Provided by MZ Data Products
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of March, 2006
 

 
TELE NORTE CELULAR PARTICIPAÇÕES S.A.
(Exact name of Registrant as specified in its Charter)
 
TELE NORTE CELLULAR HOLDING COMPANY
(Translation of Registrant's name into English)
 



SCN QUADRA 04 - Ed. Centro Empresarial Varig, sala 702-A
Cep: 70.714-000 - Brasília (DF) - 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:  
ý      Form 40-F:   o 

(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:  
o      No:   ý 

(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:   o      No:   ý 

(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:   o      No:   ý 

 



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 

TELE NORTE CELULAR PARTICIPAÇÕES S.A. REPORTS
FOURTH QUARTER AND YEAR-END 2005 RESULTS

- EBITDA margin of 37.3% of net service revenues for the quarter
- 5.9% increase on post-paid ARPU quarter-over-quarter
- Bad debt stable at 2.5% of net service revenues
- Net debt reduced by R$22 million in the quarter

Brasília, Brazil, March 16, 2006 – Tele Norte Celular Participações S.A. (BOVESPA: TNCP3 (Common)/TNCP4 (Preferred); NYSE: TCN), the holding Company of the wireless telecommunications service provider in the States of Amapá, Amazonas, Maranhão, Pará and Roraima in Brazil, today announced its fourth quarter and year-end 2005 results. The Company’s client base totaled 1,223,041 for the quarter. EBITDA reached R$35.4 million in 4Q05, representing 37.3% of net service revenues. For the year EBITDA reached R$124.6 million, representing 32.0% of net service revenues.

Operating Highlights:

Client base of 1,223,041 in 2005 
 


The Company’s customer base reached 1,223,041 during the fourth quarter of 2005, representing a slight increase of 1.3% over the previous quarter. Net additions amounted to 15,938 in the quarter.

The prepaid base increased by 29,615 customers reaching 965,886 customers or 79% of the total base. The postpaid base decreased by 13,677 clients, ending the quarter with 257,155 customers or 21% of the total base.


www.telenorteholding.com.br - 1/14

Churn rates 
 

Blended annualized churn rate decreased from 49.6% in the 3Q05 to 46.7% registered in the 4Q05. The prepaid annualized churn rate for 4Q05 remained high at 52.7%, but lower than the 56.8% registered in the previous quarter. It is expected further reduction in the prepaid churn rate for the next quarter. For the postpaid segment, annualized churn rates remained fairly stable at 25.4% when compared to 25.2% registered in the previous quarter. It shows the success of the retention efforts.


Operating revenues 
 

Net service revenues totaled R$94.9 million in 4Q05, representing a decrease of R$3.4 million or 3.4% over the previous quarter. For 2005, net service revenues reached R$390.0 million below the R$440.4 million registered in 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$10.5 million, an increase of 9.0% when compared to 3Q05. For the year, net equipment revenues reached R$42.0 million lower than the R$58.5 million registered in the previous year, as a consequence of lower sales during the year.

As a result, total net revenues were R$105.4 million in the quarter, 2.3% lower when compared to the previous quarter. For the year total net revenues reached R$432.0 million.

www.telenorteholding.com.br - 2/14


Data revenues, as a percentage of net service revenues, reached 4.9% in the quarter and 4.4% in the year.

In the fourth quarter of 2005, handset subsidies for client acquisitions were R$2.3 million (or R$15.0 per gross addition), representing a R$2.3 million decrease when compared to the previous quarter. For 2005, handset subsidies reached R$14.1 million or R$25.0 per gross addition.

Operating costs and expenses 
 

Cost of services in 4Q05 totaled R$30.5 million, higher than the R$23.7 million reported in 3Q05. This increase is primarily explained by higher interconnection and Fistel costs, and also by the reduction of cost of services during 3Q05 related to both the savings provided by the installation of a new GSM network mobile switching centre in São Luiz do Maranhão (State of Maranhão) and the reversion of provisioned amounts, retroactive to January 2005, due to the negotiation of dedicated line contracts. Excluding these non-recurring events, cost of services would have been stable, reaching R$26.5 million in the 4Q05 as compared to the R$26.7 million registered in the previous quarter. For the year, cost of services reached R$111.6 million, representing a 28.8% decrease when compared to the previous year mainly due to the implementation of the SMP rules.

