Form 425
Table of Contents

Filed by Brasil Telecom S.A.

Pursuant to Rule 425 of the Securities Act of 1933

Subject Company: Brasil Telecom Participações S.A.

Commission File No.: 001-14477

THE FOLLOWING ARE MATERIALS MADE PUBLIC BY BRASIL TELECOM S.A. OR BRASIL TELECOM PARTICIPAÇÕES S.A. RELATING TO THE PROPOSED MERGER OF BRASIL TELECOM PARTICIPAÇÕES S.A. WITH AND INTO BRASIL TELECOM S.A.

* * * * *

Additional Information and Where to Find It:

This communication contains information with respect to the proposed merger (incorporação) of Brasil Telecom Participações S.A. (“Brasil Telecom Holding”) with and into Brasil Telecom S.A. (“Brasil Telecom”). In connection with the merger of Brasil Telecom Holding with and into Brasil Telecom, Brasil Telecom (1) has filed with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement on Form F-4, containing a prospectus which will be mailed to the shareholders of Brasil Telecom Holding, and (2) has filed and will file with the Commission other documents regarding the merger. We urge investors and security holders to carefully read the relevant prospectus and other relevant materials when they become available as they will contain important information about the merger. Investors and security holders will be able to obtain the documents filed with the Commission regarding the merger, when available, free of charge on the Commission’s website at www.sec.gov or from Brasil Telecom.

Special Note Regarding Forward-Looking Statements:

This communication contains certain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to Brasil Telecom Holding and Brasil Telecom, are intended to identify forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. Undue reliance should not be placed on such statements. Forward-looking statements speak only for the date they are made.

* * * * *


Table of Contents

EXHIBITS

 

Exhibit
Number

 

Description of Document

1   Protocol of Merger and Instrument of Justification (Protocolo e Justificação de Incorporação) between Brasil Telecom S.A. and Brasil Telecom Participações S.A. (English translation).
2   Minutes of the Extraordinary Meeting of the Board of Directors of Brasil Telecom S.A. held on August 7, 2009 (English translation).
3   Minutes of the Extraordinary Meeting of the Board of Directors of Brasil Telecom Participações S.A. held on August 7, 2009 (English translation).


Table of Contents

Exhibit 1

PROTOCOL AND JUSTIFICATION OF THE MERGER OF

BRASIL TELECOM PARTICIPAÇÕES S.A.

WITH AND INTO

BRASIL TELECOM S.A.

BRASIL TELECOM PARTICIPAÇÕES S.A., a publicly-held company with head offices in the City of Brasília, Federal District, at SIA SUL – ASP, Lot D, Block B, registered with the Treasury Ministry on the National Corporate Tax-Payers’ Register under CNPJ/MF No. 02.570.688/0001-70, represented herein as set forth in its Corporate Bylaws (“BrT Part”);

BRASIL TELECOM PARTICIPAÇÕES S.A., a publicly-held company with head offices in the City of Brasília, Federal District, at SIA SUL – ASP – Lot D – Block B, registered with the Treasury Ministry on the National Corporate Tax-Payers’ Register under CNPJ/MF No. 76.535.764/0001-43, represented herein as set forth in its Corporate By-laws (“BrT”);

BrT Part and BrT are referred to herein, collectively, simply as the “Parties” or the “Companies”;

WHEREAS:

 

(i) BrT Part is a publicly-held company whose purpose is to (i) control carriers providing fixed telephony public services in Region II as set forth in the General Concession Plan approved by Decree No. 2,534, dated April 2, 1998; (ii) through controlled or associated companies, foster the expansion and implementation of fixed telephony services in their respective concession areas; (iii) promote, undertake or direct the acquisition of funds from domestic and foreign sources to be allocated by the Company or by its subsidiaries; (iv) encourage and stimulate study and research activities underpinning the development of the fixed telephony sector; (v) perform specialized technical services, either directly or through subsidiary or associated companies, related to the fixed telephony area; (vi) promote, encourage and coordinate, either directly or through associated or subsidiary companies, the training and qualification of personnel required for the fixed telephony sector; (vii) undertake or arrange imports of goods and services for or through its subsidiary and/or associated companies; (viii) perform other activities that are similar to or correlated with its corporate purpose; and (ix) hold stakes in the capital of other companies;

 

(ii) BrT is a publicly-held company that is a subsidiary of BrT Part, whose purpose is to render telecommunications services and conduct the activities required or useful for the performance of these services, in compliance with the concessions, authorizations and permits granted to it. In order to achieve its purpose, BrT may include among its assets third-party assets and rights, as well as: (i) hold stakes in the capital of other companies, provided that it maintains compliance with Brazil’s National Telecommunications Policy; (ii) establish wholly-owned subsidiaries in order to perform the activities encompassed by its corporate purpose and that should preferably be decentralized; (iii) undertake imports of goods and services required to perform the activities encompassed by its corporate purpose; (iv) provide post-sale and technical assistance services to telecommunications enterprises, performing activities of common interest; (v) engage in study and research activities designed to foster the development of the telecommunications sector; (vi) execute contracts and agreements with other companies engaged in rendering telecommunications services or with any persons or entities, in order to ensure the operation services, without adversely affecting its duties and responsibilities, and (vii) participate in other activities that are similar to or correlated with its corporate purpose;

 

(iii) on January 8, 2009, Telemar Norte Leste S.A. (“Telemar”) acquired, through its indirect subsidiary Copart 1 Participações S.A., all the shares issued by Invitel S.A. (“Invitel”), the controlling company of Solpart Participações S.A. (“Solpart”), which directly controls BrT Part, and holds BrT Part common shares representing the share control of BrT Part and BRT;


Table of Contents
(iv) on July 31, 2009, the shareholders of Invitel, Solpart, Copart 1, Copart 2 Participações S.A. (“Copart 2”), BrT Part and BrT, convened at General Shareholders’ Meetings of the respective companies, approved the mergers of: Invitel with and into Solpart, Solpart with and into Copart 1, and Copart 1 with and into BrT Part and Copart 2 with and into BrT;

 

(v) as a result of the mergers described above, BrT Part absorbed the assets and liabilities of Invitel, Solpart and Copart 1, which ceased to exist, BrT absorbed the assets and liabilities of Copart 2, which ceased to exist, and Coari Participações S.A. (“Coari”), a publicly-held company that is directly controlled by Telemar, received common and preferred shares representing the direct control of BrT Part, and consequently, the indirect control of BrT;

 

(vi) as disclosed in the Relevant Fact released on April 25, 2008, the managements of Telemar, BrT Part and BrT intend to conduct a corporate reorganization in order to simplify the shareholding structure, unifying the shareholders of BrT Part and BrT in Telemar and strengthening these companies (the “Corporate Reorganization”); and

 

(vii) the merger of BrT Part with and into BrT represents one of the necessary steps in the implementation of the Corporate Reorganization.

Being in full and fair agreement, the Parties execute this Protocol and Justification of Merger, (“Protocol and Justification”), in compliance with Articles 224, 225 and 227 of Law No. 6,404/76, as amended (the “Brazilian Corporation Law”), pursuant to the following terms and conditions.

CLAUSE ONE – PROPOSED TRANSACTION AND JUSTIFICATION

1.1. Proposed Transaction. The transaction consists of the merger of BrT Part with and into BrT, transferring all the assets and liabilities of BrT Part to BrT, which will become the successor thereof to all its assets, rights and obligations, pursuant to Article 227 and the following Articles of the Brazilian Corporation Law (the “Merger”).

1.1.1. The assets, rights and obligations of BrT Part to be transferred at book value from BrT Part to BrT, are those described in the Appraisal Report (as defined in Clause 3.1 and presented in Attachment I).

1.2. Justification of the Merger. The Merger is one of the steps in the Corporate Reorganization, the purpose of which is to simplify the shareholding structure of BrT Part and BrT, unifying their shareholders in Telemar and strengthening these companies.

CLAUSE TWO – NUMBER, TYPE AND CLASS OF SHARES TO BE SUBSTITUTED

2.1. Number, Type and Class of Shares to be Attributed. As a result of the Merger, 1.2190981 common shares of BrT will be issued in substitution for each outstanding common share of BrT Part, and 0.1720066 common shares and 0.9096173 preferred shares of BrT will be substituted in exchange for each outstanding preferred share of BrT Part (the “Exchange Ratios”).

2.2. Criteria Used to Determine the Exchange Ratios. The Exchange Ratios were determined by the managements of the Companies, based on the weighted average daily market prices for the shares of the Companies on the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA S.A. — Bolsa de Valores Mercadorias e Futuros, or the “BOVESPA”), during the 90 (ninety) calendar days between January 24, 2008 and April 23, 2008, and adjusted by interest on shareholders’ equity declared between January 1, 2008 and the date hereof, pursuant to the statement presented in Attachment II.

2.2.1. The Exchange Ratios are intended to respect the position of each shareholder with regard to the Company in which it holds shares and the class of share held, while complying with the legal constraints on the division of the equity capital of BrT between preferred and common shares and taking into account the individual market value of these shares.

2.2.2. The managements of the Companies believe that the Exchange Ratios are fair, in light of the fact that the shares issued by the Companies are highly liquid and the Exchange Ratios were determined on the basis of the market prices for these shares.

 

2


Table of Contents

2.3. Fractional Shares. Fractions of BrT shares resulting from the substitution of each BrT Part shareholder’s shares of BrT Part will be grouped into whole shares, and sold at an auction to be held on the BOVESPA, with the amounts received through such sale to be provided to the respective shareholders after the final financial settlement of the shares doled through the auction.

CLAUSE THREE – NET WORTH APPRAISAL CRITERIA FOR BRT PART AND BRT

3.1. Net Worth Appraisal. The Net Worth of BrT Part was appraised on the basis of its book value, as shown in the audited financial statements of BrT Part as of May 31, 2009 (the “Base Date”) and taking into account the following events which occurred after the Base Date: (i) the acquisition by Copart 1 of 40,452,227 common shares of BrT Part in the Tender Offer for the Acquisition of BrT Part’s common shares on June 23, 2009; (ii) the capitalization of the advance for future capital increase in the amount of R$3,645,684,817.43 by Copart 1, on June 30, 2009, (iii) the merger of Solpart with and into Invitel on July 31, 2009; (iv) the merger of Solpart with and into Copart 1 on July 31, 2009; and (v) the merger of Copart 1 with and into BrT Part on July 31, 2009. Pursuant to the provisions set forth in Articles 226 and 227 of the Brazilian Corporation Law, the specialized firm Apsis Consultoria Empresarial Ltda., with head offices at Rua São José 90, suite 1,082, in the City and State of Rio de Janeiro, registered with the Treasury Ministry on the National Corporate Tax-Payers’ Roll under CNPJ/MF No. 27,281,922/0001-70 (“Apsis”), was selected to conduct the appraisal of the net worth of BrT Part that will be acquired by BrT. The selection and hiring of Apsis must be ratified and approved by the shareholders of BrT Part and BrT. As set forth in the Appraisal Report presented in Attachment I (the “Appraisal Report”), the book value of the Net Worth of BrT Part was assessed as of the Base Date, taking into account the adjustments described above, at the amount of R$9,083,341,784.17 (nine billion, eighty-three million, three hundred forty-one thousand, seven hundred and eighty-four reais and seventeen centavos).

3.2 Appraisal of the Net Worth of BrT Part and BrT at Market Prices. In compliance with the provisions set forth in Article 264 of the Brazilian Corporation Law, Apsis was selected to prepare the Net Worth Appraisal Report of BrT Part and BrT at market prices. The appraisals of BrT Part and BrT were prepared using the same criteria and as of the Base Date, taking into account the adjustments described above, pursuant to the Appraisal Report presented in Attachment III (the “Net Worth Appraisal Report at Market Prices”), resulting in, solely for the purposes of Article 264 of the Brazilian Corporation Law, an exchange ratio of 1.133089 outstanding BrT shares for each outstanding share of BrT Part.

3.3. Treatment of Equity Variations. From May 31, 2009, the Base Date of the Merger, the equity variations of BrT Part will be absorbed directly by BrT.

CLAUSE FOUR – SHARES OF ONE COMPANY HELD BY ANOTHER COMPANY AND SHARES HELD IN TREASURY

4.1. Treatment of Shares in BrT Held by BrT Part. The shares issued by BrT that are held by BrT Part will be cancelled. There are no shares issued by BrT Part held by BrT.

4.2. Treatment of Shares Held in Treasury. BrT Part holds 1,480,800 of its common shares in Treasury, which will be cancelled. BrT holds 13,231,556 of its preferred shares in Treasury, which will continue to be held in Treasury.

CLAUSE FIVE – INCREASE IN THE EQUITY CAPITAL OF BRT

5.1. Increase in the Equity Capital of BrT. The Merger will result in an increase in the equity capital of BrT in the amount of R$260,300,598.32 (two hundred and sixty million, three hundred thousand, five hundred and ninety-eight reais and thirty-two centavos), through the absorption of the Net Worth of BrT Part as set forth in the Appraisal Report and Article 227, §1 of the Brazilian Corporation Law. 201,143,307 (two hundred and one million, one hundred forty-three thousand, three hundred and seven) registered common shares, without par value, and 209,155,151 (two hundred nine million, one hundred fifty-five thousand, one hundred and fifty-one) preferred shares, without par value (collectively, the “Shares”), will be issued by BrT to the holders of shares of BrT Part.

5.2. Composition of Equity Capital of BrT after the Merger. Due to the above-mentioned increase, the equity capital of BrT will increase to R$3,731,058,950.28 (three billion, seven hundred thirty-one million,

 

3


Table of Contents

fifty-eight thousand, nine hundred and fifty reais and twenty-eight centavos), represented by 203,423,176 (two hundred and three million, four hundred twenty-three thousand, one hundred and seventy-six) registered common shares and 399,597,370 (three hundred ninety-nine million, five hundred ninety-seven thousand, three hundred and seventy) registered preferred shares, each without par value.

5.3. As a result of the merger, all the shares issued by BrT Part will be cancelled and substituted with common and preferred shares issued by BrT, in accordance with the Exchange Ratios described in Clause 2.1.

CLAUSE SIX – ALTERATIONS TO THE CORPORATE BY-LAWS OF BRT

6.1. Alteration to BrT’s Bylaws. To complete the Merger, the corporate bylaws of BrT must be altered in order to reflect the change in the value and number of shares into which its share capital is divided. Thus, the following proposed alteration to Article 5 of BrT’s bylaws will be submitted to its shareholders:

Article 5—The Equity Capital, subscribed and fully paid, is R$3,731,058,950.28 (three billion, seven hundred thirty-one million, fifty-eight thousand, nine hundred and fifty reais and twenty-eight centavos), represented by 603,020,546 (six hundred and three million, twenty thousand, five hundred and forty-six) shares, consisting of 203,423,176 (two hundred and three million, four hundred twenty-three thousand, one hundred and seventy-six) common shares and 399,597,370 (three hundred ninety-nine million, five hundred ninety-seven thousand, three hundred and seventy) preferred shares, all registered and without par value.”

CLAUSE SEVEN – REASONS FOR THE MERGER

7.1. Reasons for the Merger. The managements of BrT Part and BrT decided to conduct the Merger as they believe that it is a necessary step in the Corporate Reorganization, and that the Merger will further the best interests of the Companies and their shareholders, in particular through:

 

  (i) aligning the interests of the shareholders of BrT Part and BrT, which are companies under common control;

 

  (ii) simplifying the capital and corporate structures of BrT Part and BrT, reducing administrative costs;

 

  (iii) enhancing the liquidity of the BrT shares;

 

  (iv) eliminating the costs of separate listings of the shares of BrT Part and BrT as well as costs arising from the public disclosure obligations for information released separately by BrT Part and BrT.

CLAUSE EIGHT – ALLOCATION OF THE NET ASSETS OF BRT PART

8.1. Net Assets of BrT Part. The book value of the net assets of BrT Part to be acquired by BrT, is R$5,502,120,856.93 (five billion, five hundred and two million, one hundred and twenty thousand, eight hundred and fifty-six reais and ninety-three centavos), according to the Appraisal Report, which will be allocated to the increase in the equity capital of BrT in the amount of R$260,300,598.32 (two hundred sixty million, three hundred thousand, five hundred and ninety-eight reais and thirty-two centavos), with R$1,380,381,637.91 (one billion, three hundred and eighty million, three hundred eighty-one thousand, six hundred and thirty-seven reais and ninety-one centavos) being allocated to BrT’s capital reserve account and R$3,861,438,620.70 (three billion, eight hundred sixty-one million, four hundred thirty-eight thousand, six hundred and twenty reais and seventy centavos) being allocated to a special goodwill reserve, as set forth in Article 6, §1 (a) of Instruction No. 319/99 issued by the Brazilian Securities Commission (Comissão de Valores Mobiliários, or the “CVM”).

 

4


Table of Contents

CLAUSE NINE – CLASSES OF SHARES TO BE ISSUED TO THE BRT PART SHAREHOLDERS

9.1. Shares to be Issued to the BrT Part Shareholders. The holders of common shares of BrT Part will receive common shares issued by BrT and the holders of preferred shares of BrT Part will receive common and preferred shares issued by BrT, in order to comply with the legal constraint on the division of the equity capital of BrT between common shares (1:3) and preferred shares (2:3). The common and preferred shares issued by BrT to the BrT Part shareholders will entitle them to the same rights as those conferred by the other common and preferred shares issued by BrT, respectively, including full receipt of dividends and/or interest on shareholders’ equity that may be declared by BrT after the date on which the Merger is approved by the shareholders of BrT and BrT Part.

CLAUSE TEN – WITHDRAWAL RIGHTS

10.1. Withdrawal Rights of BrT Part Shareholders. Pursuant to the provisions set forth in Article 137 of the Brazilian Corporation Law, shareholders of BrT Part that do not approve the Merger, either through dissent, abstention or not attending the general shareholders’ meeting of BrT Part called to consider the Merger, are entitled to withdrawal rights, unless the shares owned by such shareholders possess liquidity and dispersion in the market under the terms of Article 137, II of the Brazilian Corporation Law.

10.1.1. Shareholders owning common shares of BrT Part will have withdrawal rights. Shareholders owning preferred shares of BrT Part will not have withdrawal rights because the preferred shares possess liquidity and dispersion in the market.

10.1.2. A shareholder must specifically express its intention to exercise its withdrawal right within 30 (thirty) days as from the date of publication of the minutes of the general shareholders’ meeting of BrT Part at which the Merger is approved.

10.2. Payment of Reimbursement. The payment of the reimbursement value for the withdrawn shares will depend on the effective completion of the Merger, as set forth in Article 230 of the Brazilian Corporation Law. In accordance with Article 137 of the Brazilian Corporation Law, the reimbursement of the values of the withdrawn shares will be assured only in respect of shares proven to be owned by the shareholder at the close of trading on April 25, 2008, the date of the Relevant Fact that announced the Merger.

10.3. Rescission of the Merger. Pursuant to Article 137, §3 of the Brazilian Corporation Law, in the event that the amount to be paid to shareholders of BrT Part in connection with the exercise of withdrawal rights would, in the opinion of BrT Part’s management, jeopardize the financial stability of the Companies, the Merger may be rescinded through a proposal presented by the management of BrT Part.

10.4. Value of Reimbursement of BrT Part Shareholders. Shareholders of BrT Part that do not approve the Merger at the extraordinary general shareholders’ meeting of BrT Part that approves the Merger will have the right to reimbursement for their shares in the amount of R$15.90 (fifteen reais and ninety centavos) per share, in compliance with the most recently approved balance sheet of BrT Part, which was dated December 31, 2008.

10.4.1. As the BrT shareholders do not have the withdrawal rights in connection with the Merger, the provision set forth in § 3 of Article 264 of the Brazilian Corporation Law is not applicable to the Merger.

10.4.2. The shareholders that do not approve the Merger may, upon withdrawal, request the preparation of a special balance sheet for the company, as set forth in §2 of Article 45 of the Brazilian Corporation Law. In this event, following the expiration of the deadline set for the recession of the Merger, pursuant to §3 of Article 137 of the Brazilian Corporation Law, the shareholder will receive 80% of the reimbursement value, with the balance, if any, to be paid within 120 (one hundred and twenty) days from the date of the general shareholders’ meeting of BrT Part that approves the Merger.

 

5


Table of Contents

CLAUSE ELEVEN – APPROVAL BY THE GENERAL SHAREHOLDERS’ MEETINGS OF BRT PART AND BRT

11.1. General Shareholders’ Meetings. In order to approve the Merger, General Shareholders’ Meetings of BrT Part and BrT will be timely held to consider the Merger.

CLAUSE TWELVE – GENERAL PROVISIONS

12.1. Cessation of BrT Part. With the effective completion of the Merger, BrT Part will cease to exist and BrT will absorb all the assets, rights, property, obligations, liabilities and responsibilities of BrT Part.

12.2. Auditing the Financial Statements of BrT Part. In compliance with Article 12 of CVM Instruction No. 319/99, the financial statements of BrT Part that serve as the basis for the Merger were audited by Deloitte Touche Tohmatsu.

12.3. Capitalization of BrT Part’s Reserve. Prior to the extraordinary general shareholders’ meetings to consider the Merger, a proposal will be submitted to BrT Part’s shareholders for the capital increase of BrT Part, without the issuance of new shares, in the amount of R$248,728,180.07 (two hundred forty-eight million, seven hundred twenty-eight thousand, one hundred and eighty reais and seven centavos), through the capitalization of the full amount of the reserve for future capital increase of BrT Part, which formation was approved at the ordinary and extraordinary general shareholders’ meeting of BrT Part, held on April 8, 2009.

