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 November, 2007
 

 
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)
 


Rua Levindo Lopes, 258 – Funcionários
Cep: 30.140-170 – Belo Horizonte (MG) - 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 

 


André Machado Mastrobuono
CEO, CFO and Head of Investor Relations
 
Ricardo Antunes Agostini
Finance Executive Director
 
Renata Pantoja 
Investor Relations Manager 
Phone: +55 (31) 9933-3535

 

 

 

TELE NORTE CELULAR PARTICIPAÇÕES S.A.

REPORTS THIRD QUARTER 2007 RESULTS

 

 

- EBITDA of R$26.3 million, or 23.0% of net service revenues in the 3Q07

- Net additions of 20,383 clients in the quarter

- Net debt of R$173.9 million at the end of the quarter, R$19 million lower than the previous quarter

- Highest prepaid ARPU since the 1Q04

 

 

Belo Horizonte, Brazil, November 07, 2007 – 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 results for the third quarter of 2007 (3Q07). Net additions amounted to 20,383 clients in the quarter, increasing the Company’s client base to 1,311,865. In the 3Q07, EBITDA reached R$26.3 million, representing 23.0% of net service revenues. Year-to-date EBITDA reached R$83.6 million, representing 24.9% of net service revenues. When compared to the same period of previous year, the Company registered an increase of 39.1% in the year-to-date EBITDA and 3.3 p.p. in EBITDA margin.

 

Operating Highlights:

 

Client base of 1,311,865 in the 3Q07
 

 

The Company’s client base reached 1,311,865 in the third quarter of 2007, representing increases of 1.6% and 3.0% when compared to the 2Q07 and 3Q06, respectively. Net additions totaled 20,383 clients in the quarter. Year-to-date client base increased 8,3%.

 

In the third quarter of 2007, prepaid segment increased by 2.1%, reaching 1,103,510 clients, or 84% of the total base. The postpaid base decreased by 2,722 clients, ending the quarter with 208,355 clients or 16% of the total base.

 

www.telenorteholding.com.br - 1/13



 

CLIENT BASE (000s)

 

 

 

 

Churn Rate
 

 

 

Blended annualized churn rate reached 47.7% in the 3Q07, higher than the 42.7% registered in the previous quarter, as a consequence of the increase in the prepaid churn rate. When compared to the 47.9% posted in the 3Q06, blended annualized churn rate remained practically stable.

 

Annualized churn rate for the postpaid segment reached 23.1% in the 3Q07, lower than the 26.7% recorded in the 2Q07. This reduction was due to the initiatives for retention of high value clients. When compared to the 3Q06, annualized churn rate for the postpaid segment remained practically stable.

 

Prepaid annualized churn rate totaled 52.5% in the 3Q07, a reduction of 1.5 p.p. when compared to the 3Q06. When compared to the 46.0% posted in the 2Q07, the prepaid churn rate increased by 6.4 p.p., reflecting the period’s seasonality.

 

CHURN RATE (annualized)

 

 

 

www.telenorteholding.com.br - 2/13



 

Operating Revenues
 

 

Net service revenues totaled R$114.7 million in the 3Q07, an increase of R$2.2 million, or 1.9% over the previous quarter, due to the 0.8% increase in total traffic (0.4% in incoming and 1.1% in outgoing traffics). When compared to the 3Q06, the first quarter with the adoption of the full billing, net service revenues increased by R$7.0 million or 6.5% in the quarter, due to a better quality client base and return of campaigns to stimulate use of cellular phones.

 

Data revenues totaled R$5.3 million in the 3Q07, lower than the R$6.0 million posted in the 2Q07 and the R$6.6 million recorded in the 3Q06.

 

Net equipment revenues totaled R$5.3 million in the quarter, lower than the R$7.2 million recorded in the 2Q07, as a result of lower handset sales. When compared to the 3Q06, net equipment revenues were reduced by R$9.0 million due to higher volume of direct sales from manufacturers to the Company’s dealers.

 

In the third quarter 2007, handset subsidies for client acquisition totaled R$2.6 million or R$14.6 per gross addition, higher than the R$1.6 million or R$9.1 per gross addition recorded in the 2Q07. This increase is related to actions to face stronger competition and Fathers’ Day campaign. When compared to the 3Q06, handset subsidies for client acquisition remained fairly stable.

