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[July 29, 2004]

TIW Reports Strong Second Quarter Results

MONTREAL --(Business Wire)-- July 29, 2004 --

For the quarter and the six-month period ended June 30, 2004

All amounts are in US$ unless otherwise stated -0- *T - Service Revenues of $286.5 million, up 29.2% - Operating Income of $66.3 million, up 36.8% - Net Income of $13.9 million compared to $6.5 million in Q2-2003 *T

Telesystem International Wireless Inc. ("TIW" or the "Company") (NASDAQ:TIWI) (TSX:TIW) today reported its results for the second quarter of 2004.

Service revenues for the quarter reached $286.5 million compared to $221.7 million for the second quarter of 2003. Consolidated operating income before depreciation and amortization (OIBDA)(1) increased 24.1% to $120.9 million compared to $97.4 million for the second quarter of 2003. Operating income for the quarter reached $66.3 million compared to $48.4 million for the second quarter of 2003. The growth in OIBDA and operating income reflects record subscriber growth in Romania and significant subscriber growth and margin expansion in the Czech Republic. Net income for the quarter was $13.9 million or $0.10 per share on a basic and fully diluted basis compared to a net income of $6.5 million or $0.07 per share on a basic and fully diluted basis for the second quarter 2003.


"We are pleased with our second quarter results," said Bruno Ducharme, Chief Executive Officer. "In Romania, we continued to register record subscriber growth with our best second quarter net additions ever, resulting in strong service revenues growth and, in the Czech Republic, we continued to improve our operating margins and to grow our postpaid subscriber base," added Mr. Ducharme.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE QUARTER AND THE SIX-MONTH PERIOD ENDED JUNE 30, 2004

Management's discussion and analysis, dated July 29, 2004, should be read in conjunction with the accompanying unaudited consolidated financial statements of TIW for the three month and six months ended June 30, 2004 and should also be read in conjunction with the audited consolidated financial statement and Operating and Financial Review and Prospects contained in TIW's 2003 Annual Report for the year ended December 31, 2003. Additional information relating to TIW, including the company's annual report on Form 20-F and continuous disclosure documents, is available on SEDAR at www.sedar.com under Telesystem International Wireless Inc. The financial information presented herein has been prepared on the basis of Canadian generally accepted accounting principles (GAAP). Please refer to Note 17 to our audited consolidated financial statements for the year ended December 31, 2003 for a summary of the differences between Canadian GAAP and United States (U.S.) GAAP.

Results of Operations

We recorded net subscriber additions for the second quarter of 481,844 compared to 163,245 in the same period last year. As of June 30, 2004 the total number of subscribers reached 5,767,953, up 36.1% compared to 4,238,757 at the end of the second quarter of 2003. Consolidated service revenues increased 29.2% to $286.5 million compared to $221.7 million for the second quarter of 2003. Selling, general and administrative expenses were $73.2 million in the second quarter of 2004 as compared to $52.7 million in 2003. The increase in selling, general and administrative expense is largely attributable to additional cost incurred for acquiring and servicing a significantly higher number of subscribers. Also included in the expenses for the second quarter of 2004 is a non-cash stock based compensation expense of $2.7 million. The revenue growth and lower depreciation costs as a percentage of revenue resulted in an operating income of $66.3 million compared to $48.4 million for the same period last year, an increase of 36.8%.

Net income for the second quarter of 2004 amounted to $13.9 million or $0.10 per share on a basic and fully diluted basis compared to a net income of $6.5 million or $0.07 per share on a basic and fully diluted basis for the second quarter of 2003. Interest expense net of interest income for the second quarter of 2004 was $20.4 million compared to $17.6 million for the same period last year which was net of a reversal of $7 million in the second quarter of 2003 related to contingent payments which were avoided as a result of the early redemption of the corporate 14% Notes. The second quarter 2004 results also include a foreign exchange gain of $1.3M compared to a gain of $4.8M for the second quarter of 2003.

