TNE Tele Norte Leste Participacoes S.A. Common Stock

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or

15d-16 of the Securities Exchange Act of 1934

For the month of October, 2010

Commission File Number: 001-14487

 

 

TELE NORTE LESTE PARTICIPAÇÕES S.A.

(Exact Name as Specified in its Charter)

Tele Norte Leste Holding Company

(Translation of registrant’s name into English)

 

 

Rua Humberto de Campos, 425 – 8 ^o andar

Rio de Janeiro, RJ

Federative Republic of Brazil

(Address of principal executive offices)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F:      x         Form 40-F:     ¨

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)):

Yes :       ¨          No :     x

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)):

Yes :      ¨          No :     x

(Indicate by check mark whether the registrant by furnishing the information contained in this Form, the Registrant 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

If “Yes” is marked, indicate below the file number assigned to the

registrant in connection with Rule 12g3-2(b):             

 

 

 

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U PCOMING E VENTS : C ONFERENCE C ALLS

 

P ORTUGUESE				E NGLISH
DATE:		Friday, October 29, 2010   10:00am (Rio) - 8:00am (NY)		DATE:		Friday, October 29, 2010   11:30am (Rio) - 9:30am (NY)
ACCESS:		Phone: (55 11) 4688-6361   Code: Oi   Replay: (55 11) 4688-6312   Available until November 4, 2010   Code: 47772		ACCESS:		Phone: 1-877-317-6776 (U.S.)       1 412 317 6776 (Brazil / other countries)   Code: Oi   Replay: 877-344-7529 (U.S.)       1 412 317 0088 (Brazil / other countries)   Available until November 9, 2010 (code 444753 #) dial 1 to start
WEBCAST:		Clique aqui		WEBCAST:		Clique aqui

A complementary presentation will be available before the start of the conference call at http://www.oi.com.br/ir

C ONTENTS

 

1		H IGHLIGHTS			2
2		O PERATING P ERFORMANCE			3
3		C ONSOLIDATED R ESULTS			5
4		D EBT AND C APITAL E XPENDITURE			12
5		A DDITIONAL I NFORMATION			17
6		F INANCIAL S TATEMENTS			20

 

Tele Norte Leste Participações   Outstanding shares (‘000): 382,632 TNLP3: R$31.45 (127,591 thousand shares) TNLP4: R$24.20 (255,041 thousand shares) TNE: US$14.08 ADR Market Capitalization (Million): R$10,185, US$6,012		Telemar Norte Leste   Outstanding shares (‘000): 238,607 TMAR3: R$59.89 (107,063 thousand shares) TMAR5: R$44.90 (130,480 thousand shares) TMAR6: R$41.08 (1,064 thousand shares) Market Capitalization (Million): R$12,314 US$7,268
Brasil Telecom   Outstanding shares (‘000): 589,789 BRTO3: R$15.00 (203,423 thousand shares) BRTO4: R$11.15 (386,366 thousand shares) BTM: US$19.85 PN ADR / US$8.62 ON ADR Market Capitalization (Million): R$7,359 US$4,344

Notes: (1) Prices at the end of the 3rd quarter of 2010; (2) Outstanding ex-treasury shares; (3) Market Value based on unadjusted shares.

 

 

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Rio de Janeiro, October 28, 2010. Tele Norte Leste Participações S.A. (Bovespa: TNLP4 and TNLP3), Telemar Norte Leste S.A. (Bovespa: TMAR3, TMAR5 and TMAR6) and Brasil Telecom S.A. (Bovespa: BRTO3 and BRTO4) are pleased to announce their third quarter 2010 results. This report contains the consolidated data of Tele Norte Leste Participações and its direct and indirect subsidiaries as of September 30, 2010.

1) H IGHLIGHTS IN THE Q UARTER :

 

•

At the end of September 2010, Revenue Generating Units totaled 62.4 million.

 

•

Consolidated Gross Revenue amounted to R$11,409 million and consolidated Net Revenue equaled R$7,327 million in 3Q10.

 

•

Consolidated EBITDA reached R$2,714 million in 3Q10, with a 37.0% margin. The EBITDA increase reflects the success of the company’s 2010 strategy, which focused on increasing profitability and capturing synergies in costs and expenses through the operational integration with Brasil Telecom.

 

•

Net Earnings reached R$427 million in 3Q10 (R$1.117/share; US$0.639/ADR), totaling R$1,367 million in the year to date.

 

•

Consolidated Net Debt totaled R$19.3 billion. Net Debt-to-recurring EBITDA in the past 12 months stood at 1.9 times, also in line with the strategy of reducing the company’s leverage, as announced at the start of 2010.

 

•

Cash Generation before Capex amounted to R$2.4 billion during the quarter, totaling R$6.6 billion in the year through September.

 

		Quarter												9M
TNL Consolidated		3Q09				2Q10				3Q10				9M09				9M10				YoY
Revenue Generating Unit (‘000)			60,515				62,557				62,401				60,515				62,401				3.1	%
Lines in Service (‘000)			21,442				20,759				20,410				21,442				20,410				-4.8	%
Fixed Broadband Subscribers (‘000)			4,142				4,307				4,324				4,142				4,324				4.4	%
Mobile Subscribers (‘000)			34,818				37,226				37,387				34,818				37,387				7.4	%
Pay TV Subscribers (‘000)			113				265				280				113				280				147.8	%
Net Revenue (R$ million)			7,553				7,394				7,327				22,343				22,182				-0.7	%
EBITDA (R$ million)			2,668				2,674				2,714				7,494				7,921				5.7	%
EBITDA Margin (%)			35.3	%			36.2	%			37.0	%			33.5	%			35.7	%			2.2 p.p.
Net Earnings (R$ million)			64				444				427				-71				1,367				—
Net Debt (R$ million)			21,143				20,955				19,324				21,143				19,324				-8.6	%
Available Cash (R$ million)			7,409				11,400				11,957				7,409				11,957				61.4	%
CAPEX (R$ million)			1,345				446				600				3,190				1,418				-55.5	%
Net Debt / EBITDA			2.1				2.1				1.9				2.1				1.9				-9.5	%

 

 

*	EBITDA and EBITDA Margin in 3Q09 are recurring.

 

 

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2) C ONSOLIDATED O PERATING P ERFORMANCE :

At the end of September 2010, Revenue Generating Units (RGUs) totaled 62.4 million, virtually unchanged when compared to the prior quarter and up 3.1% in 12 months. It is again important to note that the company’s priorities for 2010 are to increase profitability and reduce its leverage. As a result, it has been less aggressive, then its competitors, in gaining additional market share at any price during this year.

We highlight that the total RGUs include fixed lines in service (20,410 thousand), Oi Mobile clients (37,387 thousand), fixed broadband users (4,324 mil) and Pay-TV subscribers (280 thousand). Mobile broadband users (629 thousand) are included in the total for Oi Mobile.

Wireline – Oi Fixed

During 3Q10 the fixed lines in service base decreased by 1.7%, and by 4.8% year over year. Provided that the reduction in fixed lines is a global trend, and aiming to protect the base, the company continues to offer differentiated products, such as Alternative Plans, Pay TV and Oi Conta Total (bundle). It is worth highlighting that at the end of 3Q10 we launched Oi Conta Total in Region II.

Alternative plans ended the quarter with 12.9 million clients, in a 2.5% quarterly reduction and an 11.4% increase since 3Q09. At the end of 3Q10, such plans already accounted for 63.3% of all fixed lines in service.

Broadband – fixed + mobile

At the end of September 2010, the number of fixed broadband users (Oi Velox) increased 4.4% from the year-ago period, totaling 4,324 thousand users and accounting for 21.0% of the fixed lines in service (20.5% in 2Q10).

The user base for the 3G service, which encompasses mini-modem users and mobile data plans, increased by 73 thousand in the quarter (+13.1%) and 224 thousand from 3Q09 (+55.3%), reaching 629 thousand clients at the end of 3Q10: this total includes 462 thousand mini modem clients and 167 thousand mobile phone data packages.

Considering fixed and mobile users, the broadband user base grew 1.9% quarter over quarter and 8.9% year over year.

Wireless – Oi Mobile

Net client additions to the mobile segment totaled 161 thousand in the quarter and 2,569 thousand since 3Q09, reaching 37,387 thousand customers in 3Q10. Regions II and III were the main responsibles for the net additions.

 

 

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The increase in the mobile base raised its participation in RGUs to 59.9% (57.5% in 3Q09).

In 3Q10, the client base with Oi Control rose again, totaling 1,856 thousand users, up 9.3% and 33.1% in the quarter and in the year, respectively. Since the start of the year, the company has pushed the sale of Oi Control pre because it has post-paid features such as recurring revenue, as the client authorizes a monthly charge on his credit card. Also, the post-paid client base rose 1.2% from 2Q10 and 9.2% since 3Q09, ending 3Q10 with 4,569 thousand users. The post-paid user base and Oi Control accounted for 17.2% of the total base in the mobile segment at the end of 3Q10 (16.7% in 2Q10), reflecting the company’s strategy of boosting earnings and focusing on highend clients.

The base for pre-paid users at the end of 3Q10 totaled 30,962 thousand, accounting for 82.8% of the total base, in a 5.9% year-over-year growth.

The “Oi Conta Total” plan remained stable from the previous quarter, totaling 1,423 thousand clients, which represents 39.5% of the base for post-paid clients in Region I. At the end of 3Q10, Oi launched this product in Region II expecting to see this plan expand in the coming quarters.

Video – Oi TV

At the end of September 2010, Pay TV using DTH technology was already offered in 10 states (Bahia, Espírito Santo, Minas Gerais, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina, Sergipe, Goiás and Ceará).

The Pay TV subscription base ended the quarter with 280 thousand clients. It grew by 15 thousand clients compared with the previous quarter and by 167 thousand since 3Q09.

It must be noted that the company has focused its efforts on selling Oi TV to creditworthy clients in the fixed segment and mainly for the income C and D classes.

