PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
Cep: 70.714-000 - Brasília (DF) - Brazil
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| Antônio José Ribeiro dos Santos |  |
| CEO and Head of Investor Relations | |
| antonio.santos@telepart.com.br | |
| Phone: +55 61 3429-5620 | |
| Leonardo Dias | |
| Associate Director of Investor Relations | |
| Ldias@telepart.com.br | |
| Phone: +55 61 3429-5673 | |
TELEMIG CELULAR PARTICIPAÇÕES S.A. RECORDS
THE HIGHEST NET INCOME OF ITS HISTORY
- EBITDA of R$431.2 million or 40.6% of net service revenues for the year
- Client base reached 3.3 million for the year
- Positive free cash flow of R$199.8 million for the year
- Negative net debt of R$450.1 million by year-end
- Market share in the Triângulo Mineiro region estimated at 12%
Brasília, Brazil, March 16, 2006 – Telemig Celular Participações S.A. (BOVESPA: TMCP3 (Common)/TMCP4 (Preferred); NYSE: TMB), the holding company of the wireless telecommunications service provider in the State of Minas Gerais, today announced its fourth quarter and year-end 2005 results. The Company acquired 301,770 new customers in the quarter, increasing its client base to 3,344,184. EBITDA reached R$102.2 million in 4Q05, representing 36.6% of net service revenues. For the year, EBITDA reached R$431.2 million, representing 40.6% of net service revenues.
Operating Highlights:
| Net additions of 301,770 customers in 4Q05 |
The Company’s customer base reached 3,344,184 in the fourth quarter of 2005, representing a 20% increase when compared to the same period of last year. Net additions amounted to 301,770 for the quarter and 566,902 year-over-year.
In 4Q05, prepaid net additions were 245,289, bringing the total prepaid base to 2,487,662 or 74% of the total base. The postpaid base increased by 56,481 subscribers, ending the quarter with 856,522 subscribers or 26% of the total base.
CLIENT BASE (000s)
www.telemigholding.com.br - 1/13
| Churn rate |
In the fourth quarter of the year, blended annualized churn rate decreased to 29% from the 38% registered in the previous quarter as a result of lower churn rates in both postpaid and prepaid segments. When compared to the previous quarter, the annualized churn rate for the prepaid segment decreased to 32% from the 44% registered in the 3Q05. During the 3Q05 prepaid churn rate was high as a consequence of the credit profile of clients acquired during Christmas sales of 2004 and, in 4Q05, prepaid churn rates returned to normal levels. The postpaid segment, which accounts for most of the revenues generated, is the segment where we focus most of our retention efforts. The success of the Company’s retention program can be seen as the postpaid churn rate decreased to 18% when compared to the 22% registered in the previous quarter. Despite the increasingly competitive environment, this was the eleventh consecutive quarter with a postpaid churn rate equal or below 25%.
CHURN RATE (annualized)
| Operating revenues |
Net service revenues totaled R$279.1 million in the quarter, an increase of R$3.6 million or 1.3% over the previous quarter, primarily resulting from the 5.3% increase in total traffic (2.9% increase in incoming traffic and 7.9% increase in outgoing traffic). For 2005, net service revenues reached R$1,061.5 million in line with the previous year.
It is worth noting that service revenues recorded in 2005 is not directly comparable to that posted in 2004 since part of 2004 revenues had not been impacted by the changes related to the migration to Personal Mobile Service (SMP) occurred in August 2004. After these new rules took effect, the Company started offering the Provider Selection Code (CSP) and, therefore, customers started using CSP in national (VC2 and VC3) international long-distance calls from mobiles phones. Therefore, the Company stopped receiving VC2 and VC3 revenues and started receiving interconnection revenues for the use of its network in these calls. Additionally, the Company adopted the bill & keep rules that establish that SMP Companies’ network remuneration for traffic within the same registration area will only be paid when the traffic balance is lower than 45% or exceeds 55%, which generated a significant decrease in interconnection revenues.
