T4F Entretenimento S.A. - MZ · T4F Entretenimento S.A. São Paulo, SP We have audited the accompanying individual and consolidated financial statements of T4F Entretenimento S.A

T4F Entretenimento S.A.

Individual and Consolidated Financial Statements for the Year Ended December 31, 2011 and Independent Auditor’s Report

Deloitte Touche Tohmatsu Auditores Independentes

(Convenience Translation into English from the Original Previously Issued in Portuguese)


INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS

To the Shareholders and Management of


São Paulo, SP

We have audited the accompanying individual and consolidated financial statements of T4F

Entretenimento S.A. (“Company”) and its subsidiaries, identified as Parent and Consolidated,

respectively, which comprise the balance sheet as at December 31, 2011, and the income statement,

statement of comprehensive income, statement of changes in shareholders´ equity and statement of

cash flows for the year then ended, 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 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, and in accordance with Brazilian accounting

practices, and for such internal control as management determines is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or

error.

Auditor’s 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 Company’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 Company’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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Deloitte Touche Tohmatsu

2 © Deloitte Touche Tohmatsu. Todos os direitos reservados.

Opinion on the Individual Financial Statements

In our opinion, the individual financial statements present fairly, in all material respects, the financial

position of T4F Entretenimento S.A. as of December 31, 2011, and its financial performance and its

cash flows for the year then ended in accordance with Brazilian accounting practices.

Opinion on the Consolidated Financial Statements

In our opinion, the consolidated financial statements present fairly, in all material respects, the

consolidated financial position of T4F Entretenimento S.A. as of December 31, 2011, and its

consolidated financial performance and its consolidated cash flows for the year then ended in

accordance with International Financial Reporting Standards - IFRS issued by the International

Accounting Standards Board - IASB and Brazilian accounting practices.

Emphasis of Matter

We draw attention to note 2 to the financial statements, which states that 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, applicable to

the separate financial statements, only with respect to the measurement of investments in subsidiaries,

associates and jointly controlled entities which are valued using the equity method of accounting,

while IFRS requires these investments to be measured at cost or fair value. Our opinion is not qualified

with respect to this matter.

Other Matters

Statements of Value Added

We have also audited the individual and consolidated statements of value added (“DVA”), for the year

ended December 31, 2011, prepared under the responsibility of the Company’s management, the

presentation of which is required by the Brazilian Corporate Law for publicly-traded companies and is

an additional disclosure under IFRS which does not require the presentation of DVA. These statements

were subject to the same auditing procedures described above and, in our opinion, are fairly presented,

in all material respects, in relation to the financial statements taken as a whole.

The accompanying financial statements have been translated into English for the convenience of

readers outside Brazil.

São Paulo, February 10, 2012

DELOITTE TOUCHE TOHMATSU Reynaldo Awad Saad

Auditores Independentes Engagement Partner


T4F ENTRETENIMENTO S.A.

BALANCE SHEET AS AT DECEMBER 31, 2011

(In thousands of Brazilian reais - R$)

ASSETS Notes 12/30/2011 12/30/2010 12/30/2011 12/30/2010 LIABILITIES AND EQUITY Notes 12/30/2011 12/30/2010 12/30/2011 12/30/2010

CURRENT ASSETS CURRENT LIABILITIES

Cash and cash equivalents 6 225,011 69,859 263,277 120,934 Trade payables 15 23,325 14,776 45,379 36,475

Restricted cash 7 14,457 5,655 14,457 6,595 Debentures 16 41,931 19,026 41,931 19,026

Trade receivables 8 42,303 34,367 62,540 66,097 Accrued payroll and related taxes 7,345 6,267 10,466 9,291

Inventories 488 275 2,352 1,258 Share-based payments 31 - 2,549 - 2,549

Recoverable taxes 9 1,822 1,419 13,181 14,458 Taxes payable 17 7,065 8,971 16,197 17,423

Advances to suppliers 10 3,931 1,816 7,508 4,892 Advances from customers 18 55,736 86,329 69,386 113,290

Prepaid expenses 11 24,303 19,964 52,520 34,693 Sponsorships - Cultural Incentive Law 19 11,330 3,385 11,330 3,466

Dividends receivable from subsidiaries 2,555 2,538 - - Dividends payable 14,265 9,175 14,682 9,616

Other receivables 206 341 5,676 3,037 Related parties 12 14,889 13,491 - -

Total current assets 315,076 136,234 421,511 251,964 Provision for tax, civil and labor risks 20 3,034 6,972 3,182 7,494

Other payables 668 757 761 831

NONCURRENT ASSETS Total current liabilities 179,588 171,698 213,314 219,461

Long-term assets:

Deferred income tax and social contribution 27 59,911 90,166 62,062 92,603 NONCURRENT LIABILITIES

Escrow deposits 2,711 1,876 4,101 2,846 Debentures 16 93,750 131,250 93,750 131,250

Prepaid expenses 11 123 62 627 639 Provision for tax, civil and labor risks 20 14,157 15,774 18,933 21,915

Related parties 12 20,268 26,509 7,329 13,064 Deferred income tax and social contribution 27 1,086 1,039 1,447 1,429

Total long-term assets 83,013 118,613 74,119 109,152 Taxes payable 17 6,113 9,804 8,426 13,117

Advances from customers 18 - 1,313 - 1,313

Investments in subsidiaries 13.a) 77,076 64,482 - - Total noncurrent liabilities 115,106 159,180 122,556 169,024

Property, plant and equipment 14.a) 23,939 12,123 39,590 23,452

Intangible assets: EQUITY

Goodwill on acquisition of investments 13.b) 128,717 128,717 135,325 135,074 Issued capital 21 228,459 36,462 228,459 36,462

Other intangible assets 14.b) 2,050 1,944 3,353 2,161 Capital reserve 21 4,258 - 4,258 -

Total noncurrent assets 314,795 325,879 252,387 269,839 Legal reserve 21 10,296 7,292 10,296 7,292

Revaluation reserve 14.c) 1,589 1,726 1,589 1,726

Earnings retention reserve 21 85,177 55,319 85,177 55,319

Proposed additional dividends 21 - 27,524 - 27,524

Valuation adjustments to equity 21 5,398 2,912 5,398 2,912

Equity attributable to shareholders of the Company 335,177 131,235 335,177 131,235

Noncontrolling interests

in subsidiaries’ equity - - 2,851 2,083

Total consolidated equity 335,177 131,235 338,028 133,318

TOTAL ASSETS 629,871 462,113 673,898 521,803 TOTAL LIABILITIES AND EQUITY 629,871 462,113 673,898 521,803

The accompanying notes are an integral part of these financial statements.

ConsolidatedCompany CompanyConsolidated

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INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2011

(In thousands of Brazilian reais - R$, except earnings per share)

Notes

2011 2010 2011 2010

NET OPERATING REVENUE 22 376,612 286,539 609,825 569,179

COSTS OF SERVICES AND SALES (243,073) (183,875) (422,916) (403,214)

GROSS PROFIT 133,539 102,664 186,909 165,965

OPERATING INCOME (EXPENSES)

Selling expenses (1,680) (981) (5,969) (3,364)

General and administrative expenses 23 (52,877) (48,608) (82,260) (77,153)

Management compensation 12.2 (7,679) (2,632) (8,148) (3,497)

Share of profit of subsidiaries 13 16,531 18,199 - -

Other operating income, net 26 6,340 3,899 11,677 8,192

OPERATING PROFIT BEFORE FINANCIAL INCOME (EXPENSES) 94,174 72,541 102,209 90,143

FINANCIAL INCOME (EXPENSES) 25

Financial expenses (20,785) (17,345) (24,609) (21,955)

Financial income 24,531 5,428 28,370 7,578

Net exchange and inflation gain (loss) 545 (4,392) 946 (7,546)

PROFIT BEFORE INCOME TAX 98,465 56,232 106,916 68,220

AND SOCIAL CONTRIBUTION

INCOME TAX AND SOCIAL CONTRIBUTION

Current 27 (3,120) - (10,163) (8,395)

Deferred 27 (35,280) (17,828) (35,682) (19,562)

PROFIT FOR THE YEAR 60,065 38,404 61,071 40,263

PROFIT ATTRIBUTABLE TO:

Shareholders of the Company 60,065 38,404 60,065 38,404

Noncontrolling interests - - 1,006 1,859

60,065 38,404 61,071 40,263

BASIC EARNINGS PER SHARE - R$ 34 0.8658 0.6683 0.8658 0.6683

DILUTED EARNINGS PER SHARE - R$ 0.8935 0.6683 0.8935 0.6683


Company Consolidated

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STATEMENT OF COMPREHENSIVE INCOME



2011 2010 2011 2010

PROFIT FOR THE YEAR 60,065 38,404 61,071 40,263

Other comprehensive income:

Exchange differences on translating foreign operations 2,486 2,712 2,486 2,712

Total comprehensive income for the year 62,551 41,116 63,557 42,975

Total comprehensive income attributable to:

Shareholders of the Company 62,551 41,116 62,551 41,116

Noncontrolling interests - - 1,006 1,859

62,551 41,116 63,557 42,975



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STATEMENT OF CHANGES IN EQUITY



Equity Non-controlling

Earnings Proposed Valuation attributable to interests in

Share Capital Legal Revaluation retention additional adjustments Retained shareholders of subsidiaries' Consolidated

Notes capital reserve reserve reserve reserve dividends to equity earnings the Company equity equity

BALANCE AT DECEMBER 31, 2009 31,462 - 5,587 1,941 80,104 - 200 - 119,294 1,774 121,068

Dividends distributed as approved at AESM of April 30, 2010 21 - - - - (20,000) - - - (20,000) - (20,000)

Capital increase approved at AESM of April 30, 2010 21 5,000 - - - (5,000) - - - - - -

Realization of revaluation reserve 21 - - - (215) 215 - - - - - -

Profit for the year 21 - - - - - - - 38,404 38,404 1,859 40,263

Legal reserve 21 - - 1,705 - (1,705) - - - - - -

Exchange differences on translating foreign operations 21 - - - - - - 2,712 - 2,712 - 2,712

Recognition of earnings retention reserve 21 - - - - 38,404 - - (38,404) - - -

Dividends paid to noncontrolling shareholders 21 - - - - - - - - - (1,550) (1,550)

Mandatory 2010 dividends 21 - - - - (9,175) - - - (9,175) - (9,175)

Additional dividends proposed for 2010 pursuant to ICPC 08 21 - - - - (27,524) 27,524 - - - - -

BALANCE AT DECEMBER 31, 2010 36,462 - 7,292 1,726 55,319 27,524 2,912 - 131,235 2,083 133,318

Capital increase approved at ASM of February 14, 2011 21 13,075 - - - (13,075) - - - - - -

Capital increase approved at Board meeting of April 11, 2011 21 187,586 - - - - - - - 187,586 - 187,586

Capital increase approved at Board meeting of July 12, 2011 21 e 31 1,001 - - - - - - - 1,001 - 1,001

Share issuance costs 21 (9,665) - - - - - - - (9,665) - (9,665)

Profit for the year 21 - - - - - - - 60,065 60,065 1,006 61,071

Recognition of earnings retention reserve 21 - - - - 60,065 - - (60,065) - - -

Share-based payments 31 - 4,258 - - - - - - 4,258 - 4,258

Realization of revaluation reserve 21 - - - (137) 137 - - - - - -

Legal reserve 21 - - 3,004 - (3,004) - - - - - -

Exchange differences on translating foreign operations 21 - - - - - - 2,486 - 2,486 - 2,486

Dividends paid to noncontrolling shareholders 21 - - - - - - - - - (238) (238)

Payment of additional 2010 dividends 21 - - - - - (27,524) - - (27,524) - (27,524)

Mandatory 2011 dividends 21 - - - - (14,265) - - - (14,265) - (14,265)

BALANCE AT DECEMBER 31, 2011 228,459 4,258 10,296 1,589 85,177 - 5,398 - 335,177 2,851 338,028

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STATEMENTS OF CASH FLOWS



Notes 2011 2010 2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the year 60,065 38,404 61,071 40,263

Adjustments to reconcile profit for the year to net cash generated by

(used in) operating activities:

Share of profit of subsidiaries 13 (16,531) (18,199) - -

Depreciation and amortization 14 2,717 2,536 5,580 4,966

Residual value of property, plant and equipment written-off 843 135 877 2,862

Deferred income tax and social contribution 35,280 17,828 35,682 19,562

Financial charges and exchange differences on balances with subsidiaries,

financing, borrowings and taxes payable 19,198 18,493 19,441 18,555

Share-based payments 1,709 2,549 1,709 2,549

Recognition (reversal) of provision for tax, civil and labor risks (5,622) (1,807) (7,773) 259

Recognition (reversal) of allowance for doubtful accounts 7 (220) (1,035) 650

(Increase) decrease in operating assets and liabilities:

Trade receivables (7,943) (847) 5,561 (15,370)

Inventories (213) 30 (1,087) 404

Recoverable taxes (402) 3,838 1,747 2,552

Advances to suppliers (2,115) 16,150 (2,503) 16,329

Other receivables 135 (140) (2,534) 137

Escrow deposits (835) (495) (1,252) (635)

Prepaid expenses (4,400) (8,233) (17,129) (11,798)

Trade payables 8,517 (2,359) 8,090 74

Taxes payable (5,597) 990 (6,310) (588)

Accrued payroll and related taxes 1,078 2,219 1,110 2,732

Advances from customers (31,906) 27,450 (46,083) 21,901

Payment of tax, civil and labor lawsuits (408) (691) (408) (1,826)

Other payables (945) (1,508) 22 (2,407)

Net cash generated by operating activities 52,632 96,123 54,776 101,171

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received from subsidiaries 6,406 9,365 - -

Purchase of tangibles and intangibles (15,450) (2,733) (23,524) (7,063)

Net cash generated by (used in) investing activities (9,044) 6,632 (23,524) (7,063)

CASH FLOWS FROM FINANCING ACTIVITIES

Capital increase - issuance of new shares 188,587 - 188,587 -

Share issuance costs (14,643) - (14,643) -

Related parties (1,165) (17,988) (3,070) 3,440

Payment of dividends (27,895) (20,000) (28,335) (21,536)

Issuance of debentures - 150,000 - 150,000

Repayment of debentures (18,750) - (18,750) -

Payment of interest on debentures (14,570) - (14,570) -

Repayment of borrowings and financing and swaps - (145,429) - (146,882)

Payment of interest on borrowings and financing and swaps - (17,074) - (16,799)

Net cash generated by (used in) financing activities 111,564 (50,491) 109,219 (31,777)

EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS - - 1,872 3,438

INCREASE IN CASH AND CASH EQUIVALENTS 155,152 52,264 142,343 65,769

CASH AND CASH EQUIVALENTS

Cash and cash equivalents at beginning of year 69,859 17,595 120,934 55,165

Cash and cash equivalents at end of year 225,011 69,859 263,277 120,934

INCREASE IN CASH AND CASH EQUIVALENTS 155,152 52,264 142,343 65,769



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STATEMENT OF VALUE ADDED



2011 2010 2011 2010

REVENUES

From services 430,806 330,392 683,972 619,653

Other operating income (expenses) (1,247) 2,343 (56) 4,690

(Recognition) reversal of allowance for doubtful accounts (7) 220 103 650

INPUTS PURCHASED FROM THIRD PARTIES

Cost of services (234,005) (157,735) (384,238) (336,856)

Supplies, power, outside services and other (16,311) (17,125) (28,766) (25,702)

Loss of assets (844) (136) (1,097) (171)

