1. Market Opportunity: Brazil Renata Vasconcellos rvasconcellos@porterwright.com May 2011

2. 2 Porter Wright Morris & Arthur LLP © 2010 Brazil in Numbers ● Territory: 514,876.599 square kilometers (3,287,612 sq mi) ● Population: 193 million ● Ninth largest economy in the world, expected to be the fifth economy in the next decade ● GDP: $1,594,489,675,024 (2009) ● GDP per capita: $8,070 (2009) ● Unemployment Rate: 8.3.% (2009), 6.5% (2011, IBGE) ● Per capita incomes forecasted to grow at an average rate of 6% over the next several years

3. 3 Porter Wright Morris & Arthur LLP © 2010 U.S. Exports to Brazil ● U.S. Exports to Brazil: $35.3 billion (2010) (Census) – up 35% from 2009. ● The U.S. is the largest market for Brazilian imports (15% of the Brazilian import market). ● U.S. exports of goods to Brazil increased by 42.2% in Jan. 2011 to $3.2 billion, compared to $2.3 billion in Jan. 2010. ● Services: From 2002 to 2009, U.S. service exports to Brazil increased from $5.1 billion in 2002 to nearly $12.7 billion in 2009. Service exports to Brazil in 2009 were up 6% from the nearly $12.0 billion exported in 2008.

4. 4 Porter Wright Morris & Arthur LLP © 2010 U.S. Exports to Brazil (2010) ● Largest categories of exports: – Machinery ($7.2 billion), – Aircraft and parts ($4.4 billion), – Electric machinery ($4.3 billion), – Mineral fuel and oil ($4.2 billion), – Chemicals ($2.0 billion). ● Largest U.S. state exporters of goods to Brazil in 2010: – Texas ($7.2 billion), – Florida ($4.7 billion), – California ($2.8 billion), – Illinois ($2.1 billion), – Louisiana ($1.4 billion).

5. 5 Porter Wright Morris & Arthur LLP © 2010 Foreign Investment in Brazil ● Must be registered with the Central Bank of Brazil. ● Cash investments do not require prior official authorization. ● No restrictions on the distribution or remittance of profits abroad. ● Registered foreign capital may be repatriated without prior authorization. ● International remittances that exceed the foreign capital invested is capital gain - subject to a 15% withholding income tax. ● Participation of foreign capital is prohibited only in the following activities: nuclear energy, health services, post office and telegraph services, and aerospace industry. Rural land acquisition by foreigners is restricted. ● Investment guaranty agreement between Brazil and the U.S. ● Brazil is very supportive of international arbitration — a neutral and non-political forum for resolving commercial and investment disputes.

6. 6 Porter Wright Morris & Arthur LLP © 2010 Upcoming Events In Brazil – 2011 World Military Games – 2012 UN Rio +20 Climate Summit – 2013 Confederation Cup – 2014 World Cup – 2016 Olympic Games (www.rio2016.com)

7. 7 Porter Wright Morris & Arthur LLP © 2010 Olympic Games - Who is doing What? ● Federal Government: – Ports – Airports ● State and Municipalities – Stadiums – Urban mobility – Financed by Federal Government ● Private Sector – Hotels

8. 8 Porter Wright Morris & Arthur LLP © 2010 Cities Hosting World Cup Games Manaus (AM) ● Natal (RN) ● Fortaleza (CE) ● Curitiba (MT) ● Recife (PE) ● Salvador (BA) ● Brasilia (DF) ● Belo Horizonte (MG) ● Rio de Janeiro (RJ) ● São Paulo (SP) ● Curitiba (PR) ● Porto Alegre (RS)

9. 9 Porter Wright Morris & Arthur LLP © 2010 Foreign Investment in Rio ● Expected volume of investment 2011- 2012: R$181.4 billion (approx. $113 billion). ● Infrastructure: $36 billion ● World Cup and Olympics: $11.5 billion ● Petrobras: $107.9 billion

10. 10 Porter Wright Morris & Arthur LLP © 2010 Major Projects in Rio ● Comperj Refinary ● Ternium Metallurgy (Iron and Steel) ● New Port of Açu ● Navy and OSX Shipyards ● Third Nuclear Energy Plant ● Bus Rapid Transit System ● Porto Maravilha Project to Remodel Rio’s Port