Net equipment revenues in the quarter totaled R$25.0 million, an increase of 36.2% when compared to the R$18.4 million registered in 3Q05. This increase was already expected due to stronger sales associated with seasonal factors during the fourth quarter. For the year, net equipment revenues reached R$87.5 million, a reduction of 6.5% when compared to the previous year, related to the launch of the GSM/EDGE network in 2004.
www.telemigholding.com.br - 2/13
As a result, total net revenues amounted to R$304.0 million in the quarter, 3.5% higher when compared to the previous quarter. Year-to-date, total net revenues reached R$1,148.9 million, slightly lower than the R$1,154.0 million registered in 2004.
Data revenues, as a percentage of net service revenues, reached 6.7% for the quarter and 5.9% for the year.
In the fourth quarter of the year, handset subsidies for client acquisitions were R$17.2 million or R$32.8 per gross addition, compared to R$9.1 million or R$25.5 per gross addition registered in the 3Q05. This increase was already expected due to higher sales during Christmas sales.
| Operating costs and expenses |
Cost of services in the fourth quarter of 2005 totaled R$72.7 million, 25.4% higher when compared to the previous quarter. This difference is mainly due to higher interconnection costs and higher Fistel costs related to Christmas sales. For the year, cost of services reached R$260.9 million, 10.8% lower when compared to the previous year. Such decrease is mostly related to the Bill & Keep introduction and to reduced cloned calls.
Selling and marketing expenses in 4Q05 reached R$77.5 million, an increase of 27.4% over the previous quarter. This increase can be explained by higher marketing and advertising expenses related to the more aggressive acquisition campaigns during the Christmas season. In 2005, selling and marketing expenses totaled R$245.1 million, higher than the R$174.3 million reported 2004. This increase is primarily due to higher advertising and promotion expenses related to the launch of operations at the Triângulo Mineiro region, to greater retention efforts and to more aggressive customer acquisition campaign.
Customer acquisition cost in the fourth quarter of 2005 increased to R$147 from the R$141 registered in 3Q05. For the year, customer acquisition cost reached R$145 as compared to the R$118 registered in the previous year. Retention costs, as a percentage of net service revenues, increased to 15.7% in 4Q05, compared to 12.0% registered in 3Q05. For the year, retention costs, as a percentage of net service revenues, reached 13.3% .
G&A reached R$3.0 million in 4Q05, representing a significant decrease when compared to the positive R$18.7 million registered in the previous quarter. This reduction is related to the following non-recurrent events: a) positive effect related to the recognition of PIS and COFINS recoverable credit, amounting to R$ 37.9 million, resulting from the success in the lawsuit questioning the constitutionality of the increase in these taxes’ calculation base; and, b) negative effect of a provision related to value added tax (VAT – ICMS) in the amount of R$14.8 million. For the year, G&A reached R$52.1 million below the R$64.8 million registered in the previous year. For the coming quarters G&A is expected to remain in the range of 6% to 8% of net services revenues.
Bad debt as a percentage of net service revenues increased to 2.3% when compared to the 1.8% registered in the previous quarter. When calculated against total net revenues, bad debt reached 2.1% as compared to the 1.7% registered in the 3Q05. For the year, bad debt remained under control reaching 2.0% as a percentage of net service revenues and 1.8% as a percentage of total net revenues.
www.telemigholding.com.br - 3/13
BAD DEBT
| Average revenue per user (ARPU) |
Postpaid MOU (minutes of use) in 4Q05 totaled 194, higher than the 191 registered in the previous quarter. For the year, postpaid MOU reached 191, below the 201 registered in the previous year. Postpaid ARPU (average revenue per user) reached to R$70.2 in 4Q05 compared to the R$69.5 registered in the previous quarter. For the year, postpaid ARPU reached R$68.3, below the R$78.6 registered in 2004, as consequence of the implementation of the SMP rules in 2004.
In the fourth quarter of the year, prepaid MOU remained fairly stable when compared to the previous quarter, reaching 31 minutes. For the year, prepaid MOU reached 32 minutes. Prepaid ARPU totaled R$11.4 in 4Q05, in line with the R$11.7 registered in 3Q05. For the year, prepaid ARPU reached R$11.9.
