TCRLA_Public/050307.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

           Monday, March 7, 2005, Vol. 6, Issue 46

                            Headlines


A R G E N T I N A

BANCO GANADERO: Moody's Affirms Caa2 Global LC, FC Ratings
CABLEVISION: Fintech Buys 50% of Cable Operator
CAPEX: Fitch Assigns CC(arg) Rating to Bonds
COMPANIA MEGA: Fitch Affirms Ratings at 'B+'
DISTRI GRAF: Bankruptcy Initiated Following Court Ruling

ENAN S.A.: Seeks Reorganization Approval from Court
METROGAS: Extends APE Solicitation Period
MULTIMEDIO UNO: Court Rules Liquidation Required
SIDERAR: Nearly Quadruples Income in 2004, Profits Skyrocket
SIDERAR: To Invest $680M Between 2005-2008

VINTAGE PETROLEUM: Board OKs Cash Dividend Distribution
* Debt Swap Acceptance Rate Totals 76%


B E R M U D A

GLOBAL CROSSING: Citigroup Settles Case for $75 Million
INTELSAT: Fitch Maintains Ratings Despite Recent Changes
INTELSAT: Revenues Up 23% in 4Q04


B R A Z I L

AMBEV: Consolidated EBITDA Up Substantially In 4Q04
AOL LATIN AMERICA: Outlines Executive Retention Agreements
BANCO ITAU: Provides Additional Detail on LASA Deal
TELEMAR: Absorbes Accumulated Losses With Capital Reduction
TELEMAR: Results Continue to Improve, EBITDA up in 2004


D O M I N I C A N   R E P U B L I C

* Analysts Expect Debt Swap Bill Approval Soon


M E X I C O

ALFA: Subsidiary Completes Purchase of New Dairy Asset
PRIDE INTERNATIONAL: Bounces Back To Profit in 4Q04
SANLUIS CORPORACI0N: High Steel Cost Dampens 2004 Profit


V E N E Z U E L A

CERRO NEGRO: ExxonMobil To Discuss Tax Hike With Venezuela
CITGO: Venezuelan Governmant Launches Regulatory Probe
* S&P Raises Foreign Currency Ratings to 'B' from 'SD'


     - - - - - - - - - -

=================
A R G E N T I N A
=================

BANCO GANADERO: Moody's Affirms Caa2 Global LC, FC Ratings
----------------------------------------------------------
Moody's Investors Service upgraded the National Scale Rating
(NSR) for the local and foreign currency deposits of Banco
Ganadero S.A. to Baa2.bo from Baa3.bo. Moody's said that the
rating upgrade reflected the restructuring of the bank's capital
aided by the increased support of its majority shareholders as
well as its improved ranking relative to other domestic issuers.

Moody's also affirmed Banco Ganadero's Caa2 global local and
foreign currency deposit ratings and E financial strength
rating.

Moody's noted that Moody's global ratings indicate the relative
credit risk of banks on a globally comparable basis. Banco
Ganadero's global local currency deposit ratings are at the same
level as the foreign currency deposit ratings, as in the case of
all of the rated Bolivian banks. This reflects Bolivia's highly
dollarized financial system which, together with a weak fiat
currency, severely limits the Central Bank's ability to act as a
true lender of last resort.

Moody's National Scale Ratings are assigned based on the
corresponding global rating for either local or foreign currency
instruments. Moody's NSR, which carries the country identifier
of ".bo," ranks the likelihood of credit loss among issuers in a
particular country. The NSR is intended for domestic use and is
not globally comparable. NSRs are not opinions on absolute
default risks and therefore in countries with overall low credit
quality, even highly rated credits on the National Scale may be
susceptible to default.

The following ratings have been affected:

National Scale Rating for Local Currency Deposits: upgraded to
Baa2.bo from Baa3.bo

National Scale Rating for Foreign Currency Deposits: upgraded to
Baa2.bo from Baa3.bo

CONTACT: New York
         Ms. M. Celina Vansetti
         Senior Vice President
         Financial Institutions Group
         Moody's Investors Service
         JOURNALISTS: 212-553-0376
         SUBSCRIBERS: 212-553-1653

         Buenos Aires
         Ms. Maria Andrea Manavella
         Vice President - Senior Analyst
         Financial Institutions Group


CABLEVISION: Fintech Buys 50% of Cable Operator
-----------------------------------------------
Argentina's Cablevision (CBV.YY) announced in a press statement
Thursday the acquisition by U.S.-based fund Fintech Media LLC of
a 50% stake in the cable operator, Dow Jones Newswires relates.

Cablevision, which received notification of the ownership change
on Wednesday, said Fintech bought 100% of the units that make up
VLG Argentina LLC, which in turn controls 50% of the cable
company. Fintech acquired VLG Argentina from Liberty Media Corp.
The other 50% remains in the hands of units controlled by Texas-
based fund Hicks Muse Tate & Furst (HIX.XX). No changes were
made to the company's management team.

Cablevision, Argentina's leading cable television and cable
modem provider, reached a resolution to a long-running and
contentious US$725 million debt restructuring in November after
settling out of court with its main holdout creditor.

Meanwhile, Cablevision also said in its Thursday statement that
the company plans to invest US$220 million over the next five
years. The cable operator plans to launch digital television and
a voice-over-IP telephone service.

CONTACTS: Mr. Santiago Pena
          Phone: (5411) 4778-6520
          E-mail: mpigretti@cablevision.com.ar

          Mr. Martin Pigretti
          Phone: (5411) 4778-6546
          E-mail: spena@cablevision.com.ar

          Web Site: www.cablevision.com.ar


CAPEX: Fitch Assigns CC(arg) Rating to Bonds
--------------------------------------------
The Comision Nacional Valores (CNV), Argentina's securities
regulator, reveals that a total of US$190 million in corporate
bonds issued by Capex S.A. have been given a `CC(arg)' rating by
Fitch Argentina Calificadora de Riesgo S.A.

The bonds affected by the current rating include:

-  US$40 million worth of bonds described as "Obligaciones
Negociables Simples" that matured on June 11, 2004; and

- US$150 million worth of bonds also described as "Obligaciones
Negociables Simples" that matured on January 1 this year.

Fitch assigns a `CCarg' rating on issues that possess high
default risks. With these bonds, capacity for meeting financial
commitments is dependent upon sustained, favorable economic
conditions.

Concurrently, Fitch placed a default rating on US$105 million
worth of bonds. The bonds described as "Obligaciones Negociables
Simples" matured on December 23, 2004.

Capex produces gas and generates electric power at the wellhead
in Neuquen province.

CONTACT:  Capex SA
          5/F DepartmentC
          948/950 Av Cordoba
          Buenos Aires
          Argentina
          Phone: +54 11 4322 4884
          Home Page: http://www.capex.com.ar
          Contact:
          Enrique Gotz, Chairman
          Dr. Alejandro Enrique Gotz, Vice Chairman


COMPANIA MEGA: Fitch Affirms Ratings at 'B+'
--------------------------------------------
Fitch Ratings has affirmed Compania Mega S.A.'s (Mega) senior
secured international debt rating at 'B+' and Argentine national
scale rating at 'A(arg)'. The rating applies to the outstanding
US$168 million series G notes that are held on a pro rata basis
by the sponsors.

The rating affirmation reflects the continued strong operational
and financial performance of the project, significant liquidity,
and the fact that all debt is now held by the sponsors. Fitch
has also considered the elimination of the previous collateral
structure following the acquisition of the outstanding debt by
Mega's sponsors.

On Dec. 5, the sponsors exercised their call option for 62% of
the floating rate notes (FRNs)(US$105.6 million). On Dec. 21 and
23, 2004, Mega repurchased the outstanding FRNs for US$158.6
million. This transaction was financed with the repayment of a
loan granted by Mega to its sponsors (US$131.5 million) and its
own cash position.

Currently, the total debt consists of series G due 2014 for
US$168 million. As of December 2004, after the completion of the
transaction, Mega's liquidity position was US$124.3 million.
Fitch expects the existing bonds to be prepaid prior to
maturity.

Mega's operational and financial performance through September
2004 was strong, reflecting favorable petrochemical prices (up
33%) combined with increased production and sales volumes. In
the first nine-month period, total sales increased 37% to US$352
million, with a record level of net free cash flow of US$187
million. Despite the new tax on exports (US$22 million as of
September 2004), earnings in 2004 were positively affected by
higher benchmark oil prices, with a net result totaling US$87
million.

Exports represent approximately 58% of total volume sold in 2004
and a similar percentage in terms of USD sales. As indicated by
Mega's management, export revenues will continue to be collected
in an offshore account in New York. By law, the proceeds must be
brought back to Argentina and liquidated in the local exchange
market within 180 days of shipment. Revenues from local market
sales are collected in Argentina.

The prices of Mega's products follow crude oil price swings.
Fitch's price deck for WTI in 2005 and 2006 is US$35/bbl and
US$27/bbl, respectively. Mega is expected to continue operating
under a favorable price scenario, generating significant cash
flows, although lower than present levels, and maintaining
strong operating margins (EBITDA margin of 52% as of September
2004). Average net operating cash flow is expected to decrease
from current levels as Mega starts to pay income tax in May 2005
after the depletion of the tax credits accumulated from the
construction of its productive facilities.

During 2004 Mega significantly reduced its debt levels, to
US$168 million in December 2004 from US$393 million in December
2003. Liquidity is strong with approximately US$124 million of
excess cash as of December 2004 (US$119 million is held
offshore). Between 2005-2008 Mega's debt service (including
principal and interests) will be approximately US$22 million,
resulting in projected average debt service coverage ratio
(DSCR) of 4.6 times (x). In 2009, debt service is scheduled to
increase to US$42 million, which would reduces the DSCR to the
mid-1x range.

Compania Mega is composed of a natural gas separation plant, a
natural gas liquids fractionation plant, a 600-km pipeline, and
related storage and loading facilities in Argentina. Mega has an
annual total capacity to produce 369,000 metric tons (MT) of
propane, 242,000 MT of butane (collectively the LPG [liquid
petroleum gas]) mix), 562,000 MT of ethane, and 223,000 MT of
natural gasoline. The project's revenue is sourced from
approximately one-third ethane sales to PBB Polisur (controlled
by Dow Investment Argentina S.A.) and approximately two-thirds
export sales of LPG and natural gasoline to Petrobras.


DISTRI GRAF: Bankruptcy Initiated Following Court Ruling
--------------------------------------------------------
Distri Graf S.A. enters bankruptcy protection after Court No. 5
of Buenos Aires' civil and commercial tribunal, with the
assistance of the city's Clerk No. 9, ordered the company's
liquidation. The order effectively transfers control of the
company's assets to the court-appointed trustee who will
supervise the liquidation proceedings.