For the first six months of 2004, consolidated service revenues increased 33.8% to $550.7 million compared to $411.5 million for the same period last year. Operating income increased 47.8% to $116.5 million from $78.8 million for the same period last year. Net income for the six month period ended June 30, 2004 was $29.6 million or $0.23 per share basic and $0.22 per share fully diluted compared to a net income of $9.5 million or $0.10 per share basic and fully diluted for the corresponding prior year period. The 2004 net income includes a gain of $11.7 million on the disposal in the first quarter of our shares in Hexacom our Indian affiliate while the 2003 net income included a gain of $19.3 million on the sale of a minority interest in MobiFon. The 2003 result also includes a loss from discontinued operations of $8.8 million related to our discontinued Brazilian cellular operations which were disposed of on March 26, 2003.

MobiFon S.A. - Romania

MobiFon S.A. ("MobiFon" or its trade mark, "Connex"), the market leader in Romania with an estimated 48.8% share of the cellular market, added 417,810 net subscribers for the second quarter for a total of 4,089,948, compared to net additions of 73,362 in the second quarter of 2003 and total subscribers of 2,746,127 at the end of the same 2003 period, an increase of 48.8%. As of June 30, 2004, postpaid subscribers accounted for 35% of MobiFon's total subscriber base as compared to 36% at the end of the second quarter of 2003 and 37% at the end of last quarter.

During the past 12 months, we estimate cellular telephony market penetration in Romania increased to 39% from 26% at the end of the second quarter of 2003. The Romanian mobile market continued to show significant growth and the second quarter of 2004 was the best second quarter ever for MobiFon in terms of subscriber additions.

Service revenues reached $162.4 million compared to $127.2 million for the second quarter of 2003. This record $35.3 million increase in service revenues translated into a 27.7% year over year growth rate. This growth was largely attributable to a 43.2% increase in average number of subscribers.

The monthly average revenue per user ("ARPU")1 for the second quarter was $12.84 compared to $14.44 for the same period of last year, with the decrease being the result of the addition of more than 1.3 million subscribers during the last 12 months and the slightly higher proportion of prepaid subscribers than postpaid subscribers added in that period.

Cost of services as a percent of service revenue increased to 20.9% from 19.7% in the second quarter of 2003. This increase results primarily from higher interconnection costs associated with a higher proportion of traffic terminating on other operators' networks as well as higher average interconnection rate amongst mobile operators. Furthermore, we have been incurring costs associated with our fiber optic capacity leasing and reselling agreement since June of 2003 while revenues derived from this agreement are recorded as part of equipment revenues. Selling, general and administrative expenses increased to 23.1% of service revenues compared to 21.1% for the 2003 corresponding period primarily in support of high levels of subscriber growth.

OIBDA increased 20% to $85.7 million compared to $71.4 million for the same period last year. OIBDA as a percentage of service revenue decreased to 52.7% compared to 56.1% in the quarter ending June 30, 2003 and 53.1% for the year 2003 as a whole, primarily as a result of costs incurred in acquiring significantly more new subscribers and retaining high value subscribers during the quarter. While new subscribers tend to generate lower ARPU, the cost to acquire and service these new subscribers are managed accordingly, which enabled us to maintain a ratio of OIBDA to service revenues above 50% over twelve-month periods. Operating income for the quarter rose 24.3% to $57.0 million compared to $45.9 million for the second quarter of 2003.

For the first six months of 2004, service revenues increased 29.0% to $310.0 million compared to $240.2 million for the same period last year, consistent with the 39.0% increase in average number of subscribers. The monthly ARPU for the first six months of 2004 was $12.83 compared to $13.89 for the same period of last year, with the decrease being the result of the addition of more than 1.3 million subscribers during the last 12 months. OIBDA for the first six months of 2004 increased 18.8% to $163.0 million compared to $137.2 million for the 2003 period. OIBDA as a percentage of service revenue decreased to 52.6% for the first six months of 2004 compared to 57.1% in the corresponding period of 2003, consistent with greater costs incurred in acquiring significantly more new subscribers and retaining high value subscribers during the period. Operating income rose 28.7% to $105.1 million compared to $81.7 million for the first six months of 2003.

