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

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
THROUGH May 15, 2009

(Commission File No. 1-15256)
 

 
BRASIL TELECOM S.A.
(Exact name of Registrant as specified in its Charter)
 
BRAZIL TELECOM COMPANY
(Translation of Registrant's name into English)
 


SIA Sul, Área de Serviços Públicos, Lote D, Bloco B
Brasília, D.F., 71.215-000
Federative Republic of Brazil
(Address of Regristrant's principal executive offices)



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

Form 20-F ___X___ Form 40-F ______

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

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

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):






UPCOMING EVENTS: CONFERENCE CALLS

   
PORTUGUESE    ENGLISH 
   
DATE:    Friday, May 15, 2009    DATE:    Friday, May 15, 2009 
    11:00am (Rio) - 10:00am (NY)       1:00pm (Rio) - 12:00pm (NY)
ACCESS:    Phone: (55 11) 4688-6301    ACCESS:    Phone: 800–860–2442 (U.S.)
    Code: Oi               1 412–858–4600 (Brazil / other countries)
    Replay: (55 11) 4688-6312        Code: Oi 
          (code 806)       Replay: 877–344–7529 (U.S.)
          Available until May 21, 2009               1 412 317 0088 (Brazil / other countries)
                   Available until May 21, 2009 (code 429910 #- click 1 to start))
WEBCAST:    Click here   WEBCAST:    Click here 
   

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

CONTENTS     
   1    HIGHLIGHTS   
   2    OPERATING PERFORMANCE   
   3    CONSOLIDATED RESULTS   
   4    DEBT AND CAPITAL EXPENDITURE    17 
   5    ADDITIONAL INFORMATION    20 
   6    ADDENDUM    27 
   7    FINANCIAL STATEMENTS    29 

Tele Norte Leste Participações  Telemar Norte Leste 
Outstanding shares ('000): 382,289  Outstanding shares ('000): 238,391 
TNLP3: R$38.00  TMAR3 ON: R$58.00 
TNLP4: R$32.50  TMAR5 PNA: R$52.30 
TNE: US$13.84 ADR  TMAR6 PNB: R$38.02 
Market Capitalization (Million): R$13,126; US$5,669  Market Capitalization (Million): R$13,063 ;US$5,642 
 
Brasil Telecom Participações  Brasil Telecom 
Outstanding shares ('000): 362,488  Outstanding shares ('000): 547,719 
BRTP3: R$61.37  BRTO3: R$59.35 
BRTP4: R$16.75  BRTO4: R$12.90 
BRP: US$36.12 ADR  BTM: US$16.58 ADR 
Market Capitalization (Million): R$11,986; US$5,177  Market Capitalization (Million): R$18,659; US$8,060 

Notes: (1) Prices as at the end of 1Q09; (1) Outstanding ex-treasury shares.

May 14, 2009  www.oi.com.br/ir 

Rio de Janeiro, May 14, 2009: Tele Norte Leste Participações S.A. (Bovespa: TNLP4 and TNLP3), Telemar Norte Leste S.A. (Bovespa: TMAR3, TMAR5 and TMAR6), Brasil Telecom Participações S.A. (Bovespa: BRTP3 and BRTP4) and Brasil Telecom S.A. (Bovespa: BRTO3 and BRTO4) are pleased to announce the results for the first quarter of 2009.

This report contains the consolidated data for Tele Norte Leste Participações and its direct and indirect subsidiaries as of March 31, 2009. For the purpose of analysis and to better understand the results and compare past performance, we are presenting pro forma 1Q08 consolidated figures for Tele Norte Leste Participações (Oi) and Invitel (including Solpart and Techold), the parent company of Brasil Telecom Participações.

The present moment is particularly important and challenging for Oi, as it faces several operational and strategic actions, as noted below:

(a) Consolidation of Brasil Telecom

Operational consolidation is moving ahead at a quick pace. Many areas have already been integrated, while other areas are in the process of integration. The most complex cases will be fully consolidated in the coming months. As expected, at the first moment, the expected synergies are surpassed by the inevitable increase of our costs and expenses that a process of combining two companies normally produce.

We have begun the process to revamp Region II by launching Oi’s brand along with its retail and corporate products. The process seeks to standardize sales channels and sales points and it is expected to be completed by May. In addition, we are also standardizing the administrative and operational processes and rules, and adapting the systems to support all activities.

We are awaiting formal approval from the CVM in order to launch the mandatory tender offers, and begin to streamline Oi’s corporate structure with the corporate consolidation of the involved companies. We expect to conclude this process by the end of this year.

(b) Debt

As anticipated in previous reports, the immediate result stemming from the acquisition of Brasil Telecom’s controlling equity was an increase in Oi’s consolidated net debt. We expect net debt to reach a historic high during the second semester as we pay tag along rights of common shareholders in the approximate amount of R$3.5 billion.

As a result of the expected cash generation for the current year, we aim to have a Net Debt-to-Ebitda ratio of nearly 2x by the end of the year. Further cuts in the benchmark interest rate by the Brazilian Central Bank will ease the pressure on financial expenses this year, and help us meet our target.

The market acknowledges the size of the new company and its promising future. Recently Oi issued bonds twice in just one week: a US$750 million 10-year bond placed in the international market that was four times oversubscribed; and about R$2.0 billion in a 2 to 3 year simple debenture mostly aimed for Brazilian individuals.

May 14, 2009   
www.oi.com.br/ir 
 


(c) Start-up in São Paulo

Growth in the customer base in the State of São Paulo, which already accounts for about 3 million customers as of the end of April, in a little over seven months after the start-up, bears evidence that our decision to enter the region, as well as the strategy of selling just sim cards, was successful. In the second quarter there was the launch of mobile broadband services through 3G technology which, in the medium and long terms, will allow us to compete in other market segments, adding up a favorable prospect for the company.

All the factors described above are affecting the results of the Company in the short term. However, these are not enough to alter the plan set when we announced the acquisition of Brasil Telecom’s control.

We expect to complete the consolidation of Brasil Telecom still in 2009, as we maintain our plan to reach 39 million mobile users and 4.5 million broadband users by the end of the year. Simultaneously, one of our priorities will continue to be to generate cash as quickly as possible to reduce our debt to a level below 2 times the consolidated EBITDA until 2011. We are certain that the current quarter results are in line with our goal to consolidate the company as the largest telecommunications service provider company in the country.

May 14, 2009   
www.oi.com.br/ir 
 


1) HIGHLIGHTS FOR 1Q09:

The company maintained its growth pace by adding 1.7 million new Revenue Generating Units (RGUs) in the quarter and 10.3 million since 1Q08, reaching 57.7 million RGUs. This performance results from the evolution of mobile services and new broadband users, as described below:
 
  The mobile segment registered 9.9 million new clients since 1Q08 (+45.3%) and 1.8 million in the quarter (+6.1%), leading Oi to outperform the growth rate of the Brazilian market (22.1% year-over-year and 2.0% in 1Q09);
 
  Oi fixed broadband additions (ADSL and cable) totaled 608 thousand users since 1Q08 and 117 thousand in the quarter. 3G service additions via mini-modems equaled 70 thousand new users in the quarter.
 
Consolidated gross revenue totaled R$11.2 billion in the quarter, 7.8% higher than in 1Q08 mainly due to the performance of mobile service revenues (+28.4%) and data communication services (+25.9%) in the wireline segment.
 
Consolidated adjusted EBITDA in the quarter amounted to R$2.4 billion, a slight reduction when compared with 1Q08. In addition to the start up operations in São Paulo and the acquisition of Amazônia Celular, EBITDA was hit by the standardization of accounting practices followed at Oi and BrT, as well as additional expenses related to the integration process of both companies, all items not included in 1Q08.
 
Consolidated net debt reached R$19.2 billion, increasing R$9.4 billion since December 2008 due to the consolidation of net debt of BrT and Invitel, as well as to disbursements made during the quarter, mainly to the entity control of Invitel (R$5.4 billion).
 
Net earnings amounted to R$11 million (R$0.028 per share and US$0.016 per ADR) and were affected by the issues described above, net financial expenses which were R$462 million higher than those in 1Q08, as well as the start of BrT acquisition’s goodwill amortization.
 
May 14, 2009   
www.oi.com.br/ir 
 


Table 1 – Consolidated Financial Indicators

   
        Quarter     
             
    1Q08         
TNL Consolidated - R$ million   
Pro forma* 
  1Q09    YoY 
           
             
           
 Net Revenue    7,231    7,487    3.5% 
 EBITDA    2,585    2,192    -15.2% 
 Adjusted EBITDA    2,585    2,377    -8.0% 
     Adjusted EBITDA Margin (%)   35.7%    31.7%    -4.0 p.p. 
 Net Earnings    564    11    -98.0% 
             
           
 Net Debt    3,049    19,196    529.6% 
 Available Cash    10,312    6,676    -35.3% 
 CAPEX    807    905    12.1% 
 Net Debt / Adjusted EBITDA    0.3    1.9    533.3% 
           
 
           
    1Q08         
TMAR Consolidated - R$ million   
Pro forma* 
  1Q09    YoY 
           
             
           
 Net Revenue    7,212    7,469    3.6% 
 EBITDA    2,606    2,204    -15.4% 
 Adjusted EBITDA    2,606    2,389    -8.3% 
     Adjusted EBITDA Margin (%)   36.1%    32.0%    -4.1 p.p. 
 Net Earnings    632      -99.7% 
           
 
           
BRTP Consolidated - R$ million    1Q08    1Q09    YoY 
           
             
           
 Net Revenue    2,798    2,768    -1.1% 
 EBITDA    955    461    -51.7% 
 Adjusted EBITDA    955    910    -4.7% 
     Adjusted EBITDA Margin (%)   34.1%    32.9%    -1.2 p.p. 
 Net Earnings    250    -23    -109.2% 
           
 
 
           
BRTO Consolidated - R$ million    1Q08    1Q09    YoY 
           
             
           
 Net Revenue    2,798    2,768    -1.1% 
 EBITDA    946    468    -50.5% 
 Adjusted EBITDA    946    917    -3.1% 
     Adjusted EBITDA Margin (%)   33.8%    33.1%    -0.7 p.p. 
 Net Earnings    324    -80    -124.7% 
   

*The pro forma consolidation was made from Invitel consolidated, the parent company of Brasil Telecom Participações.

2) CONSOLIDATED OPERATING PERFORMANCE:

Oi added 15,538 thousand RGUs to its customer base, following the acquisition of Brasil Telecom Participações’ control (January 2009). The following analysis is based on the consolidated net financial income and compares to pro forma figures for the first quarter of 2008 of both companies (Invitel consolidated, Brasil Telecom Participações’ parent company and Tele Norte Leste Participações).

At the end of March 2009, the company had 57.7 million Revenue Generating Units (RGUs), up 3.1% quarter-on-quarter and 21.7% year-over-year. In 1Q09, 1,717 thousand new UGRs were added, while in the 12 month period net addition amounted to 10,290 thousand new UGRs. The quarterly performance was influenced by the expansion of mobile users and Oi Velox ADSL users.

May 14, 2009   
www.oi.com.br/ir 
 


Wireline – Oi Fixed

Fixed lines in service totaled 21.8 million at the end of March 2009, dropping slightly on a quarterly and year-over-year basis. The fixed-to-mobile substitution was partially offset by our strategy of marketing alternative plans and converging products.

At the end of 1Q09, alternative plans reached 11.1 million lines, accounting for 51% of total fixed lines in service (40% in 1Q08) and 71% of residential lines.

Broadband – Oi Velox

The user base for Oi Velox ADSL increased by 117 thousand in the quarter and by 608 thousand users in the 12 month period, totaling 3,938 thousand users as of March 2009. The performance of fixed broadband in the quarter was in line with that seen in 4Q08. In 1Q09, the penetration of ADSL over lines in service increased to 17.8%, from 14.8% in 1Q08.

On the other hand, it must be noted that as a result of transferring BrT control over to TMAR, the marketing campaigns were reduced sharply in Region II this quarter.

Sales of this product must be assessed in conjunction with the 3G broadband service through mini-modems, which have been pitched as an alternative to fixed broadband access. The company added 70 thousand 3G mini-modems in the quarter, totaling 187 thousand at the end of 1Q09.