Infobae reports that the court selected Mr. Julio Cesar
Capovilla as trustee. He will be verifying creditors' proofs of
claims until the end of the verification phase on April 22.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the company's accounting
and business records. The individual reports will be submitted
on June 6 followed by the general report that is due on August
3.

CONTACT: Mr. Julio Cesar Capovilla, Trustee
         Avda Corrientes 3859
         Buenos Aires


ENAN S.A.: Seeks Reorganization Approval from Court
---------------------------------------------------
Court No. 21 of Buenos Aires' civil and commercial tribunal is
currently reviewing the merits of the reorganization petition
filed by Enan S.A. Infobae reports that the company filed the
request after defaulting on its debt payments.

The reorganization petition, if granted by the court, will allow
the Company to negotiate a settlement with its creditors in
order to avoid a straight liquidation.

The city's Clerk No. 41 assists the court on this case.

CONTACT: Enan S.A.
         Viamonte 1592
         Buenos Aires


METROGAS: Extends APE Solicitation Period
-----------------------------------------
MetroGAS S.A. (the "Company") announced Wednesday that it is
further extending its solicitation (the "APE Solicitation") from
holders of its 9-7/8% Series A Notes due 2003 (the "Series A
Notes"), its 7.375% Series B Notes due 2002 (the "Series B
Notes") and its Floating Rate Series C Notes due 2004 (the
"Series C Notes" and, together with the Series A Notes and the
Series B Notes, the "Existing Notes") and its other unsecured
financial indebtedness (the "Existing Bank Debt" and, together
with the Existing Notes, the "Existing Debt"), subject to
certain eligibility requirements, of powers of attorney
authorizing the execution on behalf of the holders of its
Existing Notes of, and support agreements committing holders of
its Existing Bank Debt to, execute an acuerdo preventivo
extrajudicial (the "APE") until 5:00 p.m., New York City time,
on April 1st, 2005 (the "New Expiration Date"), unless further
extended by the Company.

APE Solicitation

As of 5:00 p.m., New York City time, on March 1st, 2005, powers
of attorney and support agreements had been received with
respect to approximately US$85,955,000 principal amount of
Existing Debt. The APE Solicitation will remain in all respects
subject to all terms and conditions described in the Company's
Solicitation Statement dated November 7, 2003.

This press release is not an offer in any jurisdiction,
including the United States and Italy, of the rights or the
interests in the APE arising from the execution of the APE or
any of the securities that may be issued if the ape is approved
by the reviewing court.  Neither the rights nor the interests in
the APE arising from the execution of the APE nor any of the
securities that may be issued if the APE is approved by the
reviewing court may be sold (a) in the United States absent
registration or an exemption from registration under the United
States securities act of 1933, as amended (the "securities
act"), or (b) in any other jurisdiction in which such sale is
prohibited.  The company has not registered and will not
register under the securities act the rights or the interests in
the APE arising from the execution of the APE or any of the
securities that may be issued if the ape is approved by the
reviewing court.  The APE solicitation is not being and will not
be made to holders of existing debt located in Italy and will be
made to them, if at all, at a later date and in full compliance
with Italian laws and regulations.

The Settlement Agent for the APE Solicitation is JPMorgan Chase
Bank and its telephone and fax numbers are (212) 623-5136 and
(212) 623-6216, respectively.

Any holder wishing to receive a copy of the the Solicitation
Statement and/or ancillary documents should contact J.P. Morgan
Securities Inc. at 1-877-217-2484 in the United States or
JPMorgan Chase Bank Buenos Aires at 54-11-4348-3475/4325-8046 in
Argentina.

CONTACT: MetroGAS S.A.
         Gregorio Araoz de Lamadrid 1360
         C 1267 AAB Buenos Aires, Argentina
         Phone: 5411-4309-1000


MULTIMEDIO UNO: Court Rules Liquidation Required
------------------------------------------------
Court No. 12 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Multimedio Uno S.A. after the company
defaulted on its debt obligations, Infobae reveals. The
liquidation pronouncement will effectively place the company's
affairs as well as its assets under the control of Mr. Juan
Angel Fontecha, the court-appointed trustee.

Mr. Fontecha will verify creditors' proofs of claims until April
26. The verified claims will serve as basis for the individual
reports to be submitted in court on June 8. The submission of
the general report follows on August 3.

The city's Clerk No. 24 assists the court on this case that will
end with the disposal of the company's assets to repay
creditors.

CONTACT: Mr. Juan Angel Fontecha, Trustee
         Parana 785
         Buenos Aires


SIDERAR: Nearly Quadruples Income in 2004, Profits Skyrocket
------------------------------------------------------------
Siderar (ERAR.BA) reported on Thursday a net profit of ARS1.344
billion ($1=ARS2.9525) in 2004, a big jump from the ARS422.2
million income the Argentine flat steel maker posted in 2003,
Dow Jones Newswires relates. For the fourth quarter, the company
posted a net profit of ARS487.3 million ($1=ARS2.9525) which is
more than triple its ARS137.8 million net profit in the year-
earlier period.

Despite a dip in output due to some maintenance stoppages and
adjustments from the re-starting of a previously idle furnace,
net sales for 2004 still came in at ARS3.666 billion from
ARS2.731 billion a year earlier. Its total shipments fell 4% in
2004 to 2.167 million tons, with domestic shipments rising 26%
to 1.555 million tons, and export shipments falling 40% to
612,000 tons.

The company also said it has booked an accounting gain of
ARS149.9 million in 2004, reversing an ARS193.4 million loss a
year earlier.

Siderar's total financial debt as of the end of 2004 stood at
ARS19.9 million, a big reduction from the ARS776.2 million load
it had a year earlier. The company has reached a debt
restructuring agreement with its creditors in March 2003 and
paid off the rest of its restructured debt on Sept. 30.


CONTACT: Mr. Leonardo Stazi (CFO)
         Mr. Pablo Brizzio (Financial Manager)
         Siderar S.A.I.C.
         Phone: 54 (11) 4018-2308/2249
         Web Site: www.siderar.com


SIDERAR: To Invest $680M Between 2005-2008
------------------------------------------
Siderar, Argentina's largest iron and steel company, is planning
to increase production capacity by investing some US$680 million
between 2005 and 2008, reports Dow Jones Newswires. In a filing
with the local stock exchange, Siderar said its production
capacity will rise from its current 2.6 million tons per year to
4 million tons in 2008.

"This investment plan ... will permit the company to support
growth in Argentina's industrial sector and, at the same time,
maintain an active participation in international markets," the
company said. The plan also calls for technological improvements
and the refurbishing of current production lines to make output
more efficient.

A unit of Argentine industrial conglomerate Techint, Siderar
spent about US$82 million last year on information technology
and other minor equipment adjustments.

CONTACTS: Siderar S.A.I.C.
          Mr. Leonardo Stazi (CFO)
          Mr. Pablo Brizzio (Financial Manager)
          54 (11) 4018-2308/2249

          Web Site: www.siderar.com


VINTAGE PETROLEUM: Board OKs Cash Dividend Distribution
-------------------------------------------------------
Vintage Petroleum, Inc. (NYSE:VPI) announced Thursday that its
board of directors has authorized a cash dividend of five cents
per share. The company said the dividend will be paid April 5,
2005, to stockholders of record on March 23, 2005.

About Vintage Petroleum

Vintage Petroleum, Inc. is an independent energy company engaged
in the acquisition, exploitation and exploration of oil and gas
properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Okla., and its common shares
are traded on the New York Stock Exchange under the symbol VPI.

CONTACT: Vintage Petroleum, Inc.
         Tulsa
         Mr. Robert E. Phaneuf
         Phone: 918-592-0101

         Web site: http://www.vintagepetroleum.com.


* Debt Swap Acceptance Rate Totals 76%
--------------------------------------
Argentina's Economy Minister Roberto Lavagna announced Thursday
that creditors holding 76 percent of Argentina's debt in default
accepted the government's swap offer in the biggest debt
restructuring in modern times, Reuters reports. The results of
the debt swap fell within the 70 to 80 percent range predicted
by analysts.

"The markets have spoken, they have spoken with clarity,
accepting very clearly the Argentine government's proposal,"
said Mr. Lavagna, the architect of the swap two years in the
making.

The minister said US$62.2 billion in debt entered the swap from
a total of US$81.8 billion in principal. Argentina will issue
US$35.2 billion in new debt to those creditors.

The government offered to swap US$102.6 billion including past
due interest in default for more than three years, for up to
US$41.8 billion at a loss of up to 70 percent for bondholders.

Meanwhile, the government will be making two debt payments
totaling US$300 million to the IMF on March 9, according to ISI
Emerging Markets. Of this amount, US$150 million can be
refinanced, but the Ministry of Economy has opted not to delay
this payment for another year since it prefers the country to
pay back its loans the soonest possible time.

The government will also make other debt payments to the Fund
this month, assuming that the Treasury does not request a last-
minute deferral. In addition to the March 9 payments, Argentina
must make a separate payment on March 18 and two others on March
28.


=============
B E R M U D A
=============

GLOBAL CROSSING: Citigroup Settles Case for $75 Million
-------------------------------------------------------
Citigroup, the world's largest financial-services company,
announced Wednesday it has settled a class-action litigation
related to research matters brought on behalf of purchasers of
Global Crossing Ltd. securities, The Associated Press reports.

The company, however, specifically denied it has violated any
law, saying it is entering into the settlement "solely to
eliminate the uncertainties, burden and expense of further
protracted litigation."

Under the terms of the settlement, Citigroup will pay US$75
million pretax, or US$46 million after tax, to the settlement
class, which consists of all investors in publicly traded
securities of Global Crossing or Asia Global Crossing during the
period from Feb. 1, 1999, through Dec. 8, 2003. The settlement
payment "is covered by existing reserves and is part of
Citigroup's effort to resolve open litigation issues promptly
and fairly whenever possible", the company said.

The plaintiffs are now mulling the allocation of two-thirds of
the settlement amount to investors in underwritten public
offerings of Global Crossing securities and one-third to other
investors in Global Crossing securities, Citigroup said.

The terms of the settlement and the final plan of allocation
will be subject to review by the court.


INTELSAT: Fitch Maintains Ratings Despite Recent Changes
--------------------------------------------------------
After Thursday's earnings announcement and management conference
call by Intelsat, Ltd. (Intelsat), Fitch Ratings has maintained
the ratings of the company. However, after having obtained
certain approvals and completed certain asset transfers, the
issuing entities of some of its recently issued debt have
changed. Intelsat's wholly owned subsidiary, Intelsat (Bermuda),
Ltd. (Intelsat Bermuda) created a new subsidiary named Intelsat
Subsidiary Holding Company Ltd. (Intelsat Subsidiary) and
transferred substantially all of its assets and liabilities to
Intelsat Subsidiary. This included about $3.2 billion of Fitch-
rated debt. Additionally, the $478.4 million (face amount) of
senior unsecured discount notes due 2015 originally issued by an
intermediate holding company named Zeus Special Sub Ltd. (Zeus)
have now become obligations of Intelsat Bermuda with Intelsat as
a co-obligor. The approximately $1.7 billion of outstanding
senior unsecured notes issued by Intelsat remain there.

