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Contacts:

      Tele Nordeste Celular Participações S.A.
      Paulo Narcélio Simões Amaral
      55.81.3216.2591
      Fabíola Almeida
      55.81.3216.2594
      fabiola.almeida@timnordeste.com.br
      Polyana Maciel
      55.81.3216.2593
      polyana.maciel@timnordeste.com.br



                     TELE NORDESTE CELULAR PARTICIPAÇÕES S.A.
                      ANNOUNCES FIRST QUARTER 2001 RESULTS
     Recife, Brazil (May 14, 2001) – Tele Nordeste Celular Participações S.A. (NYSE: TND,
     BOVESPA: TNEP3, TNEP4) (“Tele Nordeste Celular” or “the Company”), the holding company
     controlling the operating companies serving Band A cellular telecommunication clients in the
     states of Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas under the TIM
     brand name, announced today its results for the first quarter of 2001 in accordance with
     Brazilian GAAP.

      • 65.5% of market share at the end of March 2001;
      • 39.2% of EBITDA margin in the quarter, reaching R$79.2 million;
      • Reduction of 47.1% at the bad debt expenses quarter over quarter.

      Operational Highlights

      Commercial activities during the first quarter of 2001 resulted in consolidated gross addition of
      134,498 clients (of which 97,004, or 72.1%, were prepaid). Accumulated net additions during
      the first quarter of 2001 totaled 45,619, all prepaid, as a result of the disconnection of 14,995
      clients from the post-paid system. The propose of those disconnection was to clean the clients
      base, as a way to reduce and control the bad debt. Excluding those disconnection, the
      consolidated net addition for the first quarter of 2001 was 60,614.

      The Company had a total of 1,556,619 clients on March 31, 2001, of which 816,603 (52.5%)
      were post-paid clients and 740,016 (47.5%) were prepaid clients. The market share at the end
      of the first quarter of 2001 was estimated at 65.5%.

      The subscriber acquisition cost was R$100 in the first quarter of 2001 compared to R$80 during
      the fourth quarter of 2000 and R$169 during the first quarter of 2000.

      As a result of the intensification of the collections and billing activities and the adoption of
      rigorous collection procedures and polices, the bad debt levels are showing an improvement.
      During the first quarter of 2001 the bad debt was 4.8% of gross revenue, against 8.3% during
      the fourth quarter of 2000, and 7.2% during the first quarter of 2000.




www.timnordeste.com.br                                                                                    1
In February of 2001, two new services were offered by the Tele Nordeste Celular’s operating
      companies: Intelligent Network and WAP.

      Intelligent Network is a new conception in business mobile communications. It is a service
      designed for companies, that permits the creation of groups of users, promotes the
      improvement of the mobile communication and permits the control of generated and received
      calls. All in accordance with the company definition.

      Wap service is provided through TIMnet, a subsidiary company created with the objective of
      develop internet solutions and innovative value added services. Although the technology was
      available, this service was not offered before, because the lack of TDMA WAP handsets in the
      brazilian market.

      Still during the first quarter, the Tele Nordeste Celular’s operating companies introduced two
      new tariff plans options for the post-paid service, with very reduced tariffs: the 60 and 90 plans.
      These are excellent alternatives for those who are already taking the advantages of being TIM
      clients and for new clients who will choose a plan that most attend their requirements.

      Financial Highlights

      Tele Nordeste Celular’s consolidated net income for the first quarter of 2001 was R$10.1 million
      or R$0.03 per 1,000 shares, compared to consolidated net income of R$12.9 million for the
      fourth quarter of 2000. This compares to a consolidated net income of R$11.2 million in the first
      quarter of 2000.

      For the first quarter of 2001, Tele Nordeste Celular reported consolidated EBITDA and EBIT of
      R$79.2 million and R$36.9 million, respectively, and an EBITDA margin of 39.2% and an EBIT
      margin of 18.3% over the net operating revenues, compared to EBITDA of R$81.9 million and
      EBIT of R$39.9 million, representing an EBITDA margin of 37.5% and an EBIT margin of 18.3%
      over net operating revenues reported for the fourth quarter of 2000, and EBITDA of R$73.5
      million and EBIT of R$47.4 million, representing an EBITDA margin of 34.3% and an EBIT
      margin of 22.1% over net operating revenues reported for the first quarter of 2000.


                                                  EBITDA (in R$000)

                         100,0

                          80,0

                          60,0

                          40,0

                          20,0

                           0,0
                                 1Q99   2Q99   3Q99   4Q99   1Q00   2Q00   3Q00   4Q00   1Q01




      Consolidated net operating revenues in the first quarter of 2001 reached R$202.3 million,
      against to R$218.3 million in the fourth quarter of 2000 and R$214.5 million in the first quarter of
      2000.

      Net consolidated revenues in first quarter of 2001, reduced 7.3% when compared to the fourth
      quarter of 2000. This reduction was due to the lowest income traffic volume. During the fourth
      quarter of 2000, besides the seasonality common in this period of the year, where the tourism

www.timnordeste.com.br                                                                                       2
increases a lot, there was an additional revenue of roughly R$18 million due to the incoming
      traffic not declared in the previous quarters, and recognized only in the fourth quarter of 2000.
      Another effected was the month of February, that besides be shorter, in this year the Carnival
      was in February. So, the month of February had only 17 business days, provoking a strong
      impact in the traffic volume generated during the month.

      Another important factor was the reduction of 26.8% in the handsets sales, that reflected the
      reduction on the subsidies levels. Considering only the telecom services revenues the reduction
      compared to the fourth quarter of 2000 was 6.5%.

      For the first quarter of 2000, consolidated net operating revenues decreased 5.7%. This
      reduction was mainly due to the lowest volume at the handsets sales, roughly 51.6%. Excluding
      the revenue from the handsets sales, the telecom services revenue decreased 2.2%. This
      decreased was due to the clients‘ migration from post-paid service to prepaid service, that
      generated a decrease in the monthly subscription payments of 18.1%.


