitted during any shareholders’ meeting, at which time the elections of members of the fiscal council would occur.

The fiscal council may not include executive officers or members of the board of directors, or employees of a subsidiary or a company that participates in either of the management bodies, or spouses or relatives of any member of our management. Moreover, according to Brazilian Corporate Law, fiscal council members are entitled to at least 10% of the average compensation paid to the executive officers, excluding benefits, representation fees and profit sharing.

As of the date of this offering memorandum, we have not created a fiscal council.

Withdrawal Rights and Redemption Withdrawal (Appraisal) Rights Shareholders who disagree with certain actions taken at a shareholders’ meeting have the right to withdraw as shareholders and to receive the net worth of their shares.

According to Brazilian Corporate Law, shareholder withdrawal rights may be exercised under the following circumstances, among others: • our spin-off (in the circumstances described below); • a reduction in our minimum mandatory dividends to be paid to shareholders; • a change in our corporate form or purpose; • our merger into or consolidation with another company (in the circumstances described below); • our participation in a corporate group (as defined in Brazilian Corporate Law and in the circumstances described below); • the purchase of all our shares by another company, so that we become its wholly-owned subsidiary; and • our acquisition of the control of another company at a price that exceeds certain limits provided by law. • Brazilian Corporate Law further provides that our spin-off will only give rise to the right of withdrawal if it results in: • a change in our purpose, except to the extent that the equity is spun off to a company whose principal business purpose is consistent with our corporate purpose;

121 • a reduction of our minimum mandatory dividends to be paid to shareholders; or • our participation in a corporate group (as defined in Brazilian Corporate Law).

In case of our (i) merger into or consolidation with another company, or (ii) our participation in a corporate group (as defined in Brazilian Corporate Law), our shareholders will not be entitled to withdrawal rights if our shares: • are liquid, meaning that they are part of the BM&FBOVESPA Index or other stock exchange index (as defined by the CVM); and • are widely held, such that the principal shareholder or its affiliates hold less than 50% of our common shares.

The right to withdraw expires 30 days after publication of the minutes of the relevant shareholders’ meeting. Additionally, we are entitled to reconsider any action giving rise to withdrawal rights within 10 days after this 30-day period if the redemption of shares by dissenting shareholders would jeopardize our financial stability. The recommendation for reconsideration must be approved by a majority vote of shareholders at a special shareholders’ meeting.

Upon the exercise of withdrawal rights, shareholders are entitled to receive the net worth of the shares, based on our most recent balance sheet approved by our shareholders. If the resolution giving rise to the withdrawal rights is made later than 60 days after the date of our most recent approved balance sheet, the shareholder may demand that his or her shares be valued according to a new balance sheet dated no more than 60 days before the resolution date. In this case, we must immediately pay 80% of the equity value of the common shares according to the most recent balance sheet approved by our shareholders, and the balance must be paid within 120 days after the date of the resolution of the shareholders’ meeting.

Redemption According to Brazilian Corporate Law, we may redeem our shares subject to the approval of our shareholders at an extraordinary shareholders’ meeting, where shareholders representing at least 50% of the shares that would be affected are present. Redemption can be paid with our profits, profit reserves or capital reserves.

Preemptive Rights Except as described in the paragraph below, our shareholders have a general preemptive right to subscribe for common shares in any capital increase according to the proportion of shares held at the time of such capital increase, except in the event of a grant or exercise of stock options by shareholders, or conversions of debentures into shares. Our shareholders also have a general preemptive right to subscribe for any convertible debentures, rights to acquire our shares and subscription warrants that we may issue; however, no preemptive rights apply to actual conversions of debentures, acquisitions of common shares from subscription of warrants and offering and exercising call options. A period of at least 30 days following the publication of notice of the capital increase is allowed for the exercise of the preemptive right, which may be transferred or sold by the shareholder.

However, according to Brazilian Corporate Law and our bylaws, our board of directors is authorized to exclude preemptive rights or reduce the exercise period with respect to the issuance of new shares, debentures convertible into shares and subscription warrants up to the limit of our authorized capital stock, if the distribution of those shares, debentures or warrants is effected through a public offering or through an exchange of shares in a public offering the purpose of which is to acquire control of another company.

122 Policy for the Trading of Our Securities by Us and Our Principal Shareholder, Directors and Officers The guidelines established by our management with respect to trading our securities are set forth in accordance with the rules of CVM Instruction No. 358, dated January 3, 2002, for the trading of our securities. As a result, we, our controlling shareholder, whether direct or indirect, directors, officers and members of our fiscal council, when in operation, and any technical or advisory committees, created under our bylaws (who are considered insiders under the Brazilian securities regulation), are prohibited from trading in our securities or derivatives backed by or linked to our securities, as follows: • before the public disclosure of any material fact with respect to our business; • persons that are no longer members of our management, before the disclosure of material information regarding us that occurred during their term of office, and such prohibition from trading our securities is extended (i) for a period of six months as from the date on which such persons quit their positions or (ii) up to the date of disclosure to the public of such material information unless the trading in our securities may interfere in our detriment; • whenever there is in course a procedure for purchase or sale of our shares by us or our affiliates or an option or mandate has been granted for the same purpose, or there is an intention to merge us into another company or to carry out our total or partial spin-off, consolidation, transformation or corporate restructuring; • during the 15-day period before the disclosure of our quarterly financial statements (Informações Trimestrais), or ITR, and demonstrações financeiras padronizadas, or DFP, as required by CVM; or • with respect only to our controlling shareholder, directors and officers, in the event of acquisition or sale of our shares by us or the acquisition or sale of our shares by any of our controlled or affiliated companies or any other company under our common control.

Purchases of Our Own Shares for Treasury Our bylaws entitle our board of directors to approve the acquisition of our own shares by them, to be kept in treasury or canceled. The decision to acquire our shares or maintain the acquired shares in treasury or to cancel them may not, among other things: • result in the reduction of our capital stock; • require the use of funds in excess of our retained earnings or reserves other than legal reserve, unrealized profit reserve, revaluation reserve and special mandatory dividend reserve recorded in our most recent financial statements; • create, directly or indirectly, any artificial demand, supply or share price condition, or use any unfair practice as a result of any action or omission; • be used for the acquisition of unpaid shares or shares held by our principal shareholder; or • be conducted during the course of a public offering for the acquisition of our shares.

In order to purchase our own common shares, our board of directors has to specify its purpose, number of common shares, maximum period of time to effect such purchase (not exceeding 365 days), number of outstanding common shares, and the name and address of involved brokering institutions.

Our treasury stock may not exceed 10% of our outstanding shares, excluding the shares held by our controlling shareholder, but including the shares held by subsidiaries and affiliates.

Any acquisition of our own shares must be made on a stock exchange and the purchase price must not exceed market price, unless the shares are registered for negotiation only in the over-the-counter market and

123 cannot be made in a private transaction unless prior approval is received from the CVM. We may also purchase our own shares for the purpose of going private. Moreover, we may acquire or issue put or call options related to our shares.

Periodic and Occasional Disclosure Requirements As a publicly-listed company, we are subject to the reporting requirements established by Brazilian Corporate Law and the CVM. Brazilian securities regulations require that a publicly-listed corporation provide the CVM and the BM&FBOVESPA with certain periodic information that includes annual reports, ITR, quarterly management reports and reports by independent auditors. Brazilian securities regulations also require public companies to file with the CVM all shareholders’ agreements and notices and minutes of the shareholders’ meetings. Further, once we are listed on the Novo Mercado, we must also follow the disclosure requirements set forth in the Novo Mercado listing rules.

Disclosure of Information Pursuant to Brazilian Corporate Law, CVM regulations and the listing rules of the Novo Mercado, public companies are required to disclose to CVM and BM&FBOVESPA the following periodic information: • financial statements prepared in accordance with Brazilian GAAP, as well as the managers’ and independent auditors’ report, within three months after the end of the fiscal year, or on the date they were made available to the shareholders, whichever is earlier; together with the DFPs, a report in a standard form contemplating the material financial information resulting from our financial statements; • notices of our shareholders’ meeting on the same date as their publication; • summary of the decisions made at shareholders’ meetings, on the date they were held; • annual report (Formulário de Referência) within five months from the end of each fiscal year; • DFP, together with the audit report issued by an independent auditor duly registered with the CVM, within 3 months from the end of each fiscal year or when the company discloses the information to the shareholders, or to third parties, whichever occurs first; and • ITR, together with the special review report issued by an independent auditor duly registered with the CVM, within 45 days from the end of each quarter of the year, except the last quarter, or when the company discloses the information to the shareholders, or to third parties, whichever occurs first.

In addition to the disclosure requirements imposed by Brazilian Corporate Law and the CVM, we must also comply with the following: • no later than six months following the listing of our shares on the Novo Mercado, we must disclose consolidated financial statements at the end of each quarter (except for the last quarter of each year) and at the end of each year, including a cash flow statement, which must indicate, at a minimum, the changes in our cash and cash equivalents, divided into operational, finance and investment cash flow for the relevant quarter or year; • after the release of our financial statements relating to the second fiscal year after the listing of our shares on the Novo Mercado, we must, within four months after the end of the fiscal year: (i) release financial statements or consolidated financial statements in accordance with the U.S. GAAP or IFRS, in reais or U.S. dollars, which must be disclosed in their entirety, in the English language, together with (a) the management report, (b) the explanatory notes which must include the net income and shareholders’ equity calculated at the end of such fiscal year, prepared in accordance with Brazilian GAAP, as well as management’ proposal for the allocation of our net income, and (c) the independent auditors’ report; or (ii) disclose, in the English language, the full financial statements, management report and explanatory notes, prepared in accordance with Brazilian Corporate Law, accompanied by (a) an additional

124 explanatory note regarding the reconciliation of the year-end results and shareholders’ equity calculated in accordance with Brazilian GAAP and U.S. GAAP or IFRS, as the case may be, which must include the main differences between the accounting principles used, and (b) the independent auditors’ report; and • within 15 days following the term established by Brazilian law for the disclosure of our quarterly information, we must: (i) disclose our full quarterly information translated into the English language; or (ii) disclose our financial statements or consolidated financial statements in accordance with U.S. GAAP or IFRS, accompanied by the independent auditors’ report.

Annual and Quarterly Information In addition to the information required pursuant to applicable legislation, a company with shares listed on the Novo Mercado listing segment of the BM&FBOVESPA, such as ours, must disclose the following information together with our ITR: • a consolidated balance sheet, a consolidated statement of results and the accompanying letter to shareholders, if we are obliged to disclose consolidated financial statements at year-ends; • any direct or indirect ownership interest exceeding 5% of our capital stock, considering any ultimate individual beneficial owner; • the aggregate number and characteristics of the securities held directly or indirectly by principal shareholders, directors, executive officers and fiscal council members, when installed; • changes in the number of securities held by the principal shareholders, directors, executive officers and fiscal council members, when installed, within the immediately preceding 12 months; • include, in the explanatory notes, a consolidated cash flow statement; • a binding arbitration clause stating that we are bound to submit to arbitration by the market arbitration chamber of the BM&FBOVESPA in the event of disputes; and • the number of shares in free float and their respective percentage in relation to the total number of shares issued.

The information relating to the third, fourth and seventh items above must also be included in the section “Additional Information Deemed Relevant by the Company” of the quarterly financial reports, and the information relating to the third, fourth and sixth items above must be included in the section “Additional Information Deemed Relevant for a Better Understanding of the Company” of our FR.

Disclosure of the Trading of Our Shares by Us, Our Principal Shareholders, Directors and Officers or Members of the Fiscal Council Pursuant to CVM rules, our directors and officers, and members of our fiscal council, when created, or of any technical or advisory committee are required to disclose to us, to the CVM and to the BM&FBOVESPA the number, type and manner of acquisition of securities issued by us, our publicly-held subsidiaries that are held by them or by persons related to them (in the case of individuals, such related persons being a spouse, companion or dependant) and any changes in their respective interests in the twelve preceding months. The information regarding the acquisition of such securities (name and identification of the acquirer, amount and characteristics of the securities, form, price and date of acquisition) must be provided to us within 10 days following the end of the month in which they were traded.

In addition, the regulations of the Novo Mercado require our principal shareholder, our directors, officers and members of our fiscal council, when installed, to disclose the above-mentioned information to the BM&FBOVESPA, including information regarding derivatives and future trading plans.

According to CVM Instruction No. 358 dated January 3, 2002, if any principal shareholder or any shareholder electing members of the board of directors increases or decreases participation in our capital stock

125 directly or indirectly, by more than 5%, such person or entity must disclose to the CVM and to the BM&FBOVESPA the following information: • name and identification of the person acquiring the shares; • number, type and class, as well as other characteristics of the shares, warrants, subscription rights, call options and convertible debentures directly or indirectly held by the acquirer or any related person, as well as the acquisition of rights of such securities (in the case of debentures, including the number of shares subject to conversion); • form of acquisition; • reasons for and purpose of the transaction; and • information regarding any agreement regarding the exercise of voting rights or the purchase and sale of the securities.

Disclosure of Material Developments CVM Instruction No. 358 requires the disclosure of certain information related to material facts of publicly- listed companies. Such requirements include provisions that: • define a material fact, which includes decisions made by the principal shareholders, resolutions of the shareholders’ meeting and of the board of directors, board of executive officers, and fiscal council, if installed, and any technical or advisory committee of publicly-listed companies, or any other facts of a political, administrative, technical, business, financial or economic nature that are related to the company’s business and that may significantly influence (i) the price of its publicly traded securities; (ii) the decision of investors to buy, sell or hold such securities; and (iii) the decision of investors to exercise any of such securities’ underlying rights; • specify examples of facts that are considered to be material, which include, among others, the execution of shareholders’ agreements providing for the transfer of control, the entry or withdrawal of shareholders that maintain any management, financial, technological or administrative function with or contribution to the company, and any corporate restructuring undertaken among related companies; • oblige the investor relations officer, controlling shareholders, directors, executive officers, members of the fiscal council, if installed, and of any technical or advisory committee to disclose material facts to the CVM; • require simultaneous disclosure of material facts to all stock exchanges in which the corporation’s securities are admitted for trading; • require the acquirer of a controlling stake in a corporation to publish material facts, including its intentions as to whether or not to de-list the corporation’s shares, within one year after such acquisition; • establish rules regarding disclosure requirements with respect to the acquisition and disposal of material equity interest in a publicly-traded company; and • restrict the use of insider information.

According to the CVM Instruction No. 358, under special circumstances, we may submit to the CVM a request for confidential treatment for certain material developments when our controlling shareholder or officers believe that disclosure would place our legitimate interest at risk.

Ultra Vires Acts Brazilian Corporate Law contains a provision that sets forth certain ultra vires acts that are expressly prohibited, deeming null and without effect in relation to us any acts, such as pledges, oral guarantees, and endorsements, among others, that are not related to our corporate purpose or that are against our bylaws.

126 Arbitration As our common shares are listed under the Novo Mercado segment of the BM&FBOVESPA, we, our controlling shareholders, our management and the members of our fiscal council, when installed, must submit to arbitration any and all disputes or controversies related to the Novo Mercado rules. Pursuant to our bylaws, any dispute related to the Novo Mercado rules, Brazilian Corporate Law and rules applicable to the Brazilian capital markets that involve our shareholders, directors, officers and the members of our fiscal council, when installed, will be settled through arbitration conducted in accordance with the rules of the Market Arbitration Chamber (Câmara de Arbitragem do Mercado) created by the BM&FBOVESPA.

Public Meeting with Analysts Pursuant to Novo Mercado regulations, at least once a year we must hold a public meeting with analysts and any other interested parties to disclose information regarding our projects and forecasts, as well as our economic and financial condition.

Annual Calendar Pursuant to the Novo Mercado regulations, we must, by the end of January of each year, publicly disclose and send to the BM&FBOVESPA an annual calendar with a schedule of our corporate events. Any subsequent modification to such schedule must be immediately and publicly disclosed and sent to the BM&FBOVESPA.

Cancellation of Publicly-Listed Company Registration We may become a private company if we or our principal shareholders conduct a public tender offer for the acquisition of all of our outstanding shares, in accordance with the rules and regulations of Brazilian Corporate Law, the CVM, and the Novo Mercado subject to the conditions below: • the price offered for the shares in the public tender offer must be the fair value of those shares, as defined pursuant to a valuation report; and • shareholders holding more than two thirds of our outstanding shares have expressly agreed to the delisting or accepted the offer, provided that for such purposes, “outstanding shares” means only those shares whose holders expressly agreed to the delisting to take part in the public tender offer.

Brazilian Corporate Law defines fair value as calculated on the basis of the following criteria, either adopted individually or combined: shareholders’ equity book value, shareholders’ equity at market price, discounted cash flow, comparison by multiples, market price of our common shares or any other criteria accepted by the CVM.

According to the Novo Mercado regulations and our bylaws, the minimum price for the shares in the public tender offer for the acquisition of the outstanding shares in connection with a decision to delist is the economic value of those shares, as determined in a valuation report prepared by a registered independent and specialized institution of recognized experience, which will be chosen at a shareholders’ meeting from a list of three institutions presented by our board of directors.

Shareholders holding at least 10% of our outstanding shares may require our management to call a special shareholders’ meeting to determine whether to perform another valuation using the same or a different valuation method. Such request must be made within 15 days following the disclosure of the price to be paid for the shares in the public offering. The shareholders who make such request, as well as those who vote in its favor, must reimburse us for any costs involved in preparing the new valuation if the valuation price is lower than or equal to the original valuation price. If the new valuation price is higher than the original valuation price, the public offering must either be canceled or made at the higher price and this decision must be disclosed to the market.

127 Delisting from the Novo Mercado We may, at any time, delist our common shares from the Novo Mercado, provided that the action is approved by shareholders representing the majority of our voting capital stock at a shareholders’ meeting and that we give at least 30 days’ written notice to the BM&FBOVESPA. The resolution must specify if the delisting will occur because the securities will no longer trade on the Novo Mercado, or because we are going private. Our delisting from the Novo Mercado would not result in the loss of our registration as a public company with the BM&FBOVESPA.

If we delist from the Novo Mercado, in order for our shares to be traded outside of the Novo Mercado, our principal shareholder or group of principal shareholders will be required to conduct a public tender offer for the acquisition of shares, at a price per share at least equivalent to the fair market value of those shares, as determined in a valuation report prepared by an independent and specialized institution of recognized experience, which will be chosen at a shareholders’ meeting from a list of three institutions presented by our board of directors.

If our delisting from the Novo Mercado occurs as a result of our decision to go private, our principal shareholder or we will be required to follow the going private procedures described above in “—Cancellation of Publicly-Listed Company Registration.”

In the event that we delist from the Novo Mercado as a result of a corporate reorganization, in which the surviving company is not listed on the Novo Mercado, our principal shareholder will be required to conduct a public offering for the acquisition of the outstanding shares, at the fair market value of such shares.

In the event of a transfer of our control within 12 months following our delisting from the Novo Mercado, the seller of our control and the acquirer of our control must jointly and severally offer to purchase the shares held by our remaining shareholders for the same price and on the same terms offered to the sellers in the transfer of control as adjusted for inflation.

If our securities are delisted from the Novo Mercado, we will not be permitted to have securities listed on the Novo Mercado for a period of two years after the delisting date, unless there is a change in our control after the delisting.

Dispersed Ownership Control of us is deemed diffused if exercised by (i) a shareholder holding less than 50% of our outstanding shares, (ii) shareholders jointly holding more than 50% of our outstanding shares, provided that each shareholder holds less than 50% of our outstanding shares and (a) their respective ownership of our common shares is not subject to a voting rights agreements, (b) they are not under common control and (c) do not represent a common interest, and (iii) shareholders holding less than 50% of our outstanding shares who have executed a shareholders’ agreement in respect of their ownership of our common shares.

Furthermore, pursuant to our bylaws, as from the date we are deemed to have diffuse control, any person or group of persons who acquires, directly or indirectly, more than 5% of our outstanding shares and that intends to purchase additional shares, will be required to do so through the BM&FBOVESPA and not by way of a private sale or through the over-the-counter market.

Change of Control Protection Against Takeovers Pursuant to the Novo Mercado According to the rules of the Novo Mercado, the sale of control of our company, in one transaction or in a series of transactions, must contemplate an obligation by the acquirer (individually or as a group, as the case may be) to complete a public tender offer for the acquisition of all of our other outstanding shares on the same terms

128 and conditions granted to the selling controlling shareholders. For these purposes, the selling controlling shareholders and the acquirer (individually or as a group, as the case may be) will be required to inform the BM&FBOVESPA of the price and other conditions of the sale.

A public offer is also required: • when there is an assignment of share subscription rights or rights of other securities convertible into our shares, which results in the transfer of control of the company; and • in case of a sale of control of the controlling shareholders.

An existing shareholder (individually or as a group, as the case may be) who acquires a controlling stake in us will be required to make the aforementioned public offering and will be required to reimburse the shareholders from whom the shares were acquired six months prior to the sale of control the amount equivalent to the difference between the price paid to the selling controlling shareholders and the price paid on the stock exchange for our common shares.

The acquiring controlling shareholder (individually or as a group, as the case may be) will, if applicable, within six months after the acquisition of the control, take the necessary steps to guarantee a minimum percentage of floating shares equivalent to 25% of the total shares of our capital stock.

The controlling shareholders will not transfer our shares held by them to the purchaser of control of the company, and we will not register the transfer of the shares, if the purchaser fails to execute the Terms of Consent of the Novo Mercado regulations and the Rules of the Market Arbitration Chamber established by the BM&FBOVESPA. Moreover, we will not register any shareholders’ agreement that regulates the exercise of control rights until the signatories thereto execute the Terms of Consent of the Novo Mercado regulations and the Rules of the Market Arbitration Chamber established by the BM&FBOVESPA. For more information about our shareholders’ agreements, see “Principal and Selling Shareholders—Shareholders’ Agreements—T4F Shareholders’ Agreements.”

Protection Against Takeovers Pursuant to Our Bylaws Our by-laws contain provisions intended to avoid the concentration of our common shares in a small group of investors, in order to promote a more widespread ownership of our common shares. To this end, any shareholder acquiring our common shares or other rights in our common shares, comprising 20% or more of our total common shares, is required to, within 60 days following the acquisition, conduct a tender offer to purchase all our outstanding common shares, pursuant to the provisions of Brazilian Corporate Law and the rules and regulations of the CVM and BM&FBOVESPA.

The obligation to conduct a tender offer does not apply in where a person becomes the owner of 20% or more of our total common shares as a result of: (i) succession, so long as shares held in excess of the 20% threshold are sold within 60 days of the transfer to the successor; (ii) the merger of another legal entity into us; (iii) the merger of shares of another company into us; or (iv) a subscription to our common shares in a single primary issue that, among other requirements, is approved at a shareholders’ meeting called by our board of directors.

Furthermore, the obligation to conduct a tender offer is not applicable to acquisitions by Fernando Luiz Alterio, F.A. Participações, CIE or GIF-II in the following situations: (i) with respect to Fernando Luiz Alterio and F.A. Participações, any acquisition by them of our shares at any time; (ii) with respect to GIF-II, acquisitions by it pursuant to the share purchase option between F.A. Participações and GIF-II (see “Principal and Selling Shareholders—Share Purchase Option Agreement”); and (iii) with respect to CIE, any acquisition by it of our shares pursuant to the purchase options and exchange rights contained in the F.A. Participações shareholders’ agreement and T4F shareholders’ agreement (see “Principal and Selling Shareholders—Shareholders’ agreements”).

129 For the purpose of calculating the percentage of all shares of our capital stock, involuntary increases in ownership interest resulting from any cancellation of treasury shares or a reduction in our capital stock entailing a cancellation of our common shares are not taken into consideration. The public offering must also meet the following requirements: (i) the public offering must be made on equal terms to all of our shareholders; (ii) our common shares must be sold by auction on BM&FBOVESPA; (iii) the public offering must be launched for a price determined as provided under Brazilian Corporate Law and in our by-laws; and (iv) the public offering must be a cash offer in lawful Brazilian currency for our common shares.

The price per share to be offered under the public offering shall be 125% of the greater of: (i) the price of our common shares fixed in any prior public offering or capital increase that took place before the event that triggered the tender offer, adjusted for inflation by the IPCA index, or (ii) the highest trading price of our common shares attained during the previous 90 trading sessions on the BM&FBOVESPA before the event that triggered the tender offer.

If CVM regulations applicable to the public offering herein stated require adoption of any given criteria to determine the purchase price per share of the company in the public offering, which criteria result in a purchase price higher than that determined herein, then the purchase price determined according to CVM regulations shall prevail with respect to such public offering.

A public offering made as referred to herein shall not preclude another shareholder of the company or the company itself, as the case may be, from making a competing public offering according to applicable regulations.

130 DIVIDENDS AND DIVIDEND POLICY

Amounts Available for Distribution Brazilian Corporate Law and our bylaws require that we distribute annually to our shareholders a mandatory dividend, which is the mandatory distribution of a minimum percentage of our net income for the prior fiscal year, unless our board of directors recommends against such distribution due to considerations relating to our financial condition at that time.

In accordance with our bylaws, shareholders are entitled to receive dividends and other distributions made by us with respect to our common shares in proportion to their share of our net worth.

According to Brazilian Corporate Law, a corporation’s net income may be allocated to profit reserves and to the payment of dividends.

Payment of Dividends and Interest on Shareholders’ Equity Brazilian Corporate Law requires that the bylaws of a Brazilian corporation specify a minimum percentage of income available for the annual distribution of dividends, known as the mandatory dividend, which must be paid to shareholders either as dividends or interest on shareholders’ equity.

Pursuant to Brazilian Corporate Law and our bylaws, at least 25% of our adjusted net income should be intended for the distribution and payment of the mandatory dividend to our shareholders, as explained above in “—Amounts Available for Distribution.”

While we are required under Brazilian Corporate Law to pay a mandatory distribution every year, we are also allowed to suspend the mandatory distribution of dividends if the board of directors decides that such distribution would be inadvisable given our financial condition. Any suspension of the mandatory distribution must be reviewed by the fiscal council, if one is in place at the time. In addition, management of companies with publicly traded securities must submit a report setting forth the reasons for the suspension to the CVM. Net income not distributed as a result of a suspension is allocated to a separate reserve and, if not absorbed by subsequent losses, is required to be distributed as soon as the financial condition of the company permits such payments. Pursuant to Brazilian Corporate Law, the shareholders’ meeting of a publicly held company may, provided there is no objection from any shareholder in attendance, decide to distribute dividends in an amount lower than the mandatory minimum dividends, or decide to retain the whole net income exclusively to raise funds by issuing debentures that are not convertible into shares.

The mandatory dividend may be paid in the form of interest on shareholders’ equity, being considered as a deductible expense for purposes of calculating our income and social contribution tax obligations.

Dividends We are required by Brazilian Corporate Law and by our bylaws to hold an annual shareholders’ meeting no later than 120 days after the end of each fiscal year, at which our shareholders must review the allocation of the results of operations in any fiscal year, and the distribution of an annual dividend. The payment of annual dividends is based on our audited financial statements prepared for the immediately preceding fiscal year.

Any holder of record of shares at the time that a dividend is declared is entitled to receive dividends. Under Brazilian Corporate Law, dividends are generally required to be paid within 60 days following the date on which the dividend is declared, unless the shareholders’ resolution establishes another date of payment, which, in any case, must occur before the end of the fiscal year in which the dividend is declared. Our bylaws do not require that dividend payments be adjusted for inflation.

131 A shareholder has a three-year period from the date of the dividend payment to claim dividends or the payment of interest on shareholders’ equity with respect to its shares, after which the aggregate amount of any unclaimed dividends will legally revert to us.

Interest on Shareholders’ Equity Since January 1, 1996, Brazilian companies have been permitted to pay interest on shareholders’ equity and treat those payments as a deductible expense for purposes of calculating Brazilian income tax and, since 1998, social contribution tax. The amount of the deduction is generally limited to the greater of (i) 50% of our net income (after the deduction of any allowances for social contribution tax, but before considering allowances for corporate income tax and interest on shareholders’ equity) for the period in respect of which the payment is made, and (ii) 50% of our accumulated profits and profit reserves at the beginning of the relevant period. The rate applied in calculating interest on shareholders’ equity cannot exceed the pro rata die variation of the TJLP for the applicable period. The amount distributed to shareholders as interest on shareholders’ equity, net of any withholding tax, may be included as part of the minimum mandatory dividend. In accordance with applicable law, we are required to pay to shareholders an amount sufficient to ensure that the net amount they receive in respect of interest on shareholders’ equity, after payment of the applicable withholding tax, plus the amount of declared dividends, is at least equivalent to the amount of the minimum mandatory dividend.

Any payment of interest on shareholders’ equity to the shareholders, whether or not Brazilian residents, is subject to Brazilian withholding tax at the rate of 15%, provided that a 25% withholding tax rate applies if the person receiving this interest is a resident of a tax haven jurisdiction (i.e., a country that does not impose income tax or that imposes it at a maximum rate lower than 20% and where the local legislation imposes restrictions on disclosure of the shareholding composition, ownership of the investment or the ultimate beneficiary of earnings attributed to non-residents).

In accordance with Article 32 of Law No. 4,357 of July 16, 1964, Brazilian corporations in debt as a result of a failure to collect taxes, which debt was not guaranteed by the Government and Social Security regulatory agencies, will not be able to distribute any amount of dividends to shareholders or give or confer participation or profits to partners or quotaholders, nor to directors, executive officers, and other members of fiscal or advisory committees.

The applicable penalty for a corporation that fails to observe this law is 50% over the amount distributed or paid to beneficiaries, having recently been limited by Law No. 11,051 dated December 29, 2004 to 50% of the amount of the debt. Due to the fact that Law No. 11,051/04 was recently amended and has no relevant case law, it is not possible to predict that any interpretation that such law applies to the payment of dividends will prevail in Brazilian courts.

Reserve Accounts Capital Reserve. Under Brazilian Corporate Law capital reserves may only be applied to (i) absorb losses that exceed accumulated earnings and profit reserves; (ii) redeem, repay or purchase our common shares; (iii) redeem the shares of our founding shareholder; (iv) increase our capital stock and (v) pay dividends to preferred shares, when applicable. Amounts eventually destined to our capital reserves are not considered in the calculation of the minimum mandatory dividend. With our listing in the Novo Mercado, we will be prohibited from issuing participation certificates (partes beneficiárias). Our profit reserve accounts are comprised of a legal reserve, a contingency reserve, a retained profit reserve, an unrealized profit reserve and a statutory reserve.

Legal Reserve. Under Brazilian Corporate Law and our bylaws, we are required to maintain a legal reserve to which we must allocate 5% of our net income for each fiscal year, after certain deductions permitted by law, until the aggregate amount of the reserve equals 20% of our paid-in capital. However, we are not required to make any allocations to our legal reserve in a fiscal year in which the legal reserve, when added to our other capital reserves, exceeds 30% of our capital stock. The amounts to be allocated to such reserve must be approved

132 by our shareholders in a shareholders’ meeting, and may be used only to increase our capital stock or to offset net losses. Therefore, funds in our legal reserve are not available for the payment of dividends. As of December 31, 2010, our legal reserve was R$7.3 million.

Contingency Reserve. Under Brazilian Corporate Law, a percentage of our net income may be allocated to a contingency reserve for anticipated losses that are deemed probable in future years, if the amount of such losses may be estimated. Management must indicate the cause of the probable loss and justify the creation of the reserve. Any amount so allocated must be reversed in the fiscal year in which the loss that had been anticipated does not occur as projected, or is charged off in the event that the anticipated loss occurs.

Earnings Retention Reserve. Under Brazilian Corporate Law, the shareholders can decide through management’s proposal at the annual general shareholders’ meeting to retain a portion of net income as provided for in a previously approved capital expenditure budget. When retained profit reserves are kept for longer than one year, the shareholders must review them at the annual general shareholders’ meeting. The allocation of a portion of the net income to the earnings retention reserve cannot be detrimental to the payment of mandatory dividends. As of December 31, 2010, our earnings retention reserve was R$55.3 million.

Unrealized Earnings Reserve. Under Brazilian Corporate Law, the amount by which the mandatory dividend exceeds the “realized” net income in a given year may be allocated to an unrealized profit reserve account, and the mandatory dividends may be limited to the “realized” portion of the net income. Brazilian Corporate Law defines “realized” net income as the amount by which our net income exceeds the sum of our net positive results, if any, under the equity method of accounting, and the income, profits or net gains resulting from the market value of our assets and liabilities or transactions that occurred in the relevant fiscal year but that will be received by us after the end of the next year. Profit recorded in the unrealized profit reserve, if realized and not absorbed by losses in subsequent years, must be added to the next mandatory dividend distributed after the realization. As of December 31, 2010, we did not have any unrealized earnings reserve.

Statutory Reserve. Under Brazilian Corporate Law, we are permitted to provide for the allocation of part of our net income to reserve accounts, indicating the purpose, allotment criteria and maximum amount of the reserve. Our bylaws provide for an Investment Reserve, whose purpose is to finance the expansion of our activities and/or that of our subsidiaries and associated companies, including by means of capital increases. Such reserve will be formed by up to 100% (one hundred per cent) of the net income outstanding after the legal and statutory deductions and its balance, but may not surpass 80% of our paid-in capital. The balance of this profit reserve, added by the balance of the remaining profit reserves (except for the unrealized profit reserve and the contingence reserve) may not surpass 100% of our paid-in capital. As of December 31, 2010, had not allocated any amount to our statutory reserve.

The balance of our profit reserves, except for the unrealized profit reserve, may not surpass 100% of our paid-in capital. Once this limit is reached, our shareholders may decide to apply these excess amounts to capital increases or to the distribution of dividends.

