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Tricom Reports Fourth Quarter and Full Year Results SANTO DOMINGO, Dominican Republic, Feb. 19 /PRNewswire-FirstCall/ -- Tricom, S.A. today announced consolidated unaudited financial results for the fourth quarter and year ended December 31, 2003. On February 19, 2004, the Company announced the sale of its Central American assets. The sale is part of the Company's ongoing strategy to streamline its operations and reduce costs by divesting under-performing or non-strategic assets and focusing resources on its most attractive segments and markets. Consequently, the Company has elected to report its Central American digital trunking operations as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No.144"). The Company believes that the presentation of its Central American digital trunking services, as discontinued operations will allow for a more meaningful comparison of the results from the Company's continuing operations. "Our fourth quarter and full year results reflect a continued difficult operating environment marked by a weak economy. Our revenues from continuing operations remained under intense pressure by currency devaluation," said Carl Carlson, Chief Executive Officer. "Despite these challenges, we made progress in a number of key areas during this past year in terms of rationalizing our capital investments, and reducing our cost structure. We set out to do this while maintaining our commitment to our customers, without diminishing our operational and service capabilities. Our focus for 2004 will remain on investing prudently to support our key growth drivers, while improving our customer base by targeting the most attractive segments." Results of Continuing Operations Continuing operations consist of the Company's local service, long distance, mobile, cable television and broadband data transmission and Internet services in the Dominican Republic, as well as the Company's facility-based international long distance operations in the U.S. The Company's operating results principally reflect the impact of currency devaluation affecting the conversion of Dominican peso-generated revenues into U.S. dollars. The value of the Dominican peso, against the U.S. dollar, declined by approximately 25 percent during the 2003 fourth quarter, and by approximately 84 percent during the year. The inflation rate was approximately 43 percent for the year ended December 31,2003, compared to approximately 11 percent during 2002. Operating revenues from continuing operations totaled $50.3 million for the 2003 fourth quarter, a decrease of 16.8 percent from the 2002 fourth quarter. Total operating revenues from continuing operations for the 2003 fourth quarter grew by 3.6 percent on a sequential basis, primarily driven by international long distance revenues. For the year, operating revenues from continuing operations totaled $206.6 million, a 19.1 percent decrease from 2002. Adjusted EBITDA totaled $14.2 for the 2003 fourth quarter and $61.1 million for 2003, compared to Adjusted EBITDA of $22.3 million and $83.6 million for the 2002 fourth quarter and 2002, respectively. Long distance revenues grew by 8.6 percent to$26.3 million in the 2003 fourth quarter from the 2002 fourth quarter and by 6.6 percent to $99.7 million for the year, primarily as a result of higher long distance termination rates to the Dominican Republic, coupled with an increase in traffic volume originated by the Company's U.S.-based international long distance wholesale and retail operations. Long distance revenues for the 2003 fourth quarter grew by 9.0 percent on a sequential basis. Domestic telephony revenues totaled $13.2 million in the2003 fourth quarter and $59.5 million for the year, representing a 31.9 percent and 29.0 percent decrease from the year-ago periods, respectively. The decrease in domestic telephony revenues was primarily the result of the decline in value of the Dominican peso coupled with a lower average subscriber base during the year. Fourth quarter business and contract residential lines grew by 3.2 percent on a sequential basis. At December 31, 2003, lines in service totaled approximately 135,000, representinga 10.4 percent decrease year-over-year. The decrease in lines in service for the year reflects the Company's previously announced strategy of disconnecting low-usage wireless local loop customers and targeting high-usage consumer and business costumersin order to maximize the return on its existing network assets and resources. Mobile revenues decreased by 27.5 percent to $6.7 million in the 2003 fourth quarter from the 2002 fourth quarter and by 35.1 