Tele Norte Leste Participações S.A. Interim financial statements for the quarterly ended September 30, 2009 and 2008

Transcription

1 Tele Norte Leste Participações S.A. Interim financial statements for the quarterly ended September 30, 2009 and 2008

2 ITR - Quarterly Report 1 - CVM CODE 2 - COMPANY NAME 3 - CNPJ TELE NORTE LESTE PARTICIPAÇÕES S.A / NIRE HEAD OFFICE 1 - ADDRESS 2 - DISTRICT Rua Humberto de Campos, 425-8º andar Leblon 3 - ZIPCODE 4 - TOWN OR CITY 5 - STATE Rio de Janeiro RJ 6 AREA CODE 7 - TELEPHONE 8 - TELEPHONE. 9 - TELEPHONE 10 - TELEX AREA CODE 12 - FAX 13 - FAX 14 - FAX invest@oi.net.brmailto:terziani@telemar.com.br DIRECTOR OF INVESTOR RELATIONS (company address for correspondence) 1 NAME 2 - ADDRESS Alex Waldemar Zornig Rua Humberto de Campos, 425-8º andar 3 - DISTRICT 4 - ZIPCODE 5 - TOWN OR CITY 6 - STATE Leblon Rio de Janeiro RJ 7 AREA CODE 8 - TELEPHONE 9 - TELEPHONE 10 - TELEPHONE 11 AREA CODE 12 - FAX alex.zornig@oi.net.brmailto:terziani@telemar.com.br AUDITING REFERENCES CURRENT FIN-{}-ANCIAL YEAR CURRENT QUARTER PREVIOUS QUARTER 1 - BEGINNING 2 - END 3 - NÚMBER 4 - INITIATED 5 - END 6 - NÚMBER 7 - BEGINNING 8 - END 01/01/ /31/ /07/ /30/ /01/ /30/ NAME OF AUDITORS 10 - CVM CODE Independent Auditors Deloitte Touche Tohmatsu NAME OF INDIVIDUAL RESPONSIBLE 12- CPF OF INDIVIDUAL RESPONSIBLE Marco Antonio Brandão Simurro CAPITAL STRUCTURE Number of Shares (thousand) Paid-in Capital Treasury Stock 1 - Current quarter 09/30/ Previous quarter 06/30/ Equal period last year to 09/30/ Common 130, , ,612 2 Preferred 261, , ,223 3 Total 391, , ,835 4 Common 3,036 3,036 3,071 5 Preferred 6,343 6,375 6,475 6 Total 9,379 9,411 9,546

3 ITR - Quarterly Report CORPORATE PROFILE 3 - NATURE OF SHAREHOLDER 4 - CODE / ACTIVITY 1 - TYPE OF COMPANY 2 - SITUATION CONTROL Commercial, Industrial and other Operational Brazilian holding company Telecommunications types of Company 5 - MAIN ACTIVITY 6 - TYPE OF CONSOLIDATION 7 - TYPE OF AUDITOR S REPORT Telecommunications services Total Unqualified Opinion COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS 1 - ITEM 2 - CNPJ 3 - COMPANY NAME DIVIDENDS AND/OR IOC DECLARED AND/OR PAID OUT DURING AND/OR AFTER THE QUARTER 1 - ITEM 2 - EVENT 3 - APPROVED 4 - DIVIDENDS /IOC 5 - PAYMENT INITIATED 6 - TYPE OF SHARE 01 AGM 04/14/2009 Dividend 10/30/2009 Common AGM 04/14/2009 Dividend 10/30/2009 Preferred AGM 04/14/2009 Interest on Equity 10/30/2009 Common AGM 04/14/2009 Interest on Equity 10/30/2009 Preferred AMOUNT PER SHARE 01,09 - SUBSCRIBED CAPITAL AND CHANGES WITHIN THE CURRENT FINANCIAL YEAR 1 - ITEM 2 - DATE OF CHANGE 3 - CAPITAL STOCK (thousand reais) 4 - CHANGE (thousand reais) 5 - REASON FOR CHANGE 7 - NUMBER OF SHARES ISSUED (thousand) 8 - ISSUE PRICE (reais) 01,10 - DIRECTOR OF INVESTOR RELATIONS 1 - DATE 2 SIGNATURE

4 ITR - Quarterly Report 1 - CVM CODE COMPANY NAME TELE NORTE LESTE PARTICIPAÇÕES S/A 3 - CNPJ 02,558,134/ ,01 - BALANCE SHEET ASSETS (IN THOUSANDS OF REAIS) 1 - CODE 2 - DESCRIPTION 3-09/30/ /30/ TOTAL ASSETS 10,898,958 11,026,115 1,01 CURRENT ASSETS 1,868,391 1,899,080 1,01,01 CASH & EQUIVALENT 394, ,157 1,01,01,01 CASH AND BANK ACCOUNTS 778 1,040 1,01,01,02 CASH EQUIVALENTS 393, ,117 1,1,02 CREDITS 0 0 1,1,02,01 CLIENTS 0 0 1,1,02,02 SUNDRY CREDITS 0 0 1,01,03 OTHER 1,474,342 1,459,923 1,01,03,01 DEFERRED / RECOVERABLE TAXES 300, ,214 1,01,03,02 FINANCIAL INVESTMENTS 1,643 1,774 1,01,03,03 RELATED PARTY CRÉDITS 1,156,191 1,151,216 1,01,03,03,01 DIVIDENDS & INTEREST ON CAPITAL 1,156,191 1,151,216 1,01,03,04 JUDICIAL DEPOSITS & EMBARGOES ,01,03,05 PREPAID EXPENSES 4,500 3,819 1,01,03,06 OTHER LONG TERM ASSETS 11,842 5,895 1,02 NON-CURRENT ASSETS 9,030,567 9,127,035 1,02,01 LONG TERM ASSETS 772, ,857 1,02,01,01 SUNDRY CREDITS 203, ,053 1,02,01,01,01 DEFERRED / RECOVERABLE TAXES 203, ,053 1,02,01,01,02 AMOUNTS RECEIVABLE 0 0 1,02,01,02 RELATED PARTY CRÉDITS 545, ,851 1,02,01,02,01 CREDITS IN RELATION TO SUBSIDIARIES 545, ,851 1,02,01,03 OTHER 23,847 23,953 1,02,01,03,01 JUDICIAL DEPOSITS & EMBARGOES 8,559 8,475 1,02,01,03,02 TAX INCENTIVES 9,286 9,286 1,02,01,03,03 PREPAID EXPENSES 5,894 6,084 1,02,01,03,04 OTHER LONG TERM ASSETS ,02,02 INVESTMENT 8,246,036 8,182,879 1,02,02,01 HOLDINGS IN AFFILIATES 8,238,404 8,175,247 1,02,02,02 OTHER INVESTMENTS 7,632 7,632 1,02,03 PROPERTY, PLANT & EQUIPMENT 10,174 10,491 1,02,04 INTANGIBLE ASSETS 1,717 1,808 1,02,05 DEFERRED ASSETS 0 0