 

As a result, total net revenues reached R$120.1 million in the 3Q07, practically in line with the R$119.8 million recorded in the previous quarter. When compared to the 3Q06, total net revenues were reduced by R$2.0 million.

 

Operating costs and expenses
 

 

In the 3Q07, cost of services totaled R$49.8 million, higher than the R$47.1 million recorded in the previous quarter. This was mainly due to the increase in interconnection costs and higher volume of outgoing minutes. When compared to the 3Q06, cost of services was reduced by R$0.6 million.

 

Selling and marketing expenses in the 3Q07 totaled R$24.7 million, in line with the R$24.5 million recorded in both 2Q07 and 3Q06.

 

Customer acquisition cost in the 3Q07 reached R$142, slightly above the R$141 recorded in the 2Q07, due to higher subsidies expenses and the Fathers’ Day campaigns. When compared to the third quarter of 2006, customer acquisition cost increased by R$12, as a consequence of higher expenses related to acquisition discounts, personnel and sales campaigns.

 

Retention costs totaled R$15.7 million in the 3Q07, higher than the R$13.1 million recorded in the 2Q07, as a consequence of higher expenses with subsidies, discounts and relationship programs. When compared to the 3Q06, retention costs decreased by R$1.2 million as a consequence of rationalization of retention and relationship campaigns.

 

General and administrative expenses reached R$11.5 million in the 3Q07, a 19.4% increase over the R$9.7 million recorded in the previous quarter, mainly due to higher expenses with administrative consulting services and accounting reallocation of civil contingencies. When compared to the 3Q06, G&A expenses increased by R$5.7 million in the 3Q07 also as a result of higher consulting expenses and accounting reallocation of civil contingencies

 

www.telenorteholding.com.br - 3/13



 

 

Other operating revenues reached R$3.1 million in the 3Q07 and are related to recognition of tax credits (mainly PIS/Cofins).

 

Bad debt provisions totaled R$2.8 million in the 3Q07, practically in line with the R$2.6 million recorded in the previous quarter. When compared to the 3Q06, bad debt decreased by R$0.5 million, due to the introduction of stricter rules governing the client acquisition process, focused on credit analysis and new collection actions. As a percentage of net service revenues, 3Q07 bad debt provisions totaled 2.4%, versus 2.3% and 3.1% posted in the 2Q07 and 3Q06, respectively. As a percentage of total net revenues, bad debt provisions totaled 2.3% in the 3Q07.

 

BAD DEBT PROVISIONS (R$ million)

 

 

 

 

Average Revenue Per User (ARPU)
 

 

Postpaid MOU (minutes of use) totaled 246 in the 3Q07, higher than the 244 recorded in the previous quarter, as a result of period seasonality. When compared to the 3Q06, postpaid MOU increased by 18 minutes due to a better quality client base and campaigns to stimulate the use of cell phones.

 

Postpaid ARPU reached R$86.7 in the 3Q07, lower than the R$86.9 recorded in the 2Q07. When compared to the 3Q06, postpaid ARPU increased by R$1.8 in the quarter as a result of a better quality client base.

 

Prepaid MOU totaled 43 in the 3Q07, in line with the previous quarter. When compared to the 3Q06, 3 minutes of use per client were added as a result of a better quality client base and campaigns to stimulate the use of phone credits.

 

Prepaid ARPU totaled R$17.6 in the 3Q07, higher than the R$17.1 recorded in the previous quarter. When compared to the third quarter of 2006, prepaid ARPU increased by R$3.5 due to a better quality client base and campaigns to stimulate the use of prepaid credits.

 

As a result, blended MOU reached 76 minutes, lower than the 77 registered in the 2Q07 and in line with the 76 recorded in the 3Q06. Blended ARPU totaled R$28.7 in the 3Q07, lower than the R$28.9 posted in the 2Q07 and higher than the R$27.9 recorded in the 3Q06.