percent to $29.2 million for the year. The decrease in mobile revenues is primarily attributable to currency devaluation and the effect of a previously announced change in mobile revenue recognition, beginning in the 2003 second quarter. Mobile revenues, which had previously been accounted for on a gross basis, are now accrued net of prepaid mobile commission fees. Cellular and PCS subscribers at December 31, 2003, totaled approximately 433,000. Postpaid mobile subscribers at the end of the fourth quarter grew by 3.3 percent on a sequential basis. As part of its overall operational streamlining and in order to better focus on active customers, beginning in the 2004 first quarter the Company reduced the period in which a mobile prepaid customer can receive incoming calls without generating outgoing calls. This change in policy has identified approximately 200,000 existing prepaid mobile customers who have not utilized the Company's services for an extended period of time. The Company currently anticipates continuing its policy of disconnectinga substantial number of its incoming calls only cellular and PCS subscribers during 2004. Cable revenues totaled $3.0 million in the 2003 fourth quarter, a 35.1 percent decrease from the year-ago period. For 2003, cable revenues totaled $13.6 million,a 36.8 percent decrease from 2002. The decrease in cable revenues is primarily the result of currency devaluation together with a lower average subscriber base during the year. At December 31, 2003, cable subscribers totaled approximately 61,000, representing a 14.4 percent decrease year-over-year. The decline in the Company's cable subscriber base was partially offset by an increase in the number of premium service and cable modem accounts. Data and Internet revenues totaled $1.1 million in the 2003 fourth quarter and $4.5 million in 2003, representing a 63.2 percent quarter-over-quarter and 59.2 percent year-over-year decrease. The decrease in data and Internet revenues is attributable to the devaluation of the Dominican peso, coupled with revenue loss resulting from the Company' cancellation during the 2003 first quarter of its government contract to provide broadband satellite Internet access to public high schools in the Dominican Republic. Consolidated operating costs and expenses from continuing operations totaled $236.9 million in the 2003 fourth quarter compared to $79.1 million in the 2002 fourth quarter. For the year, consolidated operating costs and expenses from continuing operations totaled $404.2 million compared to $265.5 million during 2002. The increases in year-over-year operating costs and expenses reflect asset impairments, restructuring costs and higher depreciation and amortization expenses, offset in part by lower selling, general and administrative (SG&A) expenses, as well as the elimination of expenses in lieu of income taxes. Operating costs and expenses from continuing operations, excluding asset impairments and restructuring costs, totaled $64.9 million for the 2003 fourth quarter and $232.2 million for 2003. Cost of sales and services increased by 4.5 percent to $23.2 million during the 2003 fourth quarter and remained flat during the year. Increases in fourth quarter cost of sales and services were mainly attributable to higher transport and access charges due to the indexation to the U.S. dollar of domestic interconnection tariffs, offset in part by lower cable programming fees resulting from contract renegotiations. Selling, general and administrative (SG&A) expenses increased by 16.9 percent to $22.9 million in the 2003 fourth quarter and decreased by 17.6 percent to $71.8 million for the year. Increases in fourth quarter SG&A expenses were primarily driven by early lease cancellation costs of approximately $7.6 million, and network maintenance expenses, offset in part by lower marketing and sales commissions expenses. The year-over-year decrease in SG&A expenses reflect expense reduction efforts and streamlined operations, as well as lower Dominican peso-denominated expenses resulting from currency devaluation. During the 2003 fourth quarter, the Company recognized $166.9 million in asset impairments and approximately $5.1 million in restructuring costs. The non-cash impairment charges represent a reduction of the Company's goodwill and the carrying value of its long-lived telecommunication and cable network assets, primarily resulting from currency devaluation, which have impacted the Company's estimated, discounted future cash flows. Restructuring costs represent severance-related charges resulting from work force reductions in response to changes in business strategy