Contacts:
Tele Nordeste Celular Participações S.A.
Paulo Narcélio Simões Amaral
55.81.3216.2591
F...
As a result of the intensification of the collections and billing activities and the adoption of
rigorous collection...
Consolidated net operating revenues in the fourth quarter of 2000 reached R$218.3 million,
compared to R$202.1 milli...
Selected Consolidated Financial Data (in thousands of Reais)
...
Selected Financial Data (in thousands of Reais)
...
Amortization of Goodwill
On June 30, 2000 Tele Nordeste Celular and its operating companies completed a restructuri...
Competition
The Company estimates that its market share at the end of the fourth quarter of 2000 was
approxim...
Bands “D” and “E”:
The actions for bands “C”, “D” and “E” had the following results:
• Band “C”: no one...
Consolidated Statistics
4Q00 3Q00 2Q00 ...
Balance Sheet
December 31, 2000 and 1999
(in thousands of Reais)
...
Balance Sheet
December 31, 2000 and 1999
(in thousands of Reais)
...
Statement of Income
For the years 2000 and 1999
(in thousands of Reais)
...
Statements of Changes in Shareholders' Equity
Years ended December 31, 2000 and 1999
(In thousands of Reais...
Statements of Changes in Financial Position
Years ended December 31, 2000 and 1999
(in thousands of Reais)
...
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Press Release 4 Q00 Tele Nordeste Celular En

Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Press Release 4 Q00 Tele Nordeste Celular En

  • 1. Contacts: Tele Nordeste Celular Participações S.A. Paulo Narcélio Simões Amaral 55.81.3216.2591 Fabíola Almeida 55.81.3216.2594 fabiola.almeida@timnordeste.com.br Polyana Maciel 55.81.3216.2593 polyana.maciel@timnordeste.com.br TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. ANNOUNCES FOURTH QUARTER AND YEAR 2000 RESULTS Recife, Brazil (March 19, 2000) – Tele Nordeste Celular Participações S.A. (NYSE: TND, BOVESPA: TNEP3, TNEP4) (“Tele Nordeste Celular” or “the Company”), the holding company controlling the operating companies serving Band A cellular telecommunication clients in the states of Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas under the TIM brand name, announced today its results for the fourth quarter and year 2000. • Client growth up 27.2%% from 1999 to 1,511,000 • Market share in the fourth quarter remained stable at 65.4% • EBITDA increased 48.3% year over year to R$267.6 million Operational Highlights Commercial activities during the fourth quarter of 2000 resulted in the gross addition of 150,875 clients (of which 96,551, or 64.0%%, were prepaid). Accumulated gross additions to the year 2000 totalled 691,058, of which 481,348, or 69.7%, were prepaid. Net accumulated additions to the year 2000 totaled 323,088, all prepaid, as a result of the disconnection of clients from the post-paid system during the second and fourth quarters of 2000. The propose of those disconnection was to clean the clients base, as a way to reduce and control the bad debt. Excluding those disconnection, the net addition for 2000 was 431.893. The Company had a total of 1,511,000 clients on December 31, 2000, of which 824,806 (54.6%) were contract clients and 686,194 (45.4%) were prepaid clients. The market share at the end of the forth quarter of 2000 was estimated at 65.4%. The subscriber acquisition cost was R$80 in the fourth quarter of 2000 compared to R$119 during the third quarter of 2000 and R$211 during the fourth quarter of 1999. The accumulated subscriber acquisition cost through December 2000 was R$127, compared to R$158 for the previous year. www.timnordeste.com.br 1