Other - (6) (60) 5,693

GROSS VALUE ADDED 178,392 157,953 269,858 267,957

DEPRECIATION AND AMORTIZATION (2,717) (2,536) (5,580) (4,966)

WEALTH CREATED BY THE COMPANY 175,675 155,417 264,278 262,991

VALUE ADDED RECEIVED AS TRANSFER 43,044 33,373 32,725 19,164

Financial income including exchange gains 25,076 15,174 29,316 19,164

Share of profit of subsidiaries 16,531 18,199 - -

Other income 1,437 - 3,409 -

TOTAL VALUE ADDED FOR DISTRIBUTION 218,719 188,790 297,003 282,155

WEALTH DISTRIBUTED

Personnel 37,291 39,691 61,323 64,373

Salaries and wages 31,317 29,583 53,359 51,919

Benefits 4,632 8,911 6,152 10,912

Severance pay fund (FGTS) 1,342 1,197 1,812 1,542

Taxes and fees 98,514 46,139 136,135 78,604

Federal 84,122 32,763 104,944 58,506

State - - 15,578 4,987

Municipal 14,392 13,376 15,613 15,111

Lenders and lessors 22,849 64,556 38,474 98,915

Interest 20,525 31,482 24,564 40,889

Leases 2,324 31,510 3,408 42,263

Other - 1,564 10,502 15,763

Shareholders 60,065 38,404 61,071 40,263

Dividends 14,265 9,122 14,504 10,672

Retained earnings 45,800 29,282 45,561 27,732

Non-controlling interests - - 1,006 1,859

WEALTH DISTRIBUTED 218,719 188,790 297,003 282,155



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9



NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011

(Amounts in thousands of Brazilian reais – R$, unless otherwise stated) _________________________________________________________________________________

1. GENERAL INFORMATION

T4F Entretenimento S.A. (“Company”), is a publicly-held corporation, with registered head office at Rua Fidêncio Ramos, 213, conjuntos 42, 52, 61 e 62, in São Paulo, SP, whose shares are traded in the Novo Mercado segment of the São Paulo Mercantile and Futures Exchange (BM&FBOVESPA) under tick symbol “SHOW3”, which together with its subsidiaries (“T4F Group”), is engaged in the management, promotion, organization, production, representation, programming and undertaking of live entertainment-related activities in general, 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 a venue in Argentina: the Citi Opera House. Outside Brazil, Company operations include events in Argentina and Chile, through its local subsidiaries, and in Peru. For sports events, the Company is responsible for promoting and advertising of car races, namely Copa Caixa Stock Car, Copa Chevrolet Montana, Copa Mini Challenge, and Copa Petrobrás de Marcas. Together, these car races form the main automobile event in Brazil. The immediate controlling shareholder of the T4F Group is F.A. Comércio e Participações (“F.A. Part”), which holds a 28.14% interest. On April 13, 2011, the Company conducted its initial public offering (IPO), resulting in a R$187,586 contribution to its capital, which paid in 11,724,138 Company common shares. IPO costs were recognized in a special reduction line item to equity, in accordance with the current local and international accounting standards.

2. BASIS OF PREPARATION

Statement of compliance and basis of preparation

The Company’s financial statements comprise:

• 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.

• The individual financial statements of the Company prepared in accordance with Brazilian accounting practices, identified as Parent.


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The accounting practices adopted in Brazil comprise those included in the Brazilian Corporate Law and the Pronouncements, Guidelines and Interpretations issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities Commission (CVM).

The individual financial statements present the valuation of investments in subsidiaries by the equity method of accounting, pursuant to prevailing Brazilian statutes. Accordingly, these individual financial statements are not considered as in accordance with IFRSs, which require the measurement of such investments in separate financial statements of the parent, at their fair values or at cost.

As there is no difference between the consolidated equity and the consolidated profit for the year attributable to the shareholders’ of the Company, disclosed in the consolidated financial statements prepared in accordance with IFRSs and the Brazilian accounting practices, and the Company’s equity and profit for the year, disclosed in the individual financial statements prepared in accordance with Brazilian accounting practices, the Company opted for presenting these individual and consolidated financial statements is a single set of information, side by side.

The financial statements have been prepared based on the historical cost, except for certain financial instruments measured at their fair values, as described in the accounting policies below. The historical cost is generally based on the fair value of the consideration paid in exchange for an asset.

The significant accounting policies applied to the preparation of these individual and consolidated financial statements are presented below in note 3.

3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies described below have been consistently applied to the Company’s and consolidated financial statements:

a) General principles

Assets, liabilities, income and expenses are recognized on the accrual basis. Revenue from sales is recognized when all the inherent risks and rewards related to the product sold are transferred to the buyer or when services are actually provided. Revenue is stated net of deductions, including the tax on sales.

b) Cash and cash equivalents

Comprise cash, banks 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, no fixed term for redemption, are highly-liquid, and are subject to an immaterial risk of change in value.

c) Trade receivables and allowance for doubtful accounts

Trade receivables are stated and kept are 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 receivables; (iii) actual likelihood of receiving such amounts; and (iv) customer history, as shown in note 8. An allowance is recognized for receivables whose receiving is possible or remote. These


11

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 purchase cost, adjusted to realizable value 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 in the income statement for the period as the related events, shows and performances are held. Management reviews the carrying amount of these assets to determine and assess their impairment periodically or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

f) Other current and noncurrent assets

Stated at the lower of cost or realizable value plus income and inflation adjustments earned, when applicable.

g) Investments in subsidiaries

In the individual financial statements, investments in subsidiaries are accounted for by the equity method of accounting.

h) Property, plant and equipment

Stated at purchase cost, including interest, when applicable, plus revaluation write-up, less depreciation calculated under the straight-line method at rates based on the estimated useful lives of the assets. Leasehold improvements, which are depreciated over the shorter of estimated useful lives of the assets or the lease terms. Additionally, as the Company revalued its property, plant and equipment in 2006, the deemed cost of property, plant and equipment does not differ from the carrying amounts recognized in the financial statements.

i) Revaluation reserve

Recognized for the assets existing on January 1, 2006 and supported by appraisal reports issued by independent experts. Revalued assets refer to own assets represented by constructions, installations, leasehold improvements, furniture and fixtures, IT equipment and machinery and equipment, and is being 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 27. 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


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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 IFRSs

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 amount 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 addition, in accordance with prevailing tax regulations, this provision became deductible for tax purposes only after the merger of the company and based on the expected generation of operating profits. Therefore, an asset related to deferred income tax and social contribution arising from the merger process was recognized. Beginning January 1, 2008, goodwill is no longer amortized for accounting purposes and is tested for impairment, as prescribed by 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 carrying amounts on the transition date, pursuant to IFRS 1.

k) Other intangible assets (excluding goodwill)

Refer mainly to software licenses and trademarks and patents. The amortization of software licenses is calculated on a straight-line basis at rates that take into consideration the estimated useful lives of the assets. When there is evidence that an asset does not generate any more economic benefits, such asset is derecognized and charged to profit or loss.

l) Impairment of goodwill

Management established that the cash-generating units that correspond to each operating segment to which goodwill was allocated to conduct the impairment tests. These cash-generating units are tested for impairment annually or more frequently whenever there is an indication that a unit might be impaired. If the recoverable amount of a cash-generating unit is lower that its carrying amount, impairment losses are firstly allocated to write down the carrying amount of any goodwill allocated to the CGU and subsequently to the other assets of the CGU, prorated to the carrying amount of each of its assets. Goodwill impairment losses cannot not 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.


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m) Impairment of assets

At the end of each reporting period, the Company’s management reviews the carrying amounts of long-lived assets, especially property, plant and 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 carrying amount 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 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 carrying amount exceeds the probable recoverable amount of a long-lived asset. The probable recoverable amount of an asset is determined as 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.

Intangible assets with indefinite useful lives or not yet ready for use are tested for impairment at least annually or when there is any indication that such assets may be impaired.

The recoverable amount is the fair value less the lower of costs to sell or value-in-use. Estimates 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 carrying amount, the carrying amount is written down to its recoverable amount. An impairment loss is immediately recognized in profit or loss.

When an impairment loss is reversed in a subsequent period, the carrying amount of the asset is written up to reflect the revised estimate of its recoverable amount so that this amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. The reversal of an impairment loss is immediately recognized in profit or loss.

n) 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.

o) Other current and noncurrent liabilities

Stated at known or estimated amounts plus, when applicable, charges and inflation adjustments incurred, pursuant to agreements in effect.

p) Provision

Recognized only when a past event results in a legal or constructive obligation, it is probable


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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.

q) Advances from customers

Refer to the amounts received in advance for services related to sponsorship agreements, lease of box sets and boxes in performing arts venues, space assignment, merchandising and sales in installments of tickets, which will be recorded in the income statements as the services are provided.

r) Revenue recognition

Rendering of services

Revenue from ticket sales (box office) is recognized when the events are held.

Revenue from convenience and delivery fees, originated in the sales of tickets via the Internet, by telephone, or in the points of sales is recognized when the convenience or ticket delivery service is provided.

Revenue from naming rights agreements refer to the naming of the venues and is recognized in income as 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 in advance of tickets to customers of a certain sponsor, are complied with and/or discharged. Product sale revenue Food and beverage sales, and merchandising are recognized when the goods are transferred to customers.

s) Current and deferred income tax and social contribution

Current and deferred income tax and social contribution are recognized in the income statement except, when applicable, in the proportion related to items recognized directly in equity. In this case, taxes are recognized directly in 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 on the Company’s and other Brazilian subsidiaries’ profits 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 the tax law prevailing at the end of the reporting period, pursuant to Brazilian tax regulations.


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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 under the liability method on temporary differences arising from differences between the tax basis of assets and liabilities and their carrying amounts. Deferred income tax and social contribution are calculated using the tax rates effective at the end of the reporting period and 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 income tax and social contribution 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 utilized.

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.

t) Foreign currency transactions

Monetary assets and 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 on the adjustment of these assets and liabilities are recognized in profit or loss for the period as foreign exchange differences.

u) Functional and presentation 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) United States: US dollar. The financial statements of foreign subsidiaries are translated into Brazilian reais and exchange differences on translating foreign operations are recognized in equity, in line item ‘Valuation adjustments to equity’, and recognized in profit or loss for the period when such investments are realized. The consolidated financial statements are presented in Brazilian reais.

The results of operations and the financial positions of all the subsidiaries included in the consolidated financial statements (none of which 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.


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iii) All exchange differences are recognized in the statement of comprehensive income, in line item ‘Exchange differences on translating foreign operations’.

v) Segment reporting

The report 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.

w) 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 (other than 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 held by the Company are classified into the following categories: (1) held-to-maturity financial assets; (2) available-for-sale financial assets; and (3) loans and receivables. The classification depends on the purpose for which the financial assets have been acquired or contracted.

(1) Held-to-maturity financial assets

Comprise investments in certain financial assets classified at their inception to be held to maturity, which are measured at cost of acquisition, plus income earned according to the 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, whether or not quoted in active markets, or which are not quoted in an active market but whose fair values can be reasonably estimated.

(3) Loans and receivables

Include non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are recorded in current assets, except for maturities greater than 12 months after the end of the reporting period, when applicable, which are classified as noncurrent assets. At the end of the reporting period, in the case of the Company, comprises cash and cash equivalents (note 6), the balances of trade receivables (note 8), and related parties (note 12).

Measurement


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Regular purchases and sales of financial assets are recognized on trade day, 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 expenses. Loans and receivables are accounted for at the amortized cost.

Gains or losses resulting from changes in the fair value of financial assets at fair value through profit or loss are recognized in the income statement 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 to profit or loss for the period.

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 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 consist of swaps used exclusively to hedge against currency risks related to the positions in the balance sheet plus the projected foreign currency-denominated cash flows, and are measured at fair value, and related changes are recorded in profit or loss for the period.

The fair value of derivatives is calculated by the Company’s treasury function based on information on 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 involved financial institution.

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 28.

Other financial liabilities

Other financial liabilities, including debentures, 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 over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability or, where appropriate, a shorter period, to the net carrying amount on initial recognition.


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x) Share-based payments

The share-based payment plan contracts entered into by the Company and its executives set out the gains arising from the appreciation of the underlying securities, that would be settled in cash, duly measured at their fair values, and are, therefore, recognized as capital reserves in equity, with a balancing item in liabilities, called financial liabilities. However, said contracts also established that if an IPO were conducted, the Company would no longer be liable for the payment of such gains in cash and the benefited executives can exercise their vested stock options.

Accordingly, with the registration of the Company as a publicly-traded company and the related IPO conducted on April 13, 2011, as shown in note 1, the stock options previously classified as financial liabilities have been converted into equity instruments, duly measured at their fair values on that date.

The fair value of such instruments was calculated using the Black & Scholes pricing model on the date they were converted into equity instruments, individually for each benefited executive, since grant date, which was on September 28, 2007.

The expense corresponding to the fair value of the consideration for the services provided by the benefited executives is recognized in the income statement for the period when more stock options become vested, i.e., the accrual period of the service consideration (see note 31). As described in notes 21 and 31, the Board of Directors approved on July 12, 2011, the issuance of 100,170 shares, all subscribed and paid-in, due to the exercise on that date of the vested options of the Stock Option Plan by some of the beneficiary executives. The shares settled in August de 2011 amounted to R$1,001 (see statement of changes in equity).

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 on a straight-line basis over the lease term, except when another approach is more appropriate to reflect the timing 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 the economic benefits of the leased asset are consumed.

z) Presentation of earnings per share

Pursuant to IAS 33 and CPC 41 Earnings per Share, earnings per share are presented as basic and diluted, as described in note 34.


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aa) Statements of value added

The purpose of this statement is to disclose the wealth created by the Company and its subsidiaries, 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 supplemental information of the consolidated financial statements, since this statement is not required by IFRSs.

The statement of value added was prepared using information obtained in 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 presents 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 of the statement of value added presents the distribution of wealth among personnel, taxes, fees and contributions, lenders and lessors, and shareholders.

bb) New and revised standards and interpretations

(i) The following interpretations and revised standards applicable to the Company’s operations were issued and were in effect on December 31, 2011; however, they did not have any material impact on the individual and consolidated financial statements:

Standard Main requirements Effective date

• IFRS 1 First–time

Adoption of IFRSs • Several clarifications on

the first-time adoption of IFRSs, such as for example, elimination of fixed dates for certain exceptions as the date of transition to IFRS.

• Amendments resulting from the Annual Improvements to IFRSs of May 2010.

• Effective for annual periods beginning on or after July 1, 2011

• Effective for annual periods beginning on or after January 1, 2011


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• IFRS 7 Financial

Instruments:

Disclosures

• Increases the disclosure requirements for transactions involving financial assets to provide greater transparency around risk exposures when a financial asset is transferred but the transfer retains some level of continuing exposure in the asset. Disclosures are also required where transfers of financial assets are not evenly distributed throughout the period.

• Effective for annual periods beginning on or after July 1, 2011

• IAS 24 Related

Party Disclosures • Amendments already

adopted by the CPC. Clarifies the best concept of related parties, including with examples on specific cases.


• IFRIC 14 The Limit

on a Defined Benefit

Asset

• Prepayments of minimum funding requirements


(ii) The following standards and revised standards have been issued and are mandatory for reporting periods beginning on or after January 1, 2012. However, the Company did not early adopt these standards and revised standards:


Instruments:

Disclosures

• Improvements that address the disclosure on the offsetting of financial assets and financial liabilities.

• New disclosure requirements related to the first-time adoption of IFRS 9 Financial Instruments/ Measurement and

Classification of Financial

Assets.