12.4. Documents Available to the Shareholders. In compliance with the provisions set forth in Article 3 of CVM Instruction No. 319/99 all documents mentioned in this Protocol and Justification will be made available to the respective shareholders of BrT Part and BrT as from the date hereof, and may be consulted by the shareholders of BrT Part and BrT at the following addresses: (i) SIA SUL – ASP, Lot D, Block B, City of Brasília, Federal District, Brazil; and (ii) Rua Humberto de Campos 425, 5th floor (part), Leblon, City of Rio de Janeiro, State of Rio de Janeiro, Brazil.

12.5. Notification of the Merger to Authorities. Notification of the Merger was presented to the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica), or CADE, the Brazilian antitrust regulator and the National Telecommunications Agency (Agência Nacional de Telecomunicações), or ANATEL, the Brazilian federal telecommunications regulator. Any other notifications required in connection with the Merger will be submitted to the competent government authorities pursuant to governing law.

12.6. Registration with the U.S. Securities and Exchange Commission. The Merger, and the resulting issuance of new shares by BrT, is conditioned on the applicable registration with the SEC.

12.7. Survival of Valid Clauses. Should any clause, provision, term or condition in this Protocol and Justification be deemed invalid, the other clauses, provisions, terms and conditions hereof not affected by such invalidity will continue to remain in effect.

12.8. Election of Courts of Law. The Central Law Courts of the Rio de Janeiro State Capital Assizes are hereby elected to settle all matters arising from this Protocol and Justification, to the exclusion of any other regardless of how much more privileged it is or may be.

(rest of the page deliberately left blank)

 

6


Table of Contents

BEING IN FULL AND FAIR AGREEMENT, the PARTIES execute this Protocol and Justification in 3 (three) copies of identical content and for one sole purpose, together with the undersigned witnesses.

Rio de Janeiro, August 7, 2009.

BRASIL TELECOM PARTICIPAÇÕES S.A.

 

/s/ Alex Waldemar Zornig

    

/s/ Paulo Altmayer Gonçalves

Name:   Alex Waldemar Zornig      Name:   Paulo Altmayer Gonçalves
Position:   Chief Financial Officer and Investor Relations Officer      Position:   Human Resources Officer
BRASIL TELECOM S.A.

/s/ Julio Cesar Pinto

    

/s/ Francisco Aurélio Sampiaio Santiago

Name:   Julio Cesar Pinto      Name:   Francisco Aurélio Sampiaio Santiago
Position:   Officer      Position:   Chief Operations Officer
Witnesses:       

/s/ Ana Carolina dos R.M. da Motta

    

/s/ Carolina O.M. da Cunha

Name:   Ana Carolina dos R.M. da Motta      Name:   Carolina O.M. da Cunha

 

7


Table of Contents

Attachment I

Appraisal Report

 

 

LOGO

   LOGO   

APPRAISAL REPORT

RJ-0278/09-01

1/3 COPIES


Table of Contents

REPORT:

   RJ-0278/09-01

BASE DATE:

   May 31, 2009.

APPLICANT:

   BRASIL TELECOM S.A., with its head office located at SIA Sul, Lote D, Bloco B 1º andar, SIA, in Brasília, Federal District, registered with the General Roster of Corporate Taxpayers (CNPJ) under No. 76.535.764/0001-43, hereinafter referred to as BRTO.

OBJECT:

   BRASIL TELECOM PARTICIPAÇÕES S.A., with its head office located at ST SIA Sul Área Especial D, Bloco B Parte B, Guará, in Brasília, Federal District, registered with the General Roster of Corporate Taxpayers (CNPJ) under No. 02.570.688/0001-70, hereinafter referred to as BRTP.

PURPOSE:

   To assess the book net equity value of BRTP for the purpose of its merger with and into BRTO, pursuant to articles Nos. 226 and 227 of Law No. 6,404, of 12/15/1976 (Corporate Law).

 

LOGO


 

 

APSIS CONSULTORIA   1
REPORT RJ-0278/09-01  


Table of Contents

TABLE OF CONTENTS

 

1. INTRODUCTION

   3

2. PRINCIPLES AND QUALIFICATIONS

   4

3. RESPONSIBILITY LIMITS

   5

4. APPRAISAL METHODOLOGY

   6

5. NET EQUITY APPRAISAL

   7

6. CONCLUSION

   10

7. LIST OF ATTACHMENTS

   11

 

LOGO


 

 

APSIS CONSULTORIA   2
REPORT RJ-0278/09-01  


Table of Contents

1. INTRODUCTION

APSIS CONSULTORIA EMPRESARIAL Ltda., hereinafter referred to as APSIS, with its head office located at Rua São José no 90, grupo 1.802, in the City and State of Rio de Janeiro, registered with the General Roster of Corporate Taxpayers (CNPJ) under No 27.281.922/0001-70, was appointed to assess the book net equity value of BRTP for the purpose of its merger with and into BRTO, pursuant to articles 226 and 227 of Law No. 6,404 of 12/15/1976 (Corporate Law).

For preparing this report, we have used data and information provided by third parties, in the form of documents and verbal interviews with the client. Estimates used in this process are based on documents and information which include, among others, the following:

 

   

Balance Sheet of BRTP as of May 31, 2009.

APSIS has recently performed appraisals for publicly-held companies, for various purposes, of the following companies:

 

   

AMÉRICA LATINA LOGÍSTICA DO BRASIL S/A

 

   

BANCO PACTUAL S/A

 

   

CIMENTO MAUÁ S/A

 

   

ESTA-EMPRESA SANEADORA TERRITORIAL AGRÍCOLA S/A.

 

   

GEODEX COMMUNICATIONS DO BRASIL S/A

 

   

GERDAU S/A

 

   

HOTÉIS OTHON S/A

 

   

IBEST S/A

 

   

L.R. CIA. BRAS. PRODS. HIGIENE E TOUCADOR S/A

 

   

LIGHT SERVIÇOS DE ELETRICIDADE S/A

 

   

LOJAS AMERICANAS S/A

 

   

MINASGÁS S/A DISTRIB. DE GÁS COMBUSTÍVEL

 

   

REPSOL YPF BRASIL S/A

 

   

TAM TRANSPORTES AÉREOS MERIDIONAL S/A

 

   

WAL PETROLEO S/A

The APSIS team in charge of preparing this report comprises the following professionals:

 

   

AMILCAR DE CASTRO

Project Manager

 

   

ANA CRISTINA FRANÇA DE SOUZA

Civil Engineer

Post-graduated in Accounting Sciences (CREA/RJ 91.1.03043-4)

 

   

CESAR DE FREITAS SILVESTRE

Accountant (CRC/RJ 44779/O-3)

 

   

FLAVIO LUIZ PEREIRA

Accountant (CRC/RJ 022016-O-9)

 

   

LUIZ PAULO CESAR SILVEIRA

Mechanical Engineer

Master of Business Management (CREA/RJ 89.1.00165-1)

 

   

MARGARETH GUIZAN DA SILVA OLIVEIRA

Civil Engineer (CREA/RJ 91.1.03035-3)

 

   

RICARDO DUARTE CARNEIRO MONTEIRO

Civil Engineer

Post-graduated in Economic Engineering(CREA/RJ 30137-D)

 

   

SÉRGIO FREITAS DE SOUZA

Economist (CORECON/RJ 23521-0)

 

   

WASHINGTON FERREIRA BRAGA

Accountant (CRC/RJ 024100-6/CVM 6734)

 

LOGO


 

 

APSIS CONSULTORIA   3
REPORT RJ-0278/09-01  


Table of Contents

2. PRINCIPLES AND QUALIFICATIONS

This report strictly complies with the fundamental principles described below.

 

   

The consultants do not have any direct or indirect interest in the companies involved or in the operation, nor are there any other relevant circumstances which may characterize a conflict of interest.

 

   

To the best of the consultants’ knowledge and belief, the analyses, opinions and conclusions expressed in this Report are based on data, diligence, research and surveys that are true and correct.

 

   

The report presents all the limiting conditions imposed by the adopted methodologies, which affect the analyses, opinions and conclusions contained therein.

 

   

APSIS professional fees are not in any way whatsoever subject to the conclusions of this report.

 

   

APSIS assumes full responsibility for the matter of Appraisal Engineering, including implicit appraisals, and for the exercise of its honorable duties, primarily established in the appropriate laws, codes or regulations.

 

   

In this report, it is assumed that the information received from third parties is correct, and the sources thereof are contained in said report.

 

   

The report was prepared by APSIS and no one other than the consultants themselves prepared the analyses and respective conclusions.

 

   

For projection purposes, we start with the premise of the inexistence of liens or encumbrances of any nature, whether judicial or extrajudicial, affecting the companies in question, other than those listed in this report.

 

   

This Report complies with the specifications and criteria prescribed by USPAP (Uniform Standards of Professional Appraisal Practice), in addition to the requirements imposed by different bodies and regulations, where applicable, such as: the Ministry of Treasury, the Central Bank of Brazil, Bank of Brazil, CVM (Brazilian Securities and Exchange Commission), SUSEP (Superintendence of Private Insurance), Income Tax Regulations (RIR), etc.

 

   

The managers of the companies involved did not direct, restrict, hinder or do any acts which have or may have compromised access to, use or knowledge of information, assets, documents, or work methods applicable to the quality of the respective conclusions contained herein.

 

LOGO


 

 

APSIS CONSULTORIA   4
REPORT RJ-0278/09-01  


Table of Contents

3. RESPONSIBILITY LIMITS

 

   

To prepare this report, APSIS used historic data and information, audited by third parties or unaudited, and unaudited projected data provided in writing or verbally by the company’s management or obtained from the sources mentioned. Therefore, APSIS has assumed as true the data and information obtained for this report and does not have any responsibility in connection with its truthfulness.

 

   

The scope of this work did not include an audit of the financial statements or a revision of the work performed by the company’s auditors.

 

   

Our work was developed for use by the applicants in connection with the previously described objectives. Therefore, it may be disclosed as part of the documents related to the acquisition of control of the BRASIL TELECOM Group, and the mention of this work in related publications is authorized. It may also be filed at the Brazilian Securities and Exchange Commission – CVM and at the U.S. Securities and Exchange Commission – SEC, as well as made available to shareholders and third parties, including through the websites of the involved companies.

 

   

We emphasize that understanding of the conclusion of this report will take place by reading it and its attachments in full. Therefore, conclusions from partial reading should not be drawn.

 

   

Our work was developed to be used by BRTO and the other companies involved in the project, aiming at the previously described objective.

 

   

We do not take responsibility for occasional losses to BRTO or to other parties as a result of the use of data and information provided by the company and contained herein.

 

LOGO


 

 

APSIS CONSULTORIA   5
REPORT RJ-0278/09-01  


Table of Contents

4. APPRAISAL METHODOLOGY

Analysis of the previously mentioned supporting documents designed to ascertain whether bookkeeping was accurately conducted and was in compliance with the legal, regulatory, normative, statutory and contractual provisions which govern the matter, within the scope of “Generally Accepted Accounting Principles and Conventions”.

We examined the balance sheet of BRTP, as well as all other documents required for the preparation of this report, which was prepared on the basis of BRTP’s balance sheet for the period ended May 31, 2009.

It was ascertained that the assets and liabilities of BRTP have been duly accounted for.

 

LOGO


 

 

APSIS CONSULTORIA   6
REPORT RJ-0278/09-01  


Table of Contents

5. NET EQUITY APPRAISAL

We examined the account books of BRTP, as well as all other documents required for the preparation of this report.

We contemplated the following subsequent events to occur after the base date of this report:

 

   

Merger of COPART 1 PARTICIPAÇÕES S.A. on July, 31, 2009, as per appraisal report prepared by APSIS (RJ-0190/09-03);

 

   

Goodwill amortization expenses to be recorded for the months of August, September and October 2009, in the amount of R$ 161,370,804.42 (one hundred sixty one million, three hundred and seventy thousand, eight-hundred and four reais and forty two centavos);

 

   

Reversion of goodwill provision made in the merged company (COPART 1), in the amount of R$ 61,737,807.27 (sixty-one million, seven hundred and thirty seven thousand, eight hundred and seven reais and twenty seven centavos), according to CVM Instruction No. 319/099, article 6, paragraph 1, and alterations made by CVM Instruction 349/01.

The experts have ascertained that the book net equity value of BRTP, after giving effect to the occurrence of the above-described events stated on the pro forma balance sheet presented on the following page is R$ 9,083,341,784.17 (nine billion, eighty three million, three hundred and forty-one thousand, seven hundred and eighty-four reais and seventeen centavos), as of May 31, 2009.

 

LOGO


 

 

APSIS CONSULTORIA   7
REPORT RJ-0278/09-01  


Table of Contents

BRASIL TELECOM PARTICIPAÇÕES S.A.

         FINANCIAL STATEMENT AS OF MAY 31, 2009

BALANCE SHEET (REAIS)

         BALANCE    ADJUSTMENT*    PRO FORMA

TOTAL ASSETS

     5,598,445,437.85    3,827,197,479.01    9,425,642,916.86
                

CURRENT ASSETS

     519,160,406.92    65,254,304.00    584,414,710.92
                

Available funds

     253,547,406.89    51,819,998.40    305,367,405.29

- Cash and Banks

     3,497,697.90    51,819,998.40    55,317,696.30

- Cash Equivalents

     250,049,708.99    -        250,049,708.99

Financial Aplications

     49,786,614.92    -        49,786,614.92

Deferred Taxes and Recoverable Taxes

     28,290,112.31    13,103,610.09    41,393,722.40

Judicial Deposits

     47,899.40    -        47,899.40

Interest on Shareholders’ Equity Receivable on own Capital

     185,426,701.70    -        185,426,701.70

Pre-paid Expenses

     2,057,059.56    -        2,057,059.56

Other

     4,612.14    330,695.51    335,307.65
                

LONG TERM ASSETS

     1,495,584,697.35    137,551.47    1,495,722,248.82
                

Financial Aplications

     1,200,000,000.00    -        1,200,000,000.00

Deferred Taxes and Recoverable Taxes

     289,700,944.50    -        289,700,944.50

Judicial Deposits

     5,863,172.44    137,551.47    6,000,723.91

Other

     20,580.41    -        20,580.41
                

FIXED ASSETS

     3,583,700,333.58    3,761,805,623.54    7,345,505,957.12
                

Investments

     3,583,245,087.82    3,761,805,623.54    7,345,050,711.36
                

- Investments in shares:

     3,583,245,087.82    3,761,805,623.54    7,345,050,711.36

- Brasil Telecom S.A.

   67.2294   3,581,220,927.24    -        3,581,220,927.24

- Nova Tarrafa Participações Ltda.

   100.0000   1,742,587.87    -        1,742,587.87

- Nova Tarrafa Inc.

   100.0000   281,572.71    -        281,572.71

- Goodwill from Fixed Assets and License in BRTO

     0.00    3,761,805,623.54    3,761,805,623.54
                

Property. Plant and Equipment

     455,245.76    -        455,245.76
                

- General Goods

     455,245.76    -        455,245.76
                

 

LOGO


 

 

APSIS CONSULTORIA   8
REPORT RJ-0278/09-01  


Table of Contents

BRASIL TELECOM PARTICIPAÇÕES S.A.

   FINANCIAL STATEMENT AS OF MAY 31, 2009  

BALANCE SHEET (REAIS)

   BALANCE     ADJUSTMENT*     PRO FORMA  

TOTAL LIABILITIES AND EQUITYS

   5,598,445,437.85      3,827,197,479.01      9,425,642,916.86   
                  

CURRENT LIABILITIES

   377,652,366.20      (46,863,359.28   330,789,006.92   
                  

Accounts Payable

   204,956.72      -          204,956.72   

Interest, Taxes and Contributions

   30,804,772.27      63,267.34      30,868,039.61   

Dividends Payable

   267,693,624.75      (47,145,467.42   220,548,157.33   

Personnel. Social Benefits and Charges

   4,000.00      -          4,000.00   

Provision for Contingencies

   214,998.42      -          214,998.42   

Other

   78,730,014.04      127,789.00      78,857,803.04   

Short Term Debt

   0.00      91,051.80      91,051.80   
                  

LONG TERM LIABILITIES

   11,512,066.47      59.30      11,512,125.77   
                  

Interest, Taxes and Contributions

   8,265,855.08      -          8,265,855.08   

Provision for Contingencies

   3,246,211.39      -          3,246,211.39   

Other

   0.00      59.30      59.30   
                  

EQUITY

   5,209,281,005.18      3,874,060,778.99      9,083,341,784.17   
                  

Share Capital

   2,596,271,819.93      -          2,596,271,819.93   

Capital Reserve

   309,178,222.60      3,973,693,776.14      4,282,871,998.74   

- Special Reserve for Goodwill

   0.00      3,861,438,620.70      3,861,438,620.70   

- Special Reserve for Net Assets

   0.00      112,255,155.44      112,255,155.44   

- Other Capital Reserve

   309,178,222.60      -          309,178,222.60   

Profit Reserve

   2,879,008,099.35      -          2,879,008,099.35   

Accumulated Profit and Loss

   (554,330,772.17   (99,632,997.15   (653,963,769.32

Treasury Stock

   (20,846,364.53   -          (20,846,364.53

 

* COPART 1 merger with amorization adjustment and reversable provision of goodwill

 

LOGO


 

 

APSIS CONSULTORIA   9
REPORT RJ-0278/09-01  


Table of Contents

6. CONCLUSION

In the light of the audit performed of the previously mentioned documents and on the basis of APSIS’ analyses, the experts have concluded that the book net equity value of BRTP, having contemplated the previously mentioned subsequent events, is equivalent to R$ 9,083,341,784.17 (nine billion, eighty three million, three hundred and forty-one thousand, seven hundred and eighty-four reais and seventeen centavos), as of May 31, 2009. Disregarding BRTP’s investment in BRTO, the net assets to be incorporated by BRTO shall be R$ 5,502,120,856.93 (five billion, five hundred and two million, one hundred and twenty thousand, eight hundred and fifty-six reais and ninety-three centavos).

Having concluded Report RJ-0278/09-01, which consists of 10 (ten) pages typed on one side and 02 (two) attachments and reproduced in 03 (three) original counterparts, APSIS Consultoria Empresarial Ltda., CREA/RJ 82.2.00620-1 and CORECON/RJ RF/2.052-4, a company specializing in the appraisal of assets, legally represented by the signatories below, makes itself available for any clarifications which may be necessary.

Rio de Janeiro, July 22, 2009.