                                          Net Operating Expenses (in R$000)

                         250,0

                         200,0

                         150,0

                         100,0

                          50,0

                           0,0
                                 1Q 99   2Q 99   3Q 99   4Q 99   1Q 00   2Q 00   3Q 00   4Q 00   1Q 01




      Selected Consolidated Financial Data (in thousands of Reais)

                                                          2001                   2000
                                                           1Q             4Q               1Q
      Gross Revenues
      - Usage charges                                    113,530         115,971         131,388
      - Monthly subscription payments                      42,733          39,942          52,194
      - Interconnection                                    84,993        102,977           61,511
      - Sale of handsets and accessories                   15,191          20,741          31,375
      - Other                                               1,113             362           2,748
      Subtotal                                           257,560         279,993         279,216
      - Taxes                                            (55,300)        (61,713)        (64,738)
      Net Operating Revenue                              202,260         218,280         214,478
      Cost of services and of goods sold
      - Depreciation and amortization                    (29,973)        (29,373)        (24,357)
      - Personnel                                         (2,481)         (1,535)         (2,743)
      - Materials                                           (137)           (122)           (125)
      - Circuit leasing                                   (8,849)         (9,508)         (7,989)
      - Leases and insurance                              (2,938)         (2,445)         (2,222)
      - Handsets and accessories                         (12,545)        (15,307)        (31,721)
      - Fistel                                              (182)           (345)           (107)
      - Plant Support and maintenance                      (1,761         (5,134)           (540)
      - Interconnection                                  (27,559)        (22,445)        (26,130)
      - Other                                             (2,114)         (1,433)         (1,059)
      Subtotal                                           (88,539)        (87,647)        (96,993)
      Gross profit                                       113,721         130,633         117,483

www.timnordeste.com.br                                                                                    3
Consolidated gross profit for the first quarter of 2001 decreased 12.9% compared to the fourth
      quarter of 2000. This decrease was due to the effect provoked by the additional revenue from
      the incoming traffic accounted in the fourth quarter of 2000. Compared to the first quarter of
      2000, the reduction was 3.2%. This reduction was mainly due to the clients’ migration from the
      post-paid service to prepaid service, above mentioned.


                                                    Gross Profit (in R$000)

                         140,0
                         120,0
                         100,0
                          80,0
                          60,0
                          40,0
                          20,0
                           0,0
                                 1Q 99   2Q 99   3Q 99   4Q 99   1Q 00   2Q 00   3Q 00   4Q 00   1Q 01




      Selected Financial Data (in thousands of Reais)

                                                           2001                  2000
                                                            1Q             4Q             1Q
      Operating Expenses
        - Selling                                           48,110         63,702        52,467
        - General and administrative                        24,774         24,876        18,247
        - Other operating expenses, net                      3,897          2,173         (366)
      Subtotal                                              76,781         90,751        70,348
       - Net financial expenses (excluding
          interest on own capital)                          17,114        21,205         20,973
      Total, net of interest on own capital                 93,895       111,956         91,321

      Consolidated net operating expenses decreased 16.1% compared to the fourth quarter of 2000
      and increased 2.8% compared to the first quarter of 2000. The reduction compared to the fourth
      quarter of 2000 was a result of lower commercial expenses, mainly bad debt expenses, and due
      to lower financial expenses. The increase compared to the first quarter of 2000, was a result of
      bigger general and administrative expenses and the effect of the amortization of the goodwill,
      that came from the privatization.

      Consolidated bad debt expenses during the first quarter of 2001 reached R$12.3 million,
      representing 4.8% of gross revenues and showing a reduction of 47.1% (from R$23.3 million to
      R$12.3 million) when compared to the fourth quarter of 2000 and a reduction of 38.8%% when
      compared to the first quarter of 2000.




www.timnordeste.com.br                                                                                   4
Net Operating Expenses (in R$000)

                         150,0


                         100,0


                          50,0


                           0,0
                                 1Q 99    2Q 99   3Q 99   4Q 99   1Q 00   2Q 00   3Q 00   4Q 00   1Q 01




      Amortization of Goodwill

      On June 30, 2000 Tele Nordeste Celular and its operating companies completed a restructuring
      that resulted in the transfer of the premium paid during the privatization process from Bitel
      Participações S.A., the parent company of Tele Nordeste Celular, to each one of the operating
      companies. This restructuring is aimed at taking advantage of a fiscal benefit estimated at
      R$200 million over 8 years, through to 2008, which will be incorporated into their share capital
      by the operating companies, with significant financial benefits for them. A proposal for the
      merger of the operating companies is awaiting Anatel approval.

      During the year 2000, the consolidated amortization of the premium, net of reversal of the
      provision for the integrity of shareholder's equity, was R$13.1 million, generating a fiscal benefit
      on the order of R$11.0 million.

      On March 31, the consolidated amortization of the premium, net of reversal of the provision for
      the integrity of shareholder’s equity, was R$6.3 million, generating a fiscal benefit on the order
      of R$6.3 million.

      Capitalization of the Fiscal Benefit

      The Extraordinary General Shareholders Meeting of April 30, 2001 approved the proposal of the
      Board of Directors to increase the Tele Nordeste Celular capital in the amount of the fiscal
      benefit generated during the year 2000.

      The notice to the shareholders about the capital increased was released on May 3, 2001. The
      full document is attached.

      Capitalization of Retained Profits

      The Extraordinary General Shareholders Meeting of April 30, 2001 approved the proposal of the
      Board of Directors to increase the Company’s social capital in the amount of R$66.2 million,
      which is a part of the retained profits total amount, to attempt the Brazilian laws, about the limit
      of the profits reserves in relation of the capital .




www.timnordeste.com.br                                                                                       5
Dividends and Interest on Shareholdes’ Equity

      The Ordinary General Shareholders’ Meeting of April 30, 2001 approved the proposal of the
      Board of Directors to payment of interest on shareholders’ equity and complementary dividends.

      The proposal approved by the Ordinary Shareholders’ Meeting distributed annual dividends
      equivalent to 25% of the adjusted net income, after deducting 5% (R$1.4 million) for the legal
      reserve and adding R$9.9 million from the realizable profit reserve. This represented total
      dividends of R$9.2 million, or R$0,03 per 1,000 shares, net of income tax, which will be paid
      part as interest on shareholders’ equity as per Brazilian legislation and part as complementary
      dividends.

