PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
Brasília, D.F., 71.215-000
Federative Republic of Brazil
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
in paper as permitted by Regulation S-T Rule 101(b)(7)__.
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes ______ No ___X___
registrant in connection with Rule 12g3-2(b):
BRASIL TELECOM FINISHES 2005 WITH 2.2 MILLION MOBILE ACCESSES
Brasília, February 22, 2006 - Brasil Telecom Participações S.A. (BOVESPA: BRTP3/BRTP4; NYSE: BRP) announces its consolidated results for the fourth quarter of 2005 (4Q05). The Company’s unaudited financial statements are presented in million of Reais, except when stated otherwise, and are in conformity with generally accepted accounting principles in Brazil.
HIGHLIGHTS- 2,212.8 thousand mobile accesses in 2005, 32.0% and 255.6% higher than 3Q05 and 4Q04, respectively.
- 1,013.9 broadband accesses in service in 2005, 13.6% and 89.3% superior than 3Q05 and 4Q04, respectively.
- Data communications and other services revenue totaled R$552.8 million in 4Q05, 10.9% higher than 3Q05.
- Consolidated EBITDA margin (excluding non recurring items) reached 33.6% in 4Q05, compared to 32.1% in 3Q05.
- Brasil Telecom’s CAPEX in 2005 reached R$1,978.1 million, against R$2,867.7 million in 2004.
- Gross revenue amounted to R$14,687.2 million in 2005, a 15.1% growth when compared to 2004.
- Mobile telephony gross revenue (excluding revenue with Brasil Telecom S.A.) reached R$732.3 million in 2005, an increase of R$644.4 million compared to 2004.
| IR CONTACTS | ||||
| Ricardo Florence (Head of IR) | Phone: (55 61)3415-1140 |
rflorence@brasiltelecom.com.br | ||
| Renata Fontes (IR Manager) | Phone: (55 61)3415-1256 |
renatafontes@brasiltelecom.com.br | ||
| Ruy Nagano | Phone: (55 61)3415-1291 |
ruy.nagano@brasiltelecom.com.br | ||
| Carla Bernardes | Phone: (55 61)3415-1123 |
carla.bernardes@brasiltelecom.com.br | ||
| MEDIA CONTACTS | ||||
| Cesar Borges | Phone: (55 61)34151378 |
cesarb@brasiltelecom.com.br | ||
Brasil Telecom Participações S.A. controls Brasil Telecom S.A., a telecommunications company which provides fixed line telephony services in local, domestic long distance, international long distance, mobile telephony, public telephony, data communication, network and value added services in the states of Acre, Rondônia, Mato Grosso, Mato Grosso do Sul, Tocantins, Goiás, Santa Catarina, Paraná and Rio Grande do Sul, as well as in the Federal District. Its coverage area corresponds to 23% of the population (approximately 43 million inhabitants), 27% of the GDP (approximately R$420 billion in 2003) and 33% of the Brazilian territory (about 2.8 million km²).
OPERATING PERFORMANCE
WIRELINE TELEPHONY
Network
The utilization rate was stable throughout 2005, reaching 88.4% in December. Brasil Telecom has a technical reserve of approximately 1.2 million lines installed to serve immediately an increase in demand with no additional investments needed. By the end of 2005, Brasil Telecom’s plant had 10.8 million lines installed and 9.6 million lines in service (Annex XVI).
The hybrid terminal – LigMix - reached a 8.2% stake in relation to lines in service by the end of December, against 7.2% in September. The hybrid terminal is only offered in switching stations where there is idle capacity when the client’s bad debt is confirmed, or through marketing campaigns directed to low income households.
TrafficIn 4Q05, Brasil Telecom reached 2.2 billion billed pulses, a 6.4% reduction in comparison to 3Q05 (Annex XV). Such reduction can be explained by seasonal effects once, in December, many people leave their region of origin because of the holidays and the weight of work days is lower than the average of the other months of the year. In 2005, Brasil Telecom reached 9.3 billion billed pulses, a 14.0% reduction when compared to 2004. The growth of broadband accesses sold in the period and the migration from wireline traffic to mobile also contributed for such performance.
Long distance traffic decreased 5.7% in comparison to 3Q05, thus Brasil Telecom registered 1.2 billion minutes in 4Q05 (Annex XV). In December 2005 Brasil Telecom celebrated a co-billing agreement with a fixed-line operator, which generated a negative impact on LD traffic.
In 2005, Brasil Telecom registered 5.1 billion LD minutes, a 17.7% reduction in comparison to 2004, explained by Anatel’s ruling, as of September 2004, which redefined the wireline local area division in the country. In this ruling, calls between close areas in the same county, which were billed as long distance calls, are now considered local calls.
At the end of the year, Brasil Telecom reached a 58.7% market share in the interregional segment and a 33.8% market share in the international segment (quarterly average).
By the end of 2005, Brasil Telecom’s quarterly average long distance market share reached 84.1% in the intra-regional segment, 1.8 p.p. superior than the 82.3% market share registered in the 4Q04. In the interregional and international segments, Brasil Telecom increased its market share by 9.8 p.p. and 7.2 p.p., respectively, in 12 months.
PS: The market shares hereby presented refer to Brasil Telecom’s concession area (Region II of the PGO – General Concession Plan), except when mentioned otherwise.
Inter-network traffic decreased by 1.4% as compared to the 3Q05 (Annex XV). VC-1 traffic represented 76.4% of the inter-network traffic, while VC-2 and VC-3 represented 13.9% and 9.7%, respectively. Such performance is explained by a greater competition in the sector, where mobile operators are offering plans in which the cost of the mobile-mobile minute can be lower than the fixed-mobile minute.
MOBILE TELEPHONYBrT GSM reached 2.2 million mobile accesses in service (Annex XIX), a net addition of 536.6 thousand accesses in the quarter. At the end of 4Q05, BrT GSM’s subscriber base was 32% higher than 3Q05 and in comparison with 4Q04, there was a 255.6% increase. BrT GSM sold 1.9 million accesses in 2005.
At the end of December, our mobile operations had 693.0 thousand post-paid subscribers (representing 31.3% of our mobile customer base), which represented one of the best post-paid mix among the largest mobile operators in Brazil.
During the 4Q05, Brasil Telecom GSM reached 3,258 sale spots and increased its coverage to 782 localities. Currently, its coverage reaches 86% of the Region’s population.
At the end of 2005, Brasil Telecom GSM achieved an 8.7% market share in its area of operations, compared to 3.2% in 2004.
DATADuring 4Q05, Brasil Telecom added 121.7 thousand accesses to its plant, amounting to 1,013.9 thousand broadband accesses in service by the end of December. In the last 12 months, the broadband plant increased by 89.3% (Annex XVI).
The residential market represented 93.6% of the total broadband accesses by the end of 2005, while the corporate market represented 6.4% .
By the end of 2005, Brasil Telecom registered growth in the following data transmission services for the corporate market: DialNet, which is a dedicated access for corporate networks, Serviço Plus, which is a data transport service and Dedicated IP, which is an internet access service with speeds up to 155 Mbps.
Internet Service ProvidersThe operational integration process of its Internet Service Providers (ISP): iBest, iG and BrTurbo began in October 2005. This process is a natural step in the strategy to consolidate Brasil Telecom’s leadership in the Brazilian Internet market.
Brasil Telecom has the largest subscriber base in Latin America, generating significant telecommunications traffic nationwide and offering a wide variety of services, from free dial up access and broadband to relationship channels and differentiated content.
Altogether, the three ISPs have a subscriber base of approximately 28 million registered users and 3.2 million active users, which places Brasil Telecom among the top 15 subscribers base in the world.
Brasil Telecom is the leader in the Brazilian Internet market, having generated 38.7 billion minutes in 2005. 916 thousand subscribers pay for services, including broadband accesses and value added services.
iBest consolidated its position as the largest dial up ISP in Region II with a market share of approximately 51% by the end of 2005. iBest is present in more than 1,800 cities, has a subscriber base of approximately 10 million registered users and 1.5 million active users.
iG generated 19.8 billion minutes in 2005, which places it as leading traffic generator in Regions I and III. iG is present in more than 1,200 cities and has a subscriber base of 18 million registered users and 2.0 million active users.
iG's broadband subscriber base increased 65% when compared to the previous year, reaching 180 thousand active clients by the end of 4Q05.
BrTurbo reached 547 thousand clients on Region II by the end of 4Q05, 185% greater than the previous year. Approximately 54.5% of Brasil Telecom’s broadband accesses were BrTurbo subscribers.
At the end of December, Brasil Telecom had 734 thousand broadband customers in Brazil.
REVENUE
Gross revenue from local service reached R$1,275.4 million in 4Q05, 2.5% lower than 3Q05’s. The basic subscription and measured service revenues account for 98.4% of the total revenue from local service. In 2005, local service gross revenue amounted to R$5,006.2 million, a 6.3% growth when compared to R$4,710.8 million registered in 2004 (Annex V).
In 4Q05, gross revenue from basic subscription fees totaled R$915.9 million, in line with the R$916.0 million achieved in 3Q05. The addition of 11 thousand lines to the plant in service was offset by the demand for the LigMix terminal (plan for low income households with monthly subscription of R$28.00, 27.4% lower than the basic subscription fee, in the Federal District). In 2005, basic subscription fees increased 13.5% in comparison to 2004, explained by the average tariff readjustment of 7.27% and by the commercialization of plans with additional pulses: Plano Sob Medida and Plano Franquia Adicional.
Gross revenue from measured service totaled R$339.2 million in the 4Q05, an 8.2% reduction as compared to the previous quarter, reflected by the 6.4% reduction in local traffic. In 2005, gross revenue from measured service totaled R$1,380.6 million, against R$1,474.5 million in the previous year. Such variation is due to the competition with the mobile operators, the expansion of ADSL plant and by the revenue transfer for basic subscription deriving from plans with additional pulses.
Gross revenue with public telephony reached R$145.6 million in 4Q05, exceeding by 3.9% revenue obtained in 3Q05. In 2005, gross revenue with public telephony amounted to R$496.8 million, 3.8% above revenue registered in 2004. Such increase was influenced by the 7.37% tariff readjustment and also by the launch of Brasil Virtual Cel, which transferred R$42.6 million from the public telephony revenue to BrT GSM in 1Q05. Brasil Virtual Cel was suspended in April, 2005. After adjusting the public telephony revenue with Brasil Virtual Cel’s revenue, it would have reached R$539.4 million in 2005, a 12.7% increase in comparison to 2004.
Gross revenue from LD calls reached R$399.0 million in 4Q05, representing a reduction of 9.7% in comparison to 3Q05. This performance was influenced by a 5.7% reduction in LD traffic, due to a co-billing agreement made with a fixed-line operator. In 2005, gross revenue from LD calls reached R$1,717.0 million, a relative stability in comparison to 2004. The increase in revenue in inter-regional and international segments due to the launch of CSC 14’s operations in these segments in January 2004 was compensated by the decrease of revenue in the intra-regional segment, due to a regulation released by Anatel, which established a new division for the local areas of the fixed line telephony within the country, as of September of that year.