Wireless – Oi Mobile

The user base for the mobile segment is becoming more relevant in terms of total RGUs: 55% in 1Q09 from 46% in 1Q08. Customers in this segment totaled 31.8 million at the end of the quarter, thus adding 1,840 thousand users in 1Q09 and 9,926 thousand users compared with 1Q08 (+45.3%) . Of this total, 2,632 thousand customers were added with the start-up in São Paulo, while 1,000 thousand were added with the acquisition of Amazônia Celular and 6,294 thousand new customers resulted from organic growth in Regions I and II (+28.7%) . Net additions in the quarter were 10.6% higher than in 1Q08, when 1,663 thousand clients joined the base.

The post-paid client base rose by 1.7 million, equaling 90% of net additions in the quarter, boosted mostly by the “Oi Ligadores” campaign. At the end of the quarter, pre-paid customers totaled 26,857 thousand (6.6% increase during the quarter and 47.1% from 1Q08) and represented 84% of total users at Oi Mobile.

In the post-paid segment, we highlight the “Oi Conta Total” product, which increased 9.4% in the quarter and contributed to expanding the mobile user base and enhancing customers’ loyalty in the wireline and broadband segments. At the end of the quarter, the post-paid base amounted to 4,978 thousand, 3.8% above 4Q08 and 36.3% higher than 1Q08.

The 3G broadband services “Oi Velox 3G” and “3GMais” (mini-modems and handset data plans) had 191 thousand users in 1Q09 compared to 119 thousand in 4Q08.

May 14, 2009   
www.oi.com.br/ir 
 


Oi’s market share and market’s penetration rates by region in March 2009 are as follows:

Table 2 – Consolidated Operational Indicators

               
    1Q08    4Q08    1Q09    QoQ    YoY 
                   
 
 Wireline Services - "Oi Fixo"                     
                   
     (a) Lines in Service ('000)   22,073    22,066    21,826    -1.1%    -1.1% 
         Residential    16,087    15,788    15,576    -1.3%    -3.2% 
         Commercial    5,122    5,423    5,396    -0.5%    5.3% 
         Public Telephones    864    855    854    -0.1%    -1.2% 
     Alternatives Plans ('000)*    8,837    10,598    11,084    4.6%    25.4% 
         Proportion of Lines in Service (%)   40.0%    48.0%    50.8%    2.8 p.p.    10.8 p.p. 
     ARPU Oi Fixo (R$)**    61.1    60.7    58.7    -3.3%    -3.9% 
                   
 Broadband Services - "Oi Velox"                     
                   
     (b) Broadband Subscribers ('000)   3,330    3,821    3,938    3.1%    18.3% 
     Proportion of Lines in Service (%)   14.8%    17.1%    17.8%    0.7 p.p.    3.0 p.p. 
     ARPU Broadband (R$)   47.7    46.5    45.1    -3.0%    -5.5% 
                   
 Wireless Services - "Oi Móvel"                     
                   
     (c) Mobile Subscribers ('000)   21,909    29,995    31,835    6.1%    45.3% 
         Pre-Paid Plans    18,257    25,200    26,857    6.6%    47.1% 
         Post-Paid Plans    3,652    4,794    4,978    3.8%    36.3% 
     Oi Conta Total ('000)   646    1,061    1,161    9.4%    79.7% 
     Market Share Oi (%) - Brazil    17.4%    19.9%    20.7%    0.8 p.p.    3.3 p.p. 
     Proportion of Net Additions in Brazil (%)   34.4%    29.2%    60.7%    31.5 p.p.    26.3 p.p. 
     Penetration rate - Brazil (%)   65.9%    78.1%    80.6%    2.5 p.p.    14.7 p.p. 
     Monthly Churn rate (%)   2.3%    3.9%    2.3%    -1.6 p.p.    0.0 p.p. 
     ARPU Oi Móvel (R$)   23.9    25.0    21.1    -15.6%    -11.7% 
                   
 Vídeo - "Oi TV"                     
                   
     (d) Pay TV Subscribers ('000)   58    61    61    0.0%    5.2% 
                   
RGU - Revenue Generating Unit (a+b+c+d) (´000)   47,370    55,943    57,660    3.1%    21.7% 
                   

*Alternative plans include “Planos de Minutos”, “Plano Economia”, “Digitronco”, “PABX Virtual” and others.
** Change in the criteria for measuring Oi Fixo ARPU.
Notes: figures for Amazônia Celular are included from 2Q08.

May 14, 2009   
www.oi.com.br/ir 
 


3) CONSOLIDATED FINANCIAL RESULTS:

3.1) Revenue:

Consolidated gross revenue grew 7.8% year-over-year, in which we highlight the traditional revenue growth drivers such as Oi Velox (+54.5%) in the fixed segment, as well as from the mobile segment (+28.4%) .

At the end of March, the combined revenues from data communication services and mobile services accounted for 38.7% of the total consolidated gross revenue.

Table 3 – Breakdown of Consolidated Gross Revenue

       
    Quarter    % 
                 
    1Q08            1Q08     
R$ million   
Pro forma 
  1Q09    YoY (%)  
Pro forma 
  1Q09 
             
Wireline    8,663    8,972    3.6    83.1    79.8 
       
Local (exc. - VC1)   3,319    3,289    -0.9    31.8    29.3 
       
Local Fixed-to-Mobile (VC1)   1,139    1,151    1.1    10.9    10.2 
       
Long Distance FF + PCS**    1,244    1,222    -1.8    11.9    10.9 
       
LD Fixed-to-Mobile (VC2/3)**    381    379    -0.5    3.7    3.4 
       
Network Usage    206    230    11.7    2.0    2.0 
       
Data    1,651    2,079    25.9    15.8    18.5 
       
Public Phones    346    249    -28.0    3.3    2.2 
       
Additional Services    236    247    4.7    2.3    2.2 
       
Advanced Voice / Other    141    126    -10.6    1.4    1.1 
       
 
       
Wireless    1,768    2,270    28.4    16.9    20.2 
       
Services    1,680    2,180    29.8    16.1    19.4 
   Subscriptions    390    534    36.9    3.7    4.8 
   Outgoing Calls    659    863    31.0    6.3    7.7 
   Domestic/Inter. Roaming    39    34    -12.8    0.4    0.3 
   Network Usage    450    517    14.9    4.3    4.6 
   Data / Value Added    143    233    62.9    1.4    2.1 
Handset Sales    88    89    1.1    0.8    0.8 
       
 
       
Wireline    8,663    8,972    3.6    83.1    79.8 
Wireless*    1,768    2,270    28.4    16.9    20.2 
       
 
       
Total Gross Revenue    10,431    11,242    7.8    100.0    100.0 
             
Consolidated Net Revenue    7,231    7,487    3.5    69.3    66.6 
       

*Includes data related to Tele Norte Celular Participações S.A. (TNCP) since 2Q08.
**Adjusted to adequately reflect revenue from fixed-to-mobile traffic (VC2/3).

Wireline Services:

Gross revenue from wireline services was 3.6% higher than that recorded in 1Q08. This result was influenced by higher revenues from data communication services and the increase in network usage revenues, which compensated for the reduction in local traffic, public telephones and advanced voice/others.

May 14, 2009   
www.oi.com.br/ir 
 


Local Service:

Fixed-to-Fixed (subscription, traffic, connection fee)   Local service revenue (ex-VC1) was stable compared with 1Q08, as a larger alternative plans base (+25%) contributed to it. We highlight that in such plans, the company offers the customer higher minute packages. It is worth mentioning that this growth also considers the tariff readjustment of July 2008 (Region I: 2.76%; Region II: 3.00%). 
 
Fixed-to-Mobile: (VC1)   Growth in fixed-to-mobile calls occurred mainly as a result of the tariff readjustment of July 2008 (Region I: 2.76%; Region II: 3.00%), which more than offset the drop in traffic seen in the period. 

Long Distance Services (LD) – FF + SMP + VC2 and VC3:

Despite the tariff hike in July 2008 (Region I: 2.76%; Region II: 3.00%), lower traffic of long distance calls contributed to a decline in revenue compared with the same quarter one year earlier (-1.5%) .

Remuneration for Network Usage:

After eliminating the R$82 million in transactions done among the group companies, revenues from network usages were higher than those recorded in 1Q08 due to higher traffic combined with a readjustment in the tariff for fixed network interconnection (TU-RL) by 2.76% in both regions where Oi operates (Region I and Region II).

Data Communication Services:

Revenues from data communication services rose 25.9% year-over-year and were the highlight in the fixed segment. In this item, “Oi Velox” revenues accounted for 91% of growth, resulting from the expansion of the average ADSL user base (20.5%) .

Growth in other data-related revenues is also worth mentioning, as follows: higher IP revenues (+R$29 million), EILD (+R$9 million), rental of equipment and infrastructure (+R$12 million) and services rendered to the public sector (+R$15 million), which were partially offset by the reduction in frame relay services (-R$20 million).

Public Telephones:

The drop in revenues from public telephones occurred mainly due to the fixed-to-mobile substitution, especially in the pre-paid segment. It became more pronounced in the past few quarters, as mobile operators offered aggressive bonuses for on-net calls and reduced tariffs.

May 14, 2009   
www.oi.com.br/ir 
 


Wireless Services:

Revenues from wireless services rose 28.4% from 1Q08, ending the quarter accounting for 20.2% of the company’s consolidated gross revenue (16.9% in 1Q08). Such performance stems mostly from the increase in the average user base (+47% year-on-year). The main variations are as follows:

The consolidated average revenue per user (ARPU) in 1Q09 reached R$21.1, lower than 1Q08, mainly due to Region’s II performance, which registered: (a) lower incoming revenue from other mobile operators; (b) lower prepaid volume recharges; and (c) a higher percentage of prepaid customers in the base (82.7% in 1Q09 vs. 81.9% in 1Q08).

The ARPU decline in Region I also results from lower pre-paid recharging and lower incoming traffic.

3.2) Operating Expenses:

Operating expenses in the quarter (excluding depreciation/amortization) were R$648 million higher than in 1Q08. We should divide this amount into two categories: (1) non recurring expenses incurred in 1Q09 and (2) several expenses in the quarter whose nature did not exist in 1Q08.

(1) Non recurring expenses: Total of R$185 million, related to:

(2) Expenses which nature did not exist in 1Q08: Total de R$234 million, related to:

May 14, 2009   
www.oi.com.br/ir 
 
10 


Excluding both impacts, the residual consolidated operating expenses in the quarter rose by R$229 million, basically due to higher spending on personnel, third-party services and other operating expenses, as detailed next:

Table 4 – Breakdown of Operating Expenses

       
    Quarter    % 
                 
    1Q08            1Q08     
Item - R$ million   
Pro forma
  1Q09    YoY (%)  
Pro forma
  1Q09 
             
   Interconnection    1,375    1,321    -3.9    29.6    24.9 
   Personnel    408    494    21.1    8.8    9.3 
   Materials    107    97    -9.3    2.3    1.8 
   Handset Costs/Other (COGS)   96    194    102.1    2.1    3.7 
   Third-Party Services    1,482    1,745    17.7    31.9    33.0 
   Marketing    134    129    -3.7    2.9    2.4 
   Rent and Insurance    304    389    28.0    6.5    7.3 
   Provision for Bad Debts    342    398    16.4    7.4    7.5 
   Other Operating Expenses (Revenue), Net    399    528    32.3    8.6    10.0 
       
 
       
TOTAL    4,647    5,295    13.9    100.0    100.0 
       
 
 
 
       
   Interconnection    1,375    1,321    -3.9    29.6    24.9 
       
   Handset Costs    96    194    102.1    2.1    3.7 
       
   Cost of Services    1,303    1,552    19.1    28.0    29.3 
       
       Personnel    168    183    8.9    3.6    3.5 
       Third-Party Services    638    747    17.1    13.7    14.1 
       Materials    98    90    -8.2    2.1    1.7 
       Rent and Insurance    248    334    34.7    5.3    6.3 
       Anatel Concession Contract    46    24    -47.8    1.0    0.5 
       Other    106    175    65.1    2.3    3.3 
       
   Selling Expenses    1,108    1,347    21.6    23.8    25.4 
       
       Personnel    105    128    21.9    2.3    2.4 
       Third-Party Services    496    647    30.4    10.7    12.2 
       Marketing    134    129    -3.7    2.9    2.4 
       Materials        -20.0    0.1    0.1 
       Rent and Insurance        -20.0    0.1    0.1 
       Other    20    38    90.0    0.4    0.7 
       Provisions for Bad Debts and Receivable write-off    342    398    16.4    7.4    7.5 
       
   General and Administrative Expenses    544    599    10.1    11.7    11.3 
       
       Personnel    135    183    35.6    2.9    3.5 
       Third-Party Services    347    351    1.2    7.5    6.6 
       Materials        0.0    0.1    0.1 
       Rent and Insurance    51    51    0.0    1.1    1.0 
       Other      10    42.9    0.2    0.2 
       
   Other Operating Expenses (Revenue), Net    220    282    28.2    4.7    5.3 
       

*The pro forma consolidation was made from Invitel consolidated, the parent company of Brasil Telecom Participações.