Dividend Payments We did not distribute any dividends for the years ended December 31, 2008 and 2009, as a result of a covenant in an outstanding loan agreement with Citibank. This obligation had resulted from our corporate restructuring in May 2007, in which we merged with ADTSPE Empreendimentos e Participações S.A., or ADTSPE, the former holder of this loan. A dividend payment for fiscal year 2009 was approved at a shareholders’ meeting on April 30, 2010, in the amount of R$20.0 million, and we paid this dividend to our shareholders in August 2010. On December 31, 2010, we recorded mandatory dividends totaling R$9.6 million as a liability on our consolidated financial statements, and our February 14, 2011 annual shareholders’ meeting, we approved the payment of a dividend distribution to our current shareholders totaling R$36.7 million. Investors in this offering will not receive any payment of dividends from such dividend distributions.

133 TAXATION

The following discussion addresses certain Brazilian and U.S. federal income tax consequences of acquiring, holding and disposing of our common shares. It is not a comprehensive discussion of all the tax considerations that may be relevant to a decision to purchase our common shares, it is not applicable to all categories of investors, some of which may be subject to special rules, and it does not specifically address all of the Brazilian and U.S. federal income tax considerations applicable to any particular holder. It is based upon the tax laws of Brazil and United States in effect as of the date of this offering memorandum, which are subject to change, possibly with retroactive effect, and to differing interpretations.

The tax consequences described below do not take into account the effects of any tax treaties or reciprocity of tax treatment entered into by Brazil and other countries. Nevertheless, please note that Brazil has not entered into any tax treaty with the United States. The discussion also does not address any tax consequences under the tax laws of any state or locality of Brazil. Prospective purchasers of common shares are advised to consult their own tax advisors with respect to an investment in our common shares in light of their particular investment circumstances.

Material Brazilian Tax Considerations The following discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of common shares by an individual, entity, trust or organization resident or domiciled outside Brazil for tax purposes, or Non-Resident Holder. The following discussion summarizes the principal tax consequences applicable under Brazilian law to a Non-Resident Holder of common shares in general, and, therefore, it does not specifically address all of the Brazilian tax considerations applicable to any particular Non-Resident Holder. It is based upon the tax laws of Brazil as in effect on the date of this offering memorandum, which are subject to change, possibly with retroactive effect, and to differing interpretations. Any change in that law may change the consequences described below. Each prospective purchaser is urged to consult its own tax advisor about the particular Brazilian tax consequences to it of an investment in our common shares. The summary below does not address any tax issues that affect solely our company, such as deductibility of expenses.

Income Tax Dividends Dividends paid by a Brazilian corporation, such as us, in cash or in kind, including stock dividends and other dividends paid to a Non-Resident Holder of common shares, are currently not subject to withholding income tax in Brazil to the extent that such amounts are related to profits generated on or after January 1, 1996. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian withholding income tax at varying rates, according to the tax legislation applicable to each corresponding year.

Interest on Shareholders’ Equity Law No. 9,249, dated December 26, 1995, as amended, allows a Brazilian corporation, such as us, to make, instead of dividends distributions, distributions to shareholders of interest on shareholders’ equity and treat those payments as a deductible expense for purposes of calculating Brazilian corporate income tax and social contribution on net profits. These distributions may be paid in cash. For tax purposes this interest is limited to the daily variation of the TJLP (Taxa de Juros de longo Prazo), as determined by the Central Bank, over the taxable year, and the amount of the deduction may not exceed the greater of: • 50% of net income (after social contribution on net profits but before taking into account the amount of such interests on shareholders’ equity and the provision for corporate income) related to the period in respect of which the payment is made; and • 50% of the sum of retained profits and profit reserves as of the date of the beginning of the period in respect of which the payment is made.

134 Payment of interest on shareholders’ equity to a Non-Resident Holder is subject to withholding income tax at the rate of 15%, or 25% if the Non-Resident Holder is domiciled in a country or location (i) that does not impose income tax or where the maximum income tax rate is lower than 20%, or Favorable Tax Jurisdiction, or (ii) where applicable local laws impose restrictions on the disclosure of the shareholding composition or the ownership of investments, or the ultimate beneficiary of the income derived from transactions carried out and attributable to a Non-Resident Holder.

These payments may be included, at their net value, as part of any mandatory dividend. To the extent payment of interest on shareholders’ equity is so included, the corporation is required to distribute to shareholders an additional amount to ensure that the net amount received by them, after payment of the applicable withholding income tax plus the amount of declared dividends, is at least equal to the mandatory dividend.

Distributions of interest on shareholders’ equity to Non-Resident Holders may be converted into U.S. dollars and remitted outside Brazil, subject to applicable exchange controls, to the extent that the investment is registered before the Central Bank of Brazil.

Capital Gains According to Law No. 10,833/03, the gains realized by a Non-Resident Holder on a sale or other disposition of assets located in Brazil, such as our common shares, are generally subject to income tax in Brazil, regardless of whether the sale or the disposition is made by the Non-Resident Holder to a resident or person domiciled in Brazil or not.

In general, capital gains realized on a sale or other disposition of common shares will equal the positive difference between the amount realized on the disposition of common shares and their acquisition cost. There is a controversy regarding the currency that should be considered for purposes of determining the capital gain realized by a Non-Resident Holder on a sale or disposition of shares in Brazil, more specifically if such capital gain is to be determined in foreign or in local currency.

Under Brazilian law, income tax on such gains can vary depending on the domicile of the Non-Resident Holder, the type of registration of the investment by the Non-Resident Holder with the Central Bank and how the disposal is carried out, as described below.

Capital gains realized by a Non-Resident Holder on a sale or other disposition of common shares carried out on a Brazilian stock exchange (which includes the transactions carried out on the organized over-the-counter market) are: • exempt from income tax when realized by a Non-Resident Holder that (i) has registered its investment in Brazil with the Brazilian Central Bank under the rules of Resolution No. 2,689/00, or 2,689 Holder, and (ii) is not a resident or does not have a domicile in a Favorable Tax Jurisdiction; or • subject to income tax at a rate of 15% in any other case, including the case of gains realized by a Non- Resident Holder that is not a 2,689 Holder, or is resident or domiciled in a Favorable Tax Jurisdiction (arguably even if such a Favorable Tax Jurisdiction Holder is also not a 2,689 Holder). In these cases, a withholding income tax at a rate of 0.005% on the sales value will be applicable and can be later offset with the eventual income tax due on the capital gain.

Any gains on a disposition of common shares that is not carried out on a Brazilian stock exchange are subject to income tax at the rate of 15%, except with respect to person who is a resident of or has a domicile in a Favorable Tax Jurisdiction or yet where applicable local laws impose restrictions on the disclosure of the shareholding composition or the ownership of investments or the ultimate beneficiary of the income derived from transactions carried out and attributable to a Non-Resident Holder, who would be subject to income tax at the rate

135 of 25%. As for transactions carried out on the Brazilian non-organized over-the-counter market with intermediation, the withholding income tax of 0.005% on the sales value shall also be applicable and can be offset against the eventual income tax due on the capital gain.

In the case of redemption of common shares or capital reduction by a Brazilian corporation, such as ourselves, the positive difference between the amount effectively received by the Non-Resident Holder and the corresponding acquisition cost is treated, for tax purposes, as capital gain derived from sale or exchange of common shares not carried out on a Brazilian stock exchange market, and is therefore subject to income tax at the rate of 15% or 25%, as described above.

Any exercise of preemptive rights relating to the common shares will not be subject to Brazilian taxation. Any gain realized by a Non-Resident Holder on the disposition of preemptive rights relating to common shares will be subject to Brazilian income taxation according to the same rules applicable to the sale or disposition of common shares. Tax authorities may attempt to tax such gains even when the sale or assignment of such right takes place outside Brazil, based on the provisions of Law No. 10,833.

There can be no assurance that the current favorable treatment of 2,689 Holders will continue in the future.

Discussion on Favorable Tax Jurisdictions For purposes of Brazilian law, favorable tax jurisdictions are countries that do not tax income or that have a maximum income tax rate lower than 20%. Since 1998, the Brazilian Internal Revenue Service has issued acts expressly listing the countries/jurisdictions that are to be considered favorable tax jurisdictions for Brazilian tax purposes. Currently, the tax authorities have deemed approximately 65 countries to be favorable tax jurisdictions pursuant to Normative Instruction 1,037/2010, article 1. These countries include the Bahamas, the British Virgin Islands, the Cayman Islands, Hong Kong, Singapore, etc.

Under Brazilian tax legislation, favorable tax jurisdictions are: (1) subject to a higher rate of withholding tax on income and capital gains; (2) not entitled to exemptions for investments in the Brazilian capital markets; (3) subject to automatic application of transfer pricing rules in transactions with Brazilian legal entities that are resident in Brazil; and (4) subject to thin capitalization rules on debt with legal entities that are resident in Brazil.

On June 24, 2008, Law No. 11,727 introduced the concept of “privileged tax regime,” considered as such the tax regime that (i) does not tax income or taxes it at a maximum rate lower than 20%; (ii) grants tax benefits to non-resident entities or individuals (a) without the requirement to carry out a substantial economic activity in the country or dependency or (b) contingent to the non-exercise of a substantial economic activity in the country or dependency; or (iii) does not tax or that taxes the income generated abroad at a maximum rate lower than 20%; or (iv) does not provide access to information related to shareholding composition, ownership of assets and rights or economic transactions carried out. We believe that the best interpretation of the current Brazilian tax legislation would lead to the conclusion that the above mentioned concept of “privileged tax regime” would apply solely for purposes of Brazilian transfer pricing rules in export and import transactions and on thin capitalization rules. However, there is no judicial guidance as to the application of Law No. 11,727, and, accordingly, we are unable to predict whether the Brazilian Internal Revenue Service (Receita Federal do Brasil) or the Brazilian courts may decide that the “privileged tax regime” concept would be applicable to deem a Non- Resident holder benefiting from a “privileged tax regime” as a favorable tax jurisdiction resident when carrying out investments in the Brazilian financial and capital markets, although tax authorities appear to agree with our position. Prospective purchasers should therefore consult with their own tax advisors regarding the consequences of the implementation of Law No. 11,727, Normative Instruction No. 1,037/2010 and of any related Brazilian tax laws or regulations concerning favorable tax jurisdictions and privileged tax regimes.

136 Tax on Foreign Exchange Transactions (“IOF/Exchange”) Pursuant to Decree No. 6,306, dated December 14, 2007, as amended, the conversion of reais into foreign currency and the conversion of foreign currency into reais, may be subject to the IOF/Exchange. Currently, for most foreign exchange transactions, the rate of IOF/Exchange is 0.38%. In any case, the Brazilian Executive Branch may increase such rates at any time, up to 25.0%, with no retroactive effect. Effective as of October 5, 2010, currency exchange transactions carried out for the inflow of funds in Brazil for investment made by a foreign investor (including a Non-Resident Holder, as applicable) are subject to IOF/Exchange at (i) a 2% rate in case of variable income transactions carried out on the Brazilian stock, futures and commodities exchanges, as well as in the acquisitions of shares of Brazilian publicly-held companies in public offerings or subscription of shares related to capital contributions, provided that the issuer company has registered its shares for trading in the stock exchange and (ii) 0% for the outflow of resources from Brazil related to these type of investments, including payments of dividends and interest on shareholders’ equity and the repatriation of funds invested in the Brazilian market.

Tax on Transactions Involving Bonds and Securities (“IOF/Securities”) Pursuant to Decree No 6,306/07, the IOF/Securities may be imposed on any transaction involving bonds and securities, including those carried out on Brazilian stock, futures and commodities stock exchanges. The rate of IOF/Securities applicable to transactions involving common shares is currently zero, although the Brazilian Executive Branch may increase such rate up to 1.5% per day, but only in respect of future transactions.

Other Brazilian taxes There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of stocks by a Non-Resident Holder, except for gift and inheritance taxes imposed by some Brazilian states on gifts or bequests by individuals or entities not domiciled or residing in Brazil to individuals or entities domiciled or residing within such states. There is no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of shares.

Certain United States Federal Income Tax Considerations To ensure compliance with Internal Revenue Service Circular 230, you are hereby notified that any discussion of tax matters set forth in this offering memorandum was written in connection with the promotion or marketing, within the meaning of Internal Revenue Service Circular 230, of the transactions or matters addressed herein and was not intended or written to be used, and cannot be used by any prospective investor, for the purpose of avoiding tax-related penalties under federal, state or local tax law. Each prospective investor should seek advice based on its particular circumstances from an independent tax advisor.

The following summary describes certain U.S. federal income tax consequences of the purchase, ownership, and disposition of our common shares as of the date hereof. Except where noted, this discussion deals only with U.S. Holders (as defined below) that hold our common shares as capital assets for U.S. federal income tax purposes (generally, property held for investment). This summary does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are: • a dealer in securities or currencies; • a financial institution; • a regulated investment company; • a real estate investment trust; • an insurance company;

137 • a tax-exempt organization; • a person that received our common shares as compensation for the performance of services; • a person holding our common shares as part of a hedging, integrated or conversion transaction or a straddle; • a person deemed to sell common shares under the constructive sale provisions of the Internal Revenue Code of 1986, as amended, or Code; • a trader in securities that has elected the mark-to-market method of accounting for your securities; • a person liable for alternative minimum tax; • a person who owns or is deemed to own 10% or more of our voting stock; • a partnership or other pass-through entity for U.S. federal income tax purposes; or • a person whose “functional currency” is not the U.S. dollar.

As used herein, “U.S. Holder” means a holder of our common shares that is for U.S. federal income tax purposes: • an individual citizen or resident of the United States; • a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; • an estate the income of which is subject to U.S. federal income taxation regardless of its source; or • a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

The discussion below is based upon the provisions of the Code, and regulations, rulings and judicial decisions thereunder at the date hereof, and such authorities may be repealed, revoked or modified (possibly on a retroactive basis) so as to result in U.S. federal income tax consequences different from those discussed below.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds our common shares, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common shares, you should consult your tax advisors.

This summary does not contain a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the effects of any state, local or non-U.S. tax laws.

If you are considering the purchase, ownership or disposition of our common shares, you should consult your own tax advisors concerning the U.S. federal income tax consequences to you in light of your particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.

Taxation of Distributions Subject to the discussion under “—Passive Foreign Investment Company” below, distributions on our common shares (including amounts withheld to reflect Brazilian withholding taxes and distributions of interest on shareholders’ equity, as described above under “—Material Brazilian Tax Considerations”) will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such dividends (including withheld taxes) will be includable in your gross income as ordinary income on the day actually or constructively received by you. Such dividends, however, will not be eligible for the dividends received deduction allowed to corporations. Under current law, dividends received in taxable years beginning before January 1, 2013 by non-corporate U.S. shareholders of certain foreign corporations will be subject to U.S. federal income tax at lower rates than other types of ordinary income if

138 certain conditions are met. However, because our common shares are not readily tradable on an established securities market in the United States and there is no income tax treaty between Brazil and the United States, we currently do not expect that those conditions will be met. Thus, we do not expect that dividends we pay will be entitled to such reduced rates. You should consult your tax advisors regarding the application of this legislation to your particular circumstances.

The amount of any dividend paid in reais will equal the U.S. dollar value of the reais received, calculated by reference to the exchange rate in effect at the date the dividend is actually or constructively received by you, regardless of whether the reais are converted into U.S. dollars at that time. If the reais received as a dividend are not converted into U.S. dollars at the date of receipt, you will have a tax basis in the reais equal to their U.S. dollar value at the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the reais will be treated as U.S. source ordinary income or loss.

Subject to certain conditions and limitations, Brazilian withholding taxes on dividends may be treated as foreign taxes eligible for credit against your U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our common shares will be treated as income from sources outside the United States and will generally constitute passive category income. Further, in certain circumstances, if you have held our common shares for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends, you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on our common shares. If you do not elect to claim a U.S. foreign tax credit, you may instead claim a deduction for Brazilian income tax withheld, but only for a taxable year in which you elect to do so with respect to all foreign income taxes paid or accrued in such taxable year. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances.

To the extent that the amount of any distribution (including amounts withheld to reflect Brazilian withholding taxes and distributions of interest on shareholders’ equity, as described above under “—Material Brazilian Tax Considerations”) exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of our common shares (thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by you on a subsequent disposition of our common shares), and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange (as discussed below under “—Taxation of Capital Gains”). Consequently, such distributions in excess of our current and accumulated earnings and profits would generally not give rise to foreign source income and you would generally not be able to use the foreign tax credit arising from any Brazilian withholding tax imposed on such distributions unless such credit can be applied (subject to applicable limitations) against U.S. federal income tax due on other foreign source income in the appropriate category for foreign tax credit purposes. However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be treated as a dividend (as discussed above).

Distributions of common shares that are received as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Passive Foreign Investment Company Based on our financial statements and current expectations regarding our income, assets and activities, including goodwill, we do not believe that we were a passive foreign investment company (a “PFIC”) for our most recent taxable year and do not expect to be a PFIC for 2011 or in any future year, although there can be no assurance in this regard.

In general, we will be a PFIC for any taxable year in which: • at least 75% of our gross income is passive income, or

139 • at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.

For this purpose, passive income generally includes dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person). If we own at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s income.

The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may become a PFIC in the current or any future taxable year due to changes in our asset or income composition. Because we have valued our goodwill based on the market value of our equity, a decrease in the price of our shares may also result in our becoming a PFIC. If we are a PFIC for any taxable year during which you hold our common shares, you will be subject to special tax rules discussed below.

If we would be a PFIC for any taxable year during which you hold our common shares, you will be subject to special tax rules with respect to any “excess distribution” received and any gain realized from a sale or other disposition, including a pledge, of shares. Distributions received in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or your holding period for the shares will be treated as excess distributions. Under these special tax rules: • the excess distribution or gain will be allocated ratably over your holding period for the shares, • the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and • the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

You will be required to file Internal Revenue Service, or IRS, Form 8621 if you hold our common shares in any year in which we are classified as a PFIC.

If we are a PFIC for any taxable year during which you hold our common shares and any of our non-United States subsidiaries is also a PFIC, you would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. You are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.

In certain circumstances, in lieu of being subject to the excess distribution rules discussed above, you may make an election to include gain on the stock of a PFIC as ordinary income under a mark-to-market method, provided that such stock is regularly traded on a qualified exchange. It is intended that our common shares will be listed on the BM&FBOVESPA, which must meet certain trading, listing, financial disclosure and other requirements to be treated as a qualified exchange under applicable Treasury regulations for purposes of the mark-to-market election, and no assurance can be given that our common shares will be “regularly traded” for purposes of the mark-to-market election.

If you make an effective mark-to-market election, you will include in each year that we are a PFIC as ordinary income the excess of the fair market value of your shares at the end of the year over your adjusted tax basis in the hares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the shares over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If you make an effective mark-to-market election, any gain you recognize upon the sale or other disposition of your shares will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.

140 Your adjusted tax basis in the common shares will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the common shares are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.

Alternatively, you can sometimes avoid the rules described above by electing to treat us as a “qualified electing fund” under Section 1295 of the Code. However, this option is not available to you because we do not intend to comply with the requirements necessary to permit you to make this election.

You are urged to consult your tax advisors concerning the U.S. federal income tax consequences of holding our common shares if we are considered a PFIC in any taxable year.

Taxation of Capital Gains Subject to the discussion under “—Passive Foreign Investment Company” above, you generally will recognize capital gain or loss upon the sale, exchange or other taxable disposition of our common shares equal to the difference between the amount realized on the sale, exchange or other taxable disposition of such common shares and your adjusted tax basis in such common shares. Any such gain or loss will be long-term capital gain or loss if our common shares have been held for more than one year. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations under the Code.

If a Brazilian income tax is withheld on the sale or other disposition of our common shares, your amount realized will include the gross amount of the proceeds of that sale or other disposition before deduction of the Brazilian income tax. Capital gain or loss, if any, realized by you on the sale, exchange or other taxable disposition of our common shares generally will be treated as U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, in the case of gain from the disposition of common shares that is subject to Brazilian income tax, you may not be able to benefit from the foreign tax credit for that Brazilian income tax (i.e., because the gain from the disposition would be U.S. source), unless you can apply the credit (subject to applicable limitations) against U.S. federal income tax payable on other income from foreign sources. Alternatively, you may take a deduction for the Brazilian income tax if you do not take a credit for any foreign taxes paid or accrued during the taxable year.

Information Reporting and Backup Withholding In general, information reporting will apply to dividends (including distributions of interest attributable to shareholders’ equity) in respect of our common shares and the proceeds from the sale, exchange or redemption of our common shares that are paid to you within the United States (and in certain cases, outside the United States), unless you establish that you are an exempt recipient. A backup withholding tax may apply to such payments if you fail to provide your correct taxpayer identification number or certification of other exempt status or fail to report in full dividend and interest income.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is timely furnished to the IRS.

The above description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership or disposition of our common shares. Each holder should consult such holder’s own tax advisor concerning the overall tax consequences to it, including the consequences under laws other than U.S. federal income tax laws, of an investment in our common shares.

141 CERTAIN ERISA CONSIDERATIONS

The United States Employee Retirement Income Security Act of 1974, as amended, or ERISA, imposes certain requirements on employee benefit plans subject to Title I of ERISA and on entities that are deemed to hold the assets of such plans, or ERISA Plans, and on those persons who are fiduciaries with respect to ERISA Plans. Section 406 of ERISA and Section 4975 of the Code, prohibit certain transactions involving the assets of an ERISA Plan (as well as those plans that are not subject to ERISA but which are subject Section 4975 of the Code, such as individual retirement accounts (together with ERISA Plans, the Plans)) and certain persons (referred to as “parties in interest” or “disqualified persons”) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction, of which there are many. Prohibited transactions within the meaning of Section 406 of ERISA or Section 4975 of the Code may arise if common shares are acquired by a Plan with respect to which the Brazilian underwriters, the placement agents, the banks holding our outstanding indebtedness which is repaid out of the proceeds of this offering, or any of their respective affiliates is a party in interest or a disqualified person. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code.

Any Plan fiduciary that proposes to cause a Plan to purchase the common shares should consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code to such an investment, and to confirm that such purchase will not constitute or result in a non-exempt prohibited transaction or any other violation of an applicable requirement of Title I of ERISA or the Code.

Foreign plans, governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA), while not subject to the fiduciary responsibility provisions of ERISA or the prohibited transaction provisions of ERISA and Section 4975 of the Code, may nevertheless be subject to other federal, state, local or foreign laws or regulations that are substantially similar to the foregoing provisions of ERISA and the Code, or Similar Law. Fiduciaries of any such plans should consult with their counsel before purchasing the common shares to determine the need for, if necessary, and the availability of, any exemptive relief under any Similar Law.

142 PLAN OF DISTRIBUTION

Pursuant to the terms of a Brazilian underwriting agreement dated April 11, 2011, Banco de Investimentos Credit Suisse (Brasil) S.A., Banco BTG Pactual S.A. and Banco Bradesco BBI S.A. or the Brazilian underwriters, have agreed severally with us to place the number of common shares set forth opposite their names below:

Name Number of shares Banco de Investimentos Credit Suisse (Brasil) S.A...... 10,991,379 Banco BTG Pactual S.A...... 10,991,379 Banco Bradesco BBI S.A...... 7,327,587 Total ...... 29,310,345

Banco de Investimentos Credit Suisse (Brasil) S.A., Banco BTG Pactual S.A. and Banco Bradesco BBI S.A. will act as joint bookrunners. Pursuant to the terms of a placement facilitation agreement dated April 11, 2011, Credit Suisse Securities (USA) LLC, Bradesco Securities Inc. and BTG Pactual US Capital Corp. will act as agents on behalf of the Brazilian underwriters in connection with the placement of our common shares outside of Brazil.

The Brazilian underwriting agreement provides that the obligation of the Brazilian underwriters to place the common shares is subject to, among other conditions, the absence of any material adverse change in our business, the delivery of certain legal opinions by our legal counsels in Brazil, the United States and certain other jurisdictions and certain procedures from our auditors. The Brazilian underwriting agreement also provides that, if any of the placed common shares are not settled by their respective investors, the Brazilian underwriters are obligated to purchase them on a firm commitment basis on the settlement date, subject to certain conditions and exceptions. The common shares will initially be offered by the Brazilian underwriters and the agents at the price indicated on the cover page of this offering memorandum. The placement facilitation agreement, which we and the selling shareholders have also entered into with the agents relating to the placement of our common shares outside Brazil, contains conditions for the placement of the common shares by the agents similar to those of the Brazilian underwriting agreement.

The selling shareholders have granted to Banco de Investimentos Credit Suisse (Brasil) S.A. an option, exercisable upon notification to Banco BTG Pactual S.A. and Banco Bradesco BBI S.A. to place an aggregate of 4,396,551 additional common shares, representing 15.0% of the common shares initially offered hereby, to cover over-allotments, if any. Banco de Investimentos Credit Suisse (Brasil) S.A. will have the exclusive right to exercise such over-allotment option, at any time for a period of up to 30 days from the date of publication in Brazil of the notice of commencement of this offering, upon notification to the other Brazilian underwriters. The option, if exercised, will be at the price per common share indicated on the cover page of this offering memorandum, less any underwriting discount.

Pursuant to the Brazilian underwriting agreement and the placement facilitation agreement, we and the selling shareholders have agreed, subject to certain limitations, to indemnify the Brazilian underwriters, the agents and each of their directors, officers, employees and any person who controls such Brazilian underwriter or agent against certain liabilities, including liabilities under the Securities Act. If we and the selling shareholders are unable to provide this indemnification, we and the selling shareholders will contribute to payments to the Brazilian underwriters, the agents and each of their directors, officers, employees and any person who controls such Brazilian underwriter or agent may be required to make in respect thereof.

We have also been advised by the agents acting on behalf of the Brazilian underwriters that they propose to place the common shares initially to persons in the United States whom the agents reasonably believe to be “qualified institutional buyers” as defined under Rule 144A and to non-U.S. persons in transactions meeting the requirements of Regulation S pursuant to exemptions from registration under the Securities Act.

143 The common shares have not been registered under the Securities Act and will be subject to significant resale restrictions. See “Transfer Restrictions.” Until 40 days after the announcement of commencement of this offering, an offer or sale of common shares within the United States by a broker dealer, whether or not it is participating in this offering, may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than pursuant to Rule 144A.

The following table shows the fees to be paid by us and the selling shareholders, in proportion to the common shares offered by each in this offering, to the Brazilian underwriters and proceeds, before expenses, to us and to the selling shareholders. This information is presented assuming either no exercise or exercise in full of the over-allotment option.

Price per common Without over- With over- share allotment option allotment option (in millions of R$ except per share data) Fees ...... 0.68 19.9 22.9 Proceeds, before expenses, to us ...... 15.32 179.6 179.6 Proceeds, before expenses, to the selling shareholders ...... 15.32 269.4 336.8

We will pay for expenses and fees incurred for auditors and legal counsels, among others, in connection with this offering. Expenses and fees incurred for the registration of this offering with the CVM or with respect to other authorities will paid by us and the selling shareholders.

We intend to list our common shares on the Novo Mercado of the BM&FBOVESPA under the symbol “SHOW3.” However, we cannot assure you that the prices at which the common shares will sell in the market after this offering will not be lower than the offering price on the cover of this offering memorandum or that an active trading market for the common shares will continue after this offering. We cannot assure you as to the liquidity of or the trading market for the common shares.

The Brazilian underwriters and/or their respective affiliates may enter into derivative transactions in connection with our common shares, acting at the order and for the account of their customers. The Brazilian underwriters and/or their respective affiliates may also purchase some of the securities in this offering as a hedge for these transactions. These transactions may have an effect on demand, price or other terms of the offering.

In connection with this offering, Banco de Investimentos Credit Suisse (Brasil) S.A., may engage in transactions that stabilize, maintain or otherwise affect the price of the common shares, and may engage in stabilization activity for a period of up to 30 days counted from the date of the publication in Brazil of the announcement of the commencement of the offering. Specifically, Banco de Investimentos Credit Suisse (Brasil) S.A., may over-allot in connection with the offering, creating a syndicate short position and may bid for, and purchase, common shares in the open market to cover syndicate short positions or stabilize the price of the common shares. Any of these activities may stabilize or maintain the market price of the common shares above independent market levels or may delay a decline in the market price of the common shares. Banco de Investimentos Credit Suisse (Brasil) S.A. is not required to perform these activities every day and may terminate these activities, at any time. Reports of stabilization activity are required to be furnished to the CVM. Such stabilization activity will be in compliance with all laws, regulations and rules.

We, the selling shareholders, F.A. Participações, and our directors and officers have agreed with the Brazilian underwriters and the agents, for a period of 180 days following the pricing date of the offering, we will not do any of the following without the prior written consent of the agents: (i) issue, offer, sell, contract to sell, pledge, loan, grant any option to purchase, make any short sale or otherwise, directly or indirectly, dispose of any common shares or any securities convertible into, or exchangeable or exercisable for any common shares; (ii) enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the common shares, whether any such aforementioned transaction is to be settled by delivery of the common shares or such other

144 securities, in cash or otherwise, or publicly disclose the intention to make any such issue, offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement; nor (iii) make any demand for or exercise any right with respect to, the registration of any common shares or any security convertible into or exercisable or exchangeable for common shares. We call such actions, other than issuance, “transfer.”

Under this agreement, transfers of these securities may be made under the following circumstances, among others: • to an individual solely for the purpose of making him/her eligible to become our director; • to any of its subsidiaries or affiliates; • to any family member, charity or not-for-profit organization or trust; •asabona fide gift; • pursuant to a corporate restructuring or other similar transaction; • to another selling shareholder or their affiliates (in our case and the case of the selling shareholders); or • with the prior written consent of the agents.

In either of the cases above, it will be a condition of the transfer that the transferee agrees that it is receiving and holding the transferred securities subject to the provisions of the lock-up agreement and that the transferee will not transfer the securities except in accordance with the lock-up agreement for the remainder of its term.

We and the selling shareholders cannot assure you that the Brazilian underwriters and the agents will not waive these lock-up obligations, in which case the common shares would become eligible for sale earlier.

In addition, CIE and F.A. Participações have, under the terms of the shareholders’ agreement between them, agreed not to sell their respective shares for a term of one year following this offering. These shareholders jointly own 76.5% of our capital stock as of the date of this offering memorandum, prior to the completion of this offering.

According to the rules of the Novo Mercado, our controlling shareholder, FA Participações and our directors and officers, subject to certain exceptions, cannot sell or offer to sell common shares issued by us for the first six months after the beginning of the trading of our common shares on the Novo Mercado. After this initial period of six months, our controlling shareholder, directors and officers will not be entitled to sell or offer more than 40.0% of the common shares that they hold for an additional six months. However, this limitation will not apply in the event of the assignment or loan of common shares for the purpose of effecting market-making activities by entities registered with the BM&FBOVESPA, as long as the aggregate amount of the assignments or loans of common shares does not exceed 15.0% of the total amount of our common shares available in the market.

We cannot predict the effect, if any, that future sales of the common shares, or the availability of such common shares for future sale, will have on the market price of the common shares prevailing from time to time or on our ability to raise capital in the future. Sales of substantial amounts of common shares in the public market, or the perception that the sales could occur, could adversely affect the prevailing market price of the common shares and your ability to sell common shares in the future at a time and at a price that you deem appropriate.

The common shares may be offered outside of Brazil only to investors registered with the CVM and acting through custody accounts managed by local agents pursuant to CVM Instruction No. 325, dated January 27, 2000, and Resolution No. 2,689 of the CMN, as amended.

Other than with respect to this offering on the Novo Mercado segment of the BM&FBOVESPA, no action has been or will be taken in any country or jurisdiction by us, the selling shareholders, the Brazilian underwriters

145 and the agents that would permit a public offering of the common shares, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required. All persons that receive this offering memorandum are required by us, the selling shareholders, the Brazilian underwriters and the agents to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver common shares or have their possession or distribute such offering material, in all cases at their own expense.

In addition to the placement of common shares pursuant to this offering, the Brazilian underwriters, the agents or their affiliates have provided in the past to us, the selling shareholders and our and their respective affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us, the selling shareholders and our and their respective affiliates in the ordinary course of the Brazilian underwriters’, the agents’ or their affiliates’ respective businesses, for which they have received and may continue to receive customary fees, commissions or other remuneration. In addition, from time to time, certain of the Brazilian underwriters, the agents or their affiliates may execute in the future, derivative transactions on behalf of themselves or their client accounts and may subscribe common shares in the offering as a way to hedge such transactions, which may affect the demand, price or other terms of this offering. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness” for more information on our indebtedness and material agreements entered with the entities mentioned in this paragraph.

146 TRANSFER RESTRICTIONS

Because of the following restrictions, investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of our common shares.

Our common shares have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except: • in compliance with the registration requirements of the Securities Act and all applicable securities laws of the states of the United States; or • pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable securities laws of the states of the United States.

Accordingly, our common shares are being offered and sold only: • inside the United States to “qualified institutional buyers,” as defined in Rule 144A under the Securities Act; and • outside the United States in offshore transactions in accordance with Regulation S under the Securities Act.

In addition, purchasers of our common shares may not be able to exercise preemptive or tag-along rights relating to the common shares unless an exemption from the registration requirements of the Securities Act is available or a registration statement under the Securities Act is effective with respect to those rights. We are not obligated to file a registration statement with respect to the common shares relating to these preemptive or tag— along rights and we may not file such a registration statement. If no registration statement is filed, a holder may receive only the net proceeds from the sale of his or her preemptive and tag-along rights or, if these rights cannot be sold, they will lapse and the holder will receive no value for them.

Each purchaser of our common shares in the United States will be deemed to have agreed not to deposit such common shares into an unrestricted American Depositary Receipt facility for as long as those common shares are “restricted securities” within the meaning of Rule 144 under the Securities Act and also to have represented and agreed as follows: 1. It understands and acknowledges that the common shares have not been registered under the Securities Act or any other applicable securities law, are being offered in transactions not requiring registration under the Securities Act or any other securities law, and, unless so registered, may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act, or any other applicable securities law, pursuant to an exemption from registration or in a transaction not subject to registration. We make no representation as to the availability of the exemption provided by Rule 144 under the Securities Act for resale of our common shares.

2. It understands that the common shares (to the extent they are in certified form in the future), unless otherwise determined in accordance with applicable law, will bear a legend substantially to the following effect: THIS SHARE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A

147 QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATIONS UNDER THE SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALE OF THIS SHARE.