 

LOGO

  LOGO   LOGO

ANA CRISTINA FRANÇA DE SOUZA

  LUIZ PAULO CESAR SILVEIRA   WASHINGTON FERREIRA BRAGA

Managing Partner

  Director   Accountant (CRC/RJ 024100-6 / CVM 6734)

 

LOGO


 

 

APSIS CONSULTORIA   10
REPORT RJ-0278/09-01  


Table of Contents

7. LIST OF ATTACHMENTS

1. SUPPORTING DOCUMENTS

2. GLOSSARY AND APSIS’ PROFILE

 

 

SÃO PAULO - SP

      RIO DE JANEIRO - RJ

Alameda Franca, 1467, 44

      Rua São José, 90, grupo 1802

São Paulo - SP CEP: 01422-001

      Centro, CEP: 20010-020

Tel.: + 55 11 2626.0510

      Tel.: + 55 21 2212.6850 Fax: + 55 21 2212.6851

 

LOGO


 

 

APSIS CONSULTORIA   11
REPORT RJ-0278/09-01  


Table of Contents

 

 

ATTACHMENT 1

 

LOGO



Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  
CLOSING VERIFICATION    -       

100000000 - TOTAL ASSETS

   5,598,445,437.85   

1110000000 - CURRENT ASSETS

   519,160,406.92   

111000000 - CASH ANS CASH EQUIVALENTS

   253,547,406.89   

111200000 - BANK ACCOUNTS

   3,497,697.90   

111210000 - BANK ACCOUNTS IN USE

   64,820.01   

111210022 BANCO DO BRASIL CENTRAL HOLDING 64475

   -       

111210026 HOLDING ABN AMRO REAL DIVIDENDS 7048058

   35,271.82   

111210272 BANCO SAFRA

   33,334.11   

111210297 BANCO SAFRA N.YORK

   6,214.08   

111210458 UNIBANCO CHECKINGS ACCOUNT 106120-4

   -       

111210510 BANCO DO BRASIL PAYMENTS CHECKINGS ACCOUNT 106.447

   (10,000.00

111210511 BANCO DO BRASIL PAYROLL CHECKINGS ACCOUNT 1052616

   -       

111290000 - BANK ACCOUNTS WITH TRANSITIONS

   3,432,877.89   

111290022 TR HOLDING BANCO DO BRASIL CENTRAL 64475

   (48,027.49

111290026 TR HOLDING ABN ARNO REAL DIVIDENDS

   -       

111290230 BANCO DO BRASIL

   -       

111290297 BANCO SAFRA N.YORK

   -       

111290359 BANCO DO BRASIL PAYMENT BRTI

   -       

111290458 UNIBANCO-CHECKINGS ACCOUNT106120-4

   289.87   

111290510 BANCO DO BRASIL PAYMENTS CHECKINGS ACCOUNT 106.447

   3,488,740.47   

111290511 BANCO DO BRASIL PAYROLL CHECKINGS ACCOUNT 1052616

   (8,124.96

111300000 - FINANCIAL INVESTMENTS WITH IMEDIATE LIQUIDITY

   250,049,708.99   

111310000 - FINANCIAL INVESTMENTS WITH IMEDIATE LIQUIDITY IN DEPOSITS

   250,049,708.99   

111311000 FINANCIAL INVESTMENTS WITH IMEDIATE LIQUIDITY PRINCIPAL

   254,590,407.50   

111312000 INTEREST ON FINANCIAL INVESTMENT DEPOSITS

   (2,580,297.19

111319000 FINANCIAL INVESTMENTS WITH IMEDIATE LIQUIDITY TRANSITION

   (1,960,401.32

112000000 - CURRENT MONETARY REALIZABLE RIGTHS

   263,555,940.47   

112300000 OTHER CREDITS ADVANCEMENTS AND AMOUNS RECEIVABLE

   4,612.14   

112330000 - ADVANCEMENTS TO EMPLOYEES

   -       

112331000 - ADVANCEMENTS DEDUCTED DIRECTLY FROM PAYROLL

   -       

112331100 ADVANCEMENTS DEDUCTED DIRECTLY FROM SALARY PAYROLL

   -       

112390000 - OTHER ADVANCEMENTS AND AMOUNTS RECOVERABLE

   4,612.14   

112399000 ADVANCEMENTS - OTHER CREDITS

   4,612.14   

112400000 - TAX CREDITS RECOVERABLE / TO OFFSET

   28,290,112.31   

112410000 - FEDERAL TAXES

   28,290,112.31   

112411000 - FINANCIAL CREDITS - AMOUNTS TO BE OFFSET

   27,269,206.92   

112411100 - CORPORATE TAX

   17,231,366.22   

112411110 CORPORATE TAX RECEIVABLE

   -       

112411130 CORPORATE TAX RECEIVABLE ESTIMATE

   17,231,366.22   

112411200 - SOCIAL CONTRIBUTION

   10,037,840.70   

112411210 SOCIAL CONTRIBUTION RECOVERABLE

   1,856,212.47   

112411230 SOCIAL CONTRIBUTION RECEIVABLE ESTIMATE

   8,181,628.23   

112413000 - ECONOMIC CREDITS - . AMOUNTS RECOVERABLE (DIFFERENCES)

   73,099.47   

112413100 - CORPORATE TAX

   53,749.60   

112413120 - CORPORATE TAX ON TEMPORARY DIFFERENCES

   53,749.60   

112413121 CORPORATE TAX ON TEMPORARY DIFFERENCES CURRENT

   53,749.60   

112413200 - SOCIAL CONTRIBUTION

   19,349.87   

112413220 - SOCIAL CONTRIBUTION ON TEMPORARY DIFFERENCES

   19,349.87   

112413221 SOCIAL CONTRIBUTION ON TEMPORARY DIFFERENCES CURRENT

   19,349.87   

112415000 - FINANCIAL CREDITS FROM WITHHOLDING TAX

   947,805.92   

112415100 - WITHHOLDING TAX

   947,805.92   

112415110 WITHHOLDING TAX ON FINANCIAL INVESTMENTS WITHDRAWALS

   -       

112415180 WITHHOLDING TAX ON FINANCIAL INVESTMENTS WITHDRAWALS

   947,805.92   

112415190 WITHHOLDING TAX ON OTHER RETENTIONS

   -       

112500000 - FINANCIAL INVESTMENTS IN SECURITIES AND/OR FUNDS

   1,960,401.32   

112530000 - TEMPORARY INVESTIMENTS

   1,960,401.32   

112531000 - MARKETABLE SECURITIES

   1,960,401.32   

112531300 - INVESTMENTS IN FINANCIAL SECURITIES

   1,960,401.32   

112531310 PRINCIPAL INVESTMENT

   1,960,401.32   

112600000 - PROFIT SHARING RECEIVABLE

   185,426,701.70   

112620000 INTEREST ON OWN-CAPITAL RECEIVABLE

   185,426,701.70   

112700000 - JUDICIAL DEPOSITS

   47,899.40   

112710000 - JUDICIAL DEPOSITS CREDITS

   47,899.40   

112711000 - JUDICIAL DEPOSITS CREDITS-AMOUNTS IN LITIGATION

   47,899.40   


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

112711990 - JUDICIAL DEPOSITS TRANSITION

   47,899.40   

112711994 PAWN TRANSFERS

   47,899.40   

112800000 - FINANCIAL INVESTMENTS

   47,826,213.60   

112810000 - LOANS AND FINANCING

   47,826,213.60   

112811000 - LOANS AND FINANCING LOCAL CURRENCY

   47,826,213.60   

112811500 - DEBENTURES

   47,826,213.60   

112811520 - DEBENTURES - INTEREST AND OTHERS

   47,826,213.60   

112811521 DEBENTURES INTEREST

   47,826,213.60   

113000000 - CURRENT NON-MONETARY REALIZABLE RIGHTS

   2,057,059.56   

113100000 - FINANCIAL INVESTMENT OF REVENUE AND/OR EXPENSE FOR THE NEXT PERIOD

   2,057,059.56   

113110000 - INSURANCES PREMIUMS

   598,365.57   

113110000 INSURANCES PREMIUMS

   598,365.57   

113180000 - OTHER

   1,458,693.99   

113189000 OTHER

   1,458,693.99   

120000000 - LONG-TERM MONETARY REALIZABLE RIGHTS

   1,495,584,697.35   

122000000 - LONG-TERM MONETARY REALIZABLE RIGHTS

   1,495,564,116.94   

122400000 - TAX CREDITS RECOVERABLE OR TO BE OFFSET

   289,700,944.50   

122410000 - FEDERAL TAXES

   289,700,944.50   

122411000 - FINANCIAL CREDITS - AMOUNTS TO OFFSET

   382,882,740.46   

122411100 - CORPORATE TAX

   222,912,303.85   

122411110 CORPORATE TAX RECEIVABLE

   222,912,303.85   

122411300 - SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY

   139,632,784.51   

122411310 SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY RECOVERABLE

   139,632,784.51   

122411400 - SOCIAL INTEGRATION PROGRAM

   20,337,652.10   

122411410 SOCIAL INTEGRATION PROGRAM RECOVERABLE

   20,337,652.10   

122413000 - ECONOMIC CREDITS - . AMOUNTS RECOVERABLE (DIFFERENCES)

   26,809,204.04   

122413100 - CORPORATE TAX

   26,505,020.54   

122413120 - ICORPORATE TAX ON TEMPORARY DIFFERENCES

   26,505,020.54   

122413122 CORPORATE TAX ON TEMPORARY DIFFERENCES LONG-TERM

   26,505,020.54   

122413200 - SOCIAL CONTRIBUTION

   304,183.50   

122413220 - SOCIAL CONTRIBUTION ON TEMPORARY DIFFERENCES

   304,183.50   

122413222 SOCIAL CONTRIBUTION ON TEMPORARY DIFFERENCES LONG-TERM

   304,183.50   

122419000 - PROVISION FOR LOSSES ON RECOVERABLE TAXES

   (119,991,000.00

122419300 SOCIAL CONTRIBUTION FOR FINANCING SOC. SEC.-PROV. FOR LOSSES

   (119,991,000.00

122700000 - JUDICIAL DEPOSITS

   5,863,172.44   

122710000 - JUDICIAL DEPOSITS CREDITS

   5,863,172.44   

122711000 - JUDICIAL DEPOSITS.-CREDITS - AMOUNTS IN LITIGATION

   140,116,067.64   

122711100 - JUDICIAL DEPOSITS.-LINKED CONTINGENCIES

   5,996,777.93   

122711120 - JUDICIAL DEPOSITS LINKED TAX CONTRIBUTIONS

   5,655,899.20   

122711122 JUDICIAL DEPOSITS.TAX ON EXCHANGE VARIATION LONG-TERM

   4,557,132.67   

122711124 JUDICIAL DEPOSITS..TAX ON EXCHANGE VARIATION LONG-TERM

   1,098,766.53   

122711130 - JUDICIAL DEPOSITS. - CIVIL CONTINGENCIES

   340,878.73   

122711132 JUDICIAL DEPOSITS. CIVIL CONTINGENCIES LONG-TERM

   274,656.52   

122711134 JUDICIAL DEPOSITS. CIVIL CONTINGENCIES LONG-TERM

   66,222.21   

122711400 - JUDICIAL DEPOSITS.WITH SUSPENDED TAX REQUESTS

   134,119,289.71   

122711410 - JUDICIAL DEPOSITS.WITH SUSPENDED TAX REQUESTS

   134,119,289.71   

122711411 JUDICIAL DEPOSITS.SUSPENDED TAX REQUESTS

   102,640,265.30   

122711413 JUDICIAL DEPOSITS.CURRENT ORGANIZATION

   31,479,024.41   

122719000 - RETIFICATION LINKED CONTINGENT DEPOSITS PROBABLE

   (134,252,895.20

122719130 - RETIFICATION CONTINGENT DEPOSITS.CIVIL PROVISONS

   (133,605.45

122719131 RETIFICATION CONTINGENT DEPOSITS

   (133,605.45

122719400 - RETIFICATION LINKED DEPOSITS.SUSPENDED TAX REQUESTS

   (134,119,289.75

122719410 - RETIFICATION LINKED DEPOSITS SUSPENDED FEDERAL TAX REQUESTS

   (134,119,289.75

122719411 LINKED DEPOSITS.SUSPENDED TAX REQUESTS

   (134,119,289.75

122800000 - FINANCIAL INVESTMENTS

   1,200,000,000.00   

122810000 - LOANS AND FINANCING

   1,200,000,000.00   

122811000 - LOANS AND FINANCING LOCAL CURRENCY

   1,200,000,000.00   

122811500 - DEBENTURES

   1,200,000,000.00   

122811510 - DEBENTURES PRINCIPAL

   1,200,000,000.00   

122811511 DEBENTURES PRINCIPAL

   1,200,000,000.00   

123000000 - LONG-TERM NON-MONETARY REALIZABLE RIGHTS

   20,580.41   

123700000 - CAPITALIZABLE INVESTMENTS

   20,580.41   

123770000 CAPITALIZABLE AMOUNTS

   20,580.41   

130000000 - FIXED ASSETS

   3,583,700,333.58   

131000000 - INVESTIMENTS

   3,583,245,087.82   


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

131100000 - CORPORATE STAKEHOLDINGS

   3,583,245,087.82   

131110000 - CORPORATE STAKEHOLDINGS BASED ON EQUITY METHOD ACCOUNTING

   3,583,245,087.82   

131111000 - CORPORATE STAKEHOLDINGS.-SHAREHOLDERS’ EQUITY

   3,583,245,087.82   

131111000 CORPORATE STAKEHOLDINGS.SHAREHOLDERS’ EQUITY

   3,583,245,087.82   

131112000 - CORPORATE STAKEHOLDINGS.-GOODWILL PAID UPON ACQUISITION

   -       

131112100 CORPORATE STAKEHOLDINGS.COST OF GOODWILL

   9,391,101.89   

131112800 CORPORATE STAKEHOLDING GOODWILL RETIFICATION

   (9,391,101.89

131400000 - TAX INCENTIVES

   -       

131420000 - TAX INCENTIVES REDUCING CORPORATE TAX DUE.