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Interconnection:

Consolidated interconnection costs fell in the quarter due to lower spending in Region II as a result of the market share expansion gained in the mobile segment during 2008.

Personnel:

Greater personnel expenses occurred due to the increase in the number of employees (5,048 year-over-year), mainly due to the acquisition of Amazônia Celular and the start up operations in São Paulo.

In addition, higher personal expenses are related to the Call Center of Internet Group (IG) primarization in 2Q08, and the Region’s II compliance with the new call center legislation in force since December 2008 (Decree 6,523). Also the salary increase of December 2008 and severance expenses recorded in the quarter related to synergies impacted these expenses.

   
 Personnel    1Q08    4Q08    1Q09 
   
TNL    9,895    10,982    10,940 
   
BRT    16,578    20,451    20,581 
   
Total    26,473    31,433    31,521 
   

Handset Costs And Others (COGS):

Handset costs and others (COGS) expanded in the quarter (+102.1%) due to the end of the deferral of handset subsidies for post-paid clients since January 2009. The company opted to stop charging a penalty to customers that leave the base before the 12 month period (“Multa Não” campaign). According to the contract, the subsidized post-paid handsets allowed for a R$300 deferral per handset, which used to be amortized in a 12 month period (the contract period). This practice results from the fact that the retail customers were charged a penalty for early cancellation or migration to pre-paid.

Until December 2008, the negative impact of this amortization (expenses) was compensated by new deferrals related to fresh additions (with subsidies). As the penalty and new deferrals came to an end, we only have the (non-cash) negative impact of the amortization that had already been deferred historically, in addition to the subsidy given in the sale of post-paid handsets. This effect will continue throughout 2009, until the amount accumulated in 2008 is completely amortized.

Third-Party Services:

Spending on third-party services in 1Q09 rose by R$263 million compared with 1Q08, as a result of:

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Marketing:

Spending on marketing fell in the quarter when compared with 1Q08, despite higher spending in general advertising (TV, radio, newspaper and web) for Region I and Region III (São Paulo). The reduction in spending registered in Region II, which more than offset the growth in Regions I and III, reflects the company’s decision to launch the Oi brand and its products in that Region, which will occur only in the second quarter.

Provisions for Bad Debts:

Despite the 16.4% increase year-over-year, the provisions for bad debts ended the quarter at 3.5% of gross revenue, in line with the level seen in 1Q08 (3.3%) . The increase in the absolute amounts stems mainly from a small increase in delinquencies in the mobile segment, reflecting the economic slowdown in Brazil and its impact on the employment rate. In addition, there was an increase in the provisions of Region II due to the standardization of accounting practices used by Oi and BrT.

Other Operating Expenses (Income):

The R$129 million increase in other operating expenses mainly derives from higher Fistel fee expenses (R$51 million) and higher contingencies (R$60 million), combined with the fact that during 1Q08 this item was positively impacted by the recovery of expenses in Region II.

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3.3) Other Items in the Consolidated Result:

EBITDA:

Table 5 – Adjusted EBITDA and Adjusted EBITDA Margin

 
        Quarter     
     
 TNL Consolidated    1Q08    Adjusted    Adjusted 
    Pro forma*    1Q09    YoY 
       
EBITDA (R$ Mn)   2,585    2,377    -8.0% 
       Margin %    35.7%    31.7%    -4.0 p.p. 
       
 
       
    1Q08    Adjusted    Adjusted 
 TMAR Consolidated    Pro forma*    1Q09    YoY 
       
EBITDA (R$ Mn)   2,606    2,389    -8.3% 
       Margin %    36.1%    32.0%    -4.1 p.p. 
       
 
       
 BrTP Consolidated    1Q08    Adjusted    Adjusted 
        1Q09    YoY 
       
EBITDA (R$ Mn)   955    910    -4.7% 
       Margin %    34.1%    32.9%    -1.2 p.p. 
       
 
       
 BrTO Consolidated    1Q08    Adjusted    Adjusted 
        1Q09    YoY 
       
EBITDA (R$ Mn)   946    917    -3.1% 
       Margin %    33.8%    33.1%    -0.7 p.p. 
       
*The pro forma consolidation was based on Invitel consolidated, the parent company of Brasil Telecom Participações.

Consolidated adjusted EBITDA with non recurring expenses totaled R$2,377 million, 8.0% lower than that registered in the 1Q08 and represents a 31.7% adjusted EBITDA margin.

In addition, if we also exclude the non-comparable items, EBITDA would have dropped R$156 million, or 6.0%, mainly because of: (a) higher spending on personnel (due to the new Call Center Law at BrT); (b) third-party services (maintenance, commissions and Region I call center) and, (c) higher spending on Fistel fee (larger customer base).

The BrTP’s adjusted EBITDA was R$910 million, 4.7% lower than that of 1Q08, with a 32.9% margin. It is worth mentioning, that due to accounting estimates adopted by Oi, there was a non recurring impact in the quarter, totaling R$449 million. The adjustments to the accounting estimates net of fiscal effects were made in its net equity on the date TMAR acquired equity control of BrTP. Therefore, these effects did not have an impact on the consolidated statements for TNL.

TNL PCS, subsidiary that is responsible for mobile operations in Regions I and III, accounted an EBITDA of R$290 million in 1Q09, R$90 million below 1Q08 figures. It is important to highlight, though, that this amount is negatively impacted by a non-recurring (non-cash) value of R$114 million related to the end of the deferral of subsidies on post-paid handsets, as previously explained. Excluding this non-recurring (non-cash) impact, the adjusted EBITDA would have been R$403.6 million (adjusted EBITDA margin of 25.7%), 6.3% above 1Q08. It is also worth noting that in 1Q09, this adjusted EBITDA suffered negative impact by the mobile operations in São Paulo still in a start-up stage, as well as the acquisition of Amazônia Celular.

Net Financial Income (Expenses):

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Consolidated net financial expenses equaled R$630 million in 1Q09, rising by R$462 million compared with 1Q08. This resulted from a higher average net debt volume stemming mainly from disbursements amounting to R$5.4 billion for the acquisition of BrTP’s equity control combined with higher borrowing costs in the Brazilian markets since 3Q08.

Table 6 – Net Financial Income (Expenses)

 
      Quarter     
   
  1Q08         
R$ Million  Pro forma    1Q09    YoY (R$ Mn)
           
Financial Income  472     407    (65)
   Interest on financial investments  240    205    (35)
   Other financial income  232    203    (29)
Financial Expenses  (640)   (1,037)   (397)
   Interest on loans and financing  (279)   (625)   (346)
   Foreign exchange effect on loans and financing  (110)   (85)   25 
       Monetary and Exchange Variations  (144)   184    328 
       Currency Swap Results  34    (269)   (303)
   Other Financial Expenses  (251)   (328)   (77)
       Banking Fees (including CPMF) (34)   (47)   (13)
       Interest on rescheduled taxes (Refis)    
       Monetary restatement of provisions for contingencies  (93)   (125)   (32)
       IOF, PIS and Cofins taxes on financial income  (21)   (15)  
       Others  (103)   (148)   (45)
       
Net Financial Income (Expenses) (168)   (630)   (462)
       
*The pro forma consolidation was based on Invitel consolidated, the parent company of BrTP.

Depreciation/Amortization:

In the wireline segment, the 3.3% increase in depreciation and amortization mainly stems from the start of the goodwill amortization of BrT’s acquisition starting February/09. In the wireless segment, the 30.1% growth is mostly due to the increase in the amortization of 3G service licenses for the whole of Brazil (with depreciation starting 2Q08), as well as 2G frequencies in Regions I and III.

Table 7 – Depreciation and Amortization

 
      Quarter     
   
  1Q08         
R$ million  Pro forma*    1Q09    YoY (%)
           
Fixed Line / TNL  904    934    3.3 
       
   Depreciation  883    868    -1.7 
   Amortization of Goodwill  21    67    219.0 
       
Mobile Business  286    372    30.1 
       
   Depreciation  205    167    -18.5 
   License/Deferred Amortization  81    204    151.9 
       
Total  1,190    1,306    9.7 
       
*The pro forma consolidation was based on Invitel consolidated, the parent company of Brasil Telecom Participações.

Net Earnings:

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Net earnings dropped by R$553 million, basically resulting from: (a) Lower EBITDA in the quarter; (b) an increase in the net financial expenses mainly due to higher net debt; (c) the start of the amortization of BrT, which were partially offset by (d) the reduction in income taxes and social contribution due to the decrease in taxable income, and (e) the reduction in minority interests.

Lower net earnings for BrTP were due to the adjustment in accounting provisions and estimates, which was previously explained. Excluding such adjustment, the company would have recorded R$178 million in net earnings. This result reflects mostly the R$24 million increase in financial expenses from 1Q08.

Table 8 – Net Earnings

 
      Quarter     
   
  1Q08         
TNL  Pro forma*    1Q09    YoY 
       
Net Earnings (R$ Mn) 564    11    -98.0% 
Net Margin  7.8%    0.1%    -7.7 p.p. 
Earnings per Share (R$) 1.476    0.028    -98.1% 
Earnings per ADR (US$) 0.850    0.016    -98.1% 
       
 
       
TMAR  1Q08    1Q09    YoY 
       
 
       
Net Earnings (R$ Mn) 632      -99.7% 
Net Margin  8.8%    0.0%    -8.8 p.p. 
Earnings per Share (R$) 2.650    0.010    -99.6% 
       
 
       
BrTP  1Q08    1Q09    YoY 
           
 
       
Net Earnings (R$ Mn) 250    -23    -109.2% 
Net Margin  8.9%    -0.8%    -9.7 p.p. 
       
 
       
BrTO  1Q08    1Q09    YoY 
       
 
       
Net Earnings (R$ Mn) 324    -80    -124.7% 
Net Margin  11.6%    -2.9%    -14.5 p.p. 
       
*The pro forma consolidation was based on Invitel consolidated, the parent company of Brasil Telecom Participações.

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4) DEBT AND CAPEX:

4.1) Debt:

Consolidated net debt rose by R$9,391 million in 1Q09 to end the quarter at R$19,196 million (1.9 times adjusted EBITDA in the last 12 month period). Such growth was driven by the consolidation of gross debt of Brasil Telecom Participações (R$4.9 billion) and Invitel (R$1.0 billion), and also by the reduction in the cash balance due to payments related to the acquisition of this subsidiary in 1Q09.

Debt borrowed in foreign currencies and swaps accounted for 18.7% of total debt at the end of March 2009. However, at the end of the quarter, hedging operations drove the company’s consolidated exposure to foreign exchange to 2.2% of the total gross debt or US$245 million, equivalent to R$566 million in March 2009. It is worth noting that debt payments through 2011 are covered by hedging contracts and a cash balance kept in dollars.

The average cost of debt in March 2009 equaled 105% of the CDI interbank rate for local currency debt and USD Libor + 3% annual rate for debt denominated in foreign currencies. During the quarter, however, the effective debt cost including hedging operations was 11.65% annually, equivalent to 97% of the CDI rate. In the quarter, debt costs were affected by the real rising against other currencies, which contributed to reduce the cost of debt that was still exposed to foreign exchange variation. The reduction in interest rates in 2009 also had a positive impact on such costs, provided that after hedging operations much of the debt was linked to floating rates (about 95% of total debt).