3. It is not an affiliate (as defined in Rule 144 under the Securities Act) of us or of our selling shareholders or acting on our or their behalf and it is either: • a qualified institutional buyer as defined under Rule 144A (or a QIB) and is aware that any sale of the common shares to it will be in reliance on an exemption from the Securities Act. Such acquisition will be for its own account or for the account of another QIB; or • a person who, at the time the buy order for the common shares was originated, was outside the United States and was not a U.S. person (and was not purchasing for the account or benefit of a U.S. person) within the meaning of Regulation S under the Securities Act.

4. If it is a purchaser in a sale that occurs outside the United States within the meaning of Regulation S under the Securities Act, it agrees that until the expiration of a 40-day “distribution compliance” period within the meaning of Rule 903 of Regulation S under the Securities Act, no offer or sale of the common shares will be made by it to a U.S. person or for the account or benefit of a U.S. person within the meaning of Rule 902(k) of the Securities Act except to a QIB and in compliance with the applicable selling restrictions. Such purchaser agrees that, during such 40-day distribution compliance period, it will not cause any advertisement with respect to the common shares (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any memorandum relating to the common shares, except such advertisements as permitted by and include the statements required by Regulation S.

5. It acknowledges that, pursuant to Brazilian Resolution No. 2,689, transfers of common shares, including by or between residents of jurisdictions outside Brazil, may be effected only in Brazil. See “Market Information.”

6. It acknowledges that neither we, the selling shareholders, the controlling shareholder, the Brazilian underwriters, the agents nor any person representing us, the selling shareholders, the Brazilian underwriters or the agents have made any representation to it with respect to us or the offering or sale of any common shares, other than the information contained in this offering memorandum, which has been delivered to it and upon which it is relying in making its investment decision with respect to the common shares. It acknowledges that no representation or warranty is made by the Brazilian underwriters or their agents as to the accuracy or completeness of such materials. It has had access to such financial and other information concerning us and the common shares as it has deemed necessary in connection with its decision to purchase the common shares, including an opportunity to ask questions of and request information from us and the Brazilian underwriters or their agents.

7. It represents and agrees that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”)) received by it in connection with the issue or sale of the common shares in circumstances in which Section 21(1) of the FSMA does not apply to the issuer; and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the common shares in, from or otherwise involving the United Kingdom.

148 8. It acknowledges that we, the selling shareholders, the controlling shareholder, and the Brazilian underwriters, the agents and our respective counsel will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by its purchase of common shares are no longer accurate, it will notify us, the selling shareholders, the controlling shareholder, the Brazilian underwriters and the agents. In the event that it is acquiring any common shares as a fiduciary or agent for one or more investment accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account. In the event that an agent or representative of the purchaser is making any acknowledgment, representation or agreement on behalf of the purchaser, such agent or representative represents that it is duly authorized to execute the subscription agreement on behalf of the purchaser and has confirmed the foregoing acknowledgments, representations and agreements with the purchaser.

We acknowledge that for so long as any of the common shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, holders of such restricted securities, and prospective purchasers (as designated by such holders) of such restricted securities, will have the right to obtain upon request any information required to be provided by Rule 144A(d)(4) under the Securities Act during any period in which we are not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, or we are not exempt from such reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act.

European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) any of our common shares which are the subject of the offering contemplated by this offering memorandum may not be offered to the public in that Relevant Member State other than: (i) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (ii) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant dealer or dealers nominated by the issuer for any such offer; or (iii) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3(2) of the Prospectus Directive; provided that no such offer of our common shares shall result in a requirement for the publication by us or the underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression “our common shares may be offered to the public” in relation to any of our common shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our common shares to be offered so as to enable an investor to decide to purchase our common shares as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospective Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), as amended, and includes any relevant implementing measure in the Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.

149 This European Economic Area selling restriction is in addition to any other selling restrictions set out below.

United Kingdom Our common shares may not be offered or sold to any persons in the United Kingdom except: (a) through communications, invitations or inducements to engage in investment activity (within the meaning of the FSMA) in connection with the issue or sale of the common shares in circumstances in which Section 21(1) of the FSMA does not apply to the issuer; and (b) in compliance with all applicable provisions of the FSMA with respect to anything done by it in relation to the common shares in, from or otherwise involving the United Kingdom.

France This document is not being distributed in the context of a public offering in France within the meaning of Article L.411-1 of the Code monétaire et financier, and has therefore not been submitted to the Autorité des marchés financiers for prior approval and clearance procedure.

The common shares may not be offered or sold, directly or indirectly, to the public in France, and neither this offering memorandum nor any other offering materials relating to the common shares has been distributed nor will not be distributed to the public in France. Nevertheless, the common shares, can be offered, sold or distributed and the prospectus or any supplement or replacement or any material relating to the common shares may be distributed or caused to be distributed, in France, only to: (i) providers of investment services relating to portfolio management for the account of third parties; and/ or (ii) qualified investors (“investisseurs qualifiés”); and/or (iii) a restricted circle of investors (“cercle restreint d’investisseurs”);

all as defined in and in accordance with Articles L.411-2, D.411-1 to D.411-3 or 4 of the Code monétaire et financier or only (iv) in a transaction that, in accordance with Article L.411-2-II-1 or 2 or 3 of the French Code monétaire et financier, does not constitute a public offer (appel public à l’épargne) as a result of the aggregate amount of the offer, in one or several transactions over a period of 12 consecutive months, or, as the case may be, of the individual amount of investment by each investor or of the nominal amount of each of the securities, as such amounts are provided by Article 211-2 of the General Regulations (Règlement General)oftheAutorité des marchés financiers.

Investors in France falling within the qualified investors or restricted circle of investor exemptions may only participate in the issue of the common shares for their own account in accordance with the conditions set out in Articles L.411-2, D.411-1 to D.411-3 or 4, D.734-1, D.744-1, D.754-1 and D.764-1 of the Code monétaire et financier. The common shares may only be issued, directly or indirectly, to the public in France in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the Code monétaire et financier.

Italy The offering of the common shares has not been registered pursuant to Italian securities legislation and, accordingly, the common shares have not been and will not be offered, sold or delivered in the Republic of Italy in a solicitation to the public, and sales of the common shares in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation.

Copies of any document relating to the common shares in the Republic of Italy will not be distributed except (a) to “Professional Investors,” as defined in Articles 31.2 of CONSOB Regulation No. 11522 of 1 July 1998, as amended (“CONSOB Regulation No. 11522”) pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of

150 24 February 1998, as amended (the “Italian Financial Act”) or (b) in any other circumstances where an express exemption from compliance with the solicitation restrictions applies, as provided under the Italian Financial Act or Regulation No. 11971 of 14 May 1999, as amended.

Any such offer, sale or delivery of the common shares or any document relating to the common shares in the Republic of Italy must be: (i) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 285 of 1 September 1993, as amended, the Italian Financial Act, CONSOB Regulation No. 11522 and any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy.

Investors should also note that, in any subsequent distribution of the common shares in the Republic of Italy, Article 100-bis of the Italian Financial Act may require compliance with the law relating to public offers of securities. Furthermore, where the common shares are placed solely with professional investors and are then systematically resold on the secondary market at any time in the 12 months following such placing, purchasers of the common shares who are acting outside the course of their business or progression may in certain circumstances be entitled to declare such purchase void and to claim damages from any authorized person at whose premises the common shares were purchased, unless an exemption provided for under the Italian Financial Act applies.

Switzerland The common shares are not being offered to the public in Switzerland. Therefore, this document constitutes neither a public offer in Switzerland nor a prospectus in accordance with applicable legislation in Switzerland and may not be issued, distributed or published in Switzerland in a manner which would be deemed to constitute a public offer of the common shares in Switzerland.

Germany The common shares have not been and will not be offered, sold or publicly promoted or advertised in the Federal Republic of Germany other than in compliance with the German Securities Prospectus Act (Wertpapierprospektgesetz, or WpPG) of 22 June 2005 or any other laws applicable in the Federal Republic of Germany governing the issue, offering and sale of securities. This document may not be distributed, and the common shares may not be offered or sold, in the Federal Republic of Germany other than to persons who are qualified investors as defined in Section 2 no. 6 of the WpPG, or to fewer than 100 non-qualified investors. Nothing in this document should be construed as investment advice to persons other than such permitted recipients or as otherwise constituting a public offering within the meaning of the WpPG or any other laws applicable in the Federal Republic of Germany.

Spain The common shares have not been registered with the Spanish National Commission for the Securities Market and, therefore, no common share may be publicly offered, sold or delivered, nor any public offer in respect of the common shares made, nor may any offering memorandum or any other offering or publicity material relating to the common shares be distributed in Spain by the placement agents or any person acting on their behalf, except in compliance with Spanish laws and regulations.

Netherlands Our common shares may not be offered, sold, transferred or delivered, in or from the Netherlands, as part of the initial distribution or as part of any reoffering, and neither this offering memorandum nor any other document in respect of the offering may be distributed in or from the Netherlands, other than to individuals or legal entities which trade or invest in securities in the conduct of their profession or trade (which includes banks, investment

151 banks, securities firms, insurance companies, pension funds, other institutional investors and treasury departments and finance companies of large enterprises), in which case, it must be made clear upon making the offer and from any documents or advertisements in which a forthcoming offering of common shares is publicly announced that the offer is exclusively made to said individuals or legal entities.

Republic of Ireland The common shares are not being offered, directly or indirectly, to the general public in Ireland and no offers or sales of any securities under or in connection with this offering memorandum may be effected except in conformity with the provisions of Irish law including the Irish Companies Acts 1963 to 2009, the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland, the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) of Ireland and the Market Abuse (Directive 2003/6/EC) Regulations 2005 of Ireland.

Hong Kong This offering memorandum has not been approved by or registered with the Securities and Futures Commission of Hong Kong or the Registrar of Companies of Hong Kong. No person may offer or sell in Hong Kong, by means of any document, any common shares other than (i) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance, or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No person may issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the common shares which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to common shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.

Singapore This offering memorandum has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore, or the SFA. Accordingly, no person may offer or sell such common shares or cause such common shares to be made the subject of an invitation for subscription or purchase, or circulate or distribute, this offering memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of such common shares, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the SFA, (ii) to a relevant person pursuant to Section 275(1), or (iii) to any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA, or otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Japan The common shares have not been and will not be registered under the Financial Instruments and Exchange Law, as amended, or the FIEL. In connection with the offering no shares will be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or entity organised under the laws of Japan) or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements under the FIEL and otherwise in compliance with such law and any other applicable laws, regulations and ministerial guidelines of Japan.

152 Dubai International Financial Centre This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The common shares which are the subject of the offering contemplated by this offering memorandum may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the common shares offered should conduct their own due diligence on the common shares. If you do not understand the contents of this document you should consult an authorized financial adviser.

Qatar The common shares described in this offering memorandum have not been, and will not be, offered, sold or delivered, at any time, directly or indirectly in the State of Qatar in a manner that would constitute a public offering. This offering memorandum has not been, and will not be, registered with or approved by the Qatar Financial Markets Authority or Qatar Central Bank and may not be publicly distributed. This offering memorandum is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

Kuwait The common shares have not been licensed for offering in Kuwait by the Ministry of Commerce and Industry or the Central Bank of Kuwait or any other relevant Kuwaiti government agency. The offering of the common shares in Kuwait on the basis a private placement or public offering is, therefore, restricted in accordance with Decree Law No. 31 of 1990, as amended, and Ministerial Order No. 113 of 1992, as amended. No private or public offering of the common shares is being made in Kuwait, and no agreement relating to the sale of the common shares will be concluded in Kuwait. No marketing or solicitation or inducement activities are being used to offer or market the common shares in Kuwait.

Saudi Arabia Any investor in the Kingdom of Saudi Arabia (a “Saudi Investor”) who acquires the common shares pursuant to the offering should note that the offer of the common shares is a private placement by way of an “offer restricted to sophisticated investors,” as such term is defined in Article 10 of the “Offers of Securities Regulations” as issued by the Board of the Capital Market Authority resolution number 2 11 2004 dated 20/08/1424H (corresponding to 04/10/2004G), as amended (the “Offers of Securities Regulations”). The offer of common shares is therefore exempt from the public offer requirements of the Offers of Securities Regulations, but is subject to the following restrictions on secondary market activity pursuant to Article 17 of the Offers of Securities Regulations: (a) A Saudi Investor (the “transferor”) who has acquired the common shares pursuant to the limited offer may not offer or sell the common shares to any person (referred to as a “transferee”) unless the offer or sale is made through an authorized person and where: (i) the price to be paid by the transferee for such common shares equals or exceeds SAR 1 million; (ii) the common shares are offered to a sophisticated investor; or (iii) the common shares are being offered or sold in such other circumstances as the Capital Market Authority may prescribe for these purposes. (b) If the provisions of paragraph (a)(i) above cannot be fulfilled because the price of the common shares being offered or sold to the transferee has declined since the date of the original private placement, the transferor may offer or sell the common shares to the transferee if their purchase price during the period of the original private placement was equal to or exceeded SAR 1 million or an equivalent amount.

153 (c) If the provisions of paragraph (b) above cannot be fulfilled, the transferor may offer or sell common shares if he sells his entire holding of the common shares to one transferee. (d) The provisions of paragraphs (a), (b) and (c) above shall apply to all subsequent transferees of the common shares and the restrictions on secondary market activity shall cease to apply upon approval of listing on the Saudi Stock Exchange of securities of the same class as the common shares that are subject to such restrictions.

This offering memorandum may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations.

The Capital Market Authority does not make any representation as to the accuracy or completeness of this offering memorandum, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this offering memorandum. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If you do not understand the contents of this offering memorandum you should consult an authorized financial adviser.

For the purpose of the Offers of Securities Regulations, the term “sophisticated investor” includes any of the following persons: (a) authorized persons (persons authorized by the Capital Market Authority to carry on securities business in the Kingdom of Saudi Arabia) acting for their own account; (b) clients of a person authorized by the Capital Market Authority to conduct managing activities provided that the private placement offer of common shares to them is made through the authorized person, all relevant communications are made through the authorized person and the authorized person has been engaged as an investment manager on terms which enable it to make decisions concerning the acceptance of private placement offers of common shares on the client’s behalf without reference to the client; (c) the government of the Kingdom of Saudi Arabia, any supranational authority recognised by the Capital Market Authority, the Saudi Stock Exchange and any other stock exchange recognised by the Capital Market Authority or the Depositary Centre; (d) institutions (meaning: (i) any company which owns, or which is a member of a group which owns, net assets of not less than 50 million Saudi Riyals; (ii) any unincorporated body, partnership or other organization which has net assets of not less than 50 million Saudi Riyals; or (iii) any person (“A”) while acting in the capacity of director, officer or employee of a person (“B”) falling within sub-paragraphs (i) or (ii) above where A is responsible for B undertaking any securities activity) acting for their own account; (e) professional investors (meaning any natural person who fulfils at least two of the following criteria: (i) he has carried out at least 10 transactions per quarter over the previous four quarters of a minimum total amount of Saudi Riyals 40 million on securities markets; (ii) the size of his securities portfolio exceeds Saudi Riyals 10 million; or (iii) he works or has worked for one or more year in the financial sector in a professional position which requires knowledge of securities investment); or (f) any other person prescribed by the Capital Market Authority.

154 NOTICE TO CANADIAN RESIDENTS

Resale Restrictions The distribution of this the common shares in Canada is being made only on a private placement basis exempt from the requirement that we and the selling shareholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of our common shares are made. Any resale of the common shares in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common shares.

Representations of Purchasers By purchasing our common shares in Canada and accepting delivery of a purchase confirmation a purchaser is representing to us, the selling shareholders and the dealer from whom the purchase confirmation is received that: • the purchaser is entitled under applicable provincial securities laws to purchase the common shares without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-06 – Prospectus and Registration exemptions, • the purchaser is a “permitted client” as defined in national instrument 31-103 – Registration Requirements and Exemptions, • where required by law, the purchaser is purchasing as principal and not as agent, • the purchaser has reviewed the text above under Resale Restrictions, and • the purchaser acknowledges and consents to the provision of specified information concerning the purchase of the shares to the regulatory authority that by law is entitled to collect the information, including certain personal information. For purchasers in Ontario, questions about such indirect collection of personal information should be directed to Administrative Support Clerk, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8 or to (416) 593-3684.

Rights of Action—Ontario Purchasers Only Under Ontario securities legislation, certain purchasers who purchase a security offered by this offering memorandum during the period of distribution will have a statutory right of action for damages, or while still the owner of the common shares, for rescission against us and the selling shareholders in the event that this offering memorandum contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the common shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the common shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling shareholders. In no case will the amount recoverable in any action exceed the price at which the common shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling shareholders will have no liability. In the case of an action for damages, we and the selling shareholders will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

155 Enforcement of Legal Rights All of our directors and officers as well as the experts named herein and the selling shareholders may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment Canadian purchasers of the common shares should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common shares in their particular circumstances and about the eligibility of the common shares for investment by the purchaser under relevant Canadian legislation.

156 LEGAL MATTERS

Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, our Brazilian counsel, has advised us in connection with this offering, and will pass on the validity of our common shares. Simpson Thacher & Bartlett LLP, our U.S. counsel, will pass on certain legal matters for us. Lefosse Advogados has acted as Brazilian counsel to the Brazilian underwriters and the placement agents. White & Case LLP has acted as U.S. counsel to the Brazilian underwriters and the placement agents.

157 INDEPENDENT AUDITORS

The financial information contained in this offering memorandum includes our audited consolidated financial statements as of and for December 31, 2010, 2009 and 2008, prepared in accordance with IFRS, which have been audited by Deloitte Touche Tohmatsu Auditores Independentes, our independent auditors, as stated in their report included elsewhere in this offering memorandum.

158 ENFORCEMENT OF JUDGMENTS

We are incorporated under the laws of Brazil. The majority of our directors and all our officers and certain advisors named herein reside in Brazil. Substantially all of our assets and those of these other persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or us in United States courts judgments predicated upon the civil liability provisions of the federal securities laws of the United States.

We have been advised by our Brazilian counsel, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, that, subject to specific requirements described below, a final conclusive judgment for civil liabilities rendered by any court in the United States in respect of the common shares would be recognized in the courts of Brazil (to the extent that Brazilian courts may have jurisdiction) and such courts would enforce such judgment without reconsideration of the merits of the original action only upon ratification of that judgment by the Brazilian Superior Court of Justice (Superior Tribunal de Justiça). That ratification will occur only if the foreign judgment: • fulfills all formalities required for its enforceability under the laws of the country where the foreign judgment is granted; • is issued by a competent court after proper service of process on the parties, which service must be in accordance with Brazilian law if made in Brazil, or after sufficient evidence of the parties’ absence has been given, as established pursuant to applicable law; • is not subject to appeal in the jurisdiction in which it was issued; • is for a fixed sum; • is authenticated by a Brazilian consular office in the country where the foreign judgment is issued; • is translated into Portuguese by a certified translator; and • is not against Brazilian public policy, good morals, national sovereignty or public morality (as provided in Article 17 of Law No. 4,657/42).

Notwithstanding the foregoing, we cannot assure you that confirmation will be obtained, that the process described above will be conducted in a timely manner or that Brazilian courts will enforce a monetary judgment for violation of the U.S. securities laws with respect to the common shares.

We have also been advised that: • civil actions may be brought before Brazilian courts based on the federal securities laws of the United States and that, subject to applicable law, Brazilian courts may enforce liabilities in such actions against us (provided that provisions of the federal securities laws of the United States do not contravene Brazilian public policy, good morals or national sovereignty and provided further that Brazilian courts can assert jurisdiction over the particular action); and • the ability of a judgment creditor to satisfy a judgment by attaching certain assets of the defendant in Brazil is governed and limited by provisions of Brazilian law.

A plaintiff, whether Brazilian or non-Brazilian, who resides outside Brazil or is outside Brazil during the course of litigation in Brazil and who does not own real estate property in Brazil must grant a pledge to guarantee the payment of the defendant’s legal fees and court expenses that could secure that payment, except in the case of collection claims based on an instrument that may be enforced in Brazilian courts without the review of its merit (título executivo extrajudicial) or counterclaims as established under Article 836 of the Brazilian Code of Procedure.

159 (Convenience Translation into English from the Original Previously Issued in Portuguese)

T4F Entretenimento S.A.

Individual (Company) and Consolidated Financial Statements for the Year Ended December 31, 2010 and Independent Auditors’ Report

Deloitte Touche Tohmatsu Auditores Independentes INDEX TO FINANCIAL STATEMENTS

T4F Entretenimento S.A. Individual (Company) and Consolidated Financial Statements as of and for the year ended December 31, 2010 and Independent Auditors Report Independent Auditors Report on Financial Statements...... F-2 Balance Sheets as of December 31, 2010, 2009 and 2008 and January 1, 2008 ...... F-4 Statements of Income for the years ended December 31, 2010, 2009 and 2008 ...... F-6 Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008 ...... F-7 Statements of Changes in Shareholders’ Equity for the years ended December 31, 2010, 2009 and 2008 . . F-8 Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 ...... F-9 Statements of Value Added for the years ended December 31, 2010, 2009 and 2008 ...... F-10 Notes to the Financial Statements for the year ended December 31, 2010...... F-11 Deloitte Touche Tohmatsu Rua José Guerra, 127 04719-030 - São Paulo - SP Brasil Tel.: +55 (11) 5186-1000 Fax: +55 (11) 5181-2911 www.deloitte.com.br

(Convenience Translation into English from the Original Previously Issued in Portuguese)

INDEPENDENT AUDITORS’ REPORT ON FINANCIAL STATEMENTS

To the Management and Shareholders of T4F Entretenimento S.A. São Paulo, SP

We have audited the accompanying individual (Company) and consolidated financial statements of T4F Entretenimento S.A. and its subsidiaries, which are comprised of the balance sheet as of December 31, 2010 and the related statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended December 31, 2010, and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with Brazilian accounting practices and the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), Brazilian accounting practices and the internal controls that management has deemed necessary for preparing financial statements that are free from material misstatements, whether due to fraud or error.

Independent auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and international standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

“Deloitte” refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its Member Firms.

F-2 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on the individual financial statements In our opinion, the individual financial statements to in paragraph 1 present fairly, in all material respects, the financial position of T4F Entretenimento S.A. as of December 31, 2010 , the results of its operations and its cash flows for the year then ended December 31, 2010, in accordance with Brazilian accounting practices.

Opinion on the consolidated financial statements In our opinion, the consolidated financial statements referred to in paragraph 1 present fairly, in all material respects, the consolidated financial position of T4F Entretenimento S.A. as of December 31, 2010, the consolidated performance of its operations and its consolidated cash flows for the year then ended December 31, 2010, in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and Brazilian accounting practices.

Emphasis of matter As described in note 6.2 to the financial statements, the individual financial statements have been prepared in accordance with Brazilian accounting practices. In the case of T4F Entretenimento S.A.’s separate financial statements, these practices differ from IFRS with respect to the valuation of investments in subsidiaries, affiliates and jointly controlled entities which are valued using the equity method of accounting, while IFRS requires these investments to be measured at cost.

Other issues Statements of value added We have also audited the individual and consolidated statements of value added for the year ended December 31, 2010, which is required by Brazilian Corporate Law and is an additional disclosure under IFRS, which does not require the presentation of a value added statement. Such information has been subjected to the auditing procedures described above, and in our opinion it is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

São Paulo, January 13, 2011

DELOITTE TOUCHE TOHMATSU Reynaldo Awad Saad Auditores Independentes Engagement Partner

F-3 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. BALANCE SHEETS AS OF DECEMBER 31, 2010, 2009 AND 2008 AND JANUARY 1, 2008 (In thousands of Brazilian reais—R$)

BR GAAP IFRS Company Consolidated January 1 January 1 ASSETS Note 2010 2009 2008 2008 2010 2009 2008 2008 CURRENT ASSETS Cash and cash equivalents . . 8 69,859 17,595 21,786 95,089 120,934 55,165 92,765 121,708 Restricted cash ...... 9 5,655 2,129 — — 6,595 2,129 — — Accounts Receivable...... 10 34,367 33,300 18,155 37,307 66,097 52,564 69,445 68,622 Inventories...... 275 305 393 481 1,258 1,675 1,523 2,056 Recoverable taxes ...... 11 1,419 5,257 14,831 1,292 14,458 17,958 31,235 10,346 Advances to suppliers ...... 12 1,816 17,966 3,589 4,123 4,892 21,499 10,205 4,501 Prepaid expenses ...... 13 19,964 11,793 6,766 14,940 34,693 23,670 22,350 22,351 Derivatives ...... 18 — — 3,855 — — — 3,855 — Dividends receivable from subsidiaries ...... 2,538 1,810 910 — — — — — Other receivables ...... 341 201 2,198 15 3,037 3,435 7,181 1,747 Total current assets ...... 136,234 90,356 72,483 153,247 251,964 178,095 238,559 231,331 NONCURRENT ASSETS Long-term assets: Deferred income tax and social contribution ...... 29 90,166 109,404 109,439 109,711 92,603 113,920 115,935 112,141 Escrow deposits...... 1,876 1,381 1,521 1,168 2,846 2,211 2,430 1,858 Prepaid expenses...... 13 62 — — — 639 1,043 2,110 — Derivatives ...... 18 — — 7,772 — — — 7,772 — Related party receivables ...... 14 26,509 30,005 2,788 984 13,064 16,504 808 — Total long-term assets ...... 118,613 140,790 121,520 111,863 109,152 133,678 129,055 113,999 Investments in subsidiaries ...... 15.a) 64,482 53,663 74,547 35,915 — — — — Property, plant and equipment ...... 16.a) 12,123 12,272 22,140 34,457 23,452 24,807 38,105 48,362 Intangible assets: Goodwill on acquisition of investments ...... 15.b) 128,717 128,717 129,223 132,217 135,074 135,654 139,489 140,739 Other intangible assets...... 16.b) 1,944 1,688 1,949 1,021 2,161 2,013 2,669 1,722 Total noncurrent assets ..... 325,879 337,130 349,379 315,473 269,839 296,152 309,318 304,822 TOTAL ASSETS...... 462,113 427,486 421,862 468,720 521,803 474,247 547,877 536,153

The accompanying notes are an integral part of these financial statements.

F-4 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. BALANCE SHEETS AS OF DECEMBER 31, 2010, 2009 AND 2008 AND JANUARY 1, 2008 (In thousands of Brazilian reais—R$)

BR GAAP IFRS Company Consolidated LIABILITIES AND January 1 January 1 SHAREHOLDERS’ EQUITY Note 2010 2009 2008 2008 2010 2009 2008 2008 CURRENT LIABILITIES Trade payables ...... 17 14,776 17,088 17,195 18,541 36,475 37,916 87,652 43,377 Loans and financing ...... 18 19,026 60,004 60,281 29,281 19,026 61,590 60,281 29,647 Accrued payroll and related taxes..... 6,267 4,048 4,751 4,063 9,291 6,719 9,144 6,318 Share-based payments...... 33 2,549 — — — 2,549 — — — Taxes payable...... 19 8,971 5,853 6,217 5,430 17,423 15,512 22,051 17,851 Advances from clients ...... 20 86,329 60,192 22,610 73,479 113,290 93,770 36,431 97,012 Sponsorships—Cultural incentives law...... 21 3,385 2,007 — — 3,466 2,007 — — Dividends payable ...... 9,175 — — 6,253 9,616 427 744 6,253 Related party payables ...... 14 13,491 34,693 28 25,706 — — 1,363 — Provision for tax, civil and labor contingencies ...... 22 6,972 4,782 1,973 4,247 7,494 5,080 2,099 4,292 Other payables ...... 757 118 354 8,348 831 525 3,142 12,169 Total current liabilities ...... 171,698 188,785 113,409 175,348 219,461 223,546 222,907 216,919 NONCURRENT LIABILITIES Loans and financing ...... 18 131,250 85,256 146,062 179,704 131,250 85,256 146,062 179,704 Provision for tax, civil and labor contingencies ...... 22 15,774 19,771 21,931 22,288 21,915 24,897 28,847 27,688 Deferred income tax and social contribution ...... 29 1,039 2,448 14,502 11,114 1,429 2,870 14,719 11,352 Allowance for investment losses...... — — — 941 — — — — Taxes payable...... 19 9,804 11,932 438 564 13,117 16,610 4,560 2,489 Advances from clients ...... 20 1,313 — — 7,305 1,313 — 2,437 21,875 Other payables ...... — — — ———— 478 Total noncurrent liabilities...... 159,180 119,407 182,933 221,916 169,024 129,633 196,625 243,586 SHAREHOLDERS’ EQUITY 23 Capital ...... 36,462 31,462 31,462 31,462 36,462 31,462 31,462 31,462 Legal reserve ...... 7,292 5,587 5,394 3,198 7,292 5,587 5,394 3,198 Revaluation reserve...... 1,726 1,941 5,984 10,815 1,726 1,941 5,984 10,815 Earnings retention reserve ...... 55,319 80,104 78,809 25,981 55,319 80,104 78,809 25,981 Additional dividends proposed ...... 27,524 — — — 27,524 — — Valuation adjustments to equity ...... 2,912 200 3,871 — 2,912 200 3,871 — Equity attributable to owners of the Company...... 131,235 119,294 125,520 71,456 131,235 119,294 125,520 71,456 Non-controlling interests in equity of subsidiaries...... — — — — 2,083 1,774 2,825 4,192 Total consolidated shareholders’ equity...... 131,235 119,294 125,520 71,456 133,318 121,068 128,345 75,648 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ..... 462,113 427,486 421,862 468,720 521,803 474,247 547,877 536,153

The accompanying notes are an integral part of these financial statements.

F-5 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008 (In thousands of Brazilian reais—R$, except earnings per share)

BR GAAP IFRS Company Consolidated Note 2010 2009 2008 2010 2009 2008 NET OPERATING REVENUE ...... 24 286,539 222,983 268,329 569,179 434,559 596,594 COSTS OF SERVICES AND SALES. . . (183,875) (176,998) (196,240) (403,214) (328,544) (437,371) GROSS PROFIT ...... 102,664 45,985 72,089 165,965 106,015 159,223 OPERATING INCOME (EXPENSES) Selling expenses ...... (981) (654) (811) (3,364) (3,463) (4,112) General and administrative expenses .... 25 (48,608) (39,453) (41,190) (77,153) (68,088) (68,875) Management compensation ...... 14.2 (2,632) (3,555) (4,669) (3,497) (5,970) (6,744) Interests in subsidiaries: Equity in subsidiaries ...... 15 18,199 15,431 40,759 — — — Reversal of losses on investments . . 15 — — 941 — — — Other operating income, net...... 28 3,899 1,506 4,710 8,192 2,568 3,906 OPERATING INCOME BEFORE FINANCIAL INCOME (EXPENSES) ...... 72,541 19,260 71,829 90,143 31,062 83,398 FINANCIAL INCOME (EXPENSES) . . 27 Financial expenses ...... (17,345) (73,095) (16,881) (21,955) (78,309) (19,891) Financial income ...... 5,428 2,875 52,036 7,578 5,552 56,398 Net foreign exchange and inflation (gain)/loss ...... (4,392) 42,807 (59,415) (7,546) 42,338 (60,035) INCOME (LOSS) BEFORE INCOME AND SOCIAL CONTRIBUTION .... 56,232 (8,153) 47,569 68,220 643 59,870 INCOME TAX AND SOCIAL CONTRIBUTION Current ...... 29 — — — (8,395) (6,601) (13,237) Deferred ...... 29 (17,828) 12,019 (3,659) (19,562) 11,932 254 NET INCOME FOR THE YEAR...... 38,404 3,866 43,910 40,263 5,974 46,887 NET INCOME ATTRIBUTABLE TO: Owners of the Company ...... 38,404 3,866 43,910 38,404 3,866 43,910 Noncontrolling interests ...... — — — 1,859 2,108 2,977 38,404 3,866 43,910 40,263 5,974 46,887 BASIC AND DILUTED EARNINGS PER SHARE—R$...... 23 0.6683 0.0673 0.7554 0.6683 0.0673 0.7554

The accompanying notes are an integral part of these financial statements.

F-6 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008 (In thousands of Brazilian reais—R$)

BR GAAP IFRS Company Consolidated 2010 2009 2008 2010 2009 2008 NET INCOME FOR THE YEAR...... 38,404 3,866 43,910 40,263 5,974 46,887 Other comprehensive income Exchange differences on translating foreign operations...... 2,712 (3,671) 3,901 2,712 (3,671) 3,901 Total comprehensive income for the year ...... 41,116 195 47,811 42,975 2,303 50,788 Total comprehensive income attributable to: Owners of the Company ...... 41,116 195 47,811 41,116 195 47,811 Noncontrolling interests...... — — — 1,859 2,108 2,977 41,116 195 47,811 42,975 2,303 50,788

The accompanying notes are an integral part of these financial statements.

