September/021

TELE NORTE LESTE PARTICIPAÇÕES S.A.TELE NORTE LESTE PARTICIPAÇÕES S.A.

September/022

Largest Telco in Latin America:

17.7 million lines installed*

14.9 million lines in service*

Concession Area:

65% of Brazilian Territory / 93 million people

40% of Country’s GDP

Over 21 Million Households

Tele Density: 16% ( vs. 22% National Average)

TNLP4: Heaviest Weighted Stock in IBOVESPA

Free Float: 79% of Total Shares

Level 2 ADR (NYSE:TNE): 28% of Total Shares

Market Value: US$ 3.4 billion (August/02)

OverviewOverview

* In June/02

September/023

TELE NORTE LESTE

PARTICIPAÇÕES S.A

79.0% 18.7%

HICORP*OUTSOURCING TNL ACESSO* CONTAX* TNEXT*

TELEMAR

PARTICIPAÇÕES S.A. **

TELEMAR

PARTICIPAÇÕES S.A. **

TELEMARNorte Leste

2.3% Tresuary

79.5%

Free FloatFree Float

18.9%

1.6% Treasuary

FREE FLOATFREE FLOAT

Pegasus

24.4%

Corporate StructureCorporate Structure

*100% owned Subsidiary

** Controlling Shareholder

September/024

• Shareholders´ Meetings

•At least one annual general meeting

• Board of Directors

• Monthly Meetings

• 11 board members (+ 11 alternates) 10 shareholders´representatives plus the CEO

•Independent Accountants

PricewaterhouseCoopers

• Executive Committee

Corporate StructureCorporate Structure

September/025

Finance Committee

• Monthly meetings

• 10 members

• Objectives: Review, analyze and advise the Board of Directors on: Financial Risks,

Insurance Policy, Independent Accountants, Internal Audit Program, Budget, etc.Procurement and Investment Committee

• 6 members

• Objectives: Advise the Board of Directors on procurement and execution on the capital

expenditures program.Compensation Committee

• Semiannual

• 3 members

• Objectives: Define conditions of employees´ benefits in general and the stock option

program in particular.

Board CommitteesBoard Committees

September/026

PersonnelPersonnel

Full-Time Employees 2Q01 3Q01 4Q01 1Q02 2Q02 % yoy

TMAR 16,795 15,803 10,663 10,483 10,283 -39%

Connect 4,141 6,977 3,417 979 152 -96%

TNE+Other Subsidiaries 961 1057 976 427 486 -49%

Wireline Total 21,897 23,837 15,056 11,889 10,921 -50%

Oi 151 286 434 570 663 339%

Contax 9,558 12,119 11,981 10,397 11,594 21%

Total 31,606 36,242 27,471 22,856 23,178 -27%

September/027

Platform GrowthPlatform Growth

8.210.1

12.714.9

7.28.1 7.8

8.89.7

10.511.8

12.8

14.8

18.1

14.8

17.7

14.9

17.7

15.2

Jul-98 1998 1999 2000 2001 Mar-02 Jun-02 Dec02ELines in Service (million) Lines Installed (million)

Average LIS

+19% +23% +26% +17%

1H99 1H00 1H01 1H02

September/028

993

472

1,093

636

192

767

-13

552

142

527

Net Additions Disconnected Lines

Quarterly Net AdditionsQuarterly Net Additions(in 000)(in 000)

2Q01 3Q01 4Q01 1Q02 2Q02

September/029

Revenue GrowthRevenue Growth(R$ Mn)(R$ Mn)

6,946

5,158

8,433

6,222

10,851

8,122

13,660

10,103

1998 1999 2000 2001 2002E

Gross Revenue Net Revenue

+97%

CAGR 25.3%

September/0210

618 614

984

1,245

1,368

Jun_01 Sep_01 Dec_01 Mar_02 jun_02

Employee Productivity - WirelineEmployee Productivity - Wireline

+121%

( LIS/ Employees)( LIS/ Employees)

September/0211

Revenue per EmployeeRevenue per Employee**

(*) Gross Revenue / Full-time wireline employees (R$ 000/year)

(**) Annualized ratio

288 346

514

907

1,265

1,380

1998 1999 2000 2001 1Q02** 2Q02**

September/0212

1,882

2.033

2,229

2,289

2,447

2,568

2,840

2,996

3,121

3,285

3,570

3,684

3,759

3,774

1999 2000 2001 1H02

8,433

10,851

13,660

Gross Revenue - Quarterly Growth Gross Revenue - Quarterly Growth (R$ Mn)(R$ Mn)

3Q

1Q

2Q

4Q

3,9155,015 6,406

7,533

1HALF 2HALF1998 49% 51%1999 46% 54%2000 46% 54%2001 47% 53%

September/0213

Gross Revenue Breakdown Gross Revenue Breakdown (R$ Mn)(R$ Mn)