Table 9 - Debt - TNL Consolidated*

         
R$ million  Mar/08  Dec/08  Mar/09    % Gross 
          Debt 
         
 Short Term  2,122  4,047  5,919    22.9% 
         
 Long Term  6,895  16,495  19,952    77.1% 
         
Total Debt  9,017  20,542  25,872    100.0% 
         
 In Local Currency  5,187  16,058  21,127    81.7% 
         
 In Foreign Currency  2,752  3,975  4,053    15.7% 
         
 Swaps  1,078  509  692    2.7% 
         
(-) Cash and ST investments  (6,481) (10,738) (6,676)   25.8% 
         
(=) Net Debt  2,536  9,804  19,196    74.2% 
         
*Only the March 2009 position contemplates BrT

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Table 10 - Debt - TMAR Consolidated*

         
  Mar/08  Dec/08  Mar/09    % Gross 
R$ million          Debt 
         
 Short Term  1,444  3,702  5,560    21.6% 
         
 Long Term  6,196  17,471  20,201    78.4% 
         
Total Debt  7,640  21,173  25,761    100.0% 
         
 In Local Currency  5,149  17,662  21,790    84.6% 
         
 In Foreign Currency  1,807  3,198  3,458    13.4% 
         
 Swaps  683  313  514    2.0% 
         
(-) Cash and ST investments  (5,853) (9,845) (6,137)   23.8% 
         
(=) Net Debt  1,787  11,328  19,624    76.2% 
         
*Only the March 2009 position contemplates BrT

Table 11 - Debt - BrTP Consolidated

         
          % Gross 
R$ million  Mar/08  Dec/08  Mar/09    Debt 
         
   Short Term  535  760  921    18.8% 
         
   Long Term  3,820  4,125  3,983    81.2% 
         
Total Debt  4,356  4,886  4,904    100.0% 
         
   In Local Currency  3,426  3,884  4,019    82.0% 
         
   In Foreign Currency  604  780  678    13.8% 
         
   Swaps  326  222  208    4.2% 
         
(-) Cash and ST investments  (3,776) (3,485) (1,857)   37.9% 
         
(=) Net Debt  580  1,400  3,047    62.1% 
         

Table 12 - Debt - BrTO Consolidated

         
          % Gross 
R$ million  Mar/08  Dec/08  Mar/09    Debt 
         
   Short Term  535  760  921    18.8% 
         
   Long Term  3,820  4,125  3,983    81.2% 
         
Total Debt  4,356  4,886  4,904    100.0% 
         
   In Local Currency  3,426  3,884  4,019    82.0% 
         
   In Foreign Currency  604  780  678    13.8% 
         
   Swaps  326  222  208    4.2% 
         
(-) Cash and ST investments  (2,289) (2,040) (1,603)   32.7% 
         
(=) Net Debt  2,067  2,845  3,301    67.3% 
         

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The consolidated gross debt amortization schedule is shown in the table below:

Table 13 - Schedule for the Amortization of Consolidated Gross Debt

(R$ million) 2009  2010  2011  2012  2013  2014 
onwards
Total 
Gross Debt amortization 5,909  4,171  4,447  2,473  4,722  4,149  25,872 
   Foreign Currency Amortization 1,231  390  624  356  634  1,510  4,745 
   Local Currency Amortization 4,677  3,782  3,823  2,118  4,088  2,640  21,127 

4.2) Capital Expenditure:

Consolidated capital expenditure amounted to R$905 million in the quarter, 12.1% higher than in 1Q08, accounting for 12% of net revenue (11% in 1Q08). We highlight the mobile segment, whose share in the total consolidated Capex rose to 42% in 1Q09 (19% in 1Q08).

Capex amounted R$233 million in the mobile segment due to the Oi Mobile start up in São Paulo (in 1Q08 there were no investments in this region).

Investments directed to the fixed segment fell due to the high capital expenditure related to the expansion of broadband coverage in 1Q09. However, despite the broad drop in the wireline segment, capex for expansion and quality increased due to R$62.4 million expense related to the number portability project, which was still present in the quarter.

Table 14– Capital Expenditure

     
    Quarter        % 
       
  1Q08          1Q08     
R$ million  Pro forma  1Q09    YoY (%)   Pro forma   1Q09 
           
 Wireline  655  521    -20.5    81%    58% 
           
     Growth & Quality  198  230    16.2    25%    25% 
     Data / Communic. Systems / Other  457  291    -36.3    57%    32% 
           
 Wireless  151  384    154.3    19%    42% 
           
 TOTAL  807  905    12.1    100%    100% 
           

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5) ADDITIONAL INFORMATION:

5.1) Acquisition of Brasil Telecom Participações – Recent Events

a) Reconciliation of Accounting Practices used by Oi and BrT

On April 3, 2009, Oi announced to the market (Material Fact) the initial result of the process of revision and reconciliation of accounting practices and estimates used by TNL/TMAR/TNL-PCS with those of BRTP/ BRTO. Additional information is available through the links below:

http://www.novaoi.com.br/ArquivosEstaticos/RI/documentos/comunicados/2009.04.03_Fato%20Relevante_praticas%20contabeis_Ingles.pdf

http://www.novaoi.com.br/ArquivosEstaticos/RI/documentos/comunicados/2009.04.09_Fato%20Relevante_praticas%20contabeis_errata_ingles.pdf

b) Tag Along Tender Offer

On January 8, 2009, by means of the indirect subsidiary Copart 1 Participações S.A., TMAR acquired 100% of the capital of Invitel, the company that held indirect capital control of Brasil Telecom Participações S.A. (BrTP) and thus that of Brasil Telecom S.A. (BrTO).

In connection with this acquisition, TMAR filed with CVM the requirements for the Register of Mandatory Tender Offer of Common Shares held by the minority shareholders of both companies (BrTP and BrTO). In these Tender Offers, the minority shareholders will be entitled to a minimum price of 80% of the price paid for the shares that were part of the control block (R$77.04/common share), net of dividends and interest on capital that may be decided on from January 2008 until the liquidation of the Tender Offer. Therefore, the Tag Along Tender Offers will be held at the following prices: R$61.63 per BRTP share and R$ 57.76 per BRTO share, updated by the CDI rate from January 8, 2009 (acquisition date conclusion) through the financial liquidation of the Auction.

The Mandatory Tender Offers depend on previous registry at the CVM, and the subsequent disclosure of public notice through the press with minimum 30 days notice.

c) Launch of the Oi Brand and product portfolio in Region II

On April 24, 2009 Oi started to introduce officially, the “Oi” brand into Region II, initially through Oi Cartão offer (pre-paid) through the “Ligadores” campaign, which was done in different ways in the Southern, Center-Western and Northern (Rondonia, Acre and Tocantins) regions.

The special launch offer, valid until May 24, 2009 or for as many as one million clients in the whole region, will give consumers up to R$600 in monthly bonuses for on-net calls during six months. Starting May 17, 2009 mobile clients at Oi and Brasil Telecom will be able to use their mobile telephones in the whole of Brazil at local prices and without paying a premium price to make or receive calls.

Oi’s operation in Region II features more than 37 thousand sales spots. The sim cards are for sale at retail stores, newsstands, pharmacies, supermarkets, convenience stores and Oi-brand kiosks and stores.

Focused on clients and on differentiated services, Oi set a gradual schedule to migrate Brasil Telecom’s services portfolio onto “Oi” offers. The marketing initiatives began in the first quarter by means of

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campaigns for free unblocking of handsets and the “Multa Não” (“No Penalty”) campaign. With the launch of the “Oi Cartão” offer to pre-paid clients, the company moves further ahead into its strategy.

5.2) New Borrowings in the Quarter

a) Bond Issuance in the International Market: US$750 million

TMAR issued bonds in the international capital markets (Europe and U.S.). The bonds are listed in the alternative market in the Luxembourg Stock Exchange (Euro MTF). The deal was structured by Citibank, Banco Itaú, Santander Investment, Bradesco BBI and BB Securities. The total amount was US$750 million at 9.625% (9.5% p.a. coupon). Demand for the securities totaled U$2.8 billion, which was close to 3.7 times the issued amount.

Moody’s rated this foreign currency issuance was Baa3 (investment grade). Fitch Ratings rating was BBB- (investment grade).

B) Borrowing from China Development Bank: US$300 million

In March, Telemar Norte Leste announced it borrowed from the China Development Bank (CDB) as much as US$300 million due in seven years, with the aim of financing investment with Huawei in 2008 and 2009. The loan was borrowed in dollars at LIBOR +2.5% per annum, with semi-annual amortizations and a two-year grace period and 7-year maturity schedule.

5.3) Corporate Restructuring of TNCP

As a result of restrictions imposed by Anatel on the acquisition of the equity control of TNCP by TMAR, which included the return of the license of Amazônia Celular or TNL PCS S.A. (“Oi”), a corporate restructuring, announced in Relevant Fact notice on February 19, 2009, proposes to consolidation TMAC assets with those of Oi. Also, Anatel will be given back the concession and licenses for the use of certain frequencies.

The Corporate Restructuring will ensure the participation of minority shareholders of TNCP and TMAC in Oi, aiming to guarantee greater operating and corporate efficiency at the involved companies. Similarly, in an attempt to avoid the dispersion of the TMAC and TNCP shareholders into different companies and to increase operating efficiency, the Corporate Restructuring will unify the shareholder bases of these companies into TNCP.

The Corporate Restructuring involved the following steps:

(i) incorporation of TMAC into TNCP, with the goal of making TMAC a wholly-owned subsidiary of TNCP, through which TMAC shareholders received TNCP shares to replace TMAC shares;
 
(ii) contribution of TMAR’s shares in Oi to the capital of TNCP, by means of a capital increase in TNCP, in order for TNCP to hold every Oi share;
 
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(iii) return to Anatel radiofrequencies attributed to Amazônia Celular with the subsequent extinction of the SMP authorization; and
 
(iv) the incorporation of TMAC by Oi, through the absorption of TMAC by Oi, and the subsequent extinction of TMAC;

The Incorporations and capital increase of TNCP were approved by shareholders of TNCP, Amazônia Celular and Oi at the Shareholder’s Meetings that took place on March 9, 2009.

On April 22, 2009, TMAR, its subsidiary TNCP and TMAC announced to the market the end of the period to exercise the right to remove nonconforming shareholders from the Extraordinary General Meetings of TNCP and TMAC, which took place on March 9, 2009, during which the incorporation of TMAC shares by TNCP was approved.

Trading elimination of tmac shares at bovespa and cancellation of the company’s registration as a publicly traded Company

Trading at TMAC shares at BM&FBOVESPA ended on April 23, 2009, as its long-standing shareholders hold now common or preferred shares of TNCP, following the replacement approval. The exchange equals 1.529505 common share of TNCP for every common share of TMAC, and 1.151515 preferred share of TNCP for each preferred share, regardless of its class, of Amazônia Celular.

On April 28, 2009, the CVM canceled TMAC’s registration following the Law 6,358/76 (21) and on April 30, 2009 Bovespa also canceled the registration at the exchange.

5.4) Results for Number Portability

Number portability, which started gradually in September 2008, was available in March 2009 to all over the country.

Up to April 20, Oi Mobile recorded a positive net balance of 25 thousand users (+25.7 thousand in Region I and Region III and -0.7 thousand in Region II). In the wireline segment, it had a negative net balance of 118.7 thousand users (39.8 thousand in Region I and Region III and 78.9 in Region II).

As anticipated, the results for number portability had a minimal impact on Oi, as the net balance accounts for 0.5% and 0.1% of the average fixed and mobile base in the last 12 months.