      The initial payment date of the above mentioned dividend payment will be June 30. 2001

      ARPU

      The blended average revenue per user (ARPU), net of taxes, for the first quarter of 2001 was
      R$41.83 per month, compared to R$47.07 per month in the fourth quarter of 2000, and R$51.05
      per month for the first quarter of 2001. The reduction when compared to the fourth quarter of
      2000, was due to the following events occurred on that quarter: disconnection of roughly 58,000
      clients and the increase in the incoming traffic. The reduction when compared to the first quarter
      of 2000, was due to the increase in the pre-paid clients base. The post-paid ARPU in 2000 was
      negatively affected by the blocked lines for credit reasons procedure, which was adopted at the
      end of the second quarter of 2000.

      In 2001 blocking is carried out on a partial basis, too, and as a result, only incoming traffic
      revenues are generated by these clients. In March, the clients base was 47.5% prepaid and
      52.5% postpaid.

      Competition

      The Company estimates that its market share at the end of the first quarter of 2001 was
      approximately 65.5% in terms of number of accesses. The penetration rate in the region at the
      end of March 2001 was estimated at 9.0%.

      Debt Profile

      Consolidated debt at March 31, 2001, was R$394.3 million, with R$58.1 million maturing in the
      short-term. The debt in foreign currency in the amount of R$148.5 million was totally converted
      to Reais and with pre-fixed costs, in line with the Company’s policy of minimizing exposure to
      foreign currency risks and interest rate fluctuations.




www.timnordeste.com.br                                                                                     6
Capital Expenditures

      During the first quarter of 2001, the company invested R$15.3 million. The investments were
      directed to expansion, digitalization and optimization of the network.

      On March 31 the Company had 812 radio base stations (RBEs), of which 16 were mobile and
      provided service in 307 municipalities that corresponded to coverage of 75% of the population.
      Network digitalization was of the order of 74%; that is, 74% of voice channels were digital, with
      90% of its clients using digital handsets.


      Annexes:
      - Announces to the shareholders
      - Selected historical statistics
      - EBITDA calculus
      - Financial statements as of March 31, 2000 and 1999

      This press release contains forward-looking statements. Statements that are not statements of historical fact only reflect the beliefs and
      expectations of the Company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” forecasts,” predicts,” “plans, ”
      “projects,” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties,
      forecast or not by the Company. 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.timnordeste.com.br                                                                                                                                7
NOTICE TO SHAREHOLDERS
                                         CAPITAL INCREASE

      We inform the Shareholders and the general market that the Extraordinary General
      Shareholders Meeting of Tele Nordeste Celular Participações S.A. (“Tele Nordeste Celular” or
      the “Company”), on April 30, 2001, approved the increase in the Company’s Capital Stock by
      R$10,984,922.49 (ten million, nine-hundred eighty four thousand, nine-hundred twenty-two
      Reais and forty-nine cents) to R$ 119,673,193.23 (one-hundred nineteen million, six-hundred
      seventy three thousand, one-hundred ninety-three Reais and twenty-three cents), by means of
      the capitalization of the tax benefit resulting from amortization of the premium incorporated as a
      result of the partial split of Tele Nordeste Celular Participações S.A. (“TNC”), as authorized by
      article 7, paragraph 1 of CVM Instructions no. 319/99 and 320/00 and in accordance with clause
      8 of the Protocol of Partial Split of TNC.

      As provided in the CVM Instructions referred to above and in article 171 of Law 6.404, dated
      December 15, 1976, the shares issued in connection with the capitalization are to be delivered
      to the controlling shareholder, Bitel Participações S.A., and the remaining shareholders have a
      preemptive right to subscribe for such shares. Shareholders who exercise their preemptive right
      shall pay directly to Bitel Participações S.A. the corresponding amounts for the exercise of such
      preemptive right.

      The Shareholders may exercise the preemptive right within 30 (thirty) days beginning on the
      date of the publication of this Notice, and the following conditions shall be observed:

      1. VALUE OF CAPITAL INCREASE:
      R$10,984,922.49 (ten million, nine-hundred eighty four thousand, nine-hundred twenty-two
      Reais and forty-nine cents).

      2. NUMBER OF SHARES AND TYPE OF SHARES TO BE ISSUED:
      3,369,608,000 (three billion, three-hundred sixty-nine million, six-hundred eight thousand)
      common shares with no par value, in book-entry form.

      3. PRICE OF ISSUANCE AND SUBSCRIPTION:
      R$3.26 per 1,000 shares.

      4. JUSTIFICATION OF THE ISSUANCE PRICE:
      The appraisal of the issuance price for the shares was made based on the average market
      value of the shares, in accordance with the quotes of the 10 trading days in the São Paulo Stock
      Exchange - BOVESPA counted retroactively as of and including 4/27/2001.

      The issuance price will remain fixed during the period of exercise of the preemptive rights.

      5. PERIOD FOR EXERCISING THE RIGHT OF PREFERENCE:

             Start date: 3/5/2001                              End date: 1/6/2001

      6. PROPORTION OF RIGHT:
      To determine the amount of shares to subscribe, the shareholder shall multiply the number of
      shares owned on 4/30/2001 by the following factors:

      TYPE OF SHARE OWNED              FACTOR PER SHARE                  TYPE TO BE SUBSCRIBED
      Common                           0.010076608249                    Common
      Preferred                        0.010076608249                    Common



www.timnordeste.com.br                                                                                     8
7. METHOD OF PAYMENT:
      On demand, at the moment of subscription.

      8. QUALIFICATIONS FOR SUBSCRIPTION:

      8.1- Shareholders who acquired shares before 4/30/2001 will have the right to subscribe.
      Shares acquired as of 5/1/2001 will be ex-right of subscription to the acquirer.

      8.2- The shareholders who wish to negotiate their subscription rights during the period to
      exercise the preemption right shall request the document of assignment of rights, which will be
      issued by the Depositary of the book entry shares, Banco Real, or by the Custodian.

      8.3- The Custodians may issue only one assignment of nominative right for each subscriber.

      8.4- The Custodians may subscribe in their names, as fiduciary owners, up to the amount
      corresponding to the shares under custody.

      8.5- After the assignment of rights is issued and in the event of a new transfer, a statement on
      the back of the assignment document will be required, with a notarized signature.

      8.6- Under no circumstances will a copy of the assignment document be accepted.

      9. DIVIDENDS:
      When the dividends relative to the year of 2001 are paid, the shares resulting from this
      subscription will have full right to the dividends.

      10. LEFTOVERS:
      There will be no leftovers of right of subscription.

      11. GENERAL INSTRUCTIONS:
      Within the period for exercising the preemptive right, the shareholders may go to one of the
      branches listed below to request the Share Subscription Bulletin, specifying the number of
      shares to be acquired.

