Iusacell Reports Solid Financial Performance and Expansion of National Coverage in 2001 -1-.Business Editors MEXICO Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. CITY--(BUSINESS WIRE)--Feb. 20, 2002 Grupo Iusacell Iusacell Grupo Iusacell is Mexico's #3 mobile operator. The company provides cellular services reaching about 90% of Mexico's population, including Mexico City and received more licenses to cover the remaining regions in early 2005. It has more than 4. , S.A. de C.V. (BMV BMV Bolsa Mexicana de Valores BMV Bureau of Motor Vehicles BMV Bundesministerium für Verkehr (German: Federal Ministry of Transport) BMV Below Market Value BMV Brome Mosaic Virus BMV Bedside Medication Verification : CEL CEL Cellular CEL Celestial CEL Check Engine Light CEL Degrees Celsius (temperature) CEL Comisión Ejecutiva Hidroeléctrica del Río Lempa (El Salvador) CEL Center for Entrepreneurial Leadership , NYSE NYSE See: New York Stock Exchange : CEL): - New management team in place. - Net 2001 customer additions were 174,000, including Portatel subscribers, a 10% increase over the year-end 2000 customer base. - Revenues increased to $6.2 billion in 2001 from $5.7 billion in 2000, a 9% increase in peso terms and 20% in dollar terms. - EBITDA improved to $2.6 billion in 2001 from $2.0 billion in 2000 and adjusted EBITDA increased to $1.6 billion in 2001 from $1.1 billion in 2000. - EBITDA margin for the year was 35%, excluding gains from sales of cellular towers and dark fiber optic cable, unchanged from 2000; adjusted EBITDA margin increased from 19% in 2000 to 26% in 2001. - Integral financing cost decreased from $548 million in 2000 to $324 million in 2001, mainly due to lower net interest expense and a foreign exchange gain versus a foreign exchange loss in 2000, partially offset by a lower monetary position gain in 2001. Grupo Iusacell, S.A. de C.V. (Iusacell or the Company) (BMV: CEL, NYSE: CEL) today announced revenues of $6,241 million for the year, a 9% increase over 2000, and $1,456 million for the fourth quarter of 2001, a 3% decrease over the same quarter of 2000. The Company's earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
fibre optic cable transmission line, cable, line - a conductor for transmitting electrical or optical signals or electric power and cellular towers. Excluding these gains, EBITDA for the year was $2,112 million, a 6% increase over 2000 and, as a percentage of sales, EBITDA margin was maintained in 35% in 2001 from the same level in 2000. For the fourth quarter of 2001, EBITDA was $477 million, including $34 million in gains from the sale of certain cellular towers (see "Tower Sales"). Compared to the fourth quarter of 2000, EBITDA remained unchanged despite higher advertising expenses related to the holiday season promotions, tower rental expense as a result of the leaseback A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. of sold towers and expenses incurred as a result of the consolidation of Region 8. For the year, adjusted EBITDA margin increased to 26% from 19% in 2000. In the fourth quarter of 2001, adjusted EBITDA margin increased to 26% from 13% in the same quarter of last year. Mr. Peter H. Burrowes, President and Director General of Iusacell stated: "During the second half of 2001 we implemented many measures we deemed necessary to improve profitability and sales control, such as stricter activation activation /ac·ti·va·tion/ (ak?ti-va´shun) 1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental , enhanced systems, reengineered commission policies and retention programs targeted at high-value subscribers, all reinforced by steps aimed at minimizing the number of inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. users in the customer base. We also further expanded distribution and tightened cost controls. We believe we have now positioned Iusacell for sustainable, profitable growth." Operating Performance Iusacell's total subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. base increased 10% in the fourth quarter of 2001 over the same period of 2000, reaching nearly 1.9 million customers. Included in this increase were approximately 100,000 subscribers added as a result of Iusacell's fourth quarter acquisition of Grupo Portatel, S.A. de C.V. (Portatel), the wireless carrier operating in the southeastern region of Mexico (Region 8) and approximately 14,000 net subscriber additions in Region 8 during the fourth quarter of 2001. Excluding the effect of Portatel, Iusacell posted 4% year over year subscriber growth. The year over year growth rate was negatively impacted by high postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. and prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. churn churn: see butter. and the
Mexican Mexicannamed after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. . The postpaid subscriber base was also negatively affected by the migration from postpaid plans to prepaid options as a result of the economic slowdown, resulting in a 12% decline during the course of 2001. The Company does not expect this trend to continue since it has implemented several initiatives to add new and retain existing postpaid customers. Compared to third quarter 2001 and excluding the impact of the Portatel acquisition, Iusacell's fourth quarter net subscriber additions benefited from a 50 basis points reduction in the blended churn rate (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. from 4.4% to 3.9%. The Company is beginning to see the benefits of the implementation of stricter credit and activation policies and other churn prevention programs. To further combat postpaid churn, the Company also implemented a preferred customer retention program targeted at high-value, post-paid Adv. 1. post-paid - having the postage paid by the sender; "I will send it post-paid" post-free post-paid adj → porte pagado post-paid adj (Brit customers in the fourth quarter. The program is designed to improve customer loyalty by offering dedicated phone lines and customer care representatives, as well as special volume-driven incentives to this important segment. Iusacell is currently designing similar programs for its high-value, prepaid customers and expects to implement these programs during the first quarter of 2002. To better leverage the capabilities and efficiencies of our CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. network and extend the benefits of digital cellular to the high-usage prepaid customers, the Company's marketing plans encourage the cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. migration of targeted analog prepaid subscribers to digital service. This initiative continues to be one of the key focus areas for the Company. As of December December: see month. 