  • 2. As a result of the intensification of the collections and billing activities and the adoption of rigorous collection procedures and polices, the bad debt levels are showing an improvement. During the fourth quarter the bad debt of around 8.3% of gross revenue, against 10.2% during the third quarter, but still a long way from 3.7% during the fourth quarter 1999. Short Message – SMS launch in July de 2000, started to be charged in December 2000, in the amount of R$0,19 per message sent (gross amount, with tax). Through the website, this service is still free. The messages received are not charged. This service is blocked to those delinquents clients (postpaid system) and no credit clients (prepaid system). During the fourth quarter, as an effort to increase the traffic volume in the prepaid system, the operating companies launched new tariffs plans: Day plan, Night plan and All time plan. With these new tariffs plans, the client call any place in Brazil, paying a local call. Year end campaigns had the objective to promote the new clients entry, stimulate the migration of actual clients from basic plan to one of those special plans, incentive the payment of post paid system on shape and the recharge of credits in the prepaid system. To achieve these goals, free traffic was conceded. Financial Highlights Tele Nordeste’s consolidated net income for the fourth quarter of 2000 was R$12.9 million compared to consolidated net income of R$1.7 million for the third quarter of 2000, resulting in consolidated net income for the year 2000 of R$26.7 million, or R$0.08 per 1,000 shares. This compares to a consolidated loss of R$3.1 million in the fourth quarter of 1999 and a consolidated net income of R$9.4 million for the year1999. For the fourth quarter of 2000, Tele Nordeste Celular reported consolidated EBITDA and EBIT of R$81.8 million and R$39.9 million, respectively, and an EBITDA margin of 37.5% and an EBIT margin of 18.3% over the net operating revenues, compared to EBITDA of R$59.6 million and EBIT of R$21.0 million, representing an EBITDA margin of 24.5% and an EBIT margin of 10.4% over net operating revenues reported for the third quarter of 2000, and EBITDA of R$24.1 million and EBIT of R$24.7 million, representing an EBITDA margin of 11.3% and an EBIT margin of 11.7% over net operating revenues reported for the fourth quarter of 1999. For the year 2000, EBITDA and EBIT were R$267.6 million and R$129.6 million, representing an EBITDA margin and EBIT margin over net operating revenues of 31.6% and 15.3%, respectively, compared to EBITDA of R$180.5 million, EBIT of R$93.4 million, EBITDA margin of 26.7% and an EBIT margin of 13.8% over net operating revenues during the year 1999. EBITDA (in R$000) 100,0 80,0 60,0 40,0 20,0 0,0 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 www.timnordeste.com.br 2
  • 3. Consolidated net operating revenues in the fourth quarter of 2000 reached R$218.3 million, compared to R$202.1 million in the third quarter of 2000, resulting in a total of R$845.6 million for the year 2000, compared to R$212.4 million in the fourth quarter of 1999 and R$674.9 million for the year 1999. Net consolidated revenues in fourth quarter of 2000, grew 8% when compared to the third quarter of 2000. This increase was due to the income traffic volume growth. This increase reflects the increase in the prepaid clients base, the seasonality during this time in the region, where tourism increases and the additional revenues of roughly R$18 million regarding the income traffic not declared in the previous quarters, and recognized only in the fourth quarter. This increase in the traffic volume compensated the reduction of 19.9% in the handset sales revenues, that reflected the Senior Management decision to maintain the subsidies only in traffic during the year end campaigns. Consolidated net operating revenues for the year 2000 grew by 25.3% over the same period of 1999. This increase was due to the growth in the traffic volume generated. In the outgoing traffic with a growth of 20% and mainly in the income traffic that grew by 83.8% year over year. The significant increase in the incoming traffic was due to the new clients base profile, where in December 45% of the clients were prepaid, with the characteristic of receiving more calls than generating ones. The increase in the telecom services revenues compensated the reduction of 19.9% in the handsets sales, that accompanied the reduction in the subsidies. Considering only the telecom services revenues the growth in the year was more than 33%. Net Operating Revenues (in R$000) 250,0 200,0 150,0 100,0 50,0 0,0 1 Q9 8 2 Q9 8 3 Q9 8 4 Q9 8 1 Q9 9 2 Q9 9 3 Q9 9 4 Q9 9 1 Q0 0 2 Q0 0 3 Q0 0 4 Q0 0 www.timnordeste.com.br 3