As a result, blended ARPU reached R$26.7 for the quarter in line with the previous quarter. For the year, blended ARPU decreased to R$26.8 from the R$33.6 registered in 2004.
ARPU (R$)
| Market share estimated at 38% in the quarter |
Total market share was estimated at 38% in the fourth quarter of the year. Excluding Triângulo Mineiro region, market share was estimated at 41% compared to 42% registered in the previous quarter. For the Triângulo Mineiro region, market share was estimated at 12%, higher than the 8% registered in the previous quarter.
Total gross sales share for 4Q05 was estimated at 34%. Excluding Triângulo Mineiro region, gross sale share was estimated at 34% compared to the 35% registered in the 3Q05. For the Triângulo Mineiro region, gross sale share was estimated at 35%.
www.telemigholding.com.br - 4/13
| EBITDA margin of 40.6% of net service revenues in the year |
EBITDA and EBITDA margin (excluding handsets revenues) in the fourth quarter of 2005 reached R$102.2 million and 36.6%, respectively, compared to R$123.7 million and 44.9% registered in the previous quarter. For the year, EBITDA and EBITDA margin reached R$431.2 million and 40.6%, respectively.
EBITDA (R$ million)
| Depreciation and amortization |
In 4Q05, depreciation and amortization expenses reached R$51.9 million, slightly below the R$52.7 million reported in the previous quarter. For the year depreciation and amortization expenses reached R$224.9 million below the R$270.3 million registered in the previous year. This decrease is mainly explained by the total obsolescence of part of the Company’s TDMA network.
| Net financial income of R$6.6 million |
| R$ million | ||
| 3Q05 | 4Q05 | |
| Interest Expense (a) | (27.2) | (14.6) |
| Interest Income (b) | 34.9 | 34.9 |
| Foreign Exchange Gain (Loss) (c) | 17.5 | (13.7) |
| Net Financial Income (Expense) | 25.2 | 6.6 |
Note: a) Interest expense: includes financial expenses related to debt, losses on hedging operations (if any), taxes on gains resulting from hedging operations and own capital interest revenues (if any); b) Interest income: includes results of cash investing activities and gains on hedging operations (if any); and, c) Foreign exchange gain (loss): almost exclusively reflects currency devaluation changes on debt principal and interest payable.
www.telemigholding.com.br - 5/13
DETAILED FINANCIAL INCOME/EXPENSE INFORMATION
| R$ million | ||
| 3Q05 | 4Q05 | |
| Gain (expense) related to debt denominated in foreign currency |
10.0 | (20.0) |
| Gain (loss) on hedging operations* | (15.8) | 3.5 |
| Sub-total | (5.8) | (16.5) |
| Expense related to debt denominated in Reais | (0.7) | (0.1) |
| Financial expense (debt related) | (6.5) | (16.6) |
| Net financial expense (not related to debt)** | (0.9) | (9.5) |
| Sub-total | (7.4) | (26.1) |
| Interest income – cash investing activities | 32.6 | 32.7 |
| Net Financial Income (Expense) | 25.2 | 6.6 |
** Net financial expense not related to debt is primarily associated with taxes such as CPMF, PIS, COFINS and IOF
| Net income of R$174.1 million in the year |
Net income in 4Q05 totaled R$39.9 million, or R$2.256 per ADS (R$0.113 per thousand shares). For the year, net income reached R$174.1 million, or R$9.839 per ADS (R$0.492 per thousand shares), the highest net income of the Company’s history.
| Total debt of R$236.2 million |
As of December 31, 2005, total debt was R$236.2 million, 100% of which was denominated in foreign currencies (99.3% denominated in U.S. Dollars and 0.7% denominated in a currency basket index from BNDES). Of the total debt denominated in foreign currencies, 100% was hedged.
| Negative net debt of R$450.1 million for the year |
As of December 31, 2005, the Company’s indebtedness was offset by cash and cash equivalents (R$706.3 million) but was impacted by accounts payable from hedging operations (R$20.0 million), resulting in a negative net debt of R$450.1 million.