• Effective for annual and interim periods beginning on or after January 1, 2013

• Effective for periods beginning on or after January 1, 2015


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Instruments • Introduces new

requirements for the classification, measurement, and derecognition of financial assets and financial liabilities. Clarifies other issues related to IAS 39.


• IFRS 10 Consolidated

Financial

Statements

• Replaces the IAS 27 requirements applicable to consolidated financial statements and SIC 12. IFRS 10 provides a single consolidation model that identifies control as the basis for consolidation for all types of entities.

• Effective for annual periods beginning on or after January 1, 2013.

• IFRS 11 Joint

Arrangements • Eliminated the

proportionate consolidation model for jointly controlled entities and maintained equity method model only. It also eliminates the concept to ‘jointly controlled assets’ and maintains only ‘jointly controlled operations’ and ‘jointly controlled entities’.


• IFRS 12 Disclosure

of Interests in

Other Entities

• Expands the current disclosure requirements in respect of entities, whether or not consolidated, where the entities have influence.


• IFRS 13 Fair

Value

Measurement

• Replaces and consolidates in a single standard all the guidance and requirements in respect of fair value measurement contained in other IFRSs. IFRS 13 defines fair value and provides guidance on how to measure fair value and requirements for disclosure relating to fair value measurement.



22

• IAS 1 Presentation

of Financial

Statements

• Introduces the requirement that all items recognized in other comprehensive income be separated into and totaled as items that are and items that are no subsequently reclassified to profit or loss.

• Presents clarifications on the way profit or loss is presented.


• Effective for periods beginning on or after July 1º, 2012.

• IAS 12 Income

Taxes • Deferred taxes - recovery

of the underlying assets when an asset is measured using the fair value model in IAS 40


• IAS 19 Employee

Benefits • Eliminates the corridor

approach and requires recognition of actuarial gains and losses as other comprehensive income for pension plans and other long-term benefits in profit or loss, when earned or incurred, among other changes.


• IAS 27 Consolidated and

Separate Financial

Statements

• IAS 27 requirements related to consolidated financial statements are replaced by IFRS 10. The requirements for separate financial statements are maintained.


• IAS 28 Investments

in Associates and

Joint Ventures

• Revision of IAS 28 to include the amendments introduced by IFRSs 10, 11 and 12. Clarifies the concepts of ‘significant influence’, examples for the application of the equity method of accounting, and how to conduct impairment tests for associates and jointly owned associates.



23

• IAS 32 Financial

Instruments:

Presentation

• Introduces application guidance on the offsetting of financial assets and financial liabilities.


4. KEY ESTIMATES AND JUDGMENTS

The estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other factors that are considered to be relevant in the circumstances. The Company uses assumptions and estimates for the future to provide an understanding how the Company make 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 carrying amounts 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 Liability Method concept described in IAS 12, equivalent to CPC 32 Income Taxes) of accounting for income tax is used for deferred income taxes arising from temporary differences between the carrying amount of assets and liabilities and their tax amounts. Deferred income tax assets are revised at the each end of the annual reporting period and written down by the amount that is not realizable using future taxable income. Deferred income tax assets and liabilities are calculated 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.

Credits recognized on tax loss carryforwards are supported by taxable income projections, 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 permit to make a credit recovery estimate in future years. Other credits, based in 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 derivative financial instruments at fair value at the end of the reporting period, and the main evidence of fair value are the quotations obtained from market participants. However, the extreme volatility of the foreign exchange and interest rate markets can generate significant changes in future exchange rates and interest rates over very short periods of time, producing significant changes in the market value of swaps and other financial instruments over a short timeframe. 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


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There are specific rules to assess the impairment of long-lived assets, especially property, plant and equipment, goodwill, and other intangible assets. At the end of the reporting period, the Company conducts an analysis to determine if there are evidences that its long-lived assets are impaired. No evidence was identified by December 31, 2011.

The recoverable amount 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 annual reporting period at December 31, 2011, no asset was impaired.

The Company assesses the recoverability of goodwill annually and uses market-accepted practices, including discounted cash flows, to compare the carrying amount of assets with their recoverable amounts.

The recoverability of goodwill is assessed based on the analysis and identification of events and circumstances that could result from the need to anticipate the annual test. The test is anticipated if any event or circumstance indicates that goodwill may be impaired.

The tests conducted did not identify the need to recognize new goodwill impairment losses.

d) Provision for tax, civil and labor risks

The Company is a party to several judicial and administrative proceedings, as described in note 20. The provision is recognized for all contingencies arising legal proceedings representing probable losses that can be reliably estimated. The likelihood of loss is assessed based on available evidences, the hierarchy of laws, available case rulings, most recent court decisions and their relevance within the legal system, and the assessment made by the outside legal counsel. Management believes that these provisions 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 trade receivables 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 and their appropriate recognition.

5. CORPORATE CONSOLIDATION

The financial statements of all investees 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 the investor's interest in the subsidiaries' equity and profit or losses, and intragroup balances and transactions have been eliminated. Noncontrolling interests in subsidiaries are separately stated. In preparing consolidated financial statements, the income statements, statements of comprehensive income, cash flows and value added, and all other changes in assets and liabilities


25

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 reporting period. The effects of changes in foreign exchange rates during the period on equity at the beginning of the period are recognized as a change in equity, as the difference between retained earnings or accumulated losses is recognized at the average foreign exchange rates prevailing at end of the period. The cumulative amount of the exchange differences is presented as a separate component in 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 income statement 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 encompasses the financial statements of the Company and the following direct and indirect subsidiaries:

The Company’s subsidiaries are engaged in:

• Área Marketing Brasil Ltda. (wholly-owned subsidiary - 99.99%): the import and sale of promotional material related to the entertainment and marketing industry, and organizing and holding sports, artistic, and cultural events.

Direct subsidiaries 2011 2010 Área Marketing Brasil Ltda. 99.99 99.99 Metropolitan Empreendimentos S.A. 99.99 99.99 T4F Alimentos, Bebidas e Ingressos Ltda. 99.99 99.99 T4F Inversiones S.A. e B.A. Inversiones S.A. 100.00 100.00 T4F USA Inc. 100.00 100.00 Ticket Co. SpA 100.00 - Vicar Promoções Desportivas S.A. 75.00 75.00

Equity interests - %

Indirect subsidiaries 2011 2010 T4F Entretenimientos Argentina S.A. 100.00 100.00 Pop Art S.A. 100.00 100.00 Ticketmaster Argentina S.A. 100.00 100.00 Ticketek Argentina S.A. 100.00 100.00 Clemente Lococo S.A. 100.00 100.00 T4F Chile S.A. 100.00 100.00 Ticketmaster Chile S.A. 100.00 100.00 Promaser S.A. 100.00 100.00

Equity interests - %


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• Metropolitan Empreendimentos S.A. (wholly-owned subsidiary - 99.99%): the promotion and organization of, and holding 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 in general, and products directly related to the entertainment industry; the provision of box office automation services, by supplying technology and technical assistance; and the provision of ticket production, distribution, sales and/or intermediation services for any type of sports, 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 S.A.- 95%, Ticketmaster Argentina S.A. - 95%, Ticketek Argentina S.A. - 5%, Clemente Lococo S.A. - 95%, Pop Art S.A. - 100%, T4F Chile S.A. - 99.31%, Ticketmaster Chile S.A. - 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 S.A. - 41.07%, T4F Entretenimientos Argentina S.A. - 5%, Clemente Lococo S.A. - 5%, Ticketek Argentina S.A. - 95%, and Ticketmaster Argentina - 5%.

• Ticket CO. SpA. (wholly-owned subsidiary - 100%), located in, is mainly engaged in selling and marketing sports events and entertainment tickets. In the year ended December 31, 2011, this company was dormant.

• 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%): mainly engaged in providing publicity, promotion and organization services in the sports events area, and is currently responsible for promoting Stock Car races in Brazil.

6. CASH AND CASH EQUIVALENTS

2011 2010 2011 2010

Cash and banks 7,946 787 24,354 29,479 Short-term investments: Balanced Fund (a) - - 5,434 5,076

Bank Certificates of Deposit (CDBs)/Interbank Certificates of Deposit (CDI) (b) 60,982 10,619 65,905 15,613 DI repurchase agreement (c) 156,083 58,453 166,161 70,766 Money market (d) - - 1,423 -

Total 225,011 69,859 263,277 120,934



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a) Investments in highly-liquid, fixed-income securities in the subsidiaries in Argentina and Chile, with an immaterial risk of change in value and average yield pegged to market rates.

b) Highly-liquid, fixed-term CDBs, which yield rates ranging from 98 to 102 percent of the interbank deposit rate (CDI) fluctuation (98 to 101 percent at December 31, 2010), 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, fixed-term deposits, which yield average rates ranging from 75 to 101,5 percent of CDI fluctuation (99 to 102.2 percent at December 31, 2010), maintained in Brazilian financial institutions. These 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.

d) Foreign, high-liquid investment in the money market, yielding 0.60% per year, and redeemable at any time. As at December 31, 2011, its balance is U$759,000.

7. RESTRICTED CASH

Refer to the funds that will be invested in cultural projects exploited 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 19). Total restricted cash amounts in consolidated is R$14,457 (R$6,595 at December 31, 2010). As at December 31, 2011, R$9,600 was invested in highly-liquid, fixed-term CDBs, which yield average rates equivalent to 99.25% of CDI fluctuation, maintained in Brazilian financial institutions. The remaining amount was deposited in a bank account.

8. TRADE RECEIVABLES

a) Broken down as follows:

(i) Billed amounts related to sponsorship, box set and box, 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, box set, box, and naming rights contracts.

2011 2010 2011 2010

Billed receivables (i) 4,401 6,580 17,414 23,302 Box office (ii) 21,289 19,797 28,302 36,488 Unbilled sponsorships, box sets and boxes (iii) 16,757 8,127 17,896 8,414 Total trade receivables 42,447 34,504 63,612 68,204

Allowance for doubtful accounts (144) (137) (1,072) (2,107)

Total 42,303 34,367 62,540 66,097

ConsolidatedCompany


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b) The aging list of trade receivables is as follows:

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 receivables; (iii) actual likelihood of receiving such amounts; and (iv) customer history.

c) Allowance to write down trade receivables to their recoverable amounts

The changes in the allowance for doubtful accounts are as follows:

2011 2010 2011 2010Falling due: 40,909 33,714 51,377 49,082 Past-due:Up to 30 days 1,390 636 5,473 14,777 31 to 60 days 4 17 2,990 1,289 61 to 90 days - - 378 672 91 to 180 days 39 - 928 234 Over 180 days 105 137 2,466 2,150

Total trade receivables 42,447 34,504 63,612 68,204



Balance at December 31, 2009 357 6,923 Additions 545 2,744 Reversals and write-offs (765) (7,560) Balance at December 31, 2010 137 2,107

Additions 1,814 2,136 Reversals and write-offs (1,807) (3,171) Balance at December 31, 2011 144 1,072


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9. RECOVERABLE TAXES

(i) Tax on gross revenue levied at the rates of 3-4 percent, withheld by the credit card companies when they pay to the Argentinean subsidiaries for tickets sold and pay using credit cards. Taxes are offset as the taxable event occurs. As the tickets are sold 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.

10. ADVANCES TO SUPPLIERS

(i) Refer to advances to suppliers made to conducts events, concerts and performances, which will be recognized in income when such events, concerts and performances are held.

11. PREPAID EXPENSES

Refer mainly to amounts paid in advance to conduct events, shows and performances (“events”), basically consisting of performers’ fees and production fixtures, which are recognized in profit or loss for the period as the related events are held.

2011 2010 2011 2010

Prepaid income tax and social contribution 1,178 34 4,542 5,047 Withholding income tax (IRRF) 400 1,129 3,059 1,547 Tax on revenue (PIS) 18 - 78 39 Tax on revenue (COFINS) 81 - 360 180 Value Added Tax (VAT) - - 259 868 Taxes on billings (i) - - 4,351 4,562 Other 145 256 532 2,215 Total 1,822 1,419 13,181 14,458


2011 2010 2011 2010

Contracted events, concerts and performances (i) 3,714 1,251 6,991 4,054 Other 217 565 517 838 Total 3,931 1,816 7,508 4,892



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The portions to be allocated to net income related to contracted events, concerts and performances are broken down as follows:

12. RELATED PARTIES

As at December 31, 2011 and 2010, the Company had transactions with the following related companies:

12.1. Intragroup transactions

a) At December 31, 2011

Company

2011 2010 2011 2010

Contracted events, concerts and performances 23,870 19,531 50,667 32,494 Other 556 495 2,479 2,838 Total 24,426 20,026 53,146 35,332

Current 24,303 19,964 52,520 34,693

Noncurrent 123 62 627 639


Company Consolidated2011 2011

Year

1st quarter of 2012 21,843 23,591

2nd quarter of 2012 1,435 23,570 3rd quarter of 2012 469 1,114 4th quarter of 2012 - 1,765 Starting 2013 123 627 Total 23,870 50,667


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Consolidated

b) At December 31, 2010

Company

Noncurrent Current Financial Financialassets liabilities expenses income

Área Marketing Brasil Ltda. 77 - - - B.A. Inversiones S.A. 435 - (50) 66 CIE Internacional S.A. de C.V. (iii) 4,072 - (11) 302 Metropolitan Empreendimentos S.A. - 252 - - Ocesa Entretenimiento, S.A. de C.V. (iii) 1,260 - - 152 T4F Alimentos, Bebidas e Ingressos Ltda. - 90 - - T4F Chile S.A. (iv) - 14,276 (4,411) 2,779 T4F Entretenimientos Argentina S.A. (i) 1,784 - (516) 835

T4F Inversiones S.A. (ii) 12,532 - (1,397) 3,058

T4F USA Inc. - 271 (52) 24 Vicar Promoções Desportivas S.A. 108 - - - Total 20,268 14,889 (6,437) 7,216


CIE Internacional S.A. de C.V. (iii) 6,069 - (11) 530 Ocesa Entretenimiento, S.A. de C.V. (iii) 1,260 - - 152 Total 7,329 - (11) 682


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Consolidated

(i) Represented mainly by the intragroup loan agreement entered into on July 1, 2009 by the Company and subsidiary T4F Entretenimientos Argentina S.A. as a result of a decision made by the Extraordinary Shareholders' Meeting that the “aportes irrevocables” owned by the Company, totaling AR$5,206,000, will not be added to the capital of this subsidiary. These contributions, until then recognized in the subsidiary’s 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 intergroup loan agreement entered into on July 1, 2009 by the Company and subsidiary T4F Inversiones S.A. as a result of a decision made by the Extraordinary Shareholders' Meeting that the “aportes irrevocables” owned by the Company, totaling AR$25,654,000, will not be added to the capital of this subsidiary. These contributions, until then recognized in the subsidiary’s 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.