5 ITR - Quarterly Report 1 - CVM CODE COMPANY NAME TELE NORTE LESTE PARTICIPAÇÕES S/A 3 - CNPJ 02,558,134/ ,02 - BALANCE SHEET LIABILITIES (IN THOUSANDS OF REAIS) 1 - CODE 2 - DESCRIPTION 3-09/30/ /30/ TOTAL LIABILITIES 10,898,958 11,026,115 2,01 CURRENT LIABILITIES 1,430,698 1,570,050 2,01,01 LOANS & FINANCING 231, ,291 2,01,02 SUPPLIERS 18,666 9,721 2,01,03 TAXES & CONTRIBUTIONS 18,240 17,880 2,01,03,01 DEFERRED / PAYABLE TAXES 4,615 3,336 2,01,03,02 REFIS II - TAX REFINANCING PROGRAM 13,625 14,544 2,01,04 DIVIDENDS & INTEREST ON CAPITAL 1,157,984 1,179,528 2,01,04,01 WITH RELATED PARTIES 187, ,274 2,01,04,02 WITH THIRD-PARTY 970, ,254 2,01,05 PROVISIONS FOR LEGAL CONTINGENCIES ,01,06 OTHER 4,511 6,535 2,01,06,01 PAYROLL & SOCIAL CHARGES / BENEFITS 1,661 1,642 2,01,06,02 OTHER LONG TERM LIABILITIES 2,850 4,893 2,02 NON-CURRENT LIABILITIES 949,472 1,015,468 2,02,01 LONG TERM LIABILITIES 949,472 1,015,468 2,02,01,01 LOANS & FINANCING 284, ,081 2,02,01,02 DEBTS TO RELATED PARTIES 488, ,112 2,02,01,03 PROVISIONS FOR LEGAL CONTINGENCIES ,02,01,04 OTHER 176, ,916 2,02,01,04,01 REFIS II - TAX REFINANCING PROGRAM 108, ,868 2,02,01,04,02 OTHER LONG TERM LIABILITIES 68,011 68,048 2,03 NET EQUITY 8,518,788 8,440,597 2,03,01 CAPITAL STOCK 5,448,731 5,448,731 2,03,02 CAPITAL RESERVES 41,571 41,015 2,03,03 REVENUE RESERVES 3,479,336 3,479,336 2,03,03,01 LEGAL RESERVE 379, ,870 2,03,03,02 UNREALIZED INCOME RESERVE 0 0 2,03,03,03 OTHER REVENUE RESERVES 3,099,466 3,099,466 2,03,03,03,01 INVESTMENT RESERVE 3,099,466 3,099,466 2,03,04 TREASURY STOCK (366,774) (366,774) 2,03,05 RETAINED EARNINGS / ACCUMULATED LOSSES (84,076) (161,711)

6 ITR - Quarterly Report 1 - CVM CODE COMPANY NAME TELE NORTE LESTE PARTICIPAÇÕES S/A 3 - CNPJ 02,558,134/ ,01 - STATEMENT OF INCOME (IN THOUSANDS OF REAIS) 1 - CODE 2 - DESCRIPTION Restated 6 - Restated From 01/07/09 From 01/01/09 From 01/07/08 From 01/01/08 To 09/30/09 To 09/30/09 To 09/30/08 To 09/30/08 3,01 GROSS REVENUE FROM SALES AND/OR SERVICES ,02 DEDUCTIONS FROM GROSS REVENUE ,03 NET REVENUE FROM SALES AND/OR SERVICES ,04 COST OF GOODS SOLD AND/OR SERVICES PROVIDED ,05 GROSS PROFIT ,06 OPERATING INCOME / (EXPENSES) 45,371 (120,583) 226,094 1,037,596 3,06,01 SALES EXPENSES ,06,02 GENERAL & ADMINISTRATIVE EXPENSES (8,989) (27,926) (8,813) (22,342) 3,06,03 FINANCIAL INCOME / (EXPENSES) - NET (8,060) (1,963) (70,304) (102,541) 3,06,03,01 FINANCIAL INCOME 35, ,980 22,322 51,542 3,06,03,02 FINANCIAL EXPENSES (43,646) (140,943) (92,626) (154,083) 3,06,04 OTHER OPERATING INCOME ,06,05 OTHER OPERATING EXPENSES (735) (4,067) (1,390) (5,257) 3,06,06 EQUITY ADJUSTMENTS 63,155 (86,627) 306,601 1,167,736 3,07 OPERATING INCOME / (EXPENSES) - NET 45,371 (120,583) 226,094 1,037,596 3,08 3,09 PROVISION FOR INCOME TAX & SOCIAL CONTRIBUTION DEFERRED INCOME TAX & SOCIAL CONTRIBUTION (8) 5,563 9,806 (15,572) (510) 3,10 PROFIT SHARING / STATUTORY CONTRIBUTIONS ,10,01 PROFIT SHARING ,10,02 STATUTORY CONTRIBUTIONS ,11 NET PROFIT / (LOSS) FOR THE PERIOD 50,934 (110,777) 210,522 1,037,078 NUMBER OF SHARES, EX-TREASURY (THOUSAND) 382, , , ,289 PROFIT PER SHARE (R$) ( )

