LEASE AND CONCESSIONS - CONSOLIDATED

The lease of RFFSA’s assets, for a 30-year period, was contracted by ALL Brasil on February 27, 1997, for R$202,112, R$82,032 of which was paid in cash. The remaining R$120,080 has been paid since January 15, 1999 in 112 quarterly installments including interest of 12% per annum, restated by the General Price Index – Internal Availability (IGP-DI). The provision for this liability is described in Note 17.

The long-term lease agreement of ALL Intermodal, relating to rolling stock owned by Delara Brasil Ltda., and other accessory assets of this rolling stock have as counterpart the payment of fixed amounts in cash and shares of the Company. The lease was amortized on a straight-line basis for a contractual 60-month period since June 2001.

The lease of RFFSA’s assets, for a 30-year period, was contracted by Ferroban Ferrovias Bandeirantes S.A. – on December 30, 1998 for R$230,160, R$52,793 of which was paid in cash. The balance of R$177,367 has been paid as from December 15, 2000, in 112 quarterly installments including interest of 12% per annum, restated by the General Price Index – Internal Availability (IGP-DI). The Company provisions such liability as described in Note 17.

The lease of RFFSA’s assets for a 30-year period, was contracted by Ferrovia Novoeste S.A. on June 26, 1996 for R$56,440, R$4,969 of which was paid in cash. The balance of R$51,471 has been paid as from January 15, 1998, in 112 quarterly installments including interest of 12% per annum, restated by the General Price Index – Internal Availability (IGP-DI). The Company provisions such liability as described in Note 17.

Prepaid right of way refers to the amount paid by ALL Brasil to Ferrovia Bandeirantes S.A. as a consideration for the use of the lines from Presidente Epitácio to RubiãoJúnior and from Pinhalzinho/Apiaí to Iperó (SP), in accordance with the agreement to operate these lines for 30 years, which is also the accounting amortization period. The 30-year concession for rail freight transportation services was obtained by ALL Brasil for R$10,830, R$4,510 of which was paid in cash. The remaining R$6,320 has been paid since January 15, 1999, in 112 quarterly installments including interest of 12% per annum, restated by the IGP-DI. The Company also provisions such liability as described in Note 17.

The 30-year concession for rail freight transportation services was obtained by Ferroban – Ferrovias Bandeirantes S.A., for R$12,252, R$2,917 of which was paid in cash. The remaining R$9,335 has been paid since December 15, 2000, in 112 quarterly installments including interest of 12% per annum, restated by the IGP-DI. The Company also provisions such liability as described in Note 17.

The 30-year concession for rail freight transportation services was obtained by Ferrovia Novoeste S.A. for R$3,118, R$409 of which was paid in cash. The remaining R$2,709 has been paid since January 15, 1998, in 112 quarterly installments including interest of 12% per annum, restated by the IGP-DI. The Company also provisions such liability as described in Note 17.

RECOVERABLE TAXES

ALL Brasil and ALL Intermodal acquired federal credits to offset with debts of other federal taxes, such as: PIS, COFINS, IRRF and CSL. Such credits derive from lawsuits filed by third parties, with res judicata and without the possibility of filing an action to overrule a final judgment on the part of the federal government. The amount offset by both Companies until December 31, 2006 amounted to R$52,115. The Company’s management negotiated the restitution of federal credits recorded by ALL Brasil at the amount of R$46,648 on December 31, 2006, and the allowance for doubtful accounts was recorded at the amount of R$16,240, related to the difference between the amount of credits to be restituted and liabilities owed to those sellers.