NET DEBT (R$ million)
www.telemigholding.com.br - 6/13
| Investments totaled R$125.1 million for the quarter |
During the fourth quarter of 2005, Telemig Celular’s capital expenditures were R$125.1 million. For the year investments totaled R$276.7 million. The breakdown of such investments is as follows:
CAPEX breakdown
| CAPEX (R$ million) | 4Q04 | 1Q05 | 2Q05 | 3Q05 | 4Q05 | 2005 |
| Network | 151.7 | 7.5 | 88.0 | 29.1 | 103.5 | 228.1 |
| IS/IT | 10.9 | 5.8 | 3.6 | 6.7 | 12.6 | 28.7 |
| Others | 25.2 | 2.8 | 4.6 | 3.5 | 9.0 | 19.9 |
| T O T A L | 187.8 | 16.1 | 96.2 | 39.3 | 125.1 | 276.7 |
| Debt payment schedule |
| Year | R$ million | % foreign currency denominated debt |
| 2006 | 48.9 | 100.0% |
| 2007 | 0.1 | 100.0% |
| 2008 | - | - |
| 2009 | 187.3 | 100.0% |
| Free cash flow |
Free cash flow in the quarter reached R$89.2 million compared to the R$74.9 million registered in the previous quarter. Year-to-date, free cash flow amounted to R$199.8 million.
| Strong financial ratios |
| Ratios | 4Q04 | 1Q05 | 2Q05 | 3Q05 | 4Q05 |
| Net Debt/EBITDA (1) | (1.02) | (1.04) | (0.86) | (1.02) | (1.04) |
| Net Debt/Total Assets | (23%) | (22%) | (19%) | (23%) | (22%) |
| Interest Coverage Ratio (1) | 10.8 | 9.6 | 9.5 | 10.1 | 11.7 |
| Current Liquidity Ratio | 2.0 | 2.3 | 2.2 | 2.3 | 1.7 |
| Outlook |
Telemig Celular expects mobile penetration within the Company's area to reach 47% by the next quarter. For the first quarter of 2006, Telemig Celular expects to maintain gross sales share at approximately 25-30%. Net additions are expected to come primarily from prepaid subscribers. ARPUs for both postpaid and prepaid subscribers are expected to slightly decrease as a consequence of seasonal factors. Total capital expenditures for the year are expected to reach approximately R$330-350 million.
*******************
www.telemigholding.com.br - 7/13
For additional information please contact:
Telemig Celular Participações S.A.
Investor Relations Department
Leonardo Dias / Renata Pantoja / Fernanda Ribeiro
Phones: (+55 61) 3429-5673/5616/5617
Fax: (+55 61) 3429-5626
E-mail: ri@telepart.com.br
| NEXT EVENTS |
| Conference Call |
| Phone: +1 (973) 582-2734 |
| Date: March 17, 2006 |
| Time: 12:00 p.m. (EDT) / 02:00 p.m. (Brasília) |
| APIMEC SP |
| Venue: Hotel Intercontinental |
| Date: March 22, 2006 |
| Time: 04:00 p.m. |
| APIMEC MG |
| Venue: Telemig Celular |
| Date: March 23, 2006 |
| Time: 06:00 p.m. |
This press release contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include those resulting from the short history of the Company's operations as an independent, private-sector, entity and the introduction of competition to the Brazilian telecommunications sector, as well as those relating to the cost and availability of financing, the performance of the Brazilian economy generally, the levels of exchange rates between Brazilian and foreign currencies and the Federal Government's telecommunications policy. 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.telemigholding.com.br - 8/13