 

www.telenorteholding.com.br - 4/13



 

 

ARPU (R$)

 

 

 

 

Estimated market share of 21.1% in the 3Q07
 

 

Market share was estimated at 21.1% in the 3Q07, versus 21.9% registered in the 2Q07. In a year-to-date basis, the company reduced its market share in 1.1 p.p., representing half of the reduction registered in the same period of the previous year reflecting the successful change in company strategy. Total gross sales share in the 3Q07 was estimated at 22.7%, lower than the 24.7% recorded in the previous quarter.

 

EBITDA of R$26.3 million in the 3Q07
 

 

EBITDA and EBTIDA margin (excluding handset revenues) in the 3Q07 totaled R$26.3 million and 23.0% of net service revenues, respectively, compared to the R$28.9 million and 25.6% posted in the 2Q07. When compared to the 3Q06, EBITDA and EBTIDA margin increased

by 23.7% (R$5.1 million) and 3.2 p.p., respectively.

 

EBITDA (R$ million)

 

 

 

 

www.telenorteholding.com.br - 5/13



 

Depreciation and amortization
 

 

Depreciation and amortization expenses totaled R$27.0 million in the 3Q07, in line with the

R$ 27.1 million recorded in the 2Q07 and slightly higher than the R$26.3 million posted in the 3Q06.

 

Net financial expense of R$9.5 million
 

 

 

R$ million

 

2Q07

3Q07

Interest Expenses (a)

(24.3)

(19.1)

Interest Income (b)

2.2

1.5

Foreign Exchange Gain (Loss) (c)

13.6

8.1

Net Financial Income (Expense)

(8.5)

(9.5)

 

Note: a) Interest expense: includes financial expenses related to debt, losses on hedging operations (if any), taxes on gains with hedge operations and revenues from interest on own capital (if any); b) Interest income: includes results of cash investing activities, clients’ interest 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.

 

DETAILED FINANCIAL INCOME/EXPENSE INFORMATION

 

 

R$ million

 

2Q07

3Q07

Expense related to debt denominated in foreign currency

8.8

4.5

Gain (loss) on hedging operations

(15.6)

(12.1)

Sub-total

(6.8)

(7.6)

Net financial expense (not related to debt)*

(3.2)

(2.8)

Sub-total

(10.0)

(10.4)

Interest income – cash investing activities

1.5

0.9

Net Financial Income (Expense)

(8.5)

(9.5)

 

* Net financial expenses not related to debt are primarily associated with taxes such as CPMF and IOF.

 

Negative net result of R$8.2 million in the quarter
 

 

Net result was negative in R$8.2 million in the 3Q07, or R$1.216 per ADS (R$1.216 per share), versus a net loss of R$4.7 million, or R$0.698 per ADS (R$0.014 per thousand shares) recorded in the 2Q07.

 

Total debt of R$201.7 million
 

 

On September 30, 2007, the Company’s total debt amounted to R$201.7 million, of which R$157.6 million related to short and long-term debt and R$44.2 million related to accounts payable from hedging operations. Short and long-term debt (R$157.6 million) was entirely denominated in US Dollars and hedged.

 

www.telenorteholding.com.br - 6/13



 

Net debt of R$173.9 million
 

 

On September 30, 2007, the Company’s total debt was partially offset by cash (cash equivalents and short-term cash investments) in the amount of R$27.9 million, resulting in a

net debt of R$173.9 million. When compared to the 2Q07, net debt was reduced by R$19 million.

 

NET DEBT (R$ million)

 

 

 

Investments totaled R$5.3 million in the quarter
 

 

During the third quarter of 2007, Amazônia Celular’s capital expenditures reached R$5.3 million. The breakdown of such investments is as follows:

 

CAPEX BREAKDOWN

 

CAPEX (R$ million)

3Q06

4Q06

1Q07

2Q07

3Q07

Network

4.0

19.5

2.5

-3.2

4.3

IS/IT

1.2

4.9

0.1

0.1

0.0

Others

0.4

3.4

0.7

0.6

1.0

T O T A L

5.6

27.8

3.3

-2.5

5.3

 

 

 

Debt payment schedule
 

 

 

Year

R$ million

% denominated

in US$

2007

-

-

2008

84.0

100.0%

2009

73.6

100.0%

 