5.5) New Board of Directors

In April, 2009, the composition of the Boards of Directors and Audit Committees of the companies stood as follows:

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TNL – Board of Directors (mandate up to 2010)
 
Effective  Substitute 
   
José Mauro Mettrau Carneiro da Cunha (President) José Augusto da Gama Figueira 
   
Alexandre Jereissati Legey  Carlos Francisco Ribeiro Jereissati 
   
Pedro Jereissati  Roberto Schneider 
   
Otávio Marques de Azevedo  Lúcio Otávio Ferreira 
   
Caio Marcelo de Medeiros Melo  Joaquim Dias de Castro 
   
Fernando Magalhães Portella  Carlos Jereissati 
   
Álvaro Furtado de Andrade  João José de Araújo Pereira Pavel 
   
João Pedro Amado Andrade  Rodrigo Werneck Gutierrez 
   
Armando Galhardo Nunes Guerra Junior (*) Paulo Roberto Teixeira (*)
   

(*) Licensed members

 
TNL – Audit Committee (mandate up to 2010)
 
Effective  Substitute 
   
Sergio Bernstein (President) Sidnei Nunes 
   
Allan Kardec de Melo Ferreira  Dênis Kleber Gomide Leite 
   
Pedro Julio Pinheiro (Minority) Dílson de Lima Ferreira Júnior (Minority)
   
Fernando Linhares Filho  Aparecido Carlos Correia Galdino 
   

 
TMAR - Board of Directors (mandate up to 2011)
 
Effective  Substitute 
   
José Mauro Mettrau Carneiro da Cunha (President) José Augusto da Gama Figueira 
   
João de Deus Pinheiro de Macêdo  Otávio Marques de Azevedo 
   
Eurico de Jesus Teles Neto  Alex Waldemar Zornig 
   
Luiz Eduardo Falco Pires Corrêa  Pedro Jereissati 
   
João Carlos de Almeida Gaspar (Preferred) Claudio José Carvalho de Andrade (Preferred)
   

 
TMAR - Audit Committee (mandate up to 2010)
 
Effective  Substitute 
   
Sergio Bernstein (President) Sidnei Nunes 
   
Fernando Linhares Filho  Dênis Kleber Gomide Leite 
   
Ricardo Malavazi Martins  Rui Flaks Schneider 
   

 
BRTP - Board of Directors (mandate up to 2011)
 
Efetivos  Suplentes 
   
José Mauro Mettrau Carneiro da Cunha (Presidente) José Augusto da Gama Figueira 
   
Luiz Eduardo Falco Pires Corrêa (vice-presidente) Pedro Jereissati 
   
Julio Cesar Pinto  João José de Araújo Pereira Pavel 
   
Alex Waldemar Zornig  Otávio Marques de Azevedo 
   

 
BRTP - Audit Committee (mandate up to 2010)
 
Efetivos  Suplentes 
   
Aparecido Carlos Correia Galdino (Presidente) Sidnei Nunes 
   
Allan Kardec de Melo Ferreira  Dênis Kleber Gomide Leite 
   
Eder Carvalho Magalhães  Sérgio Bernstein 
   
Ricardo Malavazi Martins  Marcos Duarte Santos 
   

May 14, 2009  www.oi.com.br/ir  23 


 
BRTO - Board of Directors (mandate up to 2010)
 
Efetivos  Suplentes 
   
José Mauro Mettrau Carneiro da Cunha (Presidente) Maxim Medvedovski 
   
João de Deus Pinheiro de Macedo (vice-presidente) Pedro Jereissati 
   
Eurico de Jesus Teles Neto  Otávio Marques de Azevedo 
   
José Augusto da Gama Figueira  João José de Araújo Pereira Pavel 
   
Antônio Cardoso dos Santos   
   

 
BRTO - Audit Committee (mandate up to 2010)
 
Efetivos  Suplentes 
   
Aparecido Carlos Correia Galdino (Presidente) Sidnei Nunes 
   
Allan Kardec de Melo Ferreira  Dênis Kleber Gomide Leite 
   
Eder Carvalho Magalhães  Sérgio Bernstein 
   
Ricardo Malavazi Martins  Marcos Duarte Santos 
   

5.6) Law 11,638/2007 – Related to the Elaboration and Disclosure of Financial Statements

On December 28, 2007, Law # 11,638/07 was put into effect. It added new provisions to and modified Corporate Law # 6,404/1976. This Law set a number of alterations to accounting practices and to the preparation of financial statements, aiming to align them with International Financial Reporting Standards (“IFRS”). Therefore, it attributed to CVM the power to issue accounting norms and procedures for joint stock companies.

On December 3, 2008, the Provisional Measure 449/2008, with the force of law, instituted the RTT – Transitional Tax Regime for the accounting of earnings, which deals with tax adjustments stemming from new accounting methods and criteria introduced by Law # 11,638/2007, and introduces changes to Law # 6,404/1976.

The following table shows the reconciliations of the financial and income statements announced on March 31, 2008, pursuant to Law # 11,638/2007 in order to allow its comparison with the quarter ended March 31, 2009.

     
TNL Consolidated (R$ million) - March 31, 2008  Shareholder’ Equity  Net Income 
Original balance  11,150  486 
     
Financial instruments  -1 
Financial lease  11 
Grants and government support    56 
Stock-based remuneration    -16 
Income tax and social contribution on the total adjustment  -3  -3 
Minority interest effect  -1  -8 
Equity accounting on the adjustments of Law 11,638/07 and    44 
Provisional Measure # 449/08     
     
Balance after Law # 11,638/07  11,156  250 
     

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BrTP Consolidated (R$ million) - March 31, 2008  Shareholder’ Equity  Net Income 
Original balance  5,308  248 
     
Financial instruments    -1 
Financial lease  -7 
Grants and government support     
Stock-based remuneration  -18  -4 
Income tax and social contribution on the total adjustment  27  -3 
Minority interest effect  22  -1 
Equity accounting on the adjustments of Law 11,638/07 and     
Provisional Measure # 449/08     
Deferred Asset  -70  10 
     
Balance after Law # 11,638/07  5,262  250 
     

5.7) Dividends Paid in 1Q09: TNE

On February 5, 2009, the Board of Directors of TNE decided on the distribution of extraordinary dividends in the amount of R$1,196,563,947.13 (R$3.13 per common/preferred share) whose payment started on February 16, 2009 (based on the shareholder structure of February 6, 2009).

5.8) Ordinary General Meeting approves payment of Dividends and Interest on Capital: TNL and TMAR:

TNLP: R$1,070 million

The Ordinary General Meeting of April 14, 2009 approved the payment of R$791 million in complementary dividends, as well as the payment of Interest on Capital in the amount of R$279 million, which was declared during 2008.

TNE shares are already trading “ex. Interest on Capital” at the Bovespa and NYSE. However, the Company’s Management clarified that the shares will start trading “ex-dividends” on a future date yet to be announced, while dividends and interest on capital will be paid in the current fiscal year, in compliance with Paragraph 3 of Art. 205 of Law 6,404/76, on a future date, yet to be defined.

TMAR: R$1,461 million

The Ordinary General Meeting of April 14, 2009 approved the payment of R$816 million as complementary dividends and Interest on Capital in the amount of R$645 million (of which R$495 million are to be paid based on the shareholder structure of August 15, 2008 and R$150 million based on the shareholder structure of December 22, 2008), which were declared during 2008.

TMAR shares are trading “ex. Interest on Capital” at the Bovespa. However, the Company’s Management informed that the shares will start trading “ex-dividends” on a future date yet to be announced date, while dividends and interest on capital will be paid in the current fiscal year, on a future date yet to be announced.

May 14, 2009  www.oi.com.br/ir  25 


5.9) Oi Launches 3G in São Paulo

On April 23, 2009, Oi launched its 3G offers in the State of São Paulo.

The company’s mobile broadband service covers more than 48 municipalities in the state of São Paulo and features a free and penalty-free trial, allowing the client to sample the service for as many as two months.

In addition to testing the service, the client opting for Oi’s 3G will win a bonus after the third month amounting to as much as R$135 depending on the plan chosen when purchasing the mini-modem (unblocked), or to rebates on the invoice. The client who picks Oi Velox 1 Mega will pay R$59.90 until the end of 2009, a price charged for the 300 Kb service.

This offer was successful and ended in April with almost 2 thousand additions in just one week. The offer is valid until June 30, 2009.

5.10) Change of Independent Auditors

On May 6, TNL and TMAR announced to the market the change of independent auditors. Deloitte Touche Tohmatsu Auditores was hired to replace BDO Trevisan Auditores Independentes (BDO). The change was strictly made on account of commercial circumstances.

May 14, 2009  www.oi.com.br/ir  26 


6) ADDENDUM

6.1) Operational Indicators - Regions I and III

           
  1Q08  4Q08  1Q09    QoQ  YoY 
           
 Wireline Services - "Oi Fixo"             
           
     (a) Lines in Service ('000) 14,037  13,939  13,780    -1.1%  -1.8% 
         Residential  10,868  10,733  10,627    -1.0%  -2.2% 
         Commercial  2,585  2,629  2,577    -2.0%  -0.3% 
         Public Telephones  584  577  576    -0.2%  -1.4% 
     Alternatives Plans ('000)*  5,234  6,433  6,651    3.4%  27.1% 
         Proportion of Lines in Service (%) 37.3%  46.2%  48.3%    2.1 p.p.  11.0 p.p. 
     ARPU Oi Fixo (R$)**  59.7  59.0  57.1    -3.2%  -4.4% 
           
 Broadband Services - "Oi Velox"             
           
     (b) Broadband Subscribers ('000) 1,692  2,016  2,080    3.2%  22.9% 
     Proportion of Lines in Service (%) 11.7%  14.1%  14.7%    0.6 p.p.  3.0 p.p. 
     ARPU Oi Velox (R$) 46.5  43.7  42.9    -1.8%  -7.7% 
           
 Wireless Services - "Oi Móvel"             
           
     (c) Mobile Subscribers ('000) 17,332  24,390  25,884    6.1%  49.3% 
         Pre-Paid Plans  14,509  20,574  21,937    6.6%  51.2% 
         Post-Paid Plans  2,823  3,815  3,948    3.5%  39.9% 
     Oi Conta Total ('000) 646  1,061  1,161    9.4%  79.7% 
     Market Share Oi - Region I + III (%) 18.8%  21.8%  22.7%    0.9 p.p.  3.9 p.p. 
         Market Share Oi - Region I (%) 27.9%  30.3%  31.0%    0.7 p.p.  3.1 p.p. 
         Market Share Oi - Region III (%) 5.3%  6.8%    1.5 p.p. 
     Proportion of Net Additions in Region I + III (%) 36.3%  33.0%  62.7%    29.7 p.p.  26.4 p.p. 
         Proportion of Net Additions in Region I (%) 48.5%  15.1%  64.2%    49.1 p.p.  15.7 p.p. 
         Proportion of Net Additions in Region III (%) 47.9%  60.7%    12.8 p.p. 
     Penetration rate - Region I + III (%) 63.4%  75.9%  78.3%    2.4 p.p.  14.9 p.p. 
         Penetration rate - Region I (%) 60.0%  70.5%  71.7%    1.2 p.p.  11.7 p.p. 
         Penetration rate - Region III (%) 71.9%  89.2%  95.3%    6.1 p.p.  23.4 p.p. 
     Monthly Churn rate (%) 2.2%  3.4%  2.0%    -1.4 p.p.  -0.2 p.p. 
     ARPU Oi Móvel (R$) 21.3  22.7  20.5    -9.7%  -3.8% 
           
 Vídeo - "Oi TV"             
           
     (d) Pay TV Subscribers ('000) 58  61  61    0.0%  5.2% 
           
RGU - Revenue Generating Unit (a+b+c+d) (´000) 33,119  40,406  41,805    3.5%  26.2% 
           

*Alternative plans include “Planos de Minutos”, “Plano Economia”, “Digitronco”, “PABX Virtual” and others.
** Change in the criteria for measuring Oi Fixo ARPU.
Notes: figures for Amazônia Celular are included from 2Q08.