OPERATIONAL DATA
| 2004 | 2005 | Var. % (4Q05/3Q05) | ||||||||||||||
| 4thQuarter | YTD | 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter | YTD | ||||||||||
| Licensed Pops (in millions) | 17.0 | 17.0 | 18.8 | 19.0 | 19.2 | 19.2 | 19.2 | 0.0% | ||||||||
| Clients | 2,777,282 | 2,777,282 | 2,857,654 | 2,973,130 | 3,042,414 | 3,344,184 | 3,344,184 | 9.9% | ||||||||
| Postpaid | 756,810 | 756,810 | 763,142 | 787,245 | 800,041 | 856,522 | 856,522 | 7.1% | ||||||||
| Prepaid | 2,020,472 | 2,020,472 | 2,094,512 | 2,185,885 | 2,242,373 | 2,487,662 | 2,487,662 | 10.9% | ||||||||
| MOU Incoming | ||||||||||||||||
| Postpaid | 79 | 66 | 70 | 72 | 76 | 75 | 73 | -1.1% | ||||||||
| Prepaid | 31 | 29 | 26 | 25 | 24 | 23 | 24 | -2.5% | ||||||||
| MOU Outgoing | ||||||||||||||||
| Postpaid | 130 | 135 | 117 | 117 | 115 | 119 | 117 | 3.3% | ||||||||
| Prepaid | 9 | 9 | 8 | 7 | 7 | 8 | 7 | 4.2% | ||||||||
| Total Outgoing Traffic (Million of Minutes) | 338.7 | 1366.1 | 313.6 | 314.9 | 323.1 | 348.7 | 1300.2 | 7.9% | ||||||||
| Total Incoming Traffic (Million of Minutes) | 354.3 | 1203.1 | 318.1 | 324.6 | 340.4 | 350.3 | 1333.4 | 2.9% | ||||||||
| Average Revenue per User - ARPU (R$) | 30.8 | 33.6 | 26.5 | 26.9 | 26.9 | 26.7 | 26.8 | -0.6% | ||||||||
| Postpaid | 73.6 | 78.6 | 64.4 | 68.7 | 69.5 | 70.2 | 68.3 | 1.1% | ||||||||
| Prepaid | 14.2 | 15.3 | 12.6 | 11.8 | 11.7 | 11.4 | 11.8 | -2.8% | ||||||||
| Service Revenues (R$ millions) | ||||||||||||||||
| Monthly Fee | 54,614 | 234,625 | 53,904 | 57,764 | 58,074 | 57,393 | 227,134 | -1.2% | ||||||||
| Outgoing Traffic | 79,666 | 337,718 | 75,185 | 95,730 | 100,578 | 104,895 | 376,389 | 4.3% | ||||||||
| Incoming Traffic | 102,092 | 413,926 | 90,503 | 88,852 | 91,834 | 91,318 | 362,507 | -0.6% | ||||||||
| Other | 21,151 | 74,138 | 22,863 | 22,163 | 24,943 | 25,453 | 95,421 | 2.0% | ||||||||
| TOTAL | 257,523 | 1,060,407 | 242,455 | 264,509 | 275,429 | 279,059 | 1,061,452 | 1.3% | ||||||||
| Data Revenues (% of net serv. revenues) | 4.8% | 4.7% | 6.0% | 5.2% | 5.6% | 6.7% | 5.9% | 1.1 p.p | ||||||||
| Cost of Services (R$ millions) | ||||||||||||||||
| Leased lines | 10,038 | 33,426 | 11,871 | 13,949 | 12,506 | 15,057 | 33,428 | 20.4% | ||||||||
| Interconnection | 20,222 | 139,559 | 19,648 | 12,966 | 9,265 | 15,516 | 139,559 | 67.5% | ||||||||
| Rent and network maintenance | 11,886 | 42,413 | 12,753 | 14,502 | 15,118 | 16,976 | 42,413 | 12.3% | ||||||||
| FISTEL and other taxes | 14,625 | 51,884 | 13,355 | 14,502 | 13,377 | 19,672 | 51,884 | 47.1% | ||||||||
| Other | 7,900 | 25,104 | 9,549 | 7,110 | 7,722 | 5,485 | 25,104 | -29.0% | ||||||||
| TOTAL | 64,672 | 292,386 | 67,176 | 63,029 | 57,987 | 72,707 | 292,388 | 25.4% | ||||||||
| Churn - Annualized Rate | 30.2% | 30.8% | 33.4% | 34.3% | 38.3% | 28.7% | 33.6% | -9.6 p.p. | ||||||||
| Postpaid | 21.9% | 22.1% | 23.5% | 24.8% | 21.7% | 18.3% | 22.0% | -3,4 p.p. | ||||||||
| Prepaid | 33.5% | 34.3% | 37.0% | 37.7% | 44.3% | 32.4% | 37.8% | -11.9 p.p. | ||||||||