F-7 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008 (In thousands of Brazilian reais—R$, except amounts per share) Earnings Proposed Valuation Equity attributable Noncontrolling Consolidated Capital Revaluation retentionão additional adjustments Retained to owners of interests in shareholders’ Note Capital reserve reserve reserve dividends to equity earnings the Company subsidiaries’ equity equity BALANCE ORIGINALLY REPORTED AT DECEMBER 31, 2007...... 31,462 3,198 10,815 — — — 25,981 71,456 — 71,456 Adjustment for first-time adoption of CPCs 01-40 ...... — — — 25,981 — — (25,981) — 4,192 4,192 ADJUSTED BALANCES AT JANUARY 1, 2008...... 31,462 3,198 10,815 25,981 — — — 71,456 4,192 75,648 Net income originally reported ...... — — — — — — 13,035 13,035 2,977 16,012 Adjustment to net income for first-time adoption of CPCs 01-40...... — — — — — — 30,875 30,875 — 30,875 Adjusted net income for the year ...... — — — — — — 43,910 43,910 2,977 46,887 Realization of revaluation reserve ...... — — (4,831) — — — 4,831 — — — Legal reserve ...... 23 — 2,196 — — — — (2,196) — — — Exchange differences on translating foreign operations ...... 23 — — — 30 — 3,871 — 3,901 — 3,901 Reversal of dividends proposed in the year ended December 31, 2007 (R$0.027 per share)...... 23 — — — — — — 6,253 6,253 — 6,253

F-8 Dividends paid to noncontrolling interests . . . — — — — — — — — (4,344) (4,344) Earnings retention reserve ...... 23 — — — 52,798 — — (52,798) — — — ADJUSTED BALANCES AT DECEMBER 31, 2008 ...... 31,462 5,394 5,984 78,809 — 3,871 — 125,520 2,825 128,345 Realization of revaluation reserve ...... 23 — — (4,043) — — — 4,043 — — — Net income for the year ...... 23 — — — — — — 3,866 3,866 2,108 5,974 Legal reserve ...... 23 — 193 — — — — (193) — — — Exchange differences on translating foreign operations ...... 23 — — — — — (3,671) — (3,671) — (3,671) Earnings retention reserve ...... 23 — — — 7,716 — — (7,716) — — — Dividends paid to noncontrolling interests . . . — — — — — — — — (2,361) (2,361) Acquisition of equity interests from noncontrolling shareholders ...... 23 — — — (6,421) — — — (6,421) (798) (7,219) BALANCES AT DECEMBER 31, 2009 .... 31,462 5,587 1,941 80,104 — 200 — 119,294 1,774 121,068 Dividends distributed approved at ASM of August 27, 2010 ...... — — — (20,000) — — — (20,000) — (20,000) Capital increase approved at ASM of August 27, 2010 ...... 5,000 — — (5,000) — — — — — — Net income for the year ...... — — — — — — 38,404 38,404 1,859 40,263 Earnings retention reserve ...... 23 — — — 38,404 — — (38,404) — — — Realization of revaluation reserve ...... — — (215) 215 — — — — — — Exchange differences on translating foreign operations ...... 23 — — — — — 2,712 — 2,712 — 2,712 Legal reserve ...... 23 — 1,705 — (1,705) — — — — — — Dividends paid to noncontrolling interests . . . — — — — — — — — (1,550) (1,550) Mandatory 2010 dividends...... 23 — — — (9,175) — — — (9,175) — (9,175) Additional dividends proposed for 2010 pursuant to ICPC 08 ...... 23 — — — (27,524) 27,524 — — — — — BALANCES AT DECEMBER 31, 2010 .... 36,462 7,292 1,726 55,319 27,524 2,912 — 131,235 2,083 133,318

The accompanying notes are an integral part of these financial statements. (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008 (In thousands of Brazilian reais—R$) BR GAAP IFRS Company Consolidated Note 2010 2009 2008 2010 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES Net income for the year ...... 38,404 3,866 43,910 40,263 5,974 46,887 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in subsidiaries ...... 15 (18,199) (15,431) (40,759) — — — Reversal of losses on investments in subsidiaries ...... — — (941) — — — Depreciation and amortization...... 16 2,536 12,245 14,392 4,966 15,024 17,014 Net book value of property, plant and equipment written-off ...... 136 1,031 252 2,865 1,862 766 Deferred income tax and social contribution ...... 17,828 (12,019) 3,659 19,562 (11,932) (254) Loans and financing costs and exchange differences on balances with subsidiaries, financing, borrowings and taxes payable...... 17,801 25,420 31,620 17,244 9,846 31,149 Share-based payments...... 2,549 — — 2,549 — — Provision for tax, civil and labor contingencies ...... (1,807) (2,058) (4,091) (259) (2,165) (3,356) Recognition (reversal) of allowance for doubtful accounts ...... (220) 345 34 650 1,608 1,233 Decrease (increase) in operating assets and liabilities: Related parties ...... (847) (15,490) 19,118 (15,370) 15,273 (2,056) Inventories...... 30 88 88 404 (152) 533 Recoverable taxes ...... 3,838 9,574 (13,539) 2,552 13,277 (20,889) Advances to suppliers ...... 16,150 (14,377) 534 16,329 (11,294) (5,704) Other receivables ...... (140) 489 (1,424) 137 3,145 (5,352) Escrow deposits ...... (495) 140 (353) (635) 219 (572) Prepaid expenses ...... (8,233) (5,027) 8,174 (11,798) (253) (2,109) Trade payables ...... (2,359) (111) (4,251) 74 (49,740) 41,362 Taxes payable...... 990 (1,828) 661 (588) (7,447) 6,271 Accrued payroll and related taxes...... 2,219 (703) 688 2,732 (2,424) 2,826 Advances from customers ...... 27,450 37,582 (58,174) 21,901 54,902 (80,019) Other payables ...... (1,508) (358) (410) (2,407) (3,731) (1,944) Net cash provided by (used in) operating activities ...... 96,123 23,378 (812) 101,171 31,992 25,786 CASH FLOWS FROM INVESTING ACTIVITIES Net cash received from sale of subsidiary Motivare S.A...... — 1,510 1,563 — 1,510 1,563 Write-off of goodwill of subsidiaries B.A. Inversiones S.A. and T4F Inversiones S.A. arising from corporate restructuring due to payment of Pop Art and Ticketek...... — 506 1,542 — 506 1,542 Capital increase in subsidiaries ...... — (2,290) — — — — Dividends received from subsidiaries ...... 9,365 4,073 5,241 — — — Purchase of property, plant and equipment and intangible assets ...... (2,733) (3,143) (3,260) (7,063) (6,545) (6,812) Reduction of capital in subsidiaries...... — 26,719 — — — — Net cash provided by (used in) investing activities ...... 6,632 27,375 5,086 (7,063) (4,529) (3,707) CASH FLOWS FROM FINANCING ACTIVITIES Related parties...... (17,988) 22,717 (27,482) 3,440 (735) 554 Payment of dividends...... (20,000) — — (21,536) (2,679) (3,600) Loans and financing...... — — — — 1,586 — Acquisition of new share of subsidiary Vicar ...... — (7,219) (6,022) — (7,219) (5,029) Issuance of debentures...... 150,000 — — 150,000 — — Repayment of loans, financing and swaps ...... (145,429) (55,697) (32,923) (146,882) (55,697) (32,923) Payment of interest on loans, financing and swaps ...... (17,074) (14,745) (11,150) (16,799) (14,745) (11,491) Net cash provided by (used in) financing activities ...... (50,491) (54,944) (77,577) (31,777) (79,489) (52,489) EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS ...... — — — 3,438 14,426 1,467 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...... 52,264 (4,191) (73,303) 65,769 (37,600) (28,943) CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the year...... 17,595 21,786 95,089 55,165 92,765 121,708 Cash and cash equivalents at the end of the year ...... 69,859 17,595 21,786 120,934 55,165 92,765 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...... 52,264 (4,191) (73,303) 65,769 (37,600) (28,943) The accompanying notes are an integral part of these financial statements.

F-9 (Convenience Translation into English from the Original Previously Issued in Portuguese) T4F ENTRETENIMENTO S.A. STATEMENTS OF VALUE ADDED FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008 (In thousands of Brazilian reais—R$)

BR GAAP IFRS Company Consolidated 2010 2009 2008 2010 2009 2008 REVENUES From services ...... 330,392 256,441 308,497 619,653 478,171 653,091 Other operating income ...... 2,343 676 1,602 4,690 4,004 3,525 Allowance for doubtful accounts ...... 220 (345) (34) 650 (1,608) (1,233) INPUTS PURCHASED FROM THIRD PARTIES Cost of services ...... (157,735) (146,425) (169,367) (336,856) (275,056) (386,940) Materials, electric power, outside services and other...... (17,125) (14,140) (13,965) (25,702) (25,395) (24,980) (Loss) recovery of assets ...... (136) (1,008) 941 (171) (1,008) — Other ...... (6) 160 — 5,693 1,759 — GROSS VALUE ADDED ...... 157,953 95,359 127,674 267,957 180,867 243,463 DEPRECIATION AND AMORTIZATION . . . (2,536) (12,245) (14,392) (4,966) (15,024) (17,014) WEALTH CREATED BY THE COMPANY . . 155,417 83,114 113,282 262,991 165,843 226,449 WEALTH RECEIVED IN TRANSFER...... 33,373 83,488 121,683 19,164 76,258 92,610 Financial income including exchange gains .... 15,174 68,057 80,924 19,164 76,258 92,610 Equity in subsidiaries ...... 18,199 15,431 40,759 — — — DISTRIBUTION OF WEALTH...... 188,790 166,602 234,965 282,155 242,101 319,059 WEALTH DISTRIBUTED Personnel...... 39,691 35,409 35,128 64,373 62,391 61,055 Salaries and wages ...... 29,583 31,185 30,610 51,919 56,597 55,024 Benefits...... 8,911 2,916 3,181 10,912 4,149 4,315 Severance Pay Fund (FGTS) ...... 1,197 1,308 1,337 1,542 1,645 1,716 Taxes, fees and contributions ...... 46,139 9,043 22,658 78,604 35,364 50,248 Federal ...... 32,762 (854) 11,015 58,506 19,887 29,989 State ...... — — (10) 4,987 4,871 6,987 Municipal...... 13,376 9,897 11,653 15,111 10,606 13,272 Lenders and lessors ...... 64,556 118,284 133,269 98,915 138,372 160,869 Interest ...... 31,482 95,470 105,184 40,889 106,677 116,142 Leases ...... 31,510 20,592 28,645 42,263 28,071 38,961 Other ...... 1,564 2,222 (560) 15,763 3,624 5,766 Shareholders...... 38,404 3,866 43,910 40,263 5,974 46,887 Dividends...... 9,122 — — 10,672 2,361 4,344 Retained earnings ...... 29,282 3,866 43,910 27,732 1,505 39,566 Noncontrolling interests ...... — — — 1,859 2,108 2,977 WEALTH DISTRIBUTED ...... 188,790 166,602 234,965 282,155 242,101 319,059

The accompanying notes are an integral part of these financial statements.

F-10 (Convenience Translation into English from the Original Previously Issued in Portuguese)

T4F ENTRETENIMENTO S.A.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts in thousands of Brazilian reais - R$ and/or thousands of U.S. dollars - US$, unless otherwise stated)

1. OPERATIONS T4F Entretenimento S.A. (the “Company”) is engaged in the general management, promotion, organization, production, representation, programming and undertaking of live entertainment-related activities, such as sports, artistic and cultural events and shows and performances of any type or nature, as well as the management and operation of performing arts venues, such as theaters, gymnasiums and stadiums.

The Company manages four venues in Brazil, Credicard Hall, Citibank Hall and Teatro Abril, in São Paulo and Citibank Hall, in Rio de Janeiro, and it manages a venue in Argentina, the Citi Opera House. In addition to Brazil, operations include events held in Argentina, and Chile through its subsidiaries.

In August 2008, the Company entered into with Live Nation Worldwide, the largest live entertainment company in the world, an agreement that covers: (a) non-competition; (b) live show scheduling; and (c) exclusivity in international concerts with artists managed by Live Nation Worldwide. The agreement covers South America (except Colombia), and is effective for seven years. With this agreement, the Company benefits from an increase in the contents of its portfolio, leveraging its business.

2. BASIS OF PREPARATION 2.1. Declaration of Conformity The Company’s financial statements are comprised of: • The consolidated financial statements in accordance with the International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”), and the Brazilian accounting practices, identified as “Consolidated – IFRS”. • The individual financial statements of the parent company prepared in accordance with Brazilian accounting practices, identified as “Company - BR GAAP”.

The Brazilian accounting practices are comprised of the policies set out in Brazilian Corporate Law and the pronouncements, guidance, and interpretations issued by the Accounting Pronouncements Committee (“CPC”) and approved by the Brazilian Securities and Exchange Commission (“CVM”).

The individual financial statements present the valuation of investments in subsidiaries under the equity method, pursuant to prevailing Brazilian accounting practices. Accordingly, these individual financial statements are not considered in accordance with IFRS, which requires the measurement of such investments in separate financial statements from that of the parent at their fair values or at cost.

As there is no difference between the consolidated shareholders’ equity and the consolidated net income attributable to the owners of the Company, disclosed in the consolidated financial statements prepared in accordance with IFRS and the Brazilian accounting practices, and the Company’s shareholders’ equity and net income, disclosed in the individual financial statements prepared in accordance with Brazilian accounting practices, the Company opted to present these individual and consolidated financial statements as a single set of information, side by side.

F-11 2.2. Basis of Preparation The financial statements have been prepared based on historical cost base, except for certain financial instruments measured at their fair values, as described in accounting policies below. The historical cost is normally based on the fair value of consideration paid for the assets.

These consolidated financial statements are the first prepared in accordance with IFRS. When preparing the individual financial statements, the Company adopted the changes introduced in Brazilian accounting practices which were introduced by pronouncements CPC 15 Business Combinations to CPC 40 Financial Instruments. The effects of adopting IFRS and the new pronouncements issued by the CPC are described in note 5.

The summary of the main accounting policies adopted by the Company are described in note 3.

3. SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies can be summarized as follows: a) General principles Assets, liabilities, income and expenses are stated on the accrual basis. Revenue from sales is recognized when all risks and rewards inherent in the product sold are transferred to the buyer or when services are actually provided. Revenue is stated net of deductions, including sales tax.

b) Cash and cash equivalents Comprised of cash, bank deposits and short-term investments. Short-term investments are stated at their fair values at the end of the annual reporting period, have maturities lower than 90 days, have no fixed term for redemption, are highly-liquid, and are subject to an immaterial risk of change in value.

c) Accounts receivable and allowance for doubtful accounts Accounts receivable are stated and kept at their original amounts which approximate the amortized cost method, less the allowance for doubtful accounts, which is recognized based on an analysis of all receivables past due for more than 90 days with respect to: (i) the customer’s justification for the delay; (ii) renegotiation and/or payment in installments of the receivable; (iii) actual likelihood of receiving such amounts; and (iv) customer history, as shown in note 10. An allowance is recognized for receivables for which payment is possible or remote. These amounts are not adjusted to present value since they have a short term maturity and have an immaterial impact on the financial statements.

d) Inventories Stated at the cost of purchase, adjusted to realized value (valor de realização) and for possible losses, when applicable. The costs of inventories are determined under the average cost method.

e) Prepaid expenses Refer mainly to amounts paid in advance to conduct events, shows and performances, and are recorded as income for the year as the related events, shows and performances are held. Management tests these assets for impairment periodically or when events or changes in circumstances indicate that their book values might not be recovered.

f) Other current and noncurrent assets Stated at the lower of cost or realizable value plus income and inflation adjustments earned, when applicable.

F-12 g) Investments In the individual financial statements, investments in subsidiaries are accounted for under the equity method.

h) Property, plant and equipment Stated at cost of purchase including interest, when applicable, plus revaluation write-up and less depreciation, calculated under the straight-line method at rates based on the estimated useful lives of the assets, except leasehold improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the lease terms. Additionally, given that the Company revalued its property, plant and equipment in 2006, the deemed cost of property, plant and equipment does not differ from the book value recognized in the financial statements.

i) Revaluation reserve Recognized for the assets existing as of January 1, 2006 and supported by appraisal reports issued by independent experts. Revalued assets refer to assets represented by constructions, installations, leasehold improvements, furniture and fixtures, IT equipment and machinery and equipment, and is realized as a credit to retained earnings (accumulated losses) by depreciation based on the revised estimated useful lives of the assets and/or by disposal. The related deferred income tax and social contribution are classified in noncurrent liabilities, as discussed in note 29. As permitted by Law 11638/07, the Company and its subsidiary Metropolitan Empreendimentos S.A. decided to maintain the balances of revaluations of existing assets as of December 31, 2007.

j) Acquisitions of subsidiaries—goodwill In the consolidated financial statements, business acquisitions are accounted for under the acquisition method. The valuable consideration transferred to the former owners of the acquiree and the equity interests by the Company in exchange for the control of the acquiree in a business combination are measured at fair value, which is calculated by adding the fair values of the transferred assets and the liabilities incurred by the entity on the date of acquisition.

Acquisitions carried out before the date of transition to IFRS As required by the accounting practices adopted in Brazil prior to Law 11638/07, the difference between the amount paid and the acquired subsidiary’s equity is accounted for as goodwill, based on the expected future earnings of the acquired business. When the Company identifies changes in circumstances that indicate an impairment of goodwill, it recognizes a provision to reflect the recoverable value of the impaired assets.

In compliance with CVM Instructions 319/99 and 349/99, when the Company merged its direct shareholder ADTSPE Empreendimentos e Participações S.A. (“ADTSPE”) in June 2007, goodwill that was originally recorded at ADTSPE was written off by means of a provision at ADTSPE itself. In accordance with prevailing tax regulations, this provision is deductible for tax purposes only after the merger of the company and based on the expected generation of operating profits. Therefore, we recorded an asset related to deferred income tax and social contribution arising from the merger process.

Beginning January 1, 2008, goodwill is no longer amortized for accounting purposes and is tested for impairment, in accordance with CVM Resolution 527/07, which approves CPC 01 Impairment of Assets.

The Company adopted the option granted by IFRS 1 First-time Adoption of International Financial Reporting Standards and did not adjust goodwill on business acquisitions carried out prior to January 1, 2008, and maintained such acquisitions at their book value on the transition date, pursuant to IFRS 1.

F-13 k) Other intangible assets These refer mainly to software licenses and trademarks and patents. The amortization of software licenses is calculated under the straight-line method at rates that take into consideration the estimated useful lives of the assets. When it is identified that a license or right no longer generates economic benefits, it is written off against income for the year.

l) Impairment of goodwill In order to test the impairment loss, management determined that the cash generating units (“CGUs”) corresponding to each operating segment to which goodwill was allocated will be tested for impairment annually, or more frequently whenever there is an indication that a unit might be impaired. If the recoverable value of a CGU is lower that its book value, the impairment loss is first allocated to write down the book value of any goodwill allocated to the CGU and then to the other assets of the CGU, prorated book value based on the book value of each of its assets. Goodwill impairment losses cannot be reversed in a subsequent period. This policy applies only to assets with finite useful lives.

Upon the sale of a subsidiary, the attributable goodwill amount is included in the calculation of the related gain or loss.

m) Impairment of assets At the end of each year, the Company’s management reviews the book values of long-lived assets, especially property, plant, equipment, intangible assets and prepaid expenses, to be held and used in the Company’s operations, to determine and assess possible impairment on a periodic basis or whenever events or changes in circumstances indicate that the book value of an asset or group of assets might be impaired.

Analyses are performed in order to identify circumstances that could require testing long-lived assets for impairment and to measure potential impairment losses. Assets are grouped and tested for impairment based on expected future discounted cash flows over the estimated remaining useful lives of the assets. In this case, an impairment loss would be recognized based on the amount by which the book value exceeds the probable recoverable value of a long-lived asset. The probable recoverable value of an asset is determined by the higher of: (i) fair value of assets less estimated costs to sell, and (ii) its value in use, which is equal to the present value of discounted cash flows derived from the asset or cash generating unit. Upon the sale of a subsidiary, the attributable goodwill amount is included in the calculation of the related gain or loss.

At the end of each year, the Company tests its property, plant, equipment and intangible assets for impairment and, when applicable, other noncurrent assets to determine if there is any indication that such assets might be impaired. When such indication exists, the recoverable value of the asset is estimated to determine the impairment loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment at least annually or when there is any indication that such assets might be impaired.

The recoverable amount is the fair value less the lower of costs to sell or value-in-use. Estimated future cash flows are discounted to present value to determine the value-in-use at the pretax discount rate that reflects a current market assessment rate of the time value of money and the specific risks for the asset for which the cash flow estimate was not adjusted.

If the recoverable amount of an asset is lower than its book value, the book value is written down to its recoverable amount. An impairment loss is immediately recognized in net income for the year.

When an impairment loss is reversed in a subsequent period, the book value of the asset is written up to reflect the revised estimate of its recoverable amount so that this amount does not exceed the book value that

F-14 would have been determined had no impairment loss been recognized for the asset in prior years. The reversal of the impairment loss is immediately recognized in net income for the year.

n) Loans and financings Loans are initially recognized at fair value when funds are received, net of transaction costs. Subsequently, they are measured at amortized cost, i.e., plus foreign exchange differences or inflation adjustments and the related financial charges incurred through the end of the reporting period, according to contractual terms and conditions, using the effective interest method.

o) Debentures Recognized at their principal, plus related charges, which are accounted for as financial expenses on interest and inflation adjustments. Transaction costs incurred when funds are raised are accounted for as a reduction in fair value initially recognized pursuant to CPC 08 Equity Transaction Costs and Premiums.

p) Other current and noncurrent liabilities Stated at known or estimated amounts plus, when applicable, charges and inflation adjustments incurred, pursuant to agreements in effect.

q) Provisions Recognized only when a past event results in a legal or constructive obligation, it is probable that disbursements will be required to settle an obligation and the obligation amount can be reliably estimated.

The amount recognized as a provision corresponds to the best estimate of the payment required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties that surround such obligation.

r) Advances from customers Refer to the amounts received in advance for services related to sponsorship agreements, lease of suites and box seats in performing arts venues, space leasing, merchandising and advanced ticket sales, which will be recorded as income when the services are provided.

s) Revenue recognition Revenue from services Revenue from ticket sales (ticketing) is recognized when the events are held.

Revenue from convenience and delivery fees, originating from the sales of tickets via Internet or telephone, is recognized when the convenience or ticket delivery service is provided.

Revenue from naming rights agreements refers to the naming of the venues and is recognized as in income when the services are provided based on the agreements’ effective period.

Revenue from sponsorship agreements is recognized when certain contractual obligations, such as, but not limited to, use of sponsor trademarks/images in all media used to publicize the event, granting exclusivity in the sponsor’s market segment, granting rights to use official trademarks and images of the event, and granting the right to the purchase tickets in advance for customers of a particular sponsor, among others, are complied with and/or discharged.

F-15 Product sale revenue Food and beverage sales and merchandising are recognized when the goods are transferred to customers.

t) Income tax and social contribution – current and deferred Current and deferred income tax and social contribution are recognized in the statement of income for the year, except when prorated to items recognized directly in shareholders’ equity, when applicable. In this case, taxes are recognized directly in shareholders’ equity.

Except for the foreign subsidiaries, where the tax rates prevailing in each of the countries where they are located are applied, and subsidiary T4F Alimentos, Bebidas e Ingressos Ltda., which calculated income tax and social contribution based on deemed income, income tax and social contribution of the Company’s and other Brazilian subsidiaries’ income are calculated at the tax rates of 25% and 9%, respectively, based on actual income.

Current income tax and social contribution expenses are calculated pursuant to tax law prevailing at the end of the reporting period, pursuant to Brazilian tax regulations. Management periodically measures the positions assumed in the income tax return regarding the situations where applicable tax law is subject to possibly different interpretations and, when appropriate, recognizes provisions based on the amounts it expects to pay tax authorities.

Deferred income tax and social contribution are calculated using the liability method on temporary differences arising from differences between the tax basis of assets and liabilities and their book values. Deferred income tax and social contribution are calculated using the tax rates effective at the end of the reporting period that must be applied when the corresponding deferred income tax and social contribution assets are realized or deferred income tax and social contribution liabilities are settled.

Deferred tax assets are recognized only to the extent that there is a reasonable certainty that future taxable income will be available and against which temporary differences can be offset.

The amounts of deferred income tax and social contribution assets and liabilities are only utilized when there is a legally enforceable right to offset current tax assets against tax liabilities and/or when deferred income tax and social contribution assets and liabilities are related to the income tax and social contribution levied by the same tax authorities on the taxable entity or different taxable entities, where there is intention to settle the net balances.

The Company and its Brazilian subsidiaries opted for the Transitional Tax Regime (RTT) created by Law 11941/09, under which the calculation of business income tax (“IRPJ”), social contribution on net income (“CSLL”), Social Integration Program Tax on Revenue (“PIS”) and Social Security Funding Tax on Revenue (“COFINS”) for the two-year period 2008-2010 continues to be based on the methods and criteria set out by Law 6404/76, in effect on December 31, 2007.

When applicable, the deferred income tax and social contribution calculated based on the adjustments arising from the adoption of the new accounting practices introduced by Law 11638/07 and Law 11941/09 were recorded in the Company’s financial statements. The Company reported said option in its 2008 and 2009 Annual Income Tax Returns (DIPJ).

u) Foreign currency transactions Monetary assets and monetary liabilities denominated in foreign currency are translated into the functional currency at the exchange rate prevailing at the end of the reporting period. Gains and losses arising from the adjustment of these assets and liabilities to foreign exchange differences are recognized in income for the year as foreign exchange rate changes.

F-16 v) Functional and reporting currency Items included in the financial statements of the Company and each one of the subsidiaries included in the consolidated financial statements are measured using the currency of the main economic environment in which the companies operate (“functional currency”). The Company’s and its Brazilian subsidiaries’ functional currency is the Brazilian real. The functional currencies of foreign subsidiaries are as follows: (i) Argentina: Argentinean peso; (ii) Chile: Chilean peso; and (iii) the United States: US dollar. The financial statements of foreign subsidiaries are translated into Brazilian reais and exchange differences for translating foreign operations are recognized in shareholders’ equity, in line item “Valuation adjustments to equity,” and recognized in net income for the period in which such investments are realized. The consolidated financial statements are stated in Brazilian reais.

The results of operations and the financial positions of all the subsidiaries included in the consolidated financial statements—none of which are located in hyperinflationary economies—which have a functional currency different from the reporting currency are translated to the reporting currency as follows: i) Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period. ii) Income and expense accounts are translated at the average monthly exchange rate. iii) All exchange differences are recognized in the statement of income comprehensive, in line item ‘Exchange differences on translating foreign operations’. iv) Segment reporting Reporting on operating segments is consistent with the internal report provided to the chief operating decision maker. The chief operating decision maker, responsible for allocating resources to the operating segments and assessing their performance, is represented by the Company’s Executive Committee. v) Financial instruments Financial assets and financial liabilities are recognized when a Group entity becomes a party to the underlying contract. Financial assets and financial liabilities are initially measured at fair value. Transaction costs directly attributable to the acquisition or issuance of financial assets and financial liabilities (besides financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of financial assets and financial liabilities, as applicable, on their initial recognition. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through income are immediately recognized in income.

Classification Financial assets and financial liabilities held by the Company are classified into the following categories: (1) held-to-maturity financial assets; (2) available-for-sale financial instruments; and (3) loans and receivables. The classification depends on the purpose for which financial assets and liabilities were acquired or contracted. (1) Held-to-maturity financial assets Comprised of investments in certain financial assets classified when contracted to be held to maturity, which are measured at cost of purchase, plus income earned according to contractual terms and conditions. (2) Available-for-sale financial assets When applicable, non-derivative financial assets are included in this category, such as securities and/or shares quoted in active markets or which are not quoted in an active market but whose fair values can be reasonably estimated.

F-17 (3) Loans and receivables Include non-derivative financial assets and financial liabilities with fixed or determinable payments that are not quoted in an active market. They are recorded as current assets and current liabilities, except for maturities greater than 12 months after the end of the reporting period, when applicable, which are classified as noncurrent assets and noncurrent liabilities. As of December 31, 2010, 2009 and 2008, and January 1, 2008, in the case of the Company, it is comprised of cash and cash equivalents (note 8), loans and financing (note 18), accounts payables (note 17), and accounts receivable (note 10).

Measurement Regular purchases and sales of financial assets are recognized on transactions, i.e., on the date the Company agrees to buy or sell the asset. Financial assets at fair value through profit or loss are initially recognized at their fair value and transaction costs are deducted as expenses. Loans and receivables are accounted for at the amortized cost. Gains or losses resulting from changes in the fair value of financial assets measured through income or loss are recognized in the statement of operations in “Financial income” or “Financial expenses,” respectively, in the period in which they occur. Changes in financial assets classified as “Available for sale,” when applicable, are recorded in “Other comprehensive income” until the financial assets are settled, when they are ultimately reclassified under net income or loss for the year.

Offsetting financial instruments Financial assets and financial liabilities are offset and the net amount is recorded in the balance sheet when there is a legally enforceable right to set off recognized amounts and the intention to either settle them on a net basis or to recognize the asset and settle the liability simultaneously.

Derivatives Derivative financial instruments contracted by the Company and its subsidiaries include swaps used exclusively to hedge against currency risks related to the positions in the balance sheet plus the projected foreign currency-denominated cash flows, measured at fair value, with related changes recorded as income for the year. The fair value of the derivatives are calculated by the Company’s treasury based on information for each transaction and related market inputs available at the end of the reporting period, such as interest rates and exchange coupon. When applicable, these inputs are compared with the positions reported by the trading desks of each financial institution involved. Although the Company and its subsidiaries use derivatives for hedging purposes, they do not adopt the hedge accounting. The fair values of these derivatives are disclosed in note 30.

Other financial liabilities Other financial liabilities (including loans) are measured at the amortized cost using the effective interest method. The effective interest method is used to calculate the amortized cost of a financial liability and allocate its interest expense to the related period. The effective interest rate is the rate that discounts exactly estimated future cash flows (including fees and goodwill paid or received that form part of the effective interest rate, transaction costs, and other premiums or discounts) throughout the estimated useful life of the financial liability or, when applicable, by a shorter period, for the initial recognition of the net book value.

F-18 w) Share-based payment plan The share-based payment plan contracts entered into by the Company and its executives determines that the gains arising from the appreciation of the underlying securities will be settled in cash, duly measured at their fair value and recognized as financial liabilities. The fair value of such instruments was calculated using the Black & Scholes pricing model at the end of each annual reporting period, individually for each executive, since the date of the first grant, on September 28, 2007. Gains and losses arising on the remeasurement of these instruments are recognized in income for the year.

x) Statement of value added The purpose of this statement is to disclose the wealth created by the Company and its distribution during a certain reporting period, and is presented by the Company, as required by the Brazilian Corporate Law, as an integral part of its individual financial statements and as additional disclosure of the consolidated financial statements, since this statement is not required by IFRS. The statement of value added was prepared using information obtained from the same accounting records used to prepare the financial statements and pursuant to the provisions of CPC 09 Statement of Value Added. The first part of this statement includes the wealth created by the Company, represented by revenue (gross sales revenue, including taxes levied thereon, other income, and the effects of the allowance for doubtful accounts), inputs acquired from third parties (cost of sales and purchase of materials, electric power, and outside services, including taxes levied at the time of the acquisition, the effects of impairment losses, and depreciation and amortization), and the wealth received from third parties (equity in subsidiaries, financial income, and other income). The second part presents the distribution of wealth among personnel, taxes, fees and contributions, lenders and lessors, and shareholders.

y) Leases Leases are classified as finance leases when they substantially transfer all the risks and rewards incidental to ownership to the lessee. All other leases are classified as operating leases.

Operating leases payments are recognized as expenses under the straight-line method over the lease term, except when another approach is more appropriate to reflect the timing for when the economic benefits of the leased asset are consumed. Contingent payments arising on operating leases are recognized as expenses for the year they are incurred.

When the Company receives incentives to enter into an operating lease, such incentives are recognized as liabilities and subsequently recognized as a reduction in lease expenses on a straight-line basis, except when another approach is more appropriate to reflect the timing for when the economic benefits of the leased asset are consumed.

4. MAIN ESTIMATES AND JUDGMENTS The IFRS requires the use of certain fundamental accounting estimates and assumptions. It also requires that management exercises its judgment to apply the Company’s and its subsidiaries’ accounting estimates, as follows: a) The areas that involve judgment or the use of estimates material to the financial statements are presented below. The financial statements have been prepared based on historical cost and, when applicable, the amounts were adjusted to the fair values of transactions. b) In this context, the accounting estimates and assumptions are continually assessed by the Company’s management and are based on historical experience and other factors that are considered to be reasonable and relevant.

F-19 The Company uses assumptions and estimates for the future, to provide an understanding of how the Company forms its judgments on future events, including the variables and the assumptions used in the estimates, which require judgment regarding the impacts of relatively uncertain issues on the book values of its assets and liabilities. Actual results may differ from these estimates.

In applying the accounting policies described above, the Company’s and its subsidiaries’ management adopted the following assumptions that could affect their financial statements:

a) Deferred income tax and social contribution The liability method (according to the concept set out in IAS 12 Liability Method, equivalent to CPC 32) of accounting for income tax and social contribution is used for deferred income taxes arising from temporary differences between the book value of assets and liabilities and their and tax amounts. Deferred income tax assets are revised at the end of each annual reporting period and reduced by the amount which can no longer be realized using future taxable income. Deferred income tax assets and liabilities are calculated using tax rates applicable to taxable income in the years in which those temporary differences are expected to be realized. Future taxable income may be higher or lower than estimates made when determining whether it is necessary to record a tax asset and the amount to be recorded.

Credits recognized on tax loss carryforwards and negative social contributions are supported by projections of taxable income, based on feasibility studies annually submitted to the Board of Directors. These studies consider the Company’s and its subsidiaries’ history of profitability, and profitability maintenance prospects, which allows for a credit recovery estimate in future years. Other credits, based on temporary differences, especially the reserve for contingent tax liabilities, and the allowance for losses, were recognized according to their expected realization.

b) Derivatives The Company measures its derivatives at fair value at the end of the reporting period, the main evidence of fair value being the quotes obtained from market players. However, the extreme volatility of the currency and interest rate markets in Brazil caused, in certain periods, significant changes in future exchange rates and interest rates over very short periods of time, producing significant changes in the value of swap and other financial instruments over a short period of time. The fair value recognized in the consolidated financial statements may not necessarily reflect the cash amount the Company would receive or pay, as applicable, if it settled the transactions at the end of the reporting period.

c) Impairment test of long-lived assets There are specific rules to assess the impairment of long-lived assets, especially property, plant, equipment, goodwill and other intangible assets. At the end of the reporting period, the Company conducts an analysis to determine if there is evidence that its long-lived assets are impaired. No evidence was identified by the end of the reporting period.