and to the financial performance of certain underlying businesses and service offerings, as well as legal and other professional advisory services expenses related to the Company's debt restructuring initiatives. "The factors that affected the magnitude of the impairment charges include management's revised operating plan based on current market conditions, the results of the Company's current forecasting and long-term planning process, as well as a valuation of assets and liabilities," said Ramon Tarrago, Chief Financial Officer. The asset impairment losses include estimates that are based on the best information currently available to the Company. Adjustments tosuch estimates, if any, would be reflected in the financial statements included in the Company's future filings with the Securities and Exchange Commission. Interest expense totaled $15.4 million in the 2003 fourth quarter compared with $16.7 million in the prior year quarter, and totaled $62.4 million for 2003 compared to $64.4 million during 2002. The Company suspended interest payments on its unsecured debt obligations beginning in October 1, 2003. In the 2003 fourth quarter, the Company recognized $1.9 million in losses from discontinued operations in Central America. Loss from discontinued operations for the full year 2003 totaled $7.8 million. In accordance with SFAS No. 144, the company will continue to report losses from discontinued operations in the periods they occur. In the 2003 fourth quarter, the Company recognized a loss on disposal of discontinued operations of approximately $38.2 million. In the 2003 fourth quarter, the Company realized $2.6 million in deferred income taxes from loss carry forwards relating to the aforementioned early lease cancellation. Net loss, reflecting non-cash asset impairments and losses from discontinued operations, totaled $237.5 million, or $3.68 per share for the 2003 fourth quarter, and $299.4 million, or $4.63 per share during 2003. Liquidity and Capital Resources Total debt, including capital leases and commercial paper, amounted to $449.5 million at December 31, 2003, compared to $467.6 million at December 31, 2002. Total debt included $200 million principal amount of 11-3/8% Senior Notes due 2004, approximately $35.0 million of secured debt and approximately $214.5 million of unsecured bank and other debt. At December 31, 2003, the Company had approximately $3 million of cash on hand. Net debt totaled $446.5 million at December 31, 2003. The Company's net cash provided by operating activities totaled $18.3 million for 2003 compared to $13.6 million for 2002. Capital expenditures totaled $3.2 million during the 2003 fourth quarter and$15.0 million for the year, representing an approximate 71.8 percent quarter-over-quarter and 76.5 percent year-over-year reduction. About TRICOM Tricom, S.A. is a full service communications services provider in the Dominican Republic. We offer local, long distance, mobile, cable television and broadband data transmission and Internet services. Through Tricom USA, we are one of the few Latin American based long distance carriers that is licensed by the U.S. Federal Communications Commission to ownand operate switching facilities in the United States. Through our subsidiary, TCN Dominicana, S.A., we are the largest cable television operator in the Dominican Republic based on our number of subscribers and homes passed. For more information about Tricom, please visit http://www.tricom.net/ Cautionary Language Concerning Forward-Looking Statements Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. Actual events or results may differ materially due to various factors. Factors which may cause actual results to differ materially from those discussed herein include economic considerations that could affect demand for telecommunications services and the ability of the Company to make collections, inflation, regulatory factors, legal proceedings, exchange controls and occurrences in currency markets, competition, and the risk factors set forth in the Company's various filings with the Securities and Exchange Commission, including its more recently filed Annual Report on Form 20-F. The Company undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof. (Six tables to follow) Non-GAAP and Other Financial Measures This press release includes a discussion of the Company's historical financial results using certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt. Investors, analysts, valuation firms and lenders, also frequently use these measures although their definitions may vary. A "non-GAAP financial measure" is defined as a numerical measure of a company's performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles ("GAAP"). Pursuant to the requirements of Regulation G, the Company has included in its press release a reconciliation of all non-GAAP financial measures disclosed in the press release to the most directly comparable GAAP financial measure. EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization from continuing operations, adjusted to exclude non-cash charges and certain expenses not included within the accepted definition of EBITDA, but which management believes their exclusion provides a more appropriate measure of the Company's operating performance and liquidity. Until September 1, 2002, we made payments to the Dominican government in lieu of income taxes. As a result, we calculated Adjusted EBITDA prior to the deduction of payments to the Dominican government in lieu of income taxes. Our calculation of Adjusted EBITDA from continuing operations also adds asset impairments, which are non-cash charges related to fixed and intangible assets, restructuring costs, extraordinary items, losses from discontinued operations, non-recurring items, as well as changes in accounting charges. Adjusted EBITDA is the primary basis used by our management to measure the operational strength and performance of all of our operating segments and units. The Company believes Adjusted EBITDA provides meaningful additional information on our performance and on our ability to service our long-term debt and other obligations, and to fund capital expenditures. Because we use Adjusted EBITDA as the measure to evaluate the performance of our core businesses, we reconcile it to net earnings (loss), the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles. We define Free Cash Flow as cash provided by operating activities less cash provided by investing activities. We believe Free Cash Flow is a non-GAAP measure as contemplated by Regulation G. We believe that Free Cash Flow provides useful information about the amount of cash our business is generating after interest and capital expenditures for reinvesting in the business. We define Net Debt as the total aggregate amount of our consolidateddebt (short and long term), including capital lease obligations, less cash on hand and in banks and equivalents (including investments). We believe Net Debt is a non-GAAP measure as contemplated by Regulation G. Management believes that the presentation of Net Debt provides useful information about the Company's ability to satisfy its debt obligations with currently available funds. EBITDA, Adjusted EBITDA and Free Cash Flow should not be considered as substitutes for operating income (loss), net income (loss), net cash provided by operating activities or other measures of performance or liquidity reported in accordance with GAAP. Net Debt should not be considered a substitute for total debt. A quantitative reconciliation of EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt follows: TRICOM, S.A. AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (In US$) Three Months Ended Year Ended December 31, December 31, 2002 2003 2002 2003 Adjusted EBITDA Reconciliation Add (subtract): Net loss $(33,980,099) (237,488,784) $(76,553,362) (299,366,153) Income taxes, net 1,515,284 (2,249,862) 948,192 (252,051) Interest expense, net 16,465,187 15,354,177 62,371,262 60,978,798 Depreciation and amortization 17,554,725 18,745,669 66,352,488 73,998,602 EBITDA $1,555,097 (205,638,800) $53,118,580 (164,640,804) Extraordinary item -- -- -- -- Cummulative effect of accounting change -- -- -- -- Lossfrom discontinued operations, net 959,585 1,914,568 4,846,833 7,819,690 Loss on disposal of discontinued operations -- 38,241,048 -- 38,241,048 Asset impairments 19,734,701 166,939,949 19,734,701 166,939,949 Restructuring costs -- 5,080,132 -- 5,080,132 Expense in lieu of income taxes 3,830 -- 5,896,644 -- Other non- recurring items -- 7,616,465 -- 7,616,465 Adjusted EBITDA $22,253,213 14,153,362 $83,596,758 61,056,480 Year Ended December 31, 2002 2003 Free Cash Flow Reconciliation Add (subtract): Net cash provided by operating activities $13,607,956 18,334,139 Net cash used in investing activities (57,918,495) (3,359,960) Free cash flow surplus (deficit) $(44,310,539) 14,974,179 Period ended December 31, 2002 2003 Net Debt Reconciliation Add (subtract): Short-term debt $81,980,810 355,623,913 Long-term debt 385,583,631 93,849,870 Cash on hand and investments (6,080,303) (2,963,825) Net debt $461,484,138 446,509,958 TRICOM, S.A. AND SUBSIDIARIES Selected Financial and Operating Data (unaudited) (In US$) Sequential Y-o-Y 4Q'02 3Q'03 4Q'03 %Chng. %Chng. Economic Statistics (1) Consumer