Brazil Brazilian authorities have investigated our Brazilian
subsidiary and certain of our former employees, as well as a Brazilian
importer of our products, and its affiliates and employees, relating
to alleged evasion of import taxes and alleged improper transactions
involving the subsidiary and the importer. Brazilian tax authorities
have assessed claims against our Brazilian subsidiary based on a
theory of joint liability with the Brazilian importer for import
taxes, interest, and penalties. In addition to claims asserted by the
Brazilian federal tax authorities in prior fiscal years, tax
authorities from the Brazilian state of Sao Paulo have asserted
similar claims on the same legal basis in prior fiscal years.

The asserted claims by Brazilian federal tax authorities that remain
are for calendar years 2003 through 2007, and the asserted claims by
the tax authorities from the state of Sao Paulo are for calendar years
2005 through 2007. The total asserted claims by Brazilian state and
federal tax authorities aggregate to $215 million for the alleged
evasion of import and other taxes, $1.4 billion for interest, and $1.0
billion for various penalties, all determined using an exchange rate
as of January 26, 2019 . We have completed a thorough review of the
matters and believe the asserted claims against our Brazilian
subsidiary are without merit, and we are defending the claims
vigorously. While we believe there is no legal basis for the alleged
liability, due to the complexities and uncertainty surrounding the
judicial process in Brazil and the nature of the claims asserting
joint liability with the importer, we are unable to determine the
likelihood of an unfavorable outcome against our Brazilian subsidiary
and are unable to reasonably estimate a range of loss, if any. We do
not expect a final judicial determination for several years.