 

 

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Table 2 – Consolidated Operational Indicators

 

		3Q09				2Q10				3Q10				QoQ				YoY
Wireline Services - “Oi Fixo”
(a) Lines in Service (‘000)			21,442				20,759				20,410				-1.7	%			-4.8	%
Residential			15,272				14,778				14,487				-2.0	%			-5.1	%
Commercial			5,317				5,131				5,088				-0.8	%			-4.3	%
Public Telephones			853				849				836				-1.5	%			-2.0	%
Alternatives Plans (‘000)*			11,609				13,252				12,927				-2.5	%			11.4	%
Proportion of Lines in Service (%)			54.1	%			63.8	%			63.3	%			-0.5	p.p.			9.2	p.p.
ARPU Fixed (R$)			58.4				55.2				55.3				0.2	%			-5.3	%
Fixed Broadband Services - “Oi Velox”
(b) Fixed Broadband Subscribers (‘000)			4,142				4,307				4,324				0.4	%			4.4	%
Proportion of Lines in Service (%)			19.1	%			20.5	%			21.0	%			0.5	p.p.			1.9	p.p.
ARPU Fixed Broadband (R$)			43.8				42.6				43.8				2.8	%			0.0	%
Wireless Services - “Oi Móvel”
(c) Mobile Subscribers (‘000)			34,818				37,226				37,387				0.4	%			7.4	%
Pre-Paid Plans			29,239				31,015				30,962				-0.2	%			5.9	%
Post-Paid Plans			4,185				4,514				4,569				1.2	%			9.2	%
Oi Control			1,394				1,698				1,856				9.3	%			33.1	%
Oi Conta Total (‘000)**			1,448				1,421				1,423				0.1	%			-1.7	%
3G Clients (‘000)			405				556				629				13.1	%			55.3	%
Market Share Oi (%) - Brazil			21.0	%			20.1	%			19.5	%			-0.6	p.p.		-1.5	p.p.
Proportion of Net Additions in Brazil (%)			13.6	%			10.2	%			2.5	%			-7.7	p.p.			-11.1	p.p.
Monthly Churn rate (%)			3.8	%			3.4	%			4.1	%			0.7	p.p.			0.3	p.p.
ARPU Mobile (R$)			22.2				22.4				22.9				2.2	%			3.2	%
Vídeo - “Oi TV”
(d) Pay TV Subscribers (‘000) ***			113				265				280				5.7	%			147.8	%
RGU - Revenue Generating Unit (a+b+c+d) (´000)			60,515				62,557				62,401				-0.2	%			3.1	%

 

*	Alternative plans include “Planos de Minutos,” “Plano Economia,” “Digitronco,” “PABX Virtual” and others.

**	Includes Oi Conta Total Professional

3) C ONSOLIDATED F INANCIAL R ESULTS :

3.1) Revenue:

Consolidated gross revenue fell by 1.4% in the quarter and 1.6% since 3Q09, totaling R$11,409 million at the end of 3Q10. Consolidated net revenue amounted to R$7,327 million in 3Q10, in line with 2Q10 and 3.0% lower since 3Q09.

The fall in revenue stems from a less aggressive strategy of the company in gaining market share due to its quest for increasing proftability throughout 2010.

 

 

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Table 3 – Breakdown of Consolidated Gross Revenue

 

		Quarter																				9M												%
R$ million		3Q09				2Q10				3Q10				QoQ (%)				YoY (%)				9M09				9M10				YoY (%)				9M09				9M10
Wireline			8,990				8,674				8,483				-2.2				-5.6				26,680				25,999				-2.6				78.4				75.3
Local (exc. - VC1)			3,279				3,229				3,160				-2.1				-3.6				9,846				9,633				-2.2				28.9				27.9
Local Fixed-to-Mobile (VC1)			1,149				991				1,001				1.0				-12.9				3,430				3,011				-12.2				10.1				8.7
Long Distance FF + PCS			1,192				1,068				1,062				-0.6				-10.9				3,554				3,345				-5.9				10.4				9.7
LD Fixed-to-Mobile (VC2/3)			367				309				299				-3.2				-18.5				1,095				944				-13.8				3.2				2.7
Network Usage			233				225				240				6.7				3.0				655				704				7.5				1.9				2.0
Data			2,199				2,362				2,318				-1.9				5.4				6,392				6,958				8.9				18.8				20.2
Public Phones			236				153				86				-43.8				-63.6				735				404				-45.0				2.2				1.2
Additional Services / Advanced Voice			335				336				318				-5.4				-5.1				973				1,001				2.9				2.9				2.9
Wireless			2,548				2,805				2,831				0.9				11.1				7,171				8,237				14.9				21.1				23.9
Services			2,466				2,741				2,798				2.1				13.5				6,900				8,084				17.2				20.3				23.4
Subscriptions			589				660				669				1.4				13.6				1,665				1,938				16.4				4.9				5.6
Outgoing Calls			932				1,020				1,060				3.9				13.7				2,680				3,028				13.0				7.9				8.8
Domestic/Inter. Roaming			30				30				25				-16.7				-16.7				92				94				2.2				0.3				0.3
Network Usage			619				631				648				2.7				4.7				1,701				1,890				11.1				5.0				5.5
Data / Value Added			296				401				395				-1.5				33.4				763				1,134				48.6				2.2				3.3
Handset Sales			82				64				33				-48.4				-59.8				272				154				-43.4				0.8				0.4
Other Services*			59				89				95				6.7				61.0				171				285				66.7				0.5				0.8
Wireline - Gross			8,990				8,674				8,483				-2.2				-5.6				26,680				25,999				-2.6				78.4				75.3
Wireless - Gross			2,548				2,805				2,831				0.9				11.1				7,171				8,237				14.9				21.1				23.9
Other Services* - Gross			59				89				95				6.7				61.0				171				285				66.7				0.5				0.8
Total Gross Revenue			11,597				11,568				11,409				-1.4				-1.6				34,022				34,522				1.5				100.0				100.0
Consolidated Net Revenue			7,553				7,394				7,327				-0.9				-3.0				22,343				22,182				-0.7				100.0				100.0
Wireline - Net			5,848				5,521				5,431				-1.6				-7.1				17535.0				16,611				-4.3				78.5				74.9
Wireless - Net			1,672				1,810				1,826				0.9				9.2				4708.1				5,361				16.5				21.1				24.2
Other Services - Net			33				63				69				9.5				109.1				99.0				210				110.6				0.4				0.9

 

*	Pay TV and Paggo

Wireline Services:

Gross revenue from wireline services was 2.2% lower than that recorded in 2Q10 and 5.6% compared with the same period last year.

Revenue from network usage expanded 6.7% in the quarter and 3.0% year over year, partially offsetting the decline in revenue in the fixed segment.

Local Service:

 

Fixed-to-Fixed: Local (ex-vc1) (subscription, traffic, installation fees)		Revenue from fixed-to-fixed local services dropped 2.1% in the quarter and 3.6% since 3Q09, basically as a result of smaller traffic and a lower base of fixed lines in service.
Fixed-to-Mobile: (VC1)		Revenue from fixed-to-mobile service remained stable in the quarter and declined 12.9% compared with the same period a year earlier basically as a result of lower traffic.

 

 

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Long Distance Services FF + SMP + VC2 and VC3:

In 3Q10, revenue from long distance service dropped 1.2% in the quarter and 12.7% year over year. This change resulted mainly from smaller traffic and a reduction in SMP service, due to stiffer competition.

Remuneration for wireline Network Usage:

After the R$125 million elimination in inter-company transactions, remuneration for network usage rose 6.7% compared with the prior quarter and 3.0% from the same period last year. The year-over-year jump is due to the inclusion of mobile-originated calls to fixed telephones in the bonus offered by mobile operators. Additionally, settlements agreements made with other telecommunication operators had a positive impact on the quarterly performance.

Data Transmission Service:

Revenue from data transmission service fell 1.9% in the quarter and rose 5.4% year over year. The quarterly change basically stems from a reduction in special projects, which included agreements with the State Security Agency and Education Agency in the state of Rio de Janeiro. The annual increase is mostly related to higher corporate services, the expansion of the “Oi Velox” base, and EILD services from new data transmission contracts in leased lines.

Wireless Segment:

Revenue in the wireless segment rose 0.9% in 3Q10 and 11.1% year over year, totaling R$2,831 million. This increase results from higher: (a) subscription revenue, (b) outgoing calls and (c) network usage. The rise in revenue from data / value added also contributed positively to the performance compared with the same period in 2009.

As a result of the post-paid client base expansion, subscription revenue rose 1.4% and 13.6% in the quarter and year over year, respectively.

Revenue from outgoing calls jumped 3.9% in the quarter and 13.7% compared with 3Q09, mainly due to a positive contribution of “Oi Bonus Extra” product, which encourages the pre paid client to increase their recharge with a minutes package that can be boosted five-fold to talk to another Oi or a fixed-line Oi. This product aims to increase ARPU of this customer.

In 3Q10 consolidated revenue from mobile network use increased 2.7%, and 4.7% compared with 3Q09. This change was influenced by the increase in the average client base in Regions I and III and by the bonuses offered by mobile phone operators (on-net calls and calls to fixed lines), as the clients have unused resources for off-net calls (to other mobile phones).

 

 

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Revenue from data / value added fell 1.5% in the quarter and rose 33.4% year over year. The annual rise results basically from the expansion of the 3G (internet mobile access) user base.

Following the company’s strategy of focusing on higher-yielding clients, the ARPU in the mobile segment reached R$22.9, in a 2.2% growth in the quarter and 3.2% since 3Q09.

3.2) Operating Expenses:

Operating expenses (excluding depreciation/amortization) totaled R$4,613 million in 3Q10, decreasing 2.2% quarter over quarter and 10.9% year over year.

Table 4 – Breakdown of Operating Expenses

 

		Quarter																				9M
COST AND EXPENSES
Item - R$ million		3Q09**				2Q10				3Q10				QoQ (%)				YoY (%)				9M09**				9M10				Chg. (%)
Interconnection			1,278				1,208				1,216				0.7				-4.9				3,924				3,778				-3.7
Personnel			516				405				402				-0.7				-22.1				1,460				1,197				-18.0
Materials			108				59				59				0.0				-45.4				321				195				-39.3
Handset Costs/Other (COGS)*			120				49				32				-34.7				-73.3				464				123				-73.5
Third-Party Services			1,787				1,720				1,762				2.4				-1.4				5,302				5,176				-2.4
Marketing			137				118				132				11.9				-3.6				419				374				-10.7
Rent and Insurance			401				389				386				-0.8				-3.7				1,184				1,136				-4.1
Provision for Bad Debts			254				247				250				1.2				-1.6				1,059				802				-24.3
Other Operating Expenses (Revenue), Net			574				524				374				-28.6				-34.8				2,959				1,482				-49.9
TOTAL			5,175				4,719				4,613				-2.2				-10.9				17,093				14,262				-16.6

*	Other: sim card, mini modem, TV transmission equipment and mobile phone peripherals.