Cesky Mobil a.s. - Czech Republic

Cesky Mobil a.s. ("Cesky Mobil" or its trade mark "Oskar") added 64,034 net subscribers in the second quarter to reach 1,678,005, an increase of 25.5% compared to 1,337,492 subscribers at the end of the second quarter of 2003. In the Czech Republic, our focus on postpaid growth continued to be successful with postpaid subscribers representing 69% of net additions during the quarter. As a result, our prepaid/postpaid mix as of June 30, 2004 was 55/45 compared to 59/41 at of June 30, 2003 and 58/42 at the end of December 31, 2003. We estimate we held a 16.7% share of the national cellular market as of June 30, 2004, compared to a 15.0% share at the same time last year. During the past 12 months, we estimate cellular penetration in the Czech Republic increased to 98% from 88% at the end of the second quarter of 2003. According to our estimate, we captured approximately 40% of the total market new subscriber additions during the quarter.

Service revenues increased 31.2% to $124.1 million compared to $94.5 million for the second quarter of 2003 due to a 26.2% increase in average subscribers and a 3.6% increase in ARPU. ARPU for the second quarter was relatively stable at Czech Koruna 642.0 ($24.15) compared to Czech Koruna 645.3 ($23.32) for the same period of last year however the average exchange rate between the U.S. Dollar and the Czech Koruna during the second quarter of 2004 was 4% higher than for the same period in 2003. In April 2004, the regulatory body announced a new mobile voice terminating interconnection rate of Czech Koruna 3.19 per minute compared to Czech Koruna 3.66 which had a negative impact on the ARPU for the second quarter of 2004.

Cost of services as a percent of service revenue decreased to 40.4% from 42.3% in the second quarter of 2003. This decrease results primarily from lower average interconnection rate amongst mobile operators and from greater on-net and incoming traffic as a percentage of total traffic. The second quarter 2003 results include a $3.2 million reversal in estimated interconnection cost mainly related to prior periods. Selling, general and administrative expenses increased to 25.4% of service revenues compared to 24.8% for the same period last year mainly as a result of a $1.0 million reversal to bad debt provisions which occurred during the second quarter of 2003.

We recorded OIBDA of $39.6 million compared to OIBDA of $28.5 million ($24.3 million excluding the reversals of the aforementioned provisions) for the same period last year. OIBDA as a percentage of service revenue for the quarter reached 31.9% compared to 30.2% in the second quarter of 2003 (25.7% excluding the reversal of the aforementioned provisions) and 26.8% for the year 2003 as a whole. This improvement reflects the revenue impact of solid subscriber growth, our focus on postpaid growth and the economies of scale realized as fixed costs are spread over the larger subscriber base. We achieved an operating income of $13.6 million in the Czech Republic for the second quarter of 2004, compared to an operating income of $5.1 million for the second quarter of 2003.

For the first six months, service revenues increased 40.5% to $240.6 million compared to $171.2 million for the same period in 2003 consistent with the 27.5% increase in average number of subscribers and the 9.9% increase in ARPU as expressed in U.S. Dollars. ARPU for the first six months of 2004 reached Czech Koruna 633.0 ($23.94) compared to Czech Koruna 621.0 ($21.78) in 2003. OIBDA reached $73.9 million compared to OIBDA of $45.8 million for the first six months of last year consistent with the revenue impact of solid subscriber growth, our focus on postpaid growth and the economies of scale realized as fixed costs are spread over the larger subscriber base. Operating income reached $19.8 million compared to $1.3 million for the same period in 2003.