31, 2001, Iusacell had approximately 512,000 digital prepaid subscribers, representing 36% of its total prepaid customer base and almost a four-fold Adj. 1. four-fold - having four units or components; "quadruple rhythm has four beats per measure"; "quadruplex wire" quadruple, quadruplex, quadruplicate, fourfold increase over year end 2000. Practically 100% of the postpaid customer base enjoys digital service. In line with the strategy to significantly increase the availability of prepaid cards, Iusacell continued to aggressively expand its distribution channels during the fourth quarter. As of December 31, 2001, Iusacell's products and services were available at approximately 46,000 points of sale, a 119% increase over the approximately 21,000 points of sale at year end 2000. Evidencing Iusacell's commitment to innovation and its focus on differentiation, the Company launched its "off-peak off-peak adj. Not in the period of most frequent or heaviest use: lower rates for telephone calls made during off-peak hours; travelers who take advantage of off-peak fares. pricing" rate plan for postpaid and prepaid subscribers in December 2001. For the first time in Mexico, wireless customers were offered a discounted per minute tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic during nights and weekends. The new product should generate added traffic in less busy periods. Our competitors soon followed our lead. The Company registered $1,456 million in total revenues in the fourth quarter of 2002, a 3% decline from the same period of 2000. The year over year decline is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a combination of higher postpaid churn and a reduction in postpaid sales. Depreciation and amortization expenses decreased 9% in the fourth quarter of 2001 compared to the fourth quarter of 2000. The decrease was primarily driven by lower handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. amortization expense resulting from more cost-effective handset purchases, a market-driven handset mix weighted toward cheaper handsets and lower handset sales as well as the second quarter 2001 change in depreciation policy which extended the useful life of certain digital communications Transmitting text, voice and video in binary form. See communications. equipment to 10 years. Sales and advertising expenses in the fourth quarter of 2001 totaled $410 million. As a percentage of total revenues, sales and advertising expenses increased to 28% from the 25% reported during the fourth quarter of 2000 due to higher seasonal and prepaid market advertising expenses as well as expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the consolidation of Region 8. General and administrative expenses in the fourth quarter of 2001 totaled $146 million. As a percentage of total revenues, general and administrative expenses increased to 10% from the 9% recorded in the same period of 2000. The increase in expense is mainly due to the three-month consolidation of Region 8. Postpaid subscriber direct cash acquisition costs for the fourth quarter of 2001 decreased to US$270 per postpaid subscriber from the US$344 incurred during same period in 2000, primarily due to lower handset costs and lower net commissions paid to distributors as a result of the churn-related charge-back initiative. The Company reported an integral financing gain of $88 million in the quarter compared to a $204 million integral financing cost in the fourth quarter of 2000. This change was mainly attributable to a stronger peso during the fourth quarter of 2001 that resulted in a foreign exchange gain of $219 million versus the $115 million foreign exchange loss recorded in the fourth quarter of 2000. Also contributing to the integral financing gain was $29 million of lower net interest expense in the fourth quarter of 2001 as compared to the same period of 2000, due to lower interest rates on our LIBOR-based variable rate debt. Partially offsetting the exchange gains and lower interest expense were reduced monetary correction gains, resulting from the period's lower inflation. The lower operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. together with the integral financing gains generated a net loss of $74 million in the fourth quarter of 2001, an 85% improvement compared to the $489 million net loss incurred during the same period of 2000. Excluding the tower-related benefits, Iusacell would have reported a net loss of $108 million. Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. A. Olson Olson may refer to:
Financial Condition Liquidity. During the fourth quarter of 2001, the Company funded its operations, capital expenditures, handset purchases and interest payments principally with internally generated cash flow, vendor financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. and a portion of the proceeds from the November November: see month. 2001 US$100 million rights offering. On December 31, 2001, the Company's operating cash balance was US$45 million. Iusacell also has US$48 million in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. to cover interest payments through December 2002 on its 14.25% Senior Notes due 2006. Capital Expenditures. Iusacell invested US$68 million in its cellular and PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. regions during the fourth quarter of 2001 to increase capacity, expand coverage and improve quality. During 2001 the Company invested a total of US$21 million in its Regions 1 and 4 PCS operations and US$3 million in Region 8. Total 2001 capital expenditures were US$214 million, slightly lower than the US$ 217 million incurred in year 2000 and significantly lower than the US$240 million budgeted for 2001. The Company expects 2002 capital expenditures to be less than US$250 million, including no more than US$150 million for its core cellular business in central Mexico. Debt. As of December 31, 2001, debt, including trade notes payable and notes payable to related parties, totaled US$829 million. All of the Company's debt is U.S. dollar-denominated, with an average maturity of 3.8 years. As of December 31, 2001, Iusacell's debt-to-capital ratio was 51.9%, versus 54.8% on December 31, 2000. Hedging. On October October: see month. 4, 2001, the Company closed an additional US$50 million in forward-rate contracts to end the year with approximately US$201 million in total hedge coverage. These hedges cover the principal and interest payments related to the Company's 10% US$150 million Senior Notes due 2004 and interest payments on other short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. . Other Developments Rights Offering. On November 6, 2001, the Company completed a rights offering to holders of its outstanding Series A and V shares and Series V American Depositary Shares American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADSs) for the aggregate amount of US$100 million. The Company's two major shareholders, Verizon Communications