price index (12 month aggregate) 10.51% 33.14% 42.66% -- -- Consumer price index year-to-date 10.51% 26.47% 42.66% -- -- Exchange rate (at period end) $22.50 33.21 41.50 25.0% 84.4% Avg. period exchange rate $20.55 34.06 38.13 11.9% 85.5% Selected Financial Data Adjusted EBITDA from continuing operations 22,253,213 13,626,344 14,153,230 3.9% -36.4% Capital Expenditures, including capital leases 11,245,015 1,690,416 3,168,863 87.5% -71.8% Total employess (at period end) 1,519 1,584 1,469 -7.3% -3.3% Selected Operating Data Lines in service (at period end) 150,456 135,815 134,843 -0.7% -10.4% Avg. revenue per line in service $36.68 33.94 33.42 -1.5% -8.9% Avg. monthly churn rate 8.1% 2.6% 2.5% -- -- Cellular & PCS subscribers (at period end) (2) 432,058 429,053 433,224 1.0% 0.3% Minutes of use (in 000s) 63,057 67,474 64,475 -4.4% 2.2% Avg. revenue per user (blended) $7.51 4.95 4.83 -2.4% -35.7% Avg. monthly churn rate 4.5% 3.7% 4.2% -- -- Digital trunking subscribers (at period end) (3) 7,011 10,331 10,157 -1.7% 44.9% Avg. revenue per user $68.17 44.46 49.87 12.2% -26.8% Avg. monthly churn rate n.m. 4.4% 2.9% -- -- Cable subscribers (at period end) 71,726 63,921 61,433 -3.9% -14.4% Avg. revenue per equivalent cable subscriber $16.76 11.69 11.34 -3.0% -32.3% Avg. monthly churn rate 3.1% 2.3% 2.8% -- -- Data/Internet subscribers (at period end) 10,825 12,128 12,404 2.3% 14.6% Paging subscribers 8,752 5,105 4,006 -21.5% -54.2% Long distance minutes (in 000s) (4) 311,594 266,092 313,120 17.7% 0.5% Footnote: (1) Source: Dominican Republic Central Bank (2) Represents cellular and PCS subscribers in the Dominican Republic (3) Represents mobile subscribers in Panama. (4) Includes inbound, outbound and domestic long distance minutes. TRICOM, S.A. AND SUBSIDIARIES Consolidated Balance Sheets (In US$) December 31, December 31, 2002 2003 (Audited) (Unaudited) Assets Current assets Cash on hand and in banks $6,080,303 $2,963,825 Accounts receivable: Customers 26,253,107 17,626,196 Carriers 3,806,849 15,271,998 Others 2,848,287 1,613,102 32,908,243 34,511,296 Allowance for doubtful accounts (7,763,109) (5,446,244) Accounts receivable, net 25,145,134 29,065,052 Inventories, net of allowances 3,937,678 920,101 Certificates of deposits 15,900,710 -- Prepaid expenses 7,099,415 315,429 Deferred income taxes 1,307,870 3,571,426 Total current assets 59,471,110 36,835,833 Mortgage investments 463,542 306,658 Property and equipment, net 668,120,192 429,420,015 Intangible assets 6,946,978 3,126,140 Goodwill, net of amortization 21,914,327 -- Other assets at cost, net of amortization 25,312,934 22,982,400 $782,229,083 $492,671,046 TRICOM, S.A. AND SUBSIDIARIES Consolidated Balance Sheets (cont.) (In US$) December 31, December 31, 2002 2003 Liabilities and Stockholders' Equity (Audited) (Unaudited) Current liabilities Notes payable: Borrowed funds $38,609,926 $38,316,393 Commercial paper 9,907,583 59,136,014 Current portion of long-term debt 30,724,888 252,376,875 79,242,397 349,829,282 Current portion of capital leases 2,738,413 5,794,631 Accounts payable: Carriers 11,032,780 21,089,385 Suppliers 15,746,551 11,127,549 Others 7,384,780 3,350,020 34,164,111 35,566,954 Other liabilities 14,910,246 11,886,691 Accrued expenses 17,837,390 47,683,062 Total current liabilities 148,892,557 450,760,620 Reserve for severance indemnities 675,742 721,039 Deferred income tax 1,691,779 1,320,296 Commercial paper 41,708,647 - Capital leases, excluding current portion 11,792,908 8,736,691 Long-term debt, excluding current portion 332,082,076 85,113,179 Total liabilities 536,843,709 546,651,825 Minority interest -- -- Stockholders' equity: Class A Common Stock at par value RD$10: Authorized 55,000,000 shares; 45,458,041 shares issued at December 31, 2002 and 2003 24,951,269 24,951,269 Class B Stock at par value RD$10: Authorized 25,000,000 shares at December 31, 2002 and 2003; 19,144,544 issued at December 31, 2002 and 2003 12,595,095 12,595,095 Additional paid-in-capital 275,496,964 275,496,964 Retained loss (65,634,197) (365,000,350) Other comprehensive income-foreign currency translation (2,023,757) (2,023,757) Stockholders equity, net 245,385,374 (53,980,779) $782,229,083 $492,671,046 TRICOM, S.A. AND SUBSIDIARIES Consolidated Statement of Operations (In US$) Three Months Ended Year Ended December 31, December 31, 2002 2003 2002 2003 (Restated) (Unaudited) (Restated) (Unaudited) Operating revenues: Long distance $24,250,736 26,338,721 93,510,965 99,663,413 Domestic telephony 19,455,736 13,248,461 83,721,115 59,475,203 Mobile 9,187,124 6,659,521 45,073,022 29,231,686 Cable 4,635,220 3,007,224 21,487,466 13,587,250 Data and Internet 