Área Marketing Brasil Ltda. 452 - - - B.A. Inversiones S.A. 484 - - - CIE Internacional S.A. de C.V. (iii) 11,360 - (46) 2,698 Fernando Luiz Alterio (iii) - - (24) 317 Metropolitan Empreendimentos S.A. 119 - - - Ocesa Entretenimiento, S.A. de C.V. (iii) 969 - - - T4F Alimentos, Bebidas e Ingressos Ltda. - 120 - - T4F Chile S.A. (iv) - 13,371 (2,421) 3,371 T4F Entretenimientos Argentina S.A. (i) 1,241 - (2,099) 3,381 T4F Inversiones S.A. (ii) 11,783 - - - Vicar Promoções Desportivas S.A. 101 - - - Total 26,509 13,491 (4,590) 9,767


CIE Internacional S.A. de C.V. (iii) 12,231 - (46) 2,698 Ocesa Entretenimiento, S.A. de C.V. (iii) 833 - - - Total 13,064 - (46) 2,698


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(iii) The Company and its subsidiaries have entered into with their former controlling shareholders CIE Internacional S.A. de C.V., OCESA Entretenimientos S.A. e de C.V., and the current controlling shareholder Fernando Luiz Alterio agreements under which these acknowledge their liability for any contingencies derived from events that occurred from December 1, 2000 to May 14, 2007, as described in note 20. In compliance with these agreements, at December 31, 2011 the Company records receivables from CIE Internacional S.A. de C.V. amounting to R$4,072, Company, and R$6,069, on a consolidated basis, and receivables from OCESA Entretenimientos S.A. de C.V. amounting to R$145, Company and on a consolidated basis. These balances are adjusted according to CDI fluctuation.

The dividends distributed by the Company and paid on March 30, 2011 to its former controlling shareholder CIE Internacional S.A. de C.V., totaling R$8,804, was withheld to partially settle this balance.

(iv) On December 14, 2009, the Company raised an intragroup loan with subsidiary T4F Chile S.A. totaling US$8,000,000. The loan is annually adjusted at LIBOR plus one percent interest, repayable within five years.

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.

12.2. Management compensation

Total management compensation is as follows:

Company

Fixed Variable (*) Total

Directors 246 - 246 Officers 4,789 2,644 7,433

Total 5,035 2,644 7,679

Company

Fixed Variable (*) Total Directors 246 - 246

Officers 2,201 185 2,386

Total 2,447 185 2,632

Compensation

Compensation

2011

2010


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(*) 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.

Management does not receive: (i) postemployment benefits; (ii) other long-term benefits; or (iii) severance benefits.

13. INVESTMENTS IN SUBSIDIARIES

a) Information on subsidiaries

a.1) December 31, 2011

Consolidated


Directors 246 - 246 Officers 5,040 2,862 7,902

5,286 2,862 8,148

Consolidated


Directors 246 - 246

Officers 2,858 393 3,251

3,104 393 3,497

Compensation

Compensation

2011

2010

Profit Share of profit Investments

(loss) for Equity of subsidiaries Dividends in subsidiaries Direct or indirect subsidiaries Equity the period interests - % 2011 2011 (i) 2011

Área Marketing Brasil Ltda. 1,124 79 99.99 79 (245) 1,124

Metropolitan Empreendimentos S.A. 9,126 890 99.99 890 (211) 9,126

T4F Alimentos, Bebidas e Ingressos Ltda. 4,883 6,431 99.99 6,431 (5,249) 4,883

T4F Inversiones S.A. e B.A Inversiones S.A. 51,371 5,482 100.00 5,482 - 51,371

T4F USA Inc. 2,020 627 100.00 627 - 2,020

Vicar Promoções Desportivas S.A. 11,402 4,030 75.00 3,022 (718) 8,552

Total 16,531 (6,423) 77,076

(i) The amounts of dividends received in 2011 refering to 2010 totaled R$6,406.


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(a.2) December 31, 2010

(a.3) Changes in line item ‘Investments in subsidiaries’

b) Goodwill on acquisition of investments

(i) Up to 2006, when equity interest was acquired, the Company 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 as regards the determination of working capital as at December 31, 2007, by comparing it

Profit Share of profit Investments

(loss) for Equity of subsidiaries Dividends in subsidiaries Direct or indirect subsidiaries Equity the period interests - % 2010 2010 (i) 2010

Área Marketing Brasil Ltda. 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. 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. 8,331 7,435 75.00 5,578 (4,649) 6,245

Total 18,199 (10,092) 64,482

(i) The amounts of dividends received in 2010 refering to 2009 totaled R$9,365.

2011 2010

64,482 53,663

16,531 18,199

2,486 2,712

Dividends of subsidiaries (6,423) (10,092)

77,076 64,482 Net investment balances at December 31

Net investment balances at January 1

Share of profit of subsidiaries

Cumulative translation adjustments

2011 2010 2011 2010

Vicar Promoções Desportivas S.A. (i) 9,244 9,244 9,244 9,244 Metropolitan Empreendimentos S.A. (ii) 36,269 36,269 36,269 36,269 T4F Entretenimento S.A. (iii) 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) T4F Inversiones S.A.and B.A. Inversiones S.A. (iv) 83,204 83,204 83,204 83,204 Companies acquired in Argentina:Pop Art S.A., Ticketek Argentina S.A. and Clemente Lococo S.A. (v) - - 6,608 6,357 Total 128,717 128,717 135,325 135,074



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with working capital set down in the agreement, there was an additional adjustment to 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 R$255 related to the determination of working capital as at 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 Business Combinations (revised in 2008), once control is obtained, subsequent acquisitions or sales of interests in the subsidiary’s equity that do not result in the loss of control are accounted for as capital transactions. Therefore, neither the increase in goodwill nor any gain or loss on any decrease in interest held should not be recognized; the Company recognized the additional amounts paid for the noncontrolling interests as a reduction of 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.

(iii) As part of the corporate restructuring of 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, net goodwill recorded at ADTSPE, amounting to R$237,361, was reduced to nil through an allowance account recognized by ADTSPE itself recognized before the merger. After the 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 are R$213,625. As 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 totaling R$80,705, which were transferred to the Company at the time of the downstream merger. Said tax credit, net of the realized portions, is recorded in line item ‘Deferred income tax and social contribution’, in noncurrent assets.

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 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., generated goodwill totaling


37

R$96,853, recorded in the books at its total amount, based on the same economical rationale that originated such goodwill. Goodwill was amortized on a straight-line basis until December 31, 2007. 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$1,000,000. The Company realized a proportionate portion of goodwill through this transaction and the investment in subsidiary, amounting to R$2,092 and R$143, respectively. As at December 31, 2008 and July 31, 2009, the Company recorded a partial recovery of this goodwill totaling R$1,542, equivalent to US$660,000, and R$506, equivalent to US$270,000, respectively, due to the payment of 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 S.A. In the case of Pop Art S.A., on May 14, 2007 the subsidiaries acquired 49% of its shares, generating goodwill of R$6,435, which when added to goodwill arising on the initial acquisition of R$3,683 results in 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.

As at December 31, 2011, 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 the cash flows based on the financial projections approved by management for the five year period, and an after-tax discount rate of 11.92% 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 carrying amount to exceed its recoverable amount.

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, operational geographical expansion, and the increase in the number of shows in the marketplaces where we already operated (São Paulo and Rio de Janeiro). The geographical expansion focus is on the main state capitals of Brazil, with a yet little exploited potential audiences. Additionally, we will increase the number of shows where we already operated, in view of the growing demand identified in the period prior to the period the projections were made.


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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.

14. PROPERTY, PLANT AND EQUIPMENT AND OTHER INTANGIBLE ASSETS

a) Breakdown of property, plant and equipment

Annual average depreciation

rate - % 2011 2010 2011 2010Revalued cost:Land - - - 465 448 Leasehold constructions, installations and improvements 13 82,871 77,164 106,999 98,874 Furniture and fixtures 6 7,110 4,353 11,090 7,737 Machinery and equipment 7 14,532 10,344 19,408 14,880 Data processing equipment 17 5,800 5,362 9,778 8,640 Vehicles 20 661 357 4,195 527 Advances for PP&E - 150 - 176 - Total 111,124 97,580 152,111 131,106



39

On January 1, 2006, the Company accounted for revaluation amounting to R$31,265, and revalues assets (construction in leased properties, installations, furniture and fixtures, machinery and equipment, and IT equipment) started to be depreciated on a straight-line basis over their new useful lives, except for leasehold constructions, installations and improvements, which are depreciated over the lease terms.

b) Breakdown of other intangible assets

Line item ‘Other intangible assets’ represents basically software licenses, as follows:

Annual average depreciation

rate - % 2011 2010 2011 2010Accumulated depreciation:Leasehold constructions, installations and improvements 13 (76,395) (76,135) (93,165) (90,975) Furniture and fixtures 6 (2,181) (1,899) (4,618) (4,079) Machinery and equipment 7 (4,638) (4,364) (7,118) (6,610) Data processing equipment 17 (3,668) (2,827) (6,892) (5,593)

Vehicles 20 (303) (232) (728) (397)

Total (87,185) (85,457) (112,521) (107,654)

Property, plant and equipment, net:Land - - 465 448 Leasehold constructions, installations and improvements 6,476 1,029 13,834 7,899 Furniture and fixtures 4,929 2,454 6,472 3,658 Machinery and equipment 9,894 5,980 12,290 8,270 Data processing equipment 2,132 2,535 2,886 3,048 Vehicles 358 125 3,467 129

Advances for PP&E 150 - 176 -

Total 23,939 12,123 39,590 23,452


Annual average amortization

rate - % 2011 2010 2011 2010Cost - 4,874 4,243 11,728 9,660 Amortization 20 (2,824) (2,299) (8,375) (7,499)

Total 2,050 1,944 3,353 2,161



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c) Breakdown of revalued property, plant and equipment:

Accumulated Residual revaluation revaluation

Revaluation depreciation amount

Constructions in leased properties 26,874 (26,874) - Furniture and fixtures 789 (281) 508 Machinery and equipment 2,339 (568) 1,771

Data processing equipment 367 (239) 128

30,369 (27,962) 2,407

Taxes (34% - income tax and social contribution) (818)

Revaluation reserve recognized in equity at December 31, 2011 1,589



Constructions in leased properties 26,874 (26,874) - Furniture and fixtures 1,378 (642) 736 Machinery and equipment 4,151 (1,567) 2,584 Data processing equipment 494 (346) 148

32,897 (29,429) 3,468

Taxes (34% - income tax and social contribution) (1,179) Eliminations in consolidation (i) (700)


(i) Revaluation reserve in subsidiary Metropolitan Empreendimentos S.A.

2011 Company

2011 Consolidated


41



Constructions in leased 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)


2010 Company



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 (i) (757)


(i) Revaluation reserve in subsidiary Metropolitan Empreendimentos S.A.

2010 Consolidated


42

d) Changes in property, plant and equipment

The Company and the subsidiary Metropolitan Empreendimentos S.A. pledged as collateral data processing equipment, machinery and equipment, and furniture and fixtures totaling R$2,879, for tax collection lawsuits, labor claims and customers’ complaints.

e) Changes in intangible assets

Annually, pursuant to CPC 01, Company property, plant and equipment and intangible assets are tested for impairment based on the discounted projected future cash flows, to check if there are any impairment losses to be recognized. As at December 31, 2011, the impairment test prepared by the Company’s management did not indicate any loss that should have been recognized.

2011 2010 2011 2010Opening balance at 12/31/2010 12,123 12,272 23,453 24,807 Additions:

Leasehold constructions, installations and improvements 5,740 568 7,732 4,138 Furniture and fixtures 2,807 249 3,372 347 Machinery and equipment 4,883 459 5,276 904

Data processing equipment 967 835 1,524 979 Vehicles 304 28 3,668 28

Advances for PP&E 150 - 163 -

Total additions 14,851 2,139 21,735 6,396

Write-offs, net (843) (135) (877) (2,862) Depreciation (2,192) (2,153) (4,909) (4,428) Exchange differences - - 188 (461) Closing balance 23,939 12,123 39,590 23,452


2011 2010 2011 2010

Opening balance at 12/31/2010 1,944 1,688 2,161 2,013 Additions:

- Software 631 639 1,855 715 (-) Amortization (525) (383) (671) (538) Other - - 8 (29)

Closing balance 2,050 1,944 3,353 2,161



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15. TRADE PAYABLES

16. DEBENTURES

On March 31, 2010, the Company entered into with Banco Bradesco BBI S.A. an Agreement for the Issuance of nonconvertible Simple, Debentures; the Company issued 150 single series debentures, totaling R$150 million, as authorized by 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 is, therefore, automatically exempt from its registration with the CVM required by Article 19 of Law 6385, of December 7, 1976.

Transaction costs incurred in fund raising are recognized as a reduction of the fair value initially recognized pursuant to CPC 08.

a) As at December 31, 2011, the Company is compliant with all restrictive covenants set out in the debenture indenture, described below:

i) Filing for or declaration of judicial or extrajudicial composition with creditors.

ii) Noncompliance by the Company of any financial or nonfinancial obligation.

iii) Noncompliance of obligation set forth in the Credit Card Receivables Assignment Agreement or any other subsequent guarantee agreement 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.

2011 2010 2011 2010

Domestic suppliers 17,225 12,401 37,204 33,888 Foreign suppliers 6,100 2,375 8,175 2,587 Total 23,325 14,776 45,379 36,475

ConsolidatedCompany

Type Annual interest rate - % 2011 2010

Debentures CDI + 1.47 to 2.09 135,681 150,276

Current portion 41,931 19,026 Noncurrent portion 93,750 131,250

Company and Consolidated


44

v) Change in the direct or indirect Company share control 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.

vii) Transformation of the Company in 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 the compliance of 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.

b) Debentures are guaranteed by:

i) Chattel mortgage, under a condition precedent, on behalf of the debentureholders, represented by the trustee, of shares representing 100% of the Company’s capital.

ii) Collateral transfer, under a 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, under a 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:

Year2013 37,500 2014 37,500 2015 18,750 Total 93,750

Companyand Consolidated


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17. TAXES PAYABLE

(a) Tax on gross revenue levied at the rates of 3-4 percent on the 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 installment program established by Law 11941/09

On May 27, 2009, the Federal Government issued Law 11941/09, resulting from Provisional Act 449/08, which, among other amendments to the tax law, provides for a new tax installment plan for the payment of debts managed by the Federal Revenue Service of Brazil, the National Institute of Social Security (INSS), and the National Treasury Attorney General’s Office (PGFN). 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 challenged at the administrative level or in courts. The Federal Revenue Service consolidated this installment plan on June 24, 2011 and, on this

2011 2010 2011 2010

Tax on revenue (COFINS) 2 1,889 203 2,176

Tax on revenue (PIS) 1 413 47 478 Service tax (ISS) 4,659 4,827 5,069 4,951 ISS in installments (b) - - 170 418 Income tax and social contribution 1,245 - 5,063 3,975 REFIS (c) 615 1,081 615 1,081 State VAT (ICMS) 2 2 42 55 Taxes on billings (a) - - 2,010 2,279 VAT - - 1,558 969 PIS and COFINS - installment plan 78 217 78 217 Other 463 542 1,342 824 Current liabilities 7,065 8,971 16,197 17,423

Taxes on revenue (PIS/COFINS) - 73 - 73 ISS in installments (b) - - - 139 REFIS (c) (d) 6,113 9,731 6,113 9,731 Taxes on billings (a) - - 2,313 3,174 Noncurrent liabilities 6,113 9,804 8,426 13,117



46

date, the Company definitely dropped the proceedings challenging taxes included in the installment plan. As provided for by said Law, by joining this installment plan, the Company benefits from fine, interest and legal charges reduction in percentages that depend on the payment term elected. Additionally, the Company could opt for the payment of its tax debt in a bullet payment of in installments, and settle, where applicable, late payment or assessment fines and late payment interest, including those enrolled as enforceable debt to the Government, using own tax loss carryforwards. As a result, the consolidated amount of this debt amounts to R$10,147 and the Company elected to settle it with income tax and social contribution loss carryforwards amounting to R$3,344 and R$1,204, respectively, recognized in financial income (expenses), offset against fine and interest previously challenged in proceedings. Thus, the remaining balance, amounting to R$5,599, will be paid in 120 monthly installments, starting June 2011. The outstanding balance at December 31, 2011 was R$5,195.