Verizon Communications, Inc. Inc. (NYSE: VZ) and Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). Group Plc (NYSE: VOD See video-on-demand. VoD - video on demand ), subscribed Subscribed Newly issued securities that an investor has agree to, or stated his intent to, buy in a public offering prior to the issue date. When an investor uses rights, he expects to own the designated number of shares they have subscribed to once the offering is completed. for approximately US$81 million of the offering. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Mexico, public shareholders subscribed to approximately US$15 and US$4 million of the offering, respectively. US$56 million of the proceeds from this offering were used to finance Iusacell's fourth quarter acquisition of Region 8. National Coverage Expansion. On October 19, 2001 the Company acquired 78% of Portatel and began consolidation of its results into Grupo Iusacell Celular, S.A. de C.V., Iusacell's operating company operating company A business that engages in transactions with outsiders. . In February February: see month. 2002, the Company closed the acquisition of the remaining 22% equity of Portatel. Network optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. initiatives implemented by Iusacell since October have improved Portatel quality measures by up to six-fold Adj. 1. six-fold - having six units or components sextuple, sixfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple . Please see the Region 8 fourth quarter 2001 financial and operating highlights table included at the end of this press release. In December 2001, the Company launched commercial PCS services in the cities of Tijuana Tijuana (tēhwä`nä), city (1990 pop. 698,752), Baja California state, NW Mexico, just south of the U.S. border. It is a gaudy border resort, noted for its racetracks and bullfights. An irrigated agricultural area surrounds the city. in Region 1 and Monterrey Monterrey (mōntārā`), city (1990 pop. 1,068,996), capital of Nuevo León state, NE Mexico, the third largest city of Mexico. Located c.150 mi (240 km) S of Laredo, Tex. in Region 4. The Company intends to continue deploying commercial services in the major cities of those two regions during 2002. Mr. Peter H. Burrowes, President and Director General of Iusacell stated: "With the acquisition of Region 8 in southern Mexico and the recent launch of PCS services in Regions 1 and 4 in northern Mexico, Iusacell has made significant progress towards its goal of achieving national operating coverage. The new management team is committed to offering integral and competitive services to our customers on a nationwide basis." Regulatory Affairs Regulatory Affairs (RA), also called Government Affairs, is a profession within regulated industries, such as pharmaceuticals, medical devices, energy, and banking. Regulatory Affairs professionals usually have responsibility for the following general areas: 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. on certain wireless telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. . The Company will be filing an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to action ("amparo Amparo is a Brazilian city of the state of São Paulo. The population in 2003 was 63,364. The area is 446 km². The city is part of the "Water-Circuit", a cluster of towns which are very famous for natural fountains and waterwells. ") to challenge the Mexican government's implementation of the tax. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. local media reports and government statements, several other members of the industry have either initiated similar proceedings or are in the process to doing so. In another matter, Telmex, Alestra and Avantel  Avantel is a telecommunications company based in Mexico City. reached an agreement
in principle during the fourth quarter to reduce the long distance
interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. rate from US$0.0125 per minute to US$0.00975 per minute. Iusacell is currently in negotiations with Telmex to obtain similar terms for both its long distance business and its local cellular interconnection rate. Iusacell filed a formal complaint before the Mexican Ministry of Communications and Transport (SCT Sacrococcygeal teratoma (SCT) A tumor occurring at the base of the fetus's tailbone. Mentioned in: Prenatal Surgery ) for not imposing sanctions Sanctions is the plural of sanction. Depending on context, a sanction can be either a punishment or a permission. The word is a contronym. Sanctions involving countries: Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. , against the dominant wireless provider for not complying with the new National Dialing Plan that went into effect on November 17, 2001. The National Dialing Plan consists, among other things, of 13 digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. dialing for local calls placed to cellular phones, use of the "01" long distance prefix The beginning or to add to the beginning. To prefix a header onto a packet means to place the header characters in front of the packet. "To prefix" at the beginning is the opposite of "to append" characters at the end. See prepend. 1. when calling national long distance from a cellular and use of the local city prefix when calling a local line even if you are in that city. Not complying with the new regulations (and enabling dialing with fewer digits) provides our competitor with a clear advantage over all other operators in voice, national long distance and data products. Tower Sales. During the fourth quarter of 2001, the Company sold and leased back 26 additional non-strategic towers to the Mexican subsidiary of American Tower Corporation Formed in 1995, American Tower Corporation is a publicly held company (NYSE: AMT) that is a leading owner and operator of wireless and broadcast communications sites in North America. Today American Tower owns and operates over 30,000 sites in the United States, Mexico and Brazil. (MATC MATC Madison Area Technical College MATC Milwaukee Area Technical College MATC Mellon Awards for Technology Collaboration MATC Maine Appalachian Trail Club MATC Mid-America Transportation Center MATC Mini-Armored Troop Carrier MATC Maine Antique Tractor Club ) for approximately $34 million in net book gains. Through December 31, 2001, the Company had sold and leased back a total of 244 non-strategic cellular towers to MATC. Full Year 2001 Overview:
- New management team in place.
