iHeartMedia 2011 Annual Report Download - page 28

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On August 8, 2011, Brazil’s National Council of Fiscal Policy (CONFAZ) published a rule authorizing a general amnesty
to sixteen states, including the State of São Paulo, to reduce the principal amount of VAT allegedly owed for communications
services and reduce or waive related interest and penalties. The State of São Paulo ratified the amnesty in late August 2011. However,
in late 2011, the State of São Paulo decided not to pursue the general amnesty, but it has indicated that it would be willing to consider
a special amnesty for the out-of-home industry. Klimes and L&C are actively exploring this opportunity but do not know whether the
State ultimately will offer a special amnesty or what the terms of any special amnesty might be. Accordingly, the businesses continue
to vigorously pursue their appeals in the lower public treasury court.
At December 31, 2011, the range of reasonably possible loss is from zero to approximately $31.2 million in the L&C
matter and is from zero to approximately $34.6 million in the Klimes matter. The maximum loss that could ultimately be paid
depends on the timing of the final resolution at the judicial level and applicable future interest rates. Based on our review of the law,
the outcome of similar cases at the judicial level and the advice of counsel, we have not accrued any costs related to these claims and
believe the occurrence of loss is not probable.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
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