7 1 Operations Tele Norte Leste Participações S,A, ("the company" or "TNL") is a publicly-held company and was established on May 22, 1998, uponthe break up and auctioning of Telecomunicações Brasileiras S,A, ("Telebrás"), for the principal purposesof taking equity stakes in other companies and furthering the operational and financial management of its directly and indirectly controlled subsidiaries, TNL is a holding company controlled by Telemar Participações S,A, ( Telemar Participações ), which, as at September 30, 2009, held 17,48% of the company s total capital and 52,45% of its voting capital. TNL is registered with the CVM (Brazilian Securities Commission) as a listed company whose shares are traded at the São Paulo Stock Exchange (BOVESPA), The company is also registered with the SEC (U,S,Securities and Exchange Commission) and its Level II ADSs (American Depositary Shares) are traded at the New York Stock Exchange (NYSE), through ADRs (American Depositary Receipts), Currently, 48,13% of the company s preferred shares are traded at the NYSE in the form of ADRs. (a) Main directly controlled subsidiaries Telemar Norte Leste S,A, ( TMAR ) TMAR is controlled by TNL, which, as at September 30, 2009, held 81,92% of the company s total capital and 97,35% of its voting capital. TMAR is the leading provider of wireline services in its area of operation Brazil s Region I comprising the states of Rio de Janeiro, Minas Gerais, Espírito Santo, Bahia, Sergipe, Alagoas,Pernambuco, Paraíba, Rio Grande do Norte, Ceará, Piauí, Maranhão, Pará, Amazonas, Roraima andamapá (with the exception of this region s Sector 3, covering the 57 municipalities of the TriânguloMineiro [Minas Triangle] and Alto Paranaíba [Upper Paranaíba river valley] areas in the state of MinasGerais, where the Companhia de Telecomunicações do Brasil Central - CTBC, operates), These services are provided under the terms of the concessions granted by ANATEL - National Telecommunications Agency, the regulatory body for the Brazilian telecom sector. TMAR also holds the ANATEL concession to provide national long distance services within Region I. On July 9, 2007, the government s published in its Official Gazette (D,O,U,) the contractual amendments covering the transfer, from TNL PCS S,A, ( Oi ) to TMAR, of the authorizations to provide Commutated Fixed Telephone Services (STFC) in the formats: (i) NLD - National Long Distance: in Region II, Region III and Sector 3 of Region I; and (ii) ILD - International Long Distance: throughout Brazil. TNL PCS Participações S,A, ( TNL PCS Participações )

8 TNL PCS Participações S,A,, TNL s integral subsidiary, has the corporate purpose of providing telecommunications services, in any form whatsoever, as well as acquiring equity stakeholdings in other companies, The company began operating in December (b) Main indirectly controlled subsidiaries TNL PCS S,A, ( Oi ) Oi is controlled by Tele Norte Celular Participações S,A,, which, as at September 30, 2009, held 100% of the company s total capital and its voting capital, see Note 1(d) Corporate Reorganization. Oi was created to participate at ANATEL s bid 001/2000, obtaining the same authorization for PMS - Personal Mobile Service rendering in Region I of GGP - Grant General Plan, On March 12 th, 2001 Oi was granted ANATEL authorization for undetermined term to exploit PMS, along with the right to use radiofrequencies for a 15-year term, at onerous title, paying 2% of its previous year PMS net income every two years, since the authorization conditions are met. Due to regulatory conditions, the SMP authorization and granting use of the associated radio frequencies only came into effect as from June 26, 2002, when Oi began its commercial operations. As from November 30, 2005, with its takeover of Pegasus Telecom S,A,, Oi also began to provide SCM (Data transmission services) in Regions I, II and III. On December 6, 2007, the formalization of Act nº 68,982, of December 5, 2007, was published in the D,O,U,, partially ratifying the result of ANATEL Public Tender nº 001/2007/SPV, authorizing Oi to provide SMP services and use the corresponding radio frequencies in the state of São Paulo, as well as extending the bandwidth within the following states in Region I: Amapá, Roraima, Amazonas, Pará, Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas,Sergipe, Bahia, Espírito Santo, Minas Gerais and Rio de Janeiro, for the remaining term of the authorization (ANATEL PVCP/SPV nº 001/2001) for use of radio frequencies in association with the authorization to provide SMP, which is renewable for another 15 years, under onerous title. On December 31 st, 2007, the formalization of the Qualification and Grant Notice dated December 27 th, 2007 was published on D,O,U, which qualifies Oi to use 3 rd generation (3G) radiofrequencies bands for PMS exploitation within GGP Regions I and III, which Oi won at Bid No. 002/2007/SPV ANATEL, at the offered amount of R$ 867,018. On April 29 th, 2008, published on D,O,U, of April 30 th, 2008, the authorization terms that grant Oi the authorization of 3 rd generation - 3G radiofrequencies, to provide PMS services in GGP Regions I and III areas (but Altinópólis, Aramina, Batatais, Brodósqui, Buritizal, Cajuru, Cássia dos Coqueiros, Colômbia, Franca, Guairá, Guará, Ipuã, Ituverava, Jardinópolis, Miguelópolis, Morro Agudo, Nuporanga, Orlândia, Ribeirão Corrente, Sales de Oliveira, Santa Cruz da Esperança, Santo