   -       

131421000 - AUDIOVISUAL - INVESTMENTS LAW 8685

   1,666,972.89   

131429000 TAX INCENTIVES REDUCING CORPORATE TAX

   (1,666,972.89

132000000 - PROPERTY, PLANT AND EQUIPMENT

   56,184,547.05   

132100000 - WORK IN SERVICE

   56,184,547.05   

132130000 - TERMINATION

   69,764.24   

132131000 TERMINATION

   69,764.24   

132150000 - INFRASTRUCTURE

   118,271.65   

132152000 BUILDINGS

   3,356.13   

132158000 OTHER ASSETS - INFRASTRUCTURE

   114,915.52   

132160000 - ASSETS FOR COMMON USE

   52,110,630.42   

132161000 ASSETS FOR COMMON USE

   52,110,630.42   

132180000 - INTANGIBLE ASSETS

   3,885,880.74   

132181000 BRANDS AND PATENTS

   35,757.92   

132182000 DATA PROCESSING SYSTEMS

   147,708.70   

132188000 OTHER INTANGIBLE ASSETS

   3,702,414.12   

136000000 - DEPRECIATION AND AMORTIZATION

   (55,729,301.29

136100000 - WORK IN SERVICE

   (55,729,301.29

136131000 DEPRECIATION AND AMORTIZATION-TERMINATION

   (66,624.52

136150000 - INFRASTRUCTURE

   (100,850.97

136152000 DEPRECIATION AND AMORTIZATION.-BUILDINGS

   (3,356.13

136158000 DEPRECIATION AND AMORTIZATION-OTHER ASSETS - INFRASTRUCTURE

   (97,494.84

136160000 - ASSETS FOR COMMON USE

   (51,686,195.06

136161000 DEPRECIATION AND AMORTIZATION-ASSETS FOR COMMON USE

   (51,686,195.06

136180000 - INTANGIBLE ASSETS

   (3,875,630.74

136181000 DEPRECIATION AND AMORTIZATION.-BRANDS AND PATENTS

   (25,507.92

136182000 DEPRECIATION AND AMORTIZATION-DATA PROCESSING SYSTEMS

   (147,708.70

136188000 DEPRECIATION AND AMORTIZATION.-OTHER INTANGIBLE ASSETS

   (3,702,414.12

161000000 - COMPENSATION ACCOUNTS

   -       

161600000 - PROFIT SHARING

   (1,518,241,535.57

161610000 - DIVIDENDS

   133,958,464.43   

161611000 OFFSET - DIVIDENDS ON INCOME

   133,958,464.43   

161620000 - INTEREST ON OWN CAPITAL

   (1,652,200,000.00

161625110 OFFSET - REVERSAL INTEREST ON OWN CAPITAL - SHAREHOLDERS' EQUITY

   (1,357,000,000.00

161625120 OFFSET - REVERSAL INTEREST ON OWN CAPITAL - SHAREHOLDERS' EQUITY

   (59,799,825.00

161625210 OFFSET - REVERSAL INTEREST ON OWN CAPITAL - SHAREHOLDERS' EQUITY

   (235,400,175.00

161700000 - OPERATING INCOME/EXPENSE

   61,358,464.19   

161710000 - OPERATING INCOME/EXPENSE

   41,459,692.33   

161711000 OFFSET-EQUITY ON OPERATIND RESULT FOR THE PERIOD

   44,923,192.17   

161712000 OFFSET EQUITY ON OPERATING VARIATION OF SHAREHOLDERS’ EQUITY

   (3,463,499.84

161720000 - NON-OPERATING INCOME/EXPENSE

   19,898,771.86   

161721000 OFFSET EQUITY ON OPERATING VARIATION OF SHAREHOLDERS’ EQUITY

   19,898,771.86   

161900000 - RETIFICATION

   1,456,883,071.38   

161910000 OFFSET - RETIFICATION - CONTRIBUTION

   1,456,883,071.38   

200000000 - TOTAL LIABILITIES

   (5,598,445,437.85

210000000 - CURRENT LIABILITIES

   (377,652,366.20

212000000 - OBLIGATIONS - CURRENT MONETARY LIABILITIES

   (377,652,366.20

212100000 - PAYROLL AND RELATED ACCRUALS

   (4,000.00

212120000 - PAYROLL

   -       

212121000 PAYROLL AMOUNT PAYABLE

   -       

212130000 - SOCIAL CHARGES

   (4,000.00

212131000 - SOCIAL CHARGES AMOUNTS PAYABLE

   (4,000.00

212131000 - SOCIAL CHARGES AMOUNTS PAYABLE

   (4,000.00

212131200 SOCIAL CHARGES

   (4,000.00

212200000 - MATERIALS AND SERVICES

   (204,956.72

212210000 - SUPPLIERS - OPERATING

   3,858.15   

212211000 - OPERATING SUPPLIERS.LOCAL CURRENCY

   3,858.15   


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

212211300 - SUPPLIERS - OTHER SERVICES

   3,858.15   

212211320 SUPPLIERS - OTHER SERVICES

   3,858.15   

212220000 - ACCOUNTS PAYABLE MATERIALS AND SERVICES

   (115,059.63

212221000 ACCOUNTS PAYABLE - PERSONNEL

   -       

212222000 CURRENT LIABILITIES SUPPLIERS LOCAL CURRENCY

   (1,900.46

212223000 SUPPLIERS - FOREIGN CURRENCY

   (113,159.17

212224000 CURRENT LIABILITIES - TAX ACCOUNTS PAYABLE

   -       

212229000 TRANSITION PAYMENTS

   -       

212250000 - SUPPLIERS PROVISION FOR PRO RATO

   (93,755.24

212259000 OTHER CURRENT LIABILITIES - SUPPLIERS

   (93,755.24

212400000 - TAXES

   (30,804,772.27

212410000 - FEDERAL TAXES

   (30,804,551.14

212411000 - OBLIGATIONS - AMOUNTS DUE

   (409.08

212411300 - SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY

   (336.11

212411310 CURRENT LIABILITIES-SOC. CONTR. FOR FINANCING SOC. SEC. ON BLLING

   (336.11

212411400 - SOCIAL INTEGRATION PROGRAM

   (72.97

212411410 CURRENT LIABILITIES-SOCIAL INTEGRATION PROGRAM - ON BLLING

   (72.97

212412000 - PROVISIONED AMOUNTS

   (30,790,427.27

212412100 - CORPORATE TAX

   (22,312,589.50

212412110 CORPORATE TAX ON RESULT FOR THE PERIOD

   (22,312,589.50

212412200 - SOCIAL CONTRIBUTION

   (8,477,837.77

212412210 SOCIAL CONTRIBUTION ON RESULT FOR THE PERIOD

   (8,477,837.77

212415000 - WITHHOLDING TAX PAYABLE

   (13,714.79

212415100 - WITHHOLDING TAX

   (6,141.56

212415110 CURRENT LIABILITIES CORPORATE TAX ON PAYROLL

   (4,133.32

212415120 CURRENT LIABILITIES CORPORATE TAX ON SERVICES RENDERED

   (2,008.24

212415160 CORPORATE TAX ON INTEREST ON OWN-CAPITAL

   -       

212415200 - SOC. CONTR., INTEGRATION PROG. AND FINANCING-PROV. MEASURE 135

   (6,156.95

212415219 FEDERAL CONTRIBUTIONS

   (6,156.95

212415500 - PENSION PLAN CONTRIBUTION

   (1,416.28

212415510 PENSION PLAN CONTRIBUTION PAYROLL

   (1,416.28

212430000 - MUNICIPAL TAXES

   (221.13

212431000 - OBLIGATIONS - AMOUNTS DUE

   (221.13

212431100 - TAXES ON SERVICES - AMOUNTS DUE

   (221.13

212431100 CURRENT LIABILITIES - TAXES ON SERVICES - AMOUNTS DUE

   (221.13

212435000 - WITHHOLDING TAX RECOVERABLE

   -       

212435200 CURRENT LIABILITIES-ISS - SUBSTITUTION

   -       

212500000 - CAUTIONS/RETENTIONS/THIRD PARTY CONSIGNATIONS

   -       

212530000 - RETENTIONS

   -       

212531000 - RETENTIONS IN PAYROLL PAYMENTS - NON-TAXABLE

   -       

212531600 RETENTIONS PAYROLL PENSION FUND

   -       

212600000 - PROFIT SHARING PAYABLE

   (267,693,624.75

212610000 - DIVIDENDS

   (267,693,624.75

212611000 CURRENT LIABILITIES - DIVIDENDS PAYABLE

   (267,693,624.75

212620000 - INTEREST ON OWN CAPITAL

   -       

212621000 CREDITS FROM INTEREST ON OWN-CAPITAL

   -       

212700000 - OTHER LIABILITIES

   (78,945,012.46

212710000 - LIABLE CONTINGÊNCIES

   (214,998.42

212712100 - LABOR CONTINGENCIES

   (214,998.42

212712100 - PROVISIONS FOR LABOR CONTINGENCIES

   (214,998.42

212712110 PROVISIONS FOR LABOR CONTINGENCIES CURRENT

   (214,998.42

212712200 - TAX CONTINGENCIES

   -       

212712210 - PROVISIONS FOR TAX CONTINGENCIES

   -       

212712212 PROVISIONS FOR FEDERAL TAX CONTINGENCIES LONG-TERM

   -       

212780000 - OTHER LIABLITIES

   (78,730,014.04

212781000 - AMOUNTS PAYABLE

   (78,730,014.04

212781990 AMOUNTS PAYABLE

   (78,730,014.04

220000000 - LONG-TERM LIABILITIES

   (11,512,066.47

222000000 - LONG-TERM MONETARY LIABILITIES

   (11,512,066.47

222400000 - TAXES

   (8,265,855.08

222410000 - FEDERAL TAXES

   (8,265,855.08

222411000 - OBLIGATIONS AMOUNTS DUE

   -       

222411300 - SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY

   -       

222411391 SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY ON BLLING

   (84,331,461.23

222411392 SOCIAL CONTRIBUTION FOR FINANCING SOCIAL SECURITY ON BLLLING

   (25,863,847.13


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

222411399 SOC. CONTR. FOR FINANCING SOC. SEC.-RETIFICATION JUDICIAL DEPOSITS

   110,195,308.36   

222411400 - SOCIAL INTEGRATION PROGRAM

   -       

222411491 FEDERAL TAXES - SOCIAL INTEGRATION PROGRAM ON BILLING

   (18,308,804.07

222411492 FEDERAL TAXES - SOCIAL INTEGRATION PROGRAM ON BILLING

   (5,615,177.32

222411499 SOCIAL INTEGRATION PROGRAM-RETIFICATION JUDICIAL DEPOSITS

   23,923,981.39   

222413000 - DIFFERENT TAXES ON INCOME

   (8,265,855.08

222413100 - CORPORATE TAX

   (8,161,005.14

222413110 - CORPORATE TAX ON TEMPORARY DIFFERENCES

   (8,161,005.14

222413112 CORPORATE TAX ON LONG-TERM TEMPORARY DIFFERENCES

   (8,161,005.14

222413200 - SOCIAL CONTRIBUTION ON NET INCOME

   (104,849.94

222413210 - SOCIAL CONTRIBUTION ON TEMPORARY DIFFERENCES

   (104,849.94

222413212 SOCIAL CONTRIBUTION ON LONG-TERM TEMPORARY DIFFERENCES

   (104,849.94

222700000 - OTHER LIABILITIES

   (3,246,211.39

222710000 - LIABLE CONTINGENCIES

   (3,246,211.39

222712000 - PROVISION FOR CONTINGENCIES

   (3,246,211.39

222712200 - PROVISIONS FOR TAX CONTINGENCIES

   (3,243,280.05

222712210 - PROVISIONS FOR FEDERALTAX CONTINGENCIES

   (3,243,280.05

222712212 PROVISIONS FOR FEDERALTAX CONTINGENCIES LONG-TERM

   (3,243,280.05

222712300 - PROVISIONS FOR CIVIL CONTINGENCIES

   (136,536.79

222712311 PROVISIONS FOR CIVIL CONTINGENCIES LONG TERM

   (136,536.79

222712900 - RETIFICATION JUDICIAL DEPOSITS

   133,605.45   

222712930 - RETIFICATION JUDICIAL DEPOSITS

   133,605.45   

222712931 RETIFICATION JUDICIAL DEPOSITS - CIVIL

   133,605.45   

222720000 - PROVISIONS

   -       

222724000 PROVISIONS WITH CONTROL

   -       

250000000 - SHAREHOLDERS’ EQUITY

   (5,209,281,005.18

251000000 - SHARE CAPITAL

   (2,596,271,819.93

251100000 PAID-IN CAPITAL

   (2,596,271,819.93

252000000 - RESERVES

   (3,188,186,321.95

252100000 - CAPITAL RESERVES

   (309,178,222.60

252120000 - GOODWILL ON PAID-IN SHARES

   (306,960,979.92

252121000 GOODWILL PAID-IN

   (306,960,979.92

252160000 - DONATIONS AND TAX INCENTIVES

   (100.00

252169000 OTHER DONATIONS AND TAX INCENTIVES

   (100.00

252190000 - OTHER CAPITAL RESERVES

   (2,217,142.68

252190000 OTHER CAPITAL RESERVES

   (2,217,142.68

252300000 - PROFIT RESERVES

   (2,879,008,099.35

252310000 - LEGAL RESERVE

   (305,966,349.83

252310000 LEGAL RESERVE

   (305,966,349.83

252320000 - STATUTORY RESERVE

   (2,573,041,749.52

252321000 INVESTMENT RESERVE

   (2,573,041,749.52

253000000 - RETAINED EARNINGS

   554,330,772.17   

253100000 - RETAINED EARNINGS

   -       

253100000 RETAINED EARNINGS

   -       

253200000 - RESULT FOR THE PERIOD

   -       

253200000 RESULT FOR THE PERIOD

   -       

253300000 - ACCUMULATED DEFICIT

   554,330,772.17   

253300000 ACCUMULATED DEFICIT

   554,330,772.17   

254000000 - TREASURY SHARES

   20,846,364.53   

254100000 - ORDINARY SHARES RETIFICATION

   20,846,364.53   

254100000 ORDINARY SHARES RETIFICATION

   20,846,364.53   

300000000 - EXPENSES

   -       

310000000 - OPERATING EXPENSES

   -       

310100000 - PAYROLL

   4,751,201.21   

310110000 - FEES

   239,874.68   

310111000 - FEES BOARD OF DIRECTORS AND EXECUTIVES

   193,979.47   

310111100 FEES GRATIFICATIONS

   193,979.47   

310113000 - FEES - SOCIAL CHARGES

   43,795.21   

310113100 - FEES - PENSION FUNDS

   42,764.15   

310113500 FEES - UNEMPLOYMENT GUARANTEE FUND

   1,031.06   

310117000 - REPRESENTATION BOARD OF DIRECTORS AND EXECUTIVES

   2,100.00   

310117100 BUDGET FOR REPRESENTATION

   2,100.00   

310120000 - PERSONNEL - SALARIES AND ADDITIONS

   1,065.33   

310124000 - PERSONNEL - SOCIAL BENEFITS

   1,065.33   

310124900 - OTHER SOCIAL BENEFITS

   1,065.33   


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

310124920 - SISTEL SOCIAL SECURITY FUND

   1,065.33   

310124920 SOCIAL SECURITY FUND - PERSONNEL

   1,065.33   

310190000 - OTHER EXPENSES - PERSONNEL

   4,510,261.20   

310198000 - SHARED EXPENSES

   4,510,261.20   

310198100 SHARED EXPENSES

   4,510,261.20   

310300000 - THIRD PARTY SERVICES

   1,658,439.38   

310330000 - COMMUNICATION SERVICES AND MARKETING

   1,341,953.50   

310332000 - LEGAL AND SOCIAL MARKETING

   1,341,953.50   

310332300 LEGAL MARKETING

   1,341,953.50   

310350000 - TECHNICAL AND ADMINISTRATIVE SERVICES

   307,779.51   

310356000 - ASSISTANCE AND CONSULTING CORPORATE

   11,760.00   

310356800 ASSISTANCE AND TECHNICAL CONSULTING

   11,760.00   

310359000 - OTHER ADMINISTRATIVE TECHNICAL SERVICES

   296,019.51   

310359000 OTHER ADMINISTRATIVE TECHNICAL SERVICES

   296,019.51   

310370000 - LOGISTICS AND COMMUNICATION

   7,591.34   

310371000 - LOGISTICS

   7,591.34   

310371200 - LOGISTICS - PERSONNEL

   7,591.34   

310371210 TICKETS

   7,591.34   

310390000 - OTHER THIRD PARTY SERVICES

   1,115.03   

310396000 - BLLING AND COLLECTION SERVICES

   76.57   

310396200 COLLECTION SERVICES

   76.57   

310398000 - BANKING SERVICES

   1,038.46   

310398000 BANKING SERVICES ON BLLING AND COLLECTION

   1,038.46   

310400000 - RENTALS

   2,720,766.06   

310430000 - INSURANCES

   2,720,766.06   

310435000 - INSURANCE - VEHICLES

   8,788.11   

310439000 - INSURANCE OTHER

   2,711,977.95   

310900000 - OTHER EXPENSES

   (9,130,406.65

310920000 - TAXES

   4,209.39   

310922000 - STATE TAXES

   4,209.39   

310922100 - TAXES

   4,045.39   

310922120 - TAX ON VEHICLES

   4,045.39   

310922120 TAX ON VEHICLES

   4,045.39   

310922300 - RATES

   164.00   

310922390 OTHER STATE RATES

   164.00   

310980000 - DEPRECIATIONS AND AMORTIZATIONS

   72,126.47   

310985100 - DEPRECIATION WORK IN SERVICE

   72,126.47   

310985100 - DEPRECIATION WORK IN SERVICE

   72,126.47   

310985130 DEPRECIATION WORK IN SERVICE-TERMINATION

   3,172.59   

310985150 DEPRECIATION WORK IN SERVICE-INFRASTRUCTURE

   1,380.13   

310985160 DEPRECIATION WORK IN SERVICE-COMMON USE ASSETS

   67,573.75   

310990000 - RETIFICATION OF EXPENSES / TRANSITION OF EXPENSES

   (9,206,742.51

310993000 - WITHDRAWAL FOR COST ALLOCATION

   (9,206,742.51

310993300 ALLOCATION OF GENERAL AND ADMINISTRATIVE COSTS

   (9,206,742.51

313000000 - GENERAL AND ADMINISTRATIVE

   9,206,742.51   

313100000 GENERAL AND ADMINISTRATIVE - PERSONNEL

   4,751,201.21   

313300000 GENERAL AND ADMINISTRATIVE - THIRD PARTY SERVICES

   1,658,439.38   

313400000 GENERAL AND ADMINISTRATIVE - RENTALS

   2,720,766.06   

313900000 GENERAL AND ADMINISTRATIVE - OTHER EXPENSES

   4,209.39   

313980000 GENERAL AND ADMINISTRATIVE - DEPRECIATIONS AND AMORTIZATIONS

   72,126.47   

350000000 - OTHER OPERATING EXPENSES

   621,137,187.37   

355000000 - OPERATING LOSSES FROM EQUITY METHOD ACCOUNTING

   620,972,911.67   

355900000 - OTHER EXPENSES

   620,972,911.67   

355960000 - LOSSES

   620,972,911.67   

355966000 - FIXED ASSETS INVESTIMENTS

   620,972,911.67   

355966100 - LOSSES - CORPORATE STAKEHOLDINGS

   620,972,911.67   

355966110 - LOSSES ON INVESTMENTS BASED ON SHAREHOLDERS’ EQUITY.

   620,972,911.67   

355966111 LOSSES WITH INVESTMENTS ON INCOME

   620,923,046.39   

355966116 LOSSES WITH INVESTMENTS ON INCOME

   49,865.28   

357000000 - OPERATING PROVISIONS

   (546,394.41

357900000 - OTHER EXPENSES

   (546,394.41

357950000 - PROVISIONS

   (546,394.41

357955000 - PROVISIONS FOR CONTINGENCIES

   (546,394.41

357955200 - PROVISION FOR LOSSES CURRENT MONETARY OBLIGATIONS

   (9,733.14

357955210 - PROVISION FOR LOSSES-LABOR CONTINGENCIES

   -       


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

357955210 PROVISION FOR LOSSES LABOR CONTINGENCIES

   -       

357955220 - PROVISION FOR LOSSES-TAX CONTINGENCIES

   (9,733.14

357955221 PROVISION FOR LOSSES FEDERAL TAX CONTINGENCIES

   (9,733.14

357955400 - PROVISION FOR LOSSES LONG TERM MONETARY OBLIGATIONS

   (536,661.27

357955420 - PROVISION FOR LOSSES-TAX CONTINGENCIES

   (536,661.27

357955421 PROVISION FOR LOSSES FEDERAL TAX CONTINGENCIES LONG-TERM

   (536,661.27

357955430 - PROVISION FOR LOSSES-CIVIL CONTINGENCIES

   -       

357955431 PROVISION FOR LOSSES-CIVIL CONTINGENCIES LONG-TERM

   -       

359000000 - OTHER OPERATING EXPENSES

   710,670.11   

359900000 - OTHER EXPENSES

   710,670.11   

359910000 - GENERAL EXEPENSES

   149,506.73   

359918000 - OTHER GENERAL EXPENSES

   149,506.73   

359918100 ENTITY CLASSE

   147,666.73   

359918300 OTHER GENERAL EXPENSES

   1,840.00   

359920000 - TAXES

   20,760.22   

359921000 - FEDERAL TAXES

   19,648.75   

359921200 - CONTRIBUTIONS

   2,283.30   

359921210 OTHER OPERATING EXPENSES - SOCIAL INGETRATION PROGRAM

   407.29   

359921220 OTHER OPERATING EXPENSES - SOC. CONTR. FOR FINANCING SOC. SEC.

   1,876.01   

359921300 - RATES

   17,365.45   

359921390 OTHER FEDERAL RATES

   17,365.45   

359923000 - MUNICIPAL TAXES

   1,111.47   

359923100 - TAXES

   1,111.47   

359923110 OTHER OPERATING EXPENSES - TAXES ON SERVICES

   1,111.47   

359930000 - FINES

   540,403.16   

359931000 - TAX FINES

   540,403.16   

359931100 - DEDUCTIBLE FINES

   540,403.16   

359931110 FINES TO BE OFFSET

   540,203.16   

359931120 FINES FOR NON-COMPLIANCE WITH OBLIGATIONS

   200.00   

360000000 - FINANCIAL EXPENSES

   5,710,523.87   

361000000 - FINANCIAL EXPENSES LOCAL CURRENCY

   5,629,469.85   

361500000 - EXPENSES WITH FINANCIAL OPERATIONS

   5,629,469.85   

361510000 - INTEREST REMUNERATION

   4,980,248.42   

361516000 - MONETARY CURRENT LIABILITIES

   70,180.68   

361516790 OTHER CURRENT LIABILITIES

   77.02   

361516912 FINANCIAL EXPENSES WITH CIVIL CONTINGENCIES

   9,155.48   

361516921 FINANCIAL EXPENSES WITH LABOR CONTINGENCIES

   11,370.22   

361516931 FINANCIAL EXPENSES WITH TAX CONTINGENCIES

   381.51   

361516932 FINANCIAL EXPENSES WITH TAX CONTINGENCIES

   49,196.45   

361518000 - MONETARY LONG-TERM REALIZABLE AMOUNTS

   4,910,067.74   

361518400 FIN. EXPENSE LOCAL CURR. INTEREST REMUNERATION ON TAX LONG-TERM

   4,910,067.74   

361530000 - INTEREST IN ARREARS

   649,131.04   

361536000 - MONETARY CURRENT LIABILITIES

   649,131.04   

361536400 DF-MN-JRS.MORAT.-S/TRIBUTOS-PC

   649,131.04   

361560000 - TAXES ON FINANCIAL OPERATIONS

   90.37   

361561000 - CURRENT ASSETS

   90.37   

361561100 - ON CASH AND CASH EQUIVALENTS

   90.37   

361561110 FINANCIAL OPERATIONS TAX ON NEGATIVE CHECKINGS ACCOUNTS

   90.37   

361590000 - OTHER FINANCIAL EXPENSES

   0.02   

361599000 - OTHER

   0.02   

361599800 OTHER FINANCIAL EXPENSES LOCAL CURRENCY

   0.02   

362000000 - FINANCIAL EXPENSES FOREIGN CURRENCY

   81,054.02   

362500000 - EXPENSES WITH FINANCIAL OPERATIONS

   81,054.02   

362520000 - EXCHANGE VARIATION

   81,054.02   

362522000 - MONETARY CURRENT ASSETS

   92,172.09   

362522800 ON FINANCIAL INVESTMENTS

   92,172.09   

362526000 - MONETARY CURRENT LIABILITIES

   (11,118.07

362526200 FINANCIAL EXPENSE FOREIGN CURRENCY SUPPLIERS EXCHANGE VARIATION

   (11,118.07

370000000 - NON-OPERATING EXPENSES

   13,441.24   

375000000 - NON-OPERATING LOSSES FROM EQUITY ACCOUNTING METHOD

   13,441.24   

375966000 - FIXED ASSETS - INVESTIMENTS

   13,441.24   

375966100 - LOSSES ON CORPORATE STAKEHOLDINGS

   13,441.24   

375966113 LOSSES WITH INVESTMENTS ON SHAREHOLDERS' EQUITY

   13,441.24   

380000000 - DEDUCTIONS / STAKEHOLDINGS

   34,922,478.93   

381000000 - CORPORATE TAX

   26,388,918.49   


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

381700000 - DEDUCTIONS FROM INCOME

   26,388,918.49   

381710000 - EXPENSES - PROVSIONS / TAXES

   26,388,918.49   

381711000 - CORPORATE TAX ON INCOME FOR THE PERIOD

   22,077,442.21   

381711100 CORPORATE INCOME TAX PROVISION - NORMAL RATE

   13,252,465.33   

381711200 CORPORATE INCOME TAX PROVISION - ADDITIONAL RATE

   8,824,976.88   

381712000 - CORPORATE TAX ON PERMANENT ADDITIONS

   3,003,227.39   

381712100 CORPORATE TAX ON PROVISONS FOR PERMANENT ADDITIONS

   3,003,227.39   

381713000 - CORPORATE TAX ON PERMANENT EXCLUSIONS

   (1,386,335.06

381713100 CORPORATE TAX ON PROVISIONS FOR PERMANENT EXCLUSIONS

   (1,386,335.06

381717000 - CORPORATE TAX ON PRIOR PERIOD'S RESULTS

   2,694,583.96   

381717000 CORPORATE TAX-PROVISION ON OTHER ADJUSTMENTS

   2,694,583.96   

381719000 - CORPORATE TAX PAYABLE / RECOVERABLE

   (0.01

381719100 - CURRENT EXPENSES

   (23,694,334.54

381719100 CORPORATE TAX-PROVISION FOR CURRENT EXPENSES

   (23,694,334.54

381719300 - CORPORATE TAX DIFFERENCES ON TEMPORARY ADDITIONS

   (26,558,770.15

381719310 - CORPORATE TAX ON DEFERRED CHARGES

   (26,558,770.15

381719311 DEFERRED CHARGES CURRENT

   (53,749.61

381719312 DEFERRED CHARGES LONG-TERM

   (26,505,020.54

381719400 - CORPORATE TAX ON TEMPORARY EXCLUSIONS

   27,940,515.18   

381719410 - CORPORATE TAX DIFFERENCES LIABILITIES

   1,262,672.35   

381719412 CORPORATE TAX DIFFERENCES LIABILITIES

   1,262,672.35   

381719420 - REVERSAL OF TAX ON DEFERRED CHARGES

   26,677,842.83   

381719421 REVERSAL OF TAX ON DEFERRED CHARGES CURRENT

   53,244.96   

381719422 REVERSAL OF TAX ON DEFERRED CHARGES LONG-TERM

   26,624,597.87   

381719500 - TAXES PAYABLE / TAXES RECOVERABLE

   22,312,589.50   

381719510 TAXES PAYABLE

   22,312,589.50   

382000000 - SOCIAL CONTRIBUTION

   8,533,560.44   

382700000 - DEDUCTIONS FROM INCOME

   8,533,560.44   

382710000 - EXPENSES - PROVISION FOR TAXES

   8,533,560.44   

382711000 - SOCIAL CONTRIBUTION ON INCOME FOR THE PERIOD

   7,951,479.20   

382711100 SOCIAL CONTRIBUTION-PROVISION NORMAL RATE

   7,951,479.20   

382712000 - SOCIAL CONTRIBUTION ON PERMANENT ADDITIONS

   1,081,161.86   

382712100 PROVISION FOR TAXES ON PERMANENT ADDITIONS

   1,081,161.86   

382713000 - SOCIAL CONTRIBUTIONS ON PERMANENT EXCLUSIONS

   (499,080.62

382713100 PROVISION FOR TAXES ON PERMANENT EXCLUSIONS

   (499,080.62

382719000 - SOCIAL CONTRIBUTION PAYABLE / RECOVERABLE

   -       

382719100 - CURRENT EXPENSE

   (8,533,560.44

382719100 SOCIAL CONTRIBUTION-PROVISION.-CURRENT EXPENSE

   (8,533,560.44

382719300 - SOCIAL CONTRIBUTION DIFFERENCES ON TEMPORARY ADDITIONS

   (323,533.38

382719310 - SOCIAL CONTRIBUTION ON DEFERRED CHARGES

   (323,533.38

382719311 DIFFERENCES ON TEMPORARY ADDITIONS CURRENT DEFERRED CHARGES

   (19,349.86

382719312 DIFFERENCES ON TEMPORARY ADDITIONS LONG-TERM DEFERRED CHARGES

   (304,183.52

382719400 - SOCIAL CONTRIBUTION ON TEMPORARY EXCLUSIONS

   379,256.05   

382719410 - DEFERRED SOCIAL CONTRIBUTION

   12,856.51   

382719412 TAX DIFFERENCES LIABILITIES LONG-TERM

   12,856.51   

382719420 - SOCIAL CONTRIBUTION ON DEFERRED CHARGES

   366,399.54   

382719421 REVERSAL OF TAX DIFFERENCES CURRENT

   19,168.18   

382719422 REVERSAL OF TAX DIFFERENCES LONG-TERM

   347,231.36   

382719500 - SOCIAL CONTRIBUTIONAP ON TAXES PAYABLE / TAXES RECOVERABLE

   8,477,837.77   

382719510 TAXES PAYABLE

   8,477,837.77   

390000000 - EXPENSE RETIFICATION

   (670,990,373.92

390900000 - OTHER EXPENSE RETIFICATION

   (670,990,373.92

390990000 - RETIFICATION OF EXPENSES / TRANSITION OF EXPENSES

   (670,990,373.92

390991000 - EXPENSE RETIFICATION

   (670,990,373.92

390991100 WITHDRAWAL FOR INCOME OF THE PERIOD

   (670,990,373.92

400000000 - REVENUES

   -       

450000000 - OTHER OPERATING REVENUES

   (6,858,838.36

451000000 - TECHNICAL SELLING SERVICES

   (22,229.35

451900000 - MISCELLANEOUS REVENUES

   (22,229.35

451910000 - OTHER REVENUES

   (22,229.35

451911000 - TECHNICAL SELLING SERVICES

   (22,229.35

451911300 - OCCASIONAL EVENTS

   (22,229.35

451911310 - TELEPHONE DIRECTORY

   (22,229.35

451911319 OTHER REVENUES - TELEPHONE DIRECTORY

   (22,229.35

455000000 - GAINS ON EQUITY ACCOUNTING METHOD

   (6,751,314.97


Table of Contents

Brasil Telecom Participações S,A

Verification balance

May/2009

 