- Net 2001 customer additions were 174,000, including Portatel subscribers, a
10% increase over the year-end 2000 customer base.
- Revenues increased to $6.2 billion in 2001 from $5.7 billion in 2000, a 9%
increase in peso terms and 20% in dollar terms.
- EBITDA improved to $2.6 billion in 2001 from $2.0 billion in 2000 and
adjusted EBITDA increased to $1.6 billion in 2001 from $1.1 billion in 2000.
- EBITDA margin for the year was 35%, excluding gains from sales of cellular
towers and dark fiber optic cable, unchanged from 2000; adjusted EBITDA margin
increased from 19% in 2000 to 26% in 2001.
- Integral financing cost decreased from $548 million in 2000 to $324 million
in 2001, mainly due to lower net interest expense and a foreign exchange gain
versus a foreign exchange loss in 2000, partially offset by a lower monetary
position gain in 2001.
Operating Highlights
----------------------------------------------------------------------
Millions of Pesos
as of December 31, 2001 Fourth Quarter
-----------------------------------------
2001 2000 % Change
---- ---- --------
Revenues $1,456 $1,499 -3
Gross Profit 1,000 975 3
EBITDA 477 477 -
EBITDA Margin 33% 32% -
Operating Loss (145) (205) 29
Net Loss ($74) ($489) 85
Cellular Subscriber Base 1,855,166 1,681,219 10
Gross Cellular Additions 268,280 329,777 -19
Net Cellular Additions 158,548 142,757 11
Number of Employees EOP 1,940 1,993 -3
Avg. Monthly Churn 3.9% 4.0% -
Full Year
------------------------------------------
2001 2000 % Change
---- ---- --------
Revenues $6,241 $5,730 9
Gross Profit 4,331 3,910 11
EBITDA 2,562 1,986 29
EBITDA Margin 41% 35% -
Operating Loss (57) (423) 87
Net Loss ($500) ($1,123) 55
Cellular Subscriber Base 1,855,166 1,681,219 10
Gross Cellular Additions 1,051,089 1,092,895 -4
Net Cellular Additions 173,947 358,421 -51
Number of Employees EOP 1,940 1,993 -3
Avg. Monthly Churn 3.9% 3.5% -
----------------------------------------------------------------------
All numbers are for the period indicated, except cellular
subscriber base data which is period end data. All numbers include
consolidation of Region 8. Net Cellular Additions for the fourth
quarter and year 2001 include subscribers added as a result of the
fourth quarter 2001 acquisition of Region 8.
----------------------------------------------------------------------
ARPUs in pesos as of
December 31, 2001 Fourth Quarter Full Year
--------------------------------------------------
2001 2000 % Change 2001 2000 % Change
---- ---- -------- ---- ---- --------
Avg. Monthly MOU
per Subscriber(a) 134 108 24 117 94 24
Contract 253 247 2 250 246 2
Prepay 55 39 41 45 32 41
Monthly ARPU(a) 406 339 20 370 322 15
Contract 783 772 1 798 818 -2
Prepay 170 126 35 146 100 46
Avg. Monthly MOU
per Subscriber(b) 80 89 -10 84 78 8
Monthly ARPU(b) 241 278 -13 267 267 -
----------------------------------------------------------------------
(a) Without Incoming Calls Only subscribers. 2001 data applies the new
utilization period methodology to third and fourth quarter
information. 2000 data applies the old utilization period
methodology exclusively.