Gross revenue from inter-network calls reached R$824.5 million in the 4Q05, a 2.9% reduction as compared to the previous quarter, explained by a reduction in traffic and a greater participation of LD calls in Region II, which have lower tariffs than those destined to Regions I and III. In 2005, gross revenue with inter-network calls amounted to R$3,373.1 million, an 8.8% increase in comparison to 2004, due, mainly, to a 7.99% VC-1 tariff readjustment (effective as of 06/12/2005).
In 4Q05, gross revenue from data communications and other services reached R$552.8 million, a 10.9% increase as compared to the previous quarter. The growth in network formation services (DialNet, Serviço Plus, Dedicated IP) and a 13.6% expansion in ADSL accesses in service are worth being noted. In 2005, gross revenue from data communications totaled R$1,923.5, a 55.4% growth in comparison to 2004. In 2004, data communication gross revenue represented 9.7% of total gross revenue, while in the 4Q05 the segment represented 13.1% of Brasil Telecom’s total revenue.
In the 4Q05, consolidated gross revenue from mobile telephony totaled R$252.4 million, of which R$136.5 million were related to services and R$115.9 million to the sale of handsets and accessories. In 2005, consolidated gross revenue with mobile telephony amounted to R$732.3 million.
The blended mobile ARPU recorded in the 4Q05 was of R$27.2 (Annex XVIII). The post-paid ARPU was of R$43.2 and the pre-paid ARPU was of R$20.8.
Brasil Telecom’s net revenue reached R$2,591.9 million in 4Q05, 0.6% greater than 3Q05’s. In 2005, net revenue amounted to R$10,138.7 million, a 11.8% increase in comparison to 2004 (Annex V).
COSTS AND EXPENSES
In 4Q05, operating costs and expenses amounted to R$2,952.5 million, compared to R$2,492.7 million in 3Q05. The main items that determined such performance were: provisions for contingencies (+400.4%), provisions for doubtful accounts (+51.8%), other (+58.1%), materials (+44.3%), marketing and advertising (+35.0%), and interconnection (-12.0%) . Operating costs and expenses totaled R$10,101.2 million in 2005, against R$7,963.4 million in the previous year, a 26.8% increase. This increase can be explained partially by Brasil Telecom’s mobile operation during 12 months, as opposed to 2 months in 2004 and by the extraordinary adjustments of R$642.3 million (Annex VI).
At the end of the 4Q05, 5,803 employees worked in Brasil Telecom’s wireline segment, against 5,784 employees in the previous quarter. Brasil Telecom GSM ended the 4Q05 with 1,609 employees, against 971 in the 3Q05. By the end of December, Brasil Telecom has 6,872 employees, an increase of 1.7% in comparison with September.
Total personnel costs and expenses reached R$160.9 million, a 0.3% reduction as compared to the previous quarter. In 2005, costs and expenses with personnel amounted to R$634.5 million, 48.2% larger than 2004. A portion of this variation is explained by a change in the booking of profit sharing which, in 2004, was booked after EBITDA, by the Collective Labor Agreement in effect as of January 2005, which implicated an average salary readjustment of 6.0% and by an increase in the number of employees. By adjusting the costs and expenses with personnel by the same criteria, there was a 30.5% increase in comparison to 2004. This variation is due to the fact that until October 2004, BrT GSM capitalized its operating costs and expenses, once it was still in pre-operating phase. Thus, in 2004, BrT GSM’s payroll corresponded to 2 months.
Costs and expenses with subcontracted services, excluding interconnection costs and marketing and advertising expenses, totaled R$610.4 million in the 4Q05, exceeding by
5.0% the costs and expenses reported in the previous quarter. The variation of costs and expenses in the 4Q05 in comparison to the 3Q05 is explained by the following items:
- R$12.0 million increase in plant maintenance costs and expenses;
- R$6.0 million increase in sale commissions for Brasil Telecom GSM’s mobile handsets, where there was a 116.6% increase in post-paid handsets sold;
- R$8.6 million increase referring to the growth in post-paid handsets sales, which result in a compensation for Brasil Telecom GSM’s dealers in the amount of the price difference between post-paid and pre-paid handsets. Initially, all handsets are sold to the dealers as pre-paid, when the handset is sold as post-paid, Brasil Telecom subsidies the price difference. Since in 4Q05 there was an increase of post-paid handsets sale, the difference paid to dealers increased in comparison to the previous quarter;
- R$5.1 million increase in Brasil Telecom GSM’s sale spots due to the increase of sales in Christmas;
- R$5.2 million increase regarding call center services, due to a 5% readjustment in October, 2005; and
- R$16.1 million reduction in corporate and legal consulting expenses, even considering Brasil Telecom’s expenses with the change in management.
In 2005, costs and expenses with subcontracted services, excluding interconnection costs, advertising and marketing expenses, totaled R$2,222.6 million, 40.8% greater than in 2004. A large portion of this increase is explained by the mobile operating costs, such as call center services, commissions to sales representatives and stores, among others. Furthermore, there were more legal and corporate consulting expenses during 2005.
In the 4Q05, interconnection costs amounted to R$514.6 million, a 12.0% reduction in comparison to 3Q05. Such performance reflects BrT GSM’s gain in scale. Interconnection costs in 2005 totaled R$2,275.8 million, against R$2,298.9 million in 2004, a 1.0% reduction.
Advertising and marketing expenses amounted to R$64.0 million in 4Q05, a 35.0% increase in comparison to 3Q05, due to Christmas campaigns. In 2005, advertising and marketing expenses totaled R$232.6 million, against R$133.6 million in 2004, a 74.1% increase explained by the mobile operation, which, in 2005 amounted to R$128.1 million, against R$24.2 million in 2004.
Losses from Accounts Receivable as a percentage of gross revenue in the 4Q05 were of 4.1%, against 2.8% in the 3Q05. Losses from accounts receivable totaled R$157.4 million in the 4Q05, exceeding by 51.8% the provisions in previous quarter. In December, Brasil Telecom made additional provisions amounting to R$74 million regarding risks of losses in client’s bills subject to co-billing procedures. On the other hand, the normalization of the postal services, which had a negative effect in 3Q05, had a positive impact in the 4Q05.
In the 4Q05, provisions for contingencies totaled R$335.0 million, an increase of R$268.1 million as compared to the 3Q05, of which, (i) R$198 million refer to probable risks of social security and labor legal proceedings, as well as administrative proceedings and (ii) R$77 million refer to write-off of tax credits, in particular of the ICMS (Value Added) tax levied on supplies used in the maintenance of BrT’s fixed telephone plant and on electric energy consumption.
Costs and expenses with materials totaled R$165.0 million in 4Q05, a 44.3% increase in comparison to 3Q05. In 2005, these costs and expenses amounted to R$477.1 million, a 128.5% increase in comparison to the previous year. Most of the increase refer to Brasil Telecom GSM’s costs and expenses with materials.
Other operating costs and expenses totaled R$271.8 million in the 4Q05, a 58.1% increase in comparison to 3Q05. In 4Q05, additional costs and expenses operating amounted to R$210 million, of which, R$171 million refer to adjustments in the actuarial calculation of retirement plan obligations of Fundação BrT Prev (“Fundação BrT”), by virtue of the adjustment of its mortality table and R$39.4 million were booked due to the deduction in interconnection costs and to the decision rendered by Anatel, which alters the calculation basis of FUST (Fund for the Universalization of Telecommunications Services). In 2005, these costs totaled R$654.9 million, 252.2% superior than 2004’s.
EBITDABrasil Telecom’s consolidated EBITDA was of R$312.9 million in the 4Q05 (Annex VIII). Consolidated EBITDA margin reached 12.1% in 4Q05, mainly affected by the extraordinary adjustments, which amounted to R$559 million. If the non recurring effects registered in 4Q05 were excluded, the EBITDA would have reached R$871.8 million, which represents an EBITDA margin of 33.6%, a 1.5 p.p. increase in comparison to 3Q05 (also adjusted by the extraordinary provisions for the pension funds, which amounted to R$83.3 million) (Annex VIII).
Brasil Telecom’s consolidated EBITDA in 2005 reached R$2.709.4 million (Annex I). Consolidated EBITDA margin reached 26.7% against a 39.3% margin in 2004. If the extraordinary effects registered in 2005 were excluded, EBITDA would have reached R$3,351.7 million, which represent an EBITDA margin of 33.1% .
FINANCIAL RESULTIn the 4Q05, Brasil Telecom recorded a negative consolidated financial result of R$677.1 million, which included R$479.1 million of Interest on Shareholders’ Equity, paid as of January 13, 2006 (Annex XIII). If the Interest on Shareholders’ Equity is excluded, the financial result for 4Q05 would amount to expenses of R$198.0 million, 166.8% higher than the previous quarter. More than half of this difference is explained by extraordinary adjustments made on 4Q05.
In 2005, Brasil Telecom recorded a negative consolidated financial result of R$1,161.9 million, which included R$774.5 million of Interest on Shareholders’ Equity (Annex XIII). If the Interest on Shareholders’ Equity is excluded, the financial result in 2005 would amount to expenses of R$387.4 million, compared to expenses of R$399.8 million registered in 2004 and in accordance with the same criteria.
OTHER ITEMSIn the 4Q05, Brasil Telecom amortized R$31.0 million of goodwill in connection with the acquisition of CRT (with no impact on cash flows and dividend distributions), which was accounted for as non-operational expense (Annex I).
NET EARNINGS
Net loss totaled R$118.6 million in the 4Q05 (-R$0.3257/1,000 shares) (Annex I). Net loss/ADR in the period was of US$0.6958.
In 2005, Brasil Telecom registered a net loss of R$29.6 million (-R$0.0812/1,000 shares) against a net income of R$252.2 million in 2004 (R$0,7005/1,000 shares). Such performance can be explained by the extraordinary adjustments made in 2005 and by Brasil Telecom GSM’s performance, which began its operations in the last quarter of 2004 and has not yet reached its maturity.
INDEBTEDNESSAt the end of December, 2005, Brasil Telecom’s consolidated total debt was of R$4,569.1 million, 5.9% higher than the amount recorded at the end of September (Annex X). As of December, 73.7% of the total debt corresponded to long-term debt (Annex XI). Consolidated net debt totaled R$1,955.3 million, a 0.6% increase as compared to the previous quarter (Annex X).
On November 8, 2005, BNDES approved the issuance of R$252 million. This tranche is part of the debt raised with BNDES in 2004. Of the total amount 85% were issued in TJLP +5.5% p.a. with the remainder issued in Currency Basket + 5.5% p.a.
At the end of December 2005, the foreign-currency-denominated debt totaled R$1,278.1 million, of which R$573.5 million were denominated in US dollars, R$272.6 million in currency basket and R$431.9 million in Yens (Annex X). On December 31, 2005, 59.8% of our debt affected by exchange rate variation was hedged against exchange rate risk. Of our total debt excluding hedge adjustments, 12.2% was exposed to exchange rate variations.
Brasil Telecom’s consolidated debt had a year-to-date cost equivalent to 12.7% p.a., or 67.0% of the Domestic Interbank Rate.