VERIFICATION BALANCE

   Actual balance  

455900000 - MISCELLANEOUS REVENUES

   (6,751,314.97

455960000 - GAINS

   (6,751,314.97

455966000 - GAINS ON CORPORATE STAKEHOLDINGS

   (6,751,314.97

455966111 GAINS WITH INVESTMENTS ON INCOME

   (2,042,856.97

455966112 GAINS WITH INVESTMENTS ON CAPITAL RESERVE

   (4,708,458.00

459000000 - OTHER OPERATING REVENUES

   (85,294.04

459900000 - MISCELLANEOUS REVENUES

   (85,294.04

459910000 - OTHER REVENUES

   (85,294.04

459918000 - OTHER OPERATING REVENUES

   (85,294.04

459918300 - OCCASIONAL EVENTS

   (85,294.04

459918390 - OTHER

   (85,294.04

459918391 RECOVERABLE EXPENSES

   (82,838.99

459918399 OTHER REVENUES

   (2,455.05

460000000 - FINANCIAL INCOME

   (98,454,999.70

461000000 - FINANCIAL INCOME LOCAL CURRENCY

   (98,445,603.90

461500000 - FINANCIAL INCOME

   (98,445,603.90

461510000 - INTEREST REMUNERATION

   (96,333,458.19

461511000 - INTEREST ON FINANCIAL INVESTMENTS

   (31,461,824.86

461511300 INTEREST ON FINANCIAL INVESTMENTS

   (31,461,824.86

461512000 - MONETARY CURRENT ASSETS

   (47,909,877.87

461512400 INTEREST ON TAXES

   (83,664.27

461512800 INTEREST ON FINANCIAL INVESTMENTS

   (47,826,213.60

461513000 MONETARY LONG-TERM REALIZABLE AMOUNTS

   (16,961,755.46

461513400 INTEREST ON TAXES

   (11,911,066.06

461513700 INTEREST ON JUDICIAL DEPOSITS

   (5,050,689.40

461590000 - OTHER FINANCIAL INCOME

   (2,112,145.71

461599000 - OTHER

   (2,112,145.71

461599400 OTHER FINANCIAL REVENUE - LOCAL CURRENCY - TAXATION RATE

   (2,112,145.71

462000000 - FINANCIAL INCOME FOREIGN CURRENCY

   (9,395.80

462500000 - FINANCIAL INCOME

   (9,395.80

462520000 - EXCHANGE VARIATION

   (9,395.80

462522000 - MONETARY CURRENT ASSETS

   (9,395.80

462522800 REVENUE ON FINANCIAL INVESTMENTS

   (9,395.80

490000000 - REVENUE RETIFICATION

   105,313,838.06   

490900000 - REVENUE RETIFICATION

   105,313,838.06   

490990000 - REVENUE RETIFICATION

   105,313,838.06   

490991100 WITHDRAWAL FOR INCOME OF THE PERIOD

   105,313,838.06   

900000000 - TRANSITIONS

   -       

990000000 - TRANSITIONS

   -       

991000000 - TRANSITIONS

   -       

991300000 - CONTIGENCIES

   -       

991310000 - CONTINGENCIES JUDICIAL DEPOSITS

   -       

991310000 TRANSITION OF EXECUTED DEPOSITS

   -       


Table of Contents

ATTACHMENT 2

 

LOGO



Table of Contents

GLOSSARY

ASSETS APPROACH - valuation methodology in which all assets and liabilities (including unregistered ones) have their value adjusted according to their market values.

BETA - measurement of a stock systematic risk, price trend of a certain stock to be related to changes in a certain index.

BUSINESS RISK - uncertainty level for realizing future returns expected for the business, which do not result from financial leverage.

CAPITAL STRUCTURE - breakdown of the capital invested in a company, including own capital (equity) and third-parties capital (indebtedness).

CAPITALIZATION - conversion of a simple period of economic benefits into value.

CAPITALIZATION RATE - any divisor used for converting economic benefits into value in a simple period.

CAPM - Capital Asset Pricing Model - model in which the cost of capital for any stock or group of stocks is equivalent to the risk-free rate added to a risk premium, provided by the systematic risk of the stock or group of stocks under analysis.

CASH FLOW - cash generated by an asset, group of assets or company during a certain period of time. Usually, such term is complemented by a qualification, depending on the context (operating, non-operating, etc)

COMPANY - commercial, industrial, service or investment entity performing an economic entity.

CONSTRUCTION EQUIVALENT AREA - constructed area on which the corresponding construction unit cost equivalence is applied, as provided by the principles of NB-140 of ABNT (Brazilian Association of Technical Rules).

CONTROL - power to direct the company strategic, politic and administrative management.

CONTROLLING PREMIUM - value or percentage of a controlling stocks pro rata value over the non-controlling stocks pro rata value, which reflect the controlling power.

COST OF CAPITAL - expected return rate required by the market for attracting funds for a determined investment.

CURRENT VALUE - It is the value for replacing an existing asset for a new one, depreciated according its physical conditions.

DISCOUNT FOR LACK OF CONTROL - value or percentage deducted from the 100%-pro rata value of a company value, which reflects the lack of part or whole control.

DISCOUNT FOR LACK OF LIQUIDITY - value or percentage deducted from the 100% pro rata value of a company value, which reflects the lack of liquidity.

DISCOUNT RATE - any divisor used for converting a future economic benefit flow into present value.

EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.

ECONOMIC BENEFIT - benefits such as revenues, net income, net cash flow, etc.

ELECTRIC DAMAGE VALUE - It is an estimation of the cost for repairing or replacing the parts of an asset in case of electric damage. Values are scheduled in percentages of the Replacing Value and were calculated through equipment’s manual analysis and the repairing maintenance expertise of APSIS’ technicians.

 

LOGO


 

1


Table of Contents

FAIR MARKET VALUE - value for which a certain asset change its ownership between a potential seller and a potential buyer, when both parties are aware of relevant facts and none of them are under pressure to make the deal.

GOODWILL - intangible asset referring to name, reputation, client portfolio, loyalty, localization and other similar items that cannot be identified separately.

HOMOGENIZED AREA - usable, private or constructed area with mathematical treatments for valuation purposes, according to criteria set forth by APSIS, based on the real state market.

INCOME APPROACH - valuation methodology by converting to present value expected economic benefits.

INSURANCE MAXIMUM VALUE - It is the maximum value of an asset for which it is advisable to insure it. Such criterion establishes that the asset which depreciation is higher than 50%should have a Insurance Maximum Value equivalent to twice the Current Value; and, an asset which depreciation is lower than 50%, should have a Insurance Maximum Value equivalent to the Replacing Value.

INSURANCE VALUE - It is the value for which the Insurance Company assumes the risks, and it is not applied on land and foundations, expect in special cases.

INTANGIBLE ASSETS - non-physical assets such as brands, patents, rights, contracts, industrial secrets that provide the owner with rights and values.

INTERNAL RETURN RATE - discount rated in which the present value of the future cash flow is equivalent to the investment cost.

INVESTED CAPITAL - sum of own capital and third-parties capital invested in a company. Third-parties capital is usually related to debts with short and long term interests to be specified in the valuation context.

INVESTED CAPITAL CASH FLOW - cash flow generated by the company to be reverted to financers (interests and amortizations) and shareholders (dividends) after operating costs and expenses and capital expenditures.

INVESTMENT VALUE - value for a particular investor, based on particular interests for a certain asset such as synergy with other companies of a investor, different perceptions of risk and future performances, etc.

ISSUE DATE - date on which the valuation report is ended, when valuation conclusions are presented to the client.

LEVERAGED BETA - beta value reflecting the indebtedness in the capital structure.

LIQUIDATION VALUE - It is the value of a sale in the market, out of its original productive process. In other words, it is the value that would be verified in case the asset was deactivated and put up for sale separately, considering costs of disassembly or demolition (in case of real estate), storage and transportation.

LIQUIDITY - capacity to rapidly convert a certain asset into cash or into a debt payment.

MARKET APPROACH - valuation methodology, which utilizes multiples that result from the sale price of similar assets.

MARKET NET EQUITY - see assets approach.

MULTIPLE - market value of a company, stock or invested capital, divided by a company’s measurement (revenues, income, client volume, etc.).

 

LOGO


 

2


Table of Contents

NON-OPERATING ASSETS - assets that are not directly related to the company operating activity (whether they generate revenue or not) and that may be sold without affecting its operation.

OPERATING ASSETS - assets that are necessary for the company’s operations.

PERPETUITY VALUE - value at the end of the projective period to be added to the cash flow.

PRESENT VALUE - value of a future economic benefit on a specific date, calculated by the application of a discount rate.

PRIVATE AREA - usable area including building elements (such as walls, columns, etc) and elevators hall (in some cases).

REFERENCE DATE - specific date (day, month and year) to apply the valuation.

RESIDUAL VALUE - It is the value of a new or old asset projected for a certain date, limited to the date on which such asset turns into scrap, considering that during such period of time, the asset will be operating.

REPLACING VALUE (FOR A NEW ASSET) - value based on the price (usually at market current prices) or replacing an asset for a new equal or similar one.

SCRAP VALUE - It is the asset value at the end of its useful life, considering its disassembly or demolition value (in case of real estate), storage and transportation.

SUPPORTING DOCUMENTATION - discount rate is a return rate used to convert into present value a payable or receivable amount.

TANGIBLE ASSETS - physical assets such as lands, constructions, machines and equipment, furniture and appliances, etc.

USEFUL AREA - usable area of a real estate, measures by the internal face of its walls.

USEFUL LIFE - period of time during which an asset may generate economic benefits

VALUATION - act or process through which the value of a company, stock interest or other asset is determined.

VALUATION METHODOLOGY - the approaches used for preparing valuing calculations in order to indicate the value of a company, stock interest or other asset.

VALUE - price denominated in monetary quantity.

WACC (Weighted Average Cost of Capital) - model in which the cost of capital is determined by the weighted average of the value.

 

LOGO


 

3


Table of Contents

LOGO


Table of Contents

Attachment II

Statement of the Adjustments to the Exchange Ratios

 

     Quoted Value  
     BRTO3     BRTO4     BRTP3     BRTP4  
     (in reais)  

Average until April 23, 2008

   R$ 39.8535      R$ 17.6654      R$ 48.6234      R$ 22.9818   

Interest attributable to shareholders’ equity declared on December 30, 2008

     (0.1448     (0.1448     (0.2146     (0.2146
                                

Updated value

     39.7087        17.5206        48.4088        22.7672   

 

     Exchange Ratios
     BrT
Common
Shares
   BrT
Preferred
Shares

Per outstanding BrT Part common share

   1.2190981    —  

Per outstanding BrT Part preferred share

   0.1720066    0.9096173


Table of Contents

Attachment III

Appraisal of the Net Worth of BrT Part and BrT at Market Prices

 

LOGO

 

APPRAISAL REPORT

 

        RJ-0278/09-02

 

          1/3 COPIES

   LOGO


Table of Contents
   REPORT:    RJ-0278/09-02
   BASE DATE:    May 31, 2009
   APPLICANT:    TELE NORTE LESTE PARTICIPAÇÕES S.A., with its head office located at Rua Humberto de Campos, 425, 8º andar, Leblon, in the city of Rio de Janeiro, State of Rio de Janeiro, registered with the General Roster of Corporate Taxpayers (CNPJ) under number 02.558.134/0001-58, hereinafter referred to as TNL.
LOGO    OBJECTS:   

BRASIL TELECOM S.A., with its head office located at SIA Sul, Lote D, Bloco B 1º andar, SIA, Brasília, Distrito Federal, registered with the General Roster of Corporate Taxpayers (CNPJ) under number 76.535.764/0001-43, hereinafter referred to as BrT, and;

 

BRASIL TELECOM PARTICIPAÇÕES S.A., with its head office located at ST SIA Sul Área Especial D, Bloco B Parte B, Guara, in Brasília, Federal District, registered with the General Roster of Corporate Taxpayers (CNPJ) under number 02.570.688/0001-70, hereinafter referred to as BrT PART.

   PURPOSE:    Calculation of the Net Equity of both BrT and BrT PART, following the appraisal of the equity of each of these companies pursuant to the same criteria and as of the same date, at market prices, for the purposes of article 264 of Law number 6,404 of 12/15/1976 (Corporate Law).

 

LOGO


 

 

APSIS CONSULTORIA   1
REPORT RJ-0278/09-02  


Table of Contents

EXECUTIVE SUMMARY

APSIS CONSULTORIA EMPRESARIAL Ltda. (APSIS) was hired by TNL to calculate the Net Equity of each of BrT and BrT PART, following the appraisal of the equity of each of these companies pursuant to the same criteria and as of the same date, at market prices, for the purposes of article 264 of Law number 6,404 of 12/15/1976 (Corporate Law).

The technical procedures used in this report are in accordance with the criteria set forth by appraisal standards. Appraisal calculations to assess the value of assets were devised on the basis of the income, asset and market approaches.

This report presents the market values of the companies’ assets and liabilities used to adjust the book Net Equity of each of BrT and BrT PART through asset approaches.

 

LOGO


 

 

APSIS CONSULTORIA   2
REPORT RJ-0278/09-02  


Table of Contents

ACQUISITION OF THE BRASIL TELECOM GROUP: SUMMARY OF THE OPERATION

On January 8, 2009, TELEMAR NORTE LESTE S.A. (“TMAR”) acquired, through its subsidiary COPART 1 PARTICIPAÇÕES S.A. (“COPART 1”), the shareholding control of BrT PART and BRT, indirectly becoming owner of 81,092,986 ordinary shares issued by BrT PART, which is equivalent to 61.2% of the voting capital.

The required investment for the acquisition was R$ 5,371,098,527.04 (five billion, three hundred and seventy-one million, ninety-eight thousand, five hundred and twenty-seven reais and four centavos), which represents the amount of R$ 77.04 (seventy-seven reais and four centavos) per share, in connection with an agreed upon price of R$ 5,863,495,791.40 (five billion, eight hundred and sixty-three million, four hundred and ninety-five thousand, seven hundred and ninety-one reais and forty centavos) updated for the daily average variation of the Interbank Deposit Certificate (CDI) less the net debt of R$ 998,053,465.69 (nine hundred and ninety-eight million, fifty-three thousand, four hundred and sixty-five reais and sixty-nine centavos) of INVITEL S.A. (“INVITEL”), which entity was subsequently merged into COPART 1, and finally adjusted for the stated revenues between January 1st, 2009 and the closing date.

The acquisition of BRT and its subsequent integration into TMAR`s operations, will give rise to a telecommunications company with 100% national shareholder control, present throughout the Brazilian territory and with the managerial, operational and financial capacity to expand its operations, including on an international basis.

As described in the Material Fact “Change of Shareholder Control”, published on January 8, 2009, the following steps will be followed, namely:

 

 

  1. Conclusion of Mandatory Public Offerings for the Acquisition of Shares;

 

  2. Corporate reorganization of the companies involved in the operation;

 

  3. Approval, introduction or registration of various regulatory bodies;

 

  4. Creation of one or more American Depositary Receipt programs by TMAR.

 

 

 

LOGO


 

 

APSIS CONSULTORIA   3
REPORT RJ-0278/09-02  


Table of Contents

LOGO

 

LOGOERE]


 

 

APSIS CONSULTORIA   4
REPORT RJ-0278/09-02  


Table of Contents

SUMMARY OF RESULTS

The tables below present an overview of the Net Equity at market prices of the companies involved in the operation, as of the base date of this report:

 

BRASIL TELECOM S.A.    FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

        Balance as of
5/31/2009 *
   Market
Adjustments
    ADJUSTED
BALANCE

CURRENT ASSETS

      4,420,793    (35,397   4,385,395
                  

LONG TERM ASSETS

      4,022,570    (6,138   4,016,432
                  

FIXED ASSETS

      8,817,066    21,145,152      29,962,218
                  

Investments

      3,939,954    648,765      4,588,720
                  

- Investment in Shares:

      3,936,099    644,909      4,581,008

- 14 Brasil Telecom Celular S.A.

   100.0000%    3,001,483    513,319      3,514,802

- Brt Serviços de Internet S.A.

   100.0000%    340,485    23,792      364,277

- Brt Comunicação Multimídia Ltda.

   90.4591%    254,560    52,390      306,950

- Brasil Telecom Cabos Submarinos Ltda.

   100.0000%    277,936    38,994      316,930

- Internet Group do Brasil S.A.

   13.6450%    33,208    16,433      49,641

- Brasil Telecom Cal Center S.A.

   100.0000%    18,316    (18   18,298

- VANT Telecomunicações S.A.

   100.0000%    2,216    —        2,216

- Brt Card Serviços Financeiros Ltda.

   100.0000%    7,894    —        7,894

- Other Investments

      3,856    3,856      7,712
                  

Property, Plant and Equipment

      4,173,849    6,561,027      10,734,876
                  

- Work in Progress

      285,178    —        285,178

- Automatic Equipment

      157,428    1,022,182      1,179,610

- Transmission Equipment

      1,250,561    3,206,450      4,457,011

- Communication Data Equipment

      648,310    981,262      1,629,572

- Infrastructure

      973,998    421,206      1,395,204

- Terminals

      33,846    90,256      124,102

- Land

      83,055    154,775      237,831

- Buildings

      342,973    687,902      1,030,875

- General Goods

      207,133    188,361      395,494

-Goodwill from Property, Plant and Equipment

      191,367    (191,367   —  
                  

Intangible

      703,263    13,935,359      14,638,622
                  

- Goodwill

      7,358    —        7,358

- Goodwill from License

      175,420    (175,420   —  

- Data Processing System

      468,506    —        468,506

- Brands and Patents

      343      343

- Regulatory Licenses

      51,636    14,110,779      14,162,415
                  

TOTAL ASSETS

      17,260,429    21,103,617      38,364,045
                  

 

* After giving effect to merger of COPART 2 with an amortization adjustment and reversion of goodwill provision.

 

BRASIL TELECOM S.A.    FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

        Balance as of
5/31/2009 *
    Market
Adjustments
    ADJUSTED
BALANCE
 

CURRENT LIABILITIES

      4,502,298      (16,313   4,485,985   
                     

Loans and Financing

      1,420,464      —        1,420,464   

Debentures

      74,961      —        74,961   

Accounts Payable

      1,202,278      (16,313   1,185,965   

Interest, Taxes and Contributions

      800,077      —        800,077   

Dividends Payable

      327,349      —        327,349   

Personnel, Social Benefits and Charges

      84,647      —        84,647   

Related Party Consignations

      92,125      —        92,125   

Provision for Contingencies

      372,151      —        372,151   

Provision for Pension and Other Benefits

      40,117      —        40,117   

Advance to Clients

      27,260      —        27,260   

Other Accounts Payable

      60,870      —        60,870   
                     

LONG TERM LIABILITIES

      7,062,099      2,306,036      9,368,135   
                     

Loans and Financing

      2,535,644      —        2,535,644   

Debentures

      1,080,000      —        1,080,000   

Interest, Taxes and Contributions

      481,999      2,306,036      2,788,036   

Provision for Contingencies

      2,312,621      —        2,312,621   

Provision for Pension and Other Benefits

      608,079      —        608,079   

Advance to Clients

      34,055      —        34,055   

Other Accounts Payable

      9,700      —        9,700   
                     

EQUITY

      5,696,032      18,813,893      24,509,925   
                     

Share Capital

      3,470,758      —        3,470,758   

Capital reserve

      1,854,823      —        1,854,823   

- Special Reserve for Goodwill

      366,787        366,787   

- Special Reserve for Net Assets

      2,377        2,377   

- Other Capital Reserve

      1,485,658        1,485,658   

Profit Reserves

      1,431,948      —        1,431,948   

Accumulated Profit or Loss

      (912,073   —        (912,073

Tresury Stocks

      (149,423   (51,432   (200,855

Market Adjustments

      0      18,865,325      18,865,325   
                     

TOTAL LIABILITIES

      17,260,429      21,103,617      38,364,045   
                     

 

* After giving effect to merger of COPART 2 with an amortization adjustment and reversion of goodwill provision.

 

LOGO


 

 

APSIS CONSULTORIA   5
REPORT RJ-0278/09-02  


Table of Contents
BRASIL TELECOM PARTICIPAÇÕES S.A.   FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

         Balance as of
5/31/2009*
   MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT ASSETS

     584,415    (2,057   582,358   
                   

Available Funds

     305,367    —        305,367   
                   

- Cash

     55,318    —        55,318   

- Cash Equivalents

     250,050    —        250,050   

Financial Aplications

     49,787    —        49,787   

Diferred Taxes and Taxes Recoverable

     41,394    —        41,394   

Judicial Deposits

     48    —        48   

Interest on Shareholders Equity

     185,427    —        185,427   

Pre-Paid Expenses

     2,057    (2,057   0   

Other

     335    —        335   
                   

LONG TERM ASSETS

     1,495,722    119,991      1,615,713   
                   

Financial Aplications

     1,200,000    —        1,200,000   

Diferred Taxes and Taxes Recoverable

     289,701    119,991      409,692   

Judicial Deposits

     6,001    —        6,001   

Other

     21    —        21   
                   

FIXED ASSETS

     7,345,506    8,917,166      16,262,672   
                   

Investments

     7,345,051    8,917,166      16,262,217   
                   

- Investment in Shares

     3,583,245    12,678,972      16,262,217   

- Brasil Telecom S.A.