(b) Total subscriber base, including Incoming Calls Only subscribers
Integral Financing Gain (Cost)
----------------------------------------------------------------------
Millions of pesos as of
December 31, 2001 Fourth Quarter Full Year
-----------------------------------------------------
2001 2000 % Change 2001 2000 % Change
---- ---- -------- ---- ---- --------
Net Interest
Expense (210) (239) 12 (809) (982) 18
Exchange Gain
(Loss) 219 (115) - 218 (17)
Monetary
Correction
Gain 79 150 -47 267 451 -41
-----------------------------------------------------
Total Integral
Financing Gain
(Cost) 88 (204) - (324) (548) 41
----------------------------------------------------------------------
Revenue Breakdown
Revenues by type of service and the period-to-period comparisons
expressed in millions of pesos as of December 31, 2001 are as follows:
----------------------------------------------------------------------
Fourth Quarter Year-end
--------------------------- ---------------------------
% of % of % of % of
2001 Total 2000 Total 2001 Total 2000 Total
------ ------ ------ ------ ------ ------ ------ ------
Monthly Fee 400 28 406 27 1,743 28 1,711 30
Airtime
Consumption 684 47 737 49 2,841 46 2,533 44
Long Distance 163 11 129 9 649 10 532 9
Value-added
Services
plus roaming 93 6 108 7 401 6 425 8
------ ------ ------ ------ ------ ------ ------ ------
Total Service
Revenues 1,340 92 1,380 92 5,634 90 5,201 91
Equipment
Sales
& Other 116 8 119 8 607 10 529 9
------ ------ ------ ------ ------ ------ ------ ------
Total Revenues 1,456 100 1,499 100 6,241 100 5,730 100
----------------------------------------------------------------------
PORTATEL CONSOLIDATED HIGHLIGHTS
FOURTH QUARTER 2001
(Figures in thousands of constant December 31, 2001 Pesos)
----------------------------------------------------------------------
Fourth Quarter
-----------------------------------------
2001 % of Total
-----------------------------------------
Total Revenues 82,431 100%
Total Costs 44,136 54%
-----------------------------------------
Gross Margin 38,295 46%
Sales & Advertising expenses 24,869 30%
General & administrative 6,161 7%
-----------------------------------------
---------------------
EBITDA 7,265 9%
----------------------------------------------------------------------
Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE: CEL; BMV: CEL) is a wireless cellular and PCS service provider in seven of Mexico's nine regions, including Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi , Guadalajara Guadalajara, city, Mexico Guadalajara (gwä'thälähä`rä), city (1990 pop. 1,650,042), capital of Jalisco state, SW Mexico, second largest city of Mexico. The metropolitan area includes close to 3 million people. , Monterrey, Tijuana, Acapulco Acapulco (äk'əp  l`kō), city (1990 pop. 515,374), Guerrero state, S Mexico. , Puebla Puebla, city, MexicoPuebla, city (1990 pop. 1,007,170), capital of Puebla state, E central Mexico. Its official name is Heroica Puebla de Zaragoza, in honor of Gen. Ignacio Zaragoza, who defeated the French forces there in 1862. , Leon Leon Medieval kingdom, northwestern Spain. Leon proper included the cities of León, Salamanca, and Zamora—the adjacent areas of Vallodolid and Palencia being disputed with Castile, originally its eastern frontier. and Merida. Our total service regions encompass a total of approximately 90 million POPs, representing approximately 90% of the country's total population. Iusacell is under the management and operating control of subsidiaries of Verizon Communications Inc. (NYSE: VZ). Note: This press release contains statements about expected future events and financial results that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Listed below are some important factors which could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in the business environment in Mexico, such as the change in value of the peso, the imposition The printing of pages on a single sheet of paper in a particular order so that they come out in the correct sequence when cut and folded. of exchange controls, inflation levels above those in the U.S. and economic downturns; our ability to develop new technologies and hire and retain qualified personnel; our ability to obtain debt or equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. necessary to pursue business opportunities; and our ability to adapt to rapid technological change and significant competition. This press release is incorporated by reference into our Registration Statement on Form F-3 filed with the Securities and Exchange Commission on March 22, 2000. Macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. information used in the preparation of this report considered a 4.4% inflation rate for the twelve months ended December 31, 2001 and peso-dollar exchange rates of $9.17 and $9.61 at the close of business of December 31, 2001 and 2000, respectively. For any additional information please check our web site at http://www.iusacell.com.mx Attached are the Consolidated Income Statements consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. of each of Grupo Iusacell, S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V. for the three and twelve month periods ended December 31, 2001 and 2000, and the Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. of Grupo Iusacell, S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V. at December 31, 2001 and 2000. The financial statements of Grupo Iusacel Celular, S.A. de C.V. exclude the impact on results and financial position of the US$350 million in 14.25% Senior Notes due 2006, certain microwave equipment and related purchase money indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and the PCS business.