      12. DOCUMENTATION FOR SUBSCRIPTION AND ASSIGNMENT OF RIGHTS:

      12.1- Individuals: Identification card, taxpayer’s registration (CPF) issued by the Ministry of
      Finance and proof of address.

      12.2- Legal Entities: Articles of Incorporation or By-laws, as well as minutes evidencing the
      election of the company’s representatives, and proof of address.

      12.3- In the event of representation by proxy, it will be necessary to present the proxy, in
      addition to the documents referred to in the items above concerning the grantor.

      13- PLACES OF ATTENDANCE:
      Branches of the Bank.

                                             Recife, April 30, 2001.
                                        Paulo Narcélio Simões Amaral
                                             Chief of Financial and
                                           Investor Relations Officer




www.timnordeste.com.br                                                                                   9
Consolidated Statistics

                                                           1Q01          4Q00         1Q00

     Clients                                            1,556,619      1,511,000     1,313,252
     Net additions                                         45,619         28,327      125,340
     Market share (%)                                          66             65           69
     Market share marginal (%)                               77.1            100           40
     Growth over same period of the previous year (%)        18.5           27.0         90.4
     Estimated population of region (in millions)            26.3           26.3         26.1
     Penetration rate (%)
     - Tele Nordeste                                           5.9           5.7           5.0
     - Total                                                   9.0           8.7           7.3
     Municipalities covered                                   307           307           289
     MOU total                                                136           166           176
     Churn total (%)                                           5.8           8.2          4.7
     Blended ARPU (R$)                                      41.83         47.07         51.05
     SAC - Subscriber acquisition cost (R$)                100.38         79.94        168.63
     Digitalization rate (%)
     - Network                                                    74            74           56
     - Clients                                                    90            87           79
     Coverage
     - Population                                              75            75            74
     - Geographical area                                       29            29            28
     Workforce                                              1,648         1,628         1,277


      EBITDA (in thousands of Reais)

                                    1Q01         4Q00        1Q00

     Net operational revenue        202,260     218,280      214,478
     Operational income              19,826        9,269      26,405
     Depreciation                    35,993      35,597       26,080
     Amortization of the goodwill      6,297       6,295            -
     Financial income                (4,501)     (7,099)      (4,032)
     Financial expenses              21,615      37,712       25,005

     EBITDA                          79,230      81,774        73,458
     % EBITDA                         39.17        37.5          34.3




www.timnordeste.com.br                                                                            10
Balance Sheet

      March 31, 2001 and 2000
      (in thousands of Reais)

                                                           Parent Company                Consolidated
                                                      03.31.2001 03.31.2000 (*)   03.31.2001 03.31.2000 (*)

     Assets

     Curent assets
     Cash equivalents                                        178          1,424      69,940           7,624
     Trade accounts receivable                                 -              -     122,550         169,630
     Inventory                                                28             15      12,636          44,579
     Telecommunications companies                              -              -      50,524          36,462
     Taxes and contributions receivable                    2,171          1,937      37,935          14,759
     Deferred income and social contribution taxes         1,080          1,082      43,536          21,677
     Dividends and interest on shareholders’ equity        8,662          9,632           -               -
     Prepaid expenses                                         66             17      16,265          14,617
     Other rights                                          1,076          1,597      13,813          52,886
                                                          13,261         15,704     367,199         362,234

     Noncurrent assets
     Loan to subsidiaries                                 15,670         27,232           -               -
     Tax incentives                                            -              -       2,077           1,912
     Deferred income and social contribution taxes             -              -     160,361               -
     Amounts in litigation                                     -              -       1,083             834
                                                          15,670         27,232     163,521           2,746

     Permanent assets
     Investments                                        578,622        341,110            -               1
     Property, plant and equipment                        4,877          4,901      697,250         654,269
     Deferred asset                                           -              -        3,967               -
                                                        583,499        346,011      701,217         654,270

                                                        612,430        388,947     1,231,937      1,019,250


     (*) Reclassified




www.timnordeste.com.br                                                                                        11
Balance Sheet

      March 31, 2001 and 2000
      (in thousands of Reais)


                                                           Parent Company                Consolidated
                                                      03.31.2001 03.31.2000 (*)   03.31.2001 03.31.2000 (*)

     Liabilities

     Current liabilities
     Suppliers                                               862            504       33,032         76,898
     Financing and loans                                       -              -       58,113        332,370
     Debentures                                              802            594       34,498         45,796
     Taxes payable                                         1,843          1,205        4,893          5,885
     Salaries and vacation pay                             4,013         10,641            -              -
     Subsidiaries                                              -              -       30,949          9,843
     Telecommunications companies                         11,594         10,373       18,963         16,625
     Dividends and interest on shareholders’ equity        7,371            379       19,827         19,937
     Other liabilities
                                                          26,485         23,696     200,275         507,354

     Noncurrent liabilities
     Financing and loans                                       -              -     136,147          45,376
     Debentures                                                -              -     200,000               -
     Other liabilities                                         -              -         903              93
                                                               -              -     337,050          45,469

     Minority interest                                         -              -     108,667         101,176


     Shareholders’ equity
     Capital stock                                      108,843        108,943      108,843         108,943
     Capital reserves                                   204,068              -      204,068               -
     Profit reserves                                    170,405        178,922      170,405         178,922
     Retained profits                                   102,629         77,386      102,629          77,386
                                                        585,945        365,251      585,945         365,251

                                                        612,430        388,947     1,231,937      1,019,250


     (*) Reclassified




www.timnordeste.com.br                                                                                        12
Statement of Income

      For the quarter end on March 31, 2001 and 2000
      (in thousands of Reais)

                                                                  Parent Company               Consolidated
                                                                 2001       2000 (*)        2001        2000 (*)

  Revenues
  Telecommunications services and sale of goods                          -              -   257,560       279,216

  Deductions
  ICMS (tax on distribution of goods and services)                       -              -   (42,322)      (54,147)
  PIS (profit participation program tax) and COFINS (social
  security financing contribution)                                       -              -    (9,156)      (10,399)
  FUST/FUNTELL (tax on telecommunication services)                       -              -    (1,158)             -
  Discounts                                                              -              -    (2,441)         (193)
  Returns of goods                                                       -              -      (223)             -