Intelsat also reported its fourth-quarter financial results
today. Reported revenues of $283 million and free cash flow
after capital spending (including satellite deposits and
payments for orbital rights) of $136 million were as expected.
There were no major changes in market conditions noted on
today's management-led conference call that would lead Fitch to
change its expectations for the future as discussed in our
Intelsat Credit Analysis report dated Feb. 2, 2005 and as
modified to incorporate the issuance of the senior discount
notes in our press release dated Feb. 8, 2005.

Based on the recent financial performance and no change in our
expectations, Fitch's ratings on Intelsat and its subsidiaries
remain the same. However, due to the changes described above, we
have withdrawn our ratings on Zeus, affirmed Intelsat's ratings,
and assigned ratings to Intelsat Bermuda and Intelsat Subsidiary
as follows:

Intelsat, Ltd.:

- No change to senior unsecured notes at 'CCC+'.

Intelsat (Bermuda), Ltd. (formerly Zeus Special Sub Ltd.):

- Senior unsecured discount notes at 'B-'.

- Intelsat Subsidiary Holding Company Ltd.
  (formerly Intelsat (Bermuda), Ltd.:

- Senior unsecured notes at 'B';
- Senior secured credit facilities at 'BB-'.

The Stable Rating Outlook reflects the prospects for stable
revenues from its lease backlog and the expected resulting free
cash flow offset by a very competitive operating environment and
ownership by an investment group.

Fitch's rating action affects about $5.4 billion of existing
debt including undrawn bank lines.

This action is based on existing public information and is being
provided as a service to investors.

CONTACT: Fitch Ratings
         Mr. Phelps B. Hoyt
         Phone: 312-368-3205
         Mr. Michael Weaver
         Phone: 312-368-3156
         Media Relation:
         Mr. Brian Bertsch
         Phone: 212-908-0549


INTELSAT: Revenues Up 23% in 4Q04
---------------------------------
Intelsat, Ltd., a global satellite communications leader
providing services in over 200 countries and territories,
reported Thursday results for the three months and fiscal year
ended December 31, 2004.

Intelsat, Ltd. and its subsidiaries, referred to as Intelsat,
reported revenue of $283.4 million and a loss from continuing
operations of $49.0 million for the quarter ended December 31,
2004, including a non-cash impairment charge of $84.4 million
related to the IA-7 satellite, which, as previously reported,
suffered an electrical distribution anomaly on November 28,
2004.

The company also reported positive EBITDA from continuing
operations, or income from continuing operations before
interest, taxes and depreciation and amortization, of $95.2
million for the quarter, which includes the effect of the IA-7
satellite impairment charge and one-time and unusual charges of
$5.4 million related to severance, Loral transition services,
and expenses associated with the transaction involving Zeus
Holdings Limited, which recently changed its name to Intelsat
Holdings Limited (see discussion in Recent Events section
below).

(In this release, financial measures are presented both in
accordance with United States generally accepted accounting
principles and also on a non-GAAP basis. All EBITDA from
continuing operations, covenant EBITDA, and Free Cash Flow
figures in this release are non-GAAP financial measures. Please
see the financial summary below for information reconciling non-
GAAP financial measures to comparable GAAP financial measures.)

For all of 2004, Intelsat reported revenue of $1.04 billion and
income from continuing operations of $7.0 million. EBITDA from
continuing operations for the full year was $621.9 million.
These figures include the aforementioned $84.4 million non-cash
impairment charge and $26.0 million of one-time and unusual
charges, including the severance, Loral transition services, and
expenses associated with the Intelsat Holdings transaction as
described above.

The company also reported "covenant EBITDA" for the year ended
December 31, 2004 of $800.2 million. "Covenant EBITDA," is a
term defined in the covenants to the company's credit agreement
dated January 28, 2005, and is a pro forma presentation of
EBITDA. Please see the discussion of financial results for the
12 months ended December 31, 2004 below for an explanation of
this measure.

Intelsat generated strong free cash flow from operations of
$320.5 million for 2004. Free cash flow from operations is
defined as net cash provided by operating activities, less
payments for satellites and other property, plant and equipment
and associated capitalized interest, and a $50 million down
payment on a future satellite. The 2004 figure also includes a
customer prepayment for services of $87.7 million.

For the fourth quarter and 2004 fiscal year, Intelsat recorded
losses from discontinued operations of $6.1 million and $43.9
million, respectively, reflecting the company's previously
announced disposal of its interest in Galaxy Satellite
Broadcasting Limited.

"The revenue growth of 10% and solid cash flow achieved in 2004
evidence execution on the central elements of our business
strategy," said Intelsat chief executive officer Conny Kullman.

"The acquisitions of the Intelsat Americas fleet and COMSAT
General, which is now integrated with our Intelsat General
government solutions business, have been immediately accretive
and have improved our competitive positioning in the industry's
key growth segments: corporate networks, video and government
services. Our managed services offerings, conceived to help
customers efficiently navigate the rapidly changing
telecommunications landscape, contributed $75 million in new
revenue, more than double the 2003 level. In addition to
strategic execution, our customerfacing and technical teams have
done an outstanding job in mitigating service disruptions and
revenue impact from the recent IA-7 anomaly and a subsequent
anomaly in 2005 involving the IS-804 satellite."

"Intelsat is entering 2005 focused on its strengths - corporate
networks, government services, and North American video.
Intelsat has a young, flexible satellite fleet, and with solid
backlog, stable trends in our lease business, and a favorable
capital expense outlook, the company is positioned to build on
its 2004 successes."

RECENT EVENTS

- On January 28, 2005, Intelsat announced the successful closing
of the amalgamation under Bermuda law of Intelsat and a
subsidiary of Intelsat Holdings Limited ("Intelsat Holdings"), a
transaction valued at approximately $5 billion including
approximately $2 billion in existing net debt.

Intelsat Holdings is a company formed by a consortium of funds
advised by or associated with Apax Partners, Apollo Management,
Madison Dearborn Partners and Permira. Shares of Intelsat
immediately prior to the closing were generally converted into
the right to receive $18.75 per share.

Intelsat (Bermuda), Ltd. completed $2.7 billion in funded new
financings, including $2.55 billion in senior notes and $150
million in bank financing used to fund the transaction.
Subsequently, Intelsat, Ltd. and a newly formed subsidiary
completed an additional financing of senior discount notes,
which yielded net proceeds of approximately $300 million that
are being used to fund the repurchase by Intelsat Holdings of a
portion of preferred shares held by its shareholders. Effective
as of March 3, 2005, the $2.7 billion of acquisition financings
referred to above will become obligations of a newly formed
subsidiary of Intelsat (Bermuda), Ltd., with Intelsat (Bermuda),
Ltd. as guarantor, and the senior discount notes will become
obligations of Intelsat (Bermuda), Ltd. with Intelsat, Ltd.
remaining as a co-obligor.

- On January 16, 2005, the company reported a sudden and
unexpected electrical power system anomaly that resulted in the
total loss of the IS-804 satellite, which primarily served the
South Pacific region. Intelsat has established a failure review
board with manufacturer Lockheed Martin Corporation to
investigate the cause of the anomaly and estimates that it may
take several months for the board to reach its conclusions.
Intelsat expects to record a non-cash impairment charge of
approximately $73 million in the first quarter of 2005 to write
off the value of the IS-804.

- On December 10, 2004 Intelsat reported that it had restored
service on 22 transponders on the IA-7 satellite following a
sudden and unexpected electrical distribution anomaly that
occurred on November 28, 2004.

Intelsat is participating in a failure review board with
manufacturer Space Systems/Loral to investigate the cause of the
anomaly. While the board is expected to issue the final report
later this month, the board has identified the likely root cause
of the anomaly. This likely root cause is a design flaw that is
affected by a number of parameters and in some extreme cases can
result in an electrical system anomaly. This design flaw exists
on two of Intelsat's satellites - IA-7 and IA-6.

Intelsat presently believes, based on analysis by the IA-7
failure review board, that the probability of a further, similar
anomaly occurrence on the IA-7 satellite, or a similar anomaly
occurrence on the IA-6 satellite, is low.

As previously reported, Intelsat decided to delay the pending
launch of the IA-8 satellite until the causes of the IA-7
anomaly were fully understood. The failure review board has
determined that the IA-8 satellite does not include the same
design flaw that it has identified as the most likely cause of
the IA-7 anomaly. Therefore, we expect that the IA-8 satellite
will be launched during the second or third quarter of 2005. If
an anomaly as described above were to affect the IA-6 or IA-7
satellite after the launch of the IA-8 satellite, the IA-8
satellite would provide alternative capacity that could be used
to mitigate most of the impact on Intelsat's customers resulting
from such an anomaly.

- Intelsat completed the acquisition of the business of COMSAT
General Corporation, a provider of quick response communications
solutions to the U.S. Government, on October 29, 2004. Intelsat
acquired this business for a purchase price of approximately $90
million, together with assumed liabilities (net of accounts
receivable) of approximately $1 million and estimated
transaction costs of $2 million. Assumed liabilities included a
$10 million accommodation fee to be paid in connection with our
purchase of a launch vehicle from an affiliate of the COMSAT
Sellers.

The acquisition, which includes the rights to FCC and other
licenses, enhances Intelsat's competitive position in serving
U.S. and NATO users with satellite capacity and managed
satellite-based services. COMSAT General has been integrated
with the company's Intelsat Government Solutions Corporation
subsidiary and the combined entity has been renamed Intelsat
General Corporation.

FINANCIAL RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004

Intelsat's results for the three-month period ended December 31,
2004 compared with the corresponding prior-year period include
higher lease services revenue attributable to the Intelsat
Americas satellites and two full months of revenue from the
newly constituted Intelsat General Corporation, as well as
higher managed services revenue.

Higher revenues were offset by a non-cash impairment charge of
$84.4 million to write down the book value of the IA-7
satellite, and higher operating expenses, including higher cost
of sales related to the acquired businesses and the impact of
certain one-time and unusual charges incurred in part to
decrease the company's operating expenses going forward, as well
as incurred in connection with the Intelsat Holdings
transaction.