The recoverable value of an asset is the higher of: (i) its fair value less costs to sell; and (ii) its value-in-use. The value-in-use is equivalent to discounted cash flows (before taxes) arising from the continuous use of the asset up to the end of its useful life. By the end of the reporting period, no asset was impaired.

The Company assesses the recoverability of goodwill annually and uses market-accepted practices, including discounted cash flows, to compare the book value of assets with their recoverable amounts.

The recoverability of goodwill is assessed based on the analysis and identification of facts and circumstances that could result in the need to advance the annual test. The test is advanced if any fact and circumstance indicates that goodwill might be impaired.

F-20 The tests conducted did not identify the need to recognize new goodwill impairment losses.

d) Reserve for tax, civil and labor contingencies The Company is a party to several lawsuits and administrative proceedings, as described in note 22. Reserves are recognized for all contingent liabilities arising from lawsuits that represent probable losses that can be reliably estimated. The likelihood of loss is assessed based on available evidence, applicable law, the jurisdiction’s jurisprudence, recent court decisions and their relevance within the legal system, as well as the assessment made by our outside legal counsel. Management believes that these reserves for tax, civil and labor contingent liabilities are accurately presented in the financial statements.

e) Allowance for doubtful accounts The allowance for doubtful accounts on accounts receivable is estimated based on the history of losses and is considered sufficient by management to cover probable losses.

f) Revenue recognition Certain sponsorship agreements provide for the delivery of services and/or contractual rights, which are provided in different time periods over the term of the agreements, which require management to make a judgment on the portion of revenue corresponding to each agreement.

5. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS The Company and its subsidiaries did not adopt the following new and revised IFRS already issued but not yet effective:

Amendments to IFRS 1 Limited Exemption from Capital Effective date for annual periods Comparative IFRS 7 Disclosures for beginning on or after July 1, 2011 First-time Adopters Amendments to IFRS 1 Removal of Fixed Dates for First- Effective date for annual periods time Adopters beginning on or after July 1, 2011 Amendments to IFRS 7 Disclosures—Transfers of Financial Effective date for annual periods Assets beginning on or after January 1, 2013 IFRS 9 (as amended in 2010) Financial Instruments Effective date for annual periods beginning on or after January 1, 2011 Amendments to IAS 12 Deferred Tax—Recovery of Effective date for annual periods Underlying Assets when an Asset Is beginning on or after January 1, Measured Using the Fair Value 2012 Model in IAS 407 Amendments to IAS 32 Classification of Rights Issues Effective date for annual periods beginning on or after January 1, 2010 Amendments to IFRIC 14 Prepayments of a Minimum Funding Effective date for annual periods Requirement beginning on or after January 1, 2011

F-21 The Company’s management believes that the application of certain standards above, to be adopted in its consolidated financial statements on their effective dates, could impact previously reported amounts. However, it is not possible to provide a reasonable estimate of such impact until a detailed review is made at the time of their adoption.

The CPC has not yet issued the pronouncements and amendments related to the new and revised IFRS above. Because of the CPC’ s and CVM’s commitment to keep the set of standards issued updated according to the changes made by the IASB, we expect that such pronouncements and amendments be issued by the CPC and approved by the CVM by the date they become effective.

6. EFFECT FROM ADOPTING IFRS AND THE PRONOUNCEMENTS ISSUED BY THE CPC 6.1. Effects from adopting IFRS on the consolidated financial statements 6.1.1. Application of IFRS The consolidated financial statements for the year ended December 31, 2010 (identified as Consolidated), are the first to be presented in conformity with IFRS, as described in note 2.1. The Company applied the accounting policies set out in note 3 to all periods presented, which includes the transition date balance sheet, defined as January 1, 2008. For the measurement of the adjustments of the opening balances and in preparing the transition date balance sheet, the Company applied the mandatory exceptions and certain optional exemptions of retrospective application under IFRS 1 and CPC 37 (R1) First-time Adoption of International Financial Reporting Standards, as described in the notes below.

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F-23 6.1.2. Reconciliations for previous accounting practices

Effects of adopting IFRS on the consolidated balance sheet

2009 2008 January 1, 2008 Previous Effects of Previous Effects of Previous Effects of accounting transition accounting transition accounting transition ASSETS Note practices to IFRS IFRS practices to IFRS IFRS practices to IFRS IFRS CURRENT ASSETS Cash and cash equivalents...... 8 55,165 — 55,165 92,765 — 92,765 121,708 — 121,708 Restricted cash...... 9 2,129 — 2,129 — — — — — — Accounts receivable ...... 10 52,564 — 52,564 69,445 — 69,445 68,622 — 68,622 Inventories ...... 1,675 — 1,675 1,523 — 1,523 2,056 — 2,056 Recoverable taxes ...... 11 17,958 — 17,958 31,235 — 31,235 10,346 — 10,346 Advances to suppliers...... 12 21,499 — 21,499 10,205 — 10,205 4,501 — 4,501 Prepaid expenses ...... 13 23,670 — 23,670 22,350 — 22,350 22,351 — 22,351 Deferred income tax and social contribution(d)...... 29 7,272 (7,272) — 16,876 (16,876) — 19,600 (19,600) — Derivatives ...... 18 — — — 3,855 — 3,855 — — — Other receivables...... 3,435 — 3,435 7,181 — 7,181 1,747 — 1,747 Total current assets ...... 185,367 (7,272) 178,095 255,435 (16,876) 238,559 250,931 (19,600) 238,559

NONCURRENT ASSETS Long-term assets: Deferred income tax and social contribution(d) .... 29 106,648 7,272 113,920 99,059 16,876 115,935 95,541 19,600 112,141 Escrow deposits(e)...... 1,689 522 2,211 2,090 340 2,430 1,569 289 1,858 Prepaid expenses ...... 13 1,043 — 1,043 2,110 — 2,110 — — — Derivatives ...... 18 — — — 7,772 — 7,772 — — — Related party receivables . . . 14 16,504 — 16,504 808 — 808 — — — Total long-term assets ...... 125,884 7,794 133,678 111,839 17,216 129,055 94,110 19,889 113,999 Investments in subsidiaries ...... 15.a) — — — — — — — — — Property, plant and equipment . . . 16.a) 24,807 — 24,807 38,105 — 38,105 48,362 — 48,362 Intangible assets: — Goodwill on acquisition of investments ...... 15.b) 111,442 24,212 135,654 108,413 31,075 139,489 140,739 — 140,739 Other intangible assets...... 16.b) 2,013 — 2,013 2,669 — 2,669 1,722 — 1,722 Total noncurrent assets...... 264,146 32,006 296,152 261,026 48,291 309,318 284,933 — 304,833 TOTAL ASSETS ...... 449,513 24,734 474,247 516,561 31,415 547,877 535,864 289 536,153

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F-25 2009 2008 January 1, 2008 Previous Effects of Previous Effects of Previous Effects of LIABILITIES AND accounting transition accounting transition accounting transition SHAREHOLDERS’ EQUITY Note practices to IFRS IFRS practices to IFRS IFRS practices to IFRS IFRS CURRENT LIABILITIES Accounts payables ...... 17 37,916 — 37,916 87,652 — 87,652 43,377 — 43,377 Loans and financing...... 18 61,590 — 61,590 60,281 — 60,281 29,647 — 29,647 Accrued payroll and related taxes . . . 6,719 — 6,719 9,144 — 9,144 6,318 — 6,318 Taxes payable ...... 19 15,512 — 15,512 22,051 — 22,051 17,851 — 17,851 Advances from clients ...... 20 93,770 — 93,770 36,431 — 36,431 97,012 — 97,012 Sponsorships—Cultural incentives law...... 21 2,007 — 2,007 — — — — — — Dividends payable ...... 23.b) 427 — 427 744 — 744 6,253 — 6,253 Related party payables...... 14 — — — 1,363 — 1,363 — — — Provision for tax, civil and labor contingencies...... 22 — — — 2,099 — 2,099 4,292 — 4,292 Other payables...... 525 — 525 3,142 — 3,142 12,169 — 12,169 Total current liabilities...... 218,466 — 218,466 222,907 — 222,907 216,919 — 216,919

NONCURRENT LIABILITIES Loans and financing...... 18 85,256 — 85,256 146,062 — 146,062 179,704 — 179,704 Reserve for tax, civil and labor contingencies(e) ...... 22 29,455 522 29,977 28,507 340 28,847 27,399 289 27,688 Deferred income tax and social contribution ...... 29 2,870 — 2,870 14,719 — 14,719 11,352 — 11,352 Allowance for investment losses .... — — — — — — — — — Taxes payable ...... 19 16,610 — 16,610 4,560 — 4,560 2,489 — 2,489 Advances from customers...... 20 — — — 2,437 — 2,437 21,875 — 21,875 Other payables...... — — — — — — 478 — 478 Total noncurrent liabilities ...... 134,191 — 134,713 196,285 — 196,625 243,297 289 243,586

SHAREHOLDERS’ EQUITY 23 Capital...... 31,462 — 31,462 31,462 — 31,462 31,462 — 31,462 Legal reserve ...... 4,043 1,544 5,587 3,850 1,544 5,394 3,198 — 3,198 Revaluation reserve ...... 1,941 — 1,941 5,984 — 5,984 10,815 — 10,815 Earnings retention reserve...... 57,194 22,910 80,104 49,478 29,331 78,809 — 25,981 25,981 Retained earnings ...... — — — — — — 25,981 (25,981) — Valuation adjustments to equity..... 442 (242) 200 3,670 200 3,871 — — — Equity attributable to owners of the Company ...... 95,082 24,212 119,294 94,444 31,075 125,520 71,456 — 71,456 Non-controlling interests in equity of subsidiaries(c)...... 1,774 — 1,774 2,825 — 2,825 — 4,192 4,192 Total consolidated shareholders’ equity ...... 96,856 24,212 121,068 97,269 31,075 128,345 71,456 — 75,648 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY.... 449,513 24,734 474,247 516,461 31,415 547,877 535,864 289 536,153

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F-27 Effects of adopting IFRS on the consolidated statement of income

2009 2008 Previous Effects of Previous Effects of accounting transition accounting transition Note practices to IFRS IFRS practices to IFRS IFRS NET OPERATING REVENUE ...... 24 434,559 — 434,559 596,594 — 596,594 COSTS OF SERVICES AND SALES ...... (328,544) — (328,544) (437,371) — (437,371) GROSS PROFIT ...... 106,015 — 106,015 159,223 — 159,223 OPERATING INCOME (EXPENSES) Selling expenses...... (3,463) — (3,463) (4,112) — (4,112) General and administrative expenses ...... (71,436) — (71,436) (70,688) — (70,688) Management compensation ...... (2,622) — (2,622) (4,931) — (4,931) Goodwill amortization ...... — — — (31,123) (31,123) — Interests in subsidiaries: Equity in subsidiaries...... 15 — — — — — — Reversal of losses on investments ...... 15 — — — — — — Other operating income, net ...... 28 2,568 — 2,568 4,154 248 3,906 INCOME (LOSS) FROM OPERATIONS BEFORE FINANCIAL INCOME (EXPENSES)...... 31,062 — 31,062 52,523 (30,875) 83,398 FINANCIAL INCOME (EXPENSES) 27 Financial expenses...... (78,309) — (78,309) (19,891) — (19,891) Financial income ...... 5,552 — 5,552 56,398 — 56,398 Net foreign exchange and inflation (gain)/loss ...... 42,338 — 42,338 (60,035) — (60,035) INCOME (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION...... 643 — 643 28,995 (30,875) 59,870 INCOME TAX AND SOCIAL CONTRIBUTION Current...... 29 (6,601) — (6,601) (13,237) — (13,237) Deferred...... 29 11,932 — 11,932 254 — 254 NET INCOME (LOSS) FOR THE YEAR ...... 5,974 — 5,974 16,012 (30,875) 46,887

NET INCOME (LOSS) ATTRIBUTABLE TO Owners of the Company...... 5,974 — 5,974 16,012 (30,875) 46,887 Noncontrolling interests ...... (2,108) — (2,108) (2,977) — (2,977) 3,866 — 3,866 13,035 (30,875) 43,910

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F-29 Reconciliation of consolidated shareholders’ equity

January 1, 2009 2008 2008 Total shareholders’ equity under previous accounting practices ...... 95,082 94,444 71,456 Reversal of goodwill amortization(a)...... 31,123 31,123 — Decrease in gain on disposal of investments ...... (248) (248) — Exchange differences on converting foreign operations...... (242) 201 — Goodwill from acquisition of equity interests from noncontrolling shareholders(b) ...... (6,421) — — Total shareholders’ equity of owners of the company pursuant to IFRS...... 119,294 125,520 71,456 Participation of non-controlling noncontrolling interests in equity of subsidiaries(c) ...... 4,192 4,192 4,192 Noncontrolling interests in net income for 2009 and 2008(c) ...... 5,085 2,977 — Dividends paid to noncontrolling interests(c)...... (6,705) (4,344) — Acquisition of equity interests from noncontrolling shareholders(b)...... (798) — — Total IFRS consolidated shareholders’ equity ...... 121,068 128,345 75,648

Reconciliation of consolidated net income

2009 2008 Net income for the year under previous accounting practices ...... 3,866 13,035 Reversal of goodwill amortization(a) ...... — 31,123 Decrease in gain on disposal of investments...... — (248) IFRS consolidated net income ...... 3,866 43,910

Main effects of adopting IFRS on the consolidated statement of cash flows

2009 2008 Previous Effects of Previous Effects of accounting transition accounting transition practices to IFRS IFRS practices to IFRS IFRS CASH FLOWS FROM OPERATING ACTIVITIES ...... 31,992 — 31,992 25,786 — 25,786 CASH FLOWS FROM INVESTING ACTIVITIES ...... (4,529) — (4,529) (3,707) — (3,707) CASH FLOWS FROM FINANCING ACTIVITIES ...... (79,489) — (79,489) (52,489) — (52,489)

Notes to the reconciliations

The transition date set for preparation of IFRS financial statements was January 1, 2008. The Company reconciled shareholders’ equity and net income, reflecting all adjustments required by IFRS and eliminating all those that do not meet the criteria for recognition of standards. In preparing of the financial information as of the transition date, the Company applied the mandatory exceptions and certain optional exemptions of retrospective application under IFRS 1, as described below: • Business combinations The Company elected not to recalculate the business acquisitions carried out prior to the IFRS transition date, in accordance with IFRS 3 Business Combinations (equivalent to CPC 15). Accordingly, goodwill arising

F-30 from acquisitions prior to January 1, 2008 was maintained at its balance net of amortization as of this date, in conformity with Brazilian accounting practices.

• Classification of financial instruments The Company elected to classify and measure its financial instruments according to IAS 32 Financial Instruments: Presentation (equivalent to CPC 39) and IAS 39 Financial Instruments: Recognition and Measurement (equivalent to CPC 38) on the date of transition to IFRS, and did not conduct any retrospective analyses for financial instruments effective on the transition date beginning on the date they were originated.

• Reconciliation of differences between the previous accounting practices and the IFRS a) Reversal of goodwill amortization Under BR GAAP, up until December 31, 2008 goodwill was amortized on a straight-line basis based on future earnings. Under CPC 01, goodwill was tested for impairment, based on discounted projected future cash flows. On December 31, 2010 and 2009, the Company tested for goodwill for impairment, and there was no indication of the need to recognize possible losses. Under IFRS, goodwill must be annually tested for impairment. The impairment test is to be conducted more frequently if new events or circumstances indicate that the conditions that supported goodwill have been changed. As a result of the application of this CPC, intangible assets were increased by R$31,123, with a corresponding increase in the same year in the balances of shareholders’ equity and net income. b) Acquisition of equity interests from noncontrolling shareholders Under BR GAAP the acquisition of noncontrolling interests is recognized as additional goodwill arising on a subsidiary’s acquisition. The Company recognized additional goodwill, as described in note 15.b)(i).

Under IFRS 3 (revised in 2008), once control is obtained, subsequent acquisitions or sales of interests in a subsidiary’s equity that do not result in the loss of control are accounted for as a capital transaction. Therefore, no increase in goodwill or gain or loss from a decrease in equity interests held should be recognized.

As a result, the acquisition of non-controlling interests in Vicar Promoções Desportivas S.A., described in note 15.b)(i), resulted in a decrease of R$6,421 in IFRS shareholders’ equity. c) Noncontrolling interest Under BR GAAP, the portion of investments in subsidiaries held by noncontrolling shareholders is presented in a separate line account of balance sheets, immediately before shareholders’ equity, and a specific line item in the statement of income, prior to net income.

Under IFRS, noncontrolling interests are separately disclosed in the consolidated financial statements, but they are treated as part of shareholders’ equity.

Due to this reclassification, shareholders’ equity increased by R$1,774 in 2009 and R$2,825 in 2008.

Under BR GAAP, earnings per share are calculated by dividing the net income for the year by the number of outstanding shares at the year end. The concept of diluted earnings per share does not exist. Up until 2009, there was no obligation to adjust prior periods’ figures for stock splits or reverse stock splits or similar transactions.

F-31 d) Deferred income tax Under IFRS, deferred taxes are presented in noncurrent assets. Under the Brazilian accounting practices, the Company presented deferred tax assets expected to be realized in the short term as current assets. e) Escrow deposits Under IFRS, escrow deposits are presented as assets because they do not meet the offset requirements between assets and liabilities as prescribed by IAS 1 Presentation of Financial Statements.

6.2. Effect of adopting the pronouncements issued by CPC on the individual financial statements 6.2.1. Adoption of the new Brazilian accounting practices In preparing its individual financial statements (identified as Company), the Company adapted all the pronouncements and the related interpretations and guidance issued by the CPC and approved by the CVM, which together with the accounting practices included in the Brazilian Corporate Law are referred to as Brazilian accounting practices (“BR GAAP”).

The Company applied the accounting policies set out in note 3 to all periods presented, which includes the opening balance sheet, as of January 1, 2008. In measuring the adjustments to and preparing this opening balance sheet, the Company applied the requirements set out in CPC 43 (R1) First-time Adoption of CPCs 15-43, and adjusted its individual financial statements so that when consolidated they produced the same amounts of assets, liabilities, shareholders’ equity and net income of the consolidation prepared in accordance with IFRS by applying IFRS 1 and CPC 37 (R1). Accordingly, the Company adjusted the individual financial statements for the adoption of IFRS in the consolidated financial statements, as described in note 6.1.2. This procedure was adopted to obtain the same net income and shareholders’ equity attributable to the owners of the Company in the individual and consolidated financial statements.

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F-33 6.2.2. Reconciliations for previous accounting practices

Effects of adopting the new accounting practices adopted in Brazil on the individual balance sheet

2009 2008 January 1, 2008 Previous Effects of Previous Effects of Previous Effects of accounting transition accounting transition accounting transition ASSETS Note practices to IFRS IFRS practices to IFRS IFRS practices to IFRS IFRS CURRENT ASSETS Cash and cash equivalents...... 8 17,595 — 17,595 21,786 — 21,786 95,089 — 95,089 Restricted cash ...... 9 2,129 — 2,129 — — — — — — Accounts receivable...... 10 33,300 — 33,300 18,155 — 18,155 37,307 — 37,307 Inventories ...... 305 — 305 393 — 393 481 — 481 Recoverable taxes...... 11 5,257 — 5,257 14,831 — 14,831 1,292 — 1,292 Advances to suppliers .... 12 17,966 — 17,966 3,589 — 3,589 4,123 — 4,123 Prepaid expenses ...... 13 11,793 — 11,793 6,766 — 6,766 14,940 — 14,940 Deferred income tax and social contribution ..... 29 7,272 (7,272) — 16,876 (16,876) — 18,195 (18,195) — Derivatives...... 18 — — — 3,855 — 3,855 — — — Dividends receivable from subsidiaries ...... 1,810 — 1,810 910 — — — — — Other receivables ...... 201 — 201 3,108 — 3,108 15 — 15 Total current assets...... 97,628 (7,272) 90,356 83,359 (16,876) 72,483 171,442 (18,195) 153,247

NONCURRENT ASSETS Long-term assets: — Deferred income tax and social contribution(d).... 29 102,132 7,272 109,404 92,563 16,876 109,439 91,516 18,195 109,711 Escrow deposits(e) ...... 1,070 311 1,381 1,237 284 1,521 925 243 1,168 Prepaid expenses .... 13 — — — — — — — — — Derivatives ...... 18 — — — 7,772 — 7,772 — — — Related party receivables ...... 14 30,005 — 30,005 2,788 — 2,788 984 — 984 Total long-term assets .... 133,207 7,582 140,479 104,360 17,160 121,520 93,425 18,438 111,863 Investments in subsidiaries ...... 15.a) 52,740 923 53,663 73,181 1,366 74,547 35,915 — 35,915 Property, plant and equipment ...... 16.a) 12,272 — 12,272 22,140 — 22,140 34,457 — 34,457 Intangible assets: Goodwill on acquisition of investments...... 15.b) 105,428 23,289 128,717 99,513 29,710 129,223 132,217 — 132,217 Other intangible assets ...... 16.b) 1,688 — 1,688 1,949 — 1,949 1,021 — 1,021 Total noncurrent assets . . . 305,335 31,795 337,130 318,019 48,235 349,379 297,035 18,438 315,473 TOTAL ASSETS ...... 402,963 24,523 427,486 390,502 31,359 421,862 468,477 243 468,420

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F-35 2009 2008 January 1, 2008 Previous Effects of Previous Effects of Previous Effects of LIABILITIES AND accounting transition accounting transition accounting transition SHAREHOLDERS’ EQUITY Note practices to IFRS IFRS practices to IFRS IFRS practices to IFRS IFRS CURRENT LIABILITIES Accounts payables ...... 17 17,088 — 17,088 17,195 — 17,195 18,541 — 18,541 Loans and financing ...... 18 60,004 — 60,004 60,281 — 60,281 29,281 — 29,281 Accrued payroll and related taxes...... 4,048 — 4,048 4,751 — 4,751 4,063 — 4,063 Taxes payable...... 19 5,853 — 5,853 6,217 — 6,217 5,430 — 5,430 Advances from clients...... 20 60,192 — 60,192 22,610 — 22,610 73,479 — 73,479 Sponsorships—Cultural incentives law...... 21 2,007 — 2,007 — — — — — — Dividends payable ...... — — — — — — 6,253 — 6,253 Related parties payables ..... 14 34,693 — 34,693 28 — 28 25,706 — 25,706 Provision for tax, civil and labor contingencies ...... 22 — — — 1,973 — 1,973 4,247 — 4,247 Other payables ...... 118 — 118 354 — 354 8,348 — 8,348 Total current liabilities ...... 184,003 — 184,003 113,409 — 113,409 175,348 — 175,348

NONCURRENT LIABILITIES Loans and financing ...... 18 85,256 — 85,256 146,062 — 146,062 179,704 — 179,704 Reserve for tax, civil and labor contingencies ...... 22 24,242 311 24,553 21,647 284 21,931 22,045 243 22,288 Deferred income tax and social contribution...... 29 2,448 — 2,448 14,502 — 14,502 11,114 — 11,114 Allowance for investment losses ...... — — — — — — 941 — 941 Taxes payable...... 19 11,932 — 11,932 438 — 438 564 — 564 Advances from customers . . . 20 — — — — — — 7,305 — 7,305 Other payables ...... — — — — — — — — — Total noncurrent liabilities . . . 123,878 — 124,189 182,649 — 182,933 221,673 243 221,916

SHAREHOLDERS’ EQUITY 23 Capital ...... 31,462 — 31,462 31,462 — 31,462 31,462 — 31,462 Legal reserve...... 4,043 1,544 5,587 3,850 1,544 5,394 3,198 — 3,198 Revaluation reserve ...... 1,941 — 1,941 5,984 — 5,984 10,815 — 10,815 Earnings retention reserve . . . 57,194 22,910 80,104 49,478 29,331 78,809 — 25,981 25,981 Retained earnings...... — — — — — — 25,981 (25,981) — Valuation adjustments to equity...... 442 (242) 200 3,670 200 3,871 — — — Equity attributable to owners of the Company ...... 95,082 24,212 119,294 94,444 31,075 125,520 71,456 — 71,456 Non-controlling interests in equity of subsidiaries ..... — — — — — — — — — Total consolidated shareholders’ equity ...... 95,082 24,212 119,294 94,444 31,075 125,520 71,456 — 71,456 ——————— —— TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 402,963 24,523 427,486 390,502 31,359 421,862 468,477 243 468,720

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F-37 Effects of adopting the new accounting practices adopted in Brazil on the individual statement of income

2009 2008 Previous Effects of Previous Effects of accounting transition accounting transition Note practices to IFRS IFRS practices to IFRS IFRS NET OPERATING REVENUE...... 24 222,983 — 222,983 268,329 — 268,329 COSTS OF SERVICES AND SALES ...... (176,998) — (176,998) (196,240) — (196,240) GROSS PROFIT...... 45,985 — 45,985 72,089 — 72,089 OPERATING INCOME (EXPENSES) Selling expenses ...... (654) — (654) (811) — (811) General and administrative expenses ...... 25 (40,491) — (40,491) (41,049) — (41,049) Management compensation...... 14,2 (2,517) — (2,517) (4,810) — (4,810) Goodwill amortization ...... — — — (29,958) 29,958 — Interests in subsidiaries: Equity in subsidiaries ...... 15 15,431 — 15,431 39,594 1,165 40,759 Reversal of losses on investments ...... 15 — — — 941 — — Other operating income (expenses), net...... 28 1,506 — 1,506 4,958 (248) 4,710 INCOME (LOSS) FROM OPERATIONS BEFORE FINANCIAL INCOME (EXPENSES) ...... 19,260 — 19,260 40,954 30,875 71,829 FINANCIAL INCOME (EXPENSES) 27 Financial expenses ...... (73,095) — (73,095) (16,881) — (16,881) Financial income...... 2,875 — 2,875 52,036 — 52,036 Net foreign exchange and inflation (gain)/loss ...... 42,807 — 42,807 (59,415) — (59,415) INCOME (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION ...... (8,153) — (8,153) 16,694 (30,875) 47,569 INCOME TAX AND SOCIAL CONTRIBUTION Current ...... 29 — — — — — — Deferred ...... 29 12,019 — 12,019 (3,659) — (3,659) NET INCOME (LOSS) FOR THE YEAR ...... 3,866 — 3,866 13,035 (30,875) 43,910

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F-39 Reconciliation of individual shareholders’ equity

January 1, 2009 2008 2008 Total shareholders’ equity under previous accounting practices...... 95,082 94,444 71,456 Reversal of goodwill amortization(a)...... 29,958 29,958 — Decrease in gain on disposal of investments...... (248) (248) — Equity in subsidiaries ...... 1,165 1,165 — Exchange differences on translating foreign operations ...... (242) 201 — Goodwill from acquisition of equity interests from noncontrolling shareholders(b)...... (6,421) — — Total individual shareholders’ equity under new Brazilian accounting practices (BR GAAP) ...... 119,294 125,520 71,456

Reconciliation of individual net income

2009 2008 Net income for the year under previous accounting practices ...... 3,866 13,035 Reversal of goodwill amortization(a) ...... — 29,958 Decrease in gain on disposal of investments ...... — (248) Equity in subsidiaries ...... — 1,165 Individual net income for the year under new Brazilian accounting practices (BR GAAP) ...... 3,866 43,910

Main effects of adopting the new accounting practices adopted in Brazil on the individual statement of cash flows

2009 2008 Previous Effects of Previous Effects of accounting transition accounting transition practices to IFRS IFRS practices to IFRS IFRS CASH FLOWS FROM OPERATING ACTIVITIES ...... 23,378 — 23,378 (812) — (812) CASH FLOWS FROM INVESTING ACTIVITIES ...... 27,375 — 27,375 5,086 — 5,086 CASH FLOWS FROM FINANCING ACTIVITIES ...... (54,944) — (54,944) (77,577) — (77,577)

Notes to the reconciliations

See note 6.1.2.

7. CONSOLIDATED FINANCIAL STATEMENTS The financial statements of all subsidiaries used in preparing the consolidated financial statements were prepared as of the same reporting date, using accounting policies consistent with those described in note 3. The Company’s investments in proportion to its interest in the subsidiaries’ equity and income or losses, and intercompany balances and transactions have been eliminated. Noncontrolling interests in subsidiaries are separately stated.

F-40 In preparing consolidated financial statements, the statements of income, cash flows and value added, and all other changes in assets and liabilities are translated into Brazilian reais at the average annual foreign exchange rate, considering an amount close to the foreign exchange rate prevailing at the date of the related transactions. The balance sheet is translated into Brazilian reais at the foreign exchange rate prevailing at the end of each annual reporting period.

The effects of changes in foreign exchange rates during the year on shareholders’ equity at the beginning of year are recognized as a change in shareholders’ equity in the same way as the difference between retained earnings or accumulated losses is recognized at the average foreign exchange rates prevailing at year end. The cumulative amount of the exchange rate differences is presented as a separate component in shareholders’ equity, in line item ‘Valuation adjustments to equity’. In case of disposal or partial disposal of a foreign subsidiary, the cumulative exchange difference is recognized in the statement of income as part of the gain or loss on the disposal of investment, pursuant to CPC 02 The Effects of Changes in Foreign Exchange Rates.

Consolidation includes the financial statements of the Company and the following direct and indirect subsidiaries:

Equity interest –% Direct subsidiaries 2010 2009 2008 Área Marketing Brasil Ltda...... 99.99 99.99 99.99 Metropolitan Empreendimentos S.A...... 99.99 99.99 99.99 T4F Alimentos, Bebidas e Ingressos Ltda...... 99.99 99.99 99.99 T4F Inversiones S.A. e B.A. Inversiones S.A...... 100.00 100.00 100.00 T4F USA Inc...... 100.00 100.00 100.00 Vicar Promoções Desportivas S.A...... 75.00 75.00 55.00

Indirect subsidiaries T4F Entretenimientos S.A...... 100.00 100.00 100.00 Pop Art S.A...... 100.00 100.00 100.00 Ticketmaster Argentina S.A...... 100.00 100.00 100.00 Ticketek Argentina S.A...... 100.00 100.00 100.00 Clemente Lococo S.A...... 100.00 100.00 100.00 T4F Chile S.A...... 100.00 100.00 100.00 Ticketmaster Chile S.A...... 100.00 100.00 100.00 Promaser S.A...... 100.00 100.00 100.00

Changes in Group equity interests in existing foreign subsidiaries

In the consolidated financial statements, the changes in equity interests in subsidiaries that do not result in loss of control of the subsidiaries by the Company are recognized as capital transactions. The accounting balances of Group interests and noncontrolling interests are adjusted to reflect the changes in their interests in the subsidiaries. The difference between the amount based on which noncontrolling interests are adjusted and the fair values of consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Company loses control over a subsidiary, the gain or loss on disposal is calculated as the difference between: (a) the aggregate of the fair value of the consideration received and the fair value of the residual interest; and (b) the previous book value of the assets (including recognized goodwill) and the liabilities of the subsidiary, and the noncontrolling interests, if any. When the subsidiary’s assets are recognized at fair values and the corresponding accumulated gain or loss was recognized in line item ‘Other comprehensive income’ and accumulated in equity, the amounts previously recognized in ‘Other comprehensive income’ and

F-41 accumulated in equity are accounted for as if the Company had directly disposed of the corresponding assets (i.e., reclassified to income or directly transferred to line item ‘Retained earnings,’ as required by the relevant IFRS). The fair value of any investment held in the former subsidiary at the date when control is lost is regarded as the fair value in the initial recognition for subsequent accounting in accordance with IAS 39 Financial Instruments: Recognition and Measurement (equivalent to CPC 38) or, when appropriate, the cost for the initial recognition of an investment in an associate or jointly controlled entity.

8. CASH AND CASH EQUIVALENTS

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Cash and banks ...... 787 708 1,090 2,339 29,479 22,041 18,067 17,909 Short-term investments: Balanced Fund(a)...... — — — — 5,076 3,998 24,619 6,191 Bank certificates of deposit (CDBs)(b) ...... 10,619 16,887 — 47,436 15,613 28,016 2,035 50,285 DI repurchase agreements(c) ...... 58,453 — 20,696 45,314 70,766 1,110 44,852 47,323 Fixed-income funds ...... — — — — — — 3,192 — Total ...... 69,859 17,595 21,786 95,089 120,934 55,165 92,765 121,708

(a) Investments in highly-liquid fixed-income securities in the subsidiaries in Argentina and Chile, with an immaterial risk of change in value, and an average yield of 8.5% per year (8.5% per year in 2009 and 9.4% per year in 2008). (b) Highly liquid, fixed-term CDBs, which yield average rates ranging from 98.0 to 101.0 percent of the interbank deposit rate (“CDI”) fluctuation (98.0 to 101.0 percent as of December 31, 2009 and 101.7 to 102.2 percent as of December 31, 2008), maintained in Brazilian financial institutions. CDBs are classified in line item ‘Cash and cash equivalents’ because they are financial assets that can be immediately redeemed without any decrease in redeemable amounts. (c) Highly-liquid time deposits, which yield average rates ranging from 99 to 102.2 percent of the CDI fluctuation (100 to 102.2 percent as of December 31, 2009 and 100.6 to 105.3 percent as of December 31, 2008), are maintained in Brazilian financial institutions. Transactions are classified in line item ‘Cash and cash equivalents’ because they are financial assets that can be immediately redeemed without any decrease in redeemable amounts.

9. RESTRICTED CASH Refers to the funds that will be invested in cultural projects produced by the Company, held on behalf of the parent or its subsidiaries in Banco do Brasil S.A. and linked exclusively to their use in Rouanet Act projects (see note 21), which yield an average interest rate equivalent to 98.0 percent of the CDI as of December 31, 2009. As of December 31, 2010, the funds raised were no longer invested because they were still unavailable.