| Cost of Acquisition (R$) | 132 | 118 | 145 | 147 | 141 | 147 | 145 | 3.7% | ||||||||
| Retention Costs (% of net serv. revenues) | 6.9% | 1.8% | 12.6% | 13.0% | 12.0% | 15.7% | 13.3% | -2.8 p.p | ||||||||
| CAPEX (R$ millions) | 187.9 | 301.1 | 16.1 | 96.3 | 39.2 | 125.1 | 276.7 | 219.0% | ||||||||
| Number of locations served | 401 | 401 | 463 | 502 | 509 | 535 | 535 | 5.1% | ||||||||
| Number of cell sites | 1320 | 1320 | 1388 | 1598 | 1620 | 1677 | 1677 | 3.5% | ||||||||
| Number of switches | 13 | 13 | 14 | 15 | 15 | 17 | 17 | 13.3% | ||||||||
| Headcount | 2,126 | 2,126 | 2,197 | 2,282 | 2,341 | 2,378 | 2,378 | 1.6% | ||||||||
| Estimated Market Share | ||||||||||||||||
| Total | 48% | 48% | 46% | 41% | 39% | 38% | 38% | -1.0 p.p | ||||||||
| Minas Market - excluding Triângulo | ||||||||||||||||
| Mineiro region | 46% | 44% | 42% | 41% | 41% | -1.0 p.p | ||||||||||
| Triângulo Mineiro region | 0% | 4% | 8% | 12% | 12% | 4 p.p | ||||||||||
www.telemigholding.com.br - 9/13
INCOME STATEMENT (BR GAAP)
| 2004 | 2005 | Var. % (4Q05/3Q05) | ||||||||||||||
| 4th Quarter | YTD | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | YTD | ||||||||||
| Service Revenues - GROSS | 347,909 | 1,420,386 | 335,713 | 359,130 | 377,816 | 389,647 | 1,462,306 | 3.1% | ||||||||
| Equipment Revenues - GROSS | 37,187 | 123,893 | 27,999 | 31,905 | 24,527 | 33,139 | 117,570 | 35.1% | ||||||||
| Total Revenues - GROSS | 385,095 | 1,544,279 | 363,712 | 391,035 | 402,343 | 422,786 | 1,579,876 | 5.1% | ||||||||
| Taxes | (99,172) | (390,269) | (100,957) | (102,686) | (108,562) | (118,737) | (430,942) | 9.4% | ||||||||
| Service Revenues - NET | 257,523 | 1,060,407 | 242,455 | 264,509 | 275,429 | 279,059 | 1,061,452 | 1.3% | ||||||||
| Equipment Revenues - NET | 28,401 | 93,603 | 20,300 | 23,840 | 18,352 | 24,990 | 87,482 | 36.2% | ||||||||
| Total Revenues - NET | 285,924 | 1,154,010 | 262,755 | 288,349 | 293,781 | 304,049 | 1,148,934 | 3.5% | ||||||||
| Cost of Services | 64,671 | 292,386 | 67,176 | 63,029 | 57,987 | 72,717 | 260,909 | 25.4% | ||||||||
| Cost of Equipment | 40,462 | 123,566 | 29,254 | 39,570 | 27,458 | 42,206 | 138,488 | 53.7% | ||||||||
| Selling & Marketing Expenses | 56,016 | 174,270 | 53,569 | 53,264 | 60,835 | 77,481 | 245,149 | 27.4% | ||||||||
| Bad Debt Expense | 2,819 | 20,153 | 4,556 | 5,040 | 5,083 | 6,415 | 21,094 | 26.2% | ||||||||
| General & Administrative Expenses | 16,487 | 64,784 | 10,977 | 19,380 | 18,738 | 3,000 | 52,095 | -84.0% | ||||||||
| EBITDA | 105,469 | 478,851 | 97,223 | 108,066 | 123,680 | 102,230 | 431,199 | -17.3% | ||||||||
| % | 41.0% | 45.2% | 40.1% | 40.9% | 44.9% | 36.6% | 40.6% | -8,3 p.p. | ||||||||
| Depreciation & Amortization | 92,563 | 270,259 | 59,873 | 60,446 | 52,682 | 51,863 | 224,864 | -1.6% | ||||||||
| Interest Expense (1) | 35,828 | 108,762 | 18,460 | 41,176 | 27,158 | 14,671 | 101,465 | -46.0% | ||||||||
| Interest Income | (39,329) | (150,314) | (39,318) | (36,003) | (34,891) | (34,940) | (145,152) | 0.1% | ||||||||
| Foreign Exchange Loss | (32,616) | (33,330) | 1,901 | (47,151) | (17,474) | 13,658 | (49,066) | -178.2% | ||||||||