Total revenue increased $53.1 million, or 23 percent, to $283.4
million for the three months ended December 31, 2004 from $230.3
million for the three months ended December 31, 2003. The
increase was primarily attributable to a net increase in lease
services revenue of $45.1 million, which resulted from the
contribution of the Intelsat Americas satellites and Intelsat
General.

Channel services revenue declined by $9.5 million to $63.5
million, in line with recent trends, with this decline largely
offset by an increase of $8.6 million in revenue from managed
services, which totaled $22.5 million. Managed services revenues
were lower than the 2004 third quarter, due to $2.2 million of
non-recurring revenue in the third quarter related to coverage
of the Olympic Games.

Other revenues, primarily from mobile satellite services
provided by Intelsat General, totaled $9.9 million, up from less
than $1 million in the prior-year period.

Total operating expenses for the fourth quarter ended December
31, 2004 were $308.8 million, including the $84.4 million non-
cash impairment charge, representing a 79 percent increase from
the $172.2 million reported for the three months ended December
31, 2003.

Depreciation and amortization expense increased $19.2 million to
$121.1 million for the three months ended December 31, 2004,
primarily due to depreciation recorded on the Intelsat Americas
satellites as well as depreciation expense related to the 10-02
satellite that entered service in August 2004. The remaining
$33.0 million of increased operating expenses included $18.2
million in incremental operating expenses associated with
Intelsat General, increased direct costs of revenue of $9.4
million, and $5.4 million of one-time and non-recurring charges
related to severance and expenses associated with the Intelsat
Holdings transaction, among others.

Loss from continuing operations was $49.0 million for the three
months ended December 31, 2004 compared with income from
continuing operations of $27.3 million for the three months
ended December 31, 2003. The decrease during the period as
compared to the same period in 2003 was primarily due to the IA7
impairment charge. Loss from discontinued operations for the
three months ended December 31, 2004 was $6.1 million, compared
with a loss from discontinued operations of $1.2 million in the
2003 three-month period. Net loss for the three months ended
December 31, 2004 was $55.1 million, compared with net income of
$26.1 million for the three months ended December 31, 2003. The
factors described above, in addition to the effect of the
discontinued Galaxy venture, were responsible for the decrease.

EBITDA from continuing operations decreased $68.6 million, or 42
percent, to $95.2 million, or 34 percent of revenue, for the
three months ended December 31, 2004 from $163.8 million, or 71
percent of revenue, for the same period in 2003. The decrease
was primarily due to the IA-7 impairment charge, higher
operating expenses and lower other income, as described above,
offset in part by increased revenues. This reported EBITDA from
continuing operations also includes the effect of one-time and
unusual charges related to severance, Loral transition services,
and expenses associated with the Intelsat Holdings transaction
of $5.4 million.

The corresponding 2003 figure includes $4.4 million of other
income in connection with a reduction in an obligation payable
by Intelsat under a share purchase agreement with Teleglobe Inc.
The decrease in EBITDA from continuing operations as a
percentage of revenue was also due to the above-mentioned
factors, in addition to the effect of increased contributions
from managed services and Intelsat General, both of which carry
lower EBITDA from continuing operations margins than traditional
FSS services.

FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2004

Total revenue increased $97.8 million, or 10 percent, to
$1,043.9 million for the year ended December 31, 2004 from
$946.1 million for the year ended December 31, 2003. The
increase was primarily attributable to a net increase in lease
services revenue of $90.2 million, largely consisting of revenue
from the Intelsat Americas satellites. Channel services revenue
declined by $41.4 million to $264.6 million, in line with recent
trends, with this decline largely offset by an increase of $40.3
million in revenue from managed services, which totaled $75.5
million. Other revenues, primarily from mobile satellite
services provided by Intelsat General, totaled $13.1 million, up
from $4.4 million in the prior year.

Total operating expenses for the year ended December 31, 2004
were $877.0 million, including the $84.4 million non-cash
impairment charge, representing a 33 percent increase from the
$658.3 million reported for the year ended December 31, 2003.

Depreciation and amortization expense increased $56.9 million to
$457.4 million for the year ended December 31, 2004, primarily
due to depreciation recorded on the Intelsat Americas satellites
as well as higher depreciation for the IS-907 that entered
service in April 2003 and initial depreciation expense related
to the 10-02 satellite that entered service in August 2004.

The remaining $77.4 million of increased operating expenses is
primarily attributable to $18.2 million in incremental operating
expenses associated with Intelsat General, increased direct
costs of revenue of $18.1 million, $11.3 million in costs
associated with the company's share incentive plan, and $26.0
million in one-time and unusual charges related to severance and
expenses associated with the withdrawal of the previously
planned initial public offering and the Intelsat Holdings
transaction, among others.

For 2004, Intelsat reported income from continuing operations of
$7.0 million, compared with income from continuing operations of
$183.2 million for 2003. The decrease during the period as
compared to the same period in 2003 was principally due to the
IA-7 impairment charge, higher operating and interest expenses,
and lower other income.

Higher interest expenses were primarily associated with
Intelsat's 5.25% Senior Notes due 2008 and 6.50% Senior Notes
due 2013 issued in November 2003 in connection with the
acquisition of the Intelsat Americas satellites. Loss from
discontinued operations for the year ended December 31, 2004 was
$43.9 million, compared with a loss from discontinued operations
of $2.1 million in 2003.

Net loss for the year ended December 31, 2004 was $37.0 million,
compared with net income of $181.1 million for the year ended
December 31, 2003. The factors described above, in addition to
the effect of the discontinued Galaxy venture, were responsible
for the decrease.

EBITDA from continuing operations decreased $85.0 million, or 12
percent, to $621.9 million, or 60 percent of revenue, for the
year ended December 31, 2004 from $706.9 million, or 75 percent
of revenue, for the same period in 2003. The decrease was due to
the IA-7 impairment charge, higher operating expenses and lower
other income, offset in part by increased revenues. This
reported EBITDA from continuing operations also includes the
effect of $26.0 million of one-time and unusual charges,
including the severance, Loral transition services, and expenses
associated with the Intelsat Holdings transaction as described
above.

The corresponding 2003 figure includes $19.8 million of other
income in connection with a reduction in an obligation payable
by Intelsat under a share purchase agreement with Teleglobe Inc.

The decrease in EBITDA from continuing operations as a
percentage of revenue was also due to above-mentioned factors,
including the effect of increased contributions from managed
services and Intelsat General, both of which carry lower EBITDA
from continuing operations margins than traditional FSS
services.

Intelsat also calculates a measure of EBITDA, called "covenant
EBITDA," as defined by the covenants of its credit agreement
dated January 28, 2005. This measure of EBITDA is presented on a
pro forma basis, as if the company's March 2004 acquisition of
the Intelsat Americas assets and October 2004 acquisition of the
COMSAT General business had occurred as of January 1, 2004. The
measure also adjusts for certain operating expense items.
"Covenant EBITDA" was $800.2 million for the year ended December
31, 2004.

At December 31, 2004, Intelsat's backlog, representing expected
future revenue under contracts with customers, was $4.0 billion.
At September 30, 2004, Intelsat's backlog was also $4.0 billion.
Free cash flow from operations for 2004 was $320.5 million,
calculated as net cash provided by operating activities of
$659.1 million less payments for satellites and other property,
plant and equipment and associated capitalized interest of
$288.6 million and a $50.0 million down payment on a future
satellite. The $320.5 million of free cash flow includes a
customer prepayment for services of $87.7 million.

Intelsat believes that its global communications network is used
to support five principal service applications. Based on
Intelsat's analysis of transmission plans and other information
provided by customers, Intelsat estimates that the percentage of
consolidated revenue for the three-month periods ended December
31, 2003 and 2004 generated by the sale of capacity for each
service application category was as follows:

                        Three Months Ended December 31,
(unaudited)                   2003       2004
Carrier                        37%         29%
Corporate Networks             26%         26%
Video                          16%         18%
Government/Military            11%         19%
Internet                       10%          8%

About Intelsat

Building on 40 Years of Leadership. As a global communications
leader with 40 years of experience, Intelsat helps service
providers, broadcasters, corporations and governments deliver
information and entertainment anywhere in the world, instantly,
securely and reliably. Intelsat's global reach and expanding
solutions portfolio enable customers to enhance their
communications networks, venture into new markets, and grow
their businesses with confidence.

To view financial statements:
http://bankrupt.com/misc/Intelsat.pdf

CONTACT: Investor Relations and Financial Media
         Mr. Noah Asher
         Senior Vice President, Finance
         E-mail: noah.asher@intelsat.com
         Phone: + 1 202 944 7328

         Web site: http://www.intelsat.com


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B R A Z I L
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AMBEV: Consolidated EBITDA Up Substantially In 4Q04
----------------------------------------------------
Companhia de Bebidas das Americas - AmBev [NYSE: ABV, ABVc and
BOVESPA: AMBV4, AMBV3], the world's fifth largest brewer and the
leading brewer in Latin America, announced Wednesday its results
for the fourth quarter 2004 (4Q04).

The following financial and operating information, unless
otherwise indicated, is presented in nominal Reais pursuant to
Brazilian Corporate Law.

AmBev's consolidated results are the sum of three business
units:

1. Brazil (comprised of the Brazilian Beer; Brazilian Carbonated
Soft Drinks & Non-Alcoholic, Non-Carbonated Beverages (CSD &
Nanc); and "Malt & By-Products Sales");

2. Hispanic Latin America (HILA) (comprising (i) AmBev's average
54.8% economic stake in Quinsa and (ii) AmBev's controlled
franchises in Northern Latin America ("HILA - ex" operations)),
and

3. North America (represented by the operations of Labatt
Brewing Company Limited ("Labatt")). Comparisons, unless
otherwise stated, refer to the fourth quarter 2003 (4Q03).

OPERATING AND FINANCIAL HIGHLIGHTS

- FY2004 consolidated EBITDA reached R$4,537.3 (+47.7%),
representing 22.2% organic growth and 25.5% growth through new
investments.

- 4Q04 consolidated EBITDA achieved R$1.772.8 million; on a per
share basis, 4Q04 EBITDA increased 15.4% to R$32.5.

- Beer market share in Brazil achieved 68.1% in December,
confirming recovery efforts carried out through 2004; EBITDA
margin for Beer Brazil increased 240 basis points to 44.2%.

- Brazil CSD & Nanc EBITDA margin further improved in relation
to 3Q04, achieving a new benchmark of 32.4%.

- EBITDA for HILA operations increased 33.7%, representing 10.3%
of AmBev's consolidated EBITDA in the 4Q04.

- Labatt delivered EBITDA of R$425.2 million, in line with
AmBev's previous guidance of CAD$190 million.