F-42 10. ACCOUNTS RECEIVABLE a) Broken down as follows:

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Billed receivables(i) ...... 6,580 7,438 5,883 6,236 23,302 21,629 33,783 19,934 Box office(ii) ...... 19,797 13,087 8,251 25,741 36,488 23,774 35,865 40,550 Unbilled sponsorships, suites and box seats(iii) ...... 8,127 13,132 4,033 5,445 8,414 14,084 5,112 11,492 Total accounts receivable ...... 34,504 33,657 18,167 37,422 68,204 59,487 74,760 71,976 Allowance for doubtful accounts ...... (137) (357) (12) (115) (2,107) (6,923) (5,315) (3,354) Total ...... 34,367 33,300 18,155 37,307 66,097 52,564 69,445 68,622

(i) Billed amounts related to sponsorship, suites and box seats contracts and naming rights contracts. (ii) Receivables originated by the sale of tickets through credit card companies. (iii) Unbilled amounts arising from services provided related to sponsorship, suites and box seats contracts.

b) The aging list of accounts receivable is as follows:

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Current:...... 33,714 32,705 17,996 35,844 49,082 44,264 51,221 55,485 Past-due: Up to 30 days ...... 636 192 98 1,419 14,777 4,642 6,430 8,346 From 31 to 60 days ...... 17 3 25 33 1,289 941 2,646 405 From 61 to 90 days ...... — 400 36 11 672 780 2,653 2,364 From 91 to 180 days ...... — 357 5 2 234 945 6,564 125 Over 180 days...... 137 — 7 113 2,150 7,915 5,246 5,251 Total accounts receivable ...... 34,504 33,657 18,167 37,422 68,204 59,487 74,760 71,976

The allowance for doubtful accounts is recognized for receivables whose receiving is possible or remote, based on the analysis of all receivables past-due for more than 90 days with respect to: (i) the customer’s justification for the delay; (ii) renegotiation and/or payment in installments of the receivable; (iii) actual likelihood of receiving such amounts; and (iv) customer history.

F-43 c) Allowance to write down accounts receivable to their recoverable amounts The changes in allowance for doubtful accounts are as follows:

Company Consolidated (BR GAAP) (IFRS) Balances at January 1, 2008 ...... 115 3,354 Additions...... 88 4,725 Reversals and write-offs...... (191) (2,764) Balances at December 31, 2008 ...... 12 5,315 Additions...... 477 2,922 Reversals and write-offs...... (132) (1,314) Balances at December 31, 2009 ...... 357 6,923 Additions...... 545 2,744 Reversals and write-offs(*) ...... (765) (7,560) Balances at December 31, 2010 ...... 137 2,107

(*) The Argentinean subsidiaries recognized in 2010 the write-off of receivables past due for more than 180 days against the allowance for doubtful accounts, which correspond to R$5,466, without any effect on net income. These receivables were written off because all the collection alternatives had been exhausted without their recovery.

11. RECOVERABLE TAXES

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Prepaid income tax and social contribution ...... 34 2,958 3,311 — 5,047 6,479 6,955 2,140 Withholding income tax (IRRF) .... 1,129 1,275 2,631 743 1,547 1,830 3,114 2,202 Tax on revenue (PIS) ...... — — 3,731 51 39 60 3,902 204 Tax on revenue (COFINS)...... — — 4,870 408 180 264 5,641 1,114 Value Added Tax (VAT) ...... — — — — 868 2,350 4,346 2,261 Taxes on billings(*) ...... — — — — 4,562 5,004 5,678 1,699 Other ...... 256 1,024 288 90 2,215 1,971 1,599 726 Total...... 1,419 5,257 14,831 1,292 14,458 17,958 31,235 10,346

(*) Tax on gross revenue levied at the rates of 3 to 4 percent, withheld by the credit card companies when they pay to the Argentinean subsidiaries for tickets sold and paid using credit cards. Taxes are offset as the taxable event occurs. As the tickets are sold a reasonable time before the shows, the tax is withheld before there is an actual payment obligation and, therefore, this is how the right to offset is recognized.

F-44 12. ADVANCES TO SUPPLIERS

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Contracted events, concerts and performances(*)...... 1,251 17,427 2,111 4,062 4,054 20,909 8,479 4,433 Other ...... 565 539 1,478 61 838 590 1,726 68 Total ...... 1,816 17,966 3,589 4,123 4,892 21,499 10,205 4,501

(*) Refer to advances to suppliers made to produce events, concerts and performances, which will be recognized in income when such events, concerts and performances are held.

13. PREPAID EXPENSES Refer mainly to amounts paid in advance to produce events, shows and performances (“events”), basically consisting of performers’ fees and equipment expenses, which are recorded as income as the related events are held.

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Contracted events, concerts and performances ...... 19,531 11,487 6,492 14,901 32,494 23,926 23,864 22,227 Other ...... 495 306 274 39 2,838 787 596 124 Total...... 20,026 11,793 6,766 14,940 35,332 24,713 24,460 22,351 Current...... 19,964 11,793 6,766 14,940 34,693 23,670 22,350 22,351 Noncurrent ...... 62 — — — 639 1,043 2,110 —

The amounts to be allocated to net income related to contracted events, concerts and performances are broken down as follows:

Consolidated (IFRS) Year 2010 1st quarter of 2011...... 13,125 2nd quarter of 2011 ...... 15,196 3rd quarter of 2011 ...... 1,717 4th quarter of 2011 ...... 1,831 Starting 2012 ...... 625 Total ...... 32,494

F-45 14. RELATED-PARTY As of December 31, 2010, 2009 and 2008, the Company had transactions with the following related companies:

14.1 Intragroup transactions a) December 31, 2010 a.1) Company (BR GAAP)

Current Current Financial Financial assets liabilities expenses income T4F Entretenimientos Argentina S.A.(i) ...... 1,241 — (2,099) 3,381 T4F Inversiones S.A.(ii) ...... 11,783 — — — CIE Internacional S.A. de C.V.(iii)...... 11,360 — (46) 2,698 B.A. Inversiones S.A...... 484 — — — Fernando Luiz Alterio(iii) ...... — — (24) 317 Área Marketing Brasil Ltda.(v) ...... 452 — — — T4F Alimentos, Bebidas e Ingressos Ltda...... — 120 — — T4F Chile S.A.(iv) ...... — 13,371 (2,421) 3,371 Ocesa Entretenimiento, S.A. de C.V...... 969 — — — Metropolitan Empreendimentos S.A...... 119 — — — Vicar Promoções Desportivas S.A...... 101 — — — Total ...... 26,509 13,491 (4,590) 9,767

a.2) Consolidated (IFRS)

Current Current Financial Financial assets liabilities expenses income CIE Internacional S.A. de C.V.(iii)...... 12,231 — (46) 2,698 Ocesa Entretenimiento, S.A. de C.V...... 833 — — — Total ...... 13,064 — (46) 2,698

b) December 31, 2009 b.1) Company (BR GAAP)

Current Current Financial Financial assets liabilities expenses income T4F Entretenimientos Argentina S.A.(i) ...... 1,411 — (1,075) 47 T4F Inversiones S.A.(ii) ...... 12,395 — (3,417) — CIE Internacional S.A. de C.V.(iii)...... 15,108 — (1,218) 435 B.A. Inversiones S.A...... 926 — (448) 54 Fernando Luiz Alterio(iii) ...... 161 — — — Área Marketing Brasil Ltda.(v) ...... — 14,280 — — T4F Alimentos, Bebidas e Ingressos Ltda...... — 278 — — T4F Chile S.A.(iv) ...... — 13,970 — 390 Metropolitan Empreendimentos S.A...... — 6,165 — — Vicar Promoções Desportivas S.A...... 4 — — — Total ...... 30,005 34,693 (6,158) 926

F-46 b.2) Consolidated (IFRS)

Current Current Financial Financial assets liabilities expenses income Radiodifusora de Buenos Aires S.A...... 135 — (349) 48 Operadora de Centros de Espectáculos ...... 10 — — — CIE Internacional S.A. de C.V.(iii)...... 16,148 — (796) 1,065 Fernando Luiz Alterio(iii) ...... 175 — (80) 80 CIE USA Entertainment ...... 36 — — — Total ...... 16,504 — (1,225) 1,193

c) December 31, 2008 c.1) Company (BR GAAP)

Current Current Financial Financial assets liabilities expenses income T4F Entretenimientos Argentina S.A...... 203 — (190) 236 T4F Chile S.A...... 2,337 — (10) — Metropolitan Empreendimentos S.A...... — 28 — — Ticketek Argentina S.A...... — — (218) 289 Vicar Promoções Desportivas S.A...... 248 — — — T4F Inversiones S.A...... — — (16) — Total ...... 2,788 28 (434) 525

c.2) Consolidated (IFRS)

Current Current Financial Financial assets liabilities expenses income Grupo Mundo ...... 3 — — — Radiodifusora de Buenos Aires S.A...... 556 — (479) 889 El Foco Punto Com Argentina S.A...... 48 — — — Producciones GMA S.A...... — 14 (77) 37 Operadora de Centros de Espectáculos ...... 14 — — — Jardín Zoológico de la Ciudad de Buenos Aires S.A...... 106 — — 81 CIE Internacional S.A. de C.V...... — 43 — — Radiodifusora del Plata S.A...... — 522 (139) 35 Desup S.A...... — 477 (246) 48 CIE USA Entertainment ...... 81 — — — Radio Libertad S.A...... — 307 (163) 19 Total ...... 808 1,363 (1,104) 1,109

F-47 d) January 1, 2008 d.1) Company (BR GAAP)

Current Current assets liabilities T4F Entretenimento Argentina S.A...... — 2,748 Área Marketing Brasil Ltda...... — 11,353 Metropolitan Empreendimentos S.A...... — 7,730 T4F Alimentos, Bebidas e Ingressos Ltda...... 984 — Ticketek Argentina S.A...... — 3,434 T4F Inversiones S.A...... — 441 Total...... 984 25,706

d.2) Consolidated (IFRS) As of January 1, 2008, there were no outstanding balances with related parties. (i) Represented mainly by the intercompany loan agreement entered into on July 1, 2009 between the Company and its subsidiary T4F Entretenimientos Argentina S.A. as a result of decision made by the Extraordinary Shareholders’ Meeting that the “aportes irrevocables” owned by the Company, totaling AR$5,206,000, whose adjusted balance at December 31, 2010 corresponded to R$2,183, will not be added to the capital of this subsidiary. These contributions, until then recognized in the subsidiary’s shareholders’ equity and in the Company’s line item “Investments in subsidiaries,” were reclassified to related parties. The amounts will be annually adjusted at LIBOR plus one percent interest, after the second year of the agreement, and will be repaid to the Company within five years. (ii) Represented mainly by the intercompany loan agreement entered into on July 1, 2009, between the Company and its subsidiary T4F Inversiones S.A. as a result of decision made by the Extraordinary Shareholders’ Meeting that the “aportes irrevocables” owned by the Company, totaling AR$25,654,000, whose adjusted balance at December 31, 2009 was equivalent to R$10,759, will not be added to the capital of this subsidiary. These contributions, until then recognized in the subsidiary’s shareholders’ equity and in the Company’s line item “Investments in subsidiaries,” were reclassified to related parties. The amounts will be annually adjusted at LIBOR plus one percent interest, after the second year of the agreement, and will be repaid to the Company within five years. (iii) The Company and its subsidiaries have entered into agreements with their former controlling shareholder, CIE Internacional, and the current controlling shareholder Fernando Luiz Alterio under which they delineate their respective liability for any contingencies derived from events that occurred from December 1, 2000 to May 14, 2007 , as described in note 22. Pursuant to these agreements, at December 31, 2010, the Company had receivables from CIE Internacional S.A. de C.V. totaling R$11,360 for the Company, and R$12,231, on a consolidated basis. The current controlling shareholder Fernando Luiz Alterio has no debts to the Company. These balances are adjusted according to CDI fluctuation. Dividends distributed by the Company and paid in May 2010 to shareholder CIE Internacional S.A. de C.V., totaling R$3,200, were withheld to partially settle this balance. Receivables from CIE Internacional S.A. de C.V. include all the tax debts resulting from the tax installment plan REFIS (Tax Debt Refinancing Program) which the Company joined in November 2009, as commented in note 19, which at December 31, 2010 totaled R$10,812. (iv) On December 14, 2009, the Company obtained financing from an intercompany loan with subsidiary T4F Chile S.A. totaling US$8,000. The loan is annually adjusted at LIBOR plus one percent interest, repayable within five years.

F-48 (v) Production and ticketing management contracts entered into by the Company with Área Marketing Brasil Ltda. for the organization of some international shows by this subsidiary.

The other balances refer to the transfer of funds between related parties to cover cash requirements and for the payment of expenses, which do not bear any interest and have no maturities.

14.2 Compensation of key management personnel Total management compensation is as follows:

Company (BR GAAP)

2010 Compensation Number of professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 246 — 246 3 2 Officers...... 2,201 185 2,386 2 3 Total ...... 2,447 185 2,632

2009 Number of Compensation professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 288 — 288 3 3 Officers ...... 2,216 1,051 3,267 3 2 Total ...... 2,504 1,051 3,555

2008 Number of Compensation professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 251 — 251 2 4 Officers ...... 3,440 978 4,418 5 3 Total ...... 3,691 978 4,669

F-49 Consolidated (IFRS)

2010 Number of Compensation professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 246 — 246 3 2 Officers ...... 2,858 393 3,251 10 7 Total ...... 3,104 393 3,497

2009 Number of Compensation professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 288 — 288 3 3 Officers ...... 4,083 1,598 5,682 12 10 Total ...... 4,371 1,598 5,970

2008 Number of Compensation professionals Variable At beginning At end Fixed (*) Total of year of year Directors ...... 251 — 251 2 4 Officers ...... 4,779 1,714 6,493 11 12 Total ...... 5,030 1,714 6,744

(*) Refers to profit sharing recorded in the year. The amounts include any additions and/or reversals to the accruals made in the previous year in view of the final assessment of the targets established for officers.

Key management personnel do not receive post-employment benefits, other long-term benefits or severance benefits.

F-50 15. INVESTMENTS a) Information on subsidiaries a.1) December 31, 2010

Net Equity in Investments in Shareholders’ income Equity subsidiaries 2010 subsidiaries at Direct or indirect subsidiaries equity (loss) interest – % 12/31/10 dividends 12/31/10 Área Marketing Brasil Ltda.(iii) ...... 1,290 440 99.99 440 — 1,290 Metropolitan Empreendimentos S.A...... 8,448 (152) 99.99 (152) — 8,448 T4F Alimentos, Bebidas e Ingressos Ltda...... 3,702 4,856 99.99 4,856 (5,443) 3,702 T4F Inversiones S.A. e B.A. Inversiones S.A.(ii)...... 43,569 7,059 100.00 7,059 — 43,569 T4F USA Inc...... 1,228 418 100.00 418 — 1,228 Vicar Promoções Desportivas S.A.(iv) e(v) ...... 8,331 7,435 75.00 5,578 (4,649) 6,245 Total...... 18,199 (10,092) 64,482

a.2) December 31, 2009

Net Equity in Investments in Shareholders’ income Equity subsidiaries 2009 subsidiaries at Direct or indirect subsidiaries equity (loss) interest – % 12/31/10 dividends 12/31/10 Área Marketing Brasil Ltda.(iii) ...... 850 (193) 99.99 (193) — 850 Metropolitan Empreendimentos S.A...... 8,598 (952) 99.99 (952) — 8,598 T4F Alimentos, Bebidas e Ingressos Ltda...... 4,290 2,138 99.99 2,137 (1,332) 4,290 T4F Inversiones S.A. e B.A. Inversiones S.A.(ii)...... 33,832 9,963 100.00 9,963 — 33,832 T4F USA Inc...... 772 (237) 100.00 (237) — 772 Vicar Promoções Desportivas S.A.(iv) ...... 7,095 6,821 75.00 4,713 (3,644) 5,321 Total...... 15,431 (4,976) 53,663

F-51 a.3) December 31, 2008

Reversal of Equity in allowance for Net subsidiaries losses on Investments in Shareholders’ income Equity as of subsidiaries 2009 subsidiaries at Direct or indirect subsidiaries equity (loss) interest – % 12/31/08 as of 12/31/08 dividends 12/31/10 Área Marketing Brasil Ltda..... 12,029 834 99.99 834 — — 12,029 Metropolitan Empreendimentos S.A.(iii) ...... 8,051 8,003 99.99 8,003 — — 8,051 Motivare S.A.(i) ...... — — 50.00 648 — (841) — T4F Alimentos, Bebidas e Ingressos Ltda...... 3,483 4,425 99.99 3,483 941 — 3,483 T4F Inversiones S.A. e B.A. Inversiones S.A.(ii) ...... 47,126 24,897 100.00 24,897 — — 47,126 T4F USA Inc...... 405 (744) 100.00 (744) — — 405 Vicar Promoções Desportivas S.A.(iv)...... 6,279 6,616 55.00 3,638 — (5,310) 3,453 Total ...... 40,759 941 (6,151) 74,547

a.4) January 1, 2008

Investments in subsidiaries Shareholders’ (allowance for equity Equity losses) at Direct or indirect subsidiaries (deficit) interest – % 1/1/2008 Área Marketing Brasil Ltda.(iii) ...... 11,195 100.00 11,195 Metropolitan Empreendimentos S.A...... 49 100.00 49 Motivare S.A.(i) ...... 2,126 50.00 1,063 T4F Alimentos, Bebidas e Ingressos Ltda...... (941) 99.99 (941) T4F Inversiones S.A. e B.A. Inversiones S.A.(ii) ...... 18,484 100.00 18,484 Vicar Promoções Desportivas S.A.(iv) ...... 9,316 55.00 5,124 Total ...... 34,974 Investments ...... 35,915 Allowance for losses ...... (941)

(i) On August 1, 2008 the Annual Shareholders’ Meeting, the shareholders approved, among other matters, the distribution of disproportionate dividends to the shareholders based on the financial statements for the years ended December 31, 2007 and 2006, of which the Company received R$363, paid on the same date, generating a loss of R$478. On August 1, 2008 the Company sold its equity interest in this company, recording a gain on divestiture of R$1,173, recorded in line item “Other operating incomes” for that year. (ii) As described in note 14, on July 1, 2009 the Extraordinary Shareholders’ Meeting of subsidiaries T4F Entretenimientos Argentina S.A. and T4F Inversiones S.A., shareholders decided that the “aportes irrevocables” owned by the Company, totaling R$2,653 (equivalent to AR$5,206,000) and R$13,076 (equivalent to AR$25,654,000), respectively, will not be added to these subsidiaries’ capital. These contributions until then recognized in the subsidiaries’ equity and in the Company’s line account “Investments in subsidiaries,” were reclassified to related parties and will be paid to the Company in subsequent years. (iii) On April 16, 2009, the shareholders of subsidiary Área Marketing Brasil Ltda. unanimously decided to reduce this company’s capital by R$10,990 to R$1,042. The Company recognized this transaction as a write-off of related parties against cash and the subsidiary as a capital reduction against related parties. This

F-52 capital reduction was triggered because under Article 1082, II, of the Civil Code, the amount of capital was considered excessive. (iv) On June 10, 2009, pursuant to the relevant Share Purchase and Sale Agreement, the Company acquired an additional interest of 20% in the capital of subsidiary Vicar Promoções Desportivas S.A., corresponding to 60 common shares, as described in note 15.b)(i). (v) On April 30, 2010, at an Extraordinary Shareholders’ Meeting, the shareholders of Vicar Promoções Desportivas S.A. approved a capital increase, without the issuance of new shares, of R$2,657, proportionally to the interest held by each shareholder.

a.5) Changes in line item “Investments in subsidiaries”

Company (BR GAAP) 2010 2009 2008 Net investment balance at January 1 ...... 53,663 74,547 34,974 Equity in subsidiaries ...... 18,199 15,431 40,759 Reversal of losses on investments in subsidiaries ...... — 941 Cumulative translation adjustments ...... 2,712 (3,671) 3,901 Dividends from subsidiaries ...... (10,092) (4,976) (6,151) Sale of investment in Motivare S.A...... — — (871) Capital increase in subsidiary T4F USA Inc...... — 790 994 Capital reduction in subsidiary Área Marketing Brasil Ltda.(iii) ...... — (10,990) — “Aportes irrevocables” in subsidiaries T4F Entretenimientos Argentina S.A. and T4F Inversiones S.A. reclassified to related parties (ii)...... — (15,729) — Realized foreign exchange gains on “aportes irrevocables” ...... — (4,037) — Capital increase in subsidiary Metropolitan Empreendimentos S.A...... — 1,500 — Acquisition of additional of 20% in the capital of Vicar Promoções Desportivas S.A...... — 798 — Net investment balance as of December 31 ...... 64,482 53,663 74,547

The Company’s subsidiaries are engaged in: • Área Marketing Brasil Ltda. (wholly-owned subsidiary—100%)—the import and sale of promotional material related to the entertainment and marketing industry, and organizing and holding sports, artistic and cultural events. • Metropolitan Empreendimentos S.A. (wholly-owned subsidiary—100%)—the promotion, organization, and holding of artistic and cultural events, concerts and shows in general. • T4F Alimentos, Bebidas e Ingressos Ltda. (wholly-owned subsidiary—99%)—the sale of tickets to concerts and artistic performances in performing arts venues, theaters, movie theaters, gymnasiums and stadiums; the sale of food and beverages, and merchandise directly related to the entertainment industry; the provision of ticketing services, by supplying technology and technical assistance; and the provision of ticket production, distribution, sales and/or intermediation services for any type of sporting, cultural or entertainment events in general. • T4F Inversiones S.A. and B.A. Inversiones S.A. (wholly-owned subsidiaries—100%)—located in Argentina, these are holding companies whose purpose is to invest in or make capital contributions to companies incorporated or to be incorporated in Argentina or abroad. T4F Inversiones S.A. currently holds direct or indirect interests in the following companies: T4F Entretenimientos Argentina—95%, Ticketmaster Argentina—95%, Ticketek Argentina—5%, Clemente Lococo—95%, Pop Art—100%, T4F Chile—99.31%, Ticketmaster Chile—99.35%, and B.A. Inversiones—5%. B.A. Inversiones S.A., in turn, holds direct or indirect interests in the following companies: T4F Inversiones—41.07%, T4F Entretenimientos Argentina—5%, Clemente Lococo—5%, Ticketek Argentina—95%, and Ticketmaster Argentina—5%.

F-53 • T4F USA Inc. (wholly-owned subsidiary—100%)—incorporated on November 26, 2007, in the State of Florida, USA, is engaged in intermediating international concerts. • Vicar Promoções Desportivas S.A. (subsidiary—75% in 2009 and 55% in 2008)—mainly engaged in providing publicity, promotion and organization services for sporting events, and is currently responsible for promoting Stock Car races in Brazil. • Motivare S.A.—the provision of business, marketing, organizational and financial consulting and advisory services related to the promotional events area; the collection, analysis, survey and provision of information in regards to promotions and events; the planning, organization and holding of trade shows, congresses, and events; advertising and publicity, sales promotion, and preparation of designs, texts and other advertising materials; the recruitment, selection, and supply of labor for trade shows, exhibits, congresses, and events; and the creation of giveaway and promotion and communication materials and sale services. On August 1, 2008, the sale of the Company’s former subsidiary Motivare S.A. (“Motivare”), under a Share Purchase and Sale Agreement and Other Covenants, was approved to the other and sole shareholder, corresponding to 10,831 registered common shares, without par value, representing 50% plus one share of this subsidiary’s capital, with the resulting withdrawal of the Company from the capital of Motivare S.A.

b) Goodwill on acquisition of investments

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Vicar Promoções Desportivas S.A.(i)...... 9,244 9,244 9,244 9,244 9,244 9,244 9,244 9,244 Motivare S.A.(vi) ...... — — — 1,452 — — — 1,452 Metropolitan Empreendimentos S.A.(ii) ...... 36,269 36,269 36,269 36,269 36,269 36,269 36,269 36,269 T4F Entretenimento(iii)...... 213,625 213,625 213,625 213,625 213,625 213,625 213,625 213,625 Allowance for write-off of goodwill in compliance with CVM Instructions 319/99 and 349/99...... (213,625) (213,625) (213,625) (213,625) (213,625) (213,625) (213,625) (213,625) T4F Inversiones and B.A. Inversiones S.A.(iv)...... 83,204 83,204 83,710 85,252 83,204 83,204 83,710 85,252 Companies acquired in Argentina-Pop Art S.A., Ticketek Argentina and Clemente Lococo(v) ...... — — — — 6,357 6,937 10,266 8,522 Total ...... 128,717 128,717 129,223 132,217 135,074 135,654 139,489 140,739

As of December 31, 2010, 2009, and 2008, pursuant to CPC 01, goodwill was tested for impairment; the recoverable amount of the cash generating units of the T4F Group was calculated based on the value-in-use, using cash flows based on the financial projections approved by management for a five year period, and an after-tax discount rate of 12% per year. The cash flows after the five-year period were extrapolated using a fixed annual growth rate of 3%, which does not exceed the gross domestic product and/or market growth expected in Brazil. Management believes that possible changes in the main assumptions on which the recoverable amounts were based would not cause its book value to exceed its recoverable amount.

F-54 The key assumptions used to calculate the value-in-use of the cash generating units of the T4F Group were as follows:

Increase in net revenue Management projects a vertical growth in net revenue focused on geographical expansion and the increase in the number of shows in the markets where we already operate (São Paulo and Rio de Janeiro). The focus of geographical expansion is on the main state capitals of Brazil, with an underserved potential audience. Additionally, we will increase the number of shows where we already operate, in view of the growing demand identified in the period prior to when the projections were made.

Projected gross margin Projected gross margin reflects the activity increase related to the expected efficiency improvements.

Ticket price inflation For ticket pricing we considered the consumer price index forecasts for the projection period in the countries where the company operates. (i) In 2006, due to an acquisition, it became the holder of 55% of the capital of Vicar Promoções Desportivas S.A., generating goodwill of R$6,168. The Investment Agreement and Other Covenants was amended on December 3, 2007, resulting in the revision of the amount previously paid for Vicar Promoções Desportivas S.A., and consequently the price of the shares then purchased was adjusted by R$4,774. In addition, as required by a contractual clause of the original agreement, specifically in regards to the determination of working capital as of December 31, 2007, by comparing it with working capital set down in the agreement, there was an additional adjustment in the amount paid of R$255. As a result, the Company recorded an increase in goodwill totaling R$5,029. The Agreement was amended again on June 10, 2009, resulting in a new revision of the amount paid for Vicar Promoções Desportivas S.A. at the time and, as a result, the Company adjusted the price of shares then purchased by R$4,152; the price difference of R$621 was paid to the Company on July 7, 2009, when the R$255 related to the determination of working capital as of December 31, 2007 was also paid. On the same date, the Company acquired from third parties an additional interest of 20% of the subsidiary’s capital (60 shares), generating total goodwill of R$6,421. Under IFRS 3 (revised in 2008), once control is obtained, subsequent acquisitions or sales of interests in a subsidiary’s equity that does not result in the loss of control is accounted for as capital transactions. Therefore, neither the increase in goodwill nor any gain or loss on any decrease in interest held should be recognized; the Company recognized the additional amounts paid for the noncontrolling interests as a reduction of shareholders’ equity. (ii) In May 2007, in connection with the corporate restructuring process, ADTSPE merged into and with the Company on June 30, 2007, acquired 85% of the capital of Metropolitan Empreendimentos S.A., which generated adjusted goodwill of R$40,298, recorded in books at its total amount, based on the same economical rationale that originated such goodwill. Up until December 31, 2007, goodwill was amortized on a straight-line basis based on this company’s expected future earnings, pursuant to an appraisal report issued by independent experts. (iii) As part of the corporate restructuring in May 2007, on June 30, 2007 the Company merged its direct parent ADTSPE for the purpose of aligning the corporate interests of its direct and indirect shareholders, reducing administrative costs, and maximizing the efficiency in information flow and management with the involvement of shareholders. However, upon the acquisition of the equity interests in the Company, ADTSPE determined goodwill of R$237,361 based on expected future earnings. As a result of the downstream merger and in compliance with CVM Instructions 319/99 and 349/99, goodwill recorded at ADTSPE, amounting to R$237,361, was reduced to zero through an allowance at ADTSPE itself recognized before the merger. After the

F-55 amortization of goodwill and the reversal of the deferred tax incurred through December 31, 2007, the balances of goodwill and the allowance for goodwill write-off was R$213,625. After the downstream merger, this goodwill will be amortized for tax purposes based on expected generation of operating profits, ADTSPE recorded the related deferred income tax and social contribution assets as totaling R$80,705, which were transferred to the Company at the time of the incorporation. Said tax credit, net of the realized portions, is recorded in line item “Deferred income tax and social contribution”, in current and noncurrent assets, based on their expected realization. This adjustment was recorded exclusively to comply with CVM Instructions 319/99 and 349/99 as it resulted from a downstream merger, even though the rationale that it gave rise to goodwill is still effective. Consequently, the balance of this goodwill, even if reduced to zero through an allowance recognized by ADTSPE itself, will not affect the financial statements of the controlling shareholders. (iv) The capital contribution transaction through the assignment of equity interests in the companies B.A. Inversiones S.A. and T4F Inversiones S.A., as discussed in note 1, generated goodwill totaling R$96,853, recorded in the books at its total amount, based on the same economic rationale that originated such goodwill. This goodwill was amortized on the straight-line basis until December 31, 2007, pursuant to an appraisal report issued by independent appraisers, which justifies such goodwill based on expected future earnings. Under the agreement entered into on August 2, 2007, the Company sold 1,200 shares of B.A. Inversiones S.A., representing 5% of its capital, to T4F Inversiones S.A. for R$1,873, equivalent to US$1,000. With this transaction, the Company proportionally realized goodwill and the investment in the subsidiary amounting to R$2,092 and R$143, respectively, and incurred a capital loss of R$362, recorded as income for the year in line item “Other operating income, net.” As of December 31, 2008 and July 31, 2009, the Company recorded a partial recovery of this goodwill totaling R$1,542, equivalent to US$660, and R$506, equivalent to US$270, respectively, due to the payment of an indemnity by the previous shareholder, CIE Internacional S.A. de C.V., for certain liabilities recorded in the subsidiaries Pop Art S.A. and Ticketek Argentina S.A. on their acquisition by the Company. (v) Subsidiaries B.A. Inversiones S. A. and T4F Inversiones S.A. acquired all the shares of the companies Pop Art S.A., Ticketek Argentina S.A., and Clemente Lococo. In the case of Pop Art S.A., on May 14, 2007 the company acquired 49% of its shares, generating goodwill of R$6,435, which added to goodwill arising on the initial acquisition of R$3,683 resulting in a total of R$10,118. As regards to Ticketek Argentina S.A., the subsidiaries acquired this company on May 16, 2006, generating total goodwill of R$641. This goodwill was amortized through December 31, 2007, when it started to be tested for impairment. (vi) On May 31, 2006, the Company acquired 10,829 shares of Motivare S.A. to become the holder of 50% of its capital. This transaction generated goodwill of R$2,125.

As commented in note 15.a), the shares of this subsidiary were sold on August 1, 2008 and the company derecognized goodwill in the subsidiary in the amount of R$1,452. This transaction generated a gain on divestiture of R$1,173, recorded in line item “Other operating income, net.”

F-56 16. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS a) Breakdown of property, plant and equipment

Company (BR GAAP) Consolidated (IFRS) Average depreciation rate - January 1, January 1, % p.a. 2010 2009 2008 2008 2010 2009 2008 2008 Revalued cost: Land...... — — — — 448 593 877 728 Constructions, installations and leasehold improvements .... 13 77,164 76,594 76,230 75,646 98,874 99,187 102,211 97,724 Furniture and fixtures ...... 6 4,353 4,111 4,331 4,198 7,737 7,725 8,290 6,654 Machinery and equipment...... 7 10,344 10,019 10,064 9,929 14,880 14,372 14,549 14,755 Data processing equipment...... 17 5,362 4,658 4,129 3,574 8,640 9,590 10,718 6,787 Vehicles...... 20 357 357 357 357 527 720 816 883 PP&E in progress . . . — — — 35 — — — 39 Total ...... 97,580 95,739 95,111 93,739 131,106 132,187 137,461 127,570 Accumulated depreciation: Constructions, installations and leasehold improvements .... 13 (76,135) (75,584) (65,340) (52,632) (90,975) (90,442) (82,055) (66,030) Furniture and fixtures ...... 6 (1,899) (1,628) (1,497) (1,240) (4,079) (3,911) (3,852) (2,693) Machinery and equipment...... 7 (4,364) (3,956) (4,206) (3,878) (6,610) (6,179) (6,649) (6,498) Data processing equipment...... 17 (2,827) (2,133) (1,827) (1,496) (5,593) (6,335) (6,292) (3,639) Vehicles...... 20 (232) (166) (101) (36) (397) (513) (508) (348) Total ...... (85,457) (83,467) (72,971) (59,282) (107,654) (107,380) (99,356) (79,208)

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Property, plant and equipment, net: Land...... — — — — 448 593 877 728 Constructions, installations and leasehold improvements .... 1,029 1,010 10,890 23,014 7,899 8,745 20,156 31,694 Furniture and fixtures ...... 2,454 2,483 2,834 2,958 3,658 3,814 4,438 3,961 Machinery and equipment...... 5,980 6,063 5,858 6,051 8,270 8,193 7,900 8,257 Data processing equipment...... 2,535 2,525 2,302 2,078 3,048 3,255 4,426 3,148 Vehicles...... 125 191 256 321 129 207 308 535 PP&E in progress . . . — — — 35 — — — 39 Total ...... 12,123 12,272 22,140 34,457 23,452 24,807 38,105 48,362

The Company approved the appraisal report of the construction in leased properties, installations and leasehold improvements, furniture and fixtures, machinery, devices and equipment, and data processing equipment issued by a specialized firm (Advance Appraisal Consultoria e Planejamento), which amounts represent the assets as of January 1, 2006.