| Others | 5,927 | 20,121 | 4,428 | 5,374 | 4,681 | 7,526 | 22,009 | 60.8% | ||||||||
| Income Taxes | 5,685 | 70,304 | 13,391 | 30,336 | 21,180 | 5,916 | 70,823 | -72.1% | ||||||||
| Minority Interests | 5,897 | 33,403 | 5,709 | 12,121 | 10,687 | 3,620 | 32,137 | -66.1% | ||||||||
| Net Income | 31,514 | 159,646 | 32,779 | 41,767 | 59,657 | 39,916 | 174,119 | -33.1% | ||||||||
| Number of shares (thousand) | 350,072,111 | 346,751,938 | 350,072,111 | 353,926,470 | 353,926,470 | 353,926,470 | 353,926,470 | 0.0% | ||||||||
| Earnings per thousands shares (R$) | 0.090 | 0.460 | 0.094 | 0.118 | 0.169 | 0.113 | 0.492 | -33.1% | ||||||||
| Earnings per ADS (R$) | 1.800 | 9.200 | 1.873 | 2.360 | 3.371 | 2.256 | 9.839 | -33.1% | ||||||||
www.telemigholding.com.br - 10/13
BALANCE SHEET (BR GAAP)
| (R$ 000) | ||||||||||
| 4Q05 | 3Q05 | 4Q05 | 3Q05 | |||||||
| Current Assets | Current Liabilities | |||||||||
| Cash & cash equivalents | 706,331 | 780,450 | Loans & Financing | 48,897 | 128,963 | |||||
| Accounts Receivable | 226,403 | 208,964 | Loan Interest | 8,555 | 6,981 | |||||
| Taxes Receivable | 76,455 | 54,839 | Suppliers | 302,672 | 211,405 | |||||
| Other Assets | 29,889 | 53,492 | Taxes Payable | 56,404 | 36,052 | |||||
| 1,039,078 | 1,097,745 | Dividends | 102,593 | 10,736 | ||||||
| Other Current Liabilities | 81,416 | 84,905 | ||||||||
| 600,537 | 479,042 | |||||||||
| Long-term Assets | 299,853 | 267,016 | ||||||||
| Loans & Financing | 187,324 | 177,874 | ||||||||
| Deferred Assets | 8,392 | 8,868 | ||||||||
| Other Long-term Liabilitie | 47,679 | 80,055 | ||||||||
| Plant & Equipment | ||||||||||
| Cost | 1,886,226 | 1,879,425 | Minority Interest | 148,371 | 145,262 | |||||
| Accumulated Depreciation | (1,211,428) | (1,281,527) | ||||||||
| 674,798 | 597,898 | Shareholders' Equity | 1,038,210 | 1,089,294 | ||||||
| 2,022,121 | 1,971,527 | 2,022,121 | 1,971,527 | |||||||
DEBT POSITION (BR GAAP)
| (in R$ 000) | ||||||||
| Debt | 4Q05 | |||||||
| Currency | ||||||||
| R$ | US$ | Basket | Total | |||||
| Index | ||||||||
| Short term | 47,285 | 1,612 | 48,897 | |||||
| Long Term | - | 187,324 | - | 187,324 | ||||
| Total | - | 234,609 | 1,612 | 236,221 | ||||
www.telemigholding.com.br - 11/13
CASH FLOW (BR GAAP)
| (in R$ 000) | ||||
| 4Q05 | YTD - 2005 | |||
| Operating Activities: | ||||
| Net income | 39,916 | 174,119 | ||
| Adjustments to reconcile net income (loss) to net cash | ||||
| provided by operating cash activities | ||||
| Depreciation and amortization | 51,863 | 224,864 | ||
| Monetary variation and foreign exchange loss (principal) | 13,280 | (47,478) | ||
| Unrealized income on hedging operations | (10,596) | 18,166 | ||
| Deferred income taxes and social charges | (16,966) | (40,737) | ||
| Minority interest | 4,297 | 32,814 | ||
| Other | 9,486 | 10,236 | ||
| Changes in operating assets and liabilities | 40,397 | (46,637) | ||
| Net cash provided by operating activities | 131,677 | 325,347 | ||
| Investing Activities: | ||||