Corporate and Other

Unallocated expenses for corporate and other activities were $4.3 million for the second quarter of 2004 compared to $2.5 million for the same period last year and $8.5 million for the first half of 2004 compared to $4.1 million for the first half of 2003. During 2003, we adopted the fair value based method of accounting for stock-based compensation on a prospective basis and, accordingly, the fair value method has been applied to all grants on or after January 1, 2003. As a result, consolidated selling, general and administrative expenses for the second quarter and first six months of 2004 include stock based compensation cost of $2.7 million and $4.2 million respectively of which $1.8 million and $2.7 million is included within corporate and other activities, while the corresponding period of 2003 had no compensation costs as no grants were awarded in that period. On May 4 2004, TIW's shareholders approved a Restricted Share Unit ("RSU") plan under which 919,680 RSU's were outstanding as of June 30, 2004 and were included in the determination of this quarter's stock based compensation. Furthermore, 2003 results included our share of net income from our Indian operation, which was disposed of at the end of 2003, of $1.2 million and $1.5 million for the three and six months ended June 30, 2003.

Liquidity and Capital Resources

For the second quarter of 2004, operating activities provided cash of $100.5 million compared to $73.3 million in the corresponding 2003 period, mainly resulting from the $23.5 million increase in OIBDA. For the first six months of 2004, operating activities provided cash of $143.0 million compared to $119.8 million in the corresponding 2003 period.

Investing activities used cash of $73.0 million for the quarter ended June 30, 2004 compared to a use of cash of $68.5 million during the same period in 2003. Our investing activities consisted primarily of the acquisition of property, plant and equipment of $65.4 million and $71.0 million for the three month periods ended June 30, 2004 and June 30, 2003, respectively. For the first six months of 2004, investing activities used cash of $136.1 million compared to $58.0 million for the first six months of 2003. Acquisitions of property, plant and equipment during the first six months of this year were $116.3 million compared to $100.8 million for the corresponding period last year. Investing activities for the six months ended June 30, 2004 also include the net proceeds from the sale of our direct investment in Hexacom during the first quarter which amounted to $21.8 million. These proceeds were offset by the use of $45 million of cash for the acquisition of additional interests in our subsidiaries including, during the second quarter of 2004, $3.6 million in connection with the acquisition of a 13% non controlling interest in ClearWave and $4.0 million in connection with the acquisition of a 5.9% non controlling interest in MobiFon. During the 2003 period, the Company received net proceeds of $41.5 million from the sale of a minority interest in MobiFon.

Financing activities used cash of $11.8 million for the second quarter of 2004 and provided cash of $47.1 million year to date compared to cash provided of $81.3 million and $61.0 million for the second quarter and first half of 2003. The source of cash provided by financing activities in the first six months of 2004 was $76.1 million of proceeds from issuances of our common shares of which $9.6 million was received during the second quarter. These proceeds were partially offset by $17.8 million scheduled repayment of MobiFon's and Cesky Mobil's senior credit facility of which $10.3 million was repaid during the second quarter, as well as by $11.1 million distributed to minority shareholders of MobiFon during the second quarter. During the first six months of 2003, sources of cash from financing activities included $246.9 million of proceeds from issuance of long term debt of which $219.8 million occurred during the second quarter, offset by the second quarter of 2003 use of cash related to $28.1 million in additions to restricted cash, $31.2 million distributed to minority shareholders of MobiFon, $6.8 million of deferred financing costs, $72.4 million in repayment of long-term debt and the first quarter of 2003 full repayment of TIW's senior corporate bank facility of $47.4 million.

Cash, cash equivalents and restricted short-term investments totaled $277.9 million as of June 30, 2004, including $144.2 million at the corporate level, which included $28.1 million in restricted short term investments.

As of June 30, 2004, total consolidated indebtedness was $1.1 billion, of which $227.3 million was at the corporate level, $285.0 million at MobiFon and $565.9 million at Cesky Mobil. As of June 30, 2004 corporate net debt defined as debt at the corporate level minus cash and short term investment at the corporate level was $83.1 million compared to $144.0 million at June 30, 2003 and $150.9 million at December 31, 2003.

