a. Preparation and disclosure criteria
The financial statements were prepared in accordance with accounting practices applicable in Brazil (BR GAAP), based on the Corporate Law, CVM – Brazilian Securities Commission standards and procedures including the new provisions introduced (those amended and revoked by Law 11.638 of December 28, 2007 and the Provisional Measure 449 of December 3, 2008), superseded by Law 11.941 of May 27, 2009, for the standards applicable to public telecommunications service concessionaires/authorized companies; and the accounting pronouncements issued by the Comitê de Pronunciamentos Contábeis – CPC (Accounting Pronouncements Committee).

The Company still holds American Depositary Receipts traded on the New York Stock Exchange – USA. Because of it, the Company is subject to the rules of the Securities and Exchange Commission (SEC). In order to meet its market needs, it is the Company's principle to disclose information prepared in accordance with the BR GAAP, simultaneously to both markets in Brazilian reais, in Portuguese and in English.

Assets and liabilities are classified as current when their realization or settlement is estimated to occur in the next twelve months. Otherwise, they are shown as non-current. Monetary assets and liabilities denominated in foreign currencies were converted into Reais at the exchange rate in effect at the balance sheet date. The translation differences were recognized in the statement of income.

As permitted by CVM Rule No. 565, of December 17, 2008, which approved Technical Pronouncement No. 13, the Company adopted Law No. 11.638 and Law No. 11.941, of May 27, 2009) in its financial statements for the year ended December 31, 2008. The Company established the transition date for adoption of the new accounting practices as January 1, 2008.

Management's authorization to complete the preparation of these financial statements was obtained on February 12, 2010.

b. Recent accounting pronouncements
In line with the process of converging Brazilian and international accounting standards, the Brazilian FASB (Comitê de Pronunciamentos Contábeis - CPC) issued and the Brazilian Securities Commission (Comissão de Valores Mobiliários - CVM) approved several accounting pronouncements throughout 2009 vis-à-vis the International Reporting Financial Standards (IFRS) issued by the IASB – International Accounting Standards Board. These pronouncements become effective as of year 2010, with retrospective application to 2009 for comparison purposes. As a result of management's initial assessment, the following accounting pronouncements, interpretations and technical guidance may have an impact, which is still being measured, on its financial statements:

•	Pronouncement CPC 15 – Business Combination, as approved by CVM Rule No. 580. Throughout 2010, the Company's management will be monitoring all the impacts arising from the business combination following the acquisition of Intelig. At this point, it is not possible to estimate the impacts on the financial statements for years 2010 and 2009, if any.
•	Pronouncement CPC 20 – Financing Costs, as approved by CVM Rule No. 577. The Company's management does not believe that this pronouncement will produce significant impacts on the financial statements, given that the Company has been adopting this procedure, as mentioned in Note 18.
•	Pronouncement CPC 26 – Presentation of Financial Statements, as approved by CVM Rule No. 595. The Company's management believes that adopting this pronouncement does not change financial statement balances but only some items relating to the financial statement presentation. The most significant change should involve the preparation of the statement of income and other comprehensive income.
•	Pronouncement CPC 27 – Property, Plant and Equipment, as approved by CVM Rule No. 583, and Technical Interpretation ICPC 10, as approved by CVM Rule No. 619 on December 22, 2009. The Company's management will review the estimated useful life of its assets in 2010, but does not expect significant impacts on the financial statements, considering that the useful life is generally adopted by the telecommunications industry.
•	Pronouncement CPC 30 – Revenue, as approved by CVM Rule No. 597. The Company's management believes that the only significant impact on the financial statements will be the presentation of net revenues.
•	Pronouncement CPC 38 – Financial Instruments: Recognition and Measurement, CPC 39 – Financial Instruments: Presentation and CPC 40 – Financial Instruments: Disclosure, as approved by CVM Rule No. 604. The Company's management does not expect significant impacts on the financial statements, given that most aspects of these pronouncements have been adopted by the Company, as described in Note 35.
•	Technical Interpretation ICPC 08, as approved by CVM Rule No. 601 on October 7, 2009, which addresses the accounting for proposed dividend distribution. The effect of applying this ICPC will be the recognition of the minimum compulsory dividends, as shown in Note 24.
•	Technical Interpretation ICPC 09, as approved by CVM Rule No. 618 on December 22, 2009, for the purpose of clarifying issues regarding the adoption of Technical Pronouncements CPC 15, 18, 19, 35 and 36, which address the preparation of individual, consolidated and separate financial statements and the adoption of the equity method of accounting, especially when preparing consolidated financial statements.

c. Consolidated Financial Information
The consolidated quarterly information includes assets, liabilities and the consolidated results of operations of the Company and its subsidiaries TIM Celular and Intelig, respectively, as follows:

	% Participation
	2009		2008
	Direct	Indirect	Direct	Indirect
TIM Celular	100.00	-	100.00	-
TIM Nordeste	-	-	-	100.00
Intelig	100.00	-	-	-

The financial information of subsidiaries included in consolidation coincide with those of the parent company and the accounting policies were consistently applied by the consolidated companies in relation to the previous period.

The main consolidation procedures are as follows:

I. Elimination of intercompany consolidated assets and liabilities accounts;

II. Elimination of participation in capital, reserves and retained earnings of the subsidiaries;

III. Elimination of consolidated intercompany revenues and expenses.


d. Comparability of the financial statements
The Company and its subsidiaries aim to continuously improve the presentation of the financial statements while maintaining compliance with generally accepted accounting principles. The adoption of new accounting principles and the application of preferred account classifications, according to the accounting practices adopted in Brazil, resulted in the adjustment of income from "penalties for breach of contract", in the amount of R$68,718, previously classified as other operating income, later reclassified as gross operating revenue. The statement of value added for the same year is also being restated to reflect this adjustment.

STATEMENT OF INCOME	Consolidated 2008
	As reported		As adjusted
Gross operating revenue
Telecommunication services (Note 25)	16,485,813	68,718	16,554,531
Sale of goods (Note 25)	1,766,400	-	1,766,400
	18,252,213	68,718	18,320,931
Deductions from gross revenues (Note 25)	(5,171,248)	(2,508)	(5,173,756)
Net operating revenue	13,080,965	66,210	13,147,175
Gross profit	6,017,168	66,210	6,083,378
Operating income (expenses)
Other operating income (expenses), net (Note 29)	1,338	(66,210)	(64,872)
Net income for the year	180,152	-	180,152