At the end 2005, Brasil Telecom’s financial leverage ratio, represented by the ratio of its net debt and shareholders’ equity, was equal to 37.3%, against 24.2% in 2004.
CAPEXBrasil Telecom’s CAPEX totaled R$782.8 million in the 4Q05, of which R$585.2 million were invested in the fixed-line network and R$197.6 million in the mobile network (Annex IX). In comparison to 3Q05, fixed line investments increased 45.3% due, mainly, by the fulfillment of regulatory demands. On the mobile telephony, there was a 180.8% increase in comparison to 3Q05 due, basically, to the expansion of the network in the Central Western and Northern Regions and in Rio Grande do Sul state, besides improvements in Paraná state’s network and restoration of stores.
Brasil Telecom’s CAPEX totaled R$1,978.1 million in 2005, a 31.0% reduction in comparison to 2004, due, mainly, to the mobile network build up and to the acquisitions made in that period. Excluding the amounts used in the acquisitions, fixed line investments amounted to R$1,492.5 million in 2005, a 22.8% increase in comparison to 2004, due to the regulatory requirements (PGMU, TAI – Customer Care Time Ratio and migration to from 7 to 8
digit phone numbers) and to the duplication of the ADSL plant. Investments in mobile telephony reached R$441.3 million in 2005, a 62.5% reduction in comparison to 2004.
Brasil Telecom acquired a 25.6% stake in iG’s capital stock in 2005, which corresponded to R$44.3 million. 2005’s CAPEX was 90.7% smaller than in 2004, when the acquisitions of 80.1% of Vant and MetroRED’s capital stock and 63% of iG’s capital stock occured.
STOCK MARKET
| Table 1: Stock Market Performance | ||||||||
Closing Price as |
Performance |
|||||||
of Dec 29, 2005 |
In 4Q05 |
In 12 |
In 24 | |||||
months |
months | |||||||
| Common Shares (BRTP3) (in R$/1,000 shares) | 23.76 | -25.9% | -1.2% | 46.6% | ||||
| Preferred Shares (BRTP4) (in R$/1,000 shares) | 17.20 | -5.7% | -0.4% | -6.6% | ||||
| ADR (BRP) (in US$/ADR) | 37.60 | -7.8% | 12.0% | 17.0% | ||||
| Ibovespa (points) | 33,456 | 5.9% | 27.7% | 50.5% | ||||
| Itel (points) | 952 | 10.7% | 3.5% | 7.2% | ||||
| IGC (points) | 3,659 | 11.8% | 43.8% | 98.3% | ||||
| Dow Jones (points) | 10,785 | 2.0% | -0.1% | 3.5% | ||||
Graph 7: Stock Market Performance in the 4Q05 – Bovespa and NYSE
(Base 100 = September 30, 2005)
Page 14 of 30
| Table 2: Theoretical Portfolio Participation – January / April | ||||||
Ibovespa |
Itel |
IGC | ||||
| BRTP3 | 0.604% | 3.998% | 0.390% | |||
| BRTP4 | 0.906% | 12.477% | 1.218% | |||
SHAREHOLDING STRUCTURE
Table 3: Shareholding Breakdown
| Dec / 05 | Common Shares |
% |
Preferred Shares |
% |
Total Shares |
% | ||||||
| Solpart Participações S.A. | 68,356,160,984 | 51.0% | - | 0.0% | 68,356,160,984 | 18.8% | ||||||
| ADR | - | 0.0% | 164,803,180,000 | 71.7% | 164,803,180,000 | 45.3% | ||||||
| Tesouraria | 1,480,800,000 | 1.1% | - | 0.0% | 1,480,800,000 | 0.4% | ||||||
| Outros | 64,194,727,219 | 47.9% | 65,134,345,684 | 28.3% | 129,329,072,903 | 35.5% | ||||||
| Total | 134,031,688,203 | 100.0% | 229,937,525,684 | 100.0% | 363,969,213,887 | 100.0% | ||||||
| Sep / 05 | Common Shares |
% |
Preferred Shares |
% |
Total Shares |
% | ||||||
| Solpart Participações S.A. | 68,356,160,984 | 51.0% | - | 0.0% | 68,356,160,984 | 18.8% | ||||||
| ADR | - | 0.0% | 159,615,680,000 | 69.4% | 159,615,680,000 | 43.9% | ||||||
| Tesouraria | 1,480,800,000 | 1.1% | - | 0.0% | 1,480,800,000 | 0.4% | ||||||
| Outros | 64,194,727,219 | 47.9% | 70,321,845,684 | 30.6% | 134,516,572,903 | 37.0% | ||||||
| Total | 134,031,688,203 | 100.0% | 229,937,525,684 | 100.0% | 363,969,213,887 | 100.0% | ||||||
CORPORATE GOVERNANCE
On November 2005, the Corporate Governance Structure was created. The main responsibilities of the officer are to facilitate the relationship and communication among the Board of Directors, shareholders and executive officers; to observe the accomplishment of good corporate governance practices; and to improve governance regulations which Brasil Telecom is subject to.
In Brasil Telecom Participações S.A.’s Extraordinary General Shareholders Meeting held on January 12, 2006, the shareholders resolved to appoint new members for the Company’s Fiscal Council, which started to count on the following members:
| Effective |
Alternate | |
| José Arthur Escodro | Hiram Bandeira Pagano Filho | |
| Rosalia Maria Tereza Sergi Agati Camello | Klítia Valeska Bicalho | |
| Jorge Michel Lepeltier | Flávio Stamm | |
| Fábio Takyi Sekiguchi | Ricardo Soares Augusto Campos | |
In Brasil Telecom Participações S.A.’s Extraordinary General Shareholders Meeting held on January 31, 2006, the shareholders appointed Mr. Ricardo Ferraz Torres as effective member of the Board of Directors, to fill a vacant position, previously occupied
by Mr. Fábio de Oliveira Moser. The Company’s Board of Directors now presents the following formation:
| Effective |
Alternate | |
| Sergio Spinelli Silva Junior (Chairman) | Renato Carvalho do Nascimento | |
| Pedro Paulo Elejalde de Campos | Alberto Ribeiro Güth | |
| Elemér André Surányi | Vacant | |
| Kevin Michael Altit | Vacant | |
| Lênin Florentino de Faria | Adriana Duarte Chagastelles | |
| Ricardo Ferraz Torres | Frederico Cavalcanti | |
RECENT DEVELOPMENTS
On February 2006, Brasil Telecom reduced its work force by 12%. This measure was taken in light of the Company’s restructuring, which seeks to maximize its efficiency.
The Company’s senior management has set priorities in mitigating fixed voice revenues erosion, growing corporate data and mobile revenues, while focusing on improving its operations and reducing its costs.
COMING EVENTS
Conference Call and Webcast: 4Q05 Results
Connection number: (+1 973) 935-2408
Access Code: 7033563 Link: http://www.brasiltelecom.com.br/ir/
Date: February 23 (Thursday)
Time: 10 a.m. (New York time)
FINANCIAL STATEMENTS
BRASIL TELECOM PARTICIPAÇÕES S.A.
Annex I: Consolidated Income Statement
| R$ Million | 4Q04 |
3Q05 |
4Q05 |
Quarter |
12M04 |
12M05 |
Year | |||||||
| GROSS REVENUES | 3,502.0 |
3,766.7 |
3,809.4 |
1.1% |
12,763.4 |
14,687.2 |
15.1% | |||||||
Fixed Telephony |
3,040.1 |
3,085.9 |
3,004.3 |
-2.6% |
11,438.1 |
12,031.4 |
5.2% | |||||||
| Local Service | 1,262.5 |
1,308.4 |
1,275.4 |
-2.5% |
4,710.8 |
5,006.2 |
6.3% | |||||||
| Public Telephony | 123.2 |
140.1 |
145.6 |
3.9% |
478.8 |
496.8 |
3.8% | |||||||
| Long Distance Service | 444.9 |
442.1 |
399.0 |
-9.7% |
1,723.7 |
1,717.0 |
-0.4% | |||||||
| Fixed-Mobile Calls | 854.4 |
849.3 |
824.5 |
-2.9% |
3,100.2 |
3,373.1 |
8.8% | |||||||
| Interconnection | 178.1 |
145.3 |
148.4 |
2.1% |
731.3 |
633.6 |
-13.4% | |||||||
| Lease of Means | 66.7 |
79.7 |
84.5 |
6.1% |
239.1 |
307.8 |
28.7% | |||||||
| Supplementary and Value Added Services | 100.7 |
112.3 |
117.0 |
4.2% |
421.0 |
459.4 |
9.1% | |||||||
| Other | 9.7 |
8.7 |
9.7 |
11.1% |
33.2 |
37.5 |
12.8% | |||||||
Mobile Telephony |
87.9 |
182.3 |
252.4 |
38.5% |
87.9 |
732.3 |
N.A. | |||||||
Data Transmission |
374.0 |
498.5 |
552.8 |
10.9% |
1,237.4 |
1,923.5 |
55.4% | |||||||
| Deductions | (1,036.0) |
(1,190.4) |
(1,217.5) |
2.3% |
(3,698.6) |
(4,548.6) |
23.0% | |||||||
| NET REVENUES | 2,466.1 |
2,576.3 |
2,591.9 |
0.6% |
9,064.9 |
10,138.7 |
11.8% | |||||||
| COSTS & OPERATING EXPENSES | (1,699.1) |
(1,831.7) |
(2,279.0) |
24.4% |
(5,499.4) |
(7,429.3) |
35.1% | |||||||
| Personnel | (125.3) |
(161.4) |
(160.9) |
-0.3% |
(428.2) |
(634.5) |
48.2% | |||||||
| Materials | (137.3) |
(114.3) |
(165.0) |
44.3% |