  • 4. Selected Consolidated Financial Data (in thousands of Reais) Accumulated for the 2000 1999 year 4Q 3Q 4Q 2000 1999 Gross Revenues - Usage charges 115,971 118,475 120,488 490,475 408,692 - Monthly subscription payments 39,942 39,647 43,130 170,305 147,176 - Interconnection 102,977 71,366 46,145 302,452 164,524 - Sale of handsets and accessories 20,741 25,889 65,413 116,554 145,508 - Other 362 641 1,359 952 4,053 Subtotal 279,993 256,018 276,535 1,080,738 869,953 - Taxes (61,713) (53,948) (64,180) (235,118) (195,100) Net Operating Revenue 218,280 202,070 212,355 845,620 674,853 Cost of services and of goods sold - Depreciation and amortization (29,373) (27,597) 1,774 (108,695) (84,381) - Personnel (1,535) (2,420) (2,860) (8,014) (7,339) - Materials (122) (221) (179) (547) (407) - Circuit leasing (9,508) (7,939) (5,322) (34,066) (31,956) - Leases and insurance (2,445) (2,830) (2,500) (9,922) (7,218) - Handsets and accessories (15,307) (23,304) (69,819) (107,123) (149,611) - Fistel (345) (234) (9,330) (979) (24,329) - Plant Support and maintenance (5,134) (4,748) - (10,132) - - Interconnection (22,445) (22,044) (16,399) (94,641) (76,602) - Other (1,433) (2,372) (5,973) (6,583) (8,557) Subtotal (87,647) (93,709) (110,608) (380,702) (390,400) Gross profit 130,633 108,361 101,747 464,918 284,453 Consolidated gross profit for the fourth quarter of 2000 increased 20.5% compared to the third quarter of 2000. This increase was due to the growth in the net operating revenues, combined with a reduction of 6.5% in the costs of services and of goods sold. Compared to the fourth quarter of 1999 the growth was 28.4%. For the year 2000, consolidated gross profit increased 63.4% compared to the same period in the previous year. This increase was principally due to a greater use of our network on the part of clients, associated with a policy for reducing costs. It is important to point out that the Fistel tax was reclassified to sales expenses in the second quarter of 2000. Gross Profit (in R$000) 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 1 Q9 8 2 Q9 8 3 Q9 8 4 Q9 8 1 Q9 9 2 Q9 9 3 Q9 9 4 Q9 9 1 Q0 0 2 Q0 0 3 Q0 0 4 Q0 0 www.timnordeste.com.br 4
  • 5. Selected Financial Data (in thousands of Reais) Accumulated for 2000 1999 the year 4Q 3Q 4Q 2000 1999 Operating Expenses - Selling 63,702 60,815 52,161 233,850 125,759 - General and administrative 24,876 20,547 21,305 87,892 68,631 - Other operating expenses, net 2,173 5,991 3,028 13,555 (3,381) Subtotal 90,751 87,353 76,494 335,297 191,009 - Net financial expenses (excluding interest on own capital) 21,205 19,003 66,250 82,317 81,127 Total, net of interest on own capital 111,956 106,356 142,744 417,614 272,136 Consolidated net operating expenses increased 5.3% compared to the third quarter of 2000 and decreased 21.6% compared to the fourth quarter of 1999. The reduction was a result of lower financial expenses, which compensated the growth in the sales expenses, mainly in the bad debt expenses, and in the general and administrative expenses. Consolidated net operating expenses for the year 2000 grew 53.5% compared to the same period in the previous year. This growth was due to higher bad debt expenses, greater marketing expenses (promotional advertising campaigns) and sales expenses (commissions), and the amortization of the goodwill, that has been done since the second quarter of 2000. Consolidated bad debt expenses during the fourth quarter of 2000 reached R$23.3 million, representing 8.3% of gross revenues and showing a reduction of 11.3% (from R$26.2 million to R$23.3 million) when compared to the third quarter of 2000 and an increase of 126.2%% when compared to the fourth quarter of 1999. Accumulated for the year, the consolidated bad debt expenses totaled R$99.3 million, representing 9.2% of gross revenues. Senior Management believes that the controls it has adopted for overdue bills since the second quarter of 2000, the bad debt expenses must be strongly reduced during 2001. Among the measures that have been adopted are the disconnection of overdue post-paid clients, the application of more effective collection procedures and the promotion of migration to the prepaid system. Operating Expenses (in R$000) 150,0 100,0 50,0 0,0 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 www.timnordeste.com.br 5