GRUPO IUSACELL CONSOLIDATED BALANCE SHEET
COMPARISON OF FOURTH QUARTER 2001 WITH FOURTH QUARTER 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
4Q00 4Q01 4Q01/4Q00
------------------ ------------------ ---------
ASSETS
Current Assets
Cash and marketable
securities 1,143,461 7% 855,292 5% -25.2%
Accounts
receivable, net 637,101 4% 595,286 4% -6.6%
Related parties 5,788 0% 169 0% -97.1%
Recoverable taxes
and other 580,646 4% 502,309 3% -13.5%
Inventories 249,388 2% 253,689 2% 1.7%
TOTAL CURRENT
ASSETS 2,616,384 16% 2,206,745 13% -15.7%
Property and
equipment, net 8,550,620 52% 9,469,044 57% 10.7%
Excess of cost of
investments in
subsidiaries over
book value, net 2,122,022 13% 2,454,614 15% 15.7%
Other assets 3,185,751 19% 2,347,814 14% -26.3%
TOTAL ASSETS 16,474,777 100% 16,478,217 100% 0.0%
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current Liabilities
Accrued liabilities 1,130,818 7% 934,997 6% -17.3%
Related parties 155,134 1% 131,604 1% -15.2%
Accounts payable 546,858 3% 804,196 5% 47.1%
Short-term debt 1,464,450 9% 220,225 1% -85.0%
TOTAL CURRENT
LIABILITIES 3,297,260 20% 2,091,022 13% -36.6%
Non-current
liabilities 6,546,618 40% 7,324,762 44% 11.9%
TOTAL LIABILITIES 9,843,878 60% 9,415,784 57% -4.3%
Minority interest 25,442 0% 24,611 0% -3.3%
Shareholders'
Equity
Capital stock 5,822,194 35% 6,754,549 41% 16.0%
Legal reserve 18,983 0% 18,983 0% 0.0%
Capital
contributions 1,329,196 8% 1,329,196 8% 0.0%
Net income (loss) -1,122,512 -7% -499,989 -3% -55.5%
Accumulated
earnings from
prior years 360,685 2% -761,827 -5% -311.2%
Excess from
restatement of
shareholders'
equity 196,911 1% 196,911 1% 0.0%
TOTAL SHAREHOLDERS'
EQUITY 6,605,457 40% 7,037,823 43% 6.5%
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY 16,474,777 100% 16,478,217 100% 0.0%
GRUPO IUSACELL CONSOLIDATED INCOME STATEMENT
COMPARISON OF FOURTH QUARTER 2001 WITH FOURTH QUARTER 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
4Q00 4Q01 4Q01/4Q00
------------------ ------------------ ---------
REVENUE
Service 1,380,136 92.1% 1,339,977 92.0% -2.9%
Equipment sales
and other 119,180 7.9% 116,367 8.0% -2.4%
TOTAL REVENUE 1,499,316 100.0% 1,456,344 100.0% -2.9%
Cost of services 414,835 27.7% 319,506 21.9% -23.0%
Other costs 109,854 7.3% 136,791 9.4% 24.5%
TOTAL COSTS 524,689 35.0% 456,297 31.3% -13.0%
GROSS MARGIN 974,627 65.0% 1,000,047 68.7% 2.6%
Depreciation and
amortization 682,305 45.5% 621,698 42.7% -8.9%
Sales & Advertising
expenses 369,686 24.7% 410,417 28.1% 11.0%
General and
administrative
expenses 127,815 8.5% 146,330 10.0% 14.5%
Other income 0.0% -33,844 -2.3% 100.0%
TOTAL OPERATING
EXPENSES 1,179,806 78.7% 1,144,600 78.6% -3.0%
OPERATING LOSS -205,179 -13.7% -144,553 -9.9% 29.5%
Interest expense,
net 238,964 15.9% 209,776 14.4% 12.2%
Foreign exchange
loss (gain) 115,393 7.7% -218,581 -15.0% -
Monetary correction -150,014 -10.0% -79,541 -5.5% 47.0%
INTEGRAL FINANCING
COST (GAIN) 204,343 13.6% -88,346 -6.1% -
LOSS BEFORE TAXES
AND STATUTORY
PROFIT SHARING
COST -409,522 -27.3% -56,207 -3.9% 86.3%
Part Loss
Subsidiaries 22,052 1.5% -507 0.0% -
Taxes 67,755 4.5% 27,005 1.9% -60.1%
Results of
discontinued
operations -8,865 -0.6% 0 0.0% -100.0%
NET LOSS BEFORE
MINORITY INTEREST -490,464 -32.7% -82,705 -5.7% 83.1%
Minority interest -1,505 -0.1% -8,416 -0.6% -459.2%
NET LOSS -488,959 -32.6% -74,289 -5.1% 84.8%
EBIT as % of
sales -13.7% -9.9%
EBITDA as % of
sales 31.8% 32.8%
EBITDA 477,126 477,145 0.0%
GRUPO IUSACELL CONSOLIDATED INCOME STATEMENT
COMPARISON OF TWELVE MONTHS 2001 WITH TWELVE MONTHS 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
12M00 12M01 12M01/12M00
------------------ ------------------ -----------