(208.7) |
(477.1) |
128.5% | |||||||
| Subcontracted Services | (486.3) |
(581.5) |
(610.4) |
5.0% |
(1,578.4) |
(2,222.6) |
40.8% | |||||||
| Interconnection | (647.2) |
(584.5) |
(514.6) |
-12.0% |
(2,298.9) |
(2,275.8) |
-1.0% | |||||||
| Advertising and Marketing | (53.5) |
(47.4) |
(64.0) |
35.0% |
(133.6) |
(232.6) |
74.1% | |||||||
| Provisions and Losses | (256.4) |
(170.7) |
(492.4) |
188.5% |
(665.7) |
(931.8) |
40.0% | |||||||
| Other | 7.1 |
(171.9) |
(271.8) |
58.1% |
(186.0) |
(654.9) |
252.2% | |||||||
| EBITDA | 767.0 |
744.6 |
312.9 |
-58.0% |
3,565.4 |
2,709.4 |
-24.0% | |||||||
| Depreciation and Amortiwation | (639.4) |
(661.1) |
(673.5) |
1.9% |
(2,463.9) |
(2,672.0) |
8.4% | |||||||
| OPERATING PROFIT BEFORE FINANCIAL | ||||||||||||||
| RESULT | 127.6 |
83.6 |
(360.7) |
N.A. |
1,101.5 |
37.4 |
-96.6% | |||||||
| Financial Result | (356.9) |
(74.2) |
(677.1) |
N.A. |
(793.4) |
(1,161.9) |
46.4% | |||||||
| Financial Revenues | 205.2 |
213.5 |
105.2 |
-50.7% |
616.9 |
850.5 |
37.9% | |||||||
| Financial Expenses | (324.4) |
(287.7) |
(303.2) |
5.4% |
(1,016.7) |
(1,237.9) |
21.8% | |||||||
| Interest on Shareholders' Equity | (237.8) |
- |
(479.1) |
N.A. |
(393.6) |
(774.5) |
96.8% | |||||||
| OPERATING PROFIT AFTER FINANCIAL | ||||||||||||||
| RESULT | (229.3) |
9.4 |
(1,037.8) |
N.A. |
308.1 |
(1,124.5) |
N.A. |
|||||||
| Non-Operating Revenues (Expenses) | 9.9 |
(35.6) |
(40.4) |
13.4% |
(168.0) |
(146.6) |
-12.8% | |||||||
| Goodwill Amortiwation - CRT Acquisition | (31.0) |
(31.0) |
(31.0) |
0.0% |
(124.0) |
(124.0) |
0.0% | |||||||
| Other | 40.9 |
(4.6) |
(9.4) |
103.4% |
(44.0) |
(22.5) |
-48.8% | |||||||
| EARNINGS BEFORE INCOME AND SOCIAL | ||||||||||||||
| CONTRIBUTION TAXES | (219.4) |
(26.2) |
(1,078.2) |
N.A. |
140.0 |
(1,271.0) |
N.A. |
|||||||
| Income and Social Contribution Taxes | 51.0 |
(24.9) |
392.3 |
N.A. |
(120.9) |
373.1 |
N.A. | |||||||
| EARNINGS BEFORE PROFIT SHARING | (168.4) |
(51.1) |
(685.9) |
N.A. |
19.1 |
(897.9) |
N.A. | |||||||
| Profit Sharing | (14.8) |
- |
(0.0) |
N.A. |
(58.1) |
(0.0) |
N.A. | |||||||
| Minority Interest | (13.0) |
26.0 |
88.2 |
239.1% |
(102.4) |
93.9 |
N.A. | |||||||
| EARNINGS BEFORE REVERSION OF | ||||||||||||||
| INTEREST ON SHAREHOLDERS' EQUITY | (196.2) |
(25.1) |
(597.7) |
N.A. |
(141.4) |
(804.1) |
468.7% |
|||||||
| Reversion of Interest on Shareholders' Equity | 237.8 |
- |
479.1 |
N.A. |
393.6 |
774.5 |
96.8% | |||||||
| NET EARNINGS | 41.6 |
(25.1) |
(118.6) |
371.9% |
252.2 |
(29.6) |
N.A. | |||||||
Page 17 of 30
Annex II: Consolidated Balance Sheet
| R$ Million |
Dec/04 |
Dec/05 | ||
| CURRENT ASSETS | 6,742.1 | 6,431.0 | ||
| Cash and Equivalents | 3,226.6 | 2,613.8 | ||
| Accounts Receivables (Net) | 2,111.6 | 2,152.8 | ||
| Deferred and Recoverable Taxes | 841.5 | 1,276.7 | ||
| Other Recoverable Amounts | 326.9 | 233.8 | ||
| Inventory | 174.0 | 83.0 | ||
| Other | 61.5 | 70.9 | ||
| LONG TERM ASSETS | 1,647.4 | 2,346.3 | ||
| Loans and Financing | 126.5 | 106.3 | ||
| Deferred and Recoverable Taxes | 957.1 | 1,512.3 | ||
| Other | 563.8 | 727.6 | ||
| PERMANENT ASSETS | 10,332.4 | 9,425.5 | ||
| Investment (Net) | 519.2 | 423.4 | ||
| Property, Plant and Equipment (Net) | 8,887.0 | 8,220.0 | ||
| Property, Plant and Equipment (Gross) | 24,608.1 | 26,145.4 | ||
Accumulated Depreciation |
(15,721.1) |
(17,925.4) | ||
| Deferred Assets (Net) | 926.3 | 782.1 | ||
| TOTAL ASSETS | 18,721.9 | 18,202.8 | ||
| CURRENT LIABILITIES | 4,613.4 | 5,429.4 | ||
| Loans and Financing | 856.6 | 1,201.7 | ||
| Suppliers | 1,769.8 | 1,787.9 | ||
| Taxes and Contributions | 822.0 | 1,035.6 | ||
| Dividends Payable | 436.2 | 499.8 | ||
| Provisions | 357.1 | 382.1 | ||
| Salaries and Benefits | 137.5 | 142.7 | ||
| Consignment for Third Parties | 114.4 | 207.6 | ||
| Authorization for Services Exploration | 44.1 | 55.5 | ||
| Other | 75.8 | 116.5 | ||
| LONG TERM LIABILITIES | 5,717.7 | 5,641.5 | ||
| Loans and Financing | 3,851.6 | 3,367.4 | ||
| Provisions | 886.5 | 1,354.8 | ||
| Taxes and Contributions | 697.9 | 635.2 | ||
| Authorization for Services Exploration | 261.5 | 252.3 | ||
| Other | 20.2 | 31.9 | ||
| DEFERRED INCOME | 74.0 | 84.6 | ||
| MINORITY INTEREST | 2,188.3 | 1,801.2 | ||
| SHAREHOLDERS' EQUITY | 6,128.5 | 5,246.0 | ||
| Capital Stock | 2,568.2 | 2,596.3 | ||
| Capital Reserves | 337.2 | 309.2 | ||
| Profit Reserves | 879.6 | 282.7 | ||
| Retained Earnings | 2,364.3 | 2,078.7 | ||
| Treasury Shares | (20.8) |
(20.8) | ||
| TOTAL LIABILITIES | 18,721.9 | 18,202.8 | ||
Page 18 of 30
Annex III - Consolidated Balance Sheet - Holding
| R$ Million |
Dec/04 |
Dec/05 | ||
| CURRENT ASSETS | 1,191.0 | 1,263.8 | ||
| Cash and Equivalents | 828.8 | 883.7 | ||
| Deferred Taxes | 105.7 | 154.2 | ||
| Other Recoverable Amounts | 0.6 | 0.4 | ||
| Dividends / Interest on Shareholders' Equity Receivable | 250.2 | 220.7 | ||
| Other | 5.6 | 4.9 | ||
| LONG TERM ASSETS | 1,390.6 | 1,021.5 | ||
| Loans and Financing | 1,164.8 | 720.4 | ||
| Deferred and Recoverable Taxes | 223.5 | 284.6 | ||
| Other | 2.3 | 16.5 | ||
| PERMANENT ASSETS | 4,366.3 | 3,746.3 | ||
| Investment (Net) | 4,364.9 | 3,745.0 | ||
| Property, Plant and Equipment (Net) | 1.2 | 1.2 | ||
| Property, Plant and Equipment (Gross) | 57.2 | 57.4 | ||
| Accumulated Depreciation | (55.9) |
(56.2) | ||
| Deferred Assets (Net) | 0.1 | 0.1 | ||
| TOTAL ASSETS | 6,947.8 | 6,031.6 | ||
| CURRENT LIABILITIES | 516.0 | 738.4 | ||
| Loans and Financing | 213.8 | 280.0 | ||
| Suppliers | 0.3 | 1.4 | ||
| Taxes and Contributions | 22.8 | 59.6 | ||
| Dividends Payable | 275.2 | 343.9 | ||
| Salaries and Benefits | 3.4 | 0.07 | ||
| Consignment for Third Parties | 0.2 | 52.9 | ||
| Other | 0.3 | 0.5 | ||
| LONG TERM LIABILITIES | 295.7 | 43.1 | ||
| Loans and Financing | 259.4 | 0.1 | ||
| Taxes and Contributions | 32.9 | 38.6 | ||
| Other | 3.4 | 4.4 | ||
| SHAREHOLDERS' EQUITY | 6,136.1 | 5,250.1 | ||
| Capital Stock | 2,568.2 | 2,596.3 | ||
| Capital Reserves | 337.2 | 309.2 | ||
| Profit Reserves | 879.6 | 282.7 | ||
| Retained Earnings | 2,371.9 | 2,082.8 | ||
| Treasury Shares | (20.8) |
(20.8) | ||
| TOTAL LIABILITIES | 6,947.8 | 6,031.6 | ||
Page 19 of 30
| R$ Million | 12M04 | 12M05 | Year | |||||
| OPERATING ACTIVITIES | ||||||||
| (+) | Net Income of the Period | 252.2 | (29.6) | N.A. | ||||
| (+) | Minority Participation | 102.4 | (93.9) | N.A. | ||||
| (+) | Items with no Cash Effects | 4,197.9 | 5,402.1 | 28.7% | ||||
| Depreciation and Amortization | 2,588.7 | 2,797.9 | 8.1% | |||||
| Losses with Accounts Receivable from Services | 353.8 | 328.8 | -7.1% | |||||
| Provision for Doubtful Accounts | 56.6 | 120.5 | 112.8% | |||||
| Provision for Contingencies | 255.3 | 482.5 | 89.0% | |||||
| Provision for Pension Funds | 31.1 | 266.2 | 755.1% | |||||
| Deferred Taxes | 290.2 | 796.7 | 174.6% | |||||
| Result from the Write-off of Permanent Assets | 56.0 | 27.9 | -50.2% | |||||
| Financial Expenses | 553.9 | 583.9 | 5.4% | |||||
| Gains/Losses in Investments | 12.3 | (2.4) | N.A. | |||||
| (-) | Equity Changes | 1,388.9 | 2,365.0 | 70.3% | ||||
| (=) | Cash Flow from Operating Activities | 3,163.7 | 2,913.7 | -7.9% | ||||
| INVESTMENT ACTIVITIES | ||||||||
| Financial Investments | 3.4 | 0.5 | -85.3% | |||||
| Investment Suppliers | 765.6 | 26.2 | -96.6% | |||||
| Funds from Sales of Permanent Assets | 7.4 | 3.6 | -51.3% | |||||
| Investments in Permanent Assets | (2,754.6) | (1,954.7) | -29.0% | |||||
| (=) | Cash Flow from Investment Activities | (1,978.2) | (1,924.4) | -2.7% | ||||