Selling and marketing expenses in the quarter remained stable reaching R$24.7 million compared to the R$23.9 million registered in the previous quarter. As a percentage of net service revenues, selling and marketing expenses reached 26.1% compared to the 24.4% registered in the previous quarter. For the year, selling and marketing expenses were 10.6% lower than 2004, as a result of much less aggressive acquisition campaigns.

Customer acquisition cost in the fourth quarter of 2005 reached R$114 representing a significant decrease when compared to the R$186 reported in 3Q05. This decrease is mainly explained by a 49% reduction in subsidies. For the year, customer acquisition cost reached R$158, below the R$178 registered in the previous year. Retention costs as a percentage of net service revenues were 13.4% in the quarter below the 14.1% registered in the 3Q05. For the year, retention costs as a percentage of net service revenues reached 13.5% .

G&A reached a negative R$0.5 million in 4Q05, below the R$9.9 million registered in the previous quarter. This reduction in G&A during the 4Q05 is due to the recognition of non-recurrent revenues referring to PIS and Cofins recoverable credit, amounting to R$10.4 million, resulting from the success in the lawsuit questioning the constitutionality of the increase in these taxes’ calculation base. For the year, G&A totaled R$26.2 million. For the coming quarters, G&A is expected to remain in the range of 9% to 11% of net services revenues.

Bad debt as a percentage of net service revenues reached 2.5%, in line with the previous quarter. When calculated against total net revenues, bad debt reached 2.2% during the 4Q05 compared to 2.3% reported in 3Q05. For 2005, bad debt was 3.4% of net service revenues, an improvement when compared to the 4.7% registered in the previous year. When calculated against total net revenues, bad debt totaled 3.1% for the year.

www.telenorteholding.com.br - 3/14




Average revenue per user (ARPU)
 

Postpaid MOU (minutes of use) in 4Q05 totaled 209, higher than the 194 registered in the previous quarter. As a result, postpaid ARPU (average revenue per user) reached R$77.3 higher than the R$72.9 registered in 3Q05.

In the fourth quarter of the year, prepaid MOU totaled 30, a slightly increase when compared to the 29 registered in the 3Q05. As a result, prepaid ARPU slightly increased reaching R$9.7 when compared to R$9.0 registered in the previous quarter.

As a result, blended ARPU slightly increased to R$24.5 when compared to R$23.5 registered in the third quarter of 2005. For 2005, blended ARPU reached R$24.1.



Market share estimated at 26% 
 

Market share was estimated at 26% compared to 27% registered in the previous quarter. Gross sales share in 4Q05 was estimated at 24.3%, representing an increase of 3.8 p.p. when compared to the previous quarter.

www.telenorteholding.com.br - 4/14


EBITDA margin of 37.3% of net service revenues for the quarter 
 

EBITDA and EBITDA margin (excluding handsets revenues) in the fourth quarter of 2005 reached R$35.4 million and 37.3%, respectively, compared to R$33.7 million and 34.2% registered in the previous quarter. For the year EBITDA and EBITDA margin reached R$124.6 million and 32.0%, respectively, representing an improvement when compared to the R$107.3 million and 24.4% registered in the previous year.


Depreciation and amortization 
 

In 4Q05, depreciation and amortization remained stable when compared to the previous quarter reaching R$28.7 million. For the year, depreciation and amortization expenses amounted to R$112.7 million.