May 14, 2009  www.oi.com.br/ir  27 


6.2) Operational Indicators - Region II

           
  1Q08  4Q08  1Q09    QoQ  YoY 
           
 Wireline Services - "Oi Fixo"             
           
     (a) Lines in Service ('000) 8,036  8,127  8,046    -1.0%  0.1% 
         Residential  5,219  5,055  4,949    -2.1%  -5.2% 
         Commercial  2,537  2,794  2,819    0.9%  11.1% 
         Public Telephones  280  278  277    -0.4%  -1.1% 
     Alternatives Plans ('000)*  3,604  4,166  4,432    6.4%  23.0% 
         Proportion of Lines in Service (%) 44.8%  51.3%  55.1%    3.8 p.p.  10.3 p.p. 
     ARPU Oi Fixo (R$)**  63.7  63.5  61.5    -3.1%  -3.5% 
           
 Broadband Services - "Oi Velox"             
           
     (b) Broadband Subscribers ('000) 1,637  1,806  1,858    2.9%  13.5% 
     Proportion of Lines in Service (%) 20.4%  22.2%  23.1%    0.9 p.p.  2.7 p.p. 
     ARPU Oi Velox (R$) 48.0  48.8  47.6    -2.5%  -0.8% 
           
Wireless Services - "Oi Móvel"             
           
     (c) Mobile Subscribers ('000) 4,578  5,605  5,951    6.2%  30.0% 
         Pre-Paid Plans  3,748  4,626  4,921    6.4%  31.3% 
         Post-Paid Plans  829  979  1,030    5.2%  24.2% 
     Market Share Oi - Region II (%) 13.7%  14.4%  15.0%    0.6 p.p.  1.3 p.p. 
     Proportion of Net Additions in Region II (%) 28.1%  16.2%  53.5%    37.3 p.p.  25.4 p.p. 
     Penetration rate - Region II (%) 73.8%  85.2%  87.9%    2.7 p.p.  14.1 p.p. 
     Monthly Churn rate (%) 2.6%  6.2%  4.0%    -2.2 p.p.  1.4 p.p. 
     ARPU Oi Móvel (R$) 29.8  28.6  24.0    -16.1%  -19.5% 
           
RGU - Revenue Generating Unit (a+b+c+d) (´000) 14,251  15,538  15,855    2.0%  11.3% 
           

*Alternative plans include “Planos de Minutos”, “Plano Economia”, “Digitronco”, “PABX Virtual” and others.
** Change in the criteria for measuring Oi Fixo ARPU.

May 14, 2009  www.oi.com.br/ir  28 


7) FINANCIAL STATEMENTS

7.1) Tele Norte Leste Participações - TNLP Consolidated

          R$ Million 
         
Income Statement  1Q08 
TNL 
1Q08 
BRTP* 
1Q08 
Pro forma 
  1Q09 
         
 Wireline Services Revenues  5,143.3  3,571.7  8,662.9    8,972.3 
         
     Local Services  2,784.0  1,673.9  4,457.9    4,440.5 
         
         Subscription Charges  1,719.3  997.2  2,716.6    2,762.3 
         Local Traffic  362.7  209.0  571.7    505.8 
         Installation Fees  21.6  2.3  23.9    18.6 
         Collect Calls  1.4  0.7  2.2    1.6 
         Other Local Revenues  0.0  4.1  4.2    0.7 
         Fixed-to-Mobile (VC1) 678.9  460.4  1,139.3    1,151.5 
     Long Distance  927.4  698.4  1,625.7    1,600.4 
         
         Intra-State  426.4  310.0  736.4    703.2 
         Inter-State  102.4  58.4  160.8    144.9 
         Inter-Regional  174.9  146.1  321.0    352.2 
         International  16.1  9.9  26.1    21.6 
         Fixed-to-Mobile (VC2 and VC3) 207.5  174.0  381.5    378.6 
     Advanced Voice  53.2  34.5  87.7    80.6 
         
     Public Telephones  211.5  134.1  345.6    249.1 
         
     Additional Services  169.2  66.4  235.6    247.1 
         
     Network Usage Remuneration  155.9  76.6  206.4    229.8 
         
     Data Transmission Services  809.0  868.0  1,650.8    2,079.3 
         
         ADSL (Velox) 319.4  391.0  710.4    1,097.7 
         Leased Lines (EILD) 150.1  105.2  230.2    239.2 
         Leased Lines (SLDD/SLDA) 59.4  85.2  144.6    150.3 
         IP Services  91.3  118.5  209.6    238.8 
         Packet switch and frame relay  77.9  47.0  125.0    104.9 
         Other Data Services  110.8  121.0  231.1    248.5 
     Other Wireline Services  33.2  19.9  53.1    45.4 
         
 Wireless Services Revenues  1,307.5  464.4  1,768.0    2,269.6 
         
     Subscription Charges  292.5  97.1  389.6    534.0 
     Outgoing Calls  524.2  134.7  658.8    862.6 
     Domestic/International Roaming  33.4  5.7  38.8    34.4 
     Network Usage Remuneration  297.7  155.3  449.5    516.6 
     Data / Value Added Services  111.3  32.1  143.3    232.6 
     Handset Sales  48.4  39.5  88.0    89.5 
         
 Gross Operating Revenue  6,450.9  4,036.1  10,430.9    11,241.9 
         
     Taxes and Deductions  (1,961.4) (1,238.4) (3,199.8)   (3,754.7)
         
 Net Operating Revenue  4,489.4  2,797.7  7,231.1    7,487.2 
         
     Operating Expenses  (2,843.8) (1,858.8) (4,646.6)   (5,295.3)
         Cost of Services  (844.0) (484.5) (1,303.3)   (1,552.0)
         Cost of Goods Sold  (45.2) (50.7) (95.9)   (194.0)
         Interconnection Costs  (839.6) (566.1) (1,374.8)   (1,321.4)
         Selling Expenses  (751.6) (356.8) (1,108.5)   (1,347.4)
         General and Administrative Expenses  (288.8) (255.0) (543.8)   (598.6)
         Other Operating (Expenses) Revenue, net  (74.6) (145.7) (220.3)   (281.8)
         
 EBITDA  1,645.6  938.9  2,584.5    2,191.9 
         
     Margin %  36.7%  33.6%  35.7%    29.3% 
     Depreciation and Amortization  (653.7) (536.2) (1,189.9)   (1,305.9)
         
 EBIT  991.9  402.7  1,394.6    885.9 
         
     Equity Accounting  93.2  (0.3) 92.9    (1.1)
     Financial Expenses  (393.7) (246.0) (639.7)   (1,037.5)
     Financial Income  257.0  214.6  471.7    407.4 
         
 Income Before Tax and Social Contribution  948.4  371.0  1,319.5    254.7 
         
     Income Tax and Social Contribution  (267.2) (67.0) (334.2)   (91.1)
     Minority Interest  (112.2) (309.2) (421.3)   (152.8)
         
 Net Income  569.0  (5.1) 564.0    10.8 
         
     Margin %  12.7%  -0.2%  7.8%    0.1% 
 Outstanding Shares - Thousand (exc.-treasury) 382,122  547,378  382,122    382,289 
 Income per share (R$) 1.489  (0.009) 1.476    0.028 
 Income per ADR (US$) 0.858  (0.005) 0.850    0.016 
         

*The pro forma consolidation was made from Invitel consolidated, the parent company of Brasil Telecom Participações.

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7.1) Tele Norte Leste Participações – TNLP Consolidated (Continued)

      R$ Million 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL ASSETS  29,636  40,768  56,856 
       
Current  12,186  17,711  18,736 
   Cash  2,939  9,498  5,676 
   Financial investments  3,519  1,240  976 
   Accounts Receivable  3,268  3,896  6,078 
   Recoverable Taxes  1,576  1,884  3,455 
   Inventories  114  153  182 
   Assets in Escrow  268  1,103 
   Other Current Assets  769  772  1,266 
       
Non-Current Assets  17,450  23,056  38,120 
       
   Long Term  3,894  3,945  8,134 
   Investments  50  3,320  55 
   Property Plant and Equipment  11,634  12,670  20,048 
   Intagible Assets  1,554  2,758  9,543 
   Deferred Assets  319  362  340 
       
 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL LIABILITIES  29,636  40,768  56,856 
       
Current  6,164  9,147  15,675 
       Suppliers  1,879  1,546  3,112 
       Loans and Financing  2,073  3,956  5,919 
       Payroll and Related Accruals  148  274  1,103 
       Payable Taxes  1,090  1,127  2,133 
       Dividends Payable  918  1,522  1,937 
       Other Accounts Payable  55  723  1,470 
Non-Current Liabilities  9,723  20,209  26,336 
       
   Long Term  9,723  20,209  26,336 
       Loans and Financing  6,763  16,288  19,952 
       Payable and Deferred Taxes  743  604  575 
       Contingency Provisions  1,954  1,622  3,465 
       Outstanding authorizations  115  1,528  1,525 
       Other Accounts Payable  148  167  819 
Minority Interest  2,593  1,820  6,438 
       
Shareholders' Equity  11,156  9,591  8,406 
   Capital Stock  4,689  5,449  5,449 
   Capital Reserve  31  38  40 
   Surplus Reserve  6,324  4,472  3,276 
   Treasury shares  (373) (369) (369)
   Retained Earnings  485  11 
       

May 14, 2009  www.oi.com.br/ir  30 


7.2) Telemar Norte Leste - TMAR Consolidated

          R$ Million 
         
Income Statement  1Q08 
TNL 
1Q08 
BRTP* 
1Q08 
Pro forma 
     1Q09 
         
   Wireline Services Revenues  5,118.6  3,571.7  8,638.1    8,962.1 
         
       Local Services  2,784.0  1,673.9  4,457.9    4,440.5 
         
           Subscription Charges  1,719.3  997.2  2,716.6    2,762.3 
           Local Traffic  362.7  209.0  571.7    505.8 
           Installation Fees  21.6  2.3  23.9    18.6 
           Collect Calls  1.4  0.7  2.2    1.6 
           Other Local Revenues  0.0  4.1  4.2    0.7 
           Fixed-to-Mobile (VC1) 678.9  460.4  1,139.3    1,151.5 
       Long Distance  927.4  698.4  1,625.7    1,600.4 
         
           Intra-State  426.4  310.0  736.4    703.2 
           Inter-State  102.4  58.4  160.8    144.9 
           Inter-Regional  174.9  146.1  321.0    352.2 
           International  16.1  9.9  26.1    21.6 
           Fixed-to-Mobile (VC2 and VC3) 207.5  174.0  381.5    378.6 
       Advanced Voice  53.2  34.5  87.7    80.6 
         
       Public Telephones  211.5  134.1  345.6    249.1 
         
       Additional Services  169.2  66.4  235.6    247.1 
         
       Network Usage Remuneration  155.9  76.6  206.4    229.8 
         
       Data Transmission Services  809.9  868.0  1,651.8    2,080.2 
         
       Other  7.6  19.9  27.5    34.3 
         
   Wireless Services Revenues  1,307.5  464.4  1,768.0    2,257.0 
         
       Subscription Charges  292.5  97.1  389.6    534.0 
       Outgoing Calls  524.2  134.7  658.8    862.6 
       Domestic/International Roaming  33.4  5.7  38.8    34.4 
       Network Usage Remuneration  297.7  155.3  449.5    516.6 
       Data / Value Added Services  111.3  32.1  143.3    220.0 
       Handset Sales  48.4  39.5  88.0    89.5 
         
   Gross Operating Revenue  6,426.1  4,036.1  10,406.2    11,219.2 
         
       Taxes and Deductions  (1,956.3) (1,238.4) (3,194.6)   (3,749.7)
         
   Net Operating Revenue  4,469.9  2,797.7  7,211.6    7,469.4 
         
       Operating Expenses  (2,802.9) (1,858.8) (4,605.7)   (5,265.2)
           Cost of Services Provided  (831.5) (484.5) (1,290.8)   (1,538.9)
           Cost of Goods Sold  (45.2) (50.7) (95.9)   (194.0)
           Interconnection Costs  (839.6) (566.1) (1,374.8)   (1,321.4)
           Selling Expenses  (748.7) (356.8) (1,105.5)   (1,276.3)
           General and Administrative Expenses  (283.0) (255.0) (537.9)   (655.9)
           Other Operting (Expenses) Revenue, net  (55.1) (145.7) (200.8)   (278.6)
         
   EBITDA  1,667.0  938.9  2,605.9    2,204.2 
         
       Margin %  37.3%  33.6%  36.1%    29.5% 
       Depreciation and Amortization  (661.3) (536.2) (1,197.5)   (1,313.6)
         
   EBIT  1,005.7  402.7  1,408.4    890.6 
         
       Equity Accounting  25.1  (0.3) 24.7    (4.8)
       Financial Expenses  (379.2) (246.0) (625.2)   (1,046.4)
       Financial Income  258.8  214.6  473.4    401.0 
         
   Income Before Tax and Social Contribution  910.4  371.0  1,281.4    240.5 
         
       Income Tax and Social Contribution  (273.5) (67.0) (340.5)   (85.8)
       Minority Interest  0.0  (309.1) (309.1)   (152.3)
         
   Net Income  636.9  (5.1) 631.8    2.4 
         
       Margin %  14.2%  -0.2%  8.8%    0.0% 
   Outstanding Shares Thousand (exc.-treasury) 238,391  547,378  238,391    238,391 
   Income per share (R$) 2.672  (0.009) 2.650    0.010 
         

*The pro forma consolidation was made from Invitel consolidated, the parent company of Brasil Telecom Participações.