**	Reflects the quarterly balance sheet as of September 2009, which was filed again in March 2010

Interconnection:

The consolidated interconnection cost amounted to R$1,216 in 3Q10, virtually stable compared with the previous quarter and 4.9% lower than 3Q09. This performance was affected by a reduction in traffic originated on Oi Mobile’s network and ended on those of other carriers, mainly due to the increase of on-net calls.

Personnel expenses:

Spending on personnel was virtually stable in the quarter and decreased by 22.1% year over year, totaling R$402 million in 3Q10. Higher spending for the workforce optimization in 2009, during the integration with BrT, explain this result.

Handset Costs and Others (COGS):

Handset costs and others (COGS) dropped 34.7% in the quarter and 73.3% since 3Q09.

 

 

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The decision of adopting in Region II the strategy of subsidizing only the post-paid handsets sold in the corporate segment, and the sale of sim cards alone in the prepaid segment, contributed to reducing COGS, resulting in a lower acquisition cost of clients.

Third-Party Services:

Third-party services expenses reduced 1.4% compared with the same period last year and increased 2.4% in the quarter, reaching R$1,762 million in 3Q10. The year-over-year reduction basically consists in lower spending on plant maintenance due to the synergies originated by the Oi-BrT merger. When compared with the prior quarter, there was an increase in consulting expenses.

Marketing:

Marketing expenses decreased 3.6% compared with 3Q09 and rose 11.9% in the quarter, hitting R$132 million in 3Q10. This quarterly increase basically stems from expenses related to the launch of the Oi Conta Total product in Region II and additional branding efforts in Region III.

Provision for Bad Debt:

The provision for bad debt remained stable year over year and quarter over quarter, totaling R$250 million in 3Q10. The allowance for bad debt accounted for 2.2% of gross revenue in 3Q10 (2.1% in 2Q10 and 2.2% in 3Q09).

Other Operating Expenses (Income):

“Other expenses (income)” dropped in the quarter and year over year by 28.6% and 34.8%, respectively, amounting to R$374 million in 3Q10.

The quarterly reduction stems from gains in some civil and tax suits, that allowed the reversal of part of the respective provisions for contingencies. The year-over-year result also reflects written down assets whose recovering was uncertain back in 3Q09.

In order to better understand the quarterly results, below is a summary of the contingencies and deposits in court related to the Expansion Plans (PEX) of Brasil Telecom.

 

		Statement for Expansion Plan
Brasil Telecom - R$ thousand		Contigency				Deposits in Court
Balance on 06/30/2010			2,821,391				3,958,324
Additions			24,300				156,376
Payments			(134,243	)			—
Withdrawals			—				(196,985	)
Inflation Accounting			1,177				30,688
Balance on 09/30/2010			2,712,625				3,948,403

 

 

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3.3) Other Items in the Consolidated Result:

EBITDA:

Table 5 – EBITDA and EBITDA Margin

 

		Quarter																				9M
TNL Consolidated		3Q09				2Q10				3Q10				QoQ				YoY				9M09				9M10				YoY
EBITDA (R$ Mn)			2,668				2,674				2,714				1.5	%			1.7	%			7,494				7,921				5.7	%
EBITDA Margin (%)			35.3	%			36.2	%			37.0	%			0.8 p.p.				1.7 p.p.				33.5	%			35.7	%			2.2 p.p.
TMAR Consolidated		3Q09				2Q10				3Q10				QoQ				YoY				9M09				9M10				YoY
EBITDA (R$ Mn)			2,680				2,685				2,724				1.5	%			1.6	%			7,528				7,952				5.6	%
EBITDA Margin (%)			35.6	%			36.4	%			37.3	%			0.9 p.p.				1.7 p.p.				33.8	%			35.9	%			2.1 p.p.
BrTO Consolidated		3Q09				2Q10				3Q10				QoQ				YoY				9M09				9M10				YoY
EBITDA (R$ Mn)			1,003				796				992				24.6	%			-1.1	%			2,954				2,655				-10.1	%
EBITDA Margin (%)			35.7	%			30.8	%			39.1	%			8.3 p.p.				3.4 p.p.				35.9	%			34.2	%			-1.7 p.p.

 

*	EBITDA and EBITDA margin in 3Q09 and 9M09 are recurring.

Consolidated EBITDA amounted to R$2,714 million in 3Q10 with a 37.0% margin, which represents a 1.7% increase from 3Q09 and 1.5% compared with 2Q10. EBITDA and EBITDA margin improvements reflect the company’s strategy implemented this year of boosting profitability and capturing of the synergies following the integration of BrT and Oi.

Net Financial Income (Expenses):

Net financial expenses shrank 6.4% since the previous quarter and 2.4% compared with the same period in 2009, reaching R$524 million in 3Q10, reflecting the lower net debt, in line with the strategy of deleveraging the company.

 

 

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Table 6 – Net Financial Income (Expenses)

 

		Quarter												9M
R$ Million		3Q09				2Q10				3Q10				9M09				9M10
Financial Income			355				494				504				1,217				1,360
Interest on financial investments			188				214				266				599				641
Other financial income			167				280				238				618				719
Financial Expenses			(892	)			(1,054	)			(1,028	)			(2,880	)			(3,018	)
Interest on loans and financing			(559	)			(659	)			(721	)			(1,834	)			(1,963	)
Foreign exchange effect on loans and financing			42				(81	)			32				(33	)			(113	)
Other Financial Expenses			(374	)			(314	)			(340	)			(1,012	)			(942	)
Net Financial Income (Expenses)			(537	)			(560	)			(524	)			(1,663	)			(1,658	)

 

*	Net of foreign exchange hedge result

Depreciation/Amortization:

Consolidated spending on depreciation and amortization in 3Q10 was stable compared with 2Q10, totaling R$1,141 million. Compared with 3Q09, there was a 22.1% reduction, stemming from a change in the economic useful life of the fixed assets ocurred following the acquisition of BrT. The appraisal was approved in December 2009 by the Company’s Board of Directors, and its effect started to be reflected in the results in 1Q10

Table 7 – Depreciation and Amortization

 

		Quarter																				9M
R$ million		3Q09				2Q10				3Q10				QoQ (%)				YoY (%)				9M09				9M10				YoY (%)
Fixed Line / TNL			1,062				844				836				-0.9				-21.3				3,069				2,514				-18.1
Depreciation			853				653				612				-6.3				-28.3				2,576				1,905				-26.0
Amortization of Goodwill			209				192				225				17.2				7.7				493				610				23.7
Mobile Business			402				289				304				5.2				-24.4				1,153				883				-23.4
Depreciation			324				211				226				7.1				-30.2				918				647				-29.5
License/Deferred Amortization			78				79				79				0.0				1.3				235				236				0.4
Total			1,464				1,134				1,141				0.6				-22.1				4,222				3,397				-19.5

Net Earnings:

In 3Q10 the company posted net earnings of R$427 million, amounting to R$1,367 million in the first nine months of 2010, compared with a loss in the first nine months of 2009. It is worth mentioning that such loss reflected non-recurring expenses mostly related to the Oi-BrT integration, which were essential to capture the synergies throughout 2010. When compared with the previous quarter, the lower costs and the improvement in net financial income influenced the positive result.

 

 

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Table 8 – Net Earnings

 

		Quarter												9M
TNL Consolidated		3Q09				2Q10				3Q10				9M09				9M10
Net Earnings (R$ Mn)			64				444				427				-71				1,367
Net Margin			0.9	%			6.0	%			5.8	%			-0.3	%			6.2	%
Earnings per Share (R$)			0.168				1.160				1.117				-0.185				3.573
Earnings per ADR (US$)			0.090				0.648				0.639				-0.065				1.999
TMAR Consolidated		3Q09				2Q10				3Q10				9M09				9M10
Net Earnings (R$ Mn)			66				543				549				-110				1,680
Net Margin			0.9	%			7.4	%			7.5	%			-0.5	%			7.6	%
Earnings per Share (R$)			0.276				2.280				2.299				-0.459				7.042
BrTO Consolidated		3Q09				2Q10				3Q10				9M09				9M10
Net Earnings (R$ Mn)			259				237				407				-1,258				944
Net Margin			9.2	%			9.2	%			16.0	%			-15.3	%			12.2	%
Earnings per Share (R$)			0.473				0.401				0.691				-2.297				1.601

4) D EBT AND C APITAL E XPENDITURE :

4.1) Debt:

Gross debt totaled R$31,281 million in September 2010, R$1.1 billion lower than that recorded in the previous quarter, mainly resulting from hefty amortizations during the quarter, which exceeded borrowings in the period. Regarding amortizations, we highlight two Promissory Notes - TNL: R$1.5 billion and TMAR: R$4.0 billion. The company’s borrowings included Real Estate Receivables Securities - CRI (R$1.6 billion) at subsidiaries controlled by TMAR and BrT and the launch of a new bond in the international market (US$1.0 billion). The Bond has a 5.5% coupon, and is 400 basis points lower than the coupon on the Bond that the company launched in April 2010 (9.5%). Also, the company offered to holders of the April 2009 bond the possibility to exchange it for the new 2010 bond. More than 80% of the holders accepted the proposal. So, the new issuance balance after the exchange totaled US$1.7 billion and the balance of the bonds issued in April/09 ends with US$142 million.

As a result, consolidated net debt ended the quarter at R$19,324 million, in a R$1,631 million reduction since 2Q10, and represented on a Net Debt-to-EBITDA ratio 1.9 times in the past 12 months. The reduction is in line with the deleveraging strategy, which the company announced previously to the market.

At the end of the quarter, about 23% of the total debt was linked to foreign currencies. However, as a result of hedging operations, only the equivalent of R$946 million (US$559 million; 3% of the total) is exposed to exchange variations. It is worth noting that debt payments through August 2012 are covered by hedging contracts and a cash balance kept in dollars.

 

 

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The amortizations and borrowings mentioned in the first paragraph contributed to improving the debt profile by extending in one year its average maturity and reducing the effective cost of debt in the third quarter of 2010 to 87.4% of the CDI rate.