In December 2003, we accepted a binding offer to sell our 27.5% direct equity interest in Hexacom for proceeds of $22.5 million. We provided our co-shareholders in Hexacom with the required notices to trigger certain rights of first refusal provided for in the Hexacom Shareholders' Agreement. During the first quarter of 2004, our co-shareholders exercised their right of first refusal and paid the $22.5 million purchase price as stipulated in the December 12, 2003 binding offer. As a result, we realized a gain on disposal of its investment in Hexacom of $11.7 million in the three months period ended March 31, 2004.

On March 25, 2004, the shareholders of MobiFon approved dividends amounting to Lei 4.6 trillion ($138 million). The dividends do not become payable to shareholders until conditions for shareholder distributions are met under the MobiFon's senior credit agreements. In April 2004, $11.1 million of dividends were distributed to non-controlling interests. As at June 30, 2004, the amount payable to non-controlling interests based on the conditions of such loan agreements, was $24.4 million and is included with total current liabilities.

On March 25, 2004, we sold 7 million common shares at $9.50 per share from treasury for gross proceeds of $66.5 million and net proceeds of $62.7 million. On March 31, 2004, the underwriters of the offering exercised the over-allotment option that they had been awarded to purchase an additional 1,050,000 million common shares at a price of $9.50 per share from treasury. The over-allotment option closed on April 5, 2004 resulting in net proceeds of $9.5 million.

On March 17, 2004, we acquired 5.9% of MobiFon and 2.9% of TIW Czech from EEIF Melville B.V., Emerging Markets Partnership c.v. and EEIF Czech N.V., in exchange for the issuance of 14,621,714 of our common shares. Pursuant to the term of the sale, the selling shareholders of MobiFon had the right to receive 5.9% of the dividends paid in 2004 relating to MobiFon 2003 earnings up to an aggregate maximum of $5.2 million. As of July 29, 2004, $5.1 million has been paid representing 5.9% of the dividends paid by MobiFon to this date.

In March 2004, we acquired 10,942,625 shares of our subsidiary ClearWave from two institutional investors for an aggregate consideration of $139.9 million, consisting of 11,268,538 of our common shares and $ 35.7 million in cash. On May 25, 2004, we launched an offer to all remaining minority shareholders of ClearWave to purchase the 186,560 shares they owned, representing a 0.2% interest in ClearWave's equity, for Cdn$16.64 ($12.48) in cash per share. As of June 30, 2004, 161,536 of the ClearWave shares were tendered under the offer for aggregate consideration of $2.0 million.

The offer was extended to July 15, 2004 and an additional 15,315 ClearWave shares were tendered during the extension period. The shares acquired through these transactions to June 30, 2004 represent a 13.1 % equity interest and a 4.7% voting interest in ClearWave and as a result our direct and indirect equity and voting interest in ClearWave increased to 99.9% and 100.0%, respectively, resulting in a 63.5% ultimate equity interest in MobiFon and a 27.1% ultimate equity interest in Cesky Mobil.

The acquisitions of shares of MobiFon, TIW Czech and ClearWave were accounted for using the purchase method as required by U.S. and Canadian generally accepted accounting principles. Accordingly, the aggregate consideration of $303.6 million was allocated to the fair value of the assets acquired and liabilities assumed based on management's best estimate of such fair values determined using generally accepted valuation methodologies. The aggregate purchase price for the above transactions as well as the acquisition of 1.2% of ClearWave which occurred in the fourth quarter of 2003 exceeded the carrying value of net assets acquired by $283.3 million which was allocated to goodwill in the amount of $290.8 million and $7.5 million to other fair value net decrements.

On May 31, 2004 we entered into an agreement in principle to acquire 15.46% of MobiFon from certain private equity investors for a combination of cash and of our common shares. We will acquire 25,185,168 shares of MobiFon in exchange for 28,358,499 of our shares, representing an exchange ratio of 1.126, and an additional 4,203,310 shares of MobiFon for $36.6 million in cash. Upon closing, we will increase our indirect ownership in MobiFon from 63.5% to 79.0%. The closing of the transaction remains subject to certain conditions and is expected to take place in the third quarter of 2004. The transaction is also subject to other MobiFon shareholders' pro rata rights of first refusal, which, if fully exercised, will reduce the actual number of shares to be acquired by us to an 11.6% interest in MobiFon in exchange for 21.3 million of our common shares and $27.5 million in cash.

