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

a) Reserve for contingencies

The Management of the Company and its subsidiaries, based on the opinions of their legal counsel, recognized a reserve for contingencies to cover losses on ongoing tax, labor and civil lawsuits, whose likelihood of an unfavorable outcome was assessed as probable.

The changes in the reserve for contingencies in the year ended December 31, 2009, were as follows:

	2008	Additions (a)	Write-offs/ reversals (b)	Inflation adjustment	Payments (c)	2009
Tax	369,430	154,047	(21,400)	2,870	(20,501)	484,446
Civil	11,196	2,771	(2,102)	-	(497)	11,368
Labor	10,837	7,376	(2,446)	-	(3)	15,764
Total	391,463	164,194	(25,948)	2,870	(21,001)	511,578

(a)	Correspond basically to the increase in the reserve for contingencies in the year ended December 31, 2009, related to suspended taxes, recorded as a contra entry to "General and administrative expenses" and "Other operating (expenses) income" in the statement of income.
(b)	Basically represented by a reserve for tax contingencies, in which the Company withdrew the lawsuits and included them in the federal tax installment program.
(c)	Correspond basically to the full settlement at sight of the lawsuits included in the federal tax installment program.

Labor and social security contingencies – consider the current stage of lawsuits in case of probable losses.

Civil contingencies – refer to frauds in credit card operating processes.

Tax contingencies – refer to differences in interpretation by tax authorities, especially regarding:

• PIS – increase in tax rate – since January 2003, the Company and its subsidiary Servinet are challenging in court the increase in PIS rate to 1.65%. As a result, the difference in the PIS rate under the cumulative and noncumulative calculation method is being recorded as reserve for contingencies since then. Escrow deposits are made for unpaid PIS amounts. As of December 31, 2009, the accrued balance is R$87,458 and the balance of escrow deposits is R$92,244. The lawsuit was filed by the Company with the 2nd Federal Court of São Bernardo do Campo. A final and unappealable decision was issued and the Company awaits the sentence execution. The lawsuit was filed by the subsidiary with the 7th Federal Court of São Paulo and is awaiting judgment of the appeal filed.
  
  
• COFINS – noncumulativeness – in February 2004, the Company and its subsidiary Servinet filed an injunction to avoid payment of COFINS according to Law No. 10833/03 that requires the noncumulative calculation at the rate of 7.60%, and began to make escrow deposits for amounts determined monthly. As a result, the difference in the COFINS rate under the cumulative and noncumulative calculation method is being recorded as reserve for contingencies since then. Escrow deposits are made for unpaid COFINS amounts. As of December 31, 2009, the accrued balance is R$361,833 and the balance of escrow deposits is R$362,474. The lawsuit is awaiting judgment of the Federal Supreme Court.
  
  
• State VAT (ICMS) on imports – in 2003, through an injunction and defense against tax notifications regarding the customs clearance of POS equipment purchased abroad for its property, plant and equipment, the Company is seeking nonpayment of ICMS. As of December 31, 2009, the accrued balance is R$5,881 and the balance of escrow deposits is R$3,040. The lawsuits filed by the Company with the 1^st, 3^rd, 6^th , 7^th, 10^th, 13^th and 14^th São Paulo State Finance Courts and the court records are awaiting judgment.
  
  
• Amazon Investment Fund (FINAM) – in 2007, the Company received a tax notification for calendar year 2002, fiscal year 2003. The Federal Revenue Service alleges that the Request for Review of Tax Incentive Issue Order (PERC) was not filed within the required deadline and, therefore, they do not recognize the portion of business income tax (IRPJ) related to FINAM. The Company awaits the distribution of the Voluntary Appeal to the Panel of the Board of Tax Appeals. As of December 31, 2009, the accrued balance is R$11,080.
  
  
• IRRF – incentive cards – in 2008, the Company received a tax notification related to calendar year 2005. The Federal Revenue Service is claiming the credits arising from incentive marketing campaigns. The lawsuit is at the stage of administrative defense. As of December 31, 2009, the accrued balance is R$390.
  
  
• Tax deficiency notices on unidentified credits – on December 23, 2009, the Company received tax deficiency notices related to calendar years 2004 through 2007 regarding IRRF, PIS, COFINS and CSLL tax payments. The Federal Revenue Service is claiming credits that were not identified in accessory obligations. This lawsuit is at the administrative defense stage, but, based on the legal counsel's opinion, the Company recognized a reserve for contingencies of R$16,953.

The Company and its subsidiaries are challenging other interpretations of the law by tax authorities and, therefore, as of December 31, 2009, recognized a reserve for contingencies in the amount of R$851.

The Management of the Company and its subsidiaries, based on the opinion of their legal counsel, believes that the actual disbursement of the reserves for contingencies will not occur before 2014.

Additionally, as of December 31, 2009, the Company and its subsidiaries are parties to tax, civil and labor lawsuits assessed by their legal counsel as possible losses, for which no reserve was recorded, as follows:

Tax	117,816
Civil	124,041
Labor	16,269
Total	258,126

Civil contingencies refer basically to collection of transactions made through the Company's system that were not transferred to merchants in view of noncompliance with clauses of the affiliation contract, and compensation for losses caused by transactions not transferred at that time.

Labor lawsuits, when started, are considered possible loss. Only after the court decision is issued, the lawsuits are reclassified to probable or remote loss, depending on the decision and based on the history of losses on similar labor lawsuits. In general, considering the history of losses, labor lawsuits are related to salary equalization, overtime, annual bonus, rights guaranteed by agreements between the employer and the labor union, recognition of employment relationship, tenure after occupational disease, and pain and suffering.

b) Escrow deposits – noncurrent assets

The Company has escrow deposits linked to the reserve for tax, labor and civil contingent liabilities, broken down as follows:

	2009
Tax	452,273
Civil	1,325
Labor	1,694
Total	455,292