In 2005, the company recorded US$ 56 million in net income, an improvement in

comparison to the US$ 96 million net loss recorded for 2004. Stronger operating
results and lower foreign exchange exposure supported this positive change. NET’s rev-
enues rose 14% in 2005, reaching US$ 669 million, versus US$ 497 million in 2004.
This result is due to the increase in both pay-TV and broadband subscriber base and to
higher revenue coming from pay-per-view (“PPV”). In the year, consolidated EBITDA
reached US$ 186 million, a 46% jump in comparison to US$ 128 million for the pre-
vious year. Consistent subscriber growth and cost control measures explain the growth.
Cash, by the end of the second quarter of 2006, totaled US$ 135 million, a 6% increase
in comparison with the US$ 127 million recorded at the end of the fourth quarter of
2005. In 2005, there was a 40% growth and costs and expenses totaling US$ 474 mil-
lion versus US$ 339 million in 2004.
The company ended the 2005 with 4,181 employees, a 30% growth in comparison
to 2004. This growth was concentrated in the sales and installation departments, rep-
resenting almost a 100% variable component and sustained by the company’s acceler-
ated growth strategy.

Results
It is always difficult to say with any certainty what drives a company’s value in the stock
market. However, it is hard to avoid the conclusion that had NET not implemented
stricter corporate governance standards, its share price and overall market value growth
would not have been as impressive.
In June 2006, NET’s market value reached US$ 2.4 billion, with US$ 115 million
in EBITDA. NET has improved its capital structure and is pursuing growth opportu-
nities on a very solid financial footing. The market is acknowledging these improve-
ments. Two large institutional investors have publicly stated that they each now own
more than 5% of the preferred (non-voting) shares. This not only demonstrates that
they support the company’s current strategy, but also that they are comfortable with the
new corporate governance framework.
NET’s share price rose 149% from 2004 (R$ 0.43) to 2005 (R$ 1.07), and signifi-
cantly outperformed the Ibovespa, IGC and IBrX50 stock indices, as shown below.
In 2005, the company received two awards, one from Institutional Investor maga-
zine and another from APIMEC-RJ, where the transparency policy adopted was direct-
ly recognized. The company has been invited to several groups of companies that dis-
cuss and analyze best corporate governance practices with investors and regulators.
In 2006, NET was judged among the Top 5 IR websites by IR Global Rankings and
was nominated for the IR Magazine Award 2006 Brazil as one of the companies that
demonstrated Higher Evolution in IR.

68 Companies Circle