  Net revenues                                                           -              -   202,260       214,477

  Cost of goods sold and services rendered                               -              -   (88,539)      (96,993)

  Gross profit                                                           -              -   113,721        117,484

  Operating revenues (expenses)
  Selling expenses                                                       -             -    (48,110)      (52,467)
  Administrative and general expenses                              (4,338)       (1,807)    (24,774)      (18,247)
  Financial expenses                                                  (89)          (57)    (21,615)      (25,005)
  Financial income                                                      84           734       4,501         4,032
  Equity in income of subsidiaries                                 15,389        11,908            -             -
  Other operating income                                                 -             -       5,362           818
  Other operating expenses                                           (795)          (74)     (9,259)         (210)

  Operating income (loss)                                          10,251        10,704      19,826         26,405

  Nonoperating income                                                    -             17        157           305
  Nonoperating expenses                                                (1)              -      (141)         (198)

  Income before reversal of interest on shareholders’ equity
  and income and social contribution taxes                         10,250        10,721      19,842         26,512

  Income and social contribution taxes                               (189)          439      (4,879)      (11,590)
  Employee profit sharing                                                -            -        (487)         (241)
  Reversal of interest on shareholders’ equity                           -            -            -             -

  Net income (loss) before minority interest                       10,061        11,160      14,476         14,681

  Minority interest                                                      -              -    (4,415)       (3,521)

  Net income (loss)                                                10,061        11,160      10,061         11,160

  Net income (loss) per lot of a thousand shares                      0.03          0.03

  Number of shares at year end (thousands)                     334,399,028   334,399,028


  (*) Reclassified




www.timnordeste.com.br                                                                                             13

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Press Release 1 Q01 Tele Nordeste Celular En