 

www.telenorteholding.com.br - 7/13



 

Financial Ratios
 

 

 

Indicadores

3Q06

4Q06

1Q07

2Q07

3Q07

Net Debt/EBITDA (1)

2.71

6.25

4.31

3.50

2.89

Net Debt/EBITDA (1) adjusted *

2.71

2.76

2.15

1.90

1.63

Net Debt/Total Assets

39%

36%

32%

35%

33%

Interest Coverage Ratio (1)

4.3

1.6

1.8

2.4

2.6

Interest Coverage Ratio (1) adjusted *

4.3

3.6

3.6

4.5

4.5

Current Liquidity Ratio

0.7

0.5

0.6

0.7

0.7

 

(1) Last twelve months.

* Excluding the effects of additional provisions related to disputes concerning the payment of value added tax (ICMS) on activations, monthly subscription fees and VAS.

 

 

 

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

 

 

 

For further information please contact:

 

Tele Norte Celular Participações S.A.

Investor Relations Department

André Mastrobuono / Ricardo Agostini / Renata Pantoja / Carolina Anastasia

Phone: (+55 31) 9933-3535

E-mail: ri@telepart.com.br

 

 

 

 

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. Accordingly, the future results of the Company’s operations 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 - 8/13



 

 

OPERATIONAL DATA

    2006        2007        Var. % (3Q07/2Q07)
     
    3rd Quarter    4th Quarter    1st Quarter    2nd Quarter    3rd Quarter       YTD   
               
Licensed Pops (in millions)   17.6    17.6    17.6    17.6    17.6    17.6    -0.3% 
               
Clients    1,273,256    1,210,780    1,256,134    1,291,482    1,311,865    1,311,865    1.6% 
   Postpaid    240,941    232,271    219,614    211,077    208,355    208,355    -1.3% 
   Prepaid    1,032,315    978,509    1,036,520    1,080,405    1,103,510    1,103,510    2.1% 
               
MOU Incoming                             
   Postpaid    82    84    80    83    83    82    0.3% 
   Prepaid    25    28    26    27    27    27    -1.5% 
MOU Outgoing                             
   Postpaid    146    155    152    161    163    158    1.3% 
   Prepaid    15    17    18    16    16    16    2.6% 
               
Total Outgoing Traffic (Million of Minutes)   152.0    158.9    156.5    153.3    155.0    464.8    1.1% 
Total Incoming Traffic (Million of Minutes)   136.9    142.9    133.1    139.7    140.3    413.1    0.4% 
               
Average Revenue per User - ARPU (R$)   27.9    28.6    28.4    28.9    28.7    28.7    -0.7% 
   Postpaid    84.9    75.2    85.4    86.9    86.7    86.3    -0.3% 
   Prepaid    14.1    17.3    15.8    17.1    17.6    16.9    3.1% 
               
Service Revenues (R$ millions)                            
   Monthly Fee    20,675    11,219    19,926    19,126    17,741    56,793    -7.2% 
   Outgoing Traffic    34,470    38,079    33,794    36,974    39,226    109,994    6.1% 
   Incoming Traffic    50,310    55,043    52,130    54,091    55,291    161,512    2.2% 
   Other    2,317    2,297    2,598    2,378    2,484    7,459    4.5% 
               
   TOTAL    107,772    106,638    108,447    112,570    114,742    335,759    1.9% 
               
Data Revenues (% of net serv. revenues)   6.1%    5.8%    6.4%    5.3%    4.6%    5.4%    -0.7 p.p. 
               
Cost of Services (R$ millions)                            
   Leased lines    9,416    8,900    8,548    8,742    9,794    27,084    12.0% 
   Interconnection    29,189    27,920    24,655    25,894    27,522    78,071    6.3% 
   Rent and network maintenance    5,050    5,767    6,152    5,471    6,354    17,977    16.2% 
   FISTEL and other taxes    5,830    3,554    6,448    6,095    5,721    18,264    -6.1% 
   Other    901    227    1,128    882    444    2,454    -49.7% 
               