Table 9 – Debt – TNL Consolidated

 

R$ million		Sep-09				Jun-10				Sep-10				% Gross Debt
Short Term			9,856				12,143				8,479				27.1	%
Long Term			18,696				20,212				22,802				72.9	%
Total Debt			28,552				32,355				31,281				100.0	%
In Local Currency			22,810				26,443				24,076				77.0	%
In Foreign Currency			4,748				5,401				6,623				21.2	%
Swaps			994				510				582				1.9	%
(-) Cash			7,409				11,400				11,957				38.2	%
(=) Net Debt			21,143				20,955				19,324				61.8	%

Table 10 – Debt – TMAR Consolidated

 

R$ million		Sep-09				Jun-10				Sep-10				% Gross Debt
Short Term			9,625				10,533				6,912				23.4	%
Long Term			18,912				19,965				22,569				76.6	%
Total Debt			28,537				30,498				29,481				100.0	%
In Local Currency			23,352				24,926				22,556				76.5	%
In Foreign Currency			4,317				5,087				6,355				21.6	%
Swaps			868				485				570				1.9	%
(-) Cash			7,009				10,724				11,397				38.7	%
(=) Net Debt			21,528				19,774				18,084				61.3	%

Table 11 – Debt – BrTO Consolidated

 

R$ million		Sep-09				Jun-10				Sep-10				% Gross Debt
Short Term			1,017				1,263				1,197				27.0	%
Long Term			3,524				2,938				3,244				73.0	%
Total Debt			4,541				4,201				4,441				100.0	%
In Local Currency			3,866				3,581				3,972				89.4	%
In Foreign Currency			489				487				400				9.0	%
Swaps			186				133				69				1.6	%
(-) Cash			3,262				4,662				5,470				123.2	%
(=) Net Debt			1,279				-461				-1,029				23.2	%

 

*	Includes private debentures acquired from TMAR

 

 

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The schedule for the amortization of long-term consolidated gross debt is shown below:

Table 12 – Schedule for the Amortization of Long-Term Consolidated Gross Debt

 

(R$ million)		2010				2011				2012				2013				2014				2015 onwards				Total
Gross Debt amortization			1,723				7,421				5,639				4,297				4,689				7,512				31,281
Foreign Currency Amortization			749				942				542				644				710				3,619				7,205
Local Currency Amortization			974				6,479				5,097				3,654				3,979				3,893				24,076

Table 13 – Main Creditors

 

Gross Debt		Contract’s currency				Debit balance (R$ milion)
National Development Banks							6,757
BNDES			R$				6,184
Others			R$				572
International Development Banks and Export Credit Agency							2,928
Asia			Yen / US$				1,422
Europe			US$				1,506
Comercial Banks							7,816
In Local Currency			R$				7,649
In Foreign Currency			Yen /US$				167
Capital Market							13,858
Debentures			R$				9,970
Bonds			US$				3,889
Debt before hedge and borrowing cost							31,359
Hedge							582
Borrowing Cost							(660	)
TOTAL DEBT							31,281

4.2) Capital expenditure:

Consolidated capital expenditure amounted to R$600 million in 3Q10, totaling R$1.4 billion in the year through September. Throughout the year the company has managed to optimize the combined mobile and data networks of Oi and BrT, capturing relevant synergies. The increase in capacity (physical investment) becomes feasible even as cash expenditure is lower than that seen in 2009.

 

 

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The fixed segment received 22.7% of the capital expenditures, while data and broadband totalled 43.7%, including projects in digital inclusion in schools, increase of speed and expansion the supply of broadband (Velox) services and the offer of data packages to corporate clients.

Investment in the mobile segment accounted for 33.7% and was earmarked for the expansion of coverage to all regions.

The bulk (77%) of Capex in the quarter was again directed to fast-growth businesses: mobile and data / broadband.

Table 14 – Capital Expenditure

 

		Quarter																				Acumulated in 9M
R$ million		3Q09				2Q10				3Q10				QoQ (%)				YoY (%)				9M09				9M10				YoY (%)
Wireline			725				281				398				41.6				-45.1				1,719				916				-46.7
Growth & Quality			306				99				136				37.4				-55.6				746				316				-57.6
Data / Communic. Systems / Other			419				182				262				44.0				-37.5				973				599				-38.4
Wireless			620				166				202				21.7				-67.4				1,471				503				-65.8
Expansion and Quality			620				166				202				21.7				-67.4				1,471				503				-65.8
TOTAL			1,345				446				600				34.5				-55.4				3,190				1,418				-55.5

4.3) Consolidated Cash Flow:

The company’s operating cash generation amounted to R$2,427million (R$6,567 million in the nine months of 2010), which was concentrated in financing activities. During this quarter, we borrowed approximately R$5,901 million and earmarked R$6,853 for the repayment of principal.

 

 

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Table 15 – Cash Flow: Indirect Cash Flow Statement

 

R$ Million		2Q10				3Q10
Earnings Befores Taxes			983				1,067
Result Items that do not affect the Cash Balance			2,629				2,156
Changes to Shareholder’s Equity			(210	)			221
Cash Balance from Operations*			(1,650	)			(1,017	)
Operating cash generation			1,753				2,427
Cash balance invested in capital expenditure			(1,168	)			(597	)
Cash flow net of capital expenditure			584				1,830
Cash balance invested in financing activities			1,839				(952	)
Cash flow net of financing activities			2,423				878
Initial cash balance			6,197				8,619
Final cash balance			8,619				9,497

 

*	Financial charges, income tax, minority interests, dividends and interest on capital, surplus reserve and treasury shares.

5) D EFINITIONS :

5.1)EBITDA:

The company measures its Adjusted EBITDA as net earnings or loss before net financial income (expenses), income tax and social contribution, depreciation and amortization, minority interests and equity accounting.

Adjusted EBITDA is not an accounting principle adopted in Brazil, U.S. or IFRS, thus it does not represent the cash flow for the indicated periods and must not be considered as an operating performance gauge, or as a replacement for cash flow in order to measure liquidity. Adjusted EBITDA does not have a standard meaning and the calculation of company’s Adjusted EBITDA may not be comparable to the EBITDA or Adjusted EBITDA of other corporations.

Even though Adjusted EBITDA does not provide a means to measure the operating cash flow in accordance with the accounting principles adopted in Brazil, as well as the IFRS or U.S. GAAP, the company’s Management understands that Adjusted EBITDA is an important indicator to analyze operating performance and the liquidity of the company because it is not affected by (i) interest rate swings, (ii) changes in income tax and social contribution, as well as (iii) by the levels of depreciation and amortization, being commonly used by investors and market analysts.

In addition, Adjusted EBITDA is also utilized by some investors and financial analysts as a measure of operating performance of companies and/or their cash flow.

 

 

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		Quarter												9M
R$ million		3Q09				2Q10				3Q10				9M09				9M10
AJUSTED EBITDA
Net Income			64				444				427				(71	)			1,367
Net Financial Income			537				560				524				1,663				1,658
Income Tax and Social Contribution			169				320				333				52				736
Depreciation and Amortization			1,464				1,134				1,141				4,222				3,398
Minority Interest			163				219				307				(591	)			786
Equity Accounting			(19	)			(2	)			(18	)			(26	)			(24	)
Total			2,378				2,674				2,714				5,249				7,921

5.2) NET DEBT:

The company measures its net debt as a balance of loans, considering the balance of debentures (convertible and not convertible) and derivative financial instruments, minus the balance of cash and cash equivalents, and financial investments. Other companies may calculate net debt differently.

Net debt is not a gauge in keeping with the Brazilian Accounting Principles, by the IFRS or U.S. GAAP. However the company’s administration understands that the measurement of Net Debt is useful to the company, investors and financial analysts, helping assess financial leverage compared with operating cash flow.

PLEASE NOTE:

 

1)

The main spreadsheets in this Press Release will be available on the company’s website ( www.oi.com.br/ir ) in “About the Company / the Company in Numbers.”

 

2)

The definition of terms used in the Press Release are also available in the glossary on the company’s web site:

http://www.mzweb.com.br/oi/web/conteudo_en.asp?idioma=1&tipo=31852&conta=44&img=31851

 

 

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6) A DDITIONAL I NFORMATION :

6.1) Launch of Oi Conta Total in Region II

On September 15, 2010, the company launched its convergent product, Oi Conta Total, in Region II. This product encompasses mobile and fixed services, broadband internet and long-distance calls, which can be used depending on the client’s profile. Anothers advantages of Oi Conta Total are that clients talk for free with other mobile phones that are part of the plan, and can make unlimited local calls from fixed lines to any other fixed line.

With the launch of Oi Conta Total, Oi finalizes the release of all its products in Region II.

6.2) Market-share in the city of São Paulo

Two years after the launch of Oi Mobile in São Paulo (Region III), the company already has 8 million clients there, accounting for a 13.2% market share in the State and almost 18% of Sao Paulo’s metropolitan area.

6.3) Colombia office is inaugurated

Oi inaugurated on September 08, 2010 its office in Bogota, Colombia, through an office of Globenet, Oi’s submarine cables company (to link Brazil to the Caribbean and the U.S.). The initial focus of this expansion is to sell network capacity to other Telecom companies and internet providers.

6.4) Issuances in the international market

A) Bond Issuance in the International Market: US$1 billion

TMAR issued notes representing the company’s debt (“Bonds”) in the international capital market, which are listed on the alternative market of the Singapore Exchange Securities Trading Limited, or SGX-ST. Bank of America Merrill Lynch, BNP Paribas, BTG Pactual and Banco ITAÚ Europa were the lead managers and bookrunners for the issuance. The total amount of the bond was US$1 billion with a coupon of 5.50% per annum, payable semiannually. Demand for the securities totaled US$6 billion, about six-fold the amount issued.

The bonds were rated investment grade by Moody’s (Baa2), S&P (BBB-) and Fitch (BBB-).

B) Exchange of Bonds

TMAR made a private offer to exchange its notes representing the company’s debt (Bonds) issued on April 17, 2009, with a coupon of 9.50% and maturing in 2019 (“Old Notes”) for new bonds with a coupon of 5.50% and maturing in 2020.

Holders of 80.3% of the Old Notes totaling approximately US$602.3 million in principal accepted the offer and tender the exchange.