Net financial expense of R$14.6 million 
 

  R$ million 
  3Q05  4Q05 
Interest Expense (a) (27.1) (6.2)
Interest Income (b) 4.5  4.9 
Foreign Exchange Gain (Loss) (c) 15.2  (13.3)
     
Net Financial Income (Expense) (7.4) (14.6)
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.telenorteholding.com.br - 5/14


DETAILED FINANCIAL INCOME/EXPENSE INFORMATION

  R$ million 
  3Q05  4Q05 
Gain (expense) related to debt denominated in foreign currency  9.8  (18.7)
Gain (loss) on hedging operations*  (19.8) 2.2 
     
Sub-total  (10.0) (16.5)
Expense related to debt denominated in Reais  (0.5) (0.1)
     
Financial expense (debt related) (10.5) (16.6)
Net financial expense (not related to debt)**  (0.5) (0.9)
     
Sub-total  (11.0) (17.5)
Interest income – cash investing activities  3.6  2.9 
     
Net Financial Income (Expense) (7.4) (14.6)
* Net of PIS/COFINS.
** Net financial expenses not related to debt are primarily associated with taxes such as CPMF, PIS, COFINS and IOF.


Provision for losses 
 

In compliance with the CVM Instruction # 371/2002, the Company’s and its subsidiary’s Board of Directors approved on March 15 and 16, 2006, respectively, a technical study of the feasibility of the future realization of deferred tax asset, considering the eventual capacity to generate taxable income for the Company in its main business segments. Among the actions implemented by the Company in order to generate future taxable income, it is worth highlighting the change of the network to the GSM/EDGE standard.

Through the aforementioned study, it was verified that the deferred social contribution and income tax installment amounting to R$34.2 million will occur after ten years, constituting, thus, a provision for losses in the realization of these assets.

Negative net result of R$39.5 million in the quarter 
 

Net result in 4Q05 was negative in R$39.5 million, or R$5.891 per ADS (R$0.118 per thousand shares). For the year, net result was negative in R$42.4 million, or R$6.322 per ADS (R$0.126 per thousand shares).

Total debt of R$248.3 million 
 

Total debt was R$248.3 million, 100.0% of which was denominated in foreign currencies (99.5% denominated in US Dollars and 0.5% denominated in a currency basket index from BNDES). From total debt denominated in foreign currency, 78.5% was hedged.

Net debt of R$222.0 million 
 

As of December 31, 2005, the Company’s indebtedness was partially offset by cash and cash equivalents (R$65.7 million) and receivables from loans (R$7.6 million) but was impacted by accounts payable from hedging operations (R$46.9 million), resulting in net debt of R$222.0 million.

www.telenorteholding.com.br - 6/14


Investments totaled R$37.7 million in the quarter 
 

During the fourth quarter of 2005, Amazônia Celular’s capital expenditures were R$37.7 million. For the year capital expenditures totaled R$65.2 million. The breakdown of such investments is as follows:

CAPEX breakdown

   CAPEX (R$ million) 4Q04  1Q05  2Q05  3Q05  4Q05  2005 
Network  65.6  2.0  17.2  5.8  33.0  57.9 
IS/IT  15.8  0.4  0.2  1.0  4.3  5.9 
Others  5.0  0.9  (0.1) 0.2  0.4  1.4 
T O T A L  86.4  3.3  17.3  7.0  37.7  65.2 


Debt payment schedule 
 

Year  R$ million  % foreign currency
denominated debt 
2006  58.3  100.0% 
2007  55.3  100.0% 
2008  14.5  100.0% 
2009  108.2  100.0% 
2010  12.0  100.0% 

Free cash flow 
 

Free cash flow in the quarter was positive at R$10.0 million, compared to a cash flow of R$21.7 million reported in the previous quarter. Year-to-date, free cash flow amounted to negative R$12.9 million as opposed to positive R$66.8 million registered in the previous year. This reduction is related mainly to negative effects on hedge operations and higher payments of debt and suppliers.

www.telenorteholding.com.br - 7/14


Financial ratios 
 

Ratios  4Q04  1Q05  2Q05  3Q05  4Q05 
Net Debt/EBITDA (1) =  1.84  2.53  2.69  2.37  1.78 
Net Debt/Total Assets =  25%  34%  33%  32%  31% 
Interest Coverage Ratio (1) =  5.2  4.5  4.4  4.7  6.1 
Current Liquidity Ratio =  0.8  0.8  1.1  1.0  0.8 
(1) Last twelve months.