In August 2004, in accordance with the covenants governing the MobiFon Holdings' 12.5% Senior Notes, we will make an offer to acquire up to $15.6 million in principal of the notes at a purchase price equal to the principal amount of the notes plus accrued and unpaid interest. Pending expiry of the offer and payment of any notes tendered $15.6 million of long-term debt has been reclassified to current liabilities pending expiration of such offer.

The Company expects to have future capital requirements, particularly in relation to the expansion and the addition of capacity to its cellular networks, for the servicing of its debt, and in connection with the acquisition of 15.46% of MobiFon described above. The Company intends to finance such future capital requirements mainly from cash and cash equivalents on hand, short-term investments and cash flows from operating activities.

Selected consolidated financial data

On June 23, 2003, we amended our share capital to implement a one for five (1:5) consolidation of our common shares. Following the consolidation, the number of issued and outstanding common shares was reduced from 467,171,850 to 93,432,101 while the number of issued and outstanding preferred shares remained unchanged at 35,000,000 but their conversion ratio was changed from 1 common share for each preferred share to 1 common share for 5 preferred shares. On March 25, 2004, the 35,000,000 issued and outstanding preferred shares were converted into 7,000,000 common shares. As of July 28, 2004, we had 139,894,759 outstanding common shares. All share and per share amounts included in the selected consolidated data shown below have been adjusted to reflect the share consolidation.

The following table contains financial information that is derived from our unaudited interim financial statements for the three and six month periods ended June 30, 2004. -0- *T ---------------------------------------------------------------------- (1) We use the term operating income before depreciation and amortization ("OIBDA") and average revenue per user ("ARPU") which may not be comparable to similarly titled measures reported by other companies. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance for our ongoing business operations, including our ability to fund discretionary spending such as capital expenditure and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles ("GAAP"), these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the wireless telecommunications industry. We believe that ARPU provides useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high value customers. ARPU excludes revenues from other cellular networks' customers roaming on our network. OIBDA and ARPU should not be considered in isolation or as alternatives measures of performance under GAAP. For the reconciliation of OIBDA to operating income, refer to Note 14 to the interim financial statements and for the reconciliation between service revenues and ARPU, refer to the non GAAP measures and operating data section of this release. Three months ended Six months ended June 30, June 30, (in thousands of us$, 2004 2003 2004 2003 except per share data) $ $ $ $ --------------------------------------------------------------------- --------------------------------------------------------------------- STATEMENTS OF INCOME AND CASH FLOWS DATA: Revenues 301,397 232,163 579,817 432,081 Operating income 66,284 48,448 116,494 78,834 Interest expense, net (20,397) (17,645) (41,721) (44,666) Foreign exchange gain (loss) 1,317 4,808 (661) 4,948 Net gain (loss) on disposal of assets - (221) 11,658 19,339 Income from continuing operations 13,907 6,500 29,590 18,348 Loss from discontinued operations - - - (8,811) Net income 13,907 6,500 29,590 9,537 Basic earnings (loss) per share From continuing operations 0.10 0.07 0.23 0.19 From discontinued operations - - - (0.09) Net earnings 0.10 0.07 0.23 0.10 Diluted earnings (loss) per share From continuing operations 0.10 0.07 0.22 0.19 From discontinued operations - - - (0.09) Net earnings 0.10 0.07 0.22 0.10 Acquisitions of property, plant and equipment 65,433 71,024 116,261 100,802 As at June As at December 30, 2004 31, 2003 (in thousands of us$) $ $ --------------------------------------------------------------------- --------------------------------------------------------------------- BALANCE SHEET DATA: Cash and cash equivalents, including restricted short-term investments of $28.1 million as of June 30, 2004 and December 31, 2003 277,940 224,822 Total assets 1,978,262 1,667,531 Short-term and long-term debt 1,078,137 1,121,411 Total shareholders' equity 459,876 91,773 --------------------------------------------------------------------- *T