11. 11 Porter Wright Morris & Arthur LLP © 2010 Rio Investment: Oil and Gas ● Largest oil (81%) and gas (53%) producer in Brazil. Royalty payments from oil and gas production have been increasing. ● Rio’s deep oil extraction is currently 1.7 million barrels a day - more than OPEC members Nigeria and Algeria. ● Recent discovery of vast oil reserves under the salt layer at the Rio coast will require construction of additional infrastructures for exploration. ● Petrochemical – Duque de Caxias Refinery. ● Exploration and production in the Campos Bay. ● Green fuel projects.

12. 12 Porter Wright Morris & Arthur LLP © 2010 Rio Investment: Manufacturing Industries ● Petrochemical (74.9%) – RJ Petrochemical Complex construction. ● Shipbuilding (18%) – Expansion and modernization of shipyards. – New shipyards. ● Steel Mills (2.7%) – Construction of new steel mills (Santa Cruz e Resende).

13. 13 Porter Wright Morris & Arthur LLP © 2010 Rio Investments: Infrastructure ● Logistics for the World Cup and Olympics – Construction and remodeling of hotels. – Construction and remodeling of stadiums and other sport venues. – Modernization of Tom Jobim Int’l Airport. – Bullet train construction connecting RJ to SP. – Road works for the RJ Metropolitan Ring Road. – Construction of two new subway lines. – Duplication of BR101 North Highway. – Costa do Sol project (Cabo Frio).

14. 14 Porter Wright Morris & Arthur LLP © 2010 Rio Investments: Infrastructure ● Logistics – Dredging of Itaguai port. – Itaguai port expansion of container and cargo terminals. – Açu Port Complex (large vessel capability). – Construction of Açu electric energy station. – Revitalization of the Port of Rio. – Construction of Nuclear Power Station Angra 3. – Construction of Simplicio Hydroelectric Complex.

15. 15 Porter Wright Morris & Arthur LLP © 2010 Promising Areas for U.S. Investments in Rio ● Oil and Gas – Petrobras Supplier Registration is open to foreign companies ● Iron and Steel ● Infrastructure ● Safety & Equipment ● Tourism ● Creative Industries

16. 16 Porter Wright Morris & Arthur LLP © 2010 Where to Get Assistance in Rio Firjan (Industry Federation of RJ) – http://www.firjan.org.br ● Invest Rio – http://www.investrio.com.br ● CODIN (Industrial Development Agency of RJ) – http://www.codin.rj.gov.br ● Rio Negocios (Investment Promotion Agency) – http://rio-negocios.com/ ● Brazil Trade Net – http://www.braziltradenet.gov.br ● Apex Brasil (FederalTrade & Investment Promotion Agency) – http://www.apexbrasil.com.br ● U.S. Consulate in Rio – http://www.embaixadaamericana.org.br http://www.embaixadaamericana.org.br

17. 17 Porter Wright Morris & Arthur LLP © 2010 Where to Get Assistance in the U.S. ● Brazilian Embassy in Washington D.C. – www.brasilemb.org ● U.S. Chamber of Commerce – www.amcham.com.br ● U.S. Department of Commerce (Brazil desk) – www.doc.gov ● Brazil-American Chamber of Commerce – http://www.brazilcham.com

18. 18 Porter Wright Morris & Arthur LLP © 2010 Tips on Brazilian Business Culture Things move slowly. ● Portuguese language is essential. ● First name basis is okay. ● Companies tend to be organized along strictly hierarchical lines. ● Better to deal with the real decision maker. ● Relationships come first, second and third in Brazil. ● Meetings are generally quite informal and relaxed. ● Punctuality is a variable commodity in Brazil.

19. 19 Porter Wright Morris & Arthur LLP © 2010 U.S. Companies in Brazil Success Stories ● Citibank ● Federal Express ● McDonalds ● Coca-Cola ● Mary Kay ● If you do not take into consideration the Brazilian culture, you will not succeed in Brazil.