   67.2294   3,581,221    12,683,045      16,264,266   

- Nova Tarrafa Participações Ltda.

   100.0000   1,743    (3,724   (1,981

- Nova Tarrafa Inc.

   100.0000   282    (349   (67

- Goodwill from Fixed Assets and License in BRTO

     3,761,806    (3,761,806   —     
                   

Property, Plant and Equipment

     455    —        455   
                   

- General Goods

     455    —        455   
                   

TOTAL ASSETS

     9,425,643    9,035,100      18,460,743   
                   

 

* After giving effect to merger of COPART 1 with an amortization adjustment and reversion of goodwill provision.

 

BRASIL TELECOM PARTICIPAÇÕES S.A.   FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

   Balance as of
5/31/2009*
    MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT LIABILITIES

   330,789      —        330,789   
                  

Accounts Payable

   205      —        205   

Loans

   91      —        91   

Interest, Taxes and Contributions

   30,868      —        30,868   

Dividends Payable

   220,548      —        220,548   

Personnel, Social Benefits and Charges

   4      —        4   

Provision for Contingencies

   215      —        215   

Other Accounts Payable

   78,858      —        78,858   
                  

LONG TERM LIABILITIES

   11,512      38,502      50,014   
                  

Interest, Taxes and Contributions

   8,266      13,382      21,648   

Provision for Contingencies

   3,246      25,120      28,366   

Other Obligations

   0      —        0   
                  

EQUITY

   9,083,342      8,996,598      18,079,940   
                  

Share Capital

   2,596,272      —        2,596,272   

Capital reserve

   4,282,872      —        4,282,872   

- Special Goodwill Reserve

   3,861,439      —        3,861,439   

- Special Net Assets Reserve

   112,255      —        112,255   

- Other Capital Reserve

   309,178      —        309,178   

Profit Reserves

   2,879,008      —        2,879,008   

Accumulated Profit or Loss

   (653,964   —        (653,964

Tresury Stock

   (20,846   (66,536   (87,382

Market Adjustments

   —        9,063,134      9,063,134   
                  

TOTAL LIABILITIES

   9,425,643      9,035,100      18,460,743   
                  

 

* After giving effect to merger of COPART 1 with an amortization adjustment and reversion of goodwill provision.

 

LOGO


 

 

APSIS CONSULTORIA   6
REPORT RJ-0278/09-02  


Table of Contents
VALUE (REAIS MILLIONS)                   BRTO X BRTP

RELEVANT

ACCOUNTS

   PRO FORMA BALANCE    ASSET APPROACH
   BRTO    BRTP    BRTO    BRTP

ASSETS

   17,260.43    9,425.64    38,364.05    18,460.74
                   

CURRENT ASSETS

   4,420.79    584.41    4,385.40    582.36

LONG TERM ASSETS

   4,022.57    1,495.72    4,016.43    1,615.71

FIXED ASSETS

   8,817.07    7,345.51    29,962.22    16,262.67

LIABILITIES

   17,260.43    9,425.64    38,364.05    18,460.74
                   

CURRENT LIABILITIES

   4,502.30    330.79    4,485.98    330.79

LONG TERM LIABILITIES

   7,062.10    11.51    9,368.14    50.01

EQUITY

   5,696.03    9,083.34    24,509.93    18,079.94
                   

TOTAL NUMBER OF SHARES

   560,950,289    363,969,213    560,950,289    363,969,213
                   

R$ PER SHARE (1) 

   10.420630    25.013622    44.051640    49.914447
                   

EXCHANGE RATIO (2) 

   2.400394    1.000000    1.133089    1.000000
                   

 

(1) Adjusted to reflect treasury stocks.
(2) Number of BRTO shares per 1 BRTP share.

 

LOGO


 

 

APSIS CONSULTORIA   7
REPORT RJ-0278/09-02  


Table of Contents

TABLE OF CONTENTS

 

1.

  

INTRODUCTION

   9

2.

  

PRINCIPLES AND QUALIFICATIONS

   10

3.

  

RESPONSIBILITY LIMITS

   11

4.

  

APPRAISAL METHODOLOGY

   12

5.

  

PROFILING OF THE BRASIL TELECOM GROUP

   14

6.

  

GENERAL APPRAISAL CRITERIA

   20

7.

  

APPRAISAL OF THE NET EQUITY AT MARKET PRICE OF BRT AND BRT PART

   38

8.

  

CONCLUSION

   46

9.

  

LIST OF ATTACHMENTS

   47

 

LOGO


 

 

APSIS CONSULTORIA   8
REPORT RJ-0278/09-02  


Table of Contents

1. INTRODUCTION

APSIS CONSULTORIA EMPRESARIAL Ltda. (APSIS) was appointed by TNL to calculate the Net Equity of each of BrT and BrT PART, following the appraisal of the equity of both companies pursuant to the same criteria and as of the same date, at market prices, for the purpose of article 264 of Law No. 6,404 of 12/15/1976 (Corporate Law).

In preparing this report, data and information supplied by third parties were used, in the form of documents and verbal interviews with the clients. The estimates used in this process are based on documents and information which include, among others, the following:

 

 

Bylaws or Articles of Incorporation of the companies;

 

 

Financial statements of the group’s companies;

 

 

Organization chart and corporate holdings;

 

 

List of permanent assets;

 

 

IAN (Annual Report) and ITR (Quarterly Report) of the companies;

 

 

Set of architectural plans;

 

 

Areas chart; and

 

 

Documents with technical specifications of the equipment appraised.

Inspections of the operational sites were conducted in March and April, 2009.

The APSIS team responsible for the coordination and performance of this report consists of the following professionals:

 

   

ANA CRISTINA FRANÇA DE SOUZA

Civil Engineer

Post-graduated in Accounting Sciences (CREA/RJ 91.1.03043-4)

 

   

AMILCAR DE CASTO

Project Manager

 

   

CARLOS SANCHES

BS in finance

 

   

FELLIPE FRANCO

economist

 

   

CESAR DE FREITAS SILVESTRE

Accountant (CRC/RJ 044779/O-3)

 

   

LUIZ PAULO CESAR SILVEIRA

Mechanical Engineer

Master of Business Management (CREA/RJ 89.1.00165-1)

 

   

MARGARETH GUIZAN DA SILVA OLIVEIRA

Civil Engineer, (CREA/RJ 91.1.03035-3)

 

   

RICARDO DUARTE CARNEIRO MONTEIRO

Civil engineer

Post-graduated in Economic Engineering (CREA/RJ 30137-D)

 

   

SÉRGIO FREITAS DE SOUZA

Economist (CORECON/RJ 23521-0)

 

   

WASHINGTON FERREIRA BRAGA

Accountant (CRC/RJ 024100-6 / CVM 6734)

 

LOGO


 

 

APSIS CONSULTORIA   9
REPORT RJ-0278/09-02  


Table of Contents

2. PRINCIPLES AND QUALIFICATIONS

This report strictly complies with the fundamental principles described below.

 

 

The consultants and appraisers have no personal bias towards the subject matter involved in this report nor do they derive any advantages from it.

 

 

The professional fees of APSIS are not, in any way, subject to the conclusions of this report.

 

 

The report was prepared by APSIS and no one, other than the consultants themselves, prepared the analyses and respective conclusions.

 

 

In this report, it is assumed that the information received from third parties is correct, and the sources thereof are contained in said report.

 

 

To the best knowledge and belief of the consultants, the analyses, opinions and conclusions presented in this report are based on data, diligence, research and surveys that are true and correct.

 

 

APSIS assumes full responsibility for the matter of Appraisal Engineering, including implicit appraisals, and for the exercise of its honorable duties, primarily established in the appropriate laws, codes or regulations.

 

 

For projection purposes, we start from the premise of the inexistence of liens or encumbrances of any nature, whether judicial or extrajudicial, affecting the object of the relevant work, other than those listed in this report.

 

 

This Report meets the specifications and criteria established by the standards of the Brazilian Association of Technical Standards (ABNT), the specifications and criteria established by USPAP (Uniform Standards of Professional Appraisal Practice), in addition to the requirements imposed by different bodies, such as: the Treasury Department, the Central Bank of Brazil, CVM (the Brazilian Securities and Exchange Commission), SUSEP (Private Insurance Superintendence), etc.

 

 

The report presents all the restrictive conditions imposed by the methodologies adopted, which affect the analyses, opinions and conclusions contained in the same.

 

 

APSIS declares that it does not have any direct or indirect interest in the companies contemplated in this report, in their respective controllers, or in the operation to which the “Protocol and Justification” refer, there being no relevant circumstances which may characterize conflict or communion of interests, whether potential or current, towards the issue of this Appraisal Report.

 

 

In the course of our work, controllers and managers of the companies contemplated in this report did not direct, limit, hinder or practice any acts, which have or may have compromised access, use or knowledge of information, property, documents or work methodologies relevant to the quality of our conclusions.

 

 

The Report was prepared in strict compliance with the postulates set forth in the Professional Code of Ethics of CONFEA – Federal Council of Engineering, Architecture and Agronomy and of the Legal Institute of Engineering.

 

LOGO


 

 

APSIS CONSULTORIA   10
REPORT RJ-0278/09-02  


Table of Contents

3. RESPONSIBILITY LIMITS

 

 

To prepare this report, APSIS used historic data and information, audited by third parties or unaudited, and projected unaudited data supplied in writing or verbally by the companies’ management or obtained from the sources mentioned. Therefore, APSIS assumed as true the data and information obtained for this report and does not have any responsibility in connection with its truthfulness.

 

 

The scope of this work did not include an audit of the financial statements or a revision of the work performed by the companies’ auditors.

 

 

Our work was developed for use by the applicants in connection with the previously described objectives. Therefore, it may be disclosed as part of the documents related to the acquisition of control of the BRASIL TELECOM Group, and the mention of this work in related publications is authorized. It may also be filed at the Brazilian Securities and Exchange Commission - CVM and at the U.S. Securities and Exchange Commission - SEC, as well as made available to shareholders and third parties, including through the websites of the involved companies.

 

 

We emphasize that understanding of the conclusion of this report will take place by reading it and its attachments in full. Therefore, conclusions from partial reading should not be drawn.

 

 

We are not responsible for occasional losses to the applicant, its shareholders, directors, creditors or to other parties as a result of the use of data and information supplied by the company and contained in this report.

 

 

The analyses and conclusions contained herein are based on several premises, held as of this date, of future operational projections, such as: macroeconomic factors, values used in the market, exchange rate variations, sale prices, volumes, market share, revenues, taxes, investments, operational margins, etc. Thus, future results may differ from any forecast or estimate contained in this report.

 

 

This appraisal does not reflect events and their respective impacts, occurring after the date of issue of this report.

 

LOGO


 

 

APSIS CONSULTORIA   11
REPORT RJ-0278/09-02  


Table of Contents

4. APPRAISAL METHODOLOGY

ASSETS APPROACH - NET EQUITY AT MARKET PRICES

This methodology is derived from generally accepted accounting principles (GAAP), where financial statements are prepared based on the principle of historic or acquisition cost.

Due to this principle and to the fundamental principle of accounting, the book value of the assets of a company less the book value of its liabilities equals the book value of its net equity.

The application of this methodology contemplates, as a starting point, the book values of assets and liabilities and requires that some of these items be adjusted so as to reflect their probable realization values. The result from the application of this method may provide an initial basis for the estimate of the company’s value, as well as a useful basis of comparison with results from other methodologies.

On the other hand, the basic principles of economics allow us to create the following appraisal technique: the value defined for assets less the value defined for liabilities equals the value defined for a company’s net equity. From an appraisal perspective, the relevant value definitions are those appropriate to the purpose of the appraisal.

The assets approach, therefore, aims at appraising a company by adjusting of the book value (net balance) to respective fair market values. The assets and liabilities deemed relevant are appraised for their fair market value, with a comparison made between this value and its book value (net balance).

The general appraisal criteria applicable to the adjustment of assets subject to being appraised at market prices can be found in detail in Chapter 6 of this report.

After being duly analyzed, these adjustments are added to the book Net Equity value, in this way determining the company’s market value through the assets approach. The company’s fair market value is the Net Equity value after giving effect to the adjustments for the assets and liabilities appraised.

 

LOGO


 

 

APSIS CONSULTORIA   12
REPORT RJ-0278/09-02  


Table of Contents

It’s worth pointing out that the identification and quantification of liabilities that were neither recorded nor disclosed by the Company’s Management were not within the scope of our work.

The methodology and scope adopted in this assessment aimed at appraising a company’s going concern value. Therefore, expenses incurred in asset realization or liability requirements, as well as related to the companies’ bankruptcy or liquidation processes were not contemplated in the calculations.

PRINCIPLE STEPS OF THE APPRAISAL

 

 

Reading and analysis of the companies’ balance sheets.

 

 

Analysis of asset and liability accounts recorded on the companies’ balance sheets, to identify accounts subject to adjustments, as well as calculations of their probable market values.

 

 

Adjustment of the companies’ fixed assets in accordance with their respective market values on the basis of equity appraisals performed by Apsis.

 

 

Adjustment of relevant intangible operating assets in accordance with their respective market values, on the basis of premises and appraisal criteria developed by Apsis.

 

 

Application of the equity method of accounting to the net equity at market value of subsidiary and affiliated companies for the purpose of calculating the value of investments.

 

 

Calculation of the market value of the companies’ net equity.

 

LOGO


 

 

APSIS CONSULTORIA   13
REPORT RJ-0278/09-02  


Table of Contents

5. PROFILING OF THE BRASIL TELECOM GROUP

Brasil Telecom Participações S.A. is a publicly-held holding company, whose shares are traded on the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA) under the ticker symbol BRTP3 and BRTP4 and on the New York Stock Exchange under the ticker symbol BRP. The corporate structure of the Brasil Telecom Group can be found in the Executive Summary of this report.

In Brazil, Brasil Telecom provides telephony services to millions of Brazilians who live in the so-called Region II, comprising the states of Acre, Rondônia, Mato Grosso, Mato Grosso do Sul, Tocantins, Goiás, Paraná, Santa Catarina and Rio Grande do Sul, in addition to the Federal District.

With its headquarters in Brasília (Federal District) and approximately 20 thousand employees on its staff, its client base comprises 8.1 million fixed terminals in operation, over 5.6 million mobile subscribers, 282 thousand public-use terminals and 1.8 million ADSL subscribers (broadband).

The company, the first to offer a full line of services in the telecommunications field in Brazil, caters to all market demands in an integrated manner and combines its fixed and mobile operations, data and voice, domestic and international long-distance calls, data center, free internet access, broadband and dial-up access into convergent solutions for home, business and government.

Brasil Telecom has provided local fixed telephony services in the Federal District and in the states of Acre, Rondônia, Tocantins, Mato Grosso, Mato Grosso do Sul, Goiás, Paraná, Santa Catarina and Rio Grande do Sul since 1998. In July 1999, it started providing Code CSP 14 for long-distance calls and in January, 2004, Code CSP 14 started operating nationally and for international calls. In addition, the company also provides high-speed internet connection services with Turbo, which uses ADSL technology so that individuals and companies may have quick access to the internet without occupying their telephone line, and offers 100% broadband content through the BrTurbo and BrTurbo Company providers. Additionally, the company offers mobile access to the wireless network with BrTurbo ASAS. For dial-up internet access, Brasil Telecom offers iBest, the second largest cost-free provider in the Brazilian market.

In 2004, the company was authorized by Anatel to provide Personal Mobile Services (PMS) in Region II and launched public mobile telephony operations with an aggressive business plan geared towards convergence, in addition to innovative offers which enabled the attainment of a 14.4% market share in a little less than four years of operations. In 2007, the Internet access providers (iG, iBest and BrTurbo) which make up the Internet Group, the Internet unit of Brasil

 

LOGO


 

 

APSIS CONSULTORIA   14
REPORT RJ-0278/09-02  


Table of Contents

Telecom, had nearly 1.4 million broadband customers and over 4 million dial-up customers. These figures make this internet portal the third most widely used in the nation, with over 11.2 million unique home visitors per month, according to the measurement method of domiciles that access the internet during the period.

iG Brasil’s operations are based on the provision of both dial-up and broadband internet access. It also provides value-added services geared towards the residential and entrepreneurial markets, including its Internet connection accelerator. In addition to these services, iG Brasil also sells advertizing space in its portal.

Through Brasil Telecom Cabos Submarinos (“Globenet”), the company owns 22 thousand kilometers of submarine cables interconnecting Brazil with Venezuela, Bermuda and North America, with points of presence in Rio de Janeiro, Fortaleza, Caracas, Miami, New York and Bermuda. This network has strengthened the group’s leadership position within the data communications market.

The company’s subsidiary Brasil Telecom Comunicação Multimídia operates in, among other areas, the three most important cities in the country outside the company’s concession area: São Paulo, Rio de Janeiro and Belo Horizonte, with a focus on the corporate and entrepreneurial markets. Both companies offer complete solutions of national and international scope, including the Cyber Data Center.

In order to further strengthen its position as a leading telecommunications provider, Brasil Telecom has acquired the entire optical fiber submarine cable system from the Globenet group, interconnecting connection points in the United States, Bermuda, Brazil and Venezuela. With the acquisition of MetroRED, a provider of private telecommunications network services through digital optical fiber networks, Brasil Telecom started providing access to Brazil’s major corporate clients in large urban centers, such as São Paulo, Rio de Janeiro and Belo Horizonte, in addition to Porto Alegre, Curitiba and Brasília, and other international urban centers.

Vant is a division of the company, whose purpose is to provide multimedia communication services, acquisition and for-consideration assignment of facilities and other means, operating in major Brazilian capitals as its area of operations. This subsidiary was also acquired for the purpose of expanding solutions to the corporate market throughout Brazil.

Brasil Telecom has expanded its operations by investing in Brasil Telecom Call Center S.A. (“BrT Call Center”), previously named Santa Bárbara dos Pinhais S.A. This company provides call center services to third parties, composed of customer service, active and passive telemarketing, as well as training, and support and advisory services and activities, among others. Its operational activities started in November 2007 with the provision of call center services to Brasil

 

LOGO


 

 

APSIS CONSULTORIA   15
REPORT RJ-0278/09-02  


Table of Contents

Telecom S.A. and its subsidiary companies, which require this type of service. Call center services were previously provided by outsourced parties.

To provide managerial, supervisory and advisory services for the development and sale of financial products and services, the company incorporated, in July 2008, BrT Card Serviços Financeiros Ltda. Its capital stock subscription took place on September 17, 2008, with 99.99% interest belonging to the Company. BrTI is holder of the remaining interest. At year-end, BrT Card held only marketable securities, originating from resources obtained in the capital subscription, and had not started its operational activities.

This diversified portfolio has contributed towards the company being able to maintain a large client base, with such distinctive needs as those of residential subscribers and corporate clients.

This challenging scenario has required the company to react in order to maintain the innovation of its offerings. Brasil Telecom was pioneer in the launching of products, such as: IPTV (transmission of pay per view films, using its broadband network as a platform); “Único” (cell phone service which transmits signals through the fixed network was used in the home environment, reducing utilization costs for the subscriber); and “Pula-Pula” (free minutes provided on the basis of the volume of Traffic received).

LOGO

In 2008, Brasil Telecom continued launching innovative services, such as third-generation mobile telephony services and minute conversion packs for fixed and cell phones. The search for innovation is important in an increasingly competitive market, such competition which was fostered by the start of number portability in the entire country.

 

LOGO


 

 

APSIS CONSULTORIA   16
REPORT RJ-0278/09-02  


Table of Contents

FIXED TELEPHONY

In 2008, there was an increase in competition with regards to fixed telephony services, whether from cable television companies or from other fixed telephony companies, or from mobile telephone operators which positioned themselves in the market with alternative plans and solutions to traditional fixed telephony services.

During the year, penetration of fixed telephony continued to decrease as a consequence of the fixed to mobile migration phenomenon. In addition, the year was marked by an increase in competition due to number portability.

Within this competitive environment, Brasil Telecom has focused its main actions on the maintenance and profitability of its terminal base, as well as on the expansion of service and alternative plan offers.

At the end of 2008, Brasil Telecom was providing nearly 4 million lines with local alternative plans for fixed telephony. The Company has been keeping its leadership rank in the long-distance market and has recorded an average market share of 90% in the intra-sector segment and 85.2% in the inter-sector segment. At the end of 2008, Brasil Telecom had a 65.7% market share in the inter-region segment and 40.4% in the international segment.

Among long-distance plans, we can highlight: “14 Simples”, with 30-minutes included for domestic long-distance calls; “14 Meu Perfil”, with special rates for in-state calls; and “14 Minhas Cidades”, with more economical rates for three cities of the customer’s choice.