 

 

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6.5) Oi Paggo

On September 29, 2010, Oi announced a partnership with Banco do Brasil and Cielo to offer the service mobile payment Paggo. The agreement boosts the technology in mobile phone payments in order to offers this convenient service to clients, with quality and security assurance.

The partnership between Oi and BB aim to bolster card issuances, resulting in a expansion of banking services and customer loyalty, while the deal between Oi and Cielo results in a new company that aims to expand the accredited network and the number of transactions involving mobile phones.

For more details, read the Announcement:

http://www.mzweb.com.br/oi/web/arquivos/TNL_TMAR_BRT_Comunicado_20100929_eng.pdf

6.6) Tariff Readjustment

On October 23, 2010, the new tariffs for long-distance and local services (subscription and traffic) became effective, as approved by Anatel.

The highest readjustment for the services basket, of 0.66% for TMAR and BrT, considers a 4.56% variation for the Telecommunication Services Index (IST) from June 2009 through July 2010, as well as the application of an average tariff deflator for 2009 and 2010 of 3.73% (X Factor).

Local interconnection tariffs (TU-RL) were readjusted by 0.66% to R$0.02852 at TMAR and to R$0.03133 at BrT (net amount). Public telephones’ credit were readjusted by 0.41% to R$0.1230 (gross amount). Fixed-to-Mobile tariffs (VC1, VC2, VC3) and VU-M were not readjusted.

In the coming charts we present the new tariffs for Local Service, as well as the maximum prices for Long Distance tariffs:

 

Local Service – Gross Tariffs (R$ - Rio de Jan.)		Current Tariff				Readjusted Tariff
Installation Fees			42.40				42.68
Residential Subscription			43.60				43.89
Non-Residential Subscription and Trunk services			77.54				78.05
AICE Subscription			26.14				26.31
Local Minute (Basic Plan)			0.10749				0.10820
Local Minute (Basic Plan)			0.21498				0.21640
AICE Completing Tariff			0.21498				0.21640
Local Minute (PASOO)			0.04173				0.04201
VCA (PASOO)			0.16693				0.16803
Completing Tariff PASOO			0.16693				0.16803

 

 

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Longa Distance*

 

Distance (Km) – R$		Current Tariff				Readjusted Tariff
0 - 50			0.21199				0.21339
50 -100			0.49348				0.49673
100 - 300			0.62714				0.63128
+ 300			0.68896				0.69350

 

*	Per-minute tariffs for long-distance national calls between 9 a.m. and 12 p.m. and between 2 p.m. and 6 p.m. on weekdays (gross tariffs – RJ-based – differentiated rate).

6.7) CADE Approves Acquisition of Brasil Telecom

On October 20, 2010, CADE (Administrative Council for Economic Defense) approved without any structural restrictions the purchase of BRT by Oi, with the signing of a Performance Commitment Term (TCD in Portuguese).

6.8) Oi Investors Day

The event Oi Investor Day will be held in:

São Paulo – November 11, 2010 (Thursday)

New York – November 30, 2010 (Tuesday)

The event in São Paulo will take place at 5:00 p.m. at the Caesar Park Faria Lima hotel. For more details, visit the hot-site: www.oisday.com.br .

The event in New York will take place at 11:00 a.m. at The Plaza Hotel. More details are available at: www.oisday.com.br/ny .

Oi senior managers will participate in both events to present the financial evolution, operating performance and future strategies of the company.

 

 

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ADDENDUM

COST STATEMENT – TNLP Consolidated

 

		Quarter																				9M
COST AND EXPENSES
Item - R$ million		3Q09 **				2Q10				3Q10				QoQ (%)				YoY (%)				9M09 **				9M10				Chg. (%)
Interconnection			1,278				1,208				1,216				0.7				-4.9				3,924				3,778				-3.7
Personnel			516				405				402				-0.7				-22.1				1,460				1,197				-18.0
Materials			108				59				59				0.0				-45.4				321				195				-39.3
Handset Costs/Other (COGS)*			120				49				32				-34.7				-73.3				464				123				-73.5
Third-Party Services			1,787				1,720				1,762				2.4				-1.4				5,302				5,176				-2.4
Marketing			137				118				132				11.9				-3.6				419				374				-10.7
Rent and Insurance			401				389				386				-0.8				-3.7				1,184				1,136				-4.1
Provision for Bad Debts			254				247				250				1.2				-1.6				1,059				802				-24.3
Other Operating Expenses (Revenue), Net			574				524				374				-28.6				-34.8				2,959				1,482				-49.9
TOTAL			5,175				4,719				4,613				-2.2				-10.9				17,093				14,262				-16.6
Interconnection			1,278				1,208				1,216				0.7				-4.9				3,924				3,778				-3.7
Handset Costs			120				49				32				-34.7				-73.3				464				123				-73.5
Cost of Services			1,593				1,541				1,488				-3.4				-6.6				4,797				4,500				-6.2
Personnel			196				148				142				-4.1				-27.6				571				433				-24.2
Third-Party Services			778				685				697				1.8				-10.4				2,315				2,105				-9.1
Materials			104				52				52				0.0				-50.0				300				175				-41.7
Rent and Insurance			350				424				371				-12.5				6.0				1,024				1,089				6.3
Anatel Concession Contract			44				37				38				2.7				-13.6				116				115				-0.9
Fistel			7				178				176				-1.1				2414.3				339				536				58.1
Other			114				17				13				-23.5				-88.6				133				48				-63.9
Selling Expenses			1,213				1,184				1,206				1.9				-0.6				3,923				3,594				-8.4
Personnel			99				88				90				2.3				-9.1				333				266				-20.1
Third-Party Services			688				693				709				2.3				3.1				1,995				2,059				3.2
Marketing			137				118				132				11.9				-3.6				419				374				-10.7
Materials			3				5				2				-60.0				-33.3				13				10				-23.1
Rent and Insurance			3				1				0				-100.0				-100.0				10				4				-60.0
Other			30				32				24				-25.0				-20.0				95				80				-15.8
Provisions for Bad Debts and Receivable write-of			254				247				250				1.2				-1.6				1,059				802				-24.3
General and Administrative Expenses			623				487				566				16.2				-9.1				1,759				1,606				-8.7
Personnel			221				169				170				0.6				-23.1				557				498				-10.6
Third-Party Services			321				342				357				4.4				11.2				992				1,013				2.1
Materials			2				2				5				150.0				150.0				9				10				11.1
Rent and Insurance			47				(36	)			15				-141.7				-68.1				150				43				-71.3
Other			32				10				19				90.0				-40.6				52				42				-19.2
Other Operating Expenses (Revenue), Net			347				249				104				-58.2				-70.0				2,225				661				-70.3
		Quarter																				9M
Third-Party Services - R$ Million		3Q09				2Q10				3Q10				QoQ (%)				YoY (%)				9M09				9M10				YoY (%)
Network Maintenance (COS - Cost of Services)			606				514				533				3.7				-12.0				1,804				1,577				-12.6
Sales Commissions and Expenses (Selling Exp.)			291				311				296				-4.8				1.7				817				901				10.3
Postage and Collection (Selling Exp.)			159				142				173				21.8				8.8				440				457				3.9
Electricity (COS / G&A)			142				142				139				-2.1				-2.1				424				423				-0.2
Data Processing (COS / G&A)			144				118				117				-0.8				-18.8				377				360				-4.5
Call Center Operations (Selling Exp.)			167				179				188				5.0				12.6				479				550				14.8
Consulting and Legal Services (COS / G&A)			99				117				138				17.9				39.4				381				364				-4.5
Printing and Clearing (Selling Exp.)			26				29				20				-31.0				-23.1				80				72				-10.0
Others			152				168				159				-5.4				4.6				500				471				-5.8
Total			1,787				1,720				1,762				2.4				-1.4				5,302				5,176				-2.4

 

*	Other: sim card, mini modem, TV transmission equipment and mobile phone peripherals.

**	Reflects the quarterly balance sheet as of September 2009, which was filed again in March 2010

 

 

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7) FINANCIAL STATEMENTS

7.1 ) TELE NORTE LESTE PARTICIPAÇÕES – TNLP Consolidated

R$ MILLION

 