Comments from AmBev Management

4Q04 results are quite meaningful for AmBev. First, the beer
market share in Brazil achieved 68.1% in December, highlighting
the merits of all AmBev people for the fantastic recovery
carried out through 2004. Furthermore, EBITDA margin for the
Brazilian Beer operation improved by 240 basis points,
fulfilling the company's commitment towards preserving
profitability while recovering market share. In addition to beer
results, CSD & Nanc operation improved margins beyond the record
levels achieved in 3Q04, reaching 32.4%. Consequently, AmBev's
Brazil business unit delivered robust 25.3% EBITDA growth in
4Q04. Nevertheless, accomplishments were not limited to Brazil.

HILA and North America also contributed substantially to AmBev
results. In the case of HILA, Quinsa continues to exceed budget
targets and to come through with significant EBITDA growth;
moreover, Northern Latin American operations provided important
outcomes last quarter, namely the well-executed launch of Brahma
in Ecuador, which reached high teen levels of market share in a
short period of time, Embodom results in the Dominican Republic
ahead of AmBev business plan, and the positive EBITDA generated
by CACN in Venezuela after sequential quarters of losses.

Finally, this was the first full quarter of Labatt results
consolidated into AmBev. The integration process between the two
companies is moving as expected, and the first results achieved
are in line with AmBev's previous guidance. We are enthusiastic
about the opportunities and challenges brought by the Canadian
beer market, and confident that Labatt will deliver the revenue
targets and cost reduction initiatives disclosed in the Canadian
business plan related to the Interbrew - AmBev deal.

2004 results reinforce our conviction on the merits of AmBev's
culture and strategy. Once again our company demonstrated the
strength of its operations, laying solid ground to pursue
further growth in 2005.

OPERATIONAL PERFORMANCE BY BUSINESS UNIT

BEER BRAZIL

Net Revenues

Net Revenues for Beer Brazil reached R$2,261.9 million, an
increase of 16.7%. This improvement was the result of a 14.3%
volume increase and a 2.1% change in revenues per hectoliter,
which increased to R$122.8. Continued market share recovery
contributed to the increase in sales volumes: AmBev's market
share reached 68.1% as of December 2004, compared to 63.2% in
December 2003 (according to ACNielsen). This consistent
recovery, achieved in a short period and at no expense to the
company's profitability, confirms the merits of AmBev's core
values and the quality and dedication of our employees and
distributors. On top of the share increase, Brazil's beer market
volumes recovered by 9.8% in Q404, also according to ACNielsen
data.

Net revenues per hectoliter increased to R$122.8 (up 2.1% versus
Q403 and 2.1% compared to 3Q04). On a sequential basis, the
increase was achieved through the successful implementation of a
5% average price repositioning at the end of December 2004 and
an increased proportion of the sales mix attributed to higher
margin direct distribution (4Q04: 44.3% X 3Q04: 40.7% X 4Q03:
38.1%). AmBev highlights that the magnitude of the previous
mentioned price adjustment is absolutely in line with current
inflation rates, confirming the company's commitment to keep
prices to consumers stable at real terms. It is also important
to mention that AmBev's market share in January 2005 decreased
by only 30 basis points, to 67.8%. The company does not expect
any significant decrease in the coming months.

Cost of Goods Sold (COGS)

COGS for the quarter amounted to R$769.9 million (an increase of
7.8%). COGS per HL was down by 5.7% to R$41.8 On a sequential
basis, COGS per HL was down by 2.6%. This sequential decrease is
a result of higher dilution of fixed costs due to higher
sequential volumes, and a better exchange rate scenario. Those
factors helped offset higher purchasing costs for aluminum cans
and crown caps, as well as a higher share of cans
in the sales mix, due to the increased relevance of supermarkets
during summertime.

AmBev also highlights that, although the exchange rate for the
Real in the 4Q04 appreciated significantly, the company was not
able to fully capture such benefit, for it had previously
locked-in foreign currency hedges for a substantial portion of
its costs. Nevertheless, the effective rate for the quarter, at
2.87 Reais per US dollar was lower than those implied in the
hedging instruments in both 3Q04 and 4Q03.

In addition, AmBev anticipates that it has fully hedged its
foreign currency exposure in costs in Brazil for the fiscal year
of 2005. The expected effective rates for each quarter are:
1Q05: 2.91; 2Q05: 2.98; 3Q05: 3.02; 4Q05: 3.11. The full-year
implied average exchange rate is expected at 3.02, compared to
2.94 in 2004. Those rates are subject to changes in interest
rates. Moreover, although current market exchange rates are
lower than the ones implied in AmBev's hedges, the company does
not expect its EBITDA margin in Brazil to decrease in comparison
to 2004.

Gross Profit

Gross profit for Beer Brazil increased by 21.9% to R$1,492.1
million. Gross margin was 66.0%, an increase of 280 points.

SG&A

SG&A for Beer Brazil were R$625.3 million for the quarter. The
largest contributors to the 14.0% increase were direct
distribution and general and administrative expenses. Due to a
higher share of direct distribution in the sales mix (4Q04:
44.3% versus 4Q03: 38.1%), direct distribution expenses
increased by 19.4% to R$182.8 million. The expenses incurred in
direct distribution are more than compensated by the resulting
higher net sales in this channel.

Direct distribution expenses per HL decreased by 10.0%,
primarily due to increased overall beer volumes in Brazil and
the dilutive fixed cost impact of increased direct distribution
volumes. On a sequential basis, direct distribution expenses per
HL are down by 17.7%, also due to higher volumes.

Sales & marketing expenses increased by 7.4% to R$245.3 million,
due to increased funds dedicated to advertisement and promotion
activities. While this amount exceeds previous guidance of
stable sales & marketing expenses (including Soft Drinks) during
the quarter, AmBev utilized these funds to achieve a 68.1%
market share in Dec 2004. In addition, despite the price
increase in the second half of December 2004, AmBev's market
share in January decreased by only 30 basis points, a much
smoother fluctuation than the ones experienced in previous years
after price increases. This reinforces the effectiveness of
investments in the equity of our brands, providing the
appropriate support to assure their profitability in the long
run.

Administrative expenses amounted to R$106.4 million, an increase
of 21.8%. This amount includes provisions for the employees'
bonus for the results in fiscal year 2004, as well as the
reversion in 4Q03 of 9 month cumulated provisions for the
payment of the bonus, as there was no variable compensation in
2003.

SG&A depreciation increased by 14.0% to R$90.8 million,
primarily due to the placement of new subzero coolers in 2004.

EBIT and EBITDA

Beer Brazil's EBIT reached R$866.8 million, an increase of
28.4%. EBIT margin was 38.3%, representing an expansion of 350
basis points EBITDA for the segment was R$998.7 million, an
improvement of 23.2%. EBITDA margin was up 230 basis points to
44.2%.

CSD & NANC

Net Revenues

Net Revenues for CSD & Nanc increased 13.4% to R$454.8 million,
and volumes were enhanced by 6.2% (a result of 15.0% growth in
CSD and 4.5% decline in Nanc). The CSD segment maintained stable
market share (Dec 04: 17.2%, Dec 03: 17.2%), while implementing
an inflation-based increase in consumer prices.

ACNielsen reports total CSD market volume growth of 4.9%. Net
sales per HL increased 6.7% to R$76.3 year over year and
decreased by 3.7% sequentially. The sequential change in sales
is due to a higher share of 2-liter PET bottles in the sales
mix, which have lower than average net sales per HL. That was an
expected effect since the relevance of supermarkets increases in
summertime.

COGS

COGS for the quarter increased 1.1% to R$246.9 million. COGS per
HL decreased 4.8% to R$41.4. In a sequential basis, increase in
volumes and the corresponding dilution of fixed costs, as well
as a more favorable exchange rate for the Real compared to 3Q04,
drove COGS per HL down by 2.5%. This more than offset increases
in the cost of aluminum and crown caps.

As already mentioned in the beer section, AmBev was not able to
fully benefit from the appreciation of the Real against the US
dollar in the 4Q04, for the company had a substantial portion of
its foreign currency exposure in costs in Brazil hedged at a
higher level than market rates.

Gross Profit

Gross Profit increased by 32.5% to R$208.0 million; the gross
margin expanded by 660 basis points to 45.7%.

SG&A

SG&A expenses increased 5.8% to R$97.7 million. The largest
contributor to this increase was Sales & Marketing. Direct
distribution expenses decreased 2.0% to R$36.5 million. Although
the proportion of the sales mix dedicated to direct distribution
increased to 54.6% in Q404 (3Q04: 51.5%; 4Q03: 52.8%), the
significant dilutive effect of higher volumes over fixed costs
resulted in a 10.1% decrease of expenses per HL, which amounted
to R$11.2. Direct distribution expenses per HL are down by 18.4%
sequentially, also due to higher volumes.

Sales & marketing expenses increased by 17.5% to R$28.2 million.
This expense level provides adequate support for the equity of
our core portfolio brands, Guaran  Antarctica and Pepsi Cola,
and is fundamental in order to maintain prices aligned with
inflation. These investments also provide a platform upon which
we expect to expand market share in the coming quarters.
Moreover, they are financed through gross margin improvements,
and do not affect our profitability.

Administrative expenses increased by 8.7% to R$3.7 million; the
increase is due to the FY04 bonus payment provision.
Depreciation expenses were up 5.7% to R$29.4 million.

EBIT and EBITDA

EBIT for the CSD and NANC segment was R$110.2 million, an
increase of 70.7%. EBIT margin was 24.2%, an expansion of 810
basis points. EBITDA for the CSD and NANC segment was R$147.2
million, an increase of 44.6%. EBITDA margins expanded 700 basis
points to 32.4%.

Malt & By-Product Sales

Sales of malt and by-products generated revenues of R$27.3
million, down 40.5%. The resulting EBIT and EBITDA were R$19.41
million (no depreciation is allocated to this operation),
representing a decrease of 9.6%.

HISPANIC LATIN AMERICA - HILA

Note: The Company has broken out the HILA results by segment:
Quinsa Beer, Quinsa Soft Drinks, HILA-ex Beer (ex-Quinsa) and
HILA-ex Soft Drinks (ex-Quinsa). The following analysis presents
Quinsa's consolidated results in Brazilian GAAP, rather than its
54.8% contribution to AmBev's operating results during 4Q04.

EBITDA for AmBev's Hispanic Latin America business unit amounted
to R$182.3 million, up 33.7% from the fourth quarter one year
ago. Organic growth accounted for the 10.4% portion of the
increase, while the 23.3% portion of the growth was due to new
investments, including AmBev's stake in Embodom in the Dominican
Republic. Overall, HILA contributed 10.3% to AmBev's
consolidated EBITDA in 4Q04.