(d) Tax installment program established by Municipal Law 15406/11

On July 8, 2011, the City of São Paulo issued Law 15406, which, among other amendments to the City tax law, establishes a new deadline for the enrollment, in 2011, with the Incentive Tax Installment Plan (PPI), created under Law 14129, of January 11, 2006, for tax debts to the City of São Paulo. 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 August 2011 to include debts challenged at the administrative level or in courts and the loss likelihood of which was considered by management and its legal counsel as possible. The City of São Paulo consolidated these installment plans on August 30, 2011 and, on this date, the Company dropped the proceedings challenging taxes included in the installment plan. The consolidated amount is being paid in 120 monthly installments. As at December 31, 2011, the tax debts enrolled in this installment plan by the Company, pursuant to Law 15406/11, total R$1,533.

18. ADVANCES FROM CUSTOMERS

Refer to the amounts received in advance for services related to sponsorship agreements, lease of box sets and boxes in performing arts venues, space assignment, merchandising and sales in installments of tickets, which will be recorded in income as the services are provided.


47

(a) Naming rights agreements

Consist of sponsorship agreements, the purpose of which is to grant the sponsor the right to name venues or a specific event for a certain consideration. The agreements set out 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) Contracts: sponsorships, box sets, boxes, and private events

(b.1) Sponsorships: the contracts aim at ensuring compliance and fulfillment of 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 in advance of tickets to customers of a certain sponsor, are complied with and/or discharged.

Box sets and boxes: the purpose of these agreements is the temporary assignment of box sets and boxes located inside the venues, generally to companies, for use in every artistic and cultural event open to the public in general, for a defined period and in exchange for payment of a certain 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 certain amount.

(c) Advance ticket sales

Refer to the advance 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.

2011 2010 2011 2010

Naming rights agreements (a) 1,253 1,124 1,739 1,715 Sponsorships, box sets and boxes (b.1) 7,361 32,422 19,086 35,296 Private events (b.2) 600 336 1,100 1,565 Advance ticket sales (c) 46,522 52,447 47,347 73,231 Shows intermediation - - 114 1,483 Current liabilities 55,736 86,329 69,386 113,290

Sponsorships - box sets and boxes (b.1)- 1,313 - 1,313

Noncurrent liabilities - 1,313 - 1,313



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19. 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 for each project, in a financial institution designated by the Ministry of Culture, and are recorded in line item ‘Restricted cash’, as described in note 7.

The balancing item of 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. Amounts possibly unrealized are returned to the Ministry of Culture when the company files the project’s expense report.

The recognition of transactions with Rouanet incentives is temporary, and there is no recording in income or expense accounts.

The table below shows the breakdown of the involved amounts:

ApprovedCompany Pronac # amount 2011 2010

Beauty and the Beast 08 10063 183 - - The Witches of Eastwick 10 10472 5,967 3 - CATS - The Musical - São Paulo 09 5007 6,155 - 253 Disney On Ice - São Paulo and Rio de Janeiro 10 12549 5,117 - - The Addams Family 11 7286 13,617 8,650 Moscow Grand Ballet 09 0576 1,867 - - Mamma Mia 09 7620 13,396 1,490 3,132 Sky Mirage 10 12564 5,893 51 - Titanic 10 12582 2,986 1,136 - Total 55,181 11,330 3,385


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The table below shows the changes in the involved amounts:

ApprovedConsolidated Pronac # amount 2011 2010

Beauty and the Beast 08 10063 183 - - The Witches of Eastwick 10 10472 5,967 3 - CATS - The Musical - São Paulo 09 5007 6,155 - 253 Disney On Ice - São Paulo and Rio de Janeiro 10 12549 5,117 - - The Addams Family 11 7286 13,617 8,650 - Moscow Grand Ballet 09 0576 1,867 - - Mamma Mia 09 7620 13,396 1,490 3,132 Sky Mirage 10 12564 5,893 51 - Slava s 09 6299 3,231 - 40 Stomp 09 4969 2,093 - 41 Titanic 10 12582 2,986 1,136 - Total 60,505 11,330 3,466

Company 12/31/2010 Additions Write-offs 12/31/2011The Witches of Eastwick - 4,824 (4,821) 3 CATS - The Musical - São Paulo 253 156 (409) - The Addams Family - 8,650 - 8,650 Mamma Mia 3,132 7,813 (9,455) 1,490 Sky Mirage - 2,246 (2,195) 51 Titanic - 1,714 (578) 1,136 Total 3,385 25,403 (17,458) 11,330

Company 12/31/2009 Additions Write-offs 12/31/2010Beauty and the Beast 183 82 (265) - Moscow Grand Ballet 1,744 226 (1,970) - CATS - The Musical - São Paulo 80 11,962 (11,789) 253 Mamma Mia - 4,984 (1,852) 3,132 CATS - The Musical - Rio de Janeiro - 416 (416) -

Total 2,007 17,670 (16,292) 3,385


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20. PROVISION FOR TAX, CIVIL AND LABOR RISKS

The Company and its subsidiaries are parties to contingencies that include ongoing labor, tax and civil lawsuits, involving contingent liabilities. It is the management policy to recognize provisions for risks assessed as probable losses.

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 (in this case the liabilities of CIE Internacional S.A. de C.V. and Fernando Luiz Alterio CIE shall be proportional to their shareholding interests at the time of the event triggering the contingency), which result in definite losses for and disbursed by the Company, as long as such losses exceed US$5,000 million, in accordance with the terms and conditions of said agreement. However, under the share subscription agreement, CIE Internacional S.A. de C.V. 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 this type of events that have occurred up to December 31, 2011 and in conformity with said agreement, CIE Internacional S.A. de C.V. has to reimburse R$4,072 to the Company, as commented in note 12.

Additionally, the Company was granted unconditional guarantee of the full payment 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

Consolidated 12/31/2010 Additions Write-offs 12/31/2011The Witches of Eastwick - 4,824 (4,821) 3 CATS - The Musical - São Paulo 253 156 (409) - Disney On Ice - São Paulo and Rio de Janeiro - 2,950 (2,950) - The Addams Family - 8,650 - 8,650 Mamma Mia 3,132 7,813 (9,455) 1,490 Sky Mirage - 2,246 (2,195) 51 Slava s 40 - (40) - Stomp 41 - (41) - Titanic - 1,714 (578) 1,136 Total 3,466 28,353 (20,489) 11,330

Consolidated 12/31/2009 Additions Write-offs 12/31/2010Beauty and the Beast 183 82 (265) - Moscow Grand Ballet 1,744 226 (1,970) - CATS - The Musical - São Paulo 80 11,962 (11,789) 253 Mamma Mia - 4,984 (1,852) 3,132 CATS - The 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


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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.

The accrued amounts for legal proceedings are broken down as follows:

20.1) Tax lawsuits

The company and its subsidiaries recognize a provision for tax contingencies for which the risk of loss was classified as probable based on the opinion of our outside legal counsel totaling R$4,597 (R$6,898 at December 31, 2010).

As at December 31, 2011, the Company and its subsidiaries are parties to potential tax contingencies classified as of possible risk of loss by their legal counsel, amounting to R$28,084.

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 at December 31, 2011, the overall amount classified as possible losses for these proceedings is approximately R$7,104, and there are no proceedings classified as losses. 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 own properties. These proceedings refer mainly to ISS levied by the City of São Paulo and the City of Rio de Janeiro. The Company alleges the illegality and challenges the levy of the tax on cancelled and free tickets, entertainment services, and rental of box sets and space during events, and lending of spaces.

In February 2011, the Company filed for an injunction against the City of São Paulo to stay any collection of ISS from the Company in light of the tax exemption set forth by City Law 15134/10. The injunction was granted on February 7, 2011 and subsequently confirmed by a court decision favorable to the Company on April 19, 2011, which recognized its right to the exemption under said law. Currently, the Company awaits the judgment of the appeals filed by the parties. The amount of the tax under litigation, for

2011 2010 2011 2010Labor 7,376 14,210 8,144 14,797 Civil 8,059 5,895 9,374 7,714 Tax 1,756 2,641 4,597 6,898

Total 17,191 22,746 22,115 29,409

Current 3,034 6,972 3,182 7,494 Noncurrent 14,157 15,774 18,933 21,915



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the period April 2010-December 31, 2011 is R$3,615. Our legal counsel classified the likelihood of an unfavorable decision on this lawsuit as possible.

b) In December 2009, the Company was assessed by the Federal Revenue Service in R$7,360, which in brief refers to the collection of income tax and social contribution related to: (i) the disallowance of depreciation and amortization expenses deducted in calendar 2004; (ii) fine of 50% on the differences between the amounts recorded as monthly income tax and social contribution estimate 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 and awaits an administrative decision; the likelihood of loss was considered possible by our legal counsel. As at December 31, 2011, this lawsuit’s adjusted amount is R$8,669.

c) In July 2010, the Company was assessed by the Federal Revenue Service in R$2,279, which in brief arising from the collection of the amounts related to the Economic Intervention Contribution (CIDE)-Technology, created by Law 10168/00, plus assessment fine (75%) and interest on late payment, for calendar 2007. The Company filed an objection against said tax assessment and awaits an administrative decision; the likelihood of loss was considered possible by our legal counsel. As at December 31, 2011, this lawsuit’s adjusted amount is R$2,576.

20.2) Labor lawsuits

The Company and its subsidiaries recognize a provision for labor and social security contingencies for which the risk of loss was classified as probable based on the opinion of their outside legal counsel, totaling R$8,144 (R$14,797 at December 31, 2010).

As at December 31, 2011, the Company and its subsidiaries are parties to labor lawsuits assessed as possible risks that total R$3,197.

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 in brief the nullity of a service agreement and the recognition of an employment relationship. As at December 31, 2011, the lawsuit is 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$1,805, and the risk of loss is classified as probable.

b) Lawsuit filed with the City of Buenos Aires (Argentina) Labor Court, 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. In brief, 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$3,415, and the likelihood of loss is considered possible.


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20.3) Civil and other lawsuits

The Company and its subsidiaries are parties to civil lawsuits amounting to R$9,374, classified as probable risks of loss (R$7,714 at December 31, 2010). 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 related to the half price ticket), and in Argentina they are related to civil liability for damages, as well as consumers’ rights.

As at December 31, 2011, the Company and its subsidiaries are parties to potential civil contingencies classified as of possible risk of loss by their legal counsel, totaling R$61,514.

The civil lawsuits that correspond to material contingencies for the Company are as follows:

a) Litigation involving Clube Atlético Mineiro, whose likelihood of loss is classified as possible, totaling R$29,510 at December 31, 2011, corresponding to 1/3 of 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 the 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 that meets the obligation could file recourse against the others for reimbursement. On February 21, 2011, the court issued a decision declaring the lawsuit groundless, the inexistence of any biding pre-agreement between the parties, and the impossibility of applying the criminal clause of the exclusivity arrangement agreed. Currently, the Company awaits the judgment of the appeals filed by the parties.

b) The Company filed with the 6th Civil Court of São Paulo against Galaxy do Brasil, cross-defendant, to seek compensation for the damages caused by the rescission of a sponsorship agreement for one of its venues, and Galaxy do Brasil Ltda. is seeking that the Company be sentenced to discontinuing the use of certain trademarks and the payment of compensation for property damages and pain and suffering, as well as loss of profits. The lawsuit filed by the Company was dismissed and the lawsuit filed by Galaxy do Brasil Ltda. was judged partially grounded, and the Company was sentenced to paying compensation amounting to 5% of the net revenue earned from July 31, 2003 to July 24, 2005, plus inflation adjustment and interest of 0.5% per month since the subpoena, plus court costs. This period was reduced to May 1, 2004 to June 24, 2005 in the court decision on the appeal filed by the Company. Should the Company’s appeal be rejected, the sentenced amount will be assessed during the award determination process, and according to the legal counsel the likelihood of loss is possible. As at December 31, 2011, the updated estimate for said lawsuit is R$6,497.

c) On August 12, 2011 the Company filed a lawsuit against TNL Participações S.A. e Telemar Norte Leste S.A. This lawsuit challenges the termination of the sponsorship agreement between the parties. On August 16, 2011, the Company was served in lawsuits filed by TNL Participações S.A. and Telemar Norte Leste S.A. against the Company with the 30th Civil Court of the Rio de Janeiro State Capital. The Company filed its defense arguments on September 26, 2011. Both lawsuits are currently with the 30th Civil Court of the Rio de Janeiro State Capital. As at December 31, 2011, the


54

amount under litigation is approximately R$3,042, and the likelihood of an unfavorable outcome is assessed by the Company’s legal counsel as possible.

d) The Company is also the 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, with attributed value in dispute of R$1,000, claiming that the Company be sentenced to discontinuing the collection of the convenience fee on the sale of tickets in the venues’ box offices. The Company filed defense arguments the court judged the claim of copyrights ungrounded. As at December 31, 2011, the Company awaits a court decision on the appeal field by the plaintiff; (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, claiming that the Company be sentenced to discontinuing the collection of: (1) the convenience fee on tickets sold online or by telephone; and (2) the delivery fee charged when a consumer withdraws the ticket purchased in person, in the venue. Additionally, the Public Prosecution Office claims that the Company be sentenced to reimburse the amounts paid as convenience and delivery fees to the consumers, after the issuance of a final and unappealable decision. The Company awaits the lower court decision. According to the Company’s legal counsel the likelihood of loss is possible. As at December 31, 2011, the updated estimate for said lawsuit is R$467.

e) In 2010 and 2011, the Company was fined by the consumer protection agency (PROCON), totaling R$1,770. 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. All lawsuits are classified as possible losses and all fines are being discussed at the administrative level. If the final administrative decision is unfavorable to the Company, the fines can be challenged in courts.

f) The Company filed three lawsuits for the renewal of the leases of properties where the Company operates its venues, as follows:

(i) Citibank Hall, São Paulo, lawsuit filed in February 2008, with the 2nd Civil Court of São Paulo, against Associação Brasileira de Educação e Assistência – ABEA. The parties reached a settlement, already accrued by the Company, and the lawsuit was dropped.

(ii) Credicard Hall, São Paulo, lawsuit filed in July 2009, with the 28th Civil Court of São Paulo, against Companhia Horário Sabino Coimbra – Comércio e Participações Ltda. As at December 31, 2011, this lawsuit awaits the delivery of the sentence. The lawsuit is at the expert evidence production stage and the Company's legal counsel assesses the likelihood of loss for the Company as remote.

(iii) Citibank Hall, Rio de Janeiro, lawsuit filed on September 20, 2011, with the 1st Regional Civil Court of Barra da Tijuca, Rio de Janeiro, against the following parties: Fundação Petrobrás de Seguridade Social - PETROS, ROVIP S.A., PRECE – Previdência Privada, Caixa de Previdência dos Funcionários do Sistema BANERJ – PREVIBANERJ, Janaf Empreendimentos e Participações Ltda., Arocenter Empreendimentos e Participações Ltda., and Fundo de Investimentos Imobiliários Via Parque Shopping. This lawsuit is at its early stage and claims the renewal of the lease in


55

accordance with the contractual agreements entered into by the parties. The attributed value in dispute is approximately R$1,100 and the Company's legal counsel assess the likelihood of loss for the Company as possible.

g) On December 16, 2011 the Company filed for an injunction against the State Governor an the Legislature of Rio de Janeiro claiming that several articles of State Law 6103, enacted on December 8, 2011 be declared unconstitutional. Said law regulates, in the State of Rio de Janeiro, the collection of the convenience fee by service providers on the sale of tickets over the Internet and/or by telephone. The Company applied for the injunction to restrain any action that requires the company and its subsidiaries to comply with such Articles of said Law when they sell tickets to the shows already advertised and they promote in the future in the State of Rio de Janeiro. The injunction request was dismissed and the Company filed an appeal still awaiting judgment and expects that the sued authorities be subpoenaed to provide information under the lawsuit. Our legal counsel classified the likelihood of an unfavorable decision on this lawsuit as possible.