Income Statement		3Q09				2Q10				3Q10				9M09				9M10
Wireline Services Revenues			8,989.6				8,673.7				8,483.4				26,680.0				25,999.3
Local Services			4,428.2				4,219.5				4,160.8				13,275.9				12,644.4
Subscription Charges			2,757.8				2,797.9				2,727.4				8,271.4				8,302.6
Local Traffic			488.7				387.8				392.3				1,489.3				1,204.3
Installation Fees			32.2				41.8				39.5				80.3				122.5
Collect Calls			1.6				0.7				0.6				5.0				2.1
Other Local Revenues			(1.0	)			0.7				0.4				0.4				1.8
Fixed-to-Mobile (VC1)			1,148.9				990.6				1,000.7				3,429.5				3,011.1
Long Distance			1,559.1				1,377.3				1,361.1				4,649.2				4,288.6
Intra-State			691.7				722.6				80.5				2,060.1				1,492.2
Inter-State			137.1				115.1				239.1				426.0				483.2
Inter-Regional			342.3				214.0				725.4				1,005.7				1,317.5
International			20.9				16.2				16.8				62.5				52.2
Fixed-to-Mobile (VC2 and VC3)			367.1				309.3				299.3				1,094.8				943.5
Advanced Voice			84.6				79.5				70.8				232.2				246.2
Public Telephones			236.0				153.4				85.7				735.1				403.8
Additional Services			250.4				256.6				246.9				741.1				755.0
Network Usage Remuneration			232.7				224.8				239.7				655.0				703.7
Data Transmission Services			2,198.6				2,362.5				2,318.3				6,391.6				6,957.6
ADSL (Velox)			1,245.6				1,318.0				1,289.2				3,510.8				3,882.6
Leased Lines (EILD)			194.4				224.0				249.1				668.5				719.4
Leased Lines (SLDD/SLDA)			146.7				137.7				130.1				441.5				393.9
IP Services			262.1				338.0				351.0				736.4				999.8
Packet switch and frame relay			98.2				94.2				81.8				311.2				271.4
Other Data Services			251.6				250.7				217.2				723.3				690.5
Wireless Services Revenues			2,547.8				2,805.2				2,830.9				7,171.4				8,237.4
Subscription Charges			588.8				659.9				669.5				1,664.7				1,937.9
Outgoing Calls			932.4				1,019.8				1,059.6				2,680.0				3,027.8
Domestic/International Roaming			29.8				29.6				25.1				91.6				94.1
Network Usage Remuneration			618.6				631.1				648.2				1,700.9				1,890.4
Data / Value Added Services			296.2				400.5				395.5				762.5				1,133.6
Handset Sales			81.9				64.2				33.1				271.7				153.6
Other Services			59.2				89.4				94.7				170.7				285.2
Gross Operating Revenue			11,596.6				11,568.3				11,409.0				34,022.2				34,521.9
Taxes and Deductions			(4,043.5	)			(4,174.7	)			(4,082.2	)			(11,679.7	)			(12,339.7	)
Net Operating Revenue			7,553.2				7,393.6				7,326.9				22,342.5				22,182.2
Operating Expenses			(5,174.9	)			(4,719.1	)			(4,612.5	)			(17,093.1	)			(14,261.6	)
Cost of Services			(1,593.3	)			(1,540.8	)			(1,489.1	)			(4,797.3	)			(4,499.9	)
Cost of Goods Sold			(120.0	)			(49.2	)			(32.0	)			(464.0	)			(122.6	)
Interconnection Costs			(1,278.0	)			(1,208.0	)			(1,216.1	)			(3,924.3	)			(3,778.1	)
Selling Expenses			(1,213.4	)			(1,183.8	)			(1,206.1	)			(3,922.8	)			(3,593.6	)
General and Administrative Expenses			(622.6	)			(488.1	)			(565.2	)			(1,759.5	)			(1,606.3	)
Other Operating (Expenses) Revenue, net			(347.5	)			(249.1	)			(103.9	)			(2,225.1	)			(661.1	)
EBITDA			2,378.3				2,674.5				2,714.4				5,249.5				7,920.6
Margin %			31.5	%			36.2	%			37.0	%			23.5	%			35.7	%
Depreciation and Amortization			(1,464.0	)			(1,133.6	)			(1,141.4	)			(4,222.3	)			(3,397.6	)
EBIT			914.3				1,540.9				1,573.1				1,027.2				4,523.0
Equity Accounting			18.7				2.4				18.2				25.7				24.1
Financial Expenses			(891.7	)			(1,053.8	)			(1,028.5	)			(2,879.8	)			(3,018.1	)
Financial Income			354.8				493.9				504.1				1,216.9				1,360.2
Income Before Tax and Social Contribution			396.1				983.5				1,066.9				(610.0	)			2,889.1
Income Tax and Social Contribution			(169.1	)			(320.2	)			(332.5	)			(52.4	)			(736.1	)
Minority Interest			(162.7	)			(219.4	)			(307.0	)			591.4				(785.9	)
Net Income			64.2				443.8				427.4				(70.9	)			1,367.2
Margin %			0.9	%			6.0	%			5.8	%			-0.3	%			6.2	%
Outstanding Shares - Thousand (exc.-treasury)			382,456				382,632				382,632				382,456				382,632
Income per share (R$)			0.168				1.160				1.117				(0.185	)			3.573
Income per ADR (US$)			0.090				0.648				0.639				(0.065	)			1.999

 

 

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7.1 ) TELE NORTE LESTE PARTICIPAÇÕES – TNLP Consolidated (continued)

R$ MILLION

 

Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL ASSETS			59,952				63,115				62,893
Current			18,846				22,159				22,727
Cash			6,062				8,619				9,497
Financial investments			1,341				2,772				2,451
Accounts Receivable			6,138				5,887				5,937
Recoverable Taxes			3,346				2,677				2,705
Inventories			138				116				108
Assets in Escrow			859				772				817
Other Current Assets			961				1,316				1,213
Non-Current Assets			41,106				40,955				40,165
Long Term			7,369				8,316				8,076
Recoverable and Deferred Taxes			4,515				4,895				4,600
Accounts Receivable			7				9				9
Assets in Escrow			2,342				2,919				2,986
Other			506				493				482
Investments			55				55				55
Property Plant and Equipment			21,789				21,331				20,925
Intagible Assets			11,599				11,027				10,905
Deferred Assets			294				227				204
Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL LIABILITIES			59,952				63,115				62,893
Current			19,372				19,993				16,705
Suppliers			3,342				3,566				3,598
Loans and Financing			9,856				12,143				8,479
Payroll and Related Accruals			491				391				527
Pension Fund Provision			82				34				60
Payable Taxes			2,265				1,862				2,004
Dividends Payable			1,632				390				362
Other Accounts Payable			1,704				1,607				1,674
Non-Current Liabilities			24,840				27,542				29,859
Long Term			24,840				27,542				29,859
Loans and Financing			18,696				20,212				22,802
Payable and Deferred Taxes			607				1,647				1,727
Contingency Provisions			3,210				3,133				2,776
Pension Fund Provision			608				575				576
Outstanding authorizations			1,563				1,584				1,609
Other Accounts Payable			156				390				370
Minority Interest			7,385				7,838				8,159
Shareholders’ Equity			8,355				7,742				8,169
Capital Stock			5,449				5,449				5,449
Capital Reserve			42				43				44
Surplus Reserve			3,276				1,660				1,660
Treasury shares			(367	)			(354	)			(354	)
Retained Earnings			(44	)			944				1,371

 

 

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7.1 ) TELE NORTE LESTE PARTICIPAÇÕES – TNLP Consolidated (continued)

 

Free Cash Flow - R$ million		2Q10				3Q10
Earnings (loss) before taxes - (A)			983				1,067
Result items that do not affect the Cash Balance - (B)			2,629				2,156
Financial charges			979				536
Depreciation/amortization			1,111				1,119
Losses on accounts receivable			247				250
Provisions for legal contingencies			240				29
Amortization of deferred assets			23				23
Remaining value from written-off fixed asset			17				14
Monetary correction of the Tax Refinancing Program			20				21
Other			(8	)			165
(C) = (A) - (B)			3,612				3,222
Changes to Operating Assets			(297	)			26
Accounts receivable			(209	)			(358	)
Amounts receivable			(9	)			5
Deferred and recoverable taxes			(50	)			268
Prepaid expenses			75				235
Inventory			26				8
Other assets			(130	)			(131	)
Changes to Operating Liabilities			87				195
Suppliers			7				159
Payroll, taxes and social benefits			24				16
Provision for Pension Funds			16				(34	)
Taxes payable and deferred			229				155
Tax Refinancing Program			(39	)			(17	)
Provisions for legal contingencies			(236	)			(230	)
Other liabilities			87				146
Cash Balance from Operations			(1,650	)			(1,017	)
Financial charges			(1,472	)			(819	)
Income tax and social contribution			(178	)			(197	)
Operating Cash Generation			1,753				2,427
Investment cash flow			(1,168	)			(597	)
Short-term investment			(309	)			422
Acquisitions of fixed/intangible assets			(663	)			(779	)
Assets in escrow			(197	)			(241	)
Cash Flow net of Capital Expenditure			584				1,830
Financing activity cash flow			1,839				(952	)
Borrowings			4,332				5,901
Payments of loans and debentures			(1,331	)			(6,853	)
Payment of dividend and interest on capital			(1,163	)			(1	)
Cash flow net of Financings			2,423				878
Net increase (reduction) of cash and equivalent			2,423				878
Cash and equivalent at the start of period			6,197				8,619
Cash and equivalent at the end of period			8,619				9,497

 

 

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7.2 ) TELEMAR NORTE LESTE - TMAR Consolidated

R$ MILLION

 

Income Statement		3Q09				2Q10				3Q10				9M09				9M10
Wireline Services Revenues			8,990.4				8,673.7				8,483.4				26,682.8				25,999.1
Local Services			4,428.2				4,219.5				4,160.8				13,275.9				12,644.4
Subscription Charges			2,757.8				2,797.9				2,727.4				8,271.4				8,302.6
Local Traffic			488.7				387.8				392.3				1,489.3				1,204.3
Installation Fees			32.2				41.8				39.5				80.3				122.5
Collect Calls			1.6				0.7				0.6				5.0				2.1
Other Local Revenues			(1.0	)			0.7				0.4				0.4				1.8
Fixed-to-Mobile (VC1)			1,148.9				990.6				1,000.7				3,429.5				3,011.1
Long Distance			1,559.1				1,377.3				1,361.1				4,649.2				4,288.6
Intra-State			691.7				722.6				80.5				2,060.1				1,492.2
Inter-State			137.1				115.1				239.1				426.0				483.2
Inter-Regional			342.3				214.0				725.4				1,005.7				1,317.5
International			20.9				16.2				16.8				62.5				52.2
Fixed-to-Mobile (VC2 and VC3)			367.1				309.3				299.3				1,094.8				943.5
Advanced Voice			84.6				79.5				70.8				232.2				246.2
Public Telephones			236.0				153.4				85.7				735.1				403.8
Additional Services			250.4				256.6				246.9				741.1				755.0
Network Usage Remuneration			232.7				224.8				239.7				655.0				703.7
Data Transmission Services			2,199.3				2,362.5				2,318.3				6,394.3				6,957.4
Wireless Services Revenues			2,547.8				2,805.2				2,830.9				7,171.4				8,237.4
Subscription Charges			588.8				659.9				669.5				1,664.7				1,937.9
Outgoing Calls			932.4				1,019.8				1,059.6				2,680.0				3,027.8
Domestic/International Roaming			29.8				29.6				25.1				91.6				94.1
Network Usage Remuneration			618.6				631.1				648.2				1,700.9				1,890.4
Data / Value Added Services			296.2				400.5				395.5				762.5				1,133.6
Handset Sales			81.9				64.2				33.1				271.7				153.6
Other Services			33.3				63.7				70.6				96.1				210.4
Gross Operating Revenue			11,571.4				11,542.6				11,384.9				33,950.3				34,447.0
Taxes and Deductions			(4,035.6	)			(4,165.3	)			(4,073.2	)			(11,660.6	)			(12,312.5	)
Net Operating Revenue			7,535.9				7,377.3				7,311.7				22,289.7				22,134.4
Operating Expenses			(5,145.7	)			(4,692.0	)			(4,587.3	)			(17,005.6	)			(14,182.2	)
Cost of Services Provided			(1,577.0	)			(1,427.7	)			(1,581.9	)			(4,751.5	)			(4,465.4	)
Cost of Goods Sold			(120.0	)			(49.2	)			(32.0	)			(464.0	)			(122.6	)
Interconnection Costs			(1,278.0	)			(1,208.0	)			(1,216.1	)			(3,924.3	)			(3,778.1	)
Selling Expenses			(1,142.1	)			(1,178.6	)			(1,199.1	)			(3,718.3	)			(3,576.3	)
General and Administrative Expenses			(680.9	)			(580.9	)			(457.8	)			(1,926.9	)			(1,584.8	)
Other Operating (Expenses) Revenue, net			(347.7	)			(247.5	)			(100.4	)			(2,220.5	)			(655.0	)
EBITDA			2,390.2				2,685.3				2,724.5				5,284.2				7,952.2
Margin %			31.7	%			36.4	%			37.3	%			23.7	%			35.9	%
Depreciation and Amortization			(1,472.5	)			(1,142.2	)			(1,149.8	)			(4,246.7	)			(3,423.3	)
EBIT			917.7				1,543.1				1,574.6				1,037.4				4,528.9
Equity Accounting			1.3				(1.8	)			16.9				(1.2	)			15.5
Financial Expenses			(899.6	)			(999.1	)			(980.2	)			(2,885.8	)			(2,964.7	)
Financial Income			371.5				447.7				490.8				1,226.9				1,333.4
Income Before Tax and Social Contribution			390.8				989.9				1,102.1				(622.6	)			2,913.1
Income Tax and Social Contribution			(174.7	)			(324.8	)			(345.2	)			(58.6	)			(749.4	)
Minority Interest			(150.4	)			(121.6	)			(208.3	)			571.7				(483.5	)
Net Income			65.8				543.5				548.6				(109.5	)			1,680.2
Margin %			0.9	%			7.4	%			7.5	%			-0.5	%			7.6	%
Outstanding Shares Thousand (exc.-treasury)			238,391				238,391				238,607				238,391				238,607
Income per share (R$)			0.276				2.280				2.299				(0.459	)			7.042

