Entity Rationalization & Alignment Planning

1. Entity Rationalization & Alignment Planning September 2011

2. General Background Key objective is to rationalize existing legal entities and reduce the global footprint in a tax optimized manner in order to mitigate administrative and compliance burden of non-vital legal entities Further, as part of its entity rationalization, Companies can consider implementing tax-aligned holding company structures In the current environment, there exist specific planning opportunities to maximize tax attributes and erode local country tax base by re-purposing subsidiaries. Footer

3. Benefits of Entity Simplification [Cross-Functional Efficiencies] Legal and Regulatory Operations HR/Payroll • Reduced time and costs associated with duplicative licensing, permitting and regulatory filing costs resulting from structure designed to meet outdated legal and regulatory requirements • Reduced costs associated with records maintenance • Savings of time expended by Board of Director members attending annual meetings and meeting other statutory formalities • Reduced time and related costs associated with the preparation and filing of public notices • Savings associated with elimination/consolidation of registered agents in applicable jurisdictions • Reduced costs incurred from duplicative administrative and shared services costs (e.g., consolidation of regional structures into national structure) • Simplify structure to align with operating model • Elimination of costs related to intercompany transactions (e.g., work orders, re-titling of property, fleet sharing, subleases, etc.) • Savings realized through the consolidation of duplicative insurance policies and elimination of duplicative premiums • Savings realized through vendor rationalization across legal entities and jurisdictions • Time savings associated with aligning the structure to match the pension, 401(k) plans, insurance plans, etc. • Savings relating to reduced costs associated with employee/ executive mobility (e.g., visa, work counsel, union, etc.) • Time and cost savings relating to the preparation and filing of multiple 990’s and 5500’s • Savings related to payroll registration fees • Reduction of time required to maintain intercompany agreements • Time and cost savings associated with the creation of structure that labor contracts can follow

4. Benefits of Entity Simplification [Cross-Functional Efficiencies] Treasury and Finance Accounting IT • Reduced time required for cash budgeting and forecasting • Savings from reduced bank account service fees and transaction charges (e.g., accounts maintenance, cash sweeps, interest charges, etc.) • Reduced time and cost of monitoring covenants (e.g., maintaining ratios, monitoring thin cap, meeting minimum cash requirements, etc.) • Reduction of time required to maintain intercompany positions • Savings from elimination of extraneous minimum deposit requirements in multiple jurisdictions resulting in lower cost of capital and more efficient cash management • Simplify currency hedging strategy • Savings of time required to compile and reconcile month-end and year-end legal entity financial reports • Savings of time required to roll forward and reconcile intercompany account balances • Savings of time required to prepare and post intercompany journal entries • Savings of time required to reconcile legal entity books including posting, adjusting and eliminating journal entries • Savings of time related to IFRS implementation readiness • Reduction of time required to input and update general ledger legal entity coding • Savings from reduced system reconfiguration costs • Reduced cost associated with incremental system capacity • Savings of time required to draft, process and maintain reports requests

5. Deloitte’s Approach [Holistic Strategy Aligned w/ Operating Model] Optimal Approach Common Approach Implications Legal Entity Structure Corporate Strategy Corporate Strategy Misalignment between legal entity structure and operating model typically results in: • Cumbersome and inefficient use of internal resources resulting in duplication of effort • Unnecessary complexity involved in execution of strategies, alignment of people, sharing of customer data and investment in infrastructure • Inefficient financial statement and tax filing processes and excessive risk • Potential employee morale and retention issues due to heavy focus on tactical activities that are manual and/or redundant • Higher effective tax rate and inability to realize other tax savings opportunities • Missed financial targets Operating Model Operating Model Detailed Designs for People, Process Technology, and Governance Legal Entity Structure Multiple Iterations Detailed Designs for People, Process Technology, and Governance

6. Operating Model Development Approach Deloitte’s Approach [Phased Execution with Cross-Functional Teaming] Understand Current State of Operating Model Perform Gap Analysis Develop Hypotheses Develop Operating Model Drafts Legal Entity Structure Development Approach Develop Business Case Finalize Operating Model and LES Develop Implementation Workplan Facilitate Implementation Discussions Critical Success Factors • The organization’s end state operating model should be used to drive the development of the legal entity structure • Active involvement from intra-departmental stakeholders is essential during the development of the operating model and legal entity structure • It is imperative to obtain executive alignment on the operating model and legal entity structure before implementation • A multi-wave work plan that is iterative in nature, should be employed to ensure successful implementation and adoption of the operating model and legal entity structure

7. Some General Considerations • What are the current legal and regulatory restrictions in the jurisdictions that may dictate legal entity designs? • What are the key operating model components that drive legal entity design (customers vs. back office operations, decentralized operations in the regions, breakdown by product/service offerings, etc.)? • What are the treasury requirements? • What non-core activities are/will be outsourced and what is the holistic outsourcing strategy? • What capabilities need to be “localized” and executed as management considers strategic shifts and pursues organic and inorganic growth strategies? • How may transaction flows be centralized in certain tax jurisdictions to minimize the effective tax rate?

8. General Observations/Considerations Benefits of Reducing Global Footprint Reduced administrative costs, tax compliance burden and stewardship expense Considerations Need to evaluate US and Local tax consequences of liquidations In-bound liquidations may result in “all earnings and profits amount” to be included in US taxable income and/or local taxation on transfer of shares Intercompany debt could result in “springing debt” or capital conversion upon liquidation Variances in functional currency could result in gain/loss to be recognized on asset transfers Opportunity to repurpose existing entities to utilize and/or preserve existing tax attributes into IP holding company, shared-service center, principal company Existing losses could create natural profit sink Need to consider “hovering deficit” issues Maintain/utilize existing entities to mitigate impact of certain tax provisions that aim to target acquisitions made to evade or avoid income tax Footer

9. Tax Legal Entity Simplification Observations Some Common Tax Opportunities & Traps to Consider

10. Holding Company Structuring Benefits Efficient movement of cash via treaty network Create “no where” income Opportunity to insert tax advantaged leverage, utilize hybrid instruments Utilization of tax attributes (NOLs, tax credits, etc) more efficiently Tax efficiently redeploy offshore cash without residual US tax burden Exit planning – capital gain mitigation, tax advantaged spin-offs, worthless stock deduction, etc. Selection of jurisdiction that is flexible to grow with the Company as the business environment changes (see Appendix II) Considerations in Selecting Holding Company Location (See attached matrix for comparison of common holding company jurisdictions) Substance requirements Statutory tax rate Flexible ruling regime Controlled foreign company legislation Treaty network Footer

11. Brazil – Reduction in local tax base Background Brazil is profitable, cash tax-paying jurisdiction Strategy Transfer profitable entities under Lux HoldCo Transfer Lux HoldCo under Brazil in exchange for debt and equity Reduce local Brazil tax base via interest payments and increased interest on net equity Considerations Brazil CFC rules Possibility to obtain amortizable step-up in Brazil as a result of restructuring in order to further reduce Brazil tax base Recent Supreme Court cases break in favor of, and against taxpayers on the issue about supremacy of domestic law over foreign tax treaties and protocols. US Interest expense Brazil Lux HoldCo Other Foreign Entities Footer