   TOTAL    50,386    46,369    46,931    47,083    49,835    143,849    5.8% 
               
Churn - Annualized Rate    47.9%    86.4%    35.9%    42.7%    47.7%    42.2%    5,0 p.p. 
   Postpaid    22.8%    27.4%    27.0%    26.7%    23.1%    25.7%    -3,6 p.p. 
   Prepaid    54.0%    100.5%    37.9%    46.0%    52.5%    45.7%    6,5 p.p 
               
Cost of Acquisition (R$)   130    96    139    141    142    141    0.9% 
Retention Costs (% of net serv. revenues)   15.7%    13.3%    13.8%    11.6%    13.7%    13.0%    2,1 p.p 
CAPEX (R$ millions)   5.6    27.8    3.3    (2.5)   5.3    6.0    -307.4% 
               
Number of locations served    214    212    212    213    213    213    0.0% 
Number of cell sites    681    690    693    692    697    697    0.7% 
Number of switches    14    14    14    14    14    14    0.0% 
               
Headcount    829    814    374    359    391    391    8.9% 
Market Share    23.5%    22.2%    22.3%    21.9%    21.1%    21.1%    0.8 p.p. 
               

 

www.telenorteholding.com.br - 9/13



 

 

INCOME STATEMENT (BR GAAP)

 

 

    (in R$ 000)
 
    2006        2007        Var. % (3Q07/2Q07)
     
    3rd Quarter    4th Quarter    1st Quarter    2nd Quarter    3rd Quarter    YTD   
               
 
Service Revenues - GROSS    179,776    192,202    191,604    185,995    189,513    567,112    1.9% 
Equipment Revenues - GROSS    20,395    16,559    9,970    10,729    7,663    28,362    -28.6% 
               
Total Revenues - GROSS    200,171    208,761    201,574    196,724    197,176    595,474    0.2% 
Taxes    (78,124)   (91,138)   (86,135)   (76,969)   (77,121)   (240,225)   0.2% 
               
 
Service Revenues - NET    107,772    106,638    108,447    112,570    114,742    335,759    1.9% 
Equipment Revenues - NET    14,275    10,985    6,992    7,185    5,313    19,490    -26.1% 
               
Total Revenues - NET    122,047    117,623    115,439    119,755    120,055    355,249    0.3% 
               
 
Cost of Services    50,386    46,369    46,931    47,083    49,835    143,849    5.8% 
Cost of Equipment    16,726    13,526    7,758    8,737    7,873    24,368    -9.9% 
Selling & Marketing Expenses    24,510    23,473    23,318    24,535    24,749    72,602    0.9% 
Bad Debt Expense    3,318    5,465    3,330    2,637    2,800    8,767    6.2% 
General & Administrative Expenses    5,824    52,170    8,718    9,655    11,530    29,903    19.4% 
Other operating expense (income)     (9)   (3,012)   (1,765)   (3,066)   (7,843)   73.7% 
               
 
EBITDA    21,283    (23,371)   28,396    28,873    26,334    83,603    -8.8% 
%    19.7%    -21.9%    26.2%    25.6%    23.0%    24.9%    -2,6 p.p. 
               
 
Depreciation & Amortization    26,264    31,314    28,176    27,074    27,046    82,296    -0.1% 
Interest Expense    12,880    31,306    18,929    24,297    19,056    62,282    -21.6% 
Interest Income    (2,125)   (3,177)   (2,808)   (2,192)   (1,528)   (6,528)   -30.3% 
Foreign Exchange Loss (Gain)   1,827    (4,257)   (8,559)   (13,616)   (8,067)   (30,242)   -40.8% 
Others    386    326    14    (627)   504    (109)   -180.4% 
Income Taxes    (5,001)   (12,424)           - 
Minority Interests    (3,129)   (17,263)   (1,763)   (1,388)   (2,527)   (5,678)   82.1% 
               
 
Net Income (loss)   (9,819)   (49,196)   (5,593)   (4,675)   (8,150)   (18,418)   74.3% 
               
 
 
               
Number of shares (thousand)*    335,084,155    335,084,155    335,084,155    335,084,155    6,701,682    6,701,682    n/a 
Earnings per thousands shares (R$)**    (0.029)   (0.147)   (0.017)   (0.014)   (1.216)   (2.748)   n/a 
Earnings per ADS (R$)   (1.465)   (7.341)   (0.835)   (0.698)   (1.216)   (2.748)   n/a 
               