Outlook 
 

Amazônia Celular expects mobile penetration within the Company's area to reach approximately 29-30% for the next quarter. For the first quarter of the year, Amazônia Celular expects to maintain gross sales share at approximately 25-28%. Net additions are expected to primarily come from prepaid customers. ARPUs for both postpaid and prepaid customers are expected to slightly decrease as a consequence of seasonal factors during the 1Q06. Capital expenditures in the year should reach approximately R$50-65 million.

*******************

www.telenorteholding.com.br - 8/14


For additional information please contact:

Tele Norte Celular Participações S.A.
Investor Relations Department
Leonardo Dias / Renata Pantoja / Fernanda Ribeiro
Phones: (+55 61) 3429-5600/5673/5616/ 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.telenorteholding.com.br - 9/14


OPERATIONAL DATA

 
    2004    2005    Var. % 
(4Q05/3Q05)
                       
    4thQuarter   YTD   1stQuarter   2ndQuarter   3rdQuarter   4thQuarter   YTD  
                     
Licensed Pops (in millions)   16.7    16.7    16.7    16.7    16.7    17.3    17.3    3.8% 
                 
Clients    1,256,273    1,256,273    1,278,586    1,244,071    1,207,103    1,223,041    1,223,041    1.3% 
   Postpaid    316,040    316,040    302,603    285,909    270,832    257,155    257,155    -5.0% 
   Prepaid    940,233    940,233    975,983    958,162    936,271    965,886    965,886    3.2% 
                 
MOU Incoming                                0.0% 
   Postpaid    74    68    66    85    85    92    81    9.2% 
   Prepaid    27    30    23    23    21    22    22    3.4% 
MOU Outgoing                                0.0% 
   Postpaid    125    134    110    111    110    117    112    6.6% 
   Prepaid                  5.8% 
                 
Total Outgoing Traffic (Million of Minutes)   135.8    555.7    123.4    118.7    113.2    114.6    470.0    1.2% 
Total Incoming Traffic (Million of Minutes)   140.7    521.5    127.7    140.9    130.3    133.5    532.5    2.4% 
                 
Average Revenue per User - ARPU (R$)   26.2    31.8    24.0    24.4    23.5    24.5    24.1    4.1% 
   Postpaid    71.7    81.2    67.3    73.1    72.9    77.3    72.4    5.9% 
   Prepaid    10.9    14.2    10.0    9.6    9.0    9.7    9.6    7.0% 
                 
Service Revenues (R$ millions)                               0.0% 
   Monthly Fee    21,823    87,998    21,849    21,510    20,789    19,837    83,985    -4.6% 
   Outgoing Traffic    41,987    173,055    37,003    39,235    41,589    39,115    156,941    -5.9% 
   Incoming Traffic    30,765    160,731    31,754    34,001    29,984    28,947    124,685    -3.5% 
   Other    5,992    18,570    5,871    5,605    5,922    6,999    24,397    18.2% 
                 
   TOTAL    100,567    440,354    96,477    100,350    98,284    94,897    390,008    -3.4% 
                 
Data Revenues (% of net serv. revenues)   2.7%    3.3%    4.2%    4.1%    4.3%    4.9%    4.4%    0.6 p.p 
                 
Cost of Services (R$ millions)                               0.0% 
   Leased lines    6,085    22,540    9,019    11,196    6,537    9,130    35,881    39.7% 
   Interconnection    5,663    68,181    4,380    3,654    3,300    5,378    16,712    63.0% 
   Rent and network maintenance    6,429    22,289    6,105    5,848    6,129    6,840    24,922    11.6% 
   FISTEL and other taxes    6,732    23,873    5,684    3,958    4,109    5,522    19,274    34.4% 
   Other    4,951    11,482    3,849    3,634    3,637    3,669    14,789    0.9% 
                 
   TOTAL    29,860    148,365    29,037    28,289    23,712    30,540    111,578    28.8% 
                 
Churn - Annualized Rate    42.7%    35.3%    46.5%    49.5%    49.6%    46.7%    48.1%    -2.9 p.p. 
   Postpaid    27.1%    32.5%    41.2%    37.6%    25.2%    25.4%    32.8%    0.2 p.p. 
   Prepaid    47.9%    36.3%    48.2%    53.2%    56.8%    52.7%    52.8%    -4.1 p.p 
                 