Summary of quarterly results (unaudited)

Our operating results are subject to seasonal fluctuations that materially impact quarter-to-quarter operating results. Accordingly, one quarter's operating results are not necessarily indicative of what a subsequent quarter's operating results will be. In particular, this seasonality generally results in relatively lower fourth quarter operating profits due primarily to increased marketing and promotional expenditures and relatively higher levels of subscriber additions, resulting in higher subscriber acquisition and activation-related expenses. Seasonal fluctuation also typically occurs in the third quarter of each year because higher usage and roaming as a result of the summer holidays result in higher network revenue and operating profit. -0- *T Q2 Q1 Q4 Q3 (in thousands of U.S.$, 2004 2004 2003 2003 except per share data) $ $ $ $ --------------------------------------------------------------------- --------------------------------------------------------------------- Revenues 301,397 278,420 277,787 257,217 Income (loss) from continuing operations 13,907 15,683 (727) 3,075 Net income (loss) 13,907 15,683 (727) 3,075 Basic earnings (loss) per Share --------------------------------------------------------------------- From continuing operations 0.10 0.13 (0.01) 0.03 From discontinued operations - - - - --------------------------------------------------------------------- Net earnings (loss) 0.10 0.13 (0.01) 0.03 --------------------------------------------------------------------- Diluted earnings (loss) per Share --------------------------------------------------------------------- From continuing operations 0.10 0.13 (0.01) 0.03 From discontinued operations - - - - --------------------------------------------------------------------- Net earnings (loss) 0.10 0.13 (0.01) 0.03 --------------------------------------------------------------------- --------------------------------------------------------------------- Q2 Q1 Q4 Q3 (in thousands of U.S.$, 2003 2003 2002 2002 except per share data) $ $ $ $ --------------------------------------------------------------------- --------------------------------------------------------------------- Revenues 232,163 199,918 196,461 185,209 Income (loss) from continuing operations 6,500 11,848 (8,405) (9,025) Net income (loss) 6,500 3,037 (35,637) (41,294) Basic earnings (loss) per share --------------------------------------------------------------------- From continuing operations 0.07 0.12 (0.08) (0.09) From discontinued operations - (0.09) (0.27) (0.32) --------------------------------------------------------------------- Net earnings (loss) 0.07 0.03 (0.35) (0.41) --------------------------------------------------------------------- Diluted earnings (loss) per Share --------------------------------------------------------------------- From continuing operations 0.07 0.12 (0.08) (0.09) From discontinued operations - (0.09) (0.27) (0.32) --------------------------------------------------------------------- Net earnings (loss) 0.07 0.03 (0.35) (0.41) --------------------------------------------------------------------- --------------------------------------------------------------------- Non GAAP measures and operating data (unaudited) operating data from Three months ended Six months ended continuing operations June 30, June 30, (in thousands of U.S. $) 2004 2003 2004 2004 --------------------------------------------------------------------- --------------------------------------------------------------------- OIBDA 120,947 97,426 228,431 178,868 Proportionate revenues 144,234 85,755 276,567 160,624 Proportionate operating income before depreciation and amortization 60,811 38,602 115,010 72,956 Proportionate operating income 35,571 21,294 63,649 36,621 ARPU (in U.S.$) MobiFon 12.84 14.44 12.83 13.89 Cesky Mobil 24.15 23.32 23.94 21.78 Start-up Licensed Date of POPs Total Technology Operations (millions) Subscriber(1) --------------------------------------------------------------------- --------------------------------------------------------------------- Romania GSM 1997 21.7 4,089,948 Czech Republic GSM 2000 10.2 1,678,005 --------------------------------------------------------------------- --------------------------------------------------------------------- Total 31.9 5,767,953 --------------------------------------------------------------------- --------------------------------------------------------------------- Equity Equity POPs Equity Interests (millions) Subscribers Romania 63.5% 13.8 2,596,900 Czech Republic 27.1% 2.8 454,100 --------------------------------------------------------------------- --------------------------------------------------------------------- Total 16.6 3,051,000 --------------------------------------------------------------------- --------------------------------------------------------------------- (1) Subscriber figures include 2,676,712 and 925,665 prepaid subscribers in Romania and Czech Republic, respectively *T