  • 1. Contacts: Tele Nordeste Celular Participações S.A. Paulo Narcélio Simões Amaral 55.81.3216.2591 Fabíola Almeida 55.81.3216.2594 fabiola.almeida@timnordeste.com.br Polyana Maciel 55.81.3216.2593 polyana.maciel@timnordeste.com.br TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. ANNOUNCES FIRST QUARTER 2001 RESULTS Recife, Brazil (May 14, 2001) – Tele Nordeste Celular Participações S.A. (NYSE: TND, BOVESPA: TNEP3, TNEP4) (“Tele Nordeste Celular” or “the Company”), the holding company controlling the operating companies serving Band A cellular telecommunication clients in the states of Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas under the TIM brand name, announced today its results for the first quarter of 2001 in accordance with Brazilian GAAP. • 65.5% of market share at the end of March 2001; • 39.2% of EBITDA margin in the quarter, reaching R$79.2 million; • Reduction of 47.1% at the bad debt expenses quarter over quarter. Operational Highlights Commercial activities during the first quarter of 2001 resulted in consolidated gross addition of 134,498 clients (of which 97,004, or 72.1%, were prepaid). Accumulated net additions during the first quarter of 2001 totaled 45,619, all prepaid, as a result of the disconnection of 14,995 clients from the post-paid system. The propose of those disconnection was to clean the clients base, as a way to reduce and control the bad debt. Excluding those disconnection, the consolidated net addition for the first quarter of 2001 was 60,614. The Company had a total of 1,556,619 clients on March 31, 2001, of which 816,603 (52.5%) were post-paid clients and 740,016 (47.5%) were prepaid clients. The market share at the end of the first quarter of 2001 was estimated at 65.5%. The subscriber acquisition cost was R$100 in the first quarter of 2001 compared to R$80 during the fourth quarter of 2000 and R$169 during the first quarter of 2000. As a result of the intensification of the collections and billing activities and the adoption of rigorous collection procedures and polices, the bad debt levels are showing an improvement. During the first quarter of 2001 the bad debt was 4.8% of gross revenue, against 8.3% during the fourth quarter of 2000, and 7.2% during the first quarter of 2000. www.timnordeste.com.br 1
  • 2. In February of 2001, two new services were offered by the Tele Nordeste Celular’s operating companies: Intelligent Network and WAP. Intelligent Network is a new conception in business mobile communications. It is a service designed for companies, that permits the creation of groups of users, promotes the improvement of the mobile communication and permits the control of generated and received calls. All in accordance with the company definition. Wap service is provided through TIMnet, a subsidiary company created with the objective of develop internet solutions and innovative value added services. Although the technology was available, this service was not offered before, because the lack of TDMA WAP handsets in the brazilian market. Still during the first quarter, the Tele Nordeste Celular’s operating companies introduced two new tariff plans options for the post-paid service, with very reduced tariffs: the 60 and 90 plans. These are excellent alternatives for those who are already taking the advantages of being TIM clients and for new clients who will choose a plan that most attend their requirements. Financial Highlights Tele Nordeste Celular’s consolidated net income for the first quarter of 2001 was R$10.1 million or R$0.03 per 1,000 shares, compared to consolidated net income of R$12.9 million for the fourth quarter of 2000. This compares to a consolidated net income of R$11.2 million in the first quarter of 2000. For the first quarter of 2001, Tele Nordeste Celular reported consolidated EBITDA and EBIT of R$79.2 million and R$36.9 million, respectively, and an EBITDA margin of 39.2% and an EBIT margin of 18.3% over the net operating revenues, compared to EBITDA of R$81.9 million and EBIT of R$39.9 million, representing an EBITDA margin of 37.5% and an EBIT margin of 18.3% over net operating revenues reported for the fourth quarter of 2000, and EBITDA of R$73.5 million and EBIT of R$47.4 million, representing an EBITDA margin of 34.3% and an EBIT margin of 22.1% over net operating revenues reported for the first quarter of 2000. EBITDA (in R$000) 100,0 80,0 60,0 40,0 20,0 0,0 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 Consolidated net operating revenues in the first quarter of 2001 reached R$202.3 million, against to R$218.3 million in the fourth quarter of 2000 and R$214.5 million in the first quarter of 2000. Net consolidated revenues in first quarter of 2001, reduced 7.3% when compared to the fourth quarter of 2000. This reduction was due to the lowest income traffic volume. During the fourth quarter of 2000, besides the seasonality common in this period of the year, where the tourism www.timnordeste.com.br 2
  • 3. increases a lot, there was an additional revenue of roughly R$18 million due to the incoming traffic not declared in the previous quarters, and recognized only in the fourth quarter of 2000. Another effected was the month of February, that besides be shorter, in this year the Carnival was in February. So, the month of February had only 17 business days, provoking a strong impact in the traffic volume generated during the month. Another important factor was the reduction of 26.8% in the handsets sales, that reflected the reduction on the subsidies levels. Considering only the telecom services revenues the reduction compared to the fourth quarter of 2000 was 6.5%. For the first quarter of 2000, consolidated net operating revenues decreased 5.7%. This reduction was mainly due to the lowest volume at the handsets sales, roughly 51.6%. Excluding the revenue from the handsets sales, the telecom services revenue decreased 2.2%. This decreased was due to the clients‘ migration from post-paid service to prepaid service, that generated a decrease in the monthly subscription payments of 18.1%. Net Operating Expenses (in R$000) 250,0 200,0 150,0 100,0 50,0 0,0 1Q 99 2Q 99 3Q 99 4Q 99 1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 Selected Consolidated Financial Data (in thousands of Reais) 2001 2000 1Q 4Q 1Q Gross Revenues - Usage charges 113,530 115,971 131,388 - Monthly subscription payments 42,733 39,942 52,194 - Interconnection 84,993 102,977 61,511 - Sale of handsets and accessories 15,191 20,741 31,375 - Other 1,113 362 2,748 Subtotal 257,560 279,993 279,216 - Taxes (55,300) (61,713) (64,738) Net Operating Revenue 202,260 218,280 214,478 Cost of services and of goods sold - Depreciation and amortization (29,973) (29,373) (24,357) - Personnel (2,481) (1,535) (2,743) - Materials (137) (122) (125) - Circuit leasing (8,849) (9,508) (7,989) - Leases and insurance (2,938) (2,445) (2,222) - Handsets and accessories (12,545) (15,307) (31,721) - Fistel (182) (345) (107) - Plant Support and maintenance (1,761 (5,134) (540) - Interconnection (27,559) (22,445) (26,130) - Other (2,114) (1,433) (1,059) Subtotal (88,539) (87,647) (96,993) Gross profit 113,721 130,633 117,483 www.timnordeste.com.br 3
  • 4. Consolidated gross profit for the first quarter of 2001 decreased 12.9% compared to the fourth quarter of 2000. This decrease was due to the effect provoked by the additional revenue from the incoming traffic accounted in the fourth quarter of 2000. Compared to the first quarter of 2000, the reduction was 3.2%. This reduction was mainly due to the clients’ migration from the post-paid service to prepaid service, above mentioned. Gross Profit (in R$000) 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 1Q 99 2Q 99 3Q 99 4Q 99 1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 Selected Financial Data (in thousands of Reais) 2001 2000 1Q 4Q 1Q Operating Expenses - Selling 48,110 63,702 52,467 - General and administrative 24,774 24,876 18,247 - Other operating expenses, net 3,897 2,173 (366) Subtotal 76,781 90,751 70,348 - Net financial expenses (excluding interest on own capital) 17,114 21,205 20,973 Total, net of interest on own capital 93,895 111,956 91,321 Consolidated net operating expenses decreased 16.1% compared to the fourth quarter of 2000 and increased 2.8% compared to the first quarter of 2000. The reduction compared to the fourth quarter of 2000 was a result of lower commercial expenses, mainly bad debt expenses, and due to lower financial expenses. The increase compared to the first quarter of 2000, was a result of bigger general and administrative expenses and the effect of the amortization of the goodwill, that came from the privatization. Consolidated bad debt expenses during the first quarter of 2001 reached R$12.3 million, representing 4.8% of gross revenues and showing a reduction of 47.1% (from R$23.3 million to R$12.3 million) when compared to the fourth quarter of 2000 and a reduction of 38.8%% when compared to the first quarter of 2000. www.timnordeste.com.br 4