9 Antônio da Alegria and São Joaquim da Barra counties) were signed for a 15-year term starting on the date of its publication, renewable for 15 more years at onerous title. On January 3, 2008, formal notice was given in the D,O,U, of Oi s official licensing, on December 28, 2007, to use second generation (2G) radio frequencies for SMP in areas of the state of São Paulo that Oi won in ANATEL Public Tender nº 001/2007/SPV, in the offer sum of R$ 139,294. Further authorization documents were signed on September 8, 2008, granting Oi the use of the corresponding radio frequencies to provide 2G (second generation) SMP, using GSM technology, in the state of São Paulo, outside the state capital, and within Regions II and III, for 15 years, renewable for an equal period, under onerous title. On October 16 th, 2008 the ANATEL s Act authorizing the exploitation for a 15-year term renewable for an equal period from the date of that publication, of the subscribed Distribution Service of Television and Audio Signals Via Satellite (DTH) in the whole national territory was published in D,O,U,, in the amount of R$ 470, being such amount paid on November 11 th, 2008, date on which the Authorization Term for service exploitation was signed. Tele Norte Celular Participações S,A, ( TNCP ) The TNCP is an publicly held corporation, registered in BOVESPA, acquired by TMAR on April 3, 2008 and held 99,7% of its total capital, has the corporate purpose of acquiring equity stakes, as a partner or shareholder, in other companies, both commercial and civil, within Brazil or abroad. Way TV Belo Horizonte S,A, ( Way TV ) Way TV an integral subsidiary of TNL PCS Participações, acquired on July 27, 2006, with the acquisition authorized by ANATEL on November 12, 2007, has the corporate purpose of providing telecom services, including cable television and SCM, performing activities that are directly or indirectly related to its corporate purpose, all within its area of operations, embracing the cities of Belo Horizonte, Poços de Caldas, Uberlândia and Barbacena, for Brazilian and foreign companies as well as taking equity stakes in other companies; Paggo Empreendimentos S,A, ( Paggo ) Paggo an integral subsidiary of Oi, acquired on December 17, 2007, is the parent company of two companies: Paggo Acquirer Gestão de Meios de Pagamentos Ltda, ( Paggo Acquirer ) and Paggo Administradora de Crédito Ltda, ( Paggo Administradora ). Paggo Acquirer has the following corporate purposes: (i) the registration and administration of payments through networks of retail outlets and service providers members of credit systems, using credit systems or some other available means of payment; (ii) recording, transmission, processing, guaranteeing and settlement of all such transactions carried out at approved establishments in your credit systems; and (iii) supplying the necessary technology and equipment for the suitable functioning of the credit systems; and

10 Paggo Administradora has the following corporate purposes: (i) registration, evaluation and approval of clients who seek to join the company s credit systems; (ii) coordinating the relations between all the integral parts of the credit systems, participating networks, commercial establishments, service providers, financial institutions and others; (iii) control and updating of data records and providing information on the transactions carried out using the credit systems; and (iv) providing administrative services for credit or other payment systems, including the recording, transmission, processing, guaranteeing and settlement of all such transactions. Coari Participações S,A, ( Coari ) Coari Participações S,A, ("Coari"), an integral subsidiary of TMAR acquired on December 2003, has the corporate purpose of acquiring equity stakes, as a partner or shareholder, in other companies, both commercial and civil, within Brazil or abroad, This firm started activities at April, 25 th, 2008, when purchased full stocks of Copart ' Participações S,A ("Copart '") and Copart 2 participações S,A, ("Copart 2") which were purchased with the purpose to participate in stocks purchasing of Invitel, Brasil Telecom Participações S,A, (BrT Part") and Brasil Telecom S,A, ("BrT), see more details at Note 1 (e) Afterwards, at May, 30 th, 2008, Coari purchased Copart 3 participações S.A. (c) Main direct and indirect subsidiaries of Coari Brasil Telecom S,A, ( BrT ) BrT was subsidiary of BrT Part until its extinction date by incorporation, occurred at September, 30 th, 2009, see more details at Note 1 (f), At September, 30 th, 2009, BrT is controlled by Coari, which holds 79,63% of voting capital and 48,20% of total capital. BrT is a concessionaire accountable for STFC in GGP Region II, that includes the states of Acre, Rondônia, Mato Grosso, Mato Grosso do Sul, Tocantins, Goiás, Paraná, Santa Catarina and Rio Grande do Sul, besides the Federal District, In that area, BrT provides STFC since July 1998, in the modalities local and intra-regional national ling distance, From January 2004 on, BrT started exploiting also both national and international long distance services in all Regions, In local modality, services outside Region II started being offered from January 2005 on. Concession agreements in force, both local service and long distance modality became effective on January1st, 2006, and are valid until December 31 st Brasil Telecom Celular S,A, ( BrT Celular ) BrT Celular is an integral subsidiary of BrT that has been operating since Q providing Personal Mobile Service ( PMS ), authorized to serve GGP Region II. BrT Serviços de Internet S,A, ( BrTI ) BrTI is an integral subsidiary of BrT withholds the control of the companies listed here below: ig Companies

11 ig companies include Internet Group (Cayman) Limited ( ig Cayman ), ig Participações S,A, ( ig Part ) and Internet Group do Brasil S,A, ( ig Brasil ) companies, ig Brasil s operation is based on providing Internet access, both on dial up and broadband, It also provides services of aggregated value addressed to the home and corporate markets, including the Internet connection accelerator, Beyond these services, IG Brasil also has advertising space sales in its portal, IG Cayman is a holding with holds, in its time, control of IG Part, where exists investments of 32,53% of IG Brasil joint stock, IG Part and IG Brasil are firms established in Brazil, Brasil Telecom Cabos Submarinos Ltda, ( BrT CS ). BrT CS, along with its controlled, operates through a system of optic fiber submarine cables, with connection points in the United States, Bermudas Islands, Venezuela and Brazil, allowing the data traffic through integrated service packages, offered to both national and international corporate customers,brt Comunicação Multimídia Ltda, ( BrT Multimídia ). BrT Multimídia provides services of private network of telecommunications through optical fiber digital networks in the local range in São Paulo, Rio de Janeiro and Belo Horizonte, and long distance network, connecting those metropolitan business centers, It operates in national range through commercial agreements with other telecommunication companies to offer services to other Brazilian regions, It also has Internet solution centers in São Paulo, Brasília, Curitiba, Porto Alegre, Rio de Janeiro and Fortaleza that provide co-location, hosting services and other aggregate value services. BrT participates with 90,46% in BrT Multimídia social capital, in that the other 9,54% of social participation belongs to BrTI. Brasil Telecom Call Center S,A, ( BrT Call Center ) BrT Call Center is an integral BrT subsidiary, that operates providing central services to third parties, encompassing the customer service areas, active and passive telemarketing, training, support consulting, and alike activities, Its operational activity started in November 2007, providing "call center services to BrT and its controlled companies that demand that kind of service, Previously, call center services were outsourced. BrT Card Serviços Financeiros Ltda, ( BrT Card ) BrT Card, made to render managing, Assessment in development of products and financial services development, with participation of 99,99% as part of BrT, At the quarter closing date, BrT Card only had financial applications of immediate liquidity, arising from capital payment resources and had not started its operational activities. (d) Corporate Restructuring - TNCP On May 5 th, 2008 TMAR started the process of corporate restructuring, as approved by its Board of Directors, applying for the registration of public offer of purchase of common shares to CVM, and then applying for registration of public offers of preferred shares of its subdisiaries TNCP and Amazônia Celular S,A ( Amazônia ), As a result of purchases made in Mandatory and Volunteer OPAs, after January 16 th, 2009 TMAR withheld 2,467,689 common shares and 4,147,288 preferred