  • 6. Amortization of Goodwill On June 30, 2000 Tele Nordeste Celular and its operating companies completed a restructuring that resulted in the transfer of the premium paid during the privatization process from Bitel Participações S.A., the parent company of Tele Nordeste Celular, to each one of the operating companies. This restructuring is aimed at taking advantage of a fiscal benefit estimated at R$200 million over 8 years, through to 2008, which will be incorporated into their share capital by the operating companies, with significant financial benefits for them. A proposal for the merger of the operating companies is awaiting Anatel approval. On December 31, 2000 the consolidated amortization of the premium, net of reversal of the provision for the integrity of shareholder's equity, was R$13.1 million, of which R$6.3 million was in the fourth quarter, generating a fiscal benefit on the order of R$11 million. Capitalization of the Fiscal Benefit The Board of Directors will submit to the Extraordinary General Shareholders’ Meeting, a proposal to increase the Tele Nordeste Celular and operating companies capital in the amount of their respectively generated fiscal benefit. Capitalization of Retained Profits Considering that, according Brazilian laws, the limit of the profits reserves in relation of the capital was reached. The Board of Directors will submit to the Extraordinary General Shareholders’ Meeting, a proposal to increase the Tele Nordeste Celular’ capital in the amount of R$66.2 million. This amount is a part of the retained profits total amount. Dividends and Interest on Shareholdes’ Equity Senior Management is proposing the distribution of annual dividends equivalent to 25% of the adjusted net income, after deducting 5% (R$1.4 million) for the legal reserve and adding R$9.9 million from the realizable profit reserve. This represents total dividends of R$9.2 million, or R$0,03 per 1,000 shares, net of income tax, which will be paid part as interest on shareholdes’ equity as per Brazilian legislation and part as complementary dividends. The approval and payment date of the above mentioned dividend payment will be determined at Tele Nordeste’s Annual Shareholders’ Meeting to be held in April. ARPU The blended average revenue per user (ARPU), net of taxes, for the fourth quarter of 2000 was R$47.07 per month, compared to R$42.46 per month in the third quarter of 2000, and R$51.41 per month for the forth quarter of 1999. This increased compared to the third quarter of 2000, was due to the disconnection of roughly 58,000 clients and the increase in the incoming traffic during the fourth quarter of 2000. The combined accumulated ARPU for 2000 was R$46.45 compared to R$56.62 for the same period a year earlier. The post-paid ARPU in 2000 was negatively affected by the blocked lines for credit reasons procedure, which was adopted at the end of the second quarter. Blocking is carried out on a partial basis, and as a result, only incoming traffic revenues are generated by these clients. In December, the clients base was 45% prepaid and 55% postpaid. www.timnordeste.com.br 6