MOBILE TELEPHONY

In 2008, Brasil Telecom Móvel completed four years of operations and surpassed the mark of 5.6 thousand subscribers, 919 of whom being postpaid and 4,626 prepaid subscribers. The Company has been increasing its revenues in this segment by creating functionalities through internet services and content, such as: Orkut, Glu (games), Som Livre (music) and Discovery. Partnerships have also been entered into with content companies, such as: Dada.net, Blinko, Spin My Mobile, Flycell, Ligaki, Memo, Sony Pictures, Neo Network and Móbile Streams, in addition to the provision of the “Escritório Móvel” e-mail pack by way of the Nokia Intellisynk solution. Several special offers and actions on services and contents which are already available to customers have been realized.

DATA COMMUNICATION

At the end of the year, Brasil Telecom accomplished 1,806 thousand accesses in the broadband segment (ADSL).

Convergent Products

Responding to the requirements of a vast number of consumers, Brasil Telecom has invested in the development of solutions which combine fixed and mobile voice services, broadband and image. Thus, the company entered into a commercial relationship with SKY cable TV, which has enabled the offer of integrated packages including digital cable TV.

 

LOGO


 

 

APSIS CONSULTORIA   17
REPORT RJ-0278/09-02  


Table of Contents

Telefone Único - Employs CTP (Cordless Telephony Profile) technology, which enables voice services for fixed and mobile telephony to be used on the same cell phone. With this product, Brasil Telecom has patronized its fixed telephony client base, increased its mobile telephony market share, offered new value-added services, fostered the sale of postpaid plans and heightened the efficiency of its fixed and cellular networks.

Cartão Único - Through the purchase of credits (R$ 15, R$ 20, R$ 30 and R$ 60), this card enables customers to recharge all prepaid services, fixed terminals (AICE, Controle Total and Ligmix) and mobile terminals of Brasil Telecom.

Unique Virtual PBX - Unique Virtual PBX is a convergent solution to cater to business necessities. With this solution, customers no longer have purchase, operation or maintenance costs relative to PBX equipment, as all such infrastructure remains at Brasil Telecom. Therefore, the Company has become the first operator to converge fixed and mobile telephones as extension lines.

Quadruple Play: SKY Cable TV Partnership- In this commercial relationship with SKY Cable TV, Brasil Telecom offers packages comprising fixed and mobile telephony, broadband and Digital TV subscription services. This offer has established itself during 2007 as a competitive advantage in view of other Triple Play offers from competitors. The package contributes approximately 10% of the total broadband sales of Brasil Telecom.

Internet Providers

The Internet Group, which comprises the operations of iG, iBest and BrTurbo providers, is the largest Internet access provider in Brazil with 4 million cost-free dial-up access users, and the second largest broadband provider in the Brazilian market.

According to the Ibope/NetRatings of December 2007, the Internet Group ranked in third place among the main national competitors, with over 11.2 million unique home visitors, which represents an annual growth of 43%.

Financial Highlights

Within its consolidated financial results, Brasil Telecom closed 2008 with net income of R$ 11,297 million and EBITDA of R$ 3,937 million, which represented an EBITDA margin of 34.8%, compared to 34.2% in 2007.

Net profit assessed was R$ 782 million, 16.2% higher than the prior year’s, influenced by the consistency in the evolution of cost and revenue lines and from significant growth in broadband and mobile telephony.

 

LOGO


 

 

APSIS CONSULTORIA   18
REPORT RJ-0278/09-02  


Table of Contents

On May 31, 2009, Brasil Telecom had gross debt of R$4,856.8 million, with R$779.9 million in foreign currency, of which R$399.2 million was not hedged, resulting in a net exposure of US$170.8 million. The net debt was R$ 1,385 million.

In 2008, CAPEX was R$ 2,678 million. Of the investments made, fixed telephony stood out, mainly as a result of the expansion of the data network, Transmission Backbone, intelligent network, information technology and regulations.

 

LOGO


 

 

APSIS CONSULTORIA   19
REPORT RJ-0278/09-02  


Table of Contents

6. GENERAL APPRAISAL CRITERIA

This report was prepared for the purpose of complying with current legislation in connection with of the acquisition of control of the BRASIL TELECOM Group, as described in the Executive Summary of this report.

EVENTS AND ADJUSTMENTS CONTEMPLATED IN THE APPRAISAL

The Financial Statements considered as the basis for this report were prepared by the Company, having already fully complied with Act No. 11. 638/07. The table below shows the general criteria defined for the appraisal of each account and/or group of accounts of the companies involved in the operation:

 

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

GENERAL    Accounts whose value is less than R$500 thousand reais were not analyzed; the book value was kept, with the exception of those that were consolidated in a specific group.    Market value identical to book value.
Available Funds   

Represented by:

 

•     Cash and Banks

 

•     Cash Equivalents - Short-term investments, with original maturity being ninety days or less and immediately convertible into cash.

  

•     Cash and Banks - Market value identical to book value.

 

•     Cash equivalents - Market value identical to book value.

Financial Investments    Represented by investments in bonds, classified in the following manner:   

•     Bonds kept for trading and available for sale - Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   20
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

  

•     Kept for trading

 

•     Kept until maturity

 

•     Available for sale

  

•     Bonds kept until maturity were measured by their acquisition cost increased by revenues ascertained, less provision for adjustments to recoverable value, when applicable.

Accounts Receivable from Clients    Substantially represented by:   

•     Invoiced and uninvoiced credit accounts with users of telecommunication services, entered as per rate value or service value charged on the date of its provision, whose book value does not differ from fair value.

  

•     Services for billing

   61%   
  

•     Billed services

   37%   
  

•     Sales of Goods

   2%   
  

•     Provision for doubtful accounts constituted on the basis of individual analyses and on the analyses of groups of assets of similar risk, for which criteria for establishing the provision contemplates the ascertainment of percentiles of losses occurring in each maturity range of accounts receivable and, on the grounds of such loss percentiles, future losses are estimated over the current balance of accounts receivable.

  
     

•     Accounts receivable resulting from the sale of cell phones and accessories have been entered for the value of sales performed at the moment of delivery to and acceptance by the client, reduced to the recoverable value whose provision is set forth when there is concrete evidence of the non-realization of values due according to the original terms of the constituting credits.

 

LOGO


 

 

APSIS CONSULTORIA   21
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

 

PREMISES

  

APPRAISAL CRITERIA

    

•     Credits receivable from other operators under litigation (DETRAF) are recognized on a cash basis. Adjustment at market value was ascertained on the basis of the application of the historical percentage of success in these litigations, per operator, over the respective values receivable on the base date.

 

•     Credits written off against provisions made and credits provided. Adjustment to market value was ascertained on the basis of the application of 5% over these credits. This percentage results from the market value appraised by jointly considering the following parameters:

 

•     Historical percentage of recovery;

 

LOGO


 

 

APSIS CONSULTORIA   22
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

     

•     Percentage of guaranteed credits;

 

•     Percentage of sector recovery; and

 

•     Current sector outlook.

Inventories

   Substantially represented by cell phones and accessories for resale, net of provision for losses or for adjustments to the forecast in which they should be realized.    Market value identical to book value.

Loans and Financing

  

Represented by:

 

•     Loans and financing referring to onlendings of financial resources to the company for the production of telephone directories and levied pursuant to the variation of the IGP-DI (General Price Index - Internal Availability).

   Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   23
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

Derivative Financial Instruments

(Assets and Liabilities)

  

Represented by:

 

•     Assets - Dollar options

 

•     Liabilities:

 

•     Dollar options

 

•     Cross currency swaps - Yen x IDC

 

Hedge operations entered into with financial institutions to minimize the risks of foreign currency loans and financing, without leverage, due to the possibility of the existence of exchange rate fluctuations which may increase the balances thereof. The portion of the foreign currency out of the foreign currency denominated debt covered by these operations and financial investments in foreign currency is 60.5%.

   Market value identical to book value.

Deferred and Recoverable Taxes

  

Represented by:

 

•     Deferred Income Tax and Social Contribution - Calculated over temporary differences, tax losses and the negative base of social contribution, and accounted for to the extent of the existence of future taxable profit at sufficient level for the total or partial use of deferred taxes.

   The book balance was adjusted for the reversal of the provision to the value recoverable from subsidiary Brt Participações S.A., bearing in mind the re-examination of the recovery outlook of its credits conducted in connection with the corporate restructuring.

 

LOGO


 

 

APSIS CONSULTORIA   24
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

 

PREMISES

  

APPRAISAL CRITERIA

 

•     Tax Credits - Composed of:

 

•     ICMS (Provisional Value Added Tax)

 

•     IRPJ/CS (Legal Entity Income Tax/Social Contribution)

 

•     PIS & COFINS (Social Participation Program and Contribution to Social Security Financing)

 

•     Others

 

Provision for Recoverable Values - Corresponds to the portion of tax credits which may be compensated within a period greater than the next ten years.

 

The ICMS recoverable originates, for the most part, from credits constituted on the acquisition of fixed assets - Complementary Law no. 102/00.

   The book value was kept for other tax credits, bearing in mind the result of future outlook analyses, which pointed to their recovery.

 

LOGO


 

 

APSIS CONSULTORIA   25
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APRAISAL CRITERIA

Judicial Deposits

  

Represented by the balance of judicial deposits related to contingencies with POSSIBLE or REMOTE levels of risk of loss, whose values have not been provisioned. The deposits are in connection with the following contingencies:

 

•     Labor

 

•     Tax

 

•     Civil

 

Judicial deposits in connection with passive provisions for contingencies with a PROBABLE level of risk of loss are shown as deductions from such provisions.

   Market value identical to book value.
Dividends and Interest on Capital Receivable    Represented by the value of dividends and interest on shareholder’s equity receivable from subsidiaries.    Market value identical to book value.

Prepaid Expenses

  

Represented by:

 

•     Insurance premiums and

 

•     Prepayments:

   Balances were cancelled.

 

LOGO


 

 

APSIS CONSULTORIA   26
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APRAISAL CRITERIA

  

•     Advertisement and publicity

 

•     Maintenance services of data processing equipment and software

 

•     Leases of cables, ducts and domain band

 

•     IPTU (Land and Territorial Urban Tax)

 

•     Others

  

Others

  

Substantially represented by:

 

•     Pension Funds - Future Contributions recoverable

 

•     Recoverable Advances

 

•     Other Assets

   Market value identical to book value.
Participation in Subsidiary Companies    Appraised through the Equity Method of Accounting.    Balances were adjusted by the results of market value adjustments reflected in the net equities of the subsidiaries appraised.
Fiscal Incentives and other Investments    Represented by tax incentives and equity holding obtained from the conversion into shares, or capital quotas, of fostered investments in the FINOR (Northeast Investment Fund)/FINAN (Amazon Investment Fund) regional funds, the Law of Incentive to IT Companies and the Audiovisual Law,    Balances were cancelled.

 

LOGO


 

 

APSIS CONSULTORIA   27
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

   with the sum being substantially composed of shares of telecommunication companies located in regions covered by these regional incentives. Balances are entered net of provisions for losses, when applicable.   
Automatic Commutation Equipment, means of data communication and transmission, Termination and Infrastructure    Assets of utmost importance for the business. Appraised at market prices on the basis of their replacement cost through the use of project parameters. Methodology and respective calculations can be found in detail in Attachment 2.    Market Value.

Land and Buildings

   Appraised at market prices, with specific appraisal reports for applicable properties. A table comprising the summary of values per property can be found in Attachment 3.    Market Value.

Works in Progress

   Assets whose book value is close to their market value, due to their being recent acquisitions.    Market value identical to book value.

General-Use Assets

   Appraised at market prices for their replacement cost through the use of project parameters. The methodology and respective calculations can be found in detail in Attachment 2.    Market Value.

Intangible Assets

  

Represented by:

 

•     Goodwill - Ascertained in the acquisition of share control of subsidiaries, calculated on the basis of

   Market Value.

 

LOGO


 

 

APSIS CONSULTORIA   28
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

  

the increase in the value of assets, on future concessions and on expected future results, and its amortization is related to projected time and realization not exceeding the period of ten years:

  
  

•     Brt Participações S.A.

 

•     Brt Cabos Submarinos Ltda.

 

•     Brt Comunicação Multimídia Ltda.

 

•     Internet Group do Brasil S.A.

 

•     Internet Group (Caymam) Limited

  
  

•     Intangible Assets - Assets of utmost importance for the business, substantially represented by licenses and rights of use of software and regulatory licenses, net of amortization calculated by the straight-line method for a period of five years for the rights of use of software and for regulatory licenses, pursuant to deadlines fixed by the regulatory body.

  
  

•     The appraisal of operating intangible assets deemed relevant for each business segment can be found in detail in Attachment 4.

  

 

LOGO


 

 

APSIS CONSULTORIA   29
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APRAISAL CRITERIA

Loans, Financing, Debentures, Derivative Financial Instruments and Intercompany Loans   

Represented by:

 

•     Financial Institutions:

 

•     Local Currency - subject to 2.4% to 10% fixed interest per year, resulting in a weighted average rate of 9.18% per year and variable interest based on the TJlP (Long-term Interest Rate) accrued of 2.3% per year to 5.5% per year, UMBNDES (BNDES Monetary Unit) accrued of 5.5% per year, 100% to 104% of CDI (Interbank Deposit Certificate), with such variable interest resulting in a weighted rate of 11.88% per year. The CDI rate was 13.61% as of the base date.

 

•     Foreign Currency - subject to 1.75% to 9.38% fixed interest per year, resulting in a weighted average rate of 9.36% per year; and variable interest of 0.5% per year above the LIBOR (London Interbank Offered Rate) and of 1.92% per year above the YEN

   Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   30
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

  

LIBOR, resulting in a weighted average rate of 2.96% per year. The LIBOR and YEN LIBOR rates for semi annual payments were 3.13% per year and 0.99% per year, respectively, as of the base date.

 

•     Financial and Derivative Instruments - Swap and Options Contracts - Hedge operations over 60.5% on loans and financing contracted in yen and U.S. dollars, entered into with third parties, were contracted to try to reduce significant fluctuations in the quotations of these debt update factors. Swap operations are linked to the CDI.

 

•     Public Debentures - Public issue of non-convertible debentures occurred in 2006, such debentures being issued for a seven-year term, with repayment of principle schedule each year beginning in 2011, in three installments of 33.33%, 33.33% and 33.34% of the face value, respectively, with maturity in 2013 and interest corresponding to 104.0% of the CDI, paid semi-annually.

 

•     Loan to Subsidiary - National Currency: Contracted by Brt S.A. from 14 Brasil Telecom Celular S.A., in April 2008, with a total term of 360 days, with payment of the principal amount and interest payable at the end of the term, calculated at the rate of 101.75% of the CDI.

  

 

LOGO


 

 

APSIS CONSULTORIA   31
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

Suppliers   

Substantially represented by:

 

•     Suppliers - Domain band

 

•     Suppliers - DETRAF (Traffic and Service Provision Declaration Document)

 

•     Investment Suppliers

 

•     Various Suppliers

  

DETRAF Suppliers - The balance relating to the portion under discussion was adjusted based on the historical percentage of success, per operator, applied over the obligation reflected on the base date.

 

The book value was maintained for other balances.

Taxes, Fees and Contributions   

Represented by:

 

•     ICMS (1) (Provisional Value Added Tax)

 

•     PIS and COFINS (Social Participation Program and Contribution

 

•     IRPJ (Legal Entity Income Tax) payable

 

•     Social Contribution payable

 

(1) Substantially represented by amounts resulting from Agreement number. 69/98, which has been disputed in Court, net of judicial deposits which take place on a monthly basis.

  

Market value identical to book value.

 

The balance was adjusted by the result of Income Tax and Social Contribution levied on market value adjustments subject to this type of taxation.

 

LOGO


 

 

APSIS CONSULTORIA   32
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

Staff, Social Charges and Benefits

  

Substantially represented by:

 

•     Social Charges and Benefits

 

•     Share Option Plan

 

•     Others

   Market value identical to book value.

Third-Party Consignment

   Substantially represented by third-party services and holdbacks.    Market value identical to book value.
Authorization for Exploration of Services   

Substantially represented by:

 

•     Personal Mobile Service:

 

•     Authorization for personal mobile services pursuant to instruments entered into by subsidiary 14 Brasil Telecom Celular S.A. with ANATEL in 2002 and 2004 for exploration of PMS for a period of 15 years in the same geographic region where the company has concession for fixed telephony. The IGP-DI variation is applied to the debit balance, plus 1% per month.

   Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   33
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

  

•     Acquisition, in 2008, of personal mobile service authorization for exploration of the 3G network. The TSI -Telecommunication Services Index - variation is applied to the debit balance, plus 1% per month.

 

•     Other authorizations belonging to Brt Multimídia which refer to the granting of authorizations for radiofrequency blocks associated with multimedia communication services.

 

•     Concession of FCTS (Fixed Commuted Telephony Services) - Referring to the provision constituted in accordance with the accrual method, taking, as a basis, the 1% of income net of taxes, to cover payments due to ANATEL, payable every two years, scheduled in the month of April of odd years, pursuant to the concession agreement in effect.

  
Dividends, On Shareholders’ equity Interest and Share of Net Income    Represented by dividends and interest on own capital net of withholding Income tax when applicable, payable to controlling and non-controlling shareholders, and the share of net income paid to employees and managers.    Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   34
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

Advances from Clients

  

Represented by:

 

•     Assignment of Means of Telecommunication - Represents prepaid assignment of means of telecommunication services as well as amounts received from the partnership between Bank of Brazil and AON, referring to the implementation of the fidelity card.

 

•     Prepaid Services - Represents prepayments from the sale of prepaid card recharges, net of discounts granted and taxes levied.

 

•     Other Advances from Clients - Advances from clients in the Government area.

  

The balance referring to prepayments on the sale of prepaid card recharges was adjusted by the value of advances net of taxes, discounts granted and estimated interconnection costs, bearing in mind that such credits have an expiration date.

 

Other prepayments were kept at their book value, due to different features presented and the fact that balances were close to the market value.

Provision for Contingencies

  

Represented by the balance of provisions for Labor, Tax and Civil contingencies whose risks are classified as PROBABLE, net of judicial deposits and made on the grounds of legal requirements or caution.

 

In the appraisal of the company and its subsidiaries, contingencies classified pursuant to their chances of being

   Market value identical to book value.

 

LOGO


 

 

APSIS CONSULTORIA   35
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

   incurred at a POSSIBLE or REMOTE risk level, are not provisioned, albeit, in some cases, similar matters may be framed in different risk-level classifications, a fact which has been justified by the peculiar factual and procedural status of each process. However, in some situations, judicial deposits are made on the grounds of legal requirements or caution.   
Provision for Pension Funds and other Benefits   

Substantially represented by the Company’s and its subsidiaries’ sponsoring of complementary social security benefit plans, relative to retirement benefits for assisted employees and participants and, for the latter, to medical assistance, in some cases.

 

For specific benefit plans, the Company and its subsidiaries have adopted the immediate recognition of actuarial gains and losses, with full liabilities being constituted for plans whose status is deficient, pursuant to the standards of Resolution CVM no. 371/00. For plans which present a positive equity situation, assets are constituted in case explicit authorization is given to compensate them with future employer contributions.

 

The pension plans herein represented are: Alternative and Founding FBrTPPREV - BrTPPREV, and the PAMEC plan.

   Market value identical to book value, taking as a basis the appraisal of independent actuaries as of the base date.

 

LOGO


 

 

APSIS CONSULTORIA   36
REPORT RJ-0278/09-02  


Table of Contents

ACCOUNT GROUP

  

PREMISES

  

APPRAISAL CRITERIA

Other Accounts Payable

  

Substantially represented by :

 

•     Tax Credit Acquisition Obligations

 

•     Self-financing Resources

 

•     Other accounts payable

   Market value identical to book value.

Net Equity

  

•     Treasury Shares - Originated from programs approved by the Board of Directors to repurchase preferred and ordinary shares of the company’s own issue, to be held in treasury, cancelled, or for future disposal.

 

•     Adjustments at Market Value - Resulting from the appraisal of Assets, Rights and Obligations, appraised at market value, net of tax effects.

   Treasury Shares - Market value ascertained on the basis of Stock Market quotations as of the base date.

 

LOGO


 

 

APSIS CONSULTORIA   37
REPORT RJ-0278/09-02  


Table of Contents

7. APPRAISAL OF THE NET EQUITY AT MARKET PRICE OF BRT AND BRT PART

The operational activities of the Brasil Telecom Group start with the company Brasil Telecom S.A. (BrT). Parent companies in the corporate chain (BrT Part), perform simple holding company functions. This report adopted the assets approach for the appraisal of the Net Equity at market price of BrT. In this approach, relevant assets and liabilities were appraised so as to reflect their fair market value, according to the criteria detailed in Chapter 6.

RELEVANT ASSETS

BrT is a company which serves a dual function within the structure of the Brasil Telecom Group: (i) as a holding company of the group’s operating investments; and (ii) as an operational company, with operations in the fixed telephony segment, and therefore, owner of operating assets alike.

Therefore, to arrive at the value of the Net Equity at market prices of BrT, it will be necessary for us to proceed to the appraisal of its relevant operating assets, and also of relevant investments in other companies of the group.

FIXED ASSETS

Property that integrates the fixed assets relating to equipment accounts are of the utmost relevance among the set of BrT’s assets. Land and buildings are assets of secondary importance within the telephony segment. Appraisal of these assets can be found in Attachment 2 hereof and in specific reports for the main real estate, and is summarized on the following table:

 

     Million R$

Property, Plant and Equipment

   Market

- Work in Progress

   285

- Automatic Equipment

   1,180

- Transmission Equipment

   4,457

- Communication Data Equipment

   1,630

- Infrastructure

   1,395

- Terminals

   124

- Land

   238

- Buildings

   1,031

- General Goods

   395
    

Total

   10,735
    

The average remaining economic useful life of BrT’s fixed assets is seven years. Disclosures per class of assets can be found in Attachment 2.