12 shares of TNCP, as well as 80,868 common shares and 971,791 preferred shares of Amazônia, representing 98,7% of TNCP s total capital and 17,9% of Amazônia s total capital, Such reorganization is aimed to optimize the control structure reducing companies, concentrating alike activities, and simplifying corporate participation among companies. On March 9 th, 2009, TMAR administration implemented the corporate reorganization aiming to consolidate the assets related to Amazônia activities to those related to Oi activities, returning to ANATEL, soon after, the authorization of use of certain radiofrequencies. The corporate reorganization took place as follows: (i) Incorporation of Amazônia shares by TNCP, aiming to turn Amazônia an integral subsidiary of TNCP, through which Amazônia s shareholders received 354,886 common shares and 1,430,859 preferred shares from TNCP, which were issued for this purpose, replacing the 151,159 common shares and 270,798 preferred shares of Amazônia that are still circulating after the OPA s, what resulted in a TNCP social capital increase of R$ 32,884, Each common share issued by Amazônia corresponds to 1, common share issued by TNCP and each preferred share issued by Amazônia, regardless the class, corresponds to 1, preferred share issued by TNCP. The share replacement ratio respected the class of the existing shares, taking into account: (i) for common shares, prices applied in TNCP and Amazônia mandatory OPA s, carried out on January 16 th, 2009, corresponding to R$ 87,61 and R$ 134,00, respectively; and (ii) for preferred shares, prices applied in TNCP and Amazônia mandatory OPA s, carried out on August 19 th, and October 22 nd, 2008, corresponding to R$ 33,00 and R$ 38,00, respectively, The use of OPA s prices as base to define the replacement ratios was based on the massive adhesion of companies minority shareholders to mandatory and volunteer offers. (ii) TMAR increased its stock participation in TNCP paying the capital in the form of assignment of almost 100% of the investment in Oi, In this procedure were issued 56,464,204 common shares and 112,928,407 preferred actions of TNCP and the total amount involved was of R$ 8,673,466, what corresponds to the accounting value of the investment in Oi. Because of the incorporation of Amazônia s shares and the capital payment of controller TMAR, TNCP social capital increased by R$ 8,706,350, turning R$ 8,791,201, represented by 59,311,566 common shares and 118,568,472 preferred shares, resulting in the following share composition: Common Shares % Preferred Shares % Total % TMAR 59,055, ,193, ,248, Shares outstanding 256, , , Total Shares 59,311, % 118,568, % 177,880, %

13 (iii) (iv) Radiofrequencies attributed to Amazônia were returned to ANATEL, hence, extinguishing its SMP grant; Amazônia incorporation by Oi, in that each common or preferred share, regardless its class, issued by Amazônia corresponds to 15, common shares issued by Oi, 92,363,839 Oi s common shares, nominative and without nominal value where issued. Because of Amazônia incorporation, Oi s social capital increased by R$ 131,301, turning R$ 9,743,805, represented by 6,193,577,065 common shares, The issued shares were paid absorbing Amazônia s net equity, being 100% of Oi s shares withheld by TNCP. (e) Acquisition of a controlling stake in Brasil Telecom Participações S.A. During the months of May and June 2008, Copart 1 and Copart 2 conducted successive acquisitions of preferred stock in the companies BrT Part and BrT, respectively, The acquisitions carried out by Copart 1 accumulated a total of 55,819,400 preferred shares (BRTP4) issued by BrT Part, for the total sum of R$ 1,425,133, which represented 24,3% of that company s preferred stock and 15,40% of its total share capital, The acquisitions carried out by Copart 2 amounted to a total of 45,590,300 preferred shares (BRTO4) issued by BrT, at a total sum of R$ 897,775, which represented 14,6% of that company s preferred stock and 8,3% of its total share capital. A voluntary public share offering was carried out by the indirect subsidiaries Copart 1 and Copart 2, on July 22, 2008, with the aim of purchasing one third of the outstanding preferred stock issued by BrT Part and BrT, Copart 1 acquired 20,826,442 BrT Part preferred shares (BRTP4) at a unit cost of R$ 30,47, making a total of R$ 634,582, and Copart 2 acquired 13,366,365 BrT preferred shares (BRTO4) at a unit cost of R$ 23,42, making a total of R$ 313,040. As a result of the acquisitions effected under the voluntary public share offering, TMAR assumed indirect control of 58,956,665 BrT preferred shares and 76,645,842 BrT Part preferred shares, representing, respectively, 18,9% of the total preferred stock and 10,5% of the share capital of BrT, and 33,3% of the total preferred stock and 21,11% of the share capital of BrT Part, On December 31 st, 2008, controlled Copart 1 and Copart 2 had no significant influence on investment withheld in BrT Part and BrT, respectively. On January 8 th, 2009, TMAR, through its indirect controlled Copart 1 purchased BrT Part s share control and therefore, BrT s, globally paying R$ 5,371,099, corresponding to a price per common share of R$ 77,04 of BrT Part, The amount paid corresponds to the price agreed in the Trade Agreement, updated according the variation of CDI daily average rate, deduced of Invitel s net debt, in the amount of R$ 998,053 adjusted according to the income declared between January 1 st, 2008 and the date of closure. BrT control exchange to TMAR basically consisted in purchasing 100% of Invitel s share, which withhelds 100% of Solpart, which withheld BrT Part direct control. The afore-mentioned purchase was recorded in TMAR considering the fair value of assets and liabilities identified at the purchase date, January 8 th, 2009, including intangible assets and contingent liabilities.