| FINANCING ACTIVITIES | ||||||||
| Dividens/Interests on Shareholders' Equity paid in the Period | (258.1) | (874.2) | 238.7% | |||||
| Loans and Financing | 366.7 | (679.8) | N.A. | |||||
Loans Obtained |
2,427.0 | 522.7 | -78.5% | |||||
Loans Paid |
(1,619.1) | (724.9) | -55.2% | |||||
Interest Paid |
(441.1) | (477.6) | 8.3% | |||||
| Increases in Shareholders' Equity | 19.5 | 5.2 | -73.6% | |||||
| Other Financing Flows | (43.7) | (53.3) | 22.1% | |||||
| (=) | Cash Flow from Financing Activities | 84.5 | (1,602.2) | N.A. | ||||
| CASH FLOW OF THE PERIOD | 1,269.9 | (612.8) | N.A. | |||||
| Cash and Cash Equivalents - current balance | 3,226.6 | 2,613.8 | -19.0% | |||||
| Cash and Cash Equivalents - previous balance | 1,956.7 | 3,226.6 | 64.9% | |||||
| Variation in Cash and Cash Equivalents | 1,269.9 | (612.8) | N.A. | |||||
| OPERATING CASH FLOW | 3,163.7 | 2,913.7 | -7.9% | |||||
| (-) | Investments on Permanent Assets (includes Investment Suppliers) | (1,978.2) | (1,924.4) | -2.7% | ||||
| (-) | Interest Paid | (441.1) | (477.6) | 8.3% | ||||
| (=) | FREE CASH FLOW | 744.3 | 511.7 | -31.2% | ||||
Page 20 of 30
| R$ Million | 4Q04 | 3Q05 | 4Q05 | D Quarter |
12M04 |
12M05 |
D 12 Months | |||||||
| GROSS REVENUES | 3,502.0 | 3,766.7 | 3,809.4 | 1.1% | 12,763.4 | 14,687.2 | 15.1% | |||||||
| FIXED TELEPHONY | 3,040.1 | 3,085.9 | 3,004.3 | -2.6% | 11,438.1 | 12,031.4 | 5.2% | |||||||
| Local Service | 1,262.5 | 1,308.4 | 1,275.4 | -2.5% | 4,710.8 | 5,006.2 | 6.3% | |||||||
| Activation | 7.3 | 4.9 | 3.7 | -25.1% | 33.5 | 23.4 | -30.2% | |||||||
| Basic Subscription | 832.2 | 916.0 | 915.9 | 0.0% | 3,110.0 | 3,529.1 | 13.5% | |||||||
| Measured Service | 402.0 | 369.5 | 339.2 | -8.2% | 1,474.5 | 1,380.6 | -6.4% | |||||||
| Lease of Facilities | 0.4 | 0.4 | 0.4 | 9.2% | 1.6 | 1.5 | -6.2% | |||||||
| Other | 20.5 | 17.5 | 16.2 | -7.6% | 91.1 | 71.6 | -21.4% | |||||||
| Public Telephony | 123.2 | 140.1 | 145.6 | 3.9% | 478.8 | 496.8 | 3.8% | |||||||
| Long Distance Service | 444.9 | 442.1 | 399.0 | -9.7% | 1,723.7 | 1,717.0 | -0.4% | |||||||
| Intra-Region | 358.4 | 348.7 | 315.1 | -9.6% | 1,477.2 | 1,365.3 | -7.6% | |||||||
| Inter-Region | 74.3 | 81.1 | 73.1 | -9.9% | 214.8 | 302.6 | 40.9% | |||||||
| International / Borderline | 12.1 | 12.3 | 10.8 | -12.1% | 31.6 | 49.2 | 55.4% | |||||||
| Inter-Network Calls | 854.4 | 849.3 | 824.5 | -2.9% | 3,100.2 | 3,373.1 | 8.8% | |||||||
| VC-1 | 553.4 | 540.7 | 517.4 | -4.3% | 2,180.9 | 2,099.5 | -3.7% | |||||||
| VC-2 | 183.7 | 174.5 | 166.7 | -4.5% | 613.8 | 725.4 | 18.2% | |||||||
| VC-3 | 115.4 | 130.9 | 136.9 | 4.6% | 303.0 | 535.8 | 76.8% | |||||||
| International | 2.0 | 3.1 | 3.5 | 11.4% | 2.4 | 12.3 | 404.2% | |||||||
| Interconnection | 178.1 | 145.3 | 148.4 | 2.1% | 731.3 | 633.6 | -13.4% | |||||||
| Fixed-Fixed | 111.7 | 90.6 | 96.3 | 6.3% | 468.0 | 397.1 | -15.2% | |||||||
| Mobile-Fixed | 66.4 | 54.7 | 52.1 | -4.8% | 263.3 | 236.6 | -10.1% | |||||||
| Lease of Means | 66.7 | 79.7 | 84.5 | 6.1% | 239.1 | 307.8 | 28.7% | |||||||
| Supplementary and Value Added Services | 100.7 | 112.3 | 117.0 | 4.2% | 421.0 | 459.4 | 9.1% | |||||||
| Other | 9.7 | 8.7 | 9.7 | 11.1% | 33.2 | 37.5 | 12.8% | |||||||
| MOBILE TELEPHONY | 87.9 | 182.3 | 252.4 | 38.5% | 87.9 | 732.3 | 733.1% | |||||||
| Subscription | 10.2 | 43.8 | 45.2 | 3.2% | 10.2 | 167.8 | 1545.0% | |||||||
| Utilization | 5.5 | 53.6 | 68.8 | 28.4% | 5.5 | 209.7 | 3686.0% | |||||||
| Interconnection | 2.1 | 10.4 | 17.5 | 67.5% | 2.1 | 43.2 | 1950.5% | |||||||
| Other Services | 0.4 | 5.0 | 5.0 | -0.1% | 0.4 | 12.2 | 3197.6% | |||||||
| Merchandise Sales (Handsets and Accessories) | 69.7 | 69.4 | 115.8 | 66.9% | 69.7 | 299.4 | 329.6% | |||||||
| DATA COMMUNICATIONS AND OTHER | 374.0 | 498.5 | 552.8 | 10.9% | 1,237.4 | 1,923.5 | 55.4% | |||||||
| Fixed | 373.7 | 488.9 | 540.3 | 10.5% | 1,237.1 | 1,899.5 | 53.5% | |||||||
| Mobile | 0.3 | 9.6 | 12.4 | 28.9% | 0.3 | 23.9 | N.A. | |||||||
| Deductions | (1,036.0) | (1,190.4) | (1,217.5) | 2.3% | -3,698.6 | -4,548.6 | 23.0% | |||||||
| NET REVENUES | 2,466.1 | 2,576.3 | 2,591.9 | 0.6% | 9,064.9 | 10,138.7 | 11.8% | |||||||
| R$ Million | 4Q04 |
3Q05 |
4Q05 |
D Quarter |
12M04 |
12M05 |
D 12 Months | |||||||
| NET REVENUES | 2,466.1 | 2,576.3 | 2,591.9 | 0.6% | 9,064.9 | 10,138.7 | 11.8% | |||||||
| Costs | (1,622.1) | (1,636.7) | (1,652.7) | 1.0% | (5,823.9) | (6,520.6) | 12.0% | |||||||
| Personnel | (32.2) | (39.4) | (45.2) | 14.8% | (120.2) | (160.7) | 33.7% | |||||||
| Materials | (113.4) | (104.6) | (152.8) | 46.0% | (180.3) | (431.6) | 139.4% | |||||||
| Subcontracted Services | (831.2) | (794.1) | (741.4) | -6.6% | (2,959.7) | (3,102.8) | 4.8% | |||||||
| Interconnection | (647.2) | (584.5) | (514.6) | -12.0% | (2,298.9) | (2,275.8) | -1.0% | |||||||
| Other | (184.0) | (209.7) | (226.8) | 8.2% | (660.7) | (827.0) | 25.2% | |||||||
| Depreciation and Amortization | (559.6) | (564.0) | (568.3) | 0.8% | (2,180.0) | (2,273.2) | 4.3% | |||||||
| Other | (85.6) | (134.5) | (145.1) | 7.8% | (383.8) | (552.3) | 43.9% | |||||||
| GROSS PROFIT | 844.0 | 939.6 | 939.1 | 0.0% | 3,241.0 | 3,618.1 | 11.6% | |||||||
| Sales Expenses | (257.4) | (304.7) | (344.6) | 13.1% | (675.6) | (1,207.0) | 78.7% | |||||||
| Personnel | (46.9) | (62.4) | (65.6) | 5.2% | (146.4) | (250.7) | 71.2% | |||||||
| Materials | (22.5) | (6.5) | (8.5) | 29.5% | (23.8) | (31.1) | 30.8% | |||||||
| Subcontracted Services | (178.4) | (230.1) | (264.5) | 15.0% | (488.2) | (901.6) | 84.7% | |||||||
| Advertising and Marketing | (53.5) | (47.4) | (64.0) | 35.0% | (133.6) | (232.6) | 74.1% | |||||||
| Other | (124.9) | (182.7) | (200.6) | 9.8% | (354.6) | (669.1) | 88.7% | |||||||
| Depreciation and Amortization | (3.1) | (4.2) | (4.1) | -1.5% | (7.2) | (16.5) | 129.2% | |||||||
| Other | (6.6) | (1.5) | (1.9) | 25.2% | (10.0) | (7.1) | -29.1% | |||||||
| General and Administrative Expenses | (189.9) | (215.3) | (191.8) | -10.9% | (630.4) | (822.9) | 30.5% | |||||||
| Personnel | (36.8) | (48.1) | (41.2) | -14.3% | (133.6) | (180.9) | 35.4% | |||||||
| Materials | (0.7) | (2.4) | (3.3) | 38.2% | (2.6) | (12.3) | 378.7% | |||||||
| Subcontracted Services | (140.6) | (154.3) | (136.6) | -11.5% | (453.3) | (581.0) | 28.2% | |||||||
| Depreciation and Amortization | (7.6) | (6.4) | (6.6) | 3.2% | (25.9) | (29.1) | 12.4% | |||||||
| Other | (4.3) | (4.1) | (4.1) | -0.1% | (15.0) | (19.5) | 29.9% | |||||||
| Information Technology | (106.8) | (114.9) | (129.9) | 13.0% | (354.0) | (465.6) | 31.5% | |||||||
| Personnel | (9.5) | (11.5) | (8.8) | -23.4% | (28.0) | (42.2) | 50.8% | |||||||
| Materials | (0.7) | (0.8) | (0.4) | -47.9% | (2.2) | (2.1) | -1.0% | |||||||
| Subcontracted Services | (36.8) | (34.9) | (46.5) | 33.3% | (109.7) | (145.5) | 32.6% | |||||||
| Depreciation and Amortization | (53.8) | (61.6) | (66.8) | 8.4% | (187.4) | (250.4) | 33.6% | |||||||
| Other | (5.9) | (6.1) | (7.4) | 20.3% | (26.8) | (25.4) | -5.1% | |||||||
| Provisions and Losses | (256.4) | (170.7) | (492.4) | 188.5% | (665.7) | (931.8) | 40.0% | |||||||
| Doubtful Accounts | (129.5) | (103.7) | (157.4) | 51.8% | (410.3) | (449.3) | 9.5% | |||||||
| Contingencies | (127.0) | (66.9) | (335.0) | 400.4% | (255.3) | (482.5) | 89.0% | |||||||
| Other Operating Revenues (Expenses) | 94.1 | (50.5) | (141.1) | 179.5% | 186.2 | (153.4) | -182.4% | |||||||
| Goodwill Amortization | (15.3) | (24.9) | (27.7) | 11.4% | (63.5) | (102.8) | 61.9% | |||||||