  • 7. Competition The Company estimates that its market share at the end of the fourth quarter of 2000 was approximately 65.4% in terms of number of accesses. The penetration rate in the region at the end of December 2000 was estimated at 8.8%, compared to Brazil’s penetration rate of approximately 13.9% (23 million lines). Debt Profile Consolidated debt at December 31, 2000, was R$407 million, with R$57 million maturing in the short-term. Tele Nordeste Celular, through its Telpe Celular operating company, signed a long-term financing contract with the European Investment Bank (EIB) in the amount of US$50 million at the beginning of October 2000. This debt was totally converted to Reais and with pre-fixed costs, in line with the Company’s policy of minimizing exposure to foreign currency risks and interest rate fluctuations. Another measure to lengthen the consolidated debt profile concluded in November 2000 was the issue of simple debentures, not convertible into shares, carried out by the Telpe Celular operating company, in the amount of R$200 million. For another source of long-term financing, Tele Nordeste Celular has had a letter of consultation approved by and now is in the project preparation phase for financing from the National Economic and Social Development Bank - BNDES (second quarter of 2001). Capital Expenditures The investment program for the year 2000 was totally concluded, reaching the amount of R$202.1 million. The investments were directed to expansion, digitalization and optimization of the network and includes improvements to the Company's information systems, new services and Internet access facilities. On December 31 the Company had 737 radio base stations (RBEs), of which 16 were mobile and provided service in 307 municipalities that corresponded to coverage of 75% of the population. Network digitalization was of the order of 74%; that is, 74% of voice channels were digital, with 87% of its clients using digital handsets. Events Subsequent to December 31, 2000 Launching of new products and services: In February de 2001, two new services were offered by the Tele Nordeste’s operating companies: Intelligent Network and WAP. Intelligent Network is a new conception in business mobile communications. It is a service designed for companies, that permits the creation of groups of users, promotes the improvement of the mobile communications and permits the control of generated and received calls. All in accordance with the company definition. Wap service is provided through TIMnet, a subsidiary company created with the objective of develop internet solutions and innovative value added services. Although the technology was available, this service was not offered before, because the lack of TDMA WAP handsets in the Brazilian market. www.timnordeste.com.br 7
  • 8. Bands “D” and “E”: The actions for bands “C”, “D” and “E” had the following results: • Band “C”: no one; • Band “D”: Region I – Telemar Region II – TIM Region III – TIM • Band “E”: Region I – TIM AREA I AREA II AREA III With the acquisition of these new licenses TIM improved strongly its presence all long Brazil and announced the creation of the first Pan-american GSM Network. In this scenario Tele Nordeste Celular will have the support of TIM to keep offering products and services with high quality and very competitive prices. The continuum technological development, the innovation in products and services, the scale economy, and synergies will be the army to win the challengers and conquer new clients in these new scenario of the Brazilian telecommunication sector. Annexes: - Selected historical statistics - EBITDA calculus - Financial statements as of December 31, 2000 and 1999 This press release contains forward-looking statements. Statements that are not statements of historical fact only reflect the beliefs and expectations of the Company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” forecasts,” predicts,” “plans, ” “projects,” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties, forecast or not by the Company. Accordingly, the actual results of operations of the Company may be different from the Company’s current expectations, and the reader should not place undue reliance 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. www.timnordeste.com.br 8