AmBev's 54.8% stake in Quinsa contributed R$150.3 (US$55.1
million); representing an increase of 16.2% from the same
quarter one year ago. HILA-ex operations contributed R$32.0
million (US$11.9 million) to 4Q04 consolidated EBITDA; this
substantial increase represents organic growth of 125.6% from
the same quarter last year, plus the investment in the Dominican
Republic.

QUINSA BEER

Quinsa Beer net sales totaled US$195.0 million for the quarter.
Volumes during the same period were up 3.6% due to strong volume
performance in Bolivia and Paraguay, offsetting softer volume
performance in Argentina. Net sales per hectoliter were US$39.4,
up 9.9%, partially explained by the successful implementation of
price increases in Argentina and Paraguay.

Gross profit for Quinsa Beer operations amounted to US$125.0
million for the quarter, allowing for a gross margin expansion
of 80 basis points to 64.1%. EBIT totaled US$78.7 million,
driving the EBIT margin up 240 basis points to 40.3%, due in
part to lower depreciation expenses in the quarter. EBITDA
totaled US$93.2 million and EBITDA margin remained at 47.8%.
EBITDA contribution to AmBev's results totaled US$51.1 million.

QUINSA SOFT DRINKS

Quinsa Soft Drinks net sales totaled US$56.3 million for the
quarter. Volumes were up 13.6% during the same period due to
strong performance in both Argentina and Uruguay. Net sales per
hectoliter increased by 4.8% to US$26.2. Gross profit for Quinsa
Soft Drinks amounted to US$19.4 million for the quarter, with
gross margin down 50 basis points to 34.5%. EBIT totaled US$4.0
million, and EBIT margin decreased 430 basis points to 7.1%, due
in part to higher sales and marketing expenses. EBITDA totaled
US$7.3 million and EBITDA margin decreased 650 basis points to
12.9%. EBITDA contribution to AmBev's results totaled US$4.0
million.

HILA-EX BEER

HILA-ex Beer net sales increased 39.2%, totaling R$216.2 million
(US$46.2 million). Beer volumes were up 47.2%, largely due to
the successful launch of Brahma in Nicaragua and Ecuador.
Substantial growth in Venezuela contributed an outstanding
volume performance resulting in market gains thus achieving
nearly 14% of total market share. Net sales per hectoliter were
down 0.3% in dollar terms to US$56.4.

Cost of goods sold was up 28.5% to R$59.1 million (US$21.6
million), though COGS per hectoliter benefited from higher fixed
cost dilution, and was down 7.6% in dollar terms to US$26.4.
Gross profit was up 50.3% to R$67.1 million (US$24.6 million),
with gross margin rising 400 basis points to 53.3%. EBIT of -
R$6.6 million (-US$2.3 million) was due in part to total
depreciation expenses of R$15.8 million (US$5.8 million), which
offset positive EBITDA. EBITDA was up 15.8% to R$9.2 million
(US$3.5 million), though EBITDA margin decreased 110 basis
points to 7.6% due to marketing expenses in Ecuador related to
the launch of Brahma.

HILA-EX SOFT DRINKS2

HILA-ex soft drinks net sales for the quarter increased
substantially to R$106.0 million (US$38.7 million). Quarter-on-
quarter comparables are the result of the timing of the Embodom
investment in 1Q04 and the acquisition of Peruvian assets in
4Q03.

Cost of goods sold amounted to R$55.0 million (US$20.1 million),
with COGS per hectoliter up 25.9% in dollar terms to US$20.0.
This result can be attributed in part to higher COGS in the
Dominican Republic than in Peru.

Gross profit amounted to R$51.0 million (US$18.6 million), with
gross margin rising 2,150 basis points to 48.1% due to
contribution of the highly profitable assets in the Dominican
Republic. EBIT amounted to R$14.4 million (US$5.3 million) with
EBIT margin of 13.6%. EBITDA amounted to R$22.8 million (US$8.4
million), with EBITDA margin of 21.7%.

North America

Note: 4Q03 information has not been audited; the quarterly
financial statements were prepared in Brazilian GAAP for
comparison purposes.

As part of the InBev alliance, Labatt was merged into AmBev on
August 27, 2004. The North American team, under the leadership
of CEO Carlos Brito, has spent the last six months further
evaluating the business and market beyond the due diligence. The
findings are very encouraging and further support our decision
to enter the Canadian beer industry.

The beer market in Canada is estimated at 21.7 million HL (as of
2004), of which the premium segment represents 18.9% in volumes
and the value segment 20.3%. Statistics from the Brewers
Association of Canada show that the beer industry has grown an
average of 1.1% over the past five years. As of December 04
Labatt's market share was of 41.9%, according to the company own
estimates.

Labatt operates eight plants (as previously announced in Canada,
Labatt's New Westminster brewery will be closed in the first
half of 2005, reducing to seven the number of plants and
enhancing the company's cost structure) with an extensive
portfolio of brands, including Budweiser which is brewed under
license.

Budweiser is the number one and fastest growing mainstream brand
in the country. Commercially speaking, Labatt is the second
largest brewer in Canada, with the number one or two dominant
market position right across the country. Labatt boasts a number
of top brands in each respective segment, and the company
consistently delivers solid operational results, giving AmBev
the confidence to meet the current challenges facing the
Canadian beer industry.

Based on analysis and experience, we see significant opportunity
to create value at Labatt, leveraging the strategic imperatives
that have underscored AmBev's success in Brazil: culture and
people, top line growth, operational excellence, obsessive cost
reduction and streamlined efficiency. AmBev has a history of
creating value and building market share in competitive
environments similar to the Canadian market. AmBev's focus is to
ensure that the right strategy is in place to improve market
share, compete with the value brands, achieve cost synergies and
deliver the company's revenue forecasts.

Net Revenues

For the fourth quarter, net sales in AmBev's North American
operations decreased by 4.6% to CAD$504.9 million (R$1,151.0
million). Consolidated volumes were down by 4.5% and domestic
volumes were down by 3.4%.

Labatt's December 2004 market share decreased to 41.9% compared
to 43.1% in the same period in the prior year, but increased by
90 basis points from the September 2004 level of 41.0%. Labatt
Blue and Budweiser, the company's core mainstream brands,
represented stable market share during the quarter.

Another reason for the lower volumes in 4Q04 was the fact that,
during 3Q03, the Montreal strike caused points-of-sale to have a
product shortage. Stocks were replenished during 4Q03,
therefore, volumes were abnormally high during that quarter.

Our Canadian team is working at full speed to implement AmBev's
proven pricing strategy and expertise, including the building of
a robust information system to support advanced revenue
management initiatives.

This will provide a comprehensive synopsis of the current market
structure, pricing trends and consumer purchase patterns. In
January 2005, Labatt increased pricing of Lucky Lager, the
company's largest value brand, in order to protect the brand
equity and improve general pricing environment. Below we provide
summary of the most relevant impacts on net sales.

- Domestic revenues per HL decreased slightly to CAD$206.5, down
0.2% in relation to 4Q03, and down by 2.6% compared to September
2004. This can be attributed to changes in AmBev's regional mix
of sales.

- Labatt discontinued a co-packing arrangement with a US brewery
during the year. The reduction of volumes produced under
contract was approximately 93,800 HL. Co-packing agreements
represented 18.9% of export volume in 4Q03. Exports of Labatt
brands to the US increased by 10.2% .

- Revenues per HL for the export segment was down 9.4% to
CAD$61.4; on a sequential basis net sales per HL for the export
segment down 6.7%. This decrease is solely attributed to the
appreciation of the Canadian dollar foreign exchange rates.

COGS

COGS was down 11.9% to CAD$162.8 million (R$372.5 million), and
COGS per HL decreased by 7.6% to CAD$58.7. COGS in 2003 were
inflated by the flow through of costs associated with the
Montreal strike. In addition, continued focus and improvement in
procurement practices resulted in the reduction of per unit
pricing of many major materials, in particular malt.

GROSS PROFIT

Gross profit decreased by 0.7% to CAD$342.0 million (R$778.6
million); however, profitability increased as gross margin
expanded by 260 basis points to 67.7%.

SG&A

SG&A expenses for the North American segment were down 3.6% to
CAD$182.8 million (R$417.6 million). This reflects the company's
efforts to reduce non-strategic costs, particularly
administrative expenses, which were down 20.1%, representing an
upside of CAD$8.2 million. As previously announced, an
administrative headcount reduction at Labatt eliminated 240
salaried positions.

The company accrued CAD$78.4 million severance cost provision as
a non-operating expense. The funding of the cash disbursement is
expected to come through in the first half of 2005.

EBIT and EBITDA

EBIT increased 2.8% to CAD$159.2 million (R$360.1 million) and
the EBIT margin expanded by 230 basis points to 31.5%. EBITDA
was up 4.0% to CAD$187.3 million (R$425.2 million), in line with
AmBev guidance. The EBITDA margin improved by 300 basis points
to 37.1%.

AMBEV - CONSOLIDATED RESULTS

Consolidated Results: The combination of AmBev's operations in
Brazil, HILA and North America result in our consolidated
financial statements.

Net Revenues

Consolidated net revenues reached R$4,503.6 million in the
quarter, 60.3% higher than 4Q03 Brazilian operations contributed
R$2,744.1 million, approximately 61% of total consolidated
revenues, increasing by 15.1%. HILA's net revenues increased by
43.2%, reaching R$608.5 million and contributing 13% to
consolidated net revenues. The North America business unit
contributed R$1,151.0 million, or 26% of consolidated net
revenues.

Net revenues for the Brazilian operations benefited from both
the Beer and CSD & Nanc segments. Beer Brazil's good performance
(+16.7%) was mainly due to (i) market share recovery (68.1% in
December); (ii) market expansion (+9.8%, according to ACNielsen)
and (iii) an increase in revenue per hectoliter to R$122.8
(+2.1%). In the CSD and Nanc segment, stable market share at
17.2% (Dec/04), combined with market expansion (+4.9%, according
to ACNielsen) and higher revenue per hectoliter of R$76.3
(+6.7%) led to a 13.4% increase in net revenues.

In the HILA business unit, net sales increased by 43.2% to
R$608.5 million, as a result of a 21.1% increase in Quinsa's net
sales to R$376.2 million and a 103.2% increase in HILA-ex net
revenues to R$232.3 million.

Quinsa Beer net revenues were up 13.9% to US$195.0 million due
mainly to strong volume performance in Bolivia and Paraguay
combined with higher net revenues per HL of US$39.4 (+9.9%).

Quinsa CSD and Nanc operations increased net revenues by 19.1%
to US$56.3 million as a result of strong performance in
Argentina and Uruguay, and increased net revenues per HL of
US$26.2 (+4.8%).