1H01

1H02

6,406

43.0%

24.0%

11.4% 8.8% 5.9% 6.9%

45.0%

21.9%

10.9% 10.0% 6.0% 6.2%

7,533

(+18%)

Local Fixed-

Mobile

Network

Usage

Long

Distance

Data Other TOTAL

100.0%

100.0%

September/0214

825

1,528

1,266

785 849

2Q01 3Q01 4Q01 1Q02 2Q02 1,397

2,188

1,832

1,372 1,448

Operating Expense Breakdown Operating Expense Breakdown (R$ Mn)(R$ Mn)

Ex- Interconnection

%

-34%

-44%

41

28

20

11

30

22

24

24

31

29

19

21

43

31

22

4

41

29

19

11

2Q01 3Q01 4Q01 1Q02 2Q02

Interconnection Cost Cost of Services

Selling Expenses G&A Expenses/ Other

September/0215

Fixed Mobile Revenue & Interconnection CostsFixed Mobile Revenue & Interconnection Costs(R$ Mn)(R$ Mn)

527

497

569

548563

595 589

573

590

554

576

558

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02

Net F-M Revenue Interconnection Cost

September/0216

2.8%

4.6%

5.1%*

10.6%

5.2%5.6%

4.2%

5.9%

4.9%

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 Average2001

Average1H02

R$ Million % of Gross Revenue

* Normalized Level (excluding non-recurring adjustments)

Bad Debt ProvisionsBad Debt Provisions

87 152 380 193 210 158

September/0217

Consolidated Income Statement Consolidated Income Statement

Var.R$ Millions 2Q01 1Q02 2Q02 2Q02/2Q01

Net Operating Revenue 2,438.0 2,784.6 2,780.4 14.0%

Operating Expenses 822.4 784.5 849.1 3.2%

Cost of Services 389.3 426.4 418.0 7.4%

Selling Expenses 286.2 300.9 274.5 -4.1%

G&A Expenses 176.3 173.3 195.4 10.8%

Other Expenses (Revenues), net (29.4) (116.1) (38.8) 32.0%

Interconection Costs 574.4 587.4 599.2 4.3%

EBITDA 1,041.2 1,412.7 1,332.1 27.9%

Equity accounting (6.9) 6.3 1.5 -121.7%

Depreciation and Amortization 728.9 954.0 953.9 30.9%

EBIT 319.2 452.4 376.8 18.0%

Financial Expenses 177.8 322.1 635.8 257.6%

Financial Income (52.4) (128.9) (135.7) 159.0%

Non Operating Expenses (Revenues) (17.7) 2.3 (1.9) -89.3%

Income before Tax and Social Contribution 211.5 256.9 (121.5) -157.4%

Income Tax and Social Contribution 15.8 74.3 (45.1) -385.4%

Employee Profit Share (1.0) - - -100.0%

Minority Interest 79.7 39.6 - -100.0%

Net Income 117.0 143.0 (76.3) -165.2%

September/0218

Consolidated Balance Sheet Consolidated Balance Sheet (R$ Mn)(R$ Mn)

6/30/2001 12/31/2001 3/31/2002 6/30/2002 6/30/2001 12/31/2001 3/31/2002 6/30/2002

TOTAL ASSETS 21,297 26,766 26,261 25,661 TOTAL LIABILITIES 21,297 26,766 26,261 25,661

Current Assets 4,526 4,950 4,950 4,736 Current Liabilities 4,149 5,609 4,438 3,386

Cash and ST Investments 251 1,235 1,044 573 Suppliers 1,420 2,199 1,648 1,245

Accounts Receivables - Services 2,537 2,146 2,227 2,401 Loans and Financing 1,088 1,388 1,424 1,220

Recoverable Taxes 1,154 1,293 1,309 1,462 Salaries Benefits and Social Sec. 155 182 161 140

Other Current Assets 584 276 370 300 Taxes 598 524 500 475

Dividends Payable 168 538 540 135

Other Accounts Payable 720 778 165 170

Long Term Assets 1,413 1,949 1,778 1,612

Recoverable Taxes 1,232 1,561 1,405 1,252 Long Term Liabilities 4,185 9,075 9,555 10,078

Other 181 388 373 360 Loans and Financing 3,160 7,549 7,937 8,481

Contingencies Provisions 1,010 1,492 1,579 1,563

Other Accounts Payable 14 34 39 34

Permanent Assets 15,358 19,867 19,533 19,313

Investments 110 160 159 158 Deferred Income 157 2 - -

Property Plant and Equipment 14,096 19,244 18,735 18,200 Minoritary Interest 2,352 2,057 2,102 2,107

Deferred Assets 1,152 463 639 955 Shareholder´s Equity 10,454 10,023 10,166 10,090