  • 9. Consolidated Statistics 4Q00 3Q00 2Q00 1Q00 4Q99 Clients 1,511,000 1,482,673 1,361,669 1,313,252 1,187,912 Net additions 28,327 121,004 48,417 125,340 235,855 Market share (%) 65 65 65 69 73 Market share marginal (%) 100 65 25 40 65 Growth over same period of the previous year (%) 27.0 55.7 71.8 90.4 93.4 Estimated population of region (in millions) 26.3 26.2 26.2 26.1 26.1 Penetration rate (%) - Tele Nordeste 5.7 5.6 5.4 5.0 4.6 - Total 8.7 8.7 8.2 7.3 6.6 Municipalities covered 307 307 297 289 N. A. MOU total 166 156 151 176 195 Churn total (%) 8.2 4.9 8.9 4.7 3.2 Blended ARPU (R$) 47.07 42.46 45.63 51.05 51.41 SAC - Subscriber acquisition cost (R$) 79.94 118.85 131.78 168.63 210.80 Digitalization rate (%) - Network 74 73 66 56 54 - Clients 87 83 82 79 72 Coverage - Population 75 75 74 74 74 - Geographical area 29 29 28 28 28 Workforce 1,628 1,623 1,646 1,277 1,283 EBITDA (in thousands of Reais) 4Q00 3Q00 2Q00 1Q00 2000 Net operational revenue 218,280 202,070 210,757 214,513 845,620 Operational income 9,269 2,004 (1,009) 26,406 36,670 Depreciation 35,597 33,517 29,681 26,094 124,889 Amortization of the goodwill 6,295 5,053 1,767 - 13,115 Financial income (7,099) (1,256) (468) (4,028) (12,851) Financial expenses 37,712 20,259 22,826 25,006 105,803 EBITDA 81,774 59,577 52,797 73,478 267,626 % EBITDA 37.5 29.5 25.1 34.3 31.6 www.timnordeste.com.br 9
  • 10. Balance Sheet December 31, 2000 and 1999 (in thousands of Reais) Parent Company Consolidated 2000 1999 (*) 2000 1999 (*) Assets Curent assets Cash equivalents 567 283 53,075 77,768 Trade accounts receivable - - 133,617 168,542 Inventory 28 25 18,289 28,284 Telecommunications companies - - 59,285 32,491 Taxes and contributions receivable 3,394 3,890 28,939 40,931 Deferred income and social contribution taxes 1,080 173 16,859 18,088 Dividends and interest on shareholders’ equity 8,619 9,568 - - Prepaid expenses 49 - 251 6,449 Other rights 1,193 2,472 13,542 12,317 14,930 16,411 323,857 314,870 Noncurrent assets Loan to subsidiaries 18,679 30,660 - - Tax incentives - - 2,077 2,679 Deferred income and social contribution taxes - - 1,088 - Amounts in litigation - - 960 - 18,679 30,660 4,125 2,679 Permanent assets Investments 561,769 329,186 - - Property, plant and equipment 5,096 4,609 718,578 644,020 Deferred asset - - 192,693 - 566,865 333,795 911,271 644,020 600,474 380,866 1,239,253 961,569 (*) Reclassified www.timnordeste.com.br 10
  • 11. Balance Sheet December 31, 2000 and 1999 (in thousands of Reais) Parent Company Consolidated 2000 1999 (*) 2000 1999 (*) Liabilities Current liabilities Suppliers 787 1,079 62,907 94,886 Financing and loans - - 49,268 270,586 Debentures - - 7,573 - Taxes payable 962 1,002 21,745 37,354 Salaries and vacation pay 1,358 554 5,534 4,313 Subsidiaries 1,556 10,295 - - Telecommunications companies - 3 23,132 7,520 Dividends and interest on shareholders’ equity 11,605 10,340 19,212 16,721 Other liabilities 8,322 3,502 19,428 25,050 24,590 26,775 208,799 456,460 Noncurrent liabilities Financing and loans - - 150,202 53,278 Debentures - - 200,000 - Other liabilities - - 903 90 - - 351,105 53,368 Minority interest - - 103,465 97,650 Shareholders’ equity Capital stock 108,843 108,943 108,843 108,943 Capital reserves 204,068 - 204,068 - Profit reserves 170,405 178,922 170,405 178,922 Retained profits 92,568 66,226 92,568 66,226 575,884 354,091 575,884 354,091 600,474 380,866 1,239,253 961,569 (*) Reclassified www.timnordeste.com.br 11
  • 12. Statement of Income For the years 2000 and 1999 (in thousands of Reais) Parent Company Consolidated 2000 1999 (*) 2000 1999 (*) Revenues Telecommunications services and sale of goods - - 1,080,738 869,953 Deductions ICMS (tax on distribution of goods and services) - - (185,696) (164,277) PIS (profit participation program tax) and COFINS (social security financing contribution) - - (39,926) (30,823) Discounts - - (9,223) - Net revenues - - 845,620 674,853 Cost of goods sold and services rendered - - (380,702) (369,214) Gross profit - - 464,918 305,639 Operating revenues (expenses) Selling expenses - (1,579) (233,850) (146,945) Administrative and general expenses (10,727) (460) (87,892) (68,631) Financial