14 On June 23, 2009, were carried out common stocks purchasing public offer of BrT Part and BrT, duly registered on CVM according registration requirements for Mandatory purchasing public offers, In Purchase Public Offers were ensured to minorities minimum amount equal to 80% of price paid do stocks on control block, being R$ 61,63 for BrT Part stocks and R$ 57,76 for BrT stocks, adjusted by declared profits and by CDI mean daily rate floating from January 1st, 2008, until auction financial termination date, which results in amounts of R$ 64,71 and R$ 60,64, respectively, Copart 1 purchased 40,452,227 common stocks from BrT part, passing in this manner to keep, directly and indirectly, between Invitel control, 54,45% of total capital and 90,68% of this company voting capital and Copart 2 purchased 630,872 BrT common stocks, passing to keep 10,62% of total capital and 0,25% of Company voting capital. Identified assets and liabilities, including BrT s contingent liabilities, were acknowledged in the accounting statements consolidated by the related percentage of participation over the fair value on the date of purchase. On December 31, 2009, the Company still found itself during the measurement of assets and liabilities mentioned above, which were calculated and allocated based on information available at the time. During the period from the date of acquisition of control of Invitel and closing of financial statements at December 31, 2009, the Directors of the Company revised the measurement of estimated fair value of contingent liabilities related to ongoing processes of hiring plans expansion Riograndense Telecommunications Company ("CRT"), merged by Brasil Telecom. The review was the consideration of further relevant information arising from the adjustment of provisions for contingencies described in Note 23, which should be considered when measuring fair value of these contingencies on the acquisition of control of Invitel. Information used to implement the improvements mentioned above were available on the date of acquisition of control of Invitel consequently the fair value of these contingencies was increased by R $ 1,084,218.

15 Taking into account the values paid purchasing Invitel s control and in BrT Part s and BrT s both Mandatory and Volunteer OPA s, the table here below demonstrates, in a summarized manner, the value paid for BrT s operations, as well as the adjustments in fair values of purchased assets and assumed liabilities in the purchase of these operations, which include the effects of the new estimate of the fair value of the contingencies mentioned above. In purchase of Invitel and volunteer OPA's (40,02%) 08/01/2009 Participation increase to 47,64% in Mandatory OPA's 23/06/2009 Total paid to former shareholders 8,641,629 2,655,920 Fees paid in the operation 1, Gross price paid 8,643,513 2,656,837 Shareholders equity of BrT 6,240,952 5,326,867 Total of purchased participation 2,497, ,907 Proportional adjusts to fair value, net: Property, plant & equipment 1,818, ,316 Intangible (STFC exploitation license) 4,605,859 1,774,560 Provision for contingencies (812,447) (143,604) Provision for doubtful debtors (17,661) Adjusted participation in BrT s net equity 8,091,991 2,386,179 Participation at Invitel net equity (discounted of indirect participation on BrT) adjusted, 551, ,658 Goodwill The Company hired a skilled company to help in the calculation of above-illustrated fair values. (f) Corporate Restructuring - BrT Company completed 1 st step and started 2 st step of corporate restructuring of indirect subsidiaries BrT Part and BrT with the purpose to optimize control structure and synergy use between activities increasing operational efficiency. At December 19 th, 2008, ANATEL issued Act nr, 7,828 by mean which Director Counsel granted previous authorization to subsequent society acts referring to firms incorporation or Invitel, Solpart and BrT Part society stocks incorporation by TMAR. In agreement to Relevant Fact disclosed at July, 15 th, 2009 and correction of same Relevant Fact at July, 21 th, 2009, as well the Relevant Fact disclosed at August, 12 th, 2009, the 1 st phase and Step 2 of 2 nd phase of society reorganization were performed, in July, 31 th and September, 30 th, 2009, respectively, comprehending a series of incorporations, performed by TMAR subsidiaries, in terms of arts, 230 and 252 terms Of Societies Law by Stocks by TMAR subsidiaries firms, as described in lines below.

16 (i) Invitel incorporation by its subsidiary Solpart, with absorption of Invitel patrimony by Solpart and consequent Invitel extinction on June 31, Invitel net patrimony incorporated by Solpart was of R$ 384,309, being not occurring Solpart joint stock increasing, being amount fully registered as capital reserve, in force of article 200 of Stocks Society Law. Current from Invitel incorporation, were attribute 0, common stock of Solpart issue for each Invitel common stock and 0, Solpart preferential stock for each Invitel preferential stock (replacement relation). Invitel hold in its treasury common stocks which were cancelled at incorporation, Solpart have not stocks on treasury. (ii) Solpart incorporation by its parent company Copart 1, with Solpart patrimony absorption by Copart 1 and consequent Solpart extinction on July 31, Solpart net patrimony incorporated by Copart 1 was of R$ 23,900, being not occuring Copart joint stock increasing, being amount fully registered as capital reserve, in force of article 200 of Stocks Society Law. (iii) Copart 1 incorporation by BrT Part, with Copart 1patrimony absorption by BrT part, by mean of Coari, full holder of Copart 1 stocks, which received BrT Part stocks replacing its Copart 1 stocks, which has been extinct on July 31, Copart 1 net patrimony incorporated by BrT Part was of R$ 3,973,694, being not occurring BrT Part joint stock increasing, being amount fully registered as capital reserve, in force of article 200 of Stocks Society Law. Current from Copart 1 incorporation, were attribute 0, common stock of BrT Part issue for each Copart 1 common stock and 0, BrT PArt preferential stock for each Copart 1 preferential stock (replacement relation). BrT Part had 1,480,800 common stocks in treasury, wich were kept in treasury. (iv) Copart 2 incorporation by BrT Part, with Copart 2 patrimony absorption by BrT part, by mean of Coari, full holder of Copart 2 stocks, which received BrT Part stocks replacing its Copart 2 stocks, which has been extinct on July 31, Copart 2 net patrimony incorporated by BrT Part was of R$ 369,165, being not occurring BrT Part joint stock increasing, being amount fully registered as capital reserve, in force of article 200 of Stocks Society Law. Current from Copart 2 incorporation, were attribute 0, common stock of BrT issue for each Copart 2 common stock and 0, BrT Part preferential stock for each Copart 2 preferential stock (replacement relation).