20.4) Changes in the provision for tax, civil and labor risks

Company 12/31/2010

Provision (reversal) Payments

Inflation adjustment 12/31/2011

Labor 14,210 (6,992) (208) 366 7,376

Civil 5,895 2,364 (200) - 8,059

Tax 2,641 (994) - 109 1,756

Total 22,746 (5,622) (408) 475 17,191

Company 12/31/2009


Inflation adjustment 12/31/2010

Labor 17,722 (3,873) (182) 543 14,210

Civil 3,266 2,735 (106) - 5,895

Tax 3,565 (669) (403) 148 2,641

Total 24,553 (1,807) (691) 691 22,746

Consolidated 12/31/2010


Inflation adjustment

Effects of exchange differences 12/31/2011

Labor 14,797 (6,914) (208) 456 13 8,144

Civil 7,714 1,763 (200) 31 66 9,374

Tax 6,898 (2,622) - 228 93 4,597

Total 29,409 (7,773) (408) 715 172 22,115


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21. EQUITY

a) Issued capital

As at December 31, 2011, the Company’s capital of R$228,459 (net of share issuance costs totaling R$9,665) is represented by 69,290,620 registered common shares without par value.

Reconciliation of shares at the beginning and end of year:

(i) On January 13, 2011, the Extraordinary Shareholders' Meeting approved a 1-for-4 reversed stock split of common shares, maintaining the share capital of the Company, which started to be represented by 57,466,312 common shares, from 229,865,248 common shares, distributed to the shareholders in the same proportion held previously to the reverse stock split.

The Extraordinary Shareholders' Meeting held on February 14, 2011 approved a capital increase of R$13,075, without the issuance of new registered common shares without par value. This capital increase was made using the earnings retention reserves of the Company recognized up to December 31, 2010.

On April 11, 2011, as approved on the Minutes of the Board of Directors’ meeting, the Company issued 11,724,138 shares, subscribed and paid in with the proceeds of the IPO on BM&FBOVESPA. The shares were sold on April 15, 2011 and total proceeds amounted to R$187,586, the Company incurred share issuance costs amounting to R$9,665, net of taxes of R$4,978. These proceeds have been accounted for net of said costs, as prescribed by CPC 08 Security Issuance.

On July 12, 2011, as approved in the Board of Directors’ Meeting Minutes, the Company issued 100,170 subscribed and paid-in shares using the funds obtained with the Stock Option Plan, as described in note 31. These shares were settled in August 2011 for R$1,001.

Consolidated 12/31/2009


Inflation adjustment

Effects of exchange differences 12/31/2010

Labor 18,159 (3,903) (100) 647 (6) 14,797

Civil 4,176 3,775 (359) 185 (63) 7,714

Tax 7,642 387 (1,367) 434 (198) 6,898

Total 29,977 259 (1,826) 1,266 (267) 29,409

Share position at December 31, 2009 229,865,248

Share position at December 31, 2010 (i) 229,865,248

Reserve stock split on January 13, 2011 57,466,312

New shares issued on April 11, 2011 11,724,138

New shares issued on July 12, 2011 100,170

Share position at December 31, 2011 69,290,620


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b) Dividend policy

Shareholders are entitled to a noncumulative minimum annual dividend of 25% of profit, adjusted in accordance with the rules provided for in the bylaws. Mandatory and supplementary dividends, separately stated as at December 31, 2010, amounting to R$9,175 and R$27,524, respectively, were paid on March 30, 2011.

c) Legal reserve

As at December 31, 2011 and 2010, the Company recognized a legal reserve totaling R$3,004 and R$1,705, 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 20% of capital.

d) Earnings retention reserve

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 earnings retention reserves cannot exceed capital, and the Shareholders’ Meeting is responsible for the allocation of this surplus as capital increase or distribution of dividends.”

e) Valuation adjustments to equity

As at December 31, 2011, in conformity with Law 11638/07 and Law 11941/09, the Company recognized in equity, in line item ‘Valuation adjustments to equity’, the gain arising from foreign exchange differences arising on translating the financial statements of foreign subsidiaries, totaling R$5,398 (accumulated gain of R$2,912 at December 31, 2010).

f) Capital reserve

As described in note 31, on April 13, 2011, the Company’s stock option plan was converted from financial liabilities to equity instrument. Accordingly, on this date the Company transferred to equity, as a balancing item to capital, R$2,549 and on the same date valued this instrument at its fair value. The expense related to the consideration for the services from this date to December 31, 2011, correspond to R$1,709 recognized in profit or loss for the period against the capital reserve, totaling R$4,258.

22. NET OPERATING REVENUE

2011 2010 2011 2010Gross revenue: Gross service revenue 430,808 331,736 658,152 609,506 Gross sales revenue - - 25,681 19,045 Taxes levied (54,196) (45,197) (74,008) (59,372)

Net revenue 376,612 286,539 609,825 569,179



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23. EXPENSES BY NATURE

The expenses by nature presented above represent the sum of the line items selling expenses, general and administrative expenses, and management compensation (see note 12.2 on the latter), disclosed in the income statement.

24. EXPENSES ON EMPLOYEE BENEFITS

(i) The Company does not offer any defined contribution or defined benefit plan to its employees.

2011 2010 2011 2010

Recognition (reversal) of allowance for doubtful accounts (7) 220 1,035 (650)

Outside services (19,467) (13,793) (31,814) (19,664)

Utilities & facilities (3,288) (2,745) (3,757) (3,207)

Employee benefit expenses (note 24) (35,082) (25,265) (52,080) (45,166)

Other operating expenses (2,712) (9,657) (3,792) (11,963)

Operating expenses (60,556) (51,240) (90,408) (80,650)


2011 2010 2011 2010Payroll and bonuses (19,667) (14,956) (35,360) (28,913) Vacation pay (1,753) (1,741) (2,408) (2,363) 13th salaries (1,236) (1,214) (2,180) (1,893) Payroll taxes (6,349) (5,869) (11,318) (10,785) Profit sharing - bonuses (2,299) (110) (2,598) (474) Share-based payments (1,709) (2,549) (1,709) (2,549) Other employee benefits (i) (3,232) (5,450) (5,258) (7,190) Total expenses on employee benefits (36,245) (31,889) (60,831) (54,167)

Benefits classified as cost of services (1,163) (6,624) (8,751) (9,001) Benefits classified as general and administrative expenses (35,082) (25,265) (52,080) (45,166)

(36,245) (31,889) (60,831) (54,167)



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25. FINANCE INCOME (EXPENSES)

2011 2010 2011 2010Financial expenses:

Interest payable (577) (3,332) (1,715) (5,935) Tax on financial transactions (IOF) (260) (216) (2,206) (2,049)

Net losses on swap transaction (292) - (292) - Fines - contingent proceedings (6) (223) (23) (254) Loss on investments in foreign exchange funds (315) - (315) -

Interest on debentures (18,725) (12,782) (18,725) (12,782) Other (610) (792) (1,333) (935)

Total (20,785) (17,345) (24,609) (21,955)

2011 2010 2011 2010Financial income:

Interest receivable 5,279 1,624 6,674 2,134 Income from short-term investments 18,969 2,636 20,831 4,239 Net gains on swap transaction 224 971 224 971

Other 59 197 641 234

Total 24,531 5,428 28,370 7,578

2011 2010 2011 2010

Foreign differences, net:Losses (10,797) (13,543) (14,231) (18,866) Gains 11,731 9,751 15,664 12,014

Inflation adjustments, net:Losses (489) (727) (631) (889) Gains 100 127 144 195

Total 545 (4,392) 946 (7,546)





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26. OTHER OPERATING INCOME, NET

27. INCOME TAX AND SOCIAL CONTRIBUTION

a) Income tax and social contribution expense recognized in net income

b) The reconciliation of income tax and social contribution recorded in income is as follows:

2011 2010 2011 2010

Reversal of provision for tax, civil and labor risks 5,622 1,807 7,773 259 Gain (loss) on write-off of property, plant and equipment (213) (101) (248) 1,350 Income related to non-competition agreements - - - 1,246 Income from bonuses 601 145 2,493 1,656 Other operating income, net 330 2,048 1,659 3,681 Total 6,340 3,899 11,677 8,192


2011 2010 2011 2010

Current income tax expenses (2,259) - (8,491) (6,965)Current social contribution expenses (861) - (1,672) (1,430)Deferred IRPJ and CSLL (35,280) (17,828) (35,682) (19,562)Total (38,400) (17,828) (45,845) (27,957)


2011 2010 2011 2010

98,465 56,232 106,916 68,220

34% 34% 34% 34%

(33,478) (19,119) (36,351) (23,195)

(248) (238) (268) (238)

- - 539 -

- - 1,499 1,178 - - (1,036) (752)

5,621 6,188 - - (581) (867) (581) (867) (11,391) - (11,391) - 131 - 198 - 1,546 (3,792) 1,546 (4,083)

(38,400) (17,828) (45,845) (27,957)

Income tax and social contribution expense

Effect of income tax and social contribution on: Nondeductible fines and expenses

ConsolidatedCompany

Utilization of tax loss carryforwards and unrecognized temporary differences

Profit for the year before IRPJ and CSLL

Statutory rate

Income tax and social contribution expense at statutory

Other

Subsidiary taxed based on the deemed income Subsidiary taxed abroadShare of profits of subsidiaries Share-based payment planTax effects of consolidation on tax installments (i)Tax incentives


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(i) As commented in note 17.(c.), on June 24, 2011 the Federal Revenue Service consolidated the taxes in installments under the installment plan created by Law 11941/2009 and the Company dropped the administrative proceedings challenging certain tax assessments of income tax and social contribution, and included the debt in such installment plan. The Company has, therefore, revised the calculations of income tax and social contribution for the assessed fiscal years and reversed tax loss carryforwards recorded, resulting in the derecognition of deferred taxes amounting to R$10,447 to profit for the period. Additionally, the Company opted for the benefit to offset tax loss carryforwards against the fine and interest to settle part of the taxes in installments and, therefore, realized deferred income tax and social contribution amounting to R$944.

c) Changes in and breakdown of deferred income tax and social contribution

The table below corresponds the analysis of deferred tax assets (liabilities) presented in the Company and consolidated financial statements:

Company 12/31/2009Recognized

in P&L 12/31/2010Recognized

in P&L 12/31/2011Deferred tax assets on:

Noncurrent:

Goodwill arising on mergers (see note 15) 60,070 (4,481) 55,589 (16,140) 39,449

Allowance for doubtful accounts 121 (74) 47 2 49

Provision for contingencies 12,649 (5,005) 7,644 (1,799) 5,845

Income tax loss carryforwards 18,475 - 18,475 (9,541) 8,934

Social contribution tax loss carryforwards 6,868 16 6,884 (3,243) 3,641

Exchange differences 11,221 (11,221) - - -

Other provisons - 1,527 1,527 466 1,993

Total assets 109,404 (19,238) 90,166 (30,255) 59,911

Deferred tax liabilities on-

Noncurrent:

Revaluation reserve for property, plant and equipment (1,000) 111 (889) 71 (818)

Exchange differences (1,448) 1,299 (150) (119) (269)Total liabilities (2,448) 1,410 (1,039) (48) (1,087)

Total net 106,956 (17,828) 89,127 (30,303) 58,824

Share issuance costs (ii) - - - (4,977) (4,977)

Total in income statement 106,956 (17,828) 89,127 (35,280) 53,847


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(ii) Refers to the income tax and social contribution effects on the share issuance costs amounting to R$14,641 (R$9,665 net of taxes) incurred on April 13, 2011 (see note 21.(a)) accounted for in equity, as prescribed by CPC 08. In view of the deductibility of such costs from taxable income, the Company recognized on that date deferred income tax and social contribution, which were realized in the same period.

d) Unrecognized deductible temporary differences, and unutilized tax losses and credits.

Deductible temporary differences, and unutilized tax losses and credits for which no deferred tax assets were recognized are attributable as follows:

Pursuant to CPC 32 and CVM Instruction 371/02, the Company recognized deferred income tax and social contribution basically 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 show 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.

Consolidated 12/31/2009Recognized

in P&L

Recognized in other

comprehensive income 12/31/2010

Recognized in P&L

Recognized in other

comprehensive income 12/31/2011

Deferred tax assets on:

Noncurrent:

Goodwill arising on mergers (see note 15) 60,070 (4,481) - 55,589 (16,140) - 39,449

Allowance for doubtful accounts 121 (74) - 47 1,171 - 1,218

Provision for contingencies 13,731 (4,475) (83) 9,173 (2,586) 109 6,696

Income tax loss carryforwards 18,475 - - 18,475 (9,541) - 8,934

Social contribution tax loss carryforwards 6,868 16 - 6,884 (3,243) - 3,641

Exchange differences 11,221 (11,221) - - - - -

Other provisions 3,434 (736) (263) 2,435 (376) 65 2,124

Total assets 113,920 (20,971) (346) 92,603 (30,715) 174 62,062

Deferred tax liabilities on-

Noncurrent:

Revaluation reserve for property, plant and equipment (1,422) 111 32 (1,279) 129 (28) (1,178)

Exchange differences (1,448) 1,298 - (150) (119) - (269)

Total liabilities (2,870) 1,409 32 (1,429) 10 (28) (1,447)

Total net 111,050 (19,562) (314) 91,174 (30,705) 146 60,615

Share issuance costs (ii) - - - - (4,977) - (4,977)

Total in income statement 111,050 (19,562) (314) 91,174 (35,682) 146 55,638

2011 2010

Subsidiaries' tax loss carryforwards 8,659 8,884 Deductible temporary differences (444) 756

8,215 9,640Statutory rate 34% 34%Deferred tax assets not recognized at the end of the period 2,793 3,278

Consolidated


63

These credits are maintained in current and noncurrent assets according to their expected realization, based on taxable income generation projections, within the 30-percent limit of annual taxable income to offset tax loss carryforwards, pursuant to legislation in force. The Company prepared technical feasibility studies, which are reviewed and approved by the Board of Directors, which indicated the full recovery of the deferred tax amounts recognized in December 2011.

The estimated realization is as follows:

28. FINANCIAL INSTRUMENTS

28.1. Capital management

The Company and its subsidiaries enter into transactions involving financial instruments, all recorded in balance sheet accounts, which are intended to meet their cash requirements and reduce the exposure to market, currency, and interest rate risks. These risks and instruments are managed by means of strategies, control systems and foreign exchange exposure limits, which is monitored by our executive committee. The Company has intercompany borrowings, trade payables, and borrowings and financing, classified as financial instruments.

The Company manages its capital to ensure that both its parent and its subsidiaries can continue as going concerns, and at the same time maximizes the return of all its stakeholders by optimizing the balance debt and equity.

The Company’s equity structure consists of its net debt (debentures detailed in note 16, less cash and banks) and the equity (note 21).

28.2. Risk factors that may affect the Company’s business

a) Exposure to interest rate risks

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 their contracts to adjust them to the market.

Year Company Consolidated 2011 20,649 21,186 2012 26,215 26,753 2013 9,149 9,686 2014 3,898 4,437 Total 59,911 62,062


64

(i) 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 16.