expenses (7,970) (10,916) (105,803) (106,266) Financial income 2,285 4,604 12,852 12,311 Equity in income of subsidiaries 39,125 9,196 - - Other operating income - - 7,830 8,129 Other operating expenses (1,481) (1,557) (21,384) (2,683) Operating income (loss) 21,232 (712) 36,671 1,554 Nonoperating income 10 - 4,194 2,294 Nonoperating expenses (1) - (1,753) (6,940) Income before reversal of interest on shareholders’ equity and income and social contribution taxes 21,241 (712) 39,112 (3,092) Income and social contribution taxes - 761 (9,915) 4,375 Employee profit sharing (787) (510) (2,117) (2,065) Reversal of interest on shareholders’ equity 7,690 9,882 10,634 12,828 Net income (loss) before minority interest 28,144 9,421 37,714 12,046 Minority interest - - (11,060) (2,625) Net income (loss) 28,144 9,421 26,654 9,421 Net income (loss) per lot of a thousand shares 0.08 0.03 Number of shares at year end (thousands) 334,399,028 334,399,028 (*) Reclassified www.timnordeste.com.br 12
  • 13. Statements of Changes in Shareholders' Equity Years ended December 31, 2000 and 1999 (In thousands of Reais) Capital reserve Profit reserves Realizable Statutory Legal profits Retained Capital Special premium reserve reserve reserve profits Total Balances at january 1, 1999 108,943 - 87,154 11,377 104,315 42,763 354,552 Realization of realizable profit reserve - - - - (24,395) 24,395 - Net income for the year - - - - - 9.421 9,421 Distributions: - Legal reverse - - - 471 - (471) - - Interest on shareholders’ equity - - - - - (9,882) (9,882) Balances at December 31, 1999 108,943 - 87,154 11,848 79,920 66,226 354,091 Partial spin-off (100) - - - - - (100) Reflex reserve - 204,068 - - - - 204,068 Realization of realizable profit reserve - - - - (9,924) 9,924 - Net income for the year - - - - - 28,144 28,144 Distributions: - Legal reverse - - - 1,407 - (1,407) - - Dividends - - - - - (2,629) (2,629) - Interest on shareholders’ equity - - - - - (7,690) (7,690) 108,843 204,068 87,154 13,255 69,996 92,568 575,884 www.timnordeste.com.br 13
  • 14. Statements of Changes in Financial Position Years ended December 31, 2000 and 1999 (in thousands of Reais) Parent Company Consolidated 2000 1999 (*) 2000 1999 (*) Sources of funds Operations Net income for the year 28,144 9,421 26,654 9,421 Items not affecting working capital: Depreciation 1,068 399 124,889 87,046 Premium amortization 2,683 - 38,572 - Reversal of the shareholders’ equity integrity provision (1,771) - (25,458) - Residual cost on disposal of fixed assets 227 276 2,664 6,471 Equity in net income of subsidiaries (39,125) (9,196) - - Price-level restatement increments to noncurrent liabilities - - 10,.118 26,567 Price-level restatement increments to noncurrent assets - (1,175) - - Other liabilities - - - 19 Minority interest - - 5,815 2,625 (8,774) (275) 183,254 132,149 From shareholders Net assets incorporated from the partial spin-off of parent company - - 203,156 - From third parties Debentures - - 200,000 - Loan and financing - - 178,163 - Dividends 3,665 1,066 - - Interest on shareholders’ equity 10,533 9,924 - - Transfer from noncurrent assets to current asets 25,267 15,529 8,317 - Tax incentives - - 1,490 - Other liabilities - - 1,883 - 39,465 26,159 389,853 - 30,691 26,244 776,263 132,149 Application of funds Partial spin-off 100 - 100 - Investments 4,500 - - - Noncurrent assets 13,286 30,660 9,763 1,027 Property, plant and equipment 1,782 4,851 202,111 239,365 Deferred charges - - 204,894 - Dividends 2,629 - 2,629 711 Interest on shareholders’ equity 7,690 9,882 7,690 12,828 Transfer of noncurrent liabilities to current liabilities - - 92,427 33,245 29,987 45,393 519,614 287,176 Increase (decrease) in the net working capital 704 (19,149) 256,649 (155,027) Changes in working capital Current assets (1,481) (18,906) 424 119,058 Current liabilities (2,185) 243 (256,225) 274,085 Increase (decrease) in net working capital 704 (19,149) 256,649 (155,027) www.timnordeste.com.br 14

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