May 14, 2009  www.oi.com.br/ir  31 


7.2) Telemar Norte Leste - TMAR Consolidated (Continued)

      R$ Million 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL ASSETS  28,871  39,836  56,302 
       
Current  11,213  16,577  17,896 
   Cash  2,323  8,606  5,140 
   Financial investments  3,507  1,238  975 
   Accounts Receivable  3,261  3,897  6,082 
   Recoverable and Deferred Taxes  1,246  1,543  3,155 
   Inventories  114  153  182 
   Assets in Escrow  374  1,103 
   Other Current Assets  762  765  1,260 
       
Non-Current Assets  17,658  23,259  38,406 
       
   Long Term  4,027  4,100  8,380 
       Recoverable and Deferred Taxes  2,046  2,211  3,772 
       Financial investments  23  23 
       Assets in Escrow  1,177  1,034  3,579 
       Other  781  853  1,006 
   Investments  42  3,313  47 
   Property Plant and Equipment  11,831  12,831  20,197 
   Intagible Assets  1,472  2,682  9,470 
   Deferred  286  333  312 
       
 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL LIABILITIES  28,871  39,836  56,302 
       
Current  5,595  8,768  15,264 
       Suppliers  1,854  1,542  3,108 
       Loans and Financing  1,427  3,621  5,560 
       Payroll and Related Accruals  146  271  1,099 
       Payable Taxes  1,066  1,100  2,116 
       Dividends Payable  1,044  1,530  1,908 
       Other Accounts Payable  57  706  1,473 
       
Non-Current Liabilities  8,870  21,058  26,404 
       
   Long Term  8,870  21,058  26,404 
       
       Loans and Financing  6,126  17,302  20,201 
       Payable Taxes  598  489  462 
       Contingency Provisions  1,953  1,642  3,467 
       Outstanding authorizations  115  1,528  1,525 
       Other Accounts Payable  78  98  749 
       
Minority Interest  0  25  4,639 
       
Shareholders' Equity  14,406  9,984  9,994 
   Capital Stock  7,419  7,419  7,419 
   Capital Reserve  2,232  2,199  2,206 
   Treasury shares  (17) (17) (17)
   Surplus Reserve  4,224  383  383 
   Retained Earnings  549 
       

May 14, 2009  www.oi.com.br/ir  32 


7.3) TNL PCS – Oi

        R$ Million 
             
Income Statement    1Q08    4Q08    1Q09 
             
Wireless Services Revenues    1,512.5    2,042.8    2,112.0 
             
 Subscription    292.5    382.4    417.1 
 Outgoing Calls    524.2    697.3    680.0 
 Domestic/Internacional Roaming    33.4    27.3    30.1 
 Network Usage Remuneration    502.4    711.1    757.0 
 Data / Value Added    111.3    156.4    166.2 
 Other SMP Services    (0.5)   (0.2)   0.0 
 Handset Sales    49.1    68.6    61.7 
LD/Advanced Voice Service/Network* Revenues    106.5    126.7    113.9 
             
Gross Operating Revenue    1,619.0    2,169.5    2,225.9 
             
Taxes and Deductions    (470.4)   (653.0)   (653.2)
             
Net Operating Revenue    1,148.6    1,516.5    1,572.7 
             
Operating Expenses    (768.8)   (1,055.1)   (1,283.1)
 Cost of Services Provided    (165.9)   (131.9)   (345.8)
 Cost of Goods Sold    (45.1)   (29.0)   (148.1)
 Interconnection Costs    (315.5)   (403.1)   (358.5)
 Selling Expenses    (222.9)   (409.5)   (367.7)
 General and Administrative Expenses    (46.2)   (110.7)   (106.8)
 Other Operating (Expenses) Revenue, net    26.8    29.1    43.8 
             
EBITDA    379.8    461.4    289.6 
             
    Margin % 
  33.1%    30.4%    18.4% 
Depreciation and Amortization    (178.8)   (216.6)   (233.5)
             
EBIT    201.1    244.7    56.1 
             
Equity Accounting    (21.8)   (57.4)   (41.1)
Financial Expenses    (32.4)   (109.1)   (58.2)
Financial Income    95.8    104.6    92.1 
             
Income Before Tax and Social Contribution    242.7    182.8    48.9 
             
Income Tax and Social Contribution    (87.7)   (53.4)   15.3 
             
Net Income    155.0    129.3    64.3 
             
    Margin % 
  13.5%    8.5%    4.1% 
             

 
Balance Sheet    3/31/08    12/31/08    3/31/09 
             
TOTAL ASSETS    10,077    12,087    12,515 
             
Current    3,948    3,942    2,988 
 Cash    514    679    215 
 Financial investments    2,014    1,107    251 
 Accounts Receivable    424    1,015    955 
 Recoverable and Deferred Taxes    407    488    695 
 Inventories    84    113    102 
 Other Current Assets    506    540    768 
Non-Current Assets    6,128    8,145    9,527 
 Long Term    1,428    1,603    2,713 
       Recoverable and Deferred Taxes    891    827    821 
       Loans and Financing    403    608    1,720 
       Financial investments       
       Other    133    167    170 
 Investments    33    24   
 Property Plant and Equipment    3,266    4,169    4,517 
 Intagible Assets    1,128    2,019    1,990 
 Deferred Assets    274    329    308 
             
TOTAL LIABILITIES    10,077    12,087    12,515 
             
Current Liabilities    1,005    1,767    1,841 
       Suppliers    555    979    1,017 
       Loans and Financing    11    12    27 
       Payroll and Related Accruals    25    49    56 
       Payable Taxes    383    440    441 
       Other Accounts Payable    31    288    300 
Non-Current Liabilities    728    1,513    1,675 
   Long Term    728    1,513    1,675 
       Loans and Financing    489    476    601 
       Contingency Provisions    93    104    145 
       Payable Taxes       
       Outstanding authorizations    115    893    882 
       Other Accounts Payable    24    34    42 
             
Shareholders' Equity    8,344    8,807    8,999 
             

May 14, 2009   
www.oi.com.br/ir 
 
33 


7.4) Brasil Telecom Participações – BrTP Consolidated

R$ Million

       
Income Statement 
1Q08  4Q08  1Q09 
       
   Wireline Services Revenues  3,571.7  3,878.4  3,876.2 
       
       Local Services  1,673.9  1,692.4  1,631.5 
       
           Subscription Charges  997.2  960.4  962.9 
           Local Traffic  209.0  225.8  194.2 
           Installation Fees  2.3  2.6  2.2 
           Collect Calls  0.7  1.1  0.6 
           Other Local Revenues  4.1  3.3  3.1 
           Fixed-to-Mobile (VC1) 460.4  499.3  468.5 
       Long Distance  698.4  663.4  696.1 
       
           Intra-State  310.0  200.5  192.3 
           Inter-State  58.4  61.1  55.2 
           Inter-Regional  146.1  54.8  52.8 
           International  9.9  8.3  8.1 
           Fixed-to-Mobile (VC2 and VC3) 174.0  338.7  387.7 
       Advanced Voice  34.5  34.1  32.6 
       
       Public Telephones  134.1  114.0  84.2 
       
       Additional Services  66.4  76.1  84.1 
       
       Network Usage Remuneration  76.6  98.8  83.1 
       
       Data Transmission Services  868.0  1,192.3  1,258.0 
       
           ADSL  391.0  666.1  722.4 
           Leased Lines (EILD) 105.2  128.4  108.6 
           Leased Lines (SLDD/SLDA) 85.2  99.7  97.6 
           IP Services  118.5  117.1  159.4 
           Packet switch and frame relay  47.0  41.3  42.8 
           Other Data Services  121.0  139.6  127.2 
       Other Wireline Services  19.9  7.3  6.6 
       
   Wireless Services Revenues  464.4  587.6  501.0 
       
       Subscription Charges  97.1  105.7  105.4 
       Outgoing Calls  134.7  186.8  167.4 
       Domestic/International Roaming  5.7  4.4  3.1 
       Network Usage Remuneration  155.3  168.8  139.0 
       Data / Value Added Services  32.1  53.5  58.3 
       Handset Sales  39.5  68.4  27.8 
       
   Gross Operating Revenue  4,036.1  4,465.9  4,377.2 
       
       Taxes and Deductions  (1,238.4) (1,553.6) (1,609.5)
       
   Net Operating Revenue  2,797.7  2,912.4  2,767.7 
       
       Operating Expenses  (1,842.5) (1,940.7) (2,306.9)
           Cost of Services  (493.1) (575.2) (535.1)
           Cost of Goods Sold  (60.7) (112.3) (64.3)
           Interconnection Costs  (563.6) (524.3) (513.4)
           Selling Expenses  (338.8) (284.8) (417.2)
           General and Administrative Expenses  (261.1) (273.4) (229.6)
           Other Operating (Expenses) Revenue, net  (125.2) (170.7) (547.3)
       
   EBITDA  955.2  971.7  460.8 
       
     Margin %  34.1%  33.4%  16.7% 
       Depreciation and Amortization  (536.2) (490.5) (495.9)
       
   EBIT  419.0  481.2  (35.1)
       
       Equity Accounting  (0.3) 4.1  4.7 
       Financial Expenses  (218.5) (438.8) (212.2)
       Financial Income  211.4  300.1  181.2 
       
   Income Before Tax and Social Contribution  411.5  346.6  (61.4)
       
       Income Tax and Social Contribution  (55.5) (164.8) 12.0 
       Minority Interest  (106.0) (61.7) 26.0 
       
   Net Income  250.0  120.1  (23.4)
       
     Margin %  8.9%  4.1%  -0.8% 
 Outstanding Shares - Thousand (exc.-treasury) 362,488  362,488  362,488 
 Income per share (R$) 0.690  0.331  (0.064)
 Income per ADR (US$) 0.397  0.145  (0.037)
       

May 14, 2009   
www.oi.com.br/ir 
 
34 


7.4) Brasil Telecom Participações – BrTP Consolidated (Continued)

      R$ Million 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL ASSETS  17,625  19,437  19,507 
Current  7,853  7,591  6,064 
   Cash  3,090  2,710  1,305 
   Financial investments  686  776  552 
   Accounts Receivable  2,221  2,210  2,123 
   Recoverable Taxes  1,117  974  1,062 
   Inventories  38  54  52 
   Other Current Assets  701  868  969 
Non-Current Assets  9,772  11,846  13,443 
   Long Term  3,191  4,301  6,216 
       Recoverable and Deferred Taxes  1,804  1,925  2,097 
       Assets in Escrow  1,300  2,231  2,462 
       Other  86  146  1,657 
   Investments  23 
   Property Plant and Equipment  5,327  5,903  5,510 
   Intagible Assets  1,231  1,638  1,712 
       
 
 
       
Balance Sheet 
3/31/08 
12/31/08 
3/31/09 
       
TOTAL LIABILITIES  17,625  19,437  19,507 
Current  4,905  4,971  4,676 
       Suppliers  1,386  1,892  1,586 
       Loans and Financing  536  760  921 
       Payroll and Related Accruals  138  193  130 
       Payable Taxes  971  892  952 
       Dividends Payable  1,248  433  412 
       Other Accounts Payable  626  801  674 
Non-Current Liabilities  5,628  6,659  7,057 
   Long Term  5,628  6,659  7,057 
       Loans and Financing  3,820  4,125  3,983 
       Payable and Deferred Taxes  218  374  464 
       Contingency Provisions  707  714  1,161 
       Outstanding authorizations  183  624  643 
       Other Accounts Payable  700  822  805 
Minority Interest  1,830  2,044  2,023 
Shareholders' Equity  5,262  5,764  5,752 
       

May 14, 2009   
www.oi.com.br/ir 
 
35 


7.5) Brasil Telecom – BrTO Consolidated

R$ Million

       
Income Statement 
1Q08  4Q08  1Q09 
       
   Wireline Services Revenues  3,571.7  3,878.4  3,876.2 
       
       Local Services  1,673.9  1,692.4  1,631.5 
       
           Subscription Charges  997.2  960.4  962.9 
           Local Traffic  209.0  225.8  194.2 
           Installation Fees  2.3  2.6  2.2 
           Collect Calls  0.7  1.1  0.6 
           Other Local Revenues  4.1  3.3  3.1 
           Fixed-to-Mobile (VC1) 460.4  499.3  468.5 
       Long Distance  698.4  663.4  696.1 
       