September/0219

Partial Blockage (outgoing calls): 30 days past due

Total Blockage (all calls): 60 days past due

Disconnection: 90 days past due

Lines BlockedLines Blocked

(in 000)(in 000)

1,152 1,185

945995

912

8.1%

6.4% 6.7%6.1%

8.5%

Jun-01 Sep-01 Dec-01 Mar-02 Jun-02

Total Partial % of Total Lines in Service

September/0220

527 767

413

472

636

552

4.5%

3.6%3.4%

3.7%

5.2%

3.5%

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02

Disconnected Lines (000) % Average LIS

Disconnected LinesDisconnected Lines (in 000)(in 000)

September/0221

49.3%

44.7%

EBITDA

Margin

EBITDA Growth (R$ Mn)EBITDA Growth (R$ Mn)

(*) Excluding Depreciation and Amortization

Net Revenue OperatingExpenses*

EBITDA

5,565

2,820 2,745

4,744

2,623

2,121

1H01

1H02

September/0222

EBITDA – Quarterly StatisticsEBITDA – Quarterly Statistics

EBITDA (R$ MM) EBITDA Margin (%)

901 865

1,372

437

1,041

1,080

1,4131,332

35%

48%

33%

17%

43%

47%51% 49%

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 Average2001

Average1H02

September/0223

2,500

5,158

2,244

6,222

2,804

8,122

10,060 10,103

825

5,565

2,000

1998 1999 2000 2001 1H02 2002

Capex Net Revenue

48.5%

36.1%

99.6%

14.8%

CAPEX / Net Revenue - 1998/2002CAPEX / Net Revenue - 1998/2002

Capex / Net Revenue* Includes PCS

34.5%

September/0224

CAPEX – Quarterly Statistics - ConsolidatedCAPEX – Quarterly Statistics - Consolidated

(R$ Bn)(R$ Bn)

1.82.1

3.23.0

0.4 0.4

10.1

2.0

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 2001 2002E

Wireline Business Wireless Business

September/0225

Wireline CAPEX 1998 / 2002E (TMAR)Wireline CAPEX 1998 / 2002E (TMAR)

2.5

1.3

2.2 1.7

2.8 2.3

7.9

5.3

0.4

1.2 1.0

-

1998 1999 2000 2001 1H02 2002E

wireline CAPEX (R$ bn) Lines Installed (mn)

September/0226TOTAL = 9,701

TOTAL DEBT

11%

8%

18%

20%

DEBT PROFILE

•R$ 6,251 million foreign currency (64%)*:

LIBOR + 5,19% p.a.

•R$ 3,450 million in Brazilian currency (36%):

(+ 17.4% p.a.)

43%2006 and beyond

2002

2003

2004

2005

* 100% Hedged

ST 1,220

Long Term 8,481

Net Debt9,128

Cash 573

R$ mn

Debt Structure – 06/30/02 Debt Structure – 06/30/02

September/0227

Changes in Debt Position – TNE (R$ Mn)Changes in Debt Position – TNE (R$ Mn)

Indebtedness Jun-01 Sep-01 Dec-01 Mar-02 Jun-02Change

Jun02/Jun01

Total 4,248 8,906 8,937 9,361 9,701 5,453 Short Term 1,088 1,160 1,388 1,424 1,220 132 Long Term 3,160 7,746 7,549 7,937 8,481 5,321 (-) Cash (251) (1,870) (1,235) (1,044) (573) (322)

- Net Debt 3,997 7,036 7,702 8,317 9,128 5,131

Suppliers 1,420 1,446 2,199 1,648 1,245 (175) Other Accounts Payable 720 765 778 165 170 (550) Total 2,140 2,211 2,977 1,813 1,415 (725)

Total 6,137 9,247 10,679 10,130 10,543 4,406

September/0228

Cost Drivers:Increase operating efficiencies;Headcount reduction;Maintenance costs reduction;

Bad debt control;Oi – operating / financial expenses

OUTLOOK 2002OUTLOOK 2002

Revenue Drivers: Rate increasePlatform in service growth

New Services – Long Distance /Data New Markets

CAPEX reduction – R$ 2 billion;

Net Debt under control - less than R$ 9 billion.

