TIM Participacoes SA : Report of Organizational Action Affecting Basis of Securities (IRS Form 8937)

Issuer's name:TIM PARTICIPAÇÕES S.A.
Issuer's employer identification number (EIN):None
Name of contact for additional information:Rogerio Tostes Lima
Telephone No. of contact:[phone]
Email address of contact: [e-mail]
Mailing Address of contact:Av. das Américas, 3434
Bloco I / 6º andar
Rio de Janeiro, Brazil, 22640-102
Date of action:August 4, 2011
Classification and description of security:ADRs representing preferred shares of the Company
CUSIP number:88706P 20 5
Ticker symbol:TSU

Description the organizational action and, if applicable, the date of the action or the date against which shareholders' ownership is measured for the action.
At an Extraordinary Shareholders Meeting held on June 22, 2011, holders of common shares of the Company approved the conversion of the preferred shares of the company into common shares, with 0.8406 newly issued common shares to be issued in exchange for each preferred share of the company. The holdersof preferred shares of the Company ratified the conversion at a Preferred Stock Holders Special Meeting held on the same date. In conjunction with the conversion of preferred shares into common shares, the ADR ratio was changed from one (1) ADR to ten (10) preferred shares to a new ratio of one (1) ADR to five (5) common shares, effective August 4, 2011. As a result of the events mentioned above, registered holders of ADR certificates were required to exchange their existing preferred ADSs for new common ADSs on the basis of 1.6812 new common ADSs for every one (1) preferred ADSs surrendered. Cash was paid in lieu of fractional ADSs.

Description the quantitative effect of the organizational action on the basis of the security in the hands of a US taxpayer as an adjustment per share or as a percentage of old basis.
A US taxpayer that held preferred ADRs had to allocate its basis in those preferred ADRs among the new common ADRs received in the exchange. The US taxpayer has a carryover basis overall, but the basis per ADR is different because the number of common ADRs received by the US taxpayer is greater than the number of preferred ADRs given up by the US taxpayer. If a taxpayer received cash in lieu of fractional ADRs, a portion of the basis was allocable to the fractional ADR, which was treated as redeemed by the company for cash.

Description of the calculation of the change in basis and the data that supports the calculation, such as the market values of securities and the valuation dates.
A US taxpayer will need to allocate its old basis in the preferred ADRs among the new common ADRs. If a US taxpayer acquired all of its preferred ADRs at the same time and for the same price, then the US taxpayer can allocate its basis pro rata among the new common ADRs (including fractions of ADRs that were redeemed for cash). If a US taxpayer acquired its preferred ADRs at different times or at different prices, then the US taxpayer must allocate its basis to the new common ADRs(including fractions of ADRs that were redeemed for cash) in a manner that reflects, to the greatest extent possible, that a common ADRreceived is received in respect of preferred ADRs that were acquired on the same date and at the same price.To the extent it is not possible to allocate basis in this manner, the basis of preferred ADRs surrendered must be allocated to the common ADRs (or allocable portions thereof) received in a manner that minimizes the disparity in the holding periods of the surrendered preferred ADRsthe basis of which is allocated to any particular common ADR received.

List of applicable Internal Revenue Code sections and subsections upon which the tax treatment is based.

Internal Revenue Code section 368(a)(1)(E) - describing a recapitalization as a "reorganization".

Internal Revenue Code section 354(a)(1) - No gain or loss is recognized if stock or securities are exchanged solely for stock or securities pursuant to a reorganization.

Internal Revenue Code section 358(a) and Treasury Regulation section 1.358-2(a)(2)(i) - Taxpayers have a carryover basis in securities received in an exchange under Internal Revenue Code section 354. The carryover basis is allocated among the stock or securities received in the reorganization as described above.

Can any loss be recognized?
No loss can be recognized.

Other information necessary to implement the adjustment, such as the reportable tax year.
The effective date of the transaction was August 4, 2011.