(ii) Short-term investments are basically realized based on the yield rates effectively negotiated, pegged to the CDI, and reflected usual market conditions prevailing at the end of the report period, as described in note 6.

Additionally, to comply with CVM Instruction 475, of December 17, 2008, as at December 31, 2011, management estimated, based on the quotations set down 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:

(i) In the probable scenario the Company would have a gain of R$84,780 over the next twelve (12) months, resulting from future CDI estimates for interest on debentures plus the surcharge of 1.96% 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, 2011. In the possible and remote scenarios, by adopting the same criteria described for the probable scenario, the estimates would generate a net change in gains or losses of R$1,866 and R$3,732, respectively, as compared to the probable

Line item Balance sheet accounts Note 2011 2010

Debentures (i) Current and noncurrent liabilities 16 (135,681) (150,276)

Cash Current assets 6 2,508 -

Short-term investments (ii) Current assets 6 217,065 69,072

Total exposure 83,892 (81,204)

Line item Balance sheet accounts Note 2011 2010

Debentures (i) Current and noncurrent liabilities 16 (135,681) (150,276)

Cash Current assets 6 2,508 -

Short-term investments (ii) Current assets 6 238,923 91,455

Total exposure 105,750 (58,821)

Company

Consolidated

2011 Probable (i) Possible (ii) Remote (iii)

Assumptions CDI - 9,00% CDI - 11,25% CDI - 13,50%

Debentures (135,681) (150,820) (153,933) (157,047)

Short-term investments 217,065 236,984 241,963 246,943

Net exposure 81,384 86,164 88,030 89,896

ScenarioScenario


65

scenario.

(ii) Assumption considered by management based on a 25% stress in the risk variable.

(iii) Assumption considered by management based on a 50% stress in the risk variable.

b) Exposure to foreign exchange 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. It is the Company’s policy to contract non-deliverable forwards (NDFs) and units in a foreign exchange fund whenever its foreign currency-denominated assets and liabilities are exposed to foreign exchange fluctuations arising from contracts with international suppliers or the opening of foreign bank accounts.

As at December 31, 2011, the Company registers the following foreign currency transactions in balance sheet:

Financial Contract Assets/ Settlement PTAX PTAX Gaininstrument date liabilities Currency Amount date Contract Settlement (loss)

Foreign exchnage fund 01/04/11 Asset R$ 5,200 4/8/2011 N/a N/a (270)NDF 01/12/11 Liability USD 2,986 4/1/2011 1.7095 1.6287 (241)NDF 08/17/11 Asset USD 10,000 9/1/2011 1.5923 1.5872 (51)NDF 09/05/11 Asset USD 10,000 9/12/2011 1.6550 1.6774 224

Balance sheetLine item accounts Note Currency 2011 2010 2011 2010Banks Current assets 6 US dollar 2,508 - 2,508 - Short-term investments

Current assets 6 (d) US dollar - - 1,423 -

Intragroup loansNoncurrent assets

12 (a,b,c)Argentinean

peso14,751 13,508 - -

Intragroup loansNoncurrent assets

12 (a,b,c) US dollar 5,332 12,329 7,329 13,065

Intragroup borrowings

Current liabilities

12 (a,b,c) US dollar (14,547) (13,371) - -

Trade payablesCurrent liabilities

15 US dollar (6,100) (2,375) (8,175) (2,588)

Total exposure 1,944 10,091 3,085 10,477



66

• Intercompany loans and borrowings: refer to the balances receivable and payable arising from loan agreements entered into by the Company with its subsidiaries, denominated in foreign currencies.

• Except for the intercompany loan between the Company and subsidiary T4F Chile S.A., totaling US$8,000,000, the balance of due to related parties derives from transactions whose terms and conditions could have been different if carried out with unrelated parties, and thus would represent part of the investment and not necessarily the fair value of the financial transactions.

• Trade payables: refer to balances payable in foreign currency.

c) Sensitivity analysis of exchange rate and interest rate fluctuations

The fluctuations of exchange rates and interest rates, such as the CDI, can have a positively or an adverse effect on the consolidated financial statements because of the increase in the balance of trade receivables and intercompany borrowings repayable to subsidiaries, denominated in foreign currencies, mostly the US dollar.

As at December 31, 2011, the Company estimated a 10% increase or reduction in interest rate fluctuations. This change would increase or reduced finance income (expenses) by approximately R$973. 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 25.

d) Credit risk

Arises 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 adopt the procedure of analyzing in detail the financial position of its customers, establishing credit limits, and constantly monitoring their balances.

e) Liquidity risk

Effectively managing liquidity risk implies to maintain enough cash and marketable securities, funds available through credit facilities used and the ability to settle market positions. 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 used.

Management monitors the Company’s consolidated liquidity level considering the expected cash flows against unused credit facilities, and cash and cash equivalents.


67

29. INSURANCE

The insurance coverage is determined according to the nature of the assets’ risks, and is considered sufficient to cover potential losses arising from claims. As at December 31, 2011 and 2010, insurance coverage is as follows:

30. CO-OBLIGATIONS, LIABILITIES AND COMMITMENTS

a) Sponsorship agreements

The Company has entered into long-term sponsorship agreements, as follows: (i) naming rights of the venues where the Company operates, namely, Credicard Hall, Citibank Hall São Paulo and Citibank Hall Rio de Janeiro, as well as Teatro Opera Citi (Opera House) in Buenos Aires, Argentina, which, in brief, provide for the right of the sponsor to name said venues and the way its trademark is disclosed; (ii) access technology sponsorship agreement, which consists of a tool that grants access to the shows organized and promoted by the Company using a credit card; iii) sponsorship agreement and other covenants the provides for granting 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) circus show sponsorship agreement.

b) Lease of venues

The lease agreements of venues were entered into for a period above five years, which ensures the Company the right of mandatory renewal of the lease, if 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 usage conditions.

After analyzing these agreements, the company’s management concluded that they qualify as operating leases.

Lease payments, based on the monthly amounts in effect, are broken down as follows:

Type 2011 2010General and premises civil liability

General and events civil liability, commercial and/or industrial premises, civil liability - employer, civil liability - valet, and pain and suffering

24,244 14,281

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 82,743 69,449

106,987 83,730

Insured amount


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c) Credit letters of guarantee

As at December 31, 2011 and 2010, the Company had credit guarantee agreement is effect entered into with financial institutions, the purpose of which is to ensure the payment of performers’ fees, and which total approximately US$20,120,000 and US$28,000,000, respectively.

d) Letters of guarantee

As at December 31, 2011 and 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$7,015 and R$6,600, respectively.

31. SHARE-BASED PAYMENTS

The Annual and Extraordinary Shareholders’ Meeting (AESM) held on September 28, 2007 approved the Company’s common stock option plan, ratified by the Extraordinary Shareholders’ Meeting (ESM) held on January 13, 2011. 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 such Plan cannot exceed 5% of total shares of capital stock. The option can 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 prescribed by such agreements, the gains obtained with these options would be settled in cash, duly measured at their fair values at the end of the reporting period. However, said contracts also established that if an IPO were conducted, the Company would no longer be liable for the payment of such gains in cash and the benefited executives can exercise their vested stock options.

Accordingly, with the registration of the Company as a publicly-traded company and the related IPO conducted on April 13, 2011, the stock options previously classified as financial liabilities have been converted into equity instruments, duly measured at their fair values on that date.


Year 2011Up to year 1 10,753 From year 2 to 5 31,836 After year 5 36,080 Total 78,669


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The fair value of such stock options was calculated using the Black & Scholes pricing model on the date they were converted into equity instruments, individually for each benefited executive, since grant date, which was on September 28, 2007.

The impacts on net income or loss for the period are as follows:

In determining the fair value of stock options as at April 13, 2011, the following economic assumptions were used:

As approved at the Board of Directors’ meeting Minutes and described note 21(a), on July 12, 2011 the Company issued 100,170 subscribed and paid-in shares because some of the executives

Amounts Amounts Amounts to

Number of recorded in recorded in be recorded options profit or loss profit or loss in future

Grant year granted 2010 2011 periods

2007 1,256,667 1,886 983 - 2008 505,576 642 645 127 2010 119,373 21 81 107 Total 1,881,616 2,549 1,709 234

Grant dates 09/28/07 10/01/07 07/15/08 02/23/10 03/01/10 Number of executives benefited

2 1 2 1 1

End of last tranche options vesting period

09/28/2014 10/1/2014 7/15/2015 2/23/2017 3/1/2017

Share price volatility 32.98% 32.98% 32.98% 32.98% 32.98%Risk-free interest rate 12.06% 12.06% 12.06% 12.06% 12.06%

Exercise price per option in R$ 10.98 10.98 10.98 10.98 10.98

IndexNot

indexedNot

indexed1 plan not indexed and another indexed to CDI

Indexed to CDI

Indexed to CDI

Exercise price adjusted using CDI - R$

10.98 10.9810.98 and 16.93,

respectively16.93 16.93

Fair value per option – R$: (i) 0.04

Series 1 5.02 5.02 5.02 and 0.00 0 0

Series 2 5.02 5.02 5.02 and 0.00 1.48 1.5

Series 3 5.02 5.02 5.28 and 0.66 2.22 2.23

Series 4 5.5 5.51 6.34 and 1.83 2.74 2.75

Individual plans of each executive benefited

(i) 1 plan not indexed and another indexed to CDI, respectively.


70

participating of the plan exercised their vested options. These shares were settled in August 2011 for R$1,001.

32. SEGMENT INFORMATION

IFRS 8 Operating Segments requires that operating segments be identified based on the basis of internal reports on Company 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 Company’s main executives identified the chief operating decision maker, responsible for allocating resources to the operating segments and assessing their performance.

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 analyzed for management decision-making, 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, stage plays, and exhibits; (ii) operations, which includes ticket sales, sale of food and beverages, and operation of venues; and (iii) sports sponsorships. Segmentation by activity is also broken down by geographical areas, as follows: (i) Brazil; (ii) Argentina; and (iii) Chile.

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, depreciation and amortization.

The tables below include summarized financial information of the Company’s operating segments as at and for the years ended December 31, 2011 and 2010. The amounts provided are consistent with the balances recorded in the financial statements and the accounting policies applied.

b) Geographical information

The Company operates in three main geographical areas: Brazil, Argentina, and Chile.


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Company revenue by geographical area is broken down as follows:

Consolidated2011

Event promotion

Box office, food and beverages, venues operation in venues

Sponsorships TotalNet revenue 370,286 100,521 139,018 609,825 Costs (359,822) (63,094) - (422,916) Gross profit 10,464 37,427 139,018 186,909 Operating expenses allocable to segments (19,209) (20,198) - (39,407)

(8,745) 17,229 139,018 147,502 Administrative expenses (45,293) Financel income (cost) 4,707 Pretax income 106,916

Consolidated2010

Event promotion

Box office, food and beverages, venues operation in venues

Sponsorships TotalNet revenue 354,973 89,907 124,299 569,179 Costs (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 (27,840) Financel income (cost) (21,923) Pretax income 68,220


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33. ADDITIONAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS

The following changes in the financial position during the twelve-month periods ended December 31, 2011 and 2010 did not have any impact on cash and cash equivalents:

34. EARNINGS PER SHARE

Basic

Basic earnings per share are calculated by dividing profit for the year by the weighted average number of common shares outstanding in the same year.

Geographical breakdown of results 2011 2010

Net revenue:Brazil 464,468 375,463 Argentina 99,253 113,358 Chile 46,104 80,358

609,825 569,179

Gross profit:Brazil 160,836 133,134 Argentina 15,910 20,684 Chile 10,163 12,147

186,909 165,965

Operating profit:Brazil 96,853 56,170 Argentina 2,466 5,770 Chile 7,597 6,280

106,916 68,220

Consolidated

2011 2010 2011 2010

Additional disclosures:Dividends receivable from subsidiaries (17) (728) - - Retained dividends 5,143 9,122 (19) 9,136 Purchases of property, plant and equipment not yet settled 32 47 66 51 Sponsorships - Cultural Incentive Law (5,276) (1,397) (3,396) (2,337) Income tax and social contribution - - (2,978) (5,432) Tax effect on share issuance costs 4,977 - 4,977 - Settlement of debt to foreign controlling shareholder 8,804 - 8,804 -



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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 any potentially dilutive common shares.

The table below shows the calculation of earnings per share and considers the reverse stock split approved at an Extraordinary Shareholders' Meeting of January 13, 2011.

35. APPROVAL OF THE FINANCIAL STATEMENTS

These individual and consolidated financial statements were approved by the Board of Directors at the meeting held and authorized for issue on February 10, 2012.

2011 2010

Profit for the year attributable to the shareholders of the Company 60,065 38,404

Number of common shares for basic earnings per share calculation purposes 69,378 57,466

Weighted average number of common shares for diluted earnings per share calculation purposes 67,223 57,466

Basic earnings per share - R$ 0.8658 0.6683

Diluted earnings per share - R$ 0.8935 0.6683


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Message from the Management

2011 was a remarkable year for T4F, having represented a watershed in the growth history of

the company. This year we took a crucial step towards ensuring T4F’s sustainable growth and

perpetuity, by going public at the Novo Mercado trading segment of the São Paulo Stock

Exchange (BM&FBovespa) and crowning a 29-year path of uninterrupted activity. The IPO

totaled R$503 million and attracted a highly qualified base of domestic and international

institutional investors. The proceeds from the primary offering, together with our strong and

recurring operating cash generation, have put us in a unique position in the live entertainment

industry by providing us with the conditions to expand our operations and consolidate our

market leadership.

In 2011 we delivered our best ever financial and operating results, reaching new records in

terms of revenue, EBITDA, net income, number of events promoted and number of tickets

sold. As the main highlight, we promoted South America’s biggest ever concert tour in terms of

revenue and attendance, the U2’s 360o. We also promoted the largest tours of performing arts

and family entertainment contents in the continent, as well as the recurring promotion of

hundreds of shows by local and international live music artists, authentic Broadway musicals

and sporting events.

We maintained our focus in the profitability of our operations, therefore posting higher gross,

EBITDA and net margins, with strong operating cash flow and reducing debt. With a strong

capital structure and ample liquidity, we are exploring and negotiating - with strict investment

discipline - several opportunities for increasing our market share through acquisitions and

geographical expansion which will bring synergies and complement our existing operations

and assets.

We have been operating in an environment where increasing amounts of marketing funds are

being allocated to sponsorship initiatives. In 2011, we further expanded and diversified our

base of sponsors, thanks to the credibility built up by T4F over time through the delivery of

creative, exclusive, high quality and therefore value-added benefits. We have also invested in

innovation, developing new sales channels and exploring new digital media in order to

improve the experience of consumers and boost our sales.

Looking at 2012 and the years ahead, we have already secured access to a diversified platform

of first-class contents, which give us visibility for future results.

The region in which we operate stands out as one of the most attractive and fastest-growing

live entertainment markets in the world, a situation we expect to continue in the coming

years, and we are in a unique position to capture the opportunities for value creation.

Finally, we would like to reiterate our commitment to being the leader in live entertainment in

all the markets where we operate, being recognized for our innovation, quality, flawless

service, profitability and human talent, and making an important contribution to the

strengthening of culture and the development of society as a whole.

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The Company

We are the leading live entertainment company in Latin America, with operations in Brazil,

Argentina, Chile and Peru.

We offer a wide range of artistic, cultural and sporting content, drawing upon our relationships

with agents and content providers in Brazil and around the world, as well as content

developed internally, such as the car racing series.