September/0229

Average Rates for Telecommunication Services* Average Rates for Telecommunication Services* (R$)(R$)

Local Rates 2000 2001 2002ReadjustmentJun_02 (%)

Installation Fee 50 50 30 -40.0%Residential Subscription 14.11 16.64 18.97 14.0%Commercial Subscription 21.96 25.65 29.79 16.1%PBX Subscription 29.3 32.62 29.79 -8.7%Pulses 0.066 0.066 0.072 9.1%

Public Telephone Rates 2000 2001 2002Local 0.05 0.054 0.058 7.4%

Fixed-Mobile Rate 2000 2001 2002(per minute)VC1 0.29 0.34 0.35 2.9%VC2 0.61 0.68 0.74 8.8%VC3 0.69 0.77 0.85 10.4%

Intraregional Long-Distance Rates (per minute) 2000 2001 20020 to 50 km 0.15 0.17 0.19 11.8%50 to 100 km 0.24 0.26 0.27 3.8%100 to 300 km 0.27 0.27 0.29 7.4%Over 300 km 0.32 0.28 0.31 10.7%

Network Usage Rates (per minute) 2000 2001 2002Local 0.04 0.047 0.047 0.0%Long-distance 0.07 0.074 0.074 0.0%

(*) Rates net of taxes, regulated by Anatel

(**) Actual Rates

Disclaimer – The rates are shown as average figures and do not necessarily correspond to actual rates, which may vary from state to state, according to day of the week, duration of the call, etc.

September/0230

National & International Long Distance Calls

New Businesses New Businesses Adding Value Adding Value

Region I

Region III

Region II

Outgoing Calls

Incoming Calls

International Calls

031

Glo

bal

September/0231

Headcount Reduction - 40% in average

Third Party Services Reduction

Bad Debt Control - less than 5% of Gross Revenue (in average)

Marketing Expenses • wireline (30% reduction) • wireless

Cost DriversCost Drivers

September/0232

2002/2001 - CAPEX Reduction - TNE2002/2001 - CAPEX Reduction - TNE

CAPEX

1998 1999 2000 2001 2002

2.5 2.2 2.8

10.1

2.0 2001

R$ 10.1 bn 2002

R$ 2.0bn

TMAR- Wireline BusinessOi - Wireless Business

-80%

September/0233

OiOi

Current Status

Tariffs

CAPEX

September/0234

TNE – PCS ´´Oi´´ - Current StatusTNE – PCS ´´Oi´´ - Current Status

Financing US$ 1.4 billion credit (suppliers and bank facilities);

Launching of the brand name (Jan/02);

Launch of Operations 25th June ;

14 Metropolitan areas (16 as of 03) – 320 cities;

Main Suppliers: Nokia, Alcatel, Siemens;

Distribution channels = over 1,600 point of sales;

2,000 integrated sites;

Employees: 663 in June;

400,000 subscribers in August/02;

Agreement with 19 countries for International roaming;

Technology GSM/GPRS - in all Capitals;

CAPEX through 2004: R$ 2.7 billion (R$ 1.4 billion until 1H02).

September/0235

TariffsTariffs

Oi 40 Oi 80 Oi 160 Oi 300

Monthly Fee (R$) 29.90 47.90 79.90 114.00

Minutes 40 80 160 300

Tariff (R$ / min) 0.75 0.60 0.50 0.38

 

Post- Paid

Pre-PaidTariffs (R$ per minute)

Normal

0.34

0.69

1.39

1.49

Limited

0.99

FlatOi to Fixed -lineOi to Oi

Oi to other cellular company

Oi to Fixed-lineOi to OiOi to other cellular company

September/0236

1.1

0.4

1.0

2001 2002E

CAPEXCAPEX

• 2001 / 2004: R$ 3.8 bnR$ 1.1bn – License (2001)R$ 2.7 bn – Network

• Network CAPEX (R$ bn):

1H02

September/0237

2002 – Industry Outlook2002 – Industry Outlook

Increasing competition DLD Market (Outgoing calls from Regions 1 and 3)

Data Businesses (Corporate – Nationwide)

Regulatory Issues

Interconnection Battle Long Distance x Local Telcos

Wireline x Wireless

Use of Universalization Funds (FUST)

Bad Debt Control – New Procedures

SMP Rules (Wireless)

Introduction of 2.5 G (?)

Beginning of Consolidation / Alliances / Partnership´s

Cellular/Cellular (Block Strategy – TEM/PT; TIM; Telecom Americas)

ILEC´s / CLEC´s

ILEC´s / Mirrors

ILEC´s / Cellular ( Band B´s / Independents)

ILEC´s / ISP´s (Flat Rate Model)

September/0238

This presentation contains forward-looking statements. Statements that are not historical facts,

including statements about our beliefs and expectations, are forward-looking statements and involve

inherent risks and uncertainties. These statements are based on current plans, estimates and

projections, and therefore you should not place undue reliance on them. Forward-looking statements

speak only as of the date they are made, and we undertake no obligation to update publicly any of them

in light of new information or future events.

““SAFE HARBOR” STATEMENTSAFE HARBOR” STATEMENT

Investor Relations

Rua Humberto de Campos, 425 / 8º andar

Leblon

Rio de Janeiro -RJ

Phone: ( 55 21) 3131-1314/1315/1316/1313

Fax: (55 21) 3131-1155

E-mail: invest@telemar.com.br

Visit our website: http://www.telemar.com.br/ri