REVENUE
Services 5,200,998 90.8% 5,634,306 90.3% 8.3%
Equipment sales
and other 528,713 9.2% 607,131 9.7% 14.8%
TOTAL REVENUE 5,729,711 100.0% 6,241,437 100.0% 8.9%
Cost of services 1,464,120 25.6% 1,532,366 24.6% 4.7%
Other costs 355,996 6.2% 378,093 6.1% 6.2%
TOTAL COSTS 1,820,116 31.8% 1,910,459 30.6% 5.0%
GROSS MARGIN 3,909,595 68.2% 4,330,978 69.4% 10.8%
Depreciation and
amortization 2,408,977 42.0% 2,619,225 42.0% 8.7%
Sales &
advertising
expenses 1,409,969 24.6% 1,497,192 24.0% 6.2%
General and
administrative
expenses 513,966 9.0% 579,506 9.5% 12.8%
Other income 0.0% -307,886 -4.9% 100.0%
TOTAL OPERATING
EXPENSES 4,332,912 75.6% 4,388,037 70.3% 1.3%
OPERATING LOSS -423,317 -7.4% -57,059 -0.9% 86.5%
Interest expense,
net 982,462 17.1% 808,678 13.0% 17.7%
Foreign exchange
loss (gain) 16,783 0.3% -218,315 -3.5% -
Monetary
correction -450,706 -7.9% -266,625 -4.3% 40.8%
INTEGRAL
FINANCING COST 548,539 9.6% 323,738 5.2% 41.0%
LOSS BEFORE TAXES
AND STATUTORY
PROFIT SHARING
COST -971,856 -17.0% -380,797 -6.1% 60.8%
Part Loss
Subsidiaries 19,647 0.3% -6,518 -0.1% -
Taxes 156,335 2.7% 146,404 2.3% -6.4%
Results of
discontinued
operations -8,865 -0.2% 0 0.0% 100.0%
NET LOSS BEFORE
MINORITY INTEREST -1,138,973 -19.9% -520,683 -8.3% 54.3%
Minority interest -16,461 -0.3% -20,694 -0.3% -25.7%
NET LOSS -1,122,512 -19.6% -499,989 -8.0% 55.5%
EBIT as % of
sales -7.4% -0.9%
EBITDA as % of
sales 34.7% 41.1%
EBITDA 1,985,660 2,562,166 29.0%
GRUPO IUSACELL CELULAR CONSOLIDATED BALANCE SHEET
COMPARISON OF FOURTH QUARTER 2001 WITH FOURTH QUARTER 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
4Q00 4Q01 4Q01/4Q00
------------------ ---------------- -----------
ASSETS
Current Assets
Cash and marketable
securities 292,354 2% 119,544 1% -59.1%
Accounts receivable,
net 637,101 5% 595,286 4% -6.6%
Related parties 67,411 0% 12,352 0% -81.7%
Recoverable taxes
and other 514,189 4% 384,591 3% -25.2%
Inventories 249,388 2% 239,770 2% -3.9%
TOTAL CURRENT ASSETS 1,760,443 13% 1,351,543 10% -23.2%
Property and
equipment, net 8,256,859 60% 8,860,266 64% 7.3%
Excess of cost of
investments in
subsidiaries over
book value, net 1,921,511 14% 2,264,561 16% 17.9%
Other assets 1,889,619 14% 1,365,251 10% -27.7%
TOTAL ASSETS 13,828,432 100% 13,841,621 100% 0.1%
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current Liabilities
Accrued liabilities 1,026,705 7% 837,612 6% -18.4%
Related parties 172,191 1% 69,592 1% -59.6%
Accounts payable 493,735 4% 589,944 4% 19.5%
Short-term debt 1,464,450 11% 193,535 1% -86.8%
TOTAL CURRENT
LIABILITIES 3,157,081 23% 1,690,683 12% -46.4%
Non-current
liabilities 2,854,219 21% 3,865,784 28% 35.4%
TOTAL LIABILITIES 6,011,300 43% 5,556,467 40% -7.6%
Minority interest 25,442 0% 24,611 0% -3.3%
Shareholders' Equity
Capital stock 14,172,571 102% 14,839,125 107% 4.7%
Legal reserve 26,827 0% 26,827 0% 0.0%
Capital contributions 92,831 1% 92,831 1% 0.0%
Net income (loss) -672,420 -5% -197,701 -1% -70.6%
Accumulated earnings
from prior years -5,163,373 -37% -5,835,793 -42% 13.0%
Excess from
restatement of
shareholders' equity -664,746 -5% -664,746 -5% 0.0%
TOTAL SHAREHOLDERS'
EQUITY 7,791,690 56% 8,260,543 60% 6.0%
TOTAL LIABILITIES
AND SHAREHOLDERS'S
EQUITY 13,828,432 100% 13,841,621 100% 0.1%
GRUPO IUSACELL CELULAR CONSOLIDATED INCOME STATEMENT
COMPARISON OF FOURTH QUARTER 2001 WITH FOURTH QUARTER 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
4Q00 4Q01 4Q01/4Q00
------------------- ------------------- -----------
REVENUE
Service 1,380,136 92.1% 1,339,977 92.0% -2.9%
Equipment sales
and other 119,180 7.9% 116,367 8.0% -2.4%
TOTAL REVENUE 1,499,316 100.0% 1,456,344 100.0% -2.9%