 

 

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7.2 ) TELEMAR NORTE LESTE - TMAR Consolidated (continued)

R$ MILLION

 

Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL ASSETS			59,512				61,832				61,701
Current			18,143				21,148				21,830
Cash			5,663				7,948				9,058
Financial investments			1,340				2,767				2,330
Accounts Receivable			6,151				5,876				5,927
Recoverable and Deferred Taxes			3,038				2,368				2,393
Inventories			138				112				104
Assets in Escrow			859				771				817
Other Current Assets			954				1,305				1,202
Non-Current Assets			41,369				40,684				39,870
Long Term			7,626				8,083				7,830
Recoverable and Deferred Taxes			4,309				4,692				4,384
Financial investments			7				9				9
Assets in Escrow			2,332				2,904				2,970
Other			978				479				467
Investments			47				47				47
Property Plant and Equipment			21,903				21,397				20,980
Intagible Assets			11,524				10,953				10,830
Deferred			268				204				182
Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL LIABILITIES			59,512				61,832				61,701
Current			19,123				18,233				14,995
Suppliers			3,339				3,567				3,604
Loans and Financing			9,625				10,533				6,912
Payroll and Related Accruals			406				389				526
Pension fund Provision			82				34				60
Payable Taxes			2,243				1,838				1,982
Dividends Payable			1,631				220				192
Other Accounts Payable			1,797				1,653				1,719
Non-Current Liabilities			24,877				27,095				29,429
Long Term			24,877				27,095				29,429
Loans and Financing			18,912				19,965				22,569
Payable Taxes			499				1,520				1,600
Contingency Provisions			3,209				3,130				2,775
Pension fund Provision			608				575				576
Outstanding authorizations			1,563				1,584				1,609
Other Accounts Payable			86				320				300
Minority Interest			5,601				5,935				6,157
Shareholders’ Equity			9,910				10,569				11,119
Capital Stock			7,434				7,434				7,434
Capital Reserve			2,214				2,017				2,018
Treasury shares			(17	)			(17	)			(17	)
Surplus Reserve			368				0				0
Retained Earnings			(89	)			1,135				1,684

 

 

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7.3 ) TNL PCS – Oi

R$ MILLION

 

Income Statement		3Q10				2Q10				3Q10				9M09				9M10
Wireless Services Revenues			2,542.7				2,801.6				2,899.9				6,938.1				8,362.4
Subscription			476.4				532.0				544.7				1,327.7				1,575.4
Outgoing Calls			773.7				850.3				891.7				2,176.3				2,557.6
Domestic/Internacional Roaming			26.7				26.2				26.2				81.4				85.7
Network Usage Remuneration			970.4				1,033.4				1,080.6				2,574.0				3,108.3
Data / Value Added			235.6				316.5				308.2				590.4				899.2
Other SMP Services			0.0				(0.0	)			0.4				0.0				0.6
Handset Sales			60.0				43.2				48.2				188.3				135.6
LD/Advanced Voice Service/Network Revenues			95.4				158.6				142.6				302.6				439.9
Gross Operating Revenue			2,638.0				2,960.2				3,042.5				7,240.7				8,802.3
Taxes and Deductions			(753.1	)			(851.4	)			(873.7	)			(2,075.8	)			(2,523.6	)
Net Operating Revenue			1,884.9				2,108.8				2,168.8				5,164.9				6,278.7
Operating Expenses			(1,274.5	)			(1,285.6	)			(1,308.2	)			(3,866.0	)			(3,843.2	)
Cost of Services Provided			(310.1	)			(368.4	)			(380.0	)			(999.8	)			(1,126.0	)
Cost of Goods Sold			(93.6	)			(34.6	)			(53.1	)			(353.8	)			(110.5	)
Interconnection Costs			(370.0	)			(384.6	)			(407.6	)			(1,091.3	)			(1,180.6	)
Selling Expenses			(393.6	)			(401.0	)			(387.4	)			(1,197.9	)			(1,158.4	)
General and Administrative Expenses			(111.4	)			(120.1	)			(120.2	)			(325.8	)			(348.1	)
Other Operating (Expenses) Revenue, net			4.2				23.0				40.1				102.7				80.4
EBITDA			610.4				823.2				860.6				1,298.9				2,435.4
Margin %			32.4	%			39.0	%			39.7	%			25.1	%			38.8	%
Depreciation and Amortization			(267.6	)			(224.5	)			(238.8	)			(746.0	)			(684.3	)
EBIT			342.8				598.7				621.8				552.8				1,751.1
Equity Accounting			(18.3	)			(23.9	)			(16.3	)			(82.6	)			(55.0	)
Financial Expenses			(26.4	)			(64.8	)			(74.3	)			(142.6	)			(206.7	)
Financial Income			83.6				112.1				169.9				257.4				381.6
Income Before Tax and Social Contribution			381.7				622.1				701.0				585.2				1,871.0
Income Tax and Social Contribution			(112.9	)			(179.4	)			(194.7	)			(194.0	)			(512.5	)
Net Income			268.8				442.7				506.3				391.2				1,358.5
Margin %			14.3	%			21.0	%			23.3	%			7.6	%			21.6	%

 

Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL ASSETS			13,080				14,919				15,522
Current			3,190				5,021				5,737
Cash			988				1,901				2,630
Financial investments			226				469				471
Accounts Receivable			917				1,185				1,178
Recoverable and Deferred Taxes			506				747				831
Inventories			69				62				59
Other Current Assets			484				657				567
Non-Current Assets			9,890				9,898				9,786
Long Term			2,759				2,467				2,452
Recoverable and Deferred Taxes			686				463				385
Loans and Financing			1,922				1,849				1,919
Financial investments			2				3				4
Other			149				151				144
Investments			0				69				53
Property Plant and Equipment			5,004				5,322				5,168
Intagible Assets			1,862				1,839				1,934
Deferred Assets			265				201				180
Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL LIABILITIES			13,080				14,919				15,522
Current Liabilities			1,774				2,164				2,299
Suppliers			725				1,130				1,102
Loans and Financing			77				120				133
Payroll and Related Accruals			42				39				55
Payable Taxes			349				475				590
Other Accounts Payable			581				400				419
Non-Current Liabilities			1,977				2,419				2,380
Long Term			1,977				2,419				2,380
Loans and Financing			854				1,325				1,290
Contingency Provisions			118				95				106
Payable Taxes			31				35				15
Outstanding authorizations			891				940				947
Other Accounts Payable			83				23				23
Shareholders’ Equity			9,329				10,337				10,843

 

 

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7.4 ) BRASIL TELECOM – BRTO Consolidated

R$ MILLION

 