Cost of Acquisition (R$)   184    178    152    188    186    114    158    -38.7% 
Retention Costs (% of net serv. revenues)   10.3%    11.1%    11.8%    14.1%    14.1%    13.4%    13.5%    -0.7 p.p 
CAPEX (R$ millions)   86.4    152.0    3.3    17.3    7.0    37.7    65.2    440.5% 
                 
Number of locations served    212    212    210    210    210    210    210    0.0% 
Number of cell sites    711    711    720    723    723    723    723    0.0% 
Number of switches    11    11    12    12    12    13    13    8.3% 
                 
Headcount    816    816    854    882    864    891    891    3.1% 
Market Share    34%    34%    33%    29%    27%    26%    26%    -1.0 p.p. 
 

www.telenorteholding.com.br - 10/14


INCOME STATEMENT (BR GAAP)

(in R$ 000)
 
    2004    2005    Var. % 
(4Q05/3Q05)
                       
    4th Quarter    YTD    1st Quarter   2nd Quarter   3rd Quarter   4th Quarter    YTD   
                 
Service Revenues - GROSS    142,807    616,115    137,127    140,635    136,657    131,476    545,895    -3.8% 
Equipment Revenues - GROSS    24,387    82,190    15,634    15,670    13,353    14,809    59,466    10.9% 
                 
Total Revenues - GROSS    167,194    698,305    152,761    156,305    150,010    146,285    605,361    -2.5% 
Taxes    (49,314)   (199,462)   (45,592)   (44,695)   (42,127)   (40,922)   (173,336)   -2.9% 
                 
Service Revenues - NET    100,567    440,354    96,477    100,350    98,284    94,897    390,008    -3.4% 
Equipment Revenues - NET    17,314    58,489    10,692    11,260    9,599    10,466    42,017    9.0% 
                 
Total Revenues - NET    117,881    498,843    107,169    111,610    107,883    105,363    432,025    -2.3% 
                 
Cost of Services    29,860    148,365    29,037    28,289    23,712    30,540    111,578    28.8% 
Cost of Equipment    29,073    86,421    13,982    15,085    14,217    12,801    56,085    -10.0% 
Selling & Marketing Expenses    39,601    112,096    26,960    24,524    23,948    24,744    100,176    3.3% 
Bad Debt Expense    3,953    20,517    4,735    3,784    2,434    2,360    13,313    -3.0% 
General & Administrative Expenses    1,731    24,153    969    15,867    9,916    (526)   26,226    -105.3% 
                 
EBITDA    13,663    107,291    31,486    24,061    33,656    35,444    124,647    5.3%     
    %    13.6%    24.4%    32.6%    24.0%    34.2%    37.3%    32.0%    3.1 p.p. 
                 
Depreciation & Amortization    24,821    98,375    27,013    28,416    28,574    28,735    112,738    0.6% 
Interest Expense (1)   21,635    57,956    11,775    35,967    27,075    6,238    81,055    -77.0% 
Interest Income    (4,241)   (22,113)   (4,292)   (4,072)   (4,521)   (4,941)   (17,826)   9.3% 
Foreign Exchange Loss    (17,051)   (17,847)   1,062    (36,138)   (15,171)   13,339    (36,908)   -187.9% 
Others    (3,652)   178    1,173    1,374    1,453    (3,158)   842    -317.3% 
Income Taxes    (3,243)   (5,782)   (2,688)   (1,326)   (2,996)   35,548    28,538    -1286.5% 
Minority Interests    (1,265)   (816)   (563)   19    (46)   (835)   (1,425)   1715.2% 
                 
Net Income    (3,340)   (2,660)   (1,994)   (179)   (712)   (39,482)   (42,367)   5445.2% 
                 
 
                 
Number of shares (thousand)   335,084,155    335,084,155    335,084,155    335,084,155    335,084,155    335,084,155    335,084,155    0.0% 
Earnings per thousands shares (R$)   (0.010)   (0.008)   (0.006)   (0.001)   (0.002)   (0.118)   (0.126)   5445.2% 
Earnings per ADS (R$)   (0.498)   (0.397)   (0.298)   (0.027)   (0.106)   (5.891)   (6.322)   5445.2% 
                 
(1) Interest paid: 4Q04 - R$ 5,225 thousand; 1Q05 R$ 6,899 thousand; 2Q05 - R$ 3,702 thousand; 3Q05 - R$ 6,223 thousand; and, 4Q05 - R$ 3.777 thousand. 