 

LOGO


 

 

APSIS CONSULTORIA   38
REPORT RJ-0278/09-02  


Table of Contents

INTANGIBLE ASSETS

In the appraisal of the intangible assets of BrT, the methodology chosen was the income approach, recommended when an industry owns relevant contracts which guarantee long-term profitability (Valuation of Intellectual Property and Intangible Assets – Smith, Parr). The following relevant category of intangible operating assets can be considered significant in fixed telephony operation companies, such as BrT:

 

   

Public Service Concession Contract - Fixed Telephony

As to the brand value, each business segment has intangible assets with greater or lesser influence in the operation. In the case of fixed telephony, the brand does not have relevant influence in cash generation, but rather the guarantee of service exclusivity for the inhabitants of a particular region, including the assignment of the client base existent at the time the service was privatized.

For appraising the Concession Contract, we analyzed the cash flow of the fixed telephony business during the remaining useful life of the concession (17 years), on a stand-alone basis, contemplating potential synergies resulting from the acquisition process described in this report.

We also added the residual value of fixed assets and working capital at the end of the concession.

After calculating the present value of this flow through a discount rate appropriate for the segment, we deducted tangible operating assets (working capital and fixed assets) at market prices, so as to draw out the intrinsic value of the Concession Contract, as shown on the table below:

 

expected rate of return

   8.8%     9.0%     9.2%  

ECONOMIC VALUE - BrT FIXED TELEPHONY CONCESSION (R$ millions)

  

DISCOUNTED CASH FLOW

   24,866      24,536      24,213   

RESIDUAL VALUE (WORKING CAPITAL and FIXED ASSETS)

   6,193      6,193      6,193   

DISCOUNTED RESIDUAL VALUE

   1,476      1,431      1,387   
                  

OPERATIONAL VALUE - FIXED TELEPHONY

   26,343      25,967      25,600   
                  

CARRYING CHARGE - WORKING CAPITAL

   (423   (423   (423

CARRYING CHARGE - FIXED ASSETS AT MARKET PRICE

   (11,026   (11,026   (11,026

BrT FIXED TELEPHONY CONCESSION VALUE - 12/31/08

   14,894      14,518      14,151   
                  

amortization term (months)

     204     

BrT FIXED CONCESSION VALUE - 05/31/09

     14,162     
          

Appraisal calculations, as well as the methodology used can be found in detail in Attachment 4.

 

LOGO


 

 

APSIS CONSULTORIA   39
REPORT RJ-0278/09-02  


Table of Contents

APPRAISAL OF INVESTMENTS IN MOBILE TELEPHONY

Investments in the mobile telephony segment are represented by their direct participation in the company 14 BRASIL TELECOM CELULAR S.A. (14 BRASIL), which concentrates the operating assets of this segment.

The main adjustments in 14 BRASIL are centered on the following groups:

FIXED ASSETS

The table below summarizes the adjustments made, specified in Attachment 2:

 

Property, Plant and Equipment

   Market

- Work in Progress

   207

- Automatic Equipment

   229

- Transmission Equipment

   786

- Communication Data Equipment

   10

- Infrastructure

   97

- Terminals

   1

- Buildings

   0

- Other Investments

   90
    

Total

   1,421
    

The average remaining economic useful life of the fixed assets of 14 BRASIL is 10 years. Disclosure per class of assets can be found in Attachment 2.

INTANGIBLE ASSETS

In mobile telephony operating companies, such as 14 BRASIL, authorizations granted by the Federal Government do not guarantee a market share in the potential market, or an initial client base, such as with fixed telephony. For the purpose of this report, we assumed that the value paid to the Federal Government by 14 BRASIL with regards to authorizations in a bidding process, constitutes the best approximation of the respective market value, therefore not requiring adjustment.

Nevertheless, we shall consider the following category of intangible assets relevant within the mobile telephony segment, not included in the financial statements:

 

   

Portfolio of Active Clients

 

LOGO


 

 

APSIS CONSULTORIA   40
REPORT RJ-0278/09-02  


Table of Contents

We used the reproduction cost to appraise this intangible asset, as shown in Attachment 4. The table below shows the market value suggested, as of the base date of this report:

 

CLIENT BASE VALUE - MOBILE TELEPHONY

   2006     2007     2008  

TOTAL USERS (IN MILLIONS)

   3.4        4.3        5.6   

POSTPAID CLIENTS (TOTAL %)

   29     20     17.56

TOTAL EXPENSES WITH CAPITAL RAISING
(R$ thousands)

   432,432        454,139        525,081   

CLIENT PORTFOLIO VALUE (R$ thousands)

      

USER INCREASE WITHIN THE PERIOD (millions)

       0.89        1.34   

COMMERCIAL EXPENSES PER ADDITIONAL CLIENT

     R$ 512.63      R$ 392.64   
            

CLIENT PORTFOLIO VALUE (2008 BASE)

         384,790   
            

APPRAISAL OF OTHER INVESTMENTS OF BrT

The table below summarizes the adjustments made in subsidiaries of BrT, other than 14 BRASIL, reflected in its equity by way of the equity method of accounting:

 

     Million R$

Investments

   Market

- 14 Brasil Telecom Celular S.A.

   3,515

- Brt Serviços de Internet S.A.

   364

- Brt Comunicação Multimídia Ltda.

   307

- Brasil Telecom Cabos Submarinos Ltda.

   317

- Internet Group do Brasil S.A.

   50

- Brasil Telecom Call Center S.A.

   18

- VANT Telecomunicações S.A.

   2

- Brt Card Serviços Financeiros Ltda.

   8

- Other Investments

   8
    

Total

   4,589
    

Appraisal of the Net Equities at market price of the above companies can be found in detail in Attachments 1, 2 and 3 of this report.

APPRAISAL OF OTHER ASSETS AND LIABILITIES

For other assets and liabilities of BrT, we adopted the criteria specified in Chapter 6, as shown on the calculation spreadsheets of Attachment 1.

 

LOGO


 

 

APSIS CONSULTORIA   41
REPORT RJ-0278/09-02  


Table of Contents

VALUE OF THE NET EQUITY AT MARKET PRICE OF BrT

The table below shows the value of the Net Equity at Market Price of BrT as of the base date, with respective adjustments made in the main accounts:

 

BRASIL TELECOM S.A.

  FINANCIAL STATEMENT

BALANCE SHEET (THOUSAND REAIS)

        Balance as of
5/31/2009 *
   Market
Adjustments
    ADJUSTED
BALANCE

CURRENT ASSETS

      4,420,793    (35,397   4,385,395
                  

LONG TERM ASSETS

      4,022,570    (6,138   4,016,432
                  

FIXED ASSETS

      8,817,066    21,145,152      29,962,218
                  

Investments

      3,939,954    648,765      4,588,720
                  

- Investment in Shares:

      3,936,099    644,909      4,581,008

- 14 Brasil Telecom Celular S.A.

   100.0000%    3,001,483    513,319      3,514,802

- Brt Serviços de Internet S.A.

   100.0000%    340,485    23,792      364,277

- Brt Comunicação Multimídia Ltda.

   90.4591%    254,560    52,390      306,950

- Brasil Telecom Cabos Submarinos Ltda.

   100.0000%    277,936    38,994      316,930

- Internet Group do Brasil S.A.

   13.6450%    33,208    16,433      49,641

- Brasil Telecom Cal Center S.A.

   100.0000%    18,316    (18   18,298

- VANT Telecomunicações S.A.

   100.0000%    2,216    —        2,216

- Brt Card Serviços Financeiros Ltda.

   100.0000%    7,894    —        7,894

- Other Investments

      3,856    3,856      7,712
                  

Property, Plant and Equipment

      4,173,849    6,561,027      10,734,876
                  

- Work in Progress

      285,178    —        285,178

- Automatic Equipment

      157,428    1,022,182      1,179,610

- Transmission Equipment

      1,250,561    3,206,450      4,457,011

- Communication Data Equipment

      648,310    981,262      1,629,572

- Infrastructure

      973,998    421,206      1,395,204

- Terminals

      33,846    90,256      124,102

- Land

      83,055    154,775      237,831

- Buildings

      342,973    687,902      1,030,875

- General Goods

      207,133    188,361      395,494

- Goodwill from Property, Plant and Equipment

      191,367    (191,367   —  
                  

Intangible

      703,263    13,935,359      14,638,622
                  

- Goodwill

      7,358    —        7,358

- Goodwill from License

      175,420    (175,420   —  

- Data Processing System

      468,506    —        468,506

- Brands and Patents

      343      343

- Regulatory Licenses

      51,636    14,110,779      14,162,415
                  

TOTAL ASSETS

      17,260,429    21,103,617      38,364,045
                  

 

* After giving effect to merger of COPART 2 with an amortization adjustment and reversion of goodwill provision.

 

BRASIL TELECOM S.A.

  FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

   Balance as of
5/31/2009 *
    Market
Adjustments
    ADJUSTED
BALANCE
 

CURRENT LIABILITIES

   4,502,298      (16,313   4,485,985   
                  

Loans and Financing

   1,420,464      —        1,420,464   

Debentures

   74,961      —        74,961   

Accounts Payable

   1,202,278      (16,313   1,185,965   

Interest, Taxes and Contributions

   800,077      —        800,077   

Dividends Payable

   327,349      —        327,349   

Personnel, Social Benefits and Charges

   84,647      —        84,647   

Related Party Consignations

   92,125      —        92,125   

Provision for Contingencies

   372,151      —        372,151   

Provision for Pension and Other Benefits

   40,117      —        40,117   

Advance to Clients

   27,260      —        27,260   

Other Accounts Payable

   60,870      —        60,870   
                  

LONG TERM LIABILITIES

   7,062,099      2,306,036      9,368,135   
                  

Loans and Financing

   2,535,644      —        2,535,644   

Debentures

   1,080,000      —        1,080,000   

Interest, Taxes and Contributions

   481,999      2,306,036      2,788,036   

Provision for Contingencies

   2,312,621      —        2,312,621   

Provision for Pension and Other Benefits

   608,079      —        608,079   

Advance to Clients

   34,055      —        34,055   

Other Accounts Payable

   9,700      —        9,700   
                  

EQUITY

   5,696,032      18,813,893      24,509,925   
                  

Share Capital

   3,470,758      —        3,470,758   

Capital reserve

   1,854,823      —        1,854,823   

- Special Reserve for Goodwill

   366,787        366,787   

- Special Reserve for Net Assets

   2,377        2,377   

- Other Capital Reserve

   1,485,658        1,485,658   

Profit Reserves

   1,431,948      —        1,431,948   

Accumulated Profit or Loss

   (912,073   —        (912,073

Tresury Stocks

   (149,423   (51,432   (200,855

Market Adjustments

   0      18,865,325      18,865,325   
                  

TOTAL LIABILITIES

   17,260,429      21,103,617      38,364,045   
                  

 

* After giving effect to merger of COPART 2 with an amortization adjustment and reversion of goodwill provision.

 

LOGO


 

 

APSIS CONSULTORIA   42
REPORT RJ-0278/09-02  


Table of Contents

VALUE OF BrT SHARES, AS OF THE BASE DATE, AFTER GIVING EFFECT TO THE RESULTS OF SUBSEQUENT EVENTS

 

560,950,289 shares

   VALUE PER
SHARE

Book equity value (1)

   R$ 10.420630

Adjustment per share

   R$ 33.631010

Equity value adjusted at market price (1)

   R$ 44.051640

 

(1) Adjusted to reflect treasury stocks

 

LOGO


 

 

APSIS CONSULTORIA   43
REPORT RJ-0278/09-02  


Table of Contents

VALUE OF THE NET EQUITY AT MARKET PRICE OF THE HOLDING COMPANY BrT PART

The table below shows the value of the Net Equity at Market Price of the company BrT PART, as of the base date, with respective adjustments made in the main accounts:

 

BRASIL TELECOM PARTICIPAÇÕES S.A.

  FINANCIAL STATEMENT

BALANCE SHEET (THOUSAND REAIS)

         Balance as of
5/31/2009 *
    MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT ASSETS

     584,415      (2,057   582,358   
                    

Available Funds

     305,367      —        305,367   
                    

- Cash

     55,318      —        55,318   

- Cash Equivalents

     250,050      —        250,050   

Financial Applications

     49,787      —        49,787   

Deferred Taxes and Taxes Recoverable

     41,394      —        41,394   

Judicial Deposits

     48      —        48   

Interest on Shareholders Equity

     185,427      —        185,427   

Pre-Paid Expenses

     2,057      (2,057   0   

Other

     335      —        335   
                    

LONG TERM ASSETS

     1,495,722      119,991      1,615,713   
                    

Financial Applications

     1,200,000      —        1,200,000   

Deferred Taxes and Taxes Recoverable

     289,701      119,991      409,692   

Judicial Deposits

     6,001      —        6,001   

Other

     21      —        21   
                    

FIXED ASSETS

     7,345,506      8,917,166      16,262,672   
                    

Investments

     7,345,051      8,917,166      16,262,217   
                    

- Investment in Shares

     3,583,245      12,678,972      16,262,217   

- Brasil Telecom S.A.

   67.2294   3,581,221      12,683,045      16,264,266   

- Nova Tarrafa Participações Ltda.

   100.0000   1,743      (3,724   (1,981

- Nova Tarrafa Inc.

   100.0000   282      (349   (67

- Goodwill from Fixed Assets and License in BRTO

   3,761,806      (3,761,806   —       
                    

Property, Plant and Equipment

     455      —        455   
                    

- General Goods

     455      —        455   
                    

TOTAL ASSETS

     9,425,643      9,035,100      18,460,743   
                    

 

* After giving effect to merger of COPART 1 with an amortization adjustment and reversion of goodwill provision.

 

BRASIL TELECOM PARTICIPAÇÕES S.A.

  FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

   Balance as of
5/31/2009 *
    MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT LIABILITIES

   330,789      —        330,789   
                  

Accounts Payable

   205      —        205   

Loans

   91      —        91   

Interest, Taxes and Contributions

   30,868      —        30,868   

Dividends Payable

   220,548      —        220,548   

Personnel, Social Benefits and Charges

   4      —        4   

Provision for Contingencies

   215      —        215   

Other Accounts Payable

   78,858      —        78,858   
                  

LONG TERM LIABILITIES

   11,512      38,502      50,014   
                  

Interest, Taxes and Contributions

   8,266      13,382      21,648   

Provision for Contingencies

   3,246      25,120      28,366   

Other Obligations

   0      —        0   
                  

EQUITY

   9,083,342      8,996,598      18,079,940   
                  

Share Capital

   2,596,272      —        2,596,272   

Capital reserve

   4,282,872      —        4,282,872   

- Special Goodwill Reserve

   3,861,439      —        3,861,439   

- Special Net Assets Reserve

   112,255      —        112,255   

- Other Capital Reserve

   309,178      —        309,178   

Profit Reserves

   2,879,008      —        2,879,008   

Accumulated Profit or Loss

   (653,964   —        (653,964

Treasury Stock

   (20,846   (66,536   (87,382

Market Adjustments

   —        9,063,134      9,063,134   
                  

TOTAL LIABILITIES

   9,425,643      9,035,100      18,460,743   
                  

 

* After giving effect to merger of COPART 1 with an amortization adjustment and reversion of goodwill provision.

 

LOGO


 

 

APSIS CONSULTORIA   44
REPORT RJ-0278/09-02  


Table of Contents

VALUE OF COPART 1 SHARES, AS OF THE BASE DATE, AFTER GIVING EFFECT TO THE RESULTS OF SUBSEQUENT EVENTS

 

363,969,213 shares

   VALUE PER SHARE

Book equity value (1)

   R$ 25.013622

Adjustment per share

   R$ 24.900825

Equity value adjusted at market price (1)

   R$ 49.914447

 

(1) Adjusted to reflect treasury stocks

 

LOGO


 

 

APSIS CONSULTORIA   45
REPORT RJ-0278/09-02  


Table of Contents

8. CONCLUSION

In the light of the analyses made of the previously mentioned documents, and on the basis of studies conducted by APSIS, the experts concluded that the rate of exchange of BRT shares for Brt Part shares, appraised for the values of their Net Equity at Market price, appraised, in turn, through the assets approach, as of May 31 2009, are:

 

 

1.133089 shares of BRT for 01 share of BrT Part

 

 

Having concluded Report RJ-0278/09-02, which consists of 47 (forty-seven) pages typed on one side and 06 (six) attachments and reproduced in 03 (three) original counterparts, APSIS Consultoria Empresarial Ltda., CREA/RJ 82.2.00620-1 and CORECON/RJ RF/2.052-4, a company specializing in the appraisal of assets, legally represented by the signatories below, makes itself available for any clarifications which may be necessary.

Rio de Janeiro, July 3rd, 2009.

 

LOGO    LOGO    LOGO
ANA CRISTINA FRANÇA DE SOUZA    LUIZ PAULO CESAR SILVEIRA    WASHINGTON FERREIRA BRAGA
Managing Partner    Director   

CRC-RJ-024.100-6

CVM 6734

 

LOGO


 

 

APSIS CONSULTORIA   46
REPORT RJ-0278/09-02  


Table of Contents

9. LIST OF ATTACHMENTS

 

1. APPRAISAL CALCULATIONS

 

2. EQUIPMENT APPRAISAL

 

3. REAL ESTATE APPRAISAL

 

4. INTANGIBLE ASSETS APPRAISAL

 

5. SUPPORT DOCUMENTS

 

6. GLOSSARY AND APSIS’ PROFILE

 

SÃO PAULO – SP    RIO DE JANEIRO – RJ
Av. Vereador José Diniz, 3.300, Cj. 808    Rua São José, 90, grupo 1802
Work Center 4, CEP: 04604-006    Centro, CEP: 20010-020
Tel.: + 55 11 2626.0510 Fax: + 55 11 2626.0510    Tel.: + 55 21 2212.6850 Fax: + 55 21 2212.6851

 

LOGO


 

 

APSIS CONSULTORIA   47
REPORT RJ-0278/09-02  


Table of Contents

ATTACHMENT 1

 

LOGO



Table of Contents

REPORT: RJ-0278/09-02

 

BRASIL TELECOM PARTICIPAÇÕES S.A.

   FINANCIAL STATEMENT   

BALANCE SHEET (THOUSAND REAIS)

   Balance as of
5/31/2009 *
   MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT ASSETS

   584,415    (2,057   582,358   
                    

Available Funds

   305,367    —        305,367   
                    

- Cash

   55,318    —        55,318   

- Cash Equivalents

   250,050    —        250,050   

Financial Applications

   49,787    —        49,787   

Deferred Taxes and Taxes Recoverable

   41,394    —        41,394   

Judicial Deposits

   48    —        48   

Interest on Shareholders Equity

   185,427    —        185,427   

Pre-Paid Expenses

   2,057    (2,057   0   

Other

   335    —        335   
                    

LONG TERM ASSETS

   1,495,722    119,991      1,615,713   
                    

Financial Applications

   1,200,000    —        1,200,000   

Deferred Taxes and Taxes Recoverable

   289,701    119,991      409,692   

Judicial Deposits

   6,001    —        6,001   

Other

   21    —        21   
                    

FIXED ASSETS

   7,345,506    8,917,166      16,262,672   
                    

Investments

   7,345,051    8,917,166      16,262,217   
                    

- Investment in Shares

   3,583,245    12,678,972      16,262,217   

- Brasil Telecom S.A.

   67.2294%    3,581,221    12,683,045      16,264,266   

- Nova Tarrafa Participações Ltda.

   100.0000%    1,743    (3,724   (1,981

- Nova Tarrafa Inc.

   100.0000%    282    (349   (67

- Goodwill from Fixed Assets and License in BRTO

   3,761,806    (3,761,806   —     
                    

Property, Plant and Equipment

   455    —        455   
                    

- General Goods

      455    —        455   
                    

TOTAL ASSETS

      9,425,643    9,035,100      18,460,743   
                    

 

  1 / 20
APSIS CONSULTORIA EMPRESARIAL   BRTP


Table of Contents

REPORT: RJ-0278/09-02

 

BRASIL TELECOM PARTICIPAÇÕES S.A.

   FINANCIAL STATEMENT

 

BALANCE SHEET (THOUSAND REAIS)

   Balance as of
5/31/2009 *
    MARKET
ADJUSTMENTS
    ADJUSTED
BALANCE
 

CURRENT LIABILITIES

   330,789      —        330,789   
                  

Accounts Payable

   205      —        205   

Loans

   91      —        91   

Interest, Taxes and Contributions

   30,868      —        30,868   

Dividends Payable

   220,548      —        220,548   

Personnel, Social Benefits and Charges

   4      —        4   

Provision for Contingencies

   215      —        215   

Other Accounts Payable

   78,858      —        78,858   
                  

LONG TERM LIABILITIES

   11,512      38,502      50,014   
                  

Interest, Taxes and Contributions

   8,266      13,382      21,648   

Provision for Contingencies

   3,246      25,120      28,366   

Other Obligations

   0      —        0   
                  

EQUITY

   9,083,342      8,996,598      18,079,940