           Intra-State  310.0  200.5  192.3 
           Inter-State  58.4  61.1  55.2 
           Inter-Regional  146.1  54.8  52.8 
           International  9.9  8.3  8.1 
           Fixed-to-Mobile (VC2 and VC3) 174.0  338.7  387.7 
       Advanced Voice  34.5  34.1  32.6 
       
       Public Telephones  134.1  114.0  84.2 
       
       Additional Services  66.4  76.1  84.1 
       
       Network Usage Remuneration  76.6  98.8  83.1 
       
       Data Transmission Services  868.0  1,192.3  1,258.0 
       
       Other  19.9  7.3  6.6 
       
   Wireless Services Revenues  464.4  587.6  501.0 
       
       Subscription Charges  97.1  105.7  105.4 
       Outgoing Calls  134.7  186.8  167.4 
       Domestic/International Roaming  5.7  4.4  3.1 
       Network Usage Remuneration  155.3  168.8  139.0 
       Data / Value Added Services  32.1  53.5  58.3 
       Handset Sales  39.5  68.4  27.8 
       
   Gross Operating Revenue  4,036.1  4,465.9  4,377.2 
       
       Taxes and Deductions  (1,238.4) (1,553.6) (1,609.5)
       
   Net Operating Revenue  2,797.7  2,912.4  2,767.7 
       
       Operating Expenses  (1,851.7) (1,928.2) (2,299.3)
           Cost of Services Provided  (493.1) (575.2) (535.1)
           Cost of Goods Sold  (60.7) (112.3) (64.3)
           Interconnection Costs  (563.6) (524.3) (513.4)
           Selling Expenses  (338.8) (284.8) (417.2)
           General and Administrative Expenses  (256.0) (260.4) (222.7)
           Other Operting (Expenses) Revenue, net  (139.4) (171.2) (546.7)
       
   EBITDA  946.0  984.1  468.4 
       
       Margin %  33.8%  33.8%  16.9% 
       Depreciation and Amortization  (534.5) (488.8) (495.9)
       
   EBIT  411.5  495.3  (27.5)
       
       Equity Accounting  (0.0) (0.0) (0.0)
       Financial Expenses  (201.6) (386.2) (209.7)
       Financial Income  168.0  244.9  122.7 
       
   Income Before Tax and Social Contribution  377.9  354.0  (114.5)
       
       Income Tax and Social Contribution  (54.4) (165.7) 34.9 
       Minority Interest  0.8  0.2  (0.0)
       
   Net Income  324.3  188.5  (79.6)
       
       Margin %  11.6%  6.5%  -2.9% 
       
   Outstanding Shares Thousand (exc.-treasury) 547,378  547,493  547,719 
   Income per share (R$) 0.592  0.344  (0.145)
       

May 14, 2009   
www.oi.com.br/ir 
 
36 


7.5) Brasil Telecom – BrTO Consolidated (Continued)

R$ Million

       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL ASSETS  15,685  17,670  17,709 
       
Current  6,260  6,139  5,774 
   Cash  2,088  1,479  1,058 
   Financial investments  201  562  545 
   Accounts Receivable  2,221  2,210  2,123 
   Recoverable Taxes  1,030  967  1,046 
   Inventories  38  54  52 
   Other Current Assets  682  867  949 
       
Non-Current Assets  9,425  11,531  11,935 
   Long Term  2,862  3,993  4,714 
       Recoverable and Deferred Taxes  1,480  1,622  1,802 
       Assets in Escrow  1,295  2,225  2,456 
       Other  86  146  457 
   Investments  17 
   Property Plant and Equipment  5,326  5,902  5,509 
   Intagible Assets  1,220  1,632  1,706 
       
 
       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL LIABILITIES  15,685  17,670  17,709 
       
Current  4,488  4,792  4,499 
       Suppliers  1,386  1,891  1,586 
       Loans and Financing  536  760  921 
       Payroll and Related Accruals  138  193  130 
       Payable Taxes  903  880  932 
       Dividends Payable  974  341  330 
       Other Accounts Payable  552  726  599 
       
Non-Current Liabilities  5,603  6,643  7,045 
       
   Long Term  5,603  6,643  7,045 
       Loans and Financing  3,820  4,125  3,983 
       Payable and Deferred Taxes  198  362  457 
       Contingency Provisions  701  710  1,157 
       Outstanding authorizations  183  624  643 
       Other Accounts Payable  700  822  805 
       
Minority Interest  8  (6) (6)
       
Shareholders' Equity  5,586  6,241  6,171 
   Capital Stock  3,471  3,471  3,471 
   Capital Reserve  1,484  1,490  1,486 
   Surplus Reserve  349  1,432  1,432 
   Treasury shares  (153) (152) (150)
   Retained Earnings  436  (68)
       

May 14, 2009  www.oi.com.br/ir  37 


7.6) 14 Brasil Telecom Celular – BrT Móvel

R$ Million

       
Income Statement  1Q08  4Q08  1Q09 
       
Wireless Services Revenues  576.7  699.5  610.4 
       
   Subscription  97.1  105.7  105.4 
   Outgoing Calls  137.6  188.5  169.0 
   Domestic/Internacional Roaming  3.6  4.4  3.1 
   Network Usage Remuneration  261.3  279.0  246.7 
   Data / Value Added  37.6  53.5  58.3 
   Handset Sales  39.5  68.4  27.8 
       
Gross Operating Revenue  576.7  699.5  610.4 
       
Taxes and Deductions  (150.7) (187.9) (167.3)
       
Net Operating Revenue  426.1  511.6  443.1 
       
Operating Expenses  (411.0) (451.3) (390.7)
   Cost of Services Provided  (91.7) (90.0) (92.6)
   Cost of Goods Sold  (60.7) (112.3) (64.3)
   Interconnection Costs  (145.8) (123.6) (123.2)
   Selling Expenses  (98.8) (119.0) (97.4)
   General and Administrative Expenses  (18.4) (22.3) (16.6)
   Other Operating (Expenses) Revenue, net  4.5  16.0  3.3 
       
EBITDA  15.1  60.3  52.4 
       
      Margin %  3.5%  11.8%  11.8% 
Depreciation and Amortization  (97.7) (87.0) (128.3)
       
EBIT  (82.6) (26.8) (75.9)
       
Financial Expenses  (15.9) (59.5) (22.9)
Financial Income  41.3  60.4  46.1 
       
Income Before Tax and Social Contribution  (57.2) (25.8) (52.6)
       
Income Tax and Social Contribution  19.2  9.9  16.8 
       
Net Income  (38.0) (16.0) (35.8)
       
      Margin %  -8.9%  -3.1%  -8.1% 
       

       
Balance Sheet  3/31/08  12/31/08  3/31/09 
       
TOTAL ASSETS  4,008  4,944  4,792 
       
Current  1,982  2,092  1,732 
   Cash  25 
   Financial investments  1,483  904  718 
   Accounts Receivable  161  200  192 
   Recoverable Taxes  162  194  190 
   Inventories 
   Other Current Assets  171  785  607 
Non-Current Assets  2,026  2,851  3,060 
   Long Term  652  729  1,055 
       Recoverable and Deferred Taxes  642  712  737 
       Other  10  17  318 
       
   Property Plant and Equipment  812  1,163  1,038 
   Intagible Assets  562  959  968 
       
TOTAL LIABILITIES  4,008  4,944  4,792 
       
Current  486  862  720 
       Suppliers  261  558  413 
       Loans and Financing  26 
       Payroll and Related Accruals  11 
       Payable Taxes  64  98  84 
       Other Accounts Payable  154  191  190 
Non-Current Liabilities  319  1,007  1,034 
   Long Term  319  1,007  1,034 
       Loans and Financing  119  314  312 
       Contingency Provisions  13  28  36 
       Payable Taxes  10  16  17 
       Other Accounts Payable  176  650  669 
Shareholders' Equity  3,203  3,074  3,038 
       

May 14, 2009  www.oi.com.br/ir  38 


RELEVANT INFORMATION

I) CVM instruction 358, article 12: The controlling shareholders, direct or indirect, and the shareholders electing members o the Board of Directors or the Statutory Audit Committee, as well as any individual or company, or group of people acting together or representing a similar interest, reaching participation, direct or indirect, of 5% (five per cent) or more of a type or class of shares representing the capital of a public company capital, must inform the CVM, and the Company in accordance with terms of the article.

Oi guides its shareholders to comply with the terms of article 12 of CVM Instruction 358, however it cannot be held responsible for the disclosure of information on acquisition or sale, by third parties, of participation that corresponds to 5% or more of a type or class of shares that represents its capital or that is entitled to rights over these shares and further securities issued.

         
 Shares TNE   Capital   Treasury  Controlling 
Shares
 
 Free-Float 
         
 Common  130,611,732  3,070,731  68,504,187  59,036,814 
 Preferred  261,223,463  6,475,663  254,747,800 
         
 Total  391,835,195  9,546,394  68,504,187  313,784,614 
         
 
         
Shares TMAR   Capital   Treasury  Controlling 
Shares
 
 Free-Float 
         
 Common  107,063,093  104,227,873  2,835,220 
 Preferred (A) 130,487,295  223,500  104,329,417  25,934,378 
 Preferred (B) 1,063,967  1,063,961 
         
 Total  238,614,355  223,500  208,557,296  29,833,559 
         
 
         
Shares BRTP   Capital   Treasury  Controlling 
Shares
 
 Free-Float 
         
 Common  134,031,688  1,480,800  81,092,986  51,457,902 
 Preferred  229,937,525  76,645,842  153,291,683 
         
 Total  363,969,213  1,480,800  157,738,828  204,749,585 
         
 
         
Shares BRTO   Capital   Treasury  Controlling 
Shares
 
 Free-Float 
         
 Common  249,597,049  247,317,180  2,279,869 
 Preferred  311,353,240  13,231,556  58,956,665  118,253,998 
         
 Total  560,950,289  13,231,556  306,273,845  120,533,867 
         
 
         
Shares TNCP   Capital   Treasury  Controlling 
Shares
 
 Free-Float 
         
 Common  2,492,476  1,292,671  1,199,805 
 Preferred  4,209,206  3,979,123  230,083 
         
 Total  6,701,682  0  5,271,794  1,429,888 
         
 
         
 Shares AMZ   Capital   Treasury  Controlling   Free-Float 
Shares
         
 Common  2,271,325  2,039,298  232,027 
 Preferred (A) 79,983  79,983 
 Preferred (B) 230,461  230,461 
 Preferred (C) 17,152  17,152 
 Preferred (D) 309,568  309,568 
 Preferred (E) 2,979,606  16  2,374,165  605,425 
         
 Total  5,888,095  16  4,413,463  1,474,616 
         

OBS: Shareholder structure as of March 31, 2009

May 14, 2009  www.oi.com.br/ir  39 


II) This report contains forecasts and/or estimates regarding future events. These projections were carefully compiled based on the present scenario and work in progress, together with the corresponding expectations. The use of forward-looking statements, such as, but not limited to: "project", "estimate", "expect", "predict", "plan", "anticipate", is intended to indicate possible trends that, inevitably, involve uncertainty and risk and whose future results may differ from current expectations. Oi cannot be held responsible for the transactions or investment decisions of third parties based on these forecasts and/or estimates. The information presented has not been audited and may therefore differ from the final audited results.

     
Oi – Investor Relations     
Roberto Terziani  55 (21) 3131-1208  rterziani@oi.net.br 
Carolina Gava Silveira  55 (21) 3131-1314  ana.silveira@oi.net.br 
Flávia Menezes de Oliveira  55 (21) 3131-1332  flavia@oi.net.br 
 
Global Consulting Group     
Lucia Domville  1 (646) 284-9416  ldomville@hfgcg.com 
     

May 14, 2009  www.oi.com.br/ir  40 

 

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

Date: May 15, 2009

 
BRASIL TELECOM S.A.
By:
/SAlex Waldemar Zornig

 
Name:  Alex Waldemar Zornig
Title:     Chief Financial Officer
 

 

FORWARD-LOOKING STATEMENTS

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