Through our vertically-integrated business model, in addition to event promotion, we operate

at all levels of the live entertainment chain, including the venue operation; ticketing; food,

beverage and merchandise sales; and corporate sponsorships. As a result, we generate income

from all the value chain in the industry.

Two of our venues were listed among the top 25 in the world in terms of numbers of tickets

sold in 2011, with the Credicard Hall, in São Paulo, being ranked 8th worldwide in the most

recent annual survey by Pollstar.

Our leadership of the live entertainment sector in Brazil and Latin America, coupled with our

unique business model, has given us access to and earned the trust of the world’s leading

providers of high quality content, affording 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.

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2011 Financial and Operating Performance

The highlight in 2011 was the significant percentage growth in the main lines of the company’s

income statement - gross income, EBITDA and net income -, coupled with improved profit

margins. In terms of the balance sheet, we ended the year with a solid and privileged financial

position, with low indebtedness and strong liquidity.

As was consistently projected in our previous quarterly earnings releases, the year of 2011

followed our historical quarterly seasonality pattern, in which (i) the second half is stronger

than the first, and (ii) the fourth quarter is the strongest of the year. In keeping with this trend,

4Q11 net revenue and EBITDA represented 38% and 46% of their respective annual totals.

On the operating front, we offered a record number of 1,226 events throughout the year,

featuring live music from international and local artists, family entertainment and theater

plays. We sold more than 3 million tickets, including tickets to sporting events and cultural

exhibitions, and strengthening our position as the leading live entertainment promoter in Latin

America.

According to Billboard magazine's recently published “Top 25 Promoters” ranking, we are the

number one live entertainment company in Latin America and the 4th in the world.

We reached record consolidated net revenue of R$610 million in 2011, representing a 7%

purely organic growth over the previous year, and R$232 million of net revenue in the fourth

quarter alone, 30% up over 4Q10.

Event promotion

Live music

We closed 2011 with 396 live music performances and more than 2 million tickets sold,

representing a growth of 14% over the 348 concerts and 1.8 million tickets sold in 2010.

82

184

112

232

8.2%

17.0% 18.9%21.9%

1Q11 2Q11 3Q11 4Q11

Net Revenue - R$ MM EBITDA Margin

77

Net revenue in this segment rose 19% over 2010 to R$261 million, due to the major shows in

open-air stadiums and arenas, including U2, Pearl Jam, Aerosmith, Britney Spears, Guns N’

Roses, Ozzy Osbourne, Judas Priest & Whitesnake and Red Hot Chili Peppers, as well as indoor

tours by such big international names as the former Beatle Ringo Starr, Roxette, Avril Lavigne,

Seal, Ricky Martin, Tears for Fears and Paramore, among others. Also contributing to the

company’s results were the large number of shows by renowned Brazilian artists, including

Roberto Carlos, Maria Rita, Ana Carolina, Luan Santana, Nando Reis, Exaltasamba, Fábio Júnior,

Jota Quest and Victor & Léo, to name just a few, which play an important role in recurring

vertically-integrated revenue at our venues.

Family entertainment events, theater and cultural exhibitions

In 2011, we promoted 830 events in this category, 13% more than in the previous year, due to

seasonal offerings of acclaimed Broadway musicals: Mamma Mia! at Teatro Abril in São Paulo

and The Sound of Music at Teatro Opera Citi in Buenos Aires, both in theaters operated by T4F,

as well as The Witches of Eastwick in São Paulo.

We also promoteed a variety of other performing arts and family entertainment events,

including Disney on Ice, Sky Mirage, Circo Eloize and Cirque du Soleil - Varekai, as well as

cultural exhibitions, such as Bodies, in Brasília, and Titanic, in Brasília, Curitiba and Porto

Alegre. Due to considerable differences in (i) audience capacity per show, (ii) ticket prices, and

(iii) the duration of the season of each of the various contents offered each year, we had a

significant difference in the content mix which resulted in a lower number of tickets sold and

lower net revenue than in 2010 in this event category.

Sporting Events

In 2011, we continued with our proprietary promotion of the best-known categories of

Brazilian motorsports: (i) the Copa Caixa Stock Car series, (ii) the Copa Chevrolet Montana and

(iii) the BMW Mini Challenge. We also invested in the launch of a new category, the Copa

Petrobras de Marcas, equivalent to the European WTCC model, a competition involving

passenger cars from major automakers. This segment’s main contribution towards the

company’s results comes from sponsorships.

Ticketing, Food and Beverage Sales, and Venue Operation

Annual net revenue from this segment grew by 12% vs. 2010 to R$101 million. The collection

of service charges on the sale of tickets through our convenience channels benefited from the

advance ticket sales for the year’s most popular content, including the big stadium shows

performed in the second half of 2011.

Our food, beverage and merchandise sales operation also recorded a hefty increase in per

capita revenue at our stadium shows, live performance venues and performing arts events.

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There was also a significant increase in revenue from corporate events in 2011, especially in

the 4Q11, which benefited our food and beverage sales as well as the operation of venues.

Sponsorships

Net revenue from sponsorships totaled R$139 million in 2011, with a growth of 12% over

2010. Among the factors for this growth, we had the higher number of events, the increase

and diversification of our base of sponsors through innovative commercial strategies and

delivery of unique benefits, and our diversified content platform, as well as the favorable

environment for the migration of marketing funds from traditional media to sponsorships,

which favors our business.

Breakdown of Revenue by Segment and Country in 2011

Gross Income

Gross income totaled R$187 million in 2011, 13% up on the year before. The gross margin

improved 1.4 percentage points, coming from a 29.2% margin reported for 2010 to a 30.6%

margin in 2011.

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Selling, General & Administrative, and Other Expenses

SG&A and other operational expenses recorded nominal growth of 11.7% over 2010, in line

with our budget, reflecting the strengthening of our corporate structure to support the new

growth phase related to the IPO, our geographical expansion and the consolidation of the live

entertainment industry.

EBITDA

The EBITDA in 2011, when adjusted for non-recurring expenses (R$2.3 million in 2Q11) related

to the IPO, increased by 16% from R$95 million, in 2010, to a record R$110 million, while the

EBITDA margin widened by 1.3 percentage points to 18.0%.

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Net Income

We reached record net income of R$61 million in 2011, 52% higher than in 2010, with a

substantial 2.9 percentage point increase in the net margin. Had it not been for the non-

recurring impact of R$11.4 million from the write-off of fiscal credits recognized as deferred

income tax and social contribution in 2Q11, annual net income would have come to R$ 72.4

million.

Our cash earnings, calculated as pre-tax income less current taxes, totaled R$97 million, or

R$36 million higher than our accounting net income of R$61 million, 62% up on 2010 and with

a 15.9% margin of net revenue.

Cash

We ended the year 2011 with a consolidated cash position of R$263 million, thanks to a

conservative investment policy which prioritizes the preservation of capital and liquidity. Our

cash is maintained in demand deposits and in floating-rate cash-equivalent instruments with

daily liquidity at first tier banks. We do not take exposure to interest rate risk, liquidity risk,

Chg.

(In R$ 000, unless otherwise stated) 2011/2010

EBITDA Reconciliation

Net Income 61.071 40.263 52%

(-) Income Tax and Social Contributions 45.845 27.957 64%

(-) Net Financial Income (Expenses) (4.707) 21.923 n.a.

(-) Depreciation and Amortization 5.580 4.966 12%

= EBITDA 107.789 95.109 13%

EBITDA Margin 17,7% 16,7% 1,0 p.p.

IPO non-recurring expenses 2.282 - n.a.

= Adjusted EBITDA(3)

110.071 95.109 16%

Adjusted EBITDA Margin 18,0% 16,7% 1,3 p.p.

(3) Exclusion of non-recurring expenses related to the IPO.

2011 2010

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and financial derivatives. Our cash funds are free to be utilized at any time for the execution of

the company’s investment plan.

Debt

We ended 2011 with an interest-bearing debt of R$136 million, represented only by the

unamortized balance of the local bonds issued in March 2010 and which amortization schedule

extends through March 2015. As a result, the Company closed the year with net cash of R$128

million.

Capital Market and Corporate Governance

In April 2011 the Company took an important step when completed its initial public offering

(IPO). There were offered 31,441,396 shares for R$ 503 million, of which R$ 188 million were

represented by a primary offering, and with 85% of total shares allocated to foreign investors.

The Company became registered under the rules of the BM&F Bovespa´s Novo Mercado,

which has the highest requirements of Corporate Governance in the Brazilian capital markets,

showing the commitment of T4F and its subsidiaries with the best corporate governance

practices in the market.

Moreover, the commitment to transparency has been renewed throughout 2011 through the

completion of: (i) presentations to groups of investors and capital market analysts, both in

Brazil and abroad, (ii) individual meetings in person or by telephone with portfolio managers

and investment analysts, (iii) conference calls in Portuguese and English to discuss the

quarterly results, as well as availability of a wide range of materials on our website:

www.t4f.com.br/ir

55

121

263

147 150 136

(92)

(29)

128

Cash

Debt

Net Cash

2009 2010 2011

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Human Resources

Committed to sustaining an environment focused on the respect to our employees and in the

creation of value, T4F developed throughout 2011 a series of projects for professional

development and career plan for their employees, in which we highlight:

� Time for Training: In order to recruit and develop high-potential young professionals

who can develop a strategic vision of both the entertainment market and the

company´s positioning, and so become future leaders, 12 new talents were hired in

early 2011 for T4F´s first-ever trainee program.

The program structure was divided into three phases: (i) integration and overview of

the company, (ii) multi-area view and (iii) specialist view, with a total duration of 12

months. Today, our trainees occupy prominent positions in the Company and have a

broader vision of our business, ensuring greater exchange of experiences and

innovation in our different areas.

� T4F Talent and HR Online System: In 2011 two important management tools were

implemented: (i) the HR online system for managing employee data such as internal

career changes and promotions, compensation, vacations, working shifts, etc., and (ii)

in parallel, we implemented the T4F Talent for competency assessment, in which all

employees register their resumés and professional aspirations, are evaluated by their

supervisors and receive both feedback and an assessment Talent, which ranges from 1

to 4, showing the points considered as strengths and the ones that need to be

developed.

� Time for All: Conference held in Teatro Abril in early 2011, with the presence of

Company's employees from Brazil, Argentina, Chile and USA and with the goal of

aligning business strategies, to set the company´s future goals and to disseminate

T4F´s culture.

In addition, the Company keeps investing in their employees by conducting technical, language

and leadership training. We highlight here the Leadership Development Program held in 2011

for all coordinators, managers and directors, and the English course for employees, with more

than a year in the Company, nominated by their managers.

Social and Environmental Responsibility

T4F´s social and environmental responsibility is based in the care of the environment while

carrying out its activities and in having a close relationship with the community. T4F had this

concern during all year of 2011, exemplified by the following actions:

Cultural Incentive: We performed a series of social actions with underserved communities,

schools and NGOs during the year 2011, through the provision of about 60,000 tickets, in order

to provide incentive and access to culture. Among the main concerts involved, we can include:

the Broadway musical Mamma Mia!, the family entertainment content Sky Mirage, the magic

of Disney on Ice and the cultural exhibition Titanic.

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Carbon Neutralization: In favor of the environment, in big shows, such as the U2 360° tour,

held in São Paulo, the Company took actions to neutralize 68,000kgCO2 and emissions of gases

that can harm the atmosphere and contribute to the greenhouse effect, certified by

independent company.

Selective Collection of Garbage and Recycling: The Company adopts the selective collection of

garbage in all its venues, recycling, annually, more than 500,000 aluminum cans, 1.5 million of

plastic and over 120,000 cartons. In addition, we also encourage selective collection in outdoor

shows, through the provision of containers for selective garbage collection.

Green Racing: Our division of sporting events, through the Stock Car race, performs actions of

environmental responsibility throughout the season. Among them are: (i) the adoption of fuel

from renewable sources, (ii) the refining of the oil used in the races, and (iii) the neutralization

of carbon emissions.

Independent Auditors

In compliance with CVM´s Instruction 381, the Company hired the services of an independent

audit by Deloitte Touche Tohmatsu. The Company's policy is to meet regulatory constraints

that define the services to be provided by independent auditors to public companies. In the

fiscal year ended December 31, 2011 no other service but financial auditing related to the

financial statements was provided by the independent auditors or parties related to them.

Acknowledgements

T4F´s management thanks its shareholders, customers and suppliers for their trust in the

Company in 2011. The management also thanks, in a special way, its employees for their

commitment and dedication in meeting the objectives that were set for this year.

São Paulo, February 13, 2012.

The Management


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Officers’ Statement On The Financial Statements

Fernando Luiz Alterio, CEO, and Orlando Viscardi Neto, CFO and Investor Relations

Officer, hereby state that they are responsible for the preparation and fair presentation of

these individual financial statements in accordance with accounting practices adopted in

Brazil and the consolidated financial statements in accordance with International

Financial Reporting Standards (IFRS), issued by the International Accounting Standards

Board (IASB), and accounting practices adopted in Brazil, as well as for the internal

control that deemed necessary for preparing financial statements that are free from

material misstatements.

They also state that they have review the set of financial statements and that their

content is a true, accurate and complete representation of the Company’s economic and

financial position.

São Paulo, February 10, 2012


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Officers’ Statement on the Independent Auditor’s Report

Fernando Luiz Alterio, CEO, and Orlando Viscardi Neto, CFO and Investor Relations

Officer, hereby state that they are aware of the independent auditor’s report on the

individual financial statements in accordance with accounting practices adopted in

Brazil and the consolidated financial statements in accordance with International

Financial Reporting Standards (IFRS), issued by the International Accounting Standards

Board (IASB), and accounting practices adopted in Brazil, and agree therewith.



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Management’s Capital Budget Proposal

The Company proposes a capital budget for FY 2012 to justify the retention of profits,

pursuant to Article 196 of Law 6404/76 and relevant CVM regulation. By their nature,

projections and business prospects involve risks and uncertainties because they relate to

events and depend on circumstances that may or may not occur in the future. General

economic conditions, industry conditions, and other operational factors might affect the

estimated fund allocation amounts to fixed assets and working capital.

To ensure the investments budgeted in the Company’s and its subsidiaries’ growth plan,

Management is proposing the retention of R$42,796 million of profit for 2011.

Sources of funds: R$ millions

Balance of earnings retention reserve at December 31, 2011 85.177

Uses of funds:

2012

projection

Investment in information technology 3.082

Leasehold improvements 1.888

Sound and light equipment 25.000

Investments in content projects 17.000

Development, design and construction of new venues 37.493

Other investments in subsidiaries 714

Total use of funds 85.177


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The Company’s management considers maintaining the Earning Reverse at its current levels, coupled with the retention of earnings for the year ended December 31, 2011, as necessary. These reserves will be added to the cash generated by operating activities in 2012 so as to support the business growth plan, in conformity with the plan presented in the Initial Public Offering Memorandum, which provides for the acquisition and construction of venues, the acquisition of businesses with synergies with the Company’s core business, and the geographic expansion of operations. This plan should be implemented throughout FY 2012.


Board of Directors Fernando Luiz Alterio – Chairman Luciano Nogueira Neto – Vice Chairman Maurizio Mauro – Director Piero Paolo Pichioni Minardi – Director Executive Committee Fernando Luiz Alterio – CEO Orlando Viscardi Neto – CFO and Investor Relations Officer

Documents

T4F Entretenimento S.A. - MZ · T4F Entretenimento S.A. São Paulo, SP We have audited the accompanying individual and consolidated financial statements of T4F Entretenimento S.A