HILA-ex Beer operations increased volumes by 47.2%, highlighting
the successful launch of the Brahma brand in Ecuador and
Nicaragua, combined with market share gains and market growth in
Venezuela. The volume performance more than offset a slight
decrease of 0.3% in US$ net revenues per HL. Net revenues for
the HILA-ex Soft Drink operations (ex-Quinsa) substantially
increased to US$38.7 million, to which a major contributor was
AmBev's investment in Embodom.

Net revenues in the North America operations decreased by 4.6%
due to a combination of factors, of which the main ones are: (i)
a decrease of 3.4% in domestic volumes; (ii) a slight decrease
of 0.2% in domestic net revenues per HL, due to changes in
AmBev's regional mix of sales; and (iii) a 9.5% decrease in
exports volumes as a result of discontinuing co-packing
agreements.

Cost of Goods Sold (COGS)

Consolidated cost of goods sold (COGS) totaled R$1,670.6 million
in the quarter (+41.3%). Excluding depreciation (R$121.9
million), consolidated cash COGS amounted to R$1,548.7 million
(+41.6%). Consolidated COGS per hectoliter increased by 11.5%,
reaching R$50.8 (4Q03: R$45.6).

In the Brazilian operations, COGS totaled R$1,024.0 million
(4Q03: R$985.9 million), or R$42.0 per HL. (4Q03: R$45.4),
accounting for 61% of AmBev's consolidated COGS. COGS per
hectoliter declined by 7.4% when compared to 4Q03, and by 5.8 %
on a sequential basis, mainly reflecting the greater dilution of
fixed operating costs in both Beer and CSD & Nanc segments, as
well as a more favorable currency scenario (although AmBev did
not fully benefit from the appreciation of the exchange rate for
the Real, as the company had previously locked-in foreign
currency hedges for a substantial portion of its costs), which
offset higher aluminum cans and crown caps costs.

In HILA, COGS totaled R$274.1 million, up 39.6% against 4Q03,
mainly due to the operations' organic growth, AmBev's greater
economic stake in Quinsa and the investment in Embodom. COGS per
hectoliter increased by 7.5%, totaling R$58.5 (4Q03: R$54.4).
HILA's COGS accounted for 16% of AmBev's consolidated COGS.

In North America, COGS totaled R$372.5 million, or R$134.2 per
hectoliter, accounting for 22% of AmBev's consolidated COGS.

Selling, General and Administrative Expenses

Consolidated selling, general and administrative expenses
totaled R$1,344.5 million (+75.2%). These expenses are comprised
of (i) sales and marketing expenses of R$697.9 million
(+109.4%); (ii) direct distribution expenses of R$264.2 million
(+31.3%); (iii) general and administrative expenses of R$220.1
million (+91.3%) and (iv) depreciation and amortization of
R$162.3 million (+37.8%).

Selling, general and administrative expenses for the Brazilian
operations accounted for 54% of consolidated expenses, amounting
to R$723.7 million (+12.8%). The increase in direct distribution
and general and administrative expenses for Beer Brazil,
combined with the increase in sales and marketing expenses for
Brazil CSD & Nanc, were the main factors driving operating
expenses.

Sales and marketing expenses for the Brazilian operations
totaled R$273.4 million (+8.3%). The increase in these expenses
is related not only to higher advertising expenditures in the
beer segment, but also to trade marketing programs aimed at
improving our service and relationship with the points of sale.
As a consequence of such investments, we continued our
consistent trend of market share recovery, reaching 68.1% in
December. Direct distribution expenses in Brazil, totaled
R$219.3 million (+15.2%), allowing us to reach 46.8% of the
volume sold (4Q03: 41.9%), while general and administrative
expenses totaled R$110.8 million (+21.1%).

Depreciation and amortization for the Brazilian operations
totaled R$120.1 million (+11.9%). The increase of depreciation
and amortization expenses is related to the expansion of our
direct distribution network and a greater number of sub-zero
coolers installed at strategic points of sale.

In the HILA business unit, selling, general and administrative
expenses represented 15% of consolidated expenses in the
quarter, totaling R$203.2 million (+61.8%). In this business
unit, the expenses breakdown was the following: (i) sales and
marketing expenses of R$116.4 million (+44.0%); (ii) general and
administrative expenses of R$34.9 million (+48.1%); (iii) direct
distribution expenses of R$24.4 million (+125.2%) and (iv)
depreciation of R$27.5 million (+164.8%).

Selling, general and administrative expenses for the North
America business unit accounted for 31% of consolidated expenses
in the quarter, totaling R$417.6 million. Such expenses are
comprised of: (i) sales and marketing expenses of R$308.0
million; (ii) general and administrative expenses of R$74.4
million; (iii) direct distribution expenses of R$20.5 million;
and (iv) depreciation of R$14.6 million.

Provisions for Contingencies

Provisions for contingencies in the 4Q04 amounted to R$183.0
million. The major impacts were Labor (R$128.6 million) and
Fiscal (R$39.0 million) provisions accrued in Brazilian
Operations (total provision for Brazilian Operations: R$182.7
million). HILA and North America together acummulated R$0.3
million of provisions.

Other Operating Income and Expenses

The net result in the 4Q04 for Other Operating Income and
Expenses was a loss of R$103.6 million. The major impacts were:

- Exchange rate gains on foreign investments: R$156.1 million -
Equity gains related to fiscal incentives in Brazil: R$89.4
million

- Goodwill amortization related to the merger of Labatt into
AmBev: R$266.6 million

- Goodwill amortization related to Latin American (including
Brazil) Operations: R$ 54.4million

- PIS/COFINS charged on financial income: R$15.8 million
Financial Result

The financial result for the 4Q04 was R$220.6 million negative.
As AmBev performs a number of hedging transactions to have debt
exposure to foreign exchange rate variations fully protected,
the company's financial result is subject to significant
volatility. AmBev's hedging instruments involve cash investments
in U.S. dollar-linked assets, as well as swaps and derivatives.
According to Brazilian Corporate Law accounting principles,
liabilities must be recorded on an accrual basis rather than at
market value, while assets must be recorded at the lowest
between market value and accrual basis.

Non-Operating Income and Expenses

The net result of Non Operating Income and Expenses in the 4Q04
was a loss of R$186.7 million. The main driver for this result
was the provision for severance costs in Canada (R$198.7
million) related to both the administrative restructuring as
well as the closure of New Westminster brewery.

Income Tax and Social Contribution

The provision for income tax and social contribution in the 4Q04
was of R$280.6 million. As anticipated by AmBev, the increased
shareholders equity after the Labatt deal provided for a
significantly higher fiscal benefit related to interest on own
capital (4Q04: R$129.6 million X 4Q03: R$35.9 million).

Profit Sharing and Contributions

AmBev booked R$60.2 million in the 4Q04 related to employees
profit sharing. As the company delivered on its profit targets
in 2004, employees will receive a bonus for performance (not
paid in 2003, when AmBev did not meet its targets).

Minority Interest

Minority stakes in AmBev subsidiaries in 4Q04 booked a loss of
R$0.8 million.

Net Income

Net income in 4Q04 increased 6.0% to R$459.7 million. Net income
per share achieved R$8.42, decreasing 26.4%. Notwithstanding the
decrease in net income per share, caused by numerous non-
operating or other operating charges (such as the one-off
provision for severance costs in Canada and goodwill
amortization), the company highlights a significant improvement
in operations, demonstrated by a 15.4% increase in EBITDA per
share, which reached R$32.5.

RECENT DEVELOPMENTS

Dividends and Interest on Own Capital

On January 7, 2005, AmBev's Board of Directors approved the
payment of interest on the own capital, at the gross amount of
R$9.6800 per lot of thousand common shares and R$10.6480 per lot
of thousand preferred shares. The Board of Directors also
approved the payment of supplementary dividends to be imputed in
mandatory minimum dividends of the year of 2004, at the amount
of R$7.3600 per lot of thousand common shares and R$8.0960 per
lot of thousand preferred shares.

Mandatory Tender Offer for AmBev Common Shares

On February 14, 2005, the Securities and Exchange Commission of
Brazil (CVM) authorized the registration of the Public Tender
Offer for Common (PTO) issued by the Company under the terms of
the Article 29 of the CVM Instruction 361/02. The PTO, which
shall be carried out on March 29, 2005, shall have the following
characteristics:
(a) Offeror: InBev AS/NV;
(b) Shares Object of the Offer:

(i) up to 100% of the outstanding common shares on the date of
the auction, which totaled, on December 31,2004, 3,577,208,360
shares, or 15.2% of the voting capital and 6.3% of the Company's
total capital;

(ii) up to 67,730,600 common shares of the Company owned by
Companhia Brasileira de Bebidas, a wholly owned subsidiary of
AmBev, which accounted for, on December 31, 2004, 0.3% of the
voting capital and 0.1% of the Company's total capital;

(iii) up to 6,006,448 common shares owned by AmBev's management,
which accounted for, on December 31, 2004, 0.02% of the voting
capital and 0.1% of the Company's total capital.

(c) Offer Price: The acquisition price for the Common Shares
tendered at the Auction will be paid in one of the following
manners, at the option of each tendering Common Shareholder,
subject to certain conditions set forth in the formal Bid
Invitation, available at AmBev's (www.ambev-ir.com) and CVM's
(www.cvm.gov.br) websites:

(i) payment in common shares of InBev, in the proportion of
13.827166 common shares of InBev 1,000 common shares of AmBev;

(ii) payment in cash, in Brazilian Reais, corresponding to
353.28 Euros, convertible into US dollars and then into
Brazilian Reais, under the terms defined in the Public Tender
Offer Notice.

Details regarding the settlement of the auction are provided in
the formal Bid Invitation, available at AmBev's (www.ambev-
ir.com) and CVM's (www.cvm.gov.br) websites.

To view financial statements:
http://bankrupt.com/misc/Ambev.pdf

CONTACT: Investor Relations Department:
         Mr. Pedro Aidar
         Phone: (5511) 2122-1415
         E-mail: acpaidar@ambev.com.br

         Ms. Vanessa Goes
         Phone: (5511) 2122-1414
         E-mail: acvsg@ambev.com.br


AOL LATIN AMERICA: Outlines Executive Retention Agreements
----------------------------------------------------------
On March 1, 2005, America Online Latin America, Inc. ("AOLA")
entered into Executive Retention Agreements dated as of April
15, 2004 and June 5, 2004, respectively, with Milton Camargo,
President and General Manager of AOLA's Brazilian subsidiary,
and Eduardo Escalante Castillo, President and General Manager of
AOLA's Mexican subsidiary.