Cost of services 414,835 27.7% 301,966 20.7% -27.2%
Other costs 109,854 7.3% 136,791 9.4% 24.5%
TOTAL COSTS 524,689 35.0% 438,757 30.1% -16.4%
GROSS MARGIN 974,627 65.0% 1,017,587 69.9% 4.4%
Depreciation and
amortization 670,544 44.7% 608,694 41.8% -9.2%
Sales & Advertising
expenses 369,686 24.7% 413,192 28.4% 11.8%
General and
administrative
expenses 125,330 8.4% 142,269 9.8% 13.5%
Otros ingresos 0 -33,841 -2.3% 100.0%
TOTAL OPERATING
EXPENSES 1,165,560 77.7% 1,130,314 77.6% -3.0%
OPERATING LOSS -190,933 -12.7% -112,727 -7.7% 41.0%
Interest expense,
net 123,220 8.2% 92,003 6.3% 25.3%
Foreign exchange
loss (gain) 79,396 5.3% -113,381 -7.8% -
Monetary
correction -128,920 -8.6% -48,573 -3.3% 62.3%
INTEGRAL
FINANCING
COST (GAIN) 73,696 4.9% -69,951 -4.8% -
LOSS BEFORE TAXES
AND STATUTORY
PROFIT SHARING
COST -264,629 -17.6% -42,776 -2.9% 83.8%
Part (Income) loss
Subsidiaries -73 0.0% -507 0.0% -594.5%
Taxes 67,755 4.5% 27,005 1.9% -60.1%
Results of
discontinued
operations -8,865 -0.6% 0 0.0% 100.0%
NET LOSS BEFORE
MINORITY INTEREST -323,446 -21.6% -69,274 -4.8% 78.6%
Minority interest -1,505 -0.1% -8,416 -0.6% 459.2%
NET LOSS -321,941 -21.5% -60,858 -4.2% 81.1%
EBIT as % of
sales -12.7% -7.7%
EBITDA as % of
sales 32.0% 34.1%
EBITDA 479,611 495,967 3.4%
GRUPO IUSACELL CELULAR CONSOLIDATED INCOME STATEMENT
COMPARISON OF TWELVE MONTHS 2001 WITH TWELVE MONTHS 2000
(figures in thousands of constant December 31, 2001 Pesos)
Growth
12M00 12M01 12M01/12M00
------------------- ----------------- ------------
REVENUE
Services 5,200,998 90.8% 5,634,306 90.3% 8.3%
Equipment sales
and other 528,713 9.2% 607,131 9.7% 14.8%
TOTAL REVENUE 5,729,711 100.0% 6,241,437 100.0% 8.9%
Cost of services 1,464,120 25.6% 1,476,595 23.7% 0.9%
Other costs 355,996 6.2% 378,093 6.1% 6.2%
TOTAL COSTS 1,820,116 31.8% 1,854,688 29.7% 1.9%
GROSS MARGIN 3,909,595 68.2% 4,386,749 70.3% 12.2%
Depreciation and
amortization 2,380,960 41.6% 2,568,688 41.2% 7.9%
Sales &
advertising
expenses 1,409,969 24.6% 1,503,222 24.1% 6.6%
General and
administrative
expenses 507,581 8.9% 566,866 9.1% 11.7%
Other income 0 0.0% -307,886 -4.9% 100.0%
TOTAL OPERATING
EXPENSES 4,298,510 75.0% 4,330,890 69.4% 0.8%
OPERATING PROFIT
(LOSS) -388,915 -6.8% 55,859 0.9% -
Interest expense,
net 509,791 8.9% 388,710 6.2% 23.8%
Foreign exchange
loss (gain) 19,566 0.3% -89,314 -1.4% -556.5%
Monetary
correction -374,383 -6.5% -165,028 -2.6% 55.9%
INTEGRAL
FINANCING
COST 154,974 2.7% 134,368 2.2% -13.3%
LOSS BEFORE TAXES
AND STATUTORY
PROFIT SHARING
COST -543,889 -9.5% -78,509 -1.3% 85.6%
Part (Income)
loss Subsidiaries -2,478 0.0% -6,518 -0.1% -163.0%
Taxes 156,335 2.7% 146,404 2.3% -6.4%
Results of
discontinued
operations -8,865 -0.2% 0 0.0% 100.0%
NET LOSS BEFORE
MINORITY INTEREST -688,881 -12.0% -218,395 -3.5% 68.3%
Minority interest -16,461 -0.3% -20,694 -0.3% 25.7%
NET LOSS -672,420 -11.7% -197,701 -3.2% 70.6%
EBIT as % of
sales -6.8% 0.9%
EBITDA as % of
sales 34.8% 42.1%
EBITDA 1,992,045 2,624,547 31.8%
(1) Unless otherwise noted, all monetary figures are in Mexican Pesos and restated as of December 31, 2001 in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Mexican GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , except for ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. (which is in nominal pesos). The symbols "$" and "US$" refer to Mexican pesos and U.S. dollars, respectively. (2) Adjusted EBIDTA EBIDTA Earnings Before Interest Depreciation Taxes and Amortization expenses rather than capitalizes handset subsidies and excludes non-operational transactions, such as fiber-optic See fiber optics. and tower sales. |
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