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BALANCE SHEET (BR GAAP)

                    R$ (000)
 
    4Q05    3Q05        4Q05    3Q05 
 
 
Current Assets            Current Liabilities         
Cash & cash equivalents    65,652    78,611    Loans & Financing    58,334    78,912 
Accounts Receivable    88,761    93,134    Loan Interest    7,651    5,629 
Taxes Receivable    22,831    42,340    Suppliers    117,103    92,303 
Other Assets    21,409    31,830    Taxes Payable    7,236    4,206 
           
    198,653    245,915    Dividends    3,991    725 
            Other Current Liabilities    48,170    64,198 
           
                242,485    245,973 
Long-term Assets    91,466    95,999             
            Loans & Financing    190,004    187,321 
Deferred Assets    -    -             
            Other Long-term Liabilities    42,634    40,787 
Plant & Equipment                     
Cost    955,917    934,448    Minority Interest    55,806    56,641 
Accum Depreciation    (535,960)   (523,745)            
           
    419,957    410,703    Shareholders' Equity    179,147    221,895 
 
 
    710,076    752,617        710,076    752,617 
 

DEBT POSITION (BR GAAP)

                (in R$ 000)
 
    4Q05 
   
Debt            Currency     
    R$    US$    Basket    Total 
            Index     
 
Short term      57,145    1,189    58,334 
Long Term      190,003      190,003 
 
Total    -    247,148    1,189    248,337 
 

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CASH FLOW (BR GAAP)

        (in R$ 000)
 
    4Q05    YTD - 2005 
 
Operating Activities:         
 
Loss    (39,482)   (42,367)
Adjustments to reconcile net income (loss) to net cash         
provided by operating cash activities         
 Depreciation and amortization    28,735    112,738 
 Monetary variation and foreign exchange loss (principal)   33,369    (15,841)
 Unrealized income on hedging operations    (15,350)   29,424 
 Deferred income taxes and social charges    39,472    24,373 
 Minority interest    (835)   (1,425)
 Other    3,011    2,139 
Changes in operating assets and liabilities    27,028    (56,184)
   
Net cash provided by (used in) operating activities    75,948    52,857 
 
 
Investing Activities:         
 
 Proceeds from sale of property, plant and equipment    33    170 
 Capital expenditures    (37,676)   (65,202)
   
Net cash used in investing activities    (37,643)   (65,032)
 
 
Financing Activities:         
 
 New loans    23,503    108,877 
 Amortization of loans    (74,767)   (130,572)
 Payment of dividends and interest on capital      (357)
   
Net cash from (used in) financing activities    (51,264)   (22,052)
 
 
 
Net increase (decrease) in cash and cash equivalents    (12,959)   (34,227)
 
 
 
Cash and cash equivalents, beginning of the period    78,611    99,879 
 
 
 
Cash and cash equivalents, end of the period    65,652    65,652 
 

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GLOSSARY OF KEY INDICATORS

I) Average Customers 
a)  Average customers – monthly 
    Sum of customers at the beginning and the end of the month 
   
b)  Average customers – quarterly and year to date 
    Sum of the average customers 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 customers for the 3 months x 12 
   
b) Churn % - year to date 
    YTD deactivations / Sum of avg monthly opening customers 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 customers 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 customers 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. 

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SIGNATURE
 
 
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: March 17, 2006

 
  TELE NORTE CELULAR PARTICIPAÇÕES S.A.
       
       
    By: /s/       Antônio José Ribeiro dos Santos
       
    Name: Antônio José Ribeiro dos Santos
    Title: CEO and Head of Investor Relations