| Other | 109.4 | (25.6) | (113.4) | 342.7% | 249.7 | (50.6) | -120.3% | |||||||
| OPERATING PROFIT BEFORE FINANCIAL RESULTS | 127.6 | 83.6 | (360.7) | N.A. | 1,101.5 | 37.4 | -96.6% | |||||||
| R$ Million | 4Q04 |
3Q05 |
4Q05 |
D Quarter |
12M04 |
12M05 |
D 12 Meses | |||||||
COSTS AND OPERATING EXPENSES |
(2,338.5) | (2,492.7) | (2,952.5) | 18.4% | (7,963.4) | (10,101.2) | 26.8% | |||||||
| Personnel | (125.3) | (161.4) | (160.9) | -0.3% | (428.2) | (634.5) | 48.2% | |||||||
| Materials | (137.3) | (114.3) | (165.0) | 44.3% | (208.7) | (477.1) | 128.5% | |||||||
| Subcontracted Services | (486.3) | (581.5) | (610.4) | 5.0% | (1,578.4) | (2,222.6) | 40.8% | |||||||
| Interconnection | (647.2) | (584.5) | (514.6) | -12.0% | (2,298.9) | (2,275.8) | -1.0% | |||||||
| Advertising and Marketing | (53.5) | (47.4) | (64.0) | 35.0% | (133.6) | (232.6) | 74.1% | |||||||
| Provisions and Losses | (256.4) | (170.7) | (492.4) | 188.5% | (665.7) | (931.8) | 40.0% | |||||||
| Other | 7.1 | (171.9) | (271.8) | 58.1% | (186.0) | (654.9) | 252.2% | |||||||
| Depreciation and Amortization | (639.4) | (661.1) | (673.5) | 1.9% | (2,463.9) | (2,672.0) | 8.4% | |||||||
Page 22 of 30
R$ Million |
4Q04 |
Vertical |
3Q05 |
Vertical |
4Q05 |
Vertical | ||||||
| GROSS REVENUES | 3,502.0 | 142.0% | 3,766.7 | 146.2% | 3,809.4 | 147.0% | ||||||
Fixed Telephony |
3,040.1 | 123.3% | 3,085.9 | 119.8% | 3,004.3 | 115.9% | ||||||
| Local Service | 1,262.5 | 51.2% | 1,308.4 | 50.8% | 1,275.4 | 49.2% | ||||||
| Public Telephony | 123.2 | 5.0% | 140.1 | 5.4% | 145.6 | 5.6% | ||||||
| Long Distance Service | 444.9 | 18.0% | 442.1 | 17.2% | 399.0 | 15.4% | ||||||
| Fixed-Mobile Calls | 854.4 | 34.6% | 849.3 | 33.0% | 824.5 | 31.8% | ||||||
| Interconnection | 178.1 | 7.2% | 145.3 | 5.6% | 148.4 | 5.7% | ||||||
| Lease of Means | 66.7 | 2.7% | 79.7 | 3.1% | 84.5 | 3.3% | ||||||
| Supplementary and Value Added Services | 100.7 | 4.1% | 112.3 | 4.4% | 117.0 | 4.5% | ||||||
| Other | 9.7 | 0.4% | 8.7 | 0.3% | 9.7 | 0.4% | ||||||
Mobile Telephony |
87.9 | 3.6% | 182.3 | 7.1% | 252.4 | 9.7% | ||||||
Data Transmission |
374.0 | 15.2% | 498.5 | 19.4% | 552.8 | 21.3% | ||||||
| Deductions | (1,036.0) | -42.0% | (1,190.4) | -46.2% | (1,217.5) | -47.0% | ||||||
| NET REVENUES | 2,466.1 | 100.0% | 2,576.3 | 100.0% | 2,591.9 | 100.0% | ||||||
| COSTS & OPERATING EXPENSES | (1,699.1) | -68.9% | (1,831.7) | -71.1% | (2,279.0) | -87.9% | ||||||
| Personnel | (125.3) | -5.1% | (161.4) | -6.3% | (160.9) | -6.2% | ||||||
| Materials | (137.3) | -5.6% | (114.3) | -4.4% | (165.0) | -6.4% | ||||||
| Subcontracted Services | (486.3) | -19.7% | (581.5) | -22.6% | (610.4) | -23.6% | ||||||
| Interconnection | (647.2) | -26.2% | (584.5) | -22.7% | (514.6) | -19.9% | ||||||
| Advertising and Marketing | (53.5) | -2.2% | (47.4) | -1.8% | (64.0) | -2.5% | ||||||
| Provisions and Losses | (256.4) | -10.4% | (170.7) | -6.6% | (492.4) | -19.0% | ||||||
| Other | 7.1 | 0.3% | (171.9) | -6.7% | (271.8) | -10.5% | ||||||
| EBITDA | 767.0 | 31.1% | 744.6 | 28.9% | 312.9 | 12.1% | ||||||
Annex VIII: Adjusted EBITDA
3Q05 |
4Q05 |
D Quarter | ||||
| Net Revenues | 2,576.3 | 2,591.9 | 0.6% | |||
| EBITDA | 744.6 | 312.9 | -58.0% | |||
| EBITDA Margin | 28.9% | 12.1% | -16.8 p.p. | |||
| Extraordinary Items | 83.3 | 559.0 | 571.1% | |||
| Contingencies with Risks with Legal Processes | - | 197.8 | N.A. | |||
| Actuarial Calculation Adjustment | 83.3 | 171.1 | 105.4% | |||
| Fiscal Credit Write-off | - | 76.9 | N.A. | |||
| Co-billing agreement | - | 73.8 | N.A. | |||
| Others | - | 39.4 | N.A. | |||
| Adjusted EBITDA | 827.9 | 871.8 | 5.3% | |||
| Adjusted EBITDA Margin | 32.1% | 33.6% | 1.5 p.p. | |||
Page 23 of 30
Annex IX: CAPEX
| R$ Million | 4Q04 | 3Q05 | 4Q05 | Quarter | 12M04 | 12M05 | D Year | |||||||
| Network Expansion | 240.5 | 179.4 | 349.2 | 94.6% | 571.6 | 789.0 | -15.2% | |||||||
| Conventional Telephony | 95.4 | 47.6 | 111.3 | 133.8% | 179.7 | 256.5 | -40.6% | |||||||
| Transmission Backbone | 22.2 | 17.2 | 42.5 | 146.4% | 49.2 | 79.4 | -14.2% | |||||||
| Data Network | 108.7 | 109.9 | 170.7 | 55.3% | 300.0 | 411.5 | 13.2% | |||||||
| Intelligent Network | 5.2 | 1.3 | 9.0 | 588.0% | 26.3 | 15.4 | -41.6% | |||||||
| Network Management Systems | 2.9 | 1.0 | 12.9 | 1189.0% | 4.3 | 15.5 | 261.0% | |||||||
| Other | 6.0 | 2.3 | 2.9 | 23.6% | 12.0 | 10.7 | -10.5% | |||||||
| Network Operation | 85.3 | 70.1 | 105.7 | 50.7% | 270.2 | 292.2 | 8.1% | |||||||
| Public Telephony | 0.9 | 0.9 | 1.3 | 54.3% | 3.0 | 4.1 | 36.0% | |||||||
| Information Technology | 106.0 | 44.5 | 78.8 | 77.3% | 216.2 | 180.9 | -16.3% | |||||||
| Expansion Personnel | 19.1 | 21.5 | 22.1 | 2.8% | 80.5 | 86.3 | 7.2% | |||||||
| Other | 162.1 | 80.6 | 21.0 | -74.0% | 542.5 | 165.4 | -69.5% | |||||||
| Expansion Financial Expenses | 6.5 | 5.7 | 7.1 | 24.0% | 8.0 | 19.0 | 138./0% | |||||||
| Total - Wireline Telephony | 620.4 | 402.7 | 585.2 | 45.3% | 1,692.0 | 1,536.8 | -9./2% | |||||||
| R$ Million | 4Q04 | 3Q05 | 4Q05 | D Quarter | 12M04 | 12M05 | D Year | |||||||
| Brasil Telecom GSM | 415.2 | 70.4 | 197.6 | 180.8% | 1,099.6 | 441.3 | -59.9% | |||||||
| Expansion Financial Expenses | 2.7 | - | - | N.A. | 76.1 | - | -100./0% | |||||||
| Total - Mobile Telephony | 417.9 | 70.4 | 197.6 | 180.8% | 1,175.7 | 441.3 | -62./5% | |||||||
| 180.8% | ||||||||||||||
| Total Investment in Permanent Assets | 1,038.3 | 473.1 | 782.8 | 65.5% | 2,867.7 | 1,978.1 | -31.0% | |||||||
Annex X: Indebtedness
| Debt (R$ Million) | Dec 2004 | Sep 2005 | Dec 2005 | D Quarter | D Year | |||||
| Short Term | 856.6 | 1,056.7 | 1,201.7 | 13.7% | 40.3% | |||||
| In R$ | 724.0 | 872.9 | 991.3 | 13.6% | 36.9% | |||||
| In US$ | 54.4 | 25.9 | 36.4 | 40.5% | -33.1% | |||||
| In Yen | 4.0 | 42.8 | 45.8 | 7.1% | N.A. | |||||
| In Currency Basket | 50.4 | 55.5 | 70.8 | 27.5% | 40.3% | |||||
| Hadge Adjustment | 23.8 | 59.6 | 57.4 | -3.7% | 141.2% | |||||
| Long Term | 3,851.6 | 3,256.0 | 3,367.4 | 3.4% | -12.6% | |||||
| In R$ | 2,335.8 | 1,910.8 | 1,950.6 | 2.1% | -16.5% | |||||
| In US$ | 626.8 | 508.0 | 537.1 | 5.7% | -14.3% | |||||
| In Yen | 561.4 | 381.2 | 386.1 | 1.3% | N.A. | |||||
| In Currency Basket | 225.2 | 178.8 | 201.9 | 12.9% | -10.3% | |||||
| Hadge Adjustment | 102.3 | 277.2 | 291.7 | 5.2% | 185.2% | |||||
| Total Debt | 4,708.2 | 4,312.7 | 4,569.1 | 5.9% | -3.0% | |||||
| (-) Cash | 3,226.6 | 2,346.1 | 2,613.8 | 11.4% | -19.0% | |||||
| Net Debt | 1,481.6 | 1,966.6 | 1,955.3 | -0.6% | 32.0% | |||||
Page 24 of 30
Annex XI: Indebtedness
| Balance (in R$ Million) |
||||||||||
| Dec/05 | Currency | Annual Cost | Maturity | % Total | ||||||
| Short Term | 26.3% | 1,201.7 | ||||||||
| BNDES | R$ | TJLP + 6.5% | dec/2007 | 16.0 | ||||||
| BNDES | R$ | TJLP + 5.85% | dec/2007 | 358.2 | ||||||
| BNDES | R$ | TJLP + 3.85% | oct/2007 | 83.3 | ||||||
| BNDES | R$ | Basket + 6.5% | dec/2007 | 31.0 | ||||||
| BNDES | R$ | Basket + 3.85% | nov/2007 | 10.6 | ||||||
| Debentures | R$ | TJLP + 4% | jul/2006 | 279.9 | ||||||
| BNDES | R$ | Basket + 5.5% | apr/2011 | 29.1 | ||||||
| BNDES | R$ | TJLP + 5.5% | apr/2011 | 192.6 | ||||||
| BRDE | R$ | IGP-M+12.0% | sep/2006 | 8.2 | ||||||
| BB | R$ | 14% | jan/2008 | 5.1 | ||||||
| BRB - GSM | R$ | 2.40% | Jan/2034 | 0.3 | ||||||
| Debentures 3rd Public Issuance | R$ | CDI + 1.0% | jul/2009 | 47.8 | ||||||
| Bonds - US$ 200 MM | US$ | 9.38% | feb/2014 | 18.5 | ||||||
| Financial Institutions I | US$ | Lib6 + 2.5% | mar/2006 | 5.1 | ||||||
| Financial Institutions II | US$ | Lib6 + 0.5% | jul/2008-jul/2013 | 12.0 | ||||||