17 Copart 2 had not stocks on treasury, BrT had 13,231,556 preferential stocks in own issue in treasury, which were kept in treasury. (v) BrT Part incorporation by BrT, with BrT Part patrimony absorption, in manner that Coari holder of 54,45% of BrT Part stocks and 10,62% of BrT stocks, received 231,077,513 stocks, being 161,359,129 common and 69,718,384 preferred substituting its BrT part stocks, terminated at September, 30 th, 2009, In this manner, Coari pass to hold 48,20% of BrT equity. BrT Part net equity incorporated by BrT was R$ 5,535,332, creating a BrT joint stock increasing in amount of R$ 260,301, and still R$ 1,413,592 was registered as capital reserve and R$ 3,861,439 destined to premium special reserve, according established at CVM Instruction nr, 319/1999. The capital increasing is represented by the issue of 201,143,307 common stocks and 209,155,151 preferred stocks of BrT, which were fully attributed to BrT part stockholders, So, BrT joint stock passes to be R$ 3,731,059, represented by 203,423,176 common stocks and 399,597,370 preferred stocks. Current from BrT Part incorporation, were attributing 1, common stock of BrT issue for each BrT part common stock and 0, common stock and 0, preferred stock from BrT issue for each preferred stock from BrT part issue (Replacement relation). BrT Part had 1,480,800 common shares in treasury, which were cancelled, BrT Part held 13,231,556 common stocks in treasury, which were kept in treasury. All net patrimony evaluations and net state of incorporated firms were performed by specialized firm, following disposed at articles 226 and 227 of Stocks Society Law, based on state amounts at base date of May, 31th, 2009, adjusted by societary events occurred between this date and incorporation date (July, 31th, and September, 30 th, 2009) and subsequent most relevant events, below are the patrimonial balance of respective parent companies: Balance Sheet - Invitel 05/31/2009 Current Assets 91,324 Non-Current Assets 137 Investments 1,402,447 Intangible 292,916 Total Assets 1,786,824 Current Liabilities 68 Shareholders equity 1,786,756 Total Liabilities 1,786,824

18 Balance Sheet - Solpart 05/31/2009 Current Assets 105,808 Non-Current Assets 138 Investments 990,258 Intangible 690,835 Total Assets 1,787,039 Current Liabilities 282 Shareholders equity 1,786,757 Total Liabilities 1,787,039 Balance Sheet Copart 1 05/31/2009 Current Assets 121,782 Non-Current Assets 138 Investments 2,817,374 Intangible 3,861,438 Total Assets 6,800,732 Current Liabilities 9,664 Shareholders equity 6,791,068 Total Liabilities 6,800,732 Balance Sheet Copart 2 05/31/2009 Current Assets 7,258 Investments 559,390 Intangible 366,788 Total Assets 933,436 Current Liabilities 4,880 Not floating liability 1 Shareholders equity 928,555 Total Liabilities 933,436

19 Patrimonial floating occurred from May, 31 th, 2009 to July, 31 th, 2009 were accounted at Parent Companies firms. Balance sheet BrT Part 05/31/2009 Current Assets 584,415 Non-Current Assets 1,495,722 Investments 7,345,051 Property, plant & equipment 455 Total Assets 9,425,643 Current Liabilities 330,789 Noncurrent liability 11,512 Shareholders equity 9,083,342 Total Liabilities 9,425,643 Patrimonial floating occurred from May, 31 th to September, 30 th, 2009 were registered at BrT (Parent Company) and totalize R$ 82,637. In terms of Law 6,404/1976, incorporations were submitted and approved by stockholders of Invitel, Solpart, Copart 1, BrT, BrT Part, Copart 2 and Coari in Stockholders General Assemblies of referred companies done at July, 31 th, 2009 and September, 30 th, BrT stock composition at September, 30 th, 2009, passes to be the following: Stock Composition BrT Stockholder Common % Preferred % Total % Coari 161,990, % 128,675, % 290,665, % Minorities 41,433, % 257,690, % 299,123, % Stock in Treasury 13,231, % 13,231, % Total 203,423, % 399,597, % 603,020, % Goodwills originally registered at Copart 1 incorporated by CrT Part has par of it from Solpart Incorporation by Copart 1 and other part from Invitel incorporation by Solpart, in nominal amount of R$ 8,235,520, were from purchasing of 100% of Invitel stocks and 35,52% of BrTP Part stocks, The registered goodwill is founded in fixed asset rise and in BrT's STFC granting right, being allocated at these rubrics in Company's consolidated financial demonstrations, Current from Copart 1 incorporation by BrT Part, and subsequent BrT Part incorporation by BrT, goodwill will be accountability amortized by BrT, in terms of actual taxpayer and accounting law, generating tax benefits. Goodwill first registered at Copart 2 incorporated by BrT, in amount of R$ 737,664 is from purchasing of 10,62% of BrT stocks, founded in rise of fixed asset and right of concession of STFC of BrT, being allocated at this accountable accounts in consolidated financial demonstrations of Company, Current from Copart 2 incorporation by BrT, Goodwill will be accountability amortized by BrT, in terms of actual taxpayer and accounting law, generating tax benefits.

20 It shall be highlighted that, for the purpose of net equity objects of reverses incorporations of Copart 1 and Copart 2 by BrT Part and BrT, respectively, Copart 1 and Copart 2 registered in force of provision for net equity integrity maintenance of its subsidiaries, the amounts of R$ 4,072,381 and R$ 340,522, respectively, The established provisions reduces the goodwill amounts founded in STFC of BrT granting, in the amount of respective fiscal benefit current from its amortization, according requested by paragraph 1 st (item a) of art, 6 th of Instruction CVM No, 319/1999. After the completion of Step 2 of 2 nd phase, resulting society structure is: Society structure before BrT Part incorporation Society structure after BrT Part incorporation TNL TMAR ON: 97,35% PN: 69,37% Total: 81,93% TNL ON: 97,35% PN: 69,37% Total: 81,93% Coari BrT Part ON: 100,00% PN: 100,00% Total: 100,00% ON: 90,68% PN: 33,33% Total: 54,45% ON: 0,25% PN: 18,94% Total: 10,62 % TMAR Coari ON: 100,00% PN: 100,00% Total: 100,00% ON: 79,63% PN: 32,20% Total: 48,20% BrT Part incorporation ON: 99,09% PN: 38,83% Total: 65,64% BrT BrT At September, 2 nd, 2009, SEC declared as effective register protocol ( Registration Statement ) related to stocks issued by BrT for BrT part stocks incorporation purposes, in terms of U,S, Securities Act of As disclosed by TMAR in the relevant fact disclosed on August 12 th, 2009, the following steps of phase 2 of the corporate reorganization will take place: Step 3: BrT stocks incorporation by Coari, Open company and a TMAR subsidiary, in order to make BrT a full Coari subsidiary (BrT stocks incorporation ); and Step 4: Coari incorporation by TMAR, with absorption of Coari Patrimony by TMAR, and consequent Coari extinction, which will result in migration of Coari stockholders to TMAR ( Coari Incorporation ). At September, 25 th, 2009, Coari s and BrT s Fiscal and Management Councils approved Step 3 of 2 nd step of society re-organization.