Income Statement		3Q09				2Q10				3Q10				9M09				9M10
Wireline Services Revenues			3,959.9				3,921.9				3,818.2				11,709.3				11,692.4
Local Services			1,628.4				1,597.6				1,590.8				4,861.1				4,765.4
Long Distance			627.8				540.9				510.0				1,951.2				1,674.7
Advanced Voice			42.5				39.1				21.7				108.4				105.0
Public Telephones			104.4				77.4				35.0				305.5				189.8
Additional Services			107.2				114.3				112.3				286.7				336.9
Network Usage Remuneration			83.7				93.0				95.6				248.5				280.2
Data Transmission Services			1,360.4				1,454.3				1,447.7				3,929.9				4,324.6
Other			5.4				5.3				5.1				18.0				15.8
Wireless Services Revenues			538.1				553.6				563.1				1,557.5				1,639.0
Subscription Charges			112.4				119.4				121.7				325.5				356.5
Outgoing Calls			159.1				157.6				171.4				489.4				476.2
Domestic/International Roaming			3.7				5.0				6.3				10.1				22.4
Network Usage Remuneration			180.7				173.8				162.0				467.3				501.7
Data / Value Added Services			60.2				76.8				87.3				181.9				234.8
Handset Sales			22.0				21.0				14.4				83.4				47.4
Gross Operating Revenue			4,498.0				4,475.5				4,381.4				13,266.8				13,331.4
Taxes and Deductions			(1,691.5	)			(1,888.3	)			(1,842.9	)			(5,044.9	)			(5,568.1	)
Net Operating Revenue			2,806.5				2,587.2				2,538.5				8,221.9				7,763.4
Operating Expenses			(1,803.2	)			(1,791.3	)			(1,546.8	)			(8,405.2	)			(5,108.3	)
Cost of Services Provided			(589.5	)			(511.1	)			(466.5	)			(1,714.7	)			(1,461.9	)
Cost of Goods Sold			(15.0	)			(17.6	)			(9.1	)			(65.4	)			(38.3	)
Interconnection Costs			(501.4	)			(460.5	)			(493.8	)			(1,511.8	)			(1,491.3	)
Selling Expenses			(240.9	)			(250.6	)			(218.5	)			(1,071.6	)			(739.9	)
General and Administrative Expenses			(261.5	)			(346.4	)			(355.1	)			(728.3	)			(965.2	)
Other Operting (Expenses) Revenue, net			(194.9	)			(205.0	)			(3.8	)			(3,313.4	)			(411.7	)
EBITDA			1,003.3				795.9				991.7				(183.3	)			2,655.0
Margin %			35.7	%			30.8	%			39.1	%			-2.2	%			34.2	%
Depreciation and Amortization			(495.0	)			(415.1	)			(403.2	)			(1,487.4	)			(1,229.8	)
EBIT			508.3				380.7				588.6				(1,670.7	)			1,425.3
Financial Expenses			(241.3	)			(257.1	)			(246.9	)			(639.0	)			(757.7	)
Financial Income			143.0				209.4				265.3				426.9				669.0
Income Before Tax and Social Contribution			410.0				333.1				606.9				(1,882.8	)			1,336.6
Income Tax and Social Contribution			(150.1	)			(96.3	)			(199.6	)			626.6				(392.3	)
Minority Interest			(0.6	)			0.0				0.0				(2.0	)			0.0
Net Income			259.3				236.8				407.3				(1,258.1	)			944.2
Margin %			9.2	%			9.2	%			16.0	%			-15.3	%			12.2	%
Outstanding Shares Thousand (exc.-treasury)			547,719				589,789				589,789				547,719				589,789
Income per share (R$)			0.473				0.401				0.691				(2.297	)			1.601

 

 

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7.4 ) BRASIL TELECOM – BRTO Consolidated (continued)

R$ MILLION

 

Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL ASSETS			22,481				23,143				23,482
Current			5,915				6,636				7,320
Cash			1,337				2,424				3,167
Financial investments			300				458				459
Accounts Receivable			2,175				1,995				2,040
Recoverable Taxes			1,480				1,140				1,099
Inventories			43				24				20
Other Current Assets			580				595				535
Non-Current Assets			16,566				16,507				16,162
Long Term			7,998				8,568				8,490
Recoverable and Deferred Taxes			4,801				4,686				4,438
Assets in Escrow			1,400				1,908				2,010
Other			1,796				1,974				2,042
Investments			5				5				5
Property Plant and Equipment			6,953				6,458				6,268
Intagible Assets			1,610				1,476				1,399
Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL LIABILITIES			22,481				23,143				23,482
Current			4,410				4,646				4,610
Suppliers			1,344				1,373				1,252
Loans and Financing			1,017				1,263				1,197
Payroll and Related Accruals			123				100				108
Payable Taxes			772				787				793
Dividends Payable			105				104				76
Other Accounts Payable			1,048				1,019				1,184
Non-Current Liabilities			7,091				6,865				6,805
Long Term			7,091				6,865				6,805
Loans and Financing			3,524				2,938				3,244
Payable and Deferred Taxes			656				772				846
Contingency Provisions			1,368				1,678				1,286
Outstanding authorizations			673				644				662
Other Accounts Payable			871				833				767
Minority Interest			0				0				0
Shareholders’ Equity			10,980				11,632				12,067

 

 

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7.5 ) 14 BRASIL TELECOM CELULAR – BRT Mobile

R$ MILLION

 

Income Statement		3Q09				2Q10				3Q10				9M09				9M10
Wireless Services Revenues			650.2				659.6				678.9				1,886.6				1,977.5
Subscription			112.4				119.4				121.7				325.5				356.5
Outgoing Calls			160.6				158.7				172.4				493.9				478.8
Domestic/Internacional Roaming			3.7				5.0				6.3				10.1				22.4
Network Usage Remuneration			291.3				278.7				276.8				791.9				837.6
Data / Value Added			60.2				76.8				87.3				181.9				234.8
Handset Sales			22.0				21.0				14.4				83.4				47.5
Gross Operating Revenue			650.2				659.6				678.9				1,886.6				1,977.5
Taxes and Deductions			(154.2	)			(178.0	)			(198.3	)			(490.3	)			(540.2	)
Net Operating Revenue			496.0				481.6				480.6				1,396.3				1,437.4
Operating Expenses			(382.5	)			(407.7	)			(404.4	)			(1,201.3	)			(1,235.6	)
Cost of Services Provided			(89.8	)			(146.3	)			(128.3	)			(276.8	)			(396.4	)
Cost of Goods Sold			(14.5	)			(17.6	)			(9.1	)			(65.0	)			(38.3	)
Interconnection Costs			(150.4	)			(123.6	)			(145.5	)			(408.9	)			(428.3	)
Selling Expenses			(94.0	)			(86.7	)			(98.1	)			(384.0	)			(288.5	)
General and Administrative Expenses			(24.7	)			(36.2	)			(36.0	)			(65.5	)			(105.6	)
Other Operating (Expenses) Revenue, net			(9.0	)			2.8				12.7				(1.1	)			21.5
EBITDA			113.5				73.9				76.1				194.9				201.7
Margin %			22.9	%			15.3	%			15.8	%			14.0	%			14.0	%
Depreciation and Amortization			(134.8	)			(64.8	)			(65.5	)			(396.6	)			(198.4	)
EBIT			(21.3	)			9.1				10.6				(201.7	)			3.3
Financial Expenses			(28.6	)			(37.9	)			(46.0	)			(76.5	)			(119.7	)
Financial Income			39.3				41.1				47.2				140.5				127.6
Income Before Tax and Social Contribution			(10.5	)			12.3				11.8				(137.7	)			11.2
Income Tax and Social Contribution			3.6				(0.4	)			(5.9	)			44.9				(24.6	)
Net Income			(6.9	)			11.8				5.9				(92.8	)			(13.4	)
Margin %			-1.4	%			2.5	%			1.1	%			-6.6	%			-0.9	%

 

Balance Sheet		9/30/09				6/30/10				9/30/10
TOTAL ASSETS			4,783				4,988				4,979
Current			1,745				1,849				1,857
Cash			23				491				472
Financial investments			633				198				204
Accounts Receivable			216				237				248
Recoverable Taxes			175				167				155
Inventories			40				16				13
Other Current Assets			659				740				765
Non-Current Assets			3,038				3,139				3,122
Long Term			1,123				1,158				1,167
Property Plant and Equipment			1,017				1,162				1,172
Intagible Assets			898				819				783
Balanço Patrimonial		9/30/09				6/30/10				9/30/10
TOTAL LIABILITIES			4,783				4,988				4,979
Current			707				787				779
Suppliers			327				358				254
Loans and Financing			8				37				46
Payroll and Related Accruals			7				6				9
Payable Taxes			84				87				101
Outstanding authorizations			93				105				108
Other Accounts Payable			189				194				261
Non-Current Liabilities			1,095				1,293				1,287
Long Term			1,095				1,293				1,287
Loans and Financing			323				519				508
Payable Taxes			53				81				91
Contingency Provisions			18				23				21
Outstanding authorizations			669				640				662
Other Accounts Payable			32				31				5
Shareholders’ Equity			2,981				2,907				2,913

 

 

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R ELEVANT I NFORMATION

I) CVM Instruction no. 358, article 12: The shareholders who direct and indirectly control the company and the shareholders who elect members to the Board of Directors or Statutory Audit Committee, as well as any natural person or corporation or group of persons acting together or representing a similar interest, that reach a direct or indirect interest that accounts for 5% (five percent) or more of the capital of a public company, must inform it to the CVM, and the company in keeping with the terms of the article.

Oi informs its shareholders to observe the terms of article 12 of CVM Instruction 358, but it cannot be held liable for the disclosure of information about acquisition or sale, by others, of interest that corresponds to 5% or more of its capital or rights to this capital or other securities.

 

Shares TNE		Capital				Treasury				Controlling Shares				Free-Float
Common			130,611,732				3,020,880				68,504,187				59,086,665
Preferred			261,223,463				6,182,160				0				255,041,303
Total			391,835,195				9,203,040				68,504,187				314,127,968
Shares TMAR		Capital				Treasury				Controlling Shares				Free-Float
Common			107,063,093				0				104,227,873				2,835,220
Preferred (A)			130,703,927				223,500				104,329,417				26,151,010
Preferred (B)			1,063,967				0				6				1,063,961
Total			238,830,987				223,500				208,557,296				30,050,191
Shares BRTO		Capital				Treasury				Controlling Shares				Free-Float
Common			203,423,176				0				161,990,002				41,433,174
Preferred			399,597,370				13,231,556				128,675,049				257,690,765
Total			603,020,546				13,231,556				290,665,051				299,123,939

NOTE: Shareholder structure 09/30/2010

II) This report contains projections and/or estimates for future events. The projections herein were gathered in a substantial manner within the current outlook, based on ongoing projects and the respective estimates. The use of terms such as: “projects,” “estimates,” “antecipates,” “forecasts,” “plans,” “waits,” and other ones, aim to signal potential trends that, evidently, involve uncertainties and risks, whose future results may differ from current expectations. Oi cannot be held liable for operations or investment decisions taken based on such projections or estimates. This is unaudited data, and may differ from the final results.

Oi – Investor Relations

 

Roberto Terziani		55 (21) 3131-1211		rterziani@oi.net.br
Bayard Gontijo		55 (21) 3131-1211		bayard.gontijo@oi.net.br
Marcelo Ferreira		55 (21) 3131-1314		marcelo.asferreira@oi.net.br
Bernardo Guttmann		55 (21) 3131-1316		bernardo.guttmann@oi.net.br
Michelle Costa		55 (21) 3131-2918		michelle.costa@oi.net.br
Patricia Frajhof		55 (21) 3131-1315		patricia.frajhof@oi.net.br
Matheus Guimarães		55 (21) 3131-2871		matheus.guimaraes@oi.net.br

 

 

October 28, 2010		www.oi.com.br/ir		31

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 28, 2010