| Financial Institutions III | Yen$ | Jibor6 + 1.92% | mar/2011 | 45.4 | ||||||
| Financial Institutions IV | Yen$ | 3.36% | feb/2009 | 0.5 | ||||||
| Suppliers I | US$ | Lib3 + 2.0% | jun/2007 | 0.5 | ||||||
| Suppliers II | US$ | 1.75% | feb/2014 | 0.2 | ||||||
| Suppliers III | US$ | Lib3 + 2.0% | jun/2007 | 0.1 | ||||||
| Hedge Adjustment | 57.4 | |||||||||
| Long Term | 73.7% | 3,367.5 | ||||||||
| BNDES | R$ | TJLP + 6.5% | dec/2007 | 15.7 | ||||||
| BNDES | R$ | TJLP + 5.85% | dec/2007 | 443.0 | ||||||
| BNDES | R$ | TJLP + 3.85% | oct/2007 | 80.2 | ||||||
| BNDES | R$ | Basket + 6.5% | dec/2007 | 30.5 | ||||||
| BNDES | R$ | Basket + 3.85% | nov/2007 | 10.4 | ||||||
| BNDES | R$ | Basket + 5.5% | apr/2011 | 161.0 | ||||||
| BNDES | R$ | TJLP + 5.5% | apr/2011 | 887.3 | ||||||
| BB | R$ | 14% | Jan/2008 | 5.4 | ||||||
| BRB - GSM | R$ | 2.4% | Jan/2034 | 15.9 | ||||||
| BRB - Fixa | R$ | 2.4% | Jan/2034 | 3.1 | ||||||
| Debentures 3rd Public Issuance | R$ | CDI + 1.0% | jul/2009 | 500.0 | ||||||
| Bonds - US$ 200 MM | US$ | 9.38% | feb/2014 | 468.1 | ||||||
| Financial Institutions I | US$ | Lib6 + 0.5% | jul/2008-jul/2013 | 44.1 | ||||||
| Financial Institutions II | Yen$ | Jibor6 + 1.92% | mar/2011 | 385.1 | ||||||
| Financial Institutions III | Yen$ | 3.36% | feb/2009 | 1.1 | ||||||
| Financial Institutions IV | US$ | 0.0% | dec/2015 | 23.3 | ||||||
| Suppliers I | US$ | Lib3 + 2.0% | jun/2007 | 0.2 | ||||||
| Suppliers II | US$ | 1.75% | feb/2014 | 1.3 | ||||||
| Suppliers III | US$ | Lib3 + 2.0% | jun/2007 | 0.1 | ||||||
| Hedge Adjustment | 291.7 | |||||||||
| Total Debt | 100.0% | 4,569.1 | ||||||||
Page 25 of 30
Annex XII: Long Term Debt Amortization Schedule
| Maturity | % Long Term Debt | |
| 2007 | 27.3% | |
| 2008 | 15.0% | |
| 2009 | 26.9% | |
| 2010 | 12.0% | |
| 2011 | 3.6% | |
| 2012 and after | 15.2% | |
Annex XIII: Consolidated Financial Result
| R$ Million | 4Q04 | 3Q05 | 4Q05 | D Quarter | 12M04 | 12M05 | D Year | |||||||
| Financial Revenue | 205.2 | 213.5 | 105.2 | -50.7% | 616.9 | 850.5 | 37.9% | |||||||
| Local Currency | 145.86 | 124.93 | 135.6 | 8.6% | 516.36 | 580.6 | 12.4% | |||||||
| Foreign Currency | 59.38 | 88.54 | (30.4) | -134.3% | 100.58 | 269.9 | 168.3% | |||||||
| Financial Expense | (324.4) | (287.7) | (303.2) | 5.4% | (1,016.8) | (1,237.9) | 21.8% | |||||||
| Local Currency | (212.8) | (150.8) | (285.5) | 89.4% | (796.8) | (780.6) | -2.0% | |||||||
| Foreign Currency | (111.5) | (136.9) | (17.7) | -87.0% | (219.9) | (457.3) | 107.9% | |||||||
| Interest on Shareholders' Equity | (237.8) | - | (479.1) | N.A. | (393.6) | (774.5) | 96.8% | |||||||
| Financial Result | (356.9) | (74.2) | (677.1) | 812.6% | (793.4) | (1,161.9) | 46.5% | |||||||
Annex XIV: Consolidated Accounts Receivable
| Mar/05 | Jun/05 | Sep/05 | Dec/05 | |||||
| Total (R$ Million) | 2,456.8 | 2,517.0 | 2,614.7 | 2,514.3 | ||||
| Due | 63.3% | 65.0% | 63.2% | 65.0% | ||||
| Overdue (up to 30 days) | 15.7% | 15.6% | 16.8% | 15.8% | ||||
| Overdue (between 31-60 days) | 6.4% | 5.8% | 5.8% | 5.2% | ||||
| Overdue (between 61-90 days) | 4.3% | 3.5% | 3.9% | 3.3% | ||||
| Overdue (over 90 days) | 10.3% | 10.1% | 10.3% | 10.7% | ||||
Page 26 of 30
Annex XV: Traffic
| TRAFFIC | 4Q04 | 3Q05 | 4Q05 | D Quarter | 12M04 | 12M05 | DYear | |||||||
| Exceeding local pulses (million) | 2,772.5 | 2,329.9 | 2,181.5 | -6.4% | 10,803.6 | 9,289.0 | -14.0% | |||||||
| Domestic long distance - DLD (million minutes) | 1,436.5 | 1,263.4 | 1,190.7 | -5.7% | 6,232.3 | 5,127.6 | -17.7% | |||||||
| Fixed-mobile (million minutes) | 1,238.0 | 1,064.9 | 1,049.6 | -1.4% | 4,409.4 | 4,325.3 | -1.9% | |||||||
| VC-1 (milhões minutos) | 908.4 | 814.6 | 801.8 | -1.6% | 3,558.3 | 3,273.2 | -8.0% | |||||||
| VC-2 (milhões minutos) | 230.8 | 146.9 | 146.4 | -0.3% | 606.4 | 633.2 | 4.4% | |||||||
| VC-3 (milhões minutos) | 98.8 | 103.3 | 101.4 | -1.9% | 244.7 | 419.0 | 71.2% | |||||||
Annex XVI - Indicators
| WIRELINE NETWORK | 4Q04 | 3Q05 | 4Q05 | D Quarter | D Year | |||||
| Lines installed (thousand) | 10,737.2 | 10,796.0 | 10,816.3 | 0.2% | 0.7% | |||||
| Additional lines installed (thousand) | 11.8 | (11.0) | 20.3 | N.A. | 71.6% | |||||
| Lines in service - LIS (thousand) | 9,503.1 | 9,549.0 | 9,560.1 | 0.1% | 0.6% | |||||
| Residential (thousand) | 6,444.9 | 6,184.7 | 6,102.9 | -1.3% | -5.3% | |||||
| Non-residential (thousand) | 1,433.0 | 1,442.2 | 1,439.2 | -0.2% | 0.4% | |||||
| Public phones (thousand) | 295.9 | 295.8 | 296.9 | 0.4% | 0.3% | |||||
| Pre-paid (thousand) | 297.1 | 314.9 | 313.8 | -0.4% | 5.6% | |||||
| Hybrid (thousand) | 408.3 | 691.0 | 783.0 | 13.3% | 91.8% | |||||
| Other (including PBX) (thousand) | 623.9 | 620.4 | 624.4 | 0.6% | 0.1% | |||||
| Additional lines in service (thousand) | (101.2) | 8.9 | 11.1 | 24.7% | N.A. | |||||
| Average lines in service (thousand) | 9,553.7 | 9,544.5 | 9,554.6 | 0.1% | 0.0% | |||||
| LIS/100 Inhabitants | 22.4 | 22.4 | 22.3 | -0.2% | -0.5% | |||||
| Public Telephones/1,000 Inhabitants | 7.0 | 6.9 | 6.9 | -0.4% | -1.2% | |||||
| Public Telephones/100 Lines Installed | 2.8 | 2.7 | 2.7 | -1.5% | -2.0% | |||||
| Utilization rate | 88.5% | 88.4% | 88.4% | 0.0 p.p. | -0.1 p.p. | |||||
| Digitalization rate | 99.7% | 100.0% | 100.0% | 0.0 p.p. | 0.3 p.p. | |||||
| Teledensity (LIS/100 inhabitants) | 22.4 | 22.4 | 22.3 | -0.2% | -0.5% | |||||
| ADSL accesses in service (thousand) | 535.5 | 892.2 | 1,013.9 | 13.6% | 89.3% | |||||
| PRODUCTIVITY | 4Q04 | 3Q05 | 4Q05 | D Quarter | D Year | |||||
| # of employees - Fixed Telephony | 5,800 | 5,784 | 5,803 | 0.3% | 0.1% | |||||
| Average # of employees | 5,652 | 5,752 | 5,794 | 0.7% | 2.5% | |||||
| LIS/employee | 1,638 | 1,651 | 1,647 | -0.2% | 0.5% | |||||
| Gross revenue/average # of employees/month (R$ thousand) | 179.3 | 178.8 | 172.9 | -3.4% | -3.6% | |||||
| EBITDA/average # of employees/month (R$ thousand) | 45.2 | 43.2 | 18.0 | -58.3% | -60.2% | |||||
| Net earnings/average # of employees/month (R$ thousand) | 2.5 | (1.5) | (6.8) | 368.5% | N.A. | |||||
| Exceeding local pulses/average LIS/month | 96.7 | 81.4 | 76.1 | -6.5% | -21.3% | |||||
| DLD minutes/average LIS/month | 50.2 | 44.5 | 42.3 | -4.9% | -15.6% | |||||
| Fixed-mobile minutes/average LIS/month | 41.2 | 37.5 | 36.9 | -1.7% | -10.4% | |||||
| Gross revenue/average LIS/month (R$) | 106.1 | 107.8 | 104.8 | -2.7% | -1.2% | |||||
| EBITDA/average LIS/month (R$) | 26.8 | 26.0 | 10.9 | -58.0% | -59.2% | |||||
| Net earnings/average LIS/month (R$) | 1.5 | (0.9) | (4.1) | 371.4% | N.A. | |||||
| PROFITABILITY | 4Q04 | 3Q05 | 4Q05 | D Quarter | D Year | |||||
| EBITDA margin | 31.1% | 28.9% | 12.1% | -16.8 p.p. | -19.0 p.p. | |||||
| Net margin | 1.7% | -1.0% | -4.6% | -3.6 p.p. | -6.3 p.p. | |||||
| Return on equity - ROE | 0.7% | -0.4% | -2.3% | -1.9 p.p. | -3.0 p.p. | |||||
| CAPITAL STRUCTURE | 4Q04 | 3Q05 | 4Q05 | D Quarter | D Year | |||||
| Cash and cash equivalents (R$ million) | 3,227 | 2,346 | 2,614 | 11.4% | -19.0% | |||||
| Total debt (R$ million) | 4,708 | 4,313 | 4,569 | 5.9% | -3.0% | |||||
| Short term debt | 18.2% | 24.5% | 26.3% | 1.8 p.p. | 8.1 p.p. | |||||
| Long term debt | 81.8% | 75.5% | 73.7% | -1.8 p.p. | -8.1 p.p. | |||||
| Net debt (R$ million) | 1,482 | 1,967 | 1,955 | -0.6% | 32.0% | |||||
| Shareholders' equity (R$ million) | 6,128 | 5,717 | 5,246 | -8.2% | -14.4% | |||||
| Net debt/shareholders' equity | 24.2% | 34.4% | 37.3% | 2.9 p.p. | 13.1 p.p. | |||||
Page 27 of 30
BRASIL TELECOM GSM
Annex XVII: Income Statement