We believe that operating income before depreciation and amortization ("OIBDA") provides useful information to investors because it is an indicator of the strength and performance for the ongoing business operations, including the ability to fund discretionary spending such as capital expenditures and other investments and its ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the wireless telecommunications industry. For the reconciliation of OIBDA to operating income, refer to Note 14 to the interim financial statements.

Proportionate financial figures and other operational data represent the combination of our ultimate proportionate ownership at the end of each period presented in each of its investees and are not intended to represent any measure of performance in accordance with generally accepted accounting principles. Equity interest figures represent our direct and indirect ownership interests in our operations. For a reconciliation of proportionate operating income to operating income, refer to the supplementary financial information filed with our interim financial statements.

We believe that average revenue per user ("ARPU") provides useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high value customers. ARPU excludes revenues from other wireless networks' customers roaming on our network and miscellaneous revenues. OIBDA and ARPU should not be considered in isolation or as alternative measures of performance under GAAP. Average number of subscribers for the period is calculated as the average of each month's average number of subscribers.

The following tables provide a reconciliation between service revenues and ARPU for both MobiFon and Cesky Mobil: -0- *T MobiFon Three months ended Six months ended June 30, June 30, 2004 2003 2004 2003 --------------------------------------------------------------------- --------------------------------------------------------------------- Service revenues for the periods (in $ thousands) 162,429 127,163 310,035 240,247 Average number of subscribers for the period (in millions) 3.88 2.71 3.72 2.68 Average monthly service revenue per subscriber for the period (in $) 13.95 15.64 13.89 14.96 Less: impact of excluding in roaming and miscellaneous revenue (1.11) (1.20) (1.06) (1.07) --------------------------------------------------------------------- --------------------------------------------------------------------- ARPU 12.84 14.44 12.83 13.89 --------------------------------------------------------------------- --------------------------------------------------------------------- Cesky Mobil Three months ended Six months ended June 30, June 30, 2004 2003 2004 2003 --------------------------------------------------------------------- --------------------------------------------------------------------- Service revenues for the periods (in $ thousands) 124,052 94,521 240,639 171,247 Average number of subscribers for the period (in millions) 1.65 1.30 1.61 1.26 Average monthly service revenue per subscriber for the period (in $) 25.12 24.16 24.87 22.57 Less: impact of excluding in roaming and miscellaneous revenue (0.97) (0.84) (0.93) (0.79) --------------------------------------------------------------------- --------------------------------------------------------------------- ARPU 24.15 23.32 23.94 21.78 --------------------------------------------------------------------- --------------------------------------------------------------------- *T

Forward-looking Statements

This news release contains certain forward-looking statements concerning our future operations, economic performances, financial conditions and financing plans. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us and our subsidiaries or their businesses or operations. We undertake no obligation and do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. For all of these forward-looking statements, we claim the protection of the safe harbour for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995.

Conference Call

The conference call with analysts on the second quarter 2004 results will be made available via an audio web cast from TIW's Internet site. The web cast is scheduled to begin at 9:00 a.m. EDST on Friday, July 30, 2004 (at www.tiw.ca). A replay of the conference call can also be heard between 12:00 p.m. on Friday, July 30 and 11:59 p.m. on August 29. To access the replay facility, dial (416) 695-5800 and you will be instructed to enter the access code: 3081221.

About TIW

TIW is a leading provider of wireless voice, data and short messaging services in Central and Eastern Europe with almost 5.8 million subscribers. TIW operates in Romania through MobiFon S.A. under the brand name Connex and in the Czech Republic through Cesky Mobil a.s. under the brand name Oskar. TIW's shares are listed on NASDAQ ("TIWI") and on the Toronto Stock Exchange ("TIW").

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