2,888,858 1,063,164 11,007,120 4,486,692 Other 81,142 6,262 498,245 121,448 Total operating revenues 60,498,816 50,323,353 255,297,933 206,565,692 Operating costs and expenses: Cost of sales and services 22,193,473 23,202,538 86,332,649 86,422,119 Selling, general and administrative expenses 19,608,410 22,929,078 87,139,040 71,770,957 Depreciation and amortization 17,554,725 18,745,669 66,352,488 73,998,602 Asset impairments 19,734,701 166,939,949 19,734,701 166,939,949 Restructuring costs -- 5,080,132 -- 5,080,132 Expense in lieu of income taxes 3,830 -- 5,896,644 -- Total operating costs and expenses 79,095,139 236,897,366 265,455,522 404,211,759 Operating income (18,596,323) (186,574,013) (10,157,589) (197,646,067) Other income (expenses): Interest expense (16,734,100) (15,418,806) (64,354,026) (62,359,034) Interest income 268,913 64,629 1,982,764 1,380,236 Foreign currency exchange gain (loss) 3,862,699 2,359,955 2,881,442 4,962,628 Gain on Sale of fixed assets, net -- -- 389,217-- Other, net (306,419) (14,795) (1,500,145) 104,771 Other expenses, net (12,908,907) (13,009,017) (60,600,748) (55,911,399) Loss from continuing operations before income taxes (31,505,230) (199,583,030) (70,758,337) (253,557,466) Income taxes, net (1,515,284) 2,249,862 (948,192) 252,051 Loss from continuing operations, net (33,020,514) (197,333,168) (71,706,529) (253,305,415) Discontinued operations: Loss from discontinued operations in Central America, net (959,585) (1,914,568) (4,846,833) (7,819,690) Loss on disposal of discontinued operations in Central America -- (38,241,048) -- (38,241,048) Net loss $(33,980,099) (237,488,784) (76,553,362) (299,366,153) Loss per common share: Loss from continuing operations $(0.76) (3.05) (1.65) (3.92) Loss from discontinuted operations (0.02) (0.03) (0.11) (0.12) Loss on disposal of discontinued operations -- (0.59) -- (0.59) Loss per common share $(0.78) (3.68) (1.76) (4.63) Average number of common shares used in calculation 43,390,464 64,602,585 43,390,464 64,602,585 TRICOM, S.A. and subsidiaries Consolidated Statement of Cash Flows (Unaudited) (In US$) Year ended December 31, 2002 2003 (Audited) (Unaudited) Cash flows from operating activities: Net loss $(76,553,362) $(299,366,153) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 66,194,501 73,681,369 Asset impairments 19,734,701 166,939,949 Allowance for doubtful accounts 7,099,263 2,318,235 Loss on disposal of discontinued operations -- 38,241,048 Deferred income tax, net (164,268) (2,635,039) Amortizations 6,257,060 4,391,452 Provision for inventory obsolence 1,941,517 1,272,755 Expense for severance indemnities 2,043,077 1,747,472 Minority interest (1,870,833) -- Loss (gain) on sale of fixed assets, net (389,217) -- Net changes in assets and liabilities: Accounts receivable 2,254,256 (6,238,153) Inventories 1,174,905 2,283,036 Prepaid expenses (1,249,148) 6,783,986 Other assets (5,355,941) 2,391,397 Accounts payable (2,961,953) 1,402,843 Other liabilities 1,160,162 (3,023,555) Accrued expenses (2,699,711) 29,845,672 Reserve for severance indemnities (3,007,053) (1,702,175) Total adjustments 90,161,318 317,700,292 Net cash provided by (used in) operating activities $13,607,956 $18,334,139 Cash flows from investing activities: Cancellation (acquisition) of investments $2,804,459 $11,632,077 Proceeds from sale of fixed assets 5,041,173 -- Acquisition of property and equipment (65,764,127) (14,992,037) Net cash used in investing activities (57,918,495) (3,359,960) Cash flows from financing activities: Borrowed (paid) funds 98,930,223 48,934,901 Principal payments to banks (173,268,664) (88,677,545) Proceeds from issuance of commercial paper 21,219,915 -- Current portion of capital lease (3,325,445) -- Payments of long-term debt (30,493,532) -- Proceeds from issuance of long term debt 56,347,216 21,651,987 Issuance of common stock 68,405,079 -- Net cash provided by financing activities 37,814,792 (18,090,657) Net increase in cash and cash equivalents (6,495,747) (3,116,478) Cash and cash equivalents at beginning of the period 12,576,050 6,080,303 Cash and cash equivalents at end of period $6,080,303 $2,963,825 For Further Information Contact: Miguel Guerrero, Investor Relations Ph (809) 476-4044 / 4012 e-mail: For additional information, please visit Tricom's Investor Relations website at http://www.tdr-investor.com/ or contact our Investor Relations department at the above numbers. DATASOURCE: Tricom, S.A. CONTACT: Miguel Guerrero, Investor Relations, Tricom, S.A., +1-809-476-4044, ext. 4012, or Web site: http://www.tricom.net/ http://www.tdr-investor.com/

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