21 Structure and conditions of BrT Stocks incorporation (Step 3) and Coari Incorporation (Step 4) are, except for previously mentioned, subject to detailing based in analysis and studies that are being executed by Companies and to preparatory acts supervision needed to obtainment of approval to list Coari and TMAR stocks at New York Stock Exchange and these stocks registration at SEC and BM&FBOVESPA. 2 Presentation of quarterly information and consolidation principles (a) Quarterly Information elaboration criteria Quarterly information were prepared in accordance with accounting practices adopted in Brazil, according to corporate legislation and CVM rules, The set of practices and rules that govern the accounting registration and the preparation of accounting demonstrations were modified from the social year ended on December 31 st, 2007, However, changes were applied to accounting statements related to social year ended December 31 st, 2008, During social year 2008, quarterly information was originally presented according to former accounting practices (effective on December 31 st, 2007 and in accordance with CVM Instruction No, 469/2008), For suitability to current accounting practices purposes, comparative information related to the previous period are being represented, where applicable. (b) Law nº 11,638/2007 and Law nº 11,941/2009 On December 28 th, 2007 Law No, 11,638/2007 was published; such law changed and introduced new provisions to the Corporation Law - Law No, 6,404/1976, The above-mentioned law established different changes on the accounting subject and the elaboration of accounting statements, aiming its alignment to the accounting international rules IFRS International Financial Reporting Standards and, in that sense, assigned to CVM the power to issue accounting rules and procedures for public companies. On December 3 rd, the Temporary Decree No, 449/2008 was edited, having law-strength, instituting the TTR - Transition Tributary Regime of taxable income, that deals with tributary adjustments arising from new methods and accounting criteria introduced by Law No, 11,638/2007, besides introducing some changes to Law No, 6,404/1976, On May 27 th 2009 the above-mentioned Temporary decree was sanctioned through Law No, 11,941/2009.

22 Here below are represented the financial statement and result demonstration reconciliations published on September 30 th, 2008, adjusted to Law No, 11,638/2007, necessary to allow the comparability to the period ended on September 30 th, 2009, Net equity on 09/30/08 Parent Company Result Quarter terminated at September, 30 th, 2008 Net equity on 09/30/08 Consolidated Quarter terminated at September, 30 th, 2008 result Originally presented outfit 10,392, ,983 10,175, ,805 Financial instruments 1,049 11,825 (12,025 ) (2,670 ) Financial commercial leasing 14,257 4,873 Subventions and governmental assistances 78,635 78,635 Remuneration based in stocks (3,687 ) (36,869 ) Deferred (2,056 ) 386 Income tax and social contribution paid on the total adjustments (357 ) (4,021 ) 5 (412 ) Equity on the adjustments of law No, 11,638/2007 and MP No, 449/ ,064 91,978 (14,061 ) 52,154 Balance according Law 11,638/ ,456,829 1,037,078 10,240,017 1,076,902 (c) Consolidation criteria Consolidation was elaborated according CVM Instruction nr, 247/1996 and include accounting demonstrations of Company s direct and indirect controlled societies, Main consolidation procedures are: Sum of balances of asset, liability, revenue and expense accounts, according to the accounting nature; Elimination of balances of asset and liability accounts, as well as relevant revenues and expenses, between consolidated companies; Elimination of investments and related participation in controlled companies net equity; Detach of minority shareholder participation in net equity and year result; and Consolidation of exclusive investment funds (Note 9). As described in Note 1(e), the Company purchased, through indirect participations, BrT stock control, and provided both mandatory and volunteer OPA s related to non-controller shareholder participation, having recorded such transactions in the consolidated accounting statements, as described here below.

23 After the stock control was purchased, assets, liabilities and identified contingent liabilities were recognized at their fair value, estimated at the date of control purchase, proportionally to the purchased stock participation. The purchase operation cost was measure as the total of: The fair value, on the date of purchase, of the purchased assets and incurred liabilities, in exchange of the purchased control. The total of the expenses directly assigned to the transaction. The purchase cost was proportionally allocated to the Company s participation in the fair value of asset and liability s acquired. As mentioned in Note 1 (e), the Company improved its preliminary estimate of the values allocated on the acquisition date of control of Invitel and held adjustments to the fair value of provision for contingencies during the measurement period of fair value of assets and liabilities acquired. Non-controller shareholder participation in the purchased company s asset and liabilities, presented in the consolidated accounting demonstrations, was calculated based on their accounting value. Restated of Quarterly Information - ITR of September 30, 2009 As disclosed in Note 23, the shareholders of Brasil Telecom SA ("Brasil Telecom") indirect subsidiary of the Company, supported by its internal and external legal advisors, has enhanced the process of measuring the provision for contingencies relating to financial contracts signed in connection with the expansion plans of the Company Riograndense Telecommunications ("CRT"), merged by Brasil Telecom. This improvement contemplated additional considerations relevant dates and theories that guided the cases heard of existing processes and the use of statistical criteria for estimating the provision for contingencies relating to the processes mentioned. Information used to implement the improvements mentioned above were available when the calculation of the estimate accounted for in the first nine months of 2009 and had not been considered at that time. In order to present the balance of provisions for contingencies with the considerations mentioned above and their reflections in the financial statements, the Company has, after its publication, the Quarterly Information - ITR for the quarter and nine months ended September , pursuant recommended by Resolution No. 506 of the CVM, which approves the Statement of IBRACON Accounting Policies, Changes in Accounting Estimates and Error Correction. These ITRs are restated spontaneously by the Company. The adjustments resulted primarily in the increase of the balance of provisions for contingencies current and noncurrent liabilities of consolidated statements, responded: (i) by an increase in property, plant and equipement and intangible assets, (ii) and by a reduction in balances of escrow deposits in current and noncurrent assets for its transfer to the respective lines of provisions for contingencies in current and noncurrent liabilities, and (iii) a reduction in the balance of the