  • 5. Net Operating Expenses (in R$000) 150,0 100,0 50,0 0,0 1Q 99 2Q 99 3Q 99 4Q 99 1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 Amortization of Goodwill On June 30, 2000 Tele Nordeste Celular and its operating companies completed a restructuring that resulted in the transfer of the premium paid during the privatization process from Bitel Participações S.A., the parent company of Tele Nordeste Celular, to each one of the operating companies. This restructuring is aimed at taking advantage of a fiscal benefit estimated at R$200 million over 8 years, through to 2008, which will be incorporated into their share capital by the operating companies, with significant financial benefits for them. A proposal for the merger of the operating companies is awaiting Anatel approval. During the year 2000, the consolidated amortization of the premium, net of reversal of the provision for the integrity of shareholder's equity, was R$13.1 million, generating a fiscal benefit on the order of R$11.0 million. On March 31, the consolidated amortization of the premium, net of reversal of the provision for the integrity of shareholder’s equity, was R$6.3 million, generating a fiscal benefit on the order of R$6.3 million. Capitalization of the Fiscal Benefit The Extraordinary General Shareholders Meeting of April 30, 2001 approved the proposal of the Board of Directors to increase the Tele Nordeste Celular capital in the amount of the fiscal benefit generated during the year 2000. The notice to the shareholders about the capital increased was released on May 3, 2001. The full document is attached. Capitalization of Retained Profits The Extraordinary General Shareholders Meeting of April 30, 2001 approved the proposal of the Board of Directors to increase the Company’s social capital in the amount of R$66.2 million, which is a part of the retained profits total amount, to attempt the Brazilian laws, about the limit of the profits reserves in relation of the capital . www.timnordeste.com.br 5
  • 6. Dividends and Interest on Shareholdes’ Equity The Ordinary General Shareholders’ Meeting of April 30, 2001 approved the proposal of the Board of Directors to payment of interest on shareholders’ equity and complementary dividends. The proposal approved by the Ordinary Shareholders’ Meeting distributed annual dividends equivalent to 25% of the adjusted net income, after deducting 5% (R$1.4 million) for the legal reserve and adding R$9.9 million from the realizable profit reserve. This represented total dividends of R$9.2 million, or R$0,03 per 1,000 shares, net of income tax, which will be paid part as interest on shareholders’ equity as per Brazilian legislation and part as complementary dividends. The initial payment date of the above mentioned dividend payment will be June 30. 2001 ARPU The blended average revenue per user (ARPU), net of taxes, for the first quarter of 2001 was R$41.83 per month, compared to R$47.07 per month in the fourth quarter of 2000, and R$51.05 per month for the first quarter of 2001. The reduction when compared to the fourth quarter of 2000, was due to the following events occurred on that quarter: disconnection of roughly 58,000 clients and the increase in the incoming traffic. The reduction when compared to the first quarter of 2000, was due to the increase in the pre-paid clients base. The post-paid ARPU in 2000 was negatively affected by the blocked lines for credit reasons procedure, which was adopted at the end of the second quarter of 2000. In 2001 blocking is carried out on a partial basis, too, and as a result, only incoming traffic revenues are generated by these clients. In March, the clients base was 47.5% prepaid and 52.5% postpaid. Competition The Company estimates that its market share at the end of the first quarter of 2001 was approximately 65.5% in terms of number of accesses. The penetration rate in the region at the end of March 2001 was estimated at 9.0%. Debt Profile Consolidated debt at March 31, 2001, was R$394.3 million, with R$58.1 million maturing in the short-term. The debt in foreign currency in the amount of R$148.5 million was totally converted to Reais and with pre-fixed costs, in line with the Company’s policy of minimizing exposure to foreign currency risks and interest rate fluctuations. www.timnordeste.com.br 6
  • 7. Capital Expenditures During the first quarter of 2001, the company invested R$15.3 million. The investments were directed to expansion, digitalization and optimization of the network. On March 31 the Company had 812 radio base stations (RBEs), of which 16 were mobile and provided service in 307 municipalities that corresponded to coverage of 75% of the population. Network digitalization was of the order of 74%; that is, 74% of voice channels were digital, with 90% of its clients using digital handsets. Annexes: - Announces to the shareholders - Selected historical statistics - EBITDA calculus - Financial statements as of March 31, 2000 and 1999 This press release contains forward-looking statements. Statements that are not statements of historical fact only reflect the beliefs and expectations of the Company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” forecasts,” predicts,” “plans, ” “projects,” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties, forecast or not by the Company. 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.timnordeste.com.br 7
  • 8. NOTICE TO SHAREHOLDERS CAPITAL INCREASE We inform the Shareholders and the general market that the Extraordinary General Shareholders Meeting of Tele Nordeste Celular Participações S.A. (“Tele Nordeste Celular” or the “Company”), on April 30, 2001, approved the increase in the Company’s Capital Stock by R$10,984,922.49 (ten million, nine-hundred eighty four thousand, nine-hundred twenty-two Reais and forty-nine cents) to R$ 119,673,193.23 (one-hundred nineteen million, six-hundred seventy three thousand, one-hundred ninety-three Reais and twenty-three cents), by means of the capitalization of the tax benefit resulting from amortization of the premium incorporated as a result of the partial split of Tele Nordeste Celular Participações S.A. (“TNC”), as authorized by article 7, paragraph 1 of CVM Instructions no. 319/99 and 320/00 and in accordance with clause 8 of the Protocol of Partial Split of TNC. As provided in the CVM Instructions referred to above and in article 171 of Law 6.404, dated December 15, 1976, the shares issued in connection with the capitalization are to be delivered to the controlling shareholder, Bitel Participações S.A., and the remaining shareholders have a preemptive right to subscribe for such shares. Shareholders who exercise their preemptive right shall pay directly to Bitel Participações S.A. the corresponding amounts for the exercise of such preemptive right. The Shareholders may exercise the preemptive right within 30 (thirty) days beginning on the date of the publication of this Notice, and the following conditions shall be observed: 1. VALUE OF CAPITAL INCREASE: R$10,984,922.49 (ten million, nine-hundred eighty four thousand, nine-hundred twenty-two Reais and forty-nine cents). 2. NUMBER OF SHARES AND TYPE OF SHARES TO BE ISSUED: 3,369,608,000 (three billion, three-hundred sixty-nine million, six-hundred eight thousand) common shares with no par value, in book-entry form. 3. PRICE OF ISSUANCE AND SUBSCRIPTION: R$3.26 per 1,000 shares. 4. JUSTIFICATION OF THE ISSUANCE PRICE: The appraisal of the issuance price for the shares was made based on the average market value of the shares, in accordance with the quotes of the 10 trading days in the São Paulo Stock Exchange - BOVESPA counted retroactively as of and including 4/27/2001. The issuance price will remain fixed during the period of exercise of the preemptive rights. 5. PERIOD FOR EXERCISING THE RIGHT OF PREFERENCE: Start date: 3/5/2001 End date: 1/6/2001 6. PROPORTION OF RIGHT: To determine the amount of shares to subscribe, the shareholder shall multiply the number of shares owned on 4/30/2001 by the following factors: TYPE OF SHARE OWNED FACTOR PER SHARE TYPE TO BE SUBSCRIBED Common 0.010076608249 Common Preferred 0.010076608249 Common www.timnordeste.com.br 8