 
(1) Interest paid: 3Q06 - R$7,312 thousand; 4Q06 - R$4,806 thousand; 1Q07 - R$7,820 thousand; 2Q07 - R$3,904 thousand; and, 3Q07 - R$6,961 thousand. 
* 3Q07 and YTD 2007: number of shares.                             
** 3Q07 and YTD 2007: earnings per share (R$).                             
N/A - share grouping                             

 

 

 

www.telenorteholding.com.br - 10/13



 

 

BALANCE SHEET (BR GAAP)

 

                    (in R$ 000)
 
    3Q07    2Q07        3Q07    2Q07 
 
 
Current Assets            Current Liabilities         
Cash & cash equivalents    4,499    3,277    Loans & Financing    84,025    99,170 
Tempory Cash Investments    23,381    24,697    Loan Interest    1,323    4,931 
Accounts Receivable    82,215    82,471    Suppliers    97,834    92,348 
Taxes Receivable    16,899    15,350    Taxes Payable    4,315    7,101 
Other Assets    18,417    24,928    Dividends    100    101 
           
    145,411    150,723    Other Current Liabilities    17,316    24,588 
           
                204,913    228,239 
 
Long-term Assets    94,239    94,921    Loans & Financing    73,556    77,048 
 
Deferred Assets    -    -    Other Long-term Liabilities    146,696    137,547 
 
Plant & Equipment            Minority Interest    24,517    27,043 
Cost    1,002,537    997,988             
Accum Depreciation    (722,791)   (695,891)   Shareholders' Equity    69,714    77,864 
         
    279,746    302,097             
 
 
    519,396    547,741        519,396    547,741 
 

 

 

CASH FLOW (BR GAAP)

 

     
  3Q07  YTD 
     
 
Operating activities     
Net loss  (8,150) (18,418)
Adjustments to reconcile net income to net cash     
from operating activities     
 Depreciation and amortization  27,046  82,296 
 Foreign exchange gains and indexation (principal) (11,312) (29,772)
 Unrealized losses (gains) on cross-currency interest  (473) 21,760 
 Minority interest  (2,527) (5,678)
 Provision for contingencies and other  5,277  6,158 
 Changes in operating assets and liabilities  7,400  (14,808)
     
Cash provided by operating activities  17,261  41,538 
     
 
Investing activities     
 Cash proceeds from disposals of property and     
 equipment  33  118 
 Additions to property and equipment  (5,266) (6,044)
     
 
Cash used in investing activities  (5,233) (5,926)
     
 
Financing activities     
 Proceeds from issuance of debt  150,497 
 Payment of debt  (10,805) (204,281)
 Dividends paid  (1) (3)
     
Cash used in financing activities  (10,806) (53,787)
     
 
 
Increase (decrease) in cash and cash equivalents  1,222  (18,175)
Cash and cash equivalents, beginning of the period  3,277  22,674 
     
Cash and cash equivalents, end of the period  4,499  4,499 
     

 

 

www.telenorteholding.com.br - 11/13



 

GLOSSARY OF KEY INDICATORS

 

I) Average Clients

 

a) Average clients – monthly

 

Sum of clients at the beginning and the end of the month

2

b) Average clients – quarterly and year to date

 

Sum of the average clients 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 clients for the 3 months x 12

3

b) Churn % - year to date

 

YTD deactivations / Sum of avg monthly opening clients 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 clients for the period

Number of months in the period

 

IV) ARPU – Average Revenue per User

 

Net service revenues for the period (excluding roaming-in revenues)

Average clients for the period

 

V) Client 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 activation 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 = Operating Revenues – Operating Costs – Operating Expenses* - Bad Debt

* Does not include profit sharing.

 

www.telenorteholding.com.br - 12/13



 
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: November 08, 2007

 
  TELE NORTE CELULAR PARTICIPAÇÕES S.A.
       
       
    By: /s/       André Mastrobuono
       
    Name: André Mastrobuono
    Title: CEO, CFO and Head of Investor Relations
 

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.