F-57 As a result, on that date, the Company recorded a revaluation amounting to R$31,265 and the revalued assets started to be depreciated on the straight-line basis according to their new useful lives, except for constructions, installations and leasehold improvements, which are depreciated based on the real estate lease contract terms.

b) Breakdown of other intangible assets Line item “Other intangible assets” generally reflects software licenses, as follows:

Company (BR GAAP) Consolidated (IFRS) Average amortization January 1, January 1, rate - % p.a. 2010 2009 2008 2008 2010 2009 2008 2008 Cost ...... 4,243 3,604 3,333 1,962 9,660 9,718 12,293 10,437 Amortization ...... 20 (2,299) (1,916) (1,384) (941) (7,499) (7,705) (9,624) (8,715) Total ...... 1,944 1,688 1,949 1,021 2,161 2,013 2,669 1,722

c) Breakdown of revalued property, plant and equipment and related realization in the year ended December 31, 2010

Company (BR GAAP) Accumulated Residual depreciation of revaluation Revaluation revaluation amount Constructions in third-party properties...... 26,874 (26,874) — Furniture and fixtures...... 790 (235) 555 Machinery and equipment...... 2,399 (491) 1,908 Data processing equipment...... 367 (216) 151 30,430 (27,816) 2,614 Taxes (34%—income tax and social contribution) ...... (888) Revaluation recorded in shareholders’ equity at December 31, 2010..... 1,726

Consolidated (IFRS) Accumulated Residual depreciation of revaluation Revaluation revaluation amount Constructions in leased properties...... 26,874 (26,874) — Furniture and fixtures...... 1,386 (574) 812 Machinery and equipment...... 4,211 (1,439) 2,772 Data processing equipment...... 494 (315) 179 32,965 (29,202) 3,763 Taxes (34%—income tax and social contribution) ...... (1,280) Eliminations in consolidation(*) ...... (757) Revaluation recorded in shareholders’ equity at December 31, 2010..... 1,726

(*) Revaluation reserve in subsidiary Metropolitan Empreendimentos S.A.

F-58 d) Changes in property, plant and equipment

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Opening balance ...... 12,272 22,140 34,457 24,807 38,105 48,362 Additions: Constructions, installations and leasehold improvements ...... 568 431 696 4,138 2,530 1,918 Furniture and fixtures ...... 249 64 184 347 232 1,640 Machinery and equipment ...... 459 1,351 176 904 1,724 391 IT equipment, applications and systems ...... 835 1,029 829 979 1,544 1,254 Vehicles ...... 28 — — 28 — — Total ...... 2,139 2,875 1,885 6,396 6,030 5,203 Write-off of subsidiary in the year ...... — — — — — (141) (Write-offs, net (*) ...... (135) (1,031) (252) (2,862) (1,815) (608 (מ) (Depreciation ...... (2,153) (11,712) (13,950) (4,428) (14,278) (16,231 (מ) Exchange differences ...... — — — (461) (3,235) 1,520 (מ) Closing balance...... 12,123 12,272 22,140 23,452 24,807 38,105

(*) During the year ended December 31, 2009, the Company took a physical inventory of its property, plant and equipment, resulting in a net write-off totaling R$731 for the Company, and R$871 on a consolidated basis.

The Company and the subsidiary Metropolitan Empreendimentos S.A. pledged data processing equipment, machinery and equipment, and furniture and fixtures totaling R$5,714, as collateral for tax collection lawsuits, labor claims and customers’ complaints.

e) Changes in intangible assets

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Opening balance ...... 1,688 1,949 1,021 2,013 2,669 1,722 Additions— Software ...... 639 272 1,370 715 362 1,689 Subsidiary write-off in the year...... ————— (22) — (Write-offs, net ...... — — — (3) (15 (מ) (Amortization ...... (383) (533) (442) (538) (746) (783 (מ) Exchange differences ...... — — — (225) 138 (מ) (Other ...... — — — (26) (32) (75 (מ) Closing balance ...... 1,944 1,688 1,949 2,161 2,013 2,669

As of December 31, 2010, 2009, and 2008, pursuant to CPC 01, property, plant and equipment and intangible assets were tested for impairment based on the discounted projected future cash flows, which did not indicate the need to recognize possible losses.

F-59 17. ACCOUNTS PAYABLES

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Domestic suppliers ...... 12,401 15,673 16,587 15,509 33,888 35,467 79,366 39,677 Foreign suppliers...... 2,375 1,415 608 3,032 2,587 2,449 8,286 3,700 Total ...... 14,776 17,088 17,195 18,541 36,475 37,916 87,652 43,377

18. LOANS AND FINANCING a) Debentures On March 31, 2010, the Company entered into an agreement for the issuance of simple nonconvertible debentures with Banco Bradesco BBI S.A. The Company issued 150 single series debentures, totaling R$150 million, as authorized at the Extraordinary Shareholders’ Meeting held on March 16, 2010.

The issuance was carried out in accordance with CVM Instruction 476, of January 16, 2009, and other relevant statutory and regulatory provisions, and the distribution of debenture was, therefore, automatically exempt from registration with the CVM required by Article 19 of Law 6385, of December 7, 1976.

Transaction costs incurred in obtaining funds are recognized as a reduction of the fair value initially recognized pursuant to CPC 08.

With this issuance, the Company restructured its debt and settled the loan from Banco Citibank S.A. (see item b) below).

2010 Company (BR GAAP) and Type Average interest rate - % consolidated (IFRS) Debentures...... CDI+1.47-2.09 150,276 Current portion ...... 19,026 Noncurrent portion ...... 131,250 a.1) As of December 31, 2010, the Company was in compliance with the events of default set out in the debenture’s indenture, described below: i) Filing for or declaration of judicial or extrajudicial recovery with creditors. ii) Noncompliance by the Company of any financial or nonfinancial obligation. iii) Compliance with obligations set forth in the Credit Card Receivables Assignment Agreement or any other guarantee agreement subsequently entered into. iv) Acceleration of maturity or default of payment of any other financial obligations, assumed by the Company in the local or a foreign market, which in aggregate or individually total R$15 million or more. v) Change in the direct or indirect control of the Company not previously approved by the debentureholders at a meeting specially called for such purpose. vi) Spin-off, merger, combination or any other form or corporate restructuring involving the Company that might in any way impair the compliance of the obligations set out in the debenture indenture.

F-60 vii) Transformation of the Company into a limited liability company, under Article 220 of the Brazilian Corporate Law, and change of the corporate objects set out in the Company’s bylaws. viii) Payment of dividends in case of delay in the compliance of any of the obligations set out in the debenture indenture, except for the payment of the mandatory minimum dividends required by Article 202 of the Brazilian Corporate Law. ix) Reduction of the Company’s capital in an amount that might directly or indirectly impact compliance with the Company’s obligations, except if such capital reduction is conducted for the purpose of absorbing accumulated losses. x) Other events detailed in the debenture indenture. a.2) Debentures are guaranteed by: i) Chattel mortgage, subject to condition precedent, on behalf of the debentureholders, represented by the trustee, of shares representing 100% of the Company’s capital. ii) Collateral transfer, subject to condition precedent, on behalf of the debentureholders, represented by the trustee, of all the receivables from sponsorship agreements effective on the debenture indenture execution date. iii) Collateral transfer, subject to condition precedent, on behalf of the debentureholders, represented by the trustee, of all credit, purchase and/or debit card receivables.

Long-term portions mature as follows:

Company Year (BR GAAP) 2012 ...... 37,500 2013 ...... 37,500 2014 ...... 37,500 2015 ...... 18,750 Total...... 131,250

b) Loans and financing b.1) December 31, 2009

Average interest Company Consolidated Type rate - % (BR GAAP) (IFRS) Resolution 2770...... US$+6.95059 109,770 109,770 Bank credit note—swap contract ...... R$-CDI+0.75-2.75 35,490 35,490 Overdraft account ...... Argentinean peso + 16.5 — 1,586 Total...... 145,260 146,846 Current portion ...... 60,004 61,590 Noncurrent portion ...... 85,256 85,256

F-61 b.2) December 31, 2008

Average interest Company (BR GAAP) and Type rate - % consolidated (IFRS) Resolution 2770 ...... US$+6.95059 206,343 Total ...... 206,343 Current portion ...... 60,281 Noncurrent portion...... 146,062

Average interest Company (BR GAAP) and Type rate - % consolidated (IFRS) Bank credit note—swap contract...... R$-CDI+0.75-2.75 11,627 Total ...... 11,627 Current assets portion ...... 3,855 Noncurrent portion ...... 7,772

b.3) January 1, 2008

Company Consolidated Type Average interest rate - % (BR GAAP) (IFRS) Resolution 2770 ...... US$+6.95059 178,736 178,736 Overdraft account...... Argentinean peso + 15 — 366 Bank credit note—swap contract...... R$-CDI+0.75-2.75 30,249 30,249 Total ...... 208,985 209,351 Current portion ...... 29,281 29,647 Noncurrent portion ...... 179,704 179,704

As part of the corporate restructuring undertaken in May 2007, ADTSPE entered into a loan agreement with Banco Citibank S.A. (“Citibank”) totaling US$100 million, bearing interest of 6.95% per year, maturing in May 2012 and amortizable semiannually. Most of these funds were used in the acquisition by ADTSPE of the equity interests held by CIE Internacional S.A. de C.V. in the Company, Metropolitan Empreendimentos S.A., and Área Marketing Brasil Ltda. After the downstream merger of ADTSPE on June 30, 2007, this loan became an obligation of the Company. On December 9, 2009, the parties agreed to amend the loan agreement to resolve the inaccuracies in the calculation of the amounts of some Trading Notes, pursuant to Amendment and Ratification Agreement executed on January 7, 2010, to revise the interest calculation method in view of the differences in interpretation of the loan agreement by the parties. Because of this revision, Citibank reimbursed R$1,478 to the Company as Citibank accepted the Company’s interpretation.

In order to hedge against the currency exposure arising from this obligation, on the date the loan agreement the Company and Citibank contracted for a swap transaction that resulted in a currency hedge for all future disbursements related to said loan, swapping its interest rate to CDI plus 0.75-2.75 percent per year, depending on the date the installment is paid.

The Company recorded on its balance sheet an accumulated loss of R$35,490 at December 31, 2009 (noncurrent liabilities) and an accumulated gain of R$11,627 at December 31, 2008, of which R$3,855 was classified in current assets and R$7,772 in noncurrent assets, on these swap transactions, with a balancing item recorded as net income for the year as “Financial income” and “Financial expenses.” On April 7, 2010, the Company settled this loan and the swap.

F-62 19. TAXES PAYABLE

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 COFINS...... 1,889 290 2,359 1,058 2,176 578 2,475 2,248 PIS...... 413 64 419 144 478 127 437 404 Service tax (ISS) ...... 4,827 2,615 3,016 2,361 4,951 2,683 3,251 2,733 ISS in installments(b) ...... — — — — 418 418 436 418 Income tax and social contribution ...... — 855 — 704 3,975 4,456 6,715 3,095 REFIS(c) ...... 1,081 1,296 — — 1,081 1,296 — — State VAT (ICMS) ...... 2 — — 17 55 23 35 236 Taxes on billings(a)...... — — — — 2,279 4,404 6,188 6,322 VAT...... — — — — 969 517 1,465 911 PIS and COFINS—installment plan ...... 217 203 188 183 217 203 188 183 Other ...... 542 530 235 963 824 807 861 1,301 Current liabilities...... 8,971 5,853 6,217 5,430 17,423 15,512 22,051 17,851 PIS/COFINS...... 72 270 438 564 72 270 438 564 ISS in installments(b) ...... — — — — 139 557 975 1,393 REFIS(c) ...... 9,731 11,662 — — 9,731 11,662 — — Taxes on billings(a)...... — — — — 3,174 4,121 3,147 532 Noncurrent liabilities ...... 9,803 11,932 438 564 13,116 16,610 4,560 2,489

(a) Tax on gross revenue levied at the rates of 3-4 percent on the gross revenue of Argentinean subsidiaries. (b) Metropolitan filed an application to pay in installments ISS debts for 1999-2000, approved by the Municipal Department of Finance, which started to be paid in May 2007. The principal of the installment plan was R$834, plus a late payment fine of R$1,255, and is being settled in 60 installments. Each tax debt installment is subject to 1% interest, calculated on the amount of the initial installment. At the end of the year, the outstanding balance is adjusted using the Extended Consumer Price Index (IPCA-E).

(c) Tax installments introduced by Law 11941/09 On May 28, 2009, the Federal Government enacted Law 11941/09, originated from Provisional Act 449/08, which, among other amendments to the tax law, provides for a tax installment plan for taxes collected by the Federal Revenue Service, the National Institute of Social Security (INSS), and the National Treasury Attorney General (PGFN).

The entities that opt to pay or divide the debts into installments under this law, in the applicable cases, can settle the amounts corresponding to default and automatic fines and late-payment interest, including those related to legally enforceable debts to the government, using tax loss carryforwards, and will benefit from reduced fines, interest and legal charges, for which the reduction percentage depends on the installment plan chosen.

Pursuant to the established rules for compliance with the first stage of the installment plans, the Company filed, within legal deadlines, a request for enrollment with said tax installment plan in November 2009 to include debts which had been challenged in court. As a result of such enrollment, the Company withdrew the lawsuits challenging the taxes included in the installment plan and, accordingly, indicated the general nature of tax debts, paying the corresponding initial installments, pursuant to the provisions of Joint Federal Revenue Service and National Treasury Attorney General Administrative Rule.

F-63 The tax debts included in the tax installment plan by the Company, pursuant to Law 11941/09, are as follows:

2010

Inflation 2009 Reversal adjustment 2010 IRPJ/CSLL/PER/DCOMP tax debts—2002 and 2003 ...... 12,720 (3,103) 934 10,551 PIS/COFINS tax debts—1997-2000 ...... 238 — 23 261 Total ...... 12,958 (3,103) 957 10,812

In 2009, the Company recorded R$12,958 for the line item reserve for contingent tax liabilities, with a balancing item in due from related parties receivable from shareholder CIE International S.A. de C.V., since the amounts to be paid in installments refer to contingent liabilities for the period CIE is liable for any type of contingencies, as described in note 14.

In 2010, the company transferred the balance of said contingent liabilities to line item “Taxes payable,” and segregated the amounts into current and noncurrent liabilities.

With the withdrawal of the lawsuits, in view of the type of installment plan to be adopted by the Company, which provides for the payment of tax debts in 120 installments, the Company returned to accrued tax installments in the amount of R$3,103, corresponding to the 70% late payment fine and 30% interest incurred and an adjustment for inflation of R$957 based on the SELIC (Central Bank’s policy rate). This return was deducted from the amounts receivable from shareholder CIE and, therefore, had no impact on the Company’s net income.

20. ADVANCES FROM CUSTOMERS Refer to the amounts received in advance for services related to sponsorship agreements, lease of suites and box seats in performing arts venues, space leasing, merchandising and advanced ticket sales, which will be recorded as income for the services are provided.

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Naming rights agreements(a) . . . 1,124 3,081 4,402 5,756 1,715 3,661 5,028 5,800 Sponsorships, suites and box seats (b.1.) ...... 32,422 20,003 11,581 14,690 35,296 24,551 23,686 23,421 Private events (b.2.) ...... 336 3,325 4,399 950 1,565 3,729 4,622 1,297 Advanced ticket sales(c) ...... 52,447 33,783 2,228 52,083 73,231 61,829 3,095 65,194 Shows intermediation...... — — — — 1,483 — — — Communication...... — — — — — — — 1,300 Current liabilities ...... 86,329 60,192 22,610 73,479 113,290 93,770 36,431 97,012 Naming rights agreements(a) . . . — — — 7,305 — — 258 7,563 Sponsorships—suites and box seats (b.1.) ...... 1,313 — — — 1,313 — 2,179 14,312 Noncurrent liabilities ...... 1,313 — — 7,305 1,313 — 2,437 21,875

(a) Naming rights agreements

F-64 Consist of sponsorship agreements, the purpose of which is to sell the sponsor the right to name venues or a specific event for a predetermined amount. The agreements set forth the terms and conditions under which the sponsor is entitled to name a certain venue or event, as a form of publicizing its trademark. (b) Space assignment agreements (b.1.) Suites and box seats: the purpose of these agreements is the temporary lease of suites and box seats located inside the venues, generally to companies, for use in every artistic and cultural event open to the general public, for a defined period and in exchange for payment of a predetermined amount for such use. (b.2.) Private events: the purpose of these agreements is the temporary assignment of rights to use part of the facilities of the venues to produce and hold private events, on certain dates, in exchange for the payment of a predetermined amount. (c) Advanced ticket sales Refer to the advanced sale of tickets, both in cash and by credit card, for the events, concerts and performances promoted and organized by the Company and its subsidiaries.

21. SPONSORSHIPS—CULTURAL INCENTIVE LAW Rouanet Act The Company raises funds that are invested in its own cultural projects, approved by the Ministry of Culture, where the Company does not earn any benefits from the amounts received, as prescribed by Law 8313/91, as amended by Law 9874/99.

The amounts received by the Company are held in a bank account or in short-term investments specific and exclusive to each project in a financial institution designated by the Ministry of Culture, and are recorded in line item “Restricted cash,” as described in note 9.

The balancing item for the amounts received is also a specific and single line item for each project, in current liabilities, and represents the Company’s obligation to invest these funds in the approved project. Expenses incurred in each project are deducted directly from this line item, whose balance should be nil at the end of the project. Eventually, unrealized amounts are returned to the Ministry of Culture when the company files the project’s expense report.

The recognition of transactions with Rouanet incentives are temporary, and there is no recognition in income or expense accounts.

The table below shows the breakdown of the involved amounts:

Company (BR GAAP)

Approved Pronac # amount 12/31/10 12/31/09 Beauty and the Beast...... 0810063 183 — 183 Moscow Grand Ballet...... 090576 1,867 — 1,744 Cats—O Musical ...... 095007 6,155 253 80 Mamma Mia ...... 097620 13,396 3,132 — Cats—O Musical—Rio de Janeiro ...... 105152 2,808 — — Slava’s ...... 096299 3,231 — — Stomp...... 094969 2,093 — — Total...... 29,733 3,385 2,007

F-65 Consolidated (IFRS)

Approved Pronac # amount 12/31/10 12/31/09 Beauty and the Beast...... 0810063 183 — 183 Moscow Grand Ballet...... 090576 1,867 — 1,744 Cats—O Musical ...... 095007 6,155 253 80 Mamma Mia ...... 097620 13,396 3,132 — Cats—O Musical—Rio de Janeiro ...... 105152 2,808 — — Slava’s ...... 096299 3,231 40 — Stomp...... 094969 2,093 41 — Total...... 29,733 3,466 2,007

The table below shows the changes in the involved amounts:

Company (BR GAAP) 12/31/09 Additions Write-offs 12/31/10 Beauty and the Beast ...... 183 82 (265) — Moscow Grand Ballet...... 1,744 226 (1,970) — Cats—O Musical...... 80 11,962 (11,789) 253 Mamma Mia...... — 4,984 (1,852) 3,132 Cats—O Musical—Rio de Janeiro...... — 416 (416) — Total ...... 2,007 17,670 (16,292) 3,385

12/31/08 Additions Write-offs 12/31/09 Beauty and the Beast ...... — 2,050 (1,867) 183 Moscow Grand Ballet...... — 1,867 (123) 1,744 Cats—O Musical...... — 80 — 80 Total ...... — 3,997 (1,990) 2,007

Consolidated (IFRS) 12/31/09 Additions Write-offs 12/31/10 Beauty and the Beast ...... 183 82 (265) — Moscow Grand Ballet...... 1,744 226 (1,970) — Cats—O Musical...... 80 11,962 (11,789) 253 Mamma Mia...... — 4,984 (1,852) 3,132 Cats—O Musical—Rio de Janeiro...... — 416 (416) — Slava’s...... — 3,231 (3,191) 40 Stomp ...... — 3,740 (3,699) 41 Total ...... 2,007 24,641 (23,182) 3,466

F-66 Consolidated (IFRS)

12/31/09 Additions Write-offs 12/31/10 Beauty and the Beast ...... — 2,050 (1,867) 183 Moscow Grand Ballet...... — 1,867 (123) 1,744 Cats—O Musical...... — 80 — 80 Total ...... — 3,997 (1,990) 2,007

22. RESERVE FOR TAX, CIVIL AND LABOR CONTINGENCIES The Company and its subsidiaries are parties to certain contingencies that include ongoing labor, tax and civil lawsuits, involving contingent liabilities. Management adopts the criteria for recognizing reserves for contingent liabilities if the risk of loss is considered probable.

The Company has entered into agreements with its former controlling shareholder CIE Internacional S.A. de C.V., under which CIE Internacional S.A. de C.V. assumes the liability for contingencies of any type, related to events prior to December 1, 2000 (where the shareholder CIE is liable for all contingencies) and from December 1, 2000 to May 14, 2007 (where CIE is liable for 85% and Fernando Luiz Alterio for 15%, or, if shareholding interests at the time of the event triggering the contingency are different from 85 and 15 percent, the liability of these shareholders will be prorated to the corresponding holding interest), which result in definite losses for and disbursements by the Company, as long as such losses exceed US$5 million, in accordance with the terms and conditions of said agreement. However, under the share subscription agreement, CIE is liable for all the contingencies of any nature related to the subsidiaries located in Argentina and Chile, whose triggering event is prior to May 14, 2007. Considering events of this nature have occurred prior to December 31, 2009 and in conformity with said agreement, CIE Internacional S.A. de C.V. is required to reimburse the Company R$1,497. The current controlling shareholder Fernando Luiz Alterio does not have any debt to the Company.

Additionally, the Company was granted an unconditional guarantee of payment, in full and in cash, of a surety pledged pursuant to the laws of the Federal District of Mexico, granted by Corporación Interamericana de Entretenimiento, S.A.B. de C.V., a publicly-held Mexican company, parent of CIE Internacional S.A. de C.V., which can be exercised at any time by the Company if the obligation to pay the indemnity losses, set forth by the share purchase and share subscription agreements, is not met by CIE Internacional S.A. de C.V.

F-67 The breakdown of the accrued amounts is as follows:

January 1, Company (BR GAAP) 2010 2009 2008 2008 Labor ...... 14,210 17,722 19,268 20,773 Civil ...... 5,895 3,266 405 280 Tax...... 2,641 3,565 4,231 5,482 Total ...... 22,746 24,553 23,904 26,535 Current...... 6,972 4,782 1,973 4,247 Noncurrent ...... 15,774 19,771 21,931 22,288

January 1, Consolidated (IFRS) 2010 2009 2008 2008 Labor ...... 14,797 18,159 20,266 21,210 Civil ...... 7,714 4,176 1,448 1,461 Tax...... 6,898 7,642 9,232 9,309 Total ...... 29,409 29,977 30,946 31,980 Current...... 7,494 5,080 2,099 4,292 Noncurrent ...... 21,915 24,897 28,847 27,688

22.1. Tax lawsuits The Company and its subsidiaries are parties to potential tax contingencies classified as possible risk of loss by our legal counsel, amounting to R$26,646 (R$19,095 and R$50,402 as of December 31, 2009 and 2008, respectively).

The main tax lawsuits that correspond to material contingencies for the Company are as follows: a) ISS-related proceedings: most tax proceedings, whether lawsuits or administrative proceedings, refer to the discussion of the service tax (ISS) levied by municipalities, plus statutory fine and interest. As of December 31, 2010, the Company classified approximately R$22 related to these proceedings as probable loss and approximately R$7,267 as possible loss. The Company filed defense arguments in all these proceedings and awaits the final administrative or court decision. The Company provided guarantees for the lawsuits in the form of cash deposits, letters of guarantee, or the attachment of its own properties. These proceedings refer mainly to ISS levied by the City of São Paulo and the City of Rio de Janeiro. The Company challenges the legality and the levy of the tax on cancelled and free tickets, entertainment services, and rental of box seats and space during events. b) In December 2009, the Company was assessed by the São Paulo Office of the Federal Revenue Service an amount of R$7,360, which refers to the collection of income tax and social contribution due to: (i) the disallowance of depreciation and amortization expenses deducted in 2004; (ii) fine of 50% on the differences between the amounts recorded as monthly income tax and social contribution estimates in 2007 and 2006 and the amounts reported in the Declaration of Federal Tax Debits and Credits (DCTF), and (iii) underpayment of income tax and social contribution in 2005. The Company filed an objection against said tax assessment notice and awaits an administrative decision; the likelihood of loss was considered possible by our legal counsel. c) In July 2010, the Company was assessed by the São Paulo Office of the Federal Revenue Service an amount of R$2,279, which refers to the collection of the amounts related to the Economic Intervention Contribution (CIDE)-Technology, created by Law 10168/00, increased by an assessment fine (75%) and interest on late payment, for calendar 2007. The Company filed an objection against said tax assessment notice and awaits an administrative decision; the likelihood of loss was considered possible by our legal counsel.

F-68 d) In December 2010, the Company´s subsidiary Vicar Promoções Desportivas S.A. was assessed by the Campina, SP Office of the Federal Revenue Service an amount of R$1,704, which refers to the collection of income tax and social contribution due to: (i) underpayment or nonpayment of monthly estimated taxes based on balance sheets or trial balance for tax payment suspension or reduction for 2005 and 2006; and (ii) collection of separate fines in all months involved. For the amounts related to the 2006 adjustment, a late payment fine (20%) and interest was paid during the tax audit. The Company filed an objection against said tax assessment notice and awaits an administrative decision. The likelihood of loss was considered probable by the Company´s legal counsel in regards to the difference between the late payment fine paid (20%) and the assessment fine (75%) and the 2005 separate fine of approximately R$396 and remote in regards to the amounts paid during the tax audit and the separate 2006 fine.

22.2. Labor lawsuits Based on an assessment made by our outside legal counsel, the Company and its subsidiaries are subject to possible labor and social security contingencies totaling approximately R$10,681 (R$14,268 and R$16,772 at December 31, 2009 and 2008, respectively). Additionally, the Company and its subsidiaries are parties to lawsuits filed by former employees for which the risk of loss, totaling approximately R$3,653 (R$3,891 and R$3,494 at December 31, 2009 and 2008, respectively) was classified as probable based on the opinion of our outside legal counsel.

As of December 31, 2010, the Company and its subsidiaries are parties to 82 labor lawsuits amounting to R$5,394 (R$2,955 and R$3,164 at December 31, 2009 and 2008, related to 90 and 105 lawsuits, respectively) assessed as possible risks.

The main labor lawsuits that correspond to material contingencies for the Company are as follows: a) Lawsuit filed with the 30th Labor Court of São Paulo, claiming the nullity of a service agreement and the recognition of an employment relationship. As of December 31, 2010, the lawsuit was at the lower court provisional execution stage; the Company filed an appeal against the decision and awaits its judgment. The gross amount involved is R$1,661, and loss is classified as probable. b) Lawsuit filed with the City of Buenos Aires (Argentina) Labor Court, filed by Roberto Costa against the following companies: T4F Inversiones S.A., Ticketek Argentina S.A., T4F Entretenimientos Argentina S.A., B.A. Inversiones S.A., Pop Art S.A., Clemente Lococo S.A., Ticketmaster S.A., and T4F Entretenimento S.A. The claimant seeks the payment of the differences between the fixed compensation and the variable compensation paid in 2007, 2008 and 2009, plus fines set forth by the labor law. The Company filed defense arguments on December 10, 2010 for each company involved and awaits the analysis and judgment of the lawsuit by the court. Total amount involved is R$2,843, and the likelihood of loss is considered possible.

22.3. Civil and other lawsuits The Company and its subsidiaries are parties to civil lawsuits totaling R$7,656, classified as probable risks of loss (R$4,176 and R$1,448 at December 31, 2009 and 2008, respectively). The main claims in Brazil are related to the breach of consumer protection regulations and refusal to sell tickets at a 50% discount (arising from laws requiring half-price tickets sales), and in Argentina they are related to civil liability for damages, as well as consumers’ rights.

The main civil lawsuits that represent material contingencies for the Company are as follows: a) The lawsuits whose likelihood of loss is classified as possible include the litigation involving Clube Atlético Mineiro (the “Club”), totaling R$27,855 at December 31, 2010, corresponding to one-third of

F-69 the total amount claimed, as follows: the lawsuit, filed with the 10th Civil Court of Belo Horizonte, MG, refers to a fine collection proceeding for alleged noncompliance by the Company and other defendants with a commitment made with the Club, plus pain and suffering. Clube Atlético Mineiro seeks the sentencing of the three defendants to the payment of a contractual fine, pain and suffering, and lawyers’ fees, which would authorize the Club, if its claims are accepted, to collect from one, some, or all the defendants so that the defendant meeting the obligation could file recourse against the others for reimbursement. The lawsuit is still at the lower court to hear witnesses summoned by the parties. b) The Company filed a lawsuit with the 6th Civil Court of São Paulo against Galaxy do Brasil, seeking compensation for damages caused by the rescission of a sponsorship agreement for one of its venues, and Galaxy filed a counterclaim seeking that the Company be ordered to discontinue the use of certain trademarks and pay compensation for property damages and pain and suffering, as well as loss of profits. The lawsuit filed by the Company was dismissed and the counterclaim filed by Galaxy was judged partially granted. The Company was ordered to pay compensation amounting to 5% of the net revenue earned from July 31, 2003 to July 24, 2005, an adjustment for inflation, and interest of 0.5% per month since the subpoena, plus court costs. Should the Company’s appeal be rejected, the ordered amount will be assessed during the award determination process. According to the legal counsel, the likelihood of loss is possible. c) The Company filed two lawsuits for the renewal of the leases of properties where the Company operates two of its venues: (i) Citibank Hall; and (ii) Credicard Hall, both in São Paulo. These lawsuits were filed in February 2008 and July 2009 with the 2nd and the 28th Civil Courts in São Paulo, respectively; the lawsuits were filed against the (i) Associação Brasileira de Educação e Assistência— ABEA, and (ii) Companhia Horário Sabino Coimbra—Comércio e Participações Ltda. According to the Company’s legal counsel, the likelihood of loss in lawsuit (i) above is probable and in lawsuit (ii) above is remote. Both lawsuits are at the production of expert assessment evidence production stage, before the lower court issues its decision. d) The Company is also a defendant in the following public civil lawsuits filed by the Public Prosecution Office: (i) Public Civil Lawsuit filed by the Rio de Janeiro State Public Prosecution Office in 2007, with the 3rd Corporate Law State Court of Rio de Janeiro, RJ, in the attributed amount of R$1,000, requesting that the Company be required to discontinue the collection of a convenience fee on the sale of tickets in the venues’ box offices. The Company filed defense arguments and as of December 31, 2010 is awaiting the lower court decision. The Company’s legal counsel believes that the likelihood of loss is probable; and (ii) civil class action filed by the São Paulo State Public Prosecution Office with the 25th Civil Court, in the attributed amount of R$300, requesting that the company be required to discontinue the collection of: (1) a convenience fee on tickets sold online or by telephone; and (2) the delivery fee charged when a consumer collects the ticket purchased in person, in the venue. Additionally, the Public Prosecution Office requests that the company be required to reimburse the amounts paid as convenience and delivery fees to the consumers, after the issuance of a final and unappealable decision. The Company filed defense arguments and awaits the lower court decision. According to the Company’s legal counsel the likelihood of loss is possible. e) In 2009 and 2010, the Company was fined by the consumer protection agency (PROCON), totaling R$2,721. These fines were imposed on the presale of tickets to sponsors’ customers and restrictions to the number of half-price tickets sold to students by the Company, in the city of São Paulo, and other actions that according to the PROCON consist of violations of the Consumer Protection Code. These lawsuits are classified as possible losses and all fines are being adjudicated at the administrative level. If the final administrative decision is unfavorable to the Company, the fines can be challenged in court.

F-70 22.4. Changes in the reserve for tax, civil and labor contingencies. 2010

Write- Inflation Company (BR GAAP) 2009 Additions offs Reversal adjustment 2010 Labor...... 17,722 581 (572) (4,064) 543 14,210 Civil ...... 3,266 2,962 (333) — — 5,895 Tax...... 3,565 1,072 (1,264) (880) 148 2,641 Total ...... 24,553 4,615 (2,169) (4,944) 691 22,746

2010

Write- Inflation Consolidated (IFRS) 2009 Additions offs Reversal adjustment 2010 Labor...... 18,159 665 (622) (4,046) 641 14,797 Civil ...... 4,176 4,159 (359) (384) 122 7,714 Tax...... 7,642 1,722 (1,367) (1,335) 236 6,898 Total ...... 29,977 6,546 (2,348) (5,765) 999 29,409

2009

Write- Inflation Company (BR GAAP) 2008 Additions offs Reversal adjustment 2009 Labor ...... 19,268 1,480 (89) (3,637) 700 17,722 Civil ...... 405 3,016 (139) (16) — 3,266 Tax...... 4,231 — — (856) 190 3,565 Total ...... 23,904 4,496 (228) (4,509) 890 24,553 Consolidated (IFRS) Labor ...... 20,266 2,016 (89) (4,566) 532 18,159 Civil ...... 1,448 3,118 (139) (143) (108) 4,176 Tax...... 9,232 646 — (1,361) (877) 7,642 Total ...... 30,946 5,780 (228) (6,070) (453) 29,977

2008

January 1, Write- Inflation Company (BR GAAP) 2008 Additions offs Reversal adjustment 2008 Labor ...... 20,773 1,990 (457) (4,367) 1,329 19,268 Civil ...... 280 361 (121) (142) 27 405 Tax...... 5,482 50 — (1,763) 462 4,231 Total ...... 26,535 2,401 (578) (6,272) 1,818 23,904 Consolidated (IFRS) Labor ...... 21,210 2,847 (473) (4,685) 1,367 20,266 Civil ...... 1,461 850 (145) (998) 280 1,448 Tax...... 9,309 357 — (1,810) 1,376 9,232 Total ...... 31,980 4,054 (618) (7,493) 3,023 30,946

F-71 23. SHAREHOLDERS’ EQUITY a) Capital As of December 31, 2010, capital in the amount of R$36,462 (R$31,462 at December 31, 2009 and 2008) is represented by 229,865,248 registered common shares without par value.