| Proceeds from sale of property, plant and equipment | 159 | 1,246 | ||
| Capital expenditures | (125,144) | (276,777) | ||
| Additions to Deferred Assets | - | (9,501) | ||
| Net cash used in investing activities | (124,985) | (285,032) | ||
| Financing Activities: | ||||
| Amortization of loans | (83,896) | (199,101) | ||
| Payment of dividends and interest on capital | 3,085 | (95,430) | ||
| Net cash used in financing activities | (80,811) | (294,531) | ||
| Net increase (decrease) in cash and cash equivalents | (74,119) | (254,216) | ||
| Cash and cash equivalents, beginning of the period | 780,450 | 960,547 | ||
| Cash and cash equivalents, end of the period | 706,331 | 706,331 | ||
www.telemigholding.com.br - 12/13
GLOSSARY OF KEY INDICATORS
| I) Average Subscribers | ||
| a) | Average subscribers – monthly | |
| Sum of subscribers at the beginning and the end of the month | ||
| 2 | ||
| b) | Average subscribers – quarterly and year to date | |
| Sum of the average subscribers for each month of the period | ||
| Number of months in the period | ||
| II) Churn Rate (Annualized) | ||
| a) Churn % quarterly | ||
| Sum of deactivations / Sum of average monthly opening subscribers for the 3 months x 12 | ||
| 3 | ||
| b) Churn % - year to date | ||
| YTD deactivations / Sum of avg monthly opening subscribers since beginning of the year x 12 | ||
| Number of months in the period | ||
| III) MOU – Minutes of Use (Monthly) | ||
| Number of total billable minutes for the period / Average subscribers for the period | ||
| Number of months in the periods | ||
| IV) ARPU – Average Revenue per User | ||
| Net service revenues for the period (excluding roaming-in revenues) | ||
| Average subscribers for the period | ||
| V) Customer Acquisition Cost | ||
| (Sum of Marketing salaries, Selling salaries, Consulting (Sales and Marketing), | ||
| Commissions, Handsets subsidies, Advertising and promotions, | ||
| FISTEL tax (activation tax), less Activation fee for the period) | ||
| Number of gross activations in the period | ||
| VI) Free Cash Flow | ||
| Free Cash Flow = (EBITDA – CAPEX – Taxes – Net Financial Expenses* | ||
| – Minority Interests – Working Capital Variation) | ||
| * Considers interest paid. | ||
| VII) Working Capital Variation | ||
| Working Capital Variation = ( D Current Assets – D Cash & Cash Equivalents ) – | ||
| (D Current Liabilities – D Short Term Loans and Financing - D Loan Interest - D Dividends) | ||
| VIII) Interest Coverage Ratio | ||
| Interest Coverage Ratio = EBITDA / Interest Paid | ||
| IX) Current Liquidity Ratio | ||
| Current Liquidity Ratio = Current Assets / Current Liabilities | ||
| X) EBITDA | ||
| EBITDA = Operational Revenues - Operational Costs - Operational Expenses* - Bad Debt | ||
| * Does not include profit sharing. | ||
www.telemigholding.com.br - 13/13
| TELEMIG CELULAR PARTICIPAÇÕES S.A. | ||||
| By: | /s/ Antônio José Ribeiro dos Santos | |||
| Name: | Antônio José Ribeiro dos Santos | |||
| Title: | CEO and Head of Investor Relations | |||