  • 9. 7. METHOD OF PAYMENT: On demand, at the moment of subscription. 8. QUALIFICATIONS FOR SUBSCRIPTION: 8.1- Shareholders who acquired shares before 4/30/2001 will have the right to subscribe. Shares acquired as of 5/1/2001 will be ex-right of subscription to the acquirer. 8.2- The shareholders who wish to negotiate their subscription rights during the period to exercise the preemption right shall request the document of assignment of rights, which will be issued by the Depositary of the book entry shares, Banco Real, or by the Custodian. 8.3- The Custodians may issue only one assignment of nominative right for each subscriber. 8.4- The Custodians may subscribe in their names, as fiduciary owners, up to the amount corresponding to the shares under custody. 8.5- After the assignment of rights is issued and in the event of a new transfer, a statement on the back of the assignment document will be required, with a notarized signature. 8.6- Under no circumstances will a copy of the assignment document be accepted. 9. DIVIDENDS: When the dividends relative to the year of 2001 are paid, the shares resulting from this subscription will have full right to the dividends. 10. LEFTOVERS: There will be no leftovers of right of subscription. 11. GENERAL INSTRUCTIONS: Within the period for exercising the preemptive right, the shareholders may go to one of the branches listed below to request the Share Subscription Bulletin, specifying the number of shares to be acquired. 12. DOCUMENTATION FOR SUBSCRIPTION AND ASSIGNMENT OF RIGHTS: 12.1- Individuals: Identification card, taxpayer’s registration (CPF) issued by the Ministry of Finance and proof of address. 12.2- Legal Entities: Articles of Incorporation or By-laws, as well as minutes evidencing the election of the company’s representatives, and proof of address. 12.3- In the event of representation by proxy, it will be necessary to present the proxy, in addition to the documents referred to in the items above concerning the grantor. 13- PLACES OF ATTENDANCE: Branches of the Bank. Recife, April 30, 2001. Paulo Narcélio Simões Amaral Chief of Financial and Investor Relations Officer www.timnordeste.com.br 9
  • 10. Consolidated Statistics 1Q01 4Q00 1Q00 Clients 1,556,619 1,511,000 1,313,252 Net additions 45,619 28,327 125,340 Market share (%) 66 65 69 Market share marginal (%) 77.1 100 40 Growth over same period of the previous year (%) 18.5 27.0 90.4 Estimated population of region (in millions) 26.3 26.3 26.1 Penetration rate (%) - Tele Nordeste 5.9 5.7 5.0 - Total 9.0 8.7 7.3 Municipalities covered 307 307 289 MOU total 136 166 176 Churn total (%) 5.8 8.2 4.7 Blended ARPU (R$) 41.83 47.07 51.05 SAC - Subscriber acquisition cost (R$) 100.38 79.94 168.63 Digitalization rate (%) - Network 74 74 56 - Clients 90 87 79 Coverage - Population 75 75 74 - Geographical area 29 29 28 Workforce 1,648 1,628 1,277 EBITDA (in thousands of Reais) 1Q01 4Q00 1Q00 Net operational revenue 202,260 218,280 214,478 Operational income 19,826 9,269 26,405 Depreciation 35,993 35,597 26,080 Amortization of the goodwill 6,297 6,295 - Financial income (4,501) (7,099) (4,032) Financial expenses 21,615 37,712 25,005 EBITDA 79,230 81,774 73,458 % EBITDA 39.17 37.5 34.3 www.timnordeste.com.br 10
  • 11. Balance Sheet March 31, 2001 and 2000 (in thousands of Reais) Parent Company Consolidated 03.31.2001 03.31.2000 (*) 03.31.2001 03.31.2000 (*) Assets Curent assets Cash equivalents 178 1,424 69,940 7,624 Trade accounts receivable - - 122,550 169,630 Inventory 28 15 12,636 44,579 Telecommunications companies - - 50,524 36,462 Taxes and contributions receivable 2,171 1,937 37,935 14,759 Deferred income and social contribution taxes 1,080 1,082 43,536 21,677 Dividends and interest on shareholders’ equity 8,662 9,632 - - Prepaid expenses 66 17 16,265 14,617 Other rights 1,076 1,597 13,813 52,886 13,261 15,704 367,199 362,234 Noncurrent assets Loan to subsidiaries 15,670 27,232 - - Tax incentives - - 2,077 1,912 Deferred income and social contribution taxes - - 160,361 - Amounts in litigation - - 1,083 834 15,670 27,232 163,521 2,746 Permanent assets Investments 578,622 341,110 - 1 Property, plant and equipment 4,877 4,901 697,250 654,269 Deferred asset - - 3,967 - 583,499 346,011 701,217 654,270 612,430 388,947 1,231,937 1,019,250 (*) Reclassified www.timnordeste.com.br 11
  • 12. Balance Sheet March 31, 2001 and 2000 (in thousands of Reais) Parent Company Consolidated 03.31.2001 03.31.2000 (*) 03.31.2001 03.31.2000 (*) Liabilities Current liabilities Suppliers 862 504 33,032 76,898 Financing and loans - - 58,113 332,370 Debentures 802 594 34,498 45,796 Taxes payable 1,843 1,205 4,893 5,885 Salaries and vacation pay 4,013 10,641 - - Subsidiaries - - 30,949 9,843 Telecommunications companies 11,594 10,373 18,963 16,625 Dividends and interest on shareholders’ equity 7,371 379 19,827 19,937 Other liabilities 26,485 23,696 200,275 507,354 Noncurrent liabilities Financing and loans - - 136,147 45,376 Debentures - - 200,000 - Other liabilities - - 903 93 - - 337,050 45,469 Minority interest - - 108,667 101,176 Shareholders’ equity Capital stock 108,843 108,943 108,843 108,943 Capital reserves 204,068 - 204,068 - Profit reserves 170,405 178,922 170,405 178,922 Retained profits 102,629 77,386 102,629 77,386 585,945 365,251 585,945 365,251 612,430 388,947 1,231,937 1,019,250 (*) Reclassified www.timnordeste.com.br 12
  • 13. Statement of Income For the quarter end on March 31, 2001 and 2000 (in thousands of Reais) Parent Company Consolidated 2001 2000 (*) 2001 2000 (*) Revenues Telecommunications services and sale of goods - - 257,560 279,216 Deductions ICMS (tax on distribution of goods and services) - - (42,322) (54,147) PIS (profit participation program tax) and COFINS (social security financing contribution) - - (9,156) (10,399) FUST/FUNTELL (tax on telecommunication services) - - (1,158) - Discounts - - (2,441) (193) Returns of goods - - (223) - Net revenues - - 202,260 214,477 Cost of goods sold and services rendered - - (88,539) (96,993) Gross profit - - 113,721 117,484 Operating revenues (expenses) Selling expenses - - (48,110) (52,467) Administrative and general expenses (4,338) (1,807) (24,774) (18,247) Financial expenses (89) (57) (21,615) (25,005) Financial income 84 734 4,501 4,032 Equity in income of subsidiaries 15,389 11,908 - - Other operating income - - 5,362 818 Other operating expenses (795) (74) (9,259) (210) Operating income (loss) 10,251 10,704 19,826 26,405 Nonoperating income - 17 157 305 Nonoperating expenses (1) - (141) (198) Income before reversal of interest on shareholders’ equity and income and social contribution taxes 10,250 10,721 19,842 26,512 Income and social contribution taxes (189) 439 (4,879) (11,590) Employee profit sharing - - (487) (241) Reversal of interest on shareholders’ equity - - - - Net income (loss) before minority interest 10,061 11,160 14,476 14,681 Minority interest - - (4,415) (3,521) Net income (loss) 10,061 11,160 10,061 11,160 Net income (loss) per lot of a thousand shares 0.03 0.03 Number of shares at year end (thousands) 334,399,028 334,399,028 (*) Reclassified www.timnordeste.com.br 13