The Extraordinary Shareholders’ Meeting held on April 30, 2010 approved a capital increase of R$5,000, without the issuance of new registered common shares, without par value.

b) Dividend policy Shareholders are entitled to a noncumulative minimum annual dividend of 25 percent of net income for the year, adjusted in accordance with the rules provided for in the bylaws. As of December 31, 2010, mandatory dividends totaled R$9,175 and are disclosed in line item “Dividends payable.” The Extraordinary Shareholders’ Meeting held on April 30, 2010 approved the payment of dividends related to net income recorded until 2009, totaling R$20,000, paid to shareholders in May 2010 proportionally to their capital interests.

c) Legal reserve As of December 31, 2010, 2009 and 2008, the Company recognized legal provision totaling R$1,705, R$193 and R$2,196, respectively. In 2010, the amount allocated to the legal reserve is lower than the 5% set out in the Corporate Law to meet another requirement of this law that caps the legal reserve at 20% of capital.

d) Earnings retention reserve As of December 31, 2009, the earnings retention reserve was recognized pursuant to Article 196 of Law 6404/76 for use in future investments. As provided for by Article 199 of Law 11638/07, “the balance of retained earnings reserves cannot exceed capital, and shareholders at a shareholders’ meeting are responsible for the allocation of this surplus as a capital increase or distribution of dividends.”

In order to balance the excess of earnings reserve with capital, management will submit to the Annual Shareholders’ Meeting that will vote to approve the 2010 financial statements, a proposal for the distribution of additional dividends amounting to R$27,524, and the capitalization of R$13,075.

As described in note 15.b)(i), the Company acquired an additional interest of 20% in subsidiary Vicar Promoções Desportivas S.A. for which a reduction in equity attributable to noncontrolling interests, amounting to R$6,421, is being recognized in line item “Earnings retention reserve.”

e) Valuation adjustments to equity As of December 31, 2010, in conformity with Law 11638/07 and Law 11461/09, the Company recognized in shareholders’ equity, in the line item “Valuation adjustments to equity,” the loss arising from foreign exchange differences in translating the financial statements of foreign subsidiaries, totaling R$2,712 (a loss of R$3,671 at December 31, 2009 and a gain of R$3,901 at December 31, 2008).

f) Additional dividends As commented in item d) above and in compliance with ICPC 08 Accounting for Proposed Dividend Payments, at December 31, 2010 the Company recognized R$27,363 in shareholders’ equity, in line item “Proposed additional dividends.”

F-72 24. NET OPERATING REVENUE

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Gross revenue Services provided...... 331,736 256,462 309,629 609,506 464,815 637,637 Product sale revenue ...... — — — 19,045 13,375 16,821 Sales taxes ...... (45,197) (33,479) (41,300) (59,372) (43,631) (57,864) Net revenue ...... 286,539 222,983 268,329 569,179 434,559 596,594

25. OPERATING INCOME (EXPENSES)—BY NATURE Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Recognition (reversal) of allowance for doubtful accounts ...... 220 (345) (34) (650) (1,608) (1,233) Third party services...... (13,793) (11,688) (11,140) (19,664) (18,103) (13,155) Utilities & facilities...... (2,745) (2,228) (2,000) (3,207) (2,808) (2,374) Employee benefit expenses (note 26) ...... (25,265) (27,297) (30,790) (45,166) (47,181) (58,271) Other operating income (expenses) ...... (7,025) 2,105 2,774 (8,466) 1,612 6,158 Operating expenses ...... (48,608) (39,453) (41,190) (77,153) (68,088) (68,875)

26. EXPENSES ON BENEFITS TO EMPLOYEES

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Payroll and bonuses ...... (14,956) (17,441) (17,655) (28,913) (31,355) (35,731) Vacation pay...... (1,741) (1,774) (1,503) (2,363) (2,370) (1,956) 13th salaries ...... (1,214) (1,272) (1,211) (1,893) (2,147) (2,282) Payroll taxes ...... (5,869) (6,422) (6,491) (10,785) (10,507) (10,807) Profit sharing—bonuses ...... (110) (1,001) (2,472) (474) (1,452) (4,750) Share-based payments ...... (2,549) — — (2,549) — — Other employee benefits(*) ...... (5,450) (7,499) (5,796) (7,190) (9,404) (9,090) Total expenses on employee benefits ...... (31,889) (35,409) (35,128) (54,167) (57,235) (64,616) Benefits classified as cost of services ...... (6,624) (8,112) (4,338) (9,001) (10,054) (6,345) Benefits classified as general and administrative expenses ...... (25,265) (27,297) (30,790) (45,166) (47,181) (58,271) Total...... (31,889) (35,409) (35,128) (54,167) (57,235) (64,616)

(*) The Company does not offer any defined contribution or defined benefit plan to its employees.

F-73 27. FINANCIAL INCOME (EXPENSES)

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Financial expenses: Interest payable...... (3,332) (11,576) (14,941) (5,935) (14,125) (15,428) Net losses on swap transaction(*) ...... — (57,008) — — (57,008) — Tax on financial transactions (IOF)...... (216) (142) (178) (2,049) (1,656) (2,208) Fines—contingent proceedings ...... (223) (352) (1,568) (254) (362) (1,676) Loss on investments in foreign exchange funds...... — (3,439) — — (4,385) — Interest on debentures ...... (12,782) — — (12,782) — — Other ...... (792) (578) (194) (935) (773) (579) Total...... (17,345) (73,095) (16,881) (21,955) (78,309) (19,891) Financial income: Interest receivable...... 1,624 283 2,620 2,134 1,160 4,446 Income from financial investments ...... 2,636 2,484 7,629 4,239 4,214 10,131 Net gains on swap transaction(*)...... 971 — 41,649 971 — 41,649 Other ...... 197 108 138 234 178 172 Total...... 5,428 2,875 52,036 7,578 5,552 56,398 Changes in exchange rates, net Losses ...... (13,543) (21,385) (86,421) (18,866) (21,386) (94,225) Gains...... 9,751 65,048 28,549 12,014 65,078 35,795 Total...... (3,792) 43,663 (57,872) (6,852) 43,692 (58,430) Inflation adjustments, net: Losses ...... (727) (989) (1,882) (889) (6,982) (2,022) Gains...... 127 133 339 195 5,628 417 Total...... (600) (856) (1,543) (694) (1,354) (1,605)

(*) Net losses and gains arising from a swap transaction are linked to the loan commented in note 30.2.c).

28. OTHER OPERATING INCOME, NET

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Reversal of contingencies...... 1,807 2,058 4,091 259 2,165 3,356 Gain (loss) on write-off of disposal of property, plant and equipment due to loss, as commented in note 16...... (101) (835) 16 1,350 (983) 16 Gain on sale of investments (see note 15.b) ...... — — 1,173 — — 1,173 Income related to non-competition agreements ...... — — — 1,246 — — Income from bonuses ...... 145 193 64 1,656 2,101 555 Other operating income (expenses), net...... 2,048 90 (634) 3,681 (715) (1,194) 3,899 1,506 4,710 8,192 2,568 3,906

F-74 29. INCOME TAX AND SOCIAL CONTRIBUTION a) Income tax and social contribution in income

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Current income tax expenses ...... — — — (6,965) (5,454) (11,287) Current social contribution expenses ...... — — — (1,430) (1,147) (1,950) Deferred IRPJ and CSLL ...... (17,828) 12,019 (3,659) (19,562) 11,932 254 Total ...... (17,828) 12,019 (3,659) (27,957) 5,331 (12,983)

The reconciliation of income tax and social contribution recorded as income is as follows:

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Income (loss) before income tax and social contribution ...... 56,232 (8,153) 47,569 68,220 643 59,870 Statutory rate ...... 34% 34% 34% 34% 34% 34% Expected income tax and social contribution expense at statutory rate ...... (19,119) 2,772 (16,173) (23,195) (219) (20,356) Effect of income tax and social contribution on: Nondeductible fines and expenses ...... (238) (226) (759) (238) (485) (844) Offset of tax loss carryforwards and unrecognized temporary differences...... — — — — — 1,230 Subsidiary taxed based on the deemed income . . . — — — 1,178 327 1,165 Subsidiary taxed abroad ...... — — — (752) 1,676 6,931 Reversal of losses on investments ...... — — 320 — — — Equity in subsidiaries ...... 6,188 5,247 13,858 — — — Share-based payment plan ...... (867) — — (867) — — Other ...... (3,792) 4,226 (905) (4,083) 4,032 (1,109) Income tax and social contribution expense ...... (17,828) 12,019 (3,659) (27,957) 5,331 (12,983)

The tax rate used in the 2010, 2009 and 2008 reconciliations presented above is 34%, payable by legal entities in Brazil on taxable income, as provided for by the relevant tax law.

b) Current tax assets and liabilities

Company (BR GAAP) Consolidated (IFRS) January 1, January 1, 2010 2009 2008 2008 2010 2009 2008 2008 Current tax assets— Prepaid IRPJ and CSLL 34 2,958 3,311 — 5,407 6,479 6,955 2,140 Current tax liabilities— Income tax and social contribution — 855 — 704 3,975 4,456 6,715 3,095

F-75 c) Changes in and breakdown of deferred income tax and social contribution: The table below details the analysis of deferred tax assets (liabilities) presented in the Company and consolidated financial statements:

Company (BR GAAP)

January 1, Recognized Recognized Recognized 2008 in income 2008 in income 2009 in income 2010 Deferred tax assets on: Noncurrent: Goodwill arising on merger (see note 15) . . . 72,633 (10,847) 61,786 (1,716) 60,070 (4,481) 55,589 Allowance for doubtful accounts ...... 39 (35) 4 117 121 (74) 47 Reserve for contingencies...... 9,022 (895) 8,127 4,522 12,649 (5,005) 7,644 Tax loss carryforwards . . 14,368 4,107 18,475 — 18,475 — 18,475 Social contribution tax loss carryforwards .... 5,217 1,649 6,866 2 6,868 16 6,884 Exchange differences .... 1,663 12,458 14,121 (2,900) 11,221 (11,221) — Other provisions ...... 6,769 (6,709) 60 (60) — 1,527 1,527 109,711 (272) 109,439 (35) 109,404 (19,238) 90,166 Deferred tax liabilities on— Noncurrent: Revaluation reserve for Property, plant and equipment ...... (5,571) 2,488 (3,083) 2,083 (1,000) 111 (889) Exchange differences .... (5,543) (5,876) (11,419) 9,971 (1,448) 1,298 (150) (11,114) (3,388) (14,502) 12,054 (2,448) 1,409 (1,039) Total ...... 98,597 (3,660) 94,937 12,019 106,956 (17,829) 89,127

F-76 Consolidated (IFRS)

Recognized Recognized Recognized other other other January 1, Recognized comprehensive Recognized comprehensive Recognized comprehensive 2008 in income income 2008 in income income 2009 in income income 2010 Deferred tax assets on: Noncurrent: Goodwill arising on merger (see note 15) . . 72,633 (10,847) — 61,786 (1,716) — 60,070 (4,481) — 55,589 Allowance for doubtful accounts...... 1,444 (1,551) 111 4 117 — 121 (74) — 47 Reserve for contingencies ...... 10,333 (567) 103 9,869 4,444 (582) 13,731 (4,475) (83) 9,173 Tax loss carryforwards . . 14,368 4,107 — 18,475 — — 18,475 — — 18,475 Social contribution tax loss carryforwards .... 5,217 1,649 — 6,866 2 — 6,868 16 — 6,884 Exchange differences . . . 1,663 12,458 — 14,121 (2,900) — 11,221 (11,221) — — Other provisions...... 6,483 (1,646) (23) 4,814 208 (1,588) 3,434 (736) (263) 2,435 112,141 3,603 191 115,935 155 (2,170) 113,920 (20,971) (346) 92,603 Deferred tax liabilities on— Noncurrent: Revaluation reserve for property, plant and equipment ..... (5,809) 2,527 (18) (3,300) 1,806 72 (1,422) 111 32 (1,279) Exchange differences ...... (5,543) (5,876) — (11,419) 9,971 — (1,448) 1,298 — (150) (11,352) (3,349) (18) (14,719) 11,777 72 (2,870) 1,409 32 (1,429) 100,789 254 173 101,216 11,932 (2,098) 111,050 (19,562) (314) 91,174

d) Unrecognized deductible temporary differences, and unutilized tax losses and credits

Consolidated (IFRS) 2010 2009 2008 Deductible temporary differences, and unutilized tax losses and credits for which no deferred tax assets were recognized are attributable as follows: Tax loss carryforwards of subsidiaries...... 8,884 8,809 8,271 Deductible temporary differences...... 756 (367) (105) 9,640 8,442 8,166 Statutory rate ...... 34% 34% 34% Unrecognized deferred tax assets at year end ...... 3,278 2,870 2,776

Pursuant to CPC 32 and CVM Instruction 371/02, the Company recognized deferred income tax and social contributions generally arising from the revaluation reserve, temporary differences, and tax loss carryforwards. The tax credit was recognized because the Company recorded future taxable income based on its net income projections which predict that such amounts will be recovered in the coming years.

As a result of the downstream merger carried out on June 30, 2007, the balance of deferred income tax and social contribution assets on the provision for the write-off of goodwill that was recorded at ADTSPE was transferred to the Company. As the balance of goodwill will be amortized proportionately to operating profit or loss and after the merger, this balance of deferred income tax and social contribution is expected to be realized over a maximum period of five years.

F-77 These credits are maintained in noncurrent assets according to their expected realization, based on taxable income generation projections, within the 30% limit of annual taxable income to offset tax loss carryforwards, pursuant to legislation in force. The Company prepared technical feasibility studies, to be reviewed and approved by the Board of Directors, which indicated the full recovery of the deferred tax amounts recognized in December 2010.

The estimated realization period is as follows:

Company Consolidated Year (BR GAAP) (IFRS) 2011 ...... 20,848 21,457 2012 ...... 27,550 28,160 2013 ...... 27,084 27,693 2014 ...... 14,684 15,293 Total...... 90,166 92,603

30. FINANCIAL INSTRUMENTS 30.1. General considerations The Company and its subsidiaries enter into transactions involving financial instruments, all of which are recorded in balance sheet accounts and are intended to meet their cash requirements and reduce the exposure to market, currency, and interest rate risks. These risks and financial instruments are managed by means of strategies, control systems and foreign exchange exposure limits, which are monitored by our executive committee. The Company has intercompany loans, accounts payable, and loans and financing, classified as financial instruments.

30.2. Risk factors that may affect the Company’s business: a) Exposure to interest rate risk This risk arises from the possibility of losses (or gains) due to fluctuations in the interest rates applicable to the Company’s assets or liabilities obtained in the market. In order to minimize possible impacts resulting from interest rate fluctuations, the Company has alternated between fixed rates and variable rates, such as Libor and the interbank deposit rate (CDI) and periodically renegotiated its contracts to adjust them to the market.

Company (BR GAAP) Consolidated (IFRS) Balance sheet January 1, January 1, Line item accounts Note 2010 2009 2008 2008 2010 2009 2008 2008 Cash and cash equivalents. . . Current assets 5 — 16,887 20,696 92,750 — 33,124 71,506 103,799 Debentures ...... Current and noncurrent liabilities 18 (150,000) — — — (150,000) — — — Total exposure...... (150,000) 16,887 20,696 92,750 (150,000) 33,124 71,506 103,799

i) Short-term investments are made based on the yield rates effectively negotiated, pegged to the CDI, and reflect typical market conditions prevailing at the end of the reporting period, as described in note 8. ii) Debentures issued by the Company pay interest equivalent to 100% of the accumulated fluctuation of the average daily overnight interbank rates (DI), expressed as a percentage per base year of 252 business days (CETIP), compounded by a scaled surcharge, starting at 1.47% per year on March 31, 2010 to 2.09% per year on March 25, 2015, as described in note 18.

F-78 iii) Additionally, to comply with CVM Instruction 475, of December 17, 2008, as of December 31, 2010, management estimated, based on the prices contained in the Focus report of the Central Bank of Brazil (BACEN), future profit rates, showing in each scenario the effect of the changes in fair value, as shown in the table below:

Scenario 2010 Probable (iii) Possible (ii) Remote (i) Assumptions ...... CDI—12.25% CDI—15.31% CDI—18.38% Debentures ...... (150,000) (171,658) (176,911) (187,756) Cash and cash equivalents ...... 69,072 77,587 79,962 84,863 Net exposure ...... (80,928) (94,071) (96,949) (102,893)

Assumptions Probable Possible Remote CDI...... BACEN Focus 25% on 50% on Report—(12/31/10) probable rate probable rate

(i) Assumption considered by management based on a 25% stress in the risk variable (ii) Assumption considered by management based on a 50% stress in the risk variable (iii) In the probable scenario the Company would have a net exposure of R$94,071 by 2011, resulting from future CDI estimates for interest on debentures plus the surcharge of 1.95% per year. For short-term investments, the Company considered the same future CDI estimates and the average yield rate obtained by the Company on these investments at December 31, 2010. In the possible and remote scenarios, by adopting the same criteria described for the probable scenario, the estimates would generate an increase in the net exposure of R$2,879 and R$8,822, respectively, as compared to the probable scenario.

b) Exposure to currency risk This risk arises from the possibility of fluctuations in exchange rates affecting financial expenses or income and the liability or asset balance of contracts denominated in a foreign currency.

As of December 31, 2010, 2009 and 2008, the currency exposure was as follows:

Company (BR GAAP) Consolidated (IFRS) Balance sheet January 1, January 1, Line item accounts Note Currency 2010 2009 2008 2008 2010 2009 2008 2008 Intercompany loans . . Noncurrent 14 (a, Argentinean 13,508 14,732 203 — — 145 727 — assets b, c) pesos Intercompany loans . . Noncurrent 14 (a, US dollars 12,329 15,269 2,337 — 13,065 16,359 81 — assets b, c) Intercompany loans . . Current 14 (a, Argentinean — — — (3,875) — — (1,320) — liabilities b, c) pesos Intercompany loans . . Current 14 (a, US dollars (13,371) (13,970) — — — — (43) — liabilities b, c) Trade payables ...... Current 17 US dollars (2,375) (1,415) (608) (3,032) (2,588) (2,449) (8,286) (3,700) liabilities Total exposure...... 10,091 14,616 1,932 (6,907) 10,477 14,055 (8,841) (3,700)

• Intercompany loans: refer to the balances between receivables and payables arising from loan agreements entered into by the Company with its subsidiaries, denominated in foreign currencies.

F-79 • Except for an intercompany loan between the Company and subsidiary T4F Chile S.A. totaling US$8,000, the balance corresponding to related parties is derived from transactions in which the terms and conditions could have been different if carried out with unrelated parties, and therefore would partially represent an investment and not necessarily the fair value of the financial transactions. • Accounts payables: refer to the balances payable to suppliers, denominated in foreign currency.

c) Loans and financing (see note 18).

Company (BR GAAP) Consolidated (IFRS) Balance sheet January 1, January 1, Line item accounts Note 2009 2008 2008 2009 2008 2008 Loans ...... Current and noncurrent liabilities 18 (a, b) (109,770) (206,343) (178,736) (109,770) (206,343) (178,736) Swap transactions .... Current and noncurrent liabilities 18 (a, b) — 11,627 — — 11,627 — Swap transactions .... Current and noncurrent liabilities 18 (a, b) (35,490) — (30,249) (35,490) — (30,249) Net value ...... (145,260) (194,716) (208,985) (145,260) (194,716) (208,985)

• Loans and financing refer to loans and financing payable, denominated in foreign currency. As of December 31, 2009, they totaled R$109,770 for the Company and on a consolidated basis, equivalent to US$63,043. On March 31, 2010, the Company restructured its debt and, with the debenture indenture, settled this loan, as commented in note 18.b). • Swap transactions: in 2007 the Company entered into a foreign currency swap to hedge the exposure of its liabilities to currency risks arising from a financing agreement entered into with Banco Citibank S.A., maturing in May 2012 but paid in advance on March 31, 2010. Under this contract, the Company held a long position in US dollars, plus a fixed interest rate, and a short position pegged to a percentage of CDI plus banking spread, which hedged against the US dollar to Brazilian real exchange rate fluctuations. The long position swap adjustment rate was 7.7638% per year and the short position rate was CDI plus spread. The transactions were duly registered with CETIP S.A. (Brazilian clearance and settlement agency) and settled concurrently with the loan, on March 31, 2010.

F-80 Even though the US dollar to CDI swap contracts were settled on March 31, 2010, at December 31, 2009 and 2008 they were summarized as follows:

Accumulated effect — Notional amount Fair value 2009 Amount Amount Description Maturity 2009 2008 2009 2008 receivable payable Swap contracts: Long position— Foreign currency—US dollar...... May2009— May 2010 106,526 159,365 116,473 213,149 110,907 — Short position— Interest rate—CDI ..... May2009— May 2010 (106,526) (159,365) (151,600) (203,359) — (146,395) Net value ...... — — (35,127) 9,790 (35,488)

d) Sensitivity analysis of exchange rate and interest rate fluctuations The fluctuation of exchange rates and interest rates, such as the CDI, can have a positive or an adverse effect on the consolidated financial statements because of the increase in the balance of accounts receivable and intercompany loans repayable to subsidiaries, denominated in foreign currencies, mostly the US dollar. As of December 31, 2010, the Company estimated that an increase or a reduction of 10% in exchange fluctuations or interest rates would have increased or decreased financial income or financial expenses in the Company by R$1,057 and on the consolidated statements by R$1,039. This amount was calculated considering the impact of hypothetical increases or decreases in interest rates on outstanding short-term investments and financing. Gains or losses on derivative transactions are recorded in “Financial income and expenses, net,” as detailed in note 27.

e) Capital risk The Company manages its capital to ensure that both its parent and its subsidiaries can continue as going concerns, and at the same time maximize the return of all its stakeholders by optimizing the balance of debt and equity.

The Company’s equity structure consists of its net debt (loan detailed in note 18, less cash and banks) and shareholders’ equity (note 23).

f) Market risk As a result of its activities, the Company is principally exposed to financial risks arising from changes in exchange rates and interest rates. On March 31, 2010, the Company used swaps to manage its exposure to US dollar fluctuations. As of December 31, 2010, the Company is exposed to financial risks arising from changes in interest rates, as detailed in a) above.

g) Credit risk Credit risks arise from the possibility of the Company and its subsidiaries not receiving amounts generated by sales transactions and receivables from financial institutions generated by short-term investments. To mitigate this risk, the Company and its subsidiaries analyze in detail the financial position of their customers, establish credit limits, and constantly monitor their balances.

F-81 h) Liquidity risk Effectively managing liquidity risk involves maintaining adequate cash, and securities available through lines of credit and liquidity. Due to the dynamic nature of the Company and its subsidiaries’ business, the treasury function maintains flexibility in funds available through the maintenance of credit lines.

Management monitors the Company’s consolidated liquidity level considering the expected cash flow against unused credit lines and cash and cash equivalents.

31. INSURANCE The Company’s insurance coverage is determined according to the nature of the assets’ risks, and is considered sufficient to cover potential losses arising from claims. As of December 31, 2010, 2009 and 2008, insurance coverage was as follows:

Insured amount Line 2010 2009 2008 General and premises civil liability General and events civil liability, commercial and/or industrial premises, civil liability—employer, civil liability— valet, and pain and suffering 14,281 12,858 12,984 Asset insurance—premises Fire, lightning, explosion, windstorm, smoke, loss of rent, equipment, neon signs, amounts, riots, strikes, glass, asset theft/robbery, amount in transit, electric damages, floods, loss of profits, and all risk due to sprinkler leakage 69,449 59,705 68,275 Total ...... 83,730 72,563 81,259

32. CO-OBLIGATIONS, LIABILITIES AND COMMITMENTS a) Lease of venues The Company has entered into long-term sponsorship agreements, as follows: (i) naming rights of the venues the Company operates, namely, Credicard Hall, Citibank Hall São Paulo and Citibank Hall Rio de Janeiro, as well as Teatro Opera Citi in Buenos Aires, Argentina, which provides the sponsor the right to name these venues and determine the manner in which its trademark is disclosed; (ii) access technology sponsorship agreement in which a credit card is used to access the shows organized and promoted by the Company; (iii) sponsorship contracts and other agreements that grant benefits to the sponsor’s customers in certain events promoted by the Company, including, but not limited to, the presale of tickets, discounts, and preferred parking; and (iv) a circus show sponsorship agreement.

The lease agreements of venues were entered into for a period greater than five years, which ensures the Company the right of mandatory renewal of the lease, as long as legal requirements are met. In the event of noncompliance with the defined lease term, an amount equal to three months of the rent prevailing on the date of termination will be charged to the lessee, and the lessee agrees to return the property in perfect condition for use.

After analyzing these agreements, the company’s management concluded that they qualify as operating leases.

F-82 Lease payments, based on the monthly amounts in effect, are broken down as follows:

Company (BR GAAP) and Year consolidated (IFRS) 2010 Up to 1st year ...... 2,207 2nd to 5th year ...... 13,109 After 5th year...... 8,568 Total...... 23,884

b) Credit letters of guarantee As of December 31, 2010, the Company had credit guarantee agreements in effect entered into with financial institutions, the purpose of which are to guarantee the payment of performers’ fees, and which totaled approximately US$28,000.

c) Letters of guarantee As of December 31, 2010, the Company had bank letters of guarantee in effect the purpose of which is to ensure the payment of leases and certain lawsuits, and which total approximately R$6,600.

33. SHARE-BASED PAYMENT PLAN The Annual and Extraordinary Shareholders’ Meeting held on September 28, 2007 approved the Company’s common stock option plan. Under this plan, the Board of Directors can grant stock options to directors, employees in leadership positions, and service providers of the Company or other companies under its control. Stock options are granted under grant agreements entered into between the Company and the beneficiaries. All stock options granted under this plan cannot exceed 5% of total shares of capital stock. The option may be partially or fully exercised during the period established in the option agreement, pursuant to the plan’s effective period.

The annual tranches that are not yet vested will expire immediately if the employment contract, service agreement, or term of office as director is terminated.

Since the approval of this plan, the company has entered into stock option agreements with seven executives, on different dates. As required by such agreements, the gains obtained from these options will be settled in cash, duly measured at their fair values; the Company, therefore, recognized this obligation as a financial liability as of December 31, 2010.

The fair value of these options was calculated using the Black & Scholes pricing model at the end of each annual reporting period, individually for each executive, since grant date, on September 28, 2007.

F-83 As the fair value of this financial liability accumulated through December 31, 2009 was zero, its effects were reflected in net income for the year ended December 31, 2010 (see note 26) and are presented as follows:

Amounts recognized Amounts to Number of for the year be recognized stock options ended in future Grant year granted 12/31/10 years 2007...... 5,026,666 1,886 683 2008...... 2,022,305 642 506 2009...... — — 2010...... 477,492 21 82 Total ...... 7,526,463 2,549 1,271

In determining the fair value of stock options as of December 31, 2010, the following economic assumptions were used:

Individual plans of each executive benefited Grant dates 9/28/2007 10/1/2007 7/15/2008 2/23/2010 3/1/2010 Number of executives contemplated ...... 2 1 2 1 1 End of last tranche options vesting period ...... 9/28/2014 10/1/2014 7/15/2015 2/23/2017 3/1/2017 Share price volatility . . . 33.21% 33.21% 33.21% 33.21% 33.21% Risk-free interest rate . . . 12.06% 12.06% 11.96% 11.48% 11.48% Exercise price per option in R$ ...... 2.74 2.74 2.74 2.74 2.74 Index ...... Notindexed Not indexed 1 plan not indexed Indexed to CDI Indexed to CDI and another indexed to CDI Price indexed to CDI up 2.74 2.74 2.74 and 4.10, 4.10 4.10 to 12/31/2010—R$. . . respectively. Fair value per share at 0.38 0.37 0.35 and 0.02, 0.04 0.04 12/31/2010—R$ ..... respectively.

34. OPERATING SEGMENTS IFRS 8 Operating Segments requires that operating segments be identified based on the basis of internal reports on Group components that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and assess its performance. The chief operating decision maker responsible for allocating resources to the operating segments and assessing their performance was identified by the Company’s main executives.

a) Segment revenue and results The segment information reported is consistent with other management reports provided to the main strategic and operating decision-makers to assess the performance of each segment and the allocation of funds. According to the reports prepared for management, the main segmentation of the Company’s business is based on the performance of activities related to: (i) promotion of events, which includes holding live concerts and shows, plays, and exhibits; (ii) operations, which includes ticket sales, sale of food and beverages, and operation of venues; and (iii) sports events. Segmentation by activity is also broken down by geographical areas, as follows: (i) Brazil; (ii) Argentina; and (iii) Chile.

F-84 The performance of the Company’s operating segments was assessed based on gross operating revenues, taxation, net operating revenues, costs of services, expenses, the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), net income for the year, and noncurrent assets. This measurement basis excludes the effects of interest, income tax and social contribution, and depreciation and amortization.

The tables below include summarized financial information of the Company’s operating segments as of and for the year ended December 31, 2010. The amounts provided are consistent with the balances recorded in the financial statements and the accounting policies applied.

2010 consolidated (IFRS) Box office, food Event and beverages, promotion venues operation Sponsorships Total Net operating revenue...... 354,973 89,907 124,299 569,179 Costs of services and sales...... (348,296) (54,918) — (403,214) Gross profit...... 6,677 34,989 124,299 165,965 Operating expenses allocable to segments ...... (25,450) (22,532) — (47,982) (18,773) 12,457 124,299 117,983 Administrative expenses...... (27,885) Financial income (expenses) ...... (21,878) Pretax income...... 68,220

2010 consolidated (IFRS) Ticketing, food Event and beverages, promotion venues operation Sponsorships Total Net operating revenue...... 248,531 60,566 125,462 434,559 Costs of services and sales...... (274,043) (54,501) — (328,544) Gross profit...... (25,512) 6,065 125,462 106,015 Operating expenses allocable to segments ...... (25,695) (24,107) — (49,802) (51,207) (18,042) 125,462 56,213 Administrative expenses...... (25,153) Financial income (expenses) ...... (30,419) Pretax income...... 641

F-85 2008 consolidated (IFRS) Ticketing, food and beverages, Event venues promotion operation Sponsorships Total Net operating revenue...... 372,571 89,557 134,466 559,594 Costs of services and sales...... (374,993) (62,377) — (427,371) Gross profit...... (2,422) 27,180 134,466 159,224 Operating expenses allocable to segments ...... (23,036) (25,967) — (49,003) (25,458) 1,213 134,466 110,220 Administrative expenses...... (26,814) Financial income (expenses) ...... (23,530) Pretax income...... 59,877

b) Geographical information The Group operates in three main geographical areas: Brazil, Argentina, and Chile.

Group revenue by geographical area is broken down as follows:

Consolidated (IFRS) 2010 2009 2008 Net revenue: Brazil...... 375,463 282,406 354,074 Argentina ...... 113,358 109,338 156,550 Chile ...... 80,358 42,815 85,970 Gross profit: Brazil...... 85,152 66,827 111,907 Argentina ...... 20,684 17,963 20,153 Chile ...... 12,147 21,225 27,165 Operating profit: Brazil...... 56,170 43,958 83,365 Argentina ...... 5,772 (6,482) 4,420 Chile ...... 6,280 18,737 22,438

35. ADDITIONAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS The following changes in the financial position in 2010, 2009 and 2008 did not have any impact on cash and cash equivalents:

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Additional disclosures: Dividends receivable from subsidiaries ...... (728) (900) (910) — — — Dividends payable to Company noncontrolling interests . . . 9,122 — 6,253 9,136 (317) 6,997 Purchases of property, plant and equipment not yet settled ...... 47 (4) 5 51 (4) (3) Sponsorships—Cultural Incentive Law ...... (1,397) (2,129) — (2,337) (2,129) — Income tax and social contribution ...... — — (1,097) (5,432) (3,773) (9,073)

F-86 36. EARNINGS PER SHARE Basic Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding in the year.

Diluted Diluted earnings per share is calculated by adjusting the weighted average outstanding common shares supposing that all potential common shares that would cause dilution are converted. The Company does not have any potential common shares that would cause dilution; accordingly, there is no difference between basic and diluted earnings per share.

The table below shows the calculation of earnings per share and considers the reverse stock split approved at an Extraordinary Shareholders’ Meeting, as described in note 37.

Company (BR GAAP) Consolidated (IFRS) 2010 2009 2008 2010 2009 2008 Net income attributable to owners of the Company...... 38,404 3,866 43,910 38,404 3,866 43,910 Weighted average number of common shares for basic earnings per share calculation purposes...... 57,466 57,466 57,466 57,466 57,466 57,466 Basic and diluted earnings per share—R$ ...... 0.6683 0.0673 0.7641 0.6683 0.0673 0.7641

37. APPROVAL OF THE FINANCIAL STATEMENTS The individual and consolidated financial statements were approved and their publication was authorized by management on January 13, 2011.

38. EVENTS AFTER THE BALANCE SHEET DATE On January 13, 2011, the Extraordinary Shareholders’ Meeting took the following principal actions, which in light of their characteristics do not change the individual and consolidated financial statements for the year ended December 31, 2010: a) Reverse split of all common shares of the Company’s stock, at a 1:4 ratio, so that four (4) of the Company’s common shares were reduced one (1) common share. The Company’s capital remained unchanged. It was previously represented by 229,865,248 common shares and is now represented by 57,466,312 common shares, which will be distributed among the shareholders at the same proportion held by each shareholder prior to the reverse stock split. b) Approve the Company’s initial public offering and the filing with the CVM of the request for registration as a public-traded company, in category “A”, pursuant to CVM Instruction 480/09. c) Approve the amendment of the Company’s Articles of Organization in light of the decision described in b) above, so that they conform to the statutory and regulatory requirements applicable to a publicly- traded company, set out in the São Paulo Mercantile and Stock Exchange (BM&FBOVESPA) New Market Listing Regulations, including, but not limited to: (i) new names and attributions of the Executive Committee positions; and (ii) provisions for special rules if there is a sale of control of the Company or acquisition of material interest, cancellation of registration as a public-traded company or exit from the BM&FBOVESPA (Novo Mercado) Corporate Governance.

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