If Messrs. Camargo and Escalante remain employed by the Company
through July 1, 2005, the Company will pay such executive on
July 1, 2005, a lump sum payment ("Retention Bonus") of $120,000
(in the case of Mr. Camargo) and $200,000 (in the case of Mr.
Escalante). If any of the following events occurs prior to July
1, 2005, AOLA will pay such officer or his estate the Retention
Bonus on the date such event occurs:

(a) AOLA terminates the executive's employment without "Cause"
(as defined in the retention agreement) or as a result of the
executive's "Disability" (as defined in the retention
agreement);

(b) the executive terminates his employment for "Good Reason"
(as defined in the retention agreement); or

(c) the executive dies. A significant portion of the Retention
Bonus is secured by an irrevocable letter of credit.

In addition, if the executive's employment is terminated without
Cause or as a result of the executive's Disability or the
executive terminates his employment for Good Reason, he will be
entitled to receive a lump sum payment equal to twelve months
salary plus pro rata bonus and a payment for accrued, but unused
vacation time. He will also receive health and dental insurance
coverage for a twelve-month period. All unvested options held by
the executive will also become immediately exercisable.

In the event of a "Going Private Event" (AOLA ceases to be
required to file reports with the Securities and Exchange
Commission) or a "Change of Control" (America Online, Inc., Time
Warner Inc. and the Cisneros Group no longer collectively hold
50% of the voting power of AOLA's stock or have the right to
approve the election of a majority of AOLA's board of
directors), all options will also become fully exercisable.

Pursuant to the retention agreements, each of Messrs. Camargo
and Escalante were granted options under AOLA's 2000 Stock Plan
to purchase AOLA's class A common stock at a price of $1.59 per
share. These options vest in two equal installments on January
1, 2005 and January 1, 2006. Mr. Camargo was granted options to
purchase 120,000 shares of class A common stock and such options
expire on April 15, 2014. Mr. Escalante was granted options to
purchase 200,000 shares of class A common stock and such options
expire on June 5, 2014.

CONTACT: America Online Latin America, Inc.
         6600 N. Andrews Ave.
         Suite 500
         Fort Lauderdale, FL 33309
         USA

         Phone: 954-229-2100


BANCO ITAU: Provides Additional Detail on LASA Deal
---------------------------------------------------
BANCO ITAU HOLDING FINANCEIRA S.A. and LOJAS AMERICANAS S.A.
DISCLOSURE OF A MATERIAL FACT

1. LOJAS AMERICANAS S.A. ("LASA") and BANCO ITAU HOLDING
FINANCEIRA S.A. ("ITAU") announce an association for the purpose
of creating a new financial institution. ITAU, through companies
controlled by it, and LASA will constitute a new company ("New
Company"), a financial institution with operations to be duly
authorized by the Brazilian Central Bank, which will engage in
the structuring and sale of financial products and services and
the like for customers of Lojas Americanas, Americanas Express
and Americanas.com, on an exclusive basis.

2. The New Company will also acquire LASA's sales promotion
company, Facilita Servicos e Propaganda S.A. ("Facilita").

3. The equity of the New Company will be R$ 80 million, owned
50% by ITAU and 50% by LASA.

4. Brazilian consumer credit markets will be strengthened by
this association between two major Brazilian groups, each of
them leader in their markets and acknowledged for excellence of
management and the value of their brand names.

5. This association will represent an opportunity to broaden and
improve the range of financial products and services currently
available to customers of LASA (such as Private Label cards,
widely accepted co-branded credit cards, consumer credit,
personal loans, insurance, extended product warranties and
more), at the following points of sale:

- at the Lojas Americanas and Americanas Express stores, through
which over 1 million people pass each day in 19 Brazilian states
plus the Federal District;

- at Americanas.com, with approximately 110,000 products offered
to its clients;

- at Facilita sales promotion company, with a presence at all
LASA's points of sale as well as having 20 strategically located
stores of its own.

6. The New Company will be managed by a Board of Directors, the
chairman of which will be nominated by ITAU and which will be
assisted by an Operating Support Committee, comprised in equal
parts by the two shareholders, aiming to ensure the development
of the business. The Executive Board will be made up of
professionals with wide experience in the New Society's field of
activity and its management will be the responsibility of ITAU.
The company will also have its own structure and staffing.

7. ITAU is the bank with the highest market capitalization in
Latin America (R$ 44.1 billion on December 31, 2004). It relies
on state-of-the-art technology, the knowledge over a wide range
of sales channels and the excellence in the management of its
financial activities. Its deep knowledge of and experience in
consumer credit guarantee ITAU a highly competitive position in
this market segment.

As of 12/31/2004      Amounts (R$ million)  Quantities

Credit cards(*)            5,162            10.7 million
Consumer finance and
personal loans             6,926             8.6 million
Number of active customers                  11.8 million
ATMs                                              21,150
Branches and customer-site branches                3,073

(*) Includes values referring to the increase of the equity
participation in Credicard Banco S.A.

8. LASA has a substantial presence in the Brazilian retail
market under the "Lojas Americanas", "Americanas Express",
"Americanas.com" and "Facilita" banners. LASA's customer
relations already involve a significant number of transactions

9. The New Company will manage the financial products to be
offered to LASA's customers as well as the customers of any new
points of sale that LASA may come to possess, estimated at 300
additional stores over the next 10 years.

10. Implications for ITAU

10.1. Reinforcement in the consumer credit segment, in line with
its strategy of expansion in credit operations and focus on this
particular segment;

10.2. This operation will result in the consolidation of Taii's
brand and the broadening of its distribution network, dedicated
to the consumer credit segment;

10.3. The association will strengthen ITAU's position in the
retail finance market, and enable its experience in retail
credit to help develop new forms of relationship with LASA's
customers;

10.4. The association implies a total investment of
approximately R$ 240 million, including R$ 40 million of initial
equity in the New Company and goodwill of R$ 200 million to be
paid to LASA, of which R$ 100 million in cash, with the
remaining R$ 100 million to be paid according to the achievement
of its targets over an up to six year period;

10.5. The results from the association are not expected to
materially affect the results of ITAU during the first three
years of operations.

11. Implications for LASA

11.1. The association will lead to greater circulation of
customers through the LASA's stores and at Americanas.com, with
a positive impact on sales, and offers an effective strategy for
broadening the range and improving the conditions of the
financial products and services it offers its customers.

11.2. Operating synergies offer scope for productivity gains and
a positive impact on LASA's results, not only via increased
revenues but also by reducing and diluting costs and expenses.

11.3. The association, and the incorporation of the New Company,
imply additional resources totaling R$ 200 million for LASA, of
which R$ 100 million cash payment to be received at a date to be
agreed upon between the two parties, the remaining R$100 million
to be received according to the achievement of targets over a
period of up to six years. Additionally, LASA will invest R$ 40
million as its part of the equity of the New Company. It is not
possible yet to estimate the effect of the association on the
sales and the results of LASA.

11.4. LASA's distribution network and knowledge of its customer
basis coupled with ITAU's excellence and technology in the
financial sector will result in an outstanding opportunity for
selling financial products and services.

12. ITAU and LASA will proceed towards the signing of the final
contracts and, once signed, will proceed to obtain the necessary
approvals from the Central Bank and other pertinent authorities
for the incorporation of the New Company. The association will
be for an initial period of 20 years, and may be further
extended. Operations are expected to commence in the second half
of 2005.

13. For ITAU and LASA, this association is a reaffirmation of
their commitment to the Brazilian market, with the certainty of
increasing customer satisfaction and creating shareholder value.

CONTACT: Banco Itau Holding Financeira S.A.
         Investor Relations
         Geraldo Soares
         Investor Relations Superintendency
         Praca Alfredo Egydio de Souza Aranha, 100
         Torre Conceicao - 11§
         04344-902 - Sao Paulo - SP
         Phone +5511 5019-1549
         Fax +5511 5019-1133


TELEMAR: Absorbes Accumulated Losses With Capital Reduction
-----------------------------------------------------------
Brazilian fixed line operator Tele Norte Leste Participacoes SA
(TNLP4.BR) or Telemar said in a statement Thursday it plans to
cut its share capital by BRL1.27 billion, reports Dow Jones
Newswires. The capital reduction will be effective after 60
days.

The company said BRL1.02 billion would be used to absorb losses
accumulated through the end of September, while the BRL250
million will be paid out to shareholders.

Telemar reported a fourth quarter net profit of BRL293 million,
down from BRL514 million a year ago.

CONTACT: TNE - Investor Relations
         Mr. Roberto Terziani
         E-mail: invest@telemar.com.br
         Phone: 55 21 3131 1208

         Mr. Carlos Lacerda
         E-mail: carlosl@telemar.com.br
         Phone: 55 21 3131 1314
         Fax: 55 21 3131 1155


TELEMAR: Results Continue to Improve, EBITDA up in 2004
-------------------------------------------------------
HIGHLIGHTS OF THE QUARTER

The Telemar Group customer base increased by 1.2 million in the
quarter and 3.3 million in the year, to reach 22.6 million at
the end of 2004, comprising:

Wireline: 15.2 million lines in service (+0.5% in 2004)
Wireless: 6.9 million subscribers (+76.3% in 2004)
Velox (ADSL): 0.5 million subscribers (+128.6% in 2004)

Net revenues amounted to R$ 4,271 million (+4.6% from 3Q04 and
+16.3% from 4Q03). In 2004, net revenues totaled R$ 15,842
million (+13.1%). Average revenue per user (ARPU) in the quarter
was equal to R$ 82 and R$ 23 for wireline and wireless services,
respectively.

Consolidated EBITDA totaled R$ 1,721 million, while the margin
stood at 40.3% (3Q04 -41.2%). EBITDA for the year reached R$
6,531 million (+5.8%), with a 41.2% margin.

Net financial expenses totaled R$ 355 million in the quarter (-
15.0% compared to 3Q04), and R$ 1,641 million in the year (-
24.7%).

Net income for the quarter amounted to R$ 293 million, or R$
0.77 per share (US$ 0.28 per ADR). Net income for the year added
up to R$ 751 million, increasing by 253.1% from 2003, and
corresponding to R$ 1.98 per share (US$ 0.68 per ADR).

At the end of 2004, net debt was equal to R$ 6,542 million (1.0x
EBITDA), declining by 6.5% and 16.5% from the position at the
end of Sep/04 and Dec/03, respectively.

Capital expenditures (Capex) totaled R$ 862 million in the
quarter and R$ 1,996 million for the year (12.6% of net
revenues), compared to R$ 1,682 million in 2003 (12.0% of net
revenues).

Free cash flow after Capex amounted to R$ 898 million in the
quarter and R$ 3,995 million for the year (2003 - R$ 4,048
million).

During the quarter, TNL's and TMAR's disbursements within the
Share Buyback Program amounted to R$ 140 million. Consolidated
repurchases in 2004 added up to R$ 349 million (2003 - R$ 23
million), representing 24.0% of the total shares authorized
under the program (TNL and TMAR).

The Boards of Directors