| R$ Million | 4Q04 | 3Q05 | 4Q05 | D Quarter | 12M04 | 12M05 | D Year | |||||||
| GROSS REVENUES | 102.3 | 255.3 | 340.4 | 33.3% | 102.3 | 989.3 | 867.1% | |||||||
| Subscription | 10.2 | 43.8 | 45.2 | 3.2% | 10.2 | 167.8 | 1544.9% | |||||||
| Utilization | 5.7 | 53.6 | 68.8 | 28.4% | 5.7 | 209.7 | 3586.7% | |||||||
| Interconnection | 16.0 | 73.9 | 93.1 | 26.0% | 16.0 | 276.2 | 1622.9% | |||||||
| Other Revenues | 0.4 | 5.0 | 5.1 | 1.0% | 0.4 | 12.3 | 3212.6% | |||||||
| Data Transmission | 0.3 | 9.6 | 12.4 | 28.5% | 0.3 | 23.9 | 7295.3% | |||||||
| Merchandise Sales (Handsets and Accessorie | 69.7 | 69.4 | 115.9 | 66.9% | 69.7 | 299.4 | 329.6% | |||||||
| Deductions | (23.3) | (80.3) | (98.4) | 22.6% | (23.3) | (289.4) | 1141.1% | |||||||
| NET REVENUES | 79.0 | 175.0 | 242.0 | 38.3% | 79.0 | 699.9 | 786.2% | |||||||
| COSTS & OPERATING EXPENSES | (223.6) | (301.2) | (409.1) | 35.8% | (223.6) | (1,298.8) | 480.8% | |||||||
| Personnel | (11.5) | (22.4) | (25.0) | 11.7% | (11.5) | (91.9) | 698.8% | |||||||
| Materials | (116.0) | (91.9) | (140.4) | 52.9% | (116.0) | (386.5) | 233.3% | |||||||
| Subcontracted Services | (43.9) | (88.7) | (116.9) | 31.7% | (43.9) | (347.4) | 691.1% | |||||||
| Interconnection | (7.8) | (26.4) | (27.0) | 2.4% | (7.8) | (121.0) | 1444.8% | |||||||
| Advertising and Marketing | (24.2) | (22.8) | (41.6) | 82.1% | (24.2) | (128.1) | 429.0% | |||||||
| Provisions and Losses | (2.8) | (13.0) | (13.7) | 5.2% | (2.8) | (41.6) | 1382.4% | |||||||
| Other | (17.4) | (36.0) | (44.5) | 23.5% | (17.4) | (182.3) | 949.4% | |||||||
| EBITDA | (144.6) | (126.2) | (167.1) | 32.4% | (144.6) | (598.9) | 314.1% | |||||||
| Depreciation and Amortization | (28.7) | (64.8) | (72.0) | 11.2% | (28.7) | (248.9) | 767.8% | |||||||
| OPERATING PROFIT BEFORE | ||||||||||||||
| FINANCIAL RESULT | (173.3) | (190.9) | (239.1) | 25.2% | (173.3) | (847.8) | 389.2% | |||||||
| Financial Result | (6.5) | (6.1) | (24.1) | 293.2% | (6.5) | (45.3) | 596.0% | |||||||
| Financial Revenues | 11.1 | 7.6 | 4.7 | -38.2% | 11.1 | 27.0 | 142.1% | |||||||
| Financial Expenses | (17.6) | (13.7) | (28.8) | 109.9% | (17.6) | (72.3) | 309.5% | |||||||
| EARNINGS BEFORE INCOME AND | ||||||||||||||
| SOCIAL CONTRIBUTION TAXES | (179.8) | (197.1) | (269.5) | 36.7% | (179.8) | (899.5) | 400.2% | |||||||
| Income and Social Contribution Taxes | 60.7 | 66.5 | 91.5 | 37.6% | 60.7 | 300.9 | 395.6% | |||||||
| NET EARNINGS (LOSSES) | (119.1) | (130.6) | (178.0) | 36.3% | (119.1) | (598.6) | 402.6% | |||||||
Obs.: The values presented in this Income Statement do not consider inter-company elimination with Brasil Telecom S.A.
Annex XVIII: ARPU Calculation – Mobile Telephony
| R$ Thousands | 1Q05 | 2Q05 | 3Q05 | 4Q05 | 2005 | |||||
| (+) Gross Revenues | 182,531 | 210,975 | 255,349 | 340,408 | 989,263 | |||||
| (-) Handsets | (47,404) | (66,723) | (69,411) | (115,824) | (299,362) | |||||
| Gross Service Revenues | 135,127 | 144,253 | 185,938 | 224,584 | 689,901 | |||||
| (-) Taxes and Deductions | (36,170) | (39,190) | (57,154) | (69,209) | (201,723) | |||||
| Net Service Revenues | 98,956 | 105,063 | 128,784 | 155,375 | 488,178 | |||||
| (-) Net Revs Public Payphones + Roaming | (27,348) | (8,262) | (934) | (1,423) | (37,967) | |||||
| Quarterly Net Revenues | 71,608 | 96,801 | 127,850 | 153,952 | 450,211 | |||||
| Monthly Net Revenues | 23,869 | 32,267 | 42,617 | 51,317 | 37,518 | |||||
| Average Number of Clients | 815,613 | 1,180,527 | 1,504,056 | 1,889,510 | 1,347,427 | |||||
| ARPU (R$) | 29.3 | 27.3 | 28.3 | 27.2 | 27.8 | |||||
Page 28 of 30
Annex XIX: Operating Data
| Operating Indicators | 4Q04 | 3Q05 | 4Q05 | Quarter | D Year | |||||
| Clientes (Mil) | 622.3 | 1,676.2 | 2,212.8 | 32.0% | 255.6% | |||||
| Pós-Pago | 205.7 | 456.6 | 693.0 | 51.8% | 236.9% | |||||
| Pré-Pago | 416.5 | 1,219.6 | 1,519.8 | 24.6% | 264.9% | |||||
| Adições Brutas (Mil) | 626.5 | 429.8 | 661.2 | 53.8% | 5.5% | |||||
| Pós-Pago | 209.5 | 120.2 | 260.3 | 116.6% | 24.2% | |||||
| Pré-Pago | 417.0 | 309.6 | 400.9 | 29.5% | -3.9% | |||||
| Cancelamentos (Mil) | 4.2 | 98.7 | 124.6 | 26.2% | 2845% | |||||
| Pós-Pago | 3.8 | 20.2 | 23.9 | 18.3% | 528.9% | |||||
| Pré-Pago | 0.5 | 78.5 | 100.7 | 28.3% | 20040.0% | |||||
| Churn Anualizado | 1.4% | 26.1% | 25.6% | -0.5 p.p. | 24.3 p.p. | |||||
| Pós-Pago | 3.7% | 19.9% | 16.6% | -3.2 p.p. | 12.9 p.p. | |||||
| Pré-Pago | 0.2% | 28.4% | 29.4% | 1.0 p.p. | 29.2 p.p. | |||||
| Custo de Aquisição do Cliente (SAC) | 205.9 | 231.9 | 187.7 | -19.1% | -8.8% | |||||
| Participação de Mercado | 3.2% | 7.0% | 8.7% | 1.7 p.p. | 5.5 p.p. | |||||
| Localidades Atendidas | 626 | 779 | 782 | 0.4% | 24.9% | |||||
| % da População Coberta | 81% | 86% | 86% | 0.0 p.p. | 5.0 p.p. | |||||
| Estações Rádio Base (ERBs) | 1,632 | 1,946 | 2,117 | 8.8% | 29.7% | |||||
| Centrais de Comutação e Controle (CCCs) | 3 | 8 | 8 | 0.0% | 166.7% | |||||
| Colaboradores | 881 | 979 | 1,069 | 9.2% | 21.3% | |||||
Page 29 of 30
GLOSSARY
ADSL: Asymmetrical Digital Subscriber Line. System that allows broadband signal transmission through metallic telephone cables. It is the most common DSL technology, which represents a midway transition to totally optic networks.
ARPU: Average Revenue Per User. It is an indicator used in telecom industry which calculates the average revenue per user.
CAPEX: Capital Expenditure. The investments made by a company.
EBITDA: Earnings Before Interests, Taxes, Depreciation and Amortization.
GSM: Global System for Mobile communications. GSM is the most used technological standard by mobile operators in the world. This feature allows its users to move around freely and easily with their handsets. The price of GSM handsets is also more attractive, the network is safer and there is a consistent technological evolution.
JSCP (Interest on Shareholders’ Equity): Shareholder remuneration option, calculated from the Shareholders’ Equity and limited, for taxes deductibility effects, to the variation of the long term interest rates. The fiscal benefit is due to the reduction of the calculation basis of the income tax and social contribution on the net income, once the interest on shareholders’ equity represent deductible expenses in the application of these resources.
LIS: Lines in Service. All the lines in a plant that are effectively being used.
SAC: Subscriber Acquisition Cost. It is the average amount spent by a company to acquire a new subscriber.
TUP (Public Phone): Public terminals which use phone cards (or collect calls) to make calls.
Financial Leverage Ratio: Net Debt / Shareholders’ Equity
| This document contains forward-looking statements. Such statements do not constitute facts occurred in the past and reflect the expectations of the Company's managers only. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "aims", as well as other similar words, are intended to identify those forward-looking statements, which obviously involve risks or uncertainties predicted or not by the Company. Accordingly, the future results of the Company’s operations may differ from the current expectations, and the reader should not rely exclusively on these forward- looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments |
Page 30 of 30
BRASIL TELECOM PARTICIPAÇÕES S.A. |
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By: |
/S/ Charles Laganá Putz
|
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Name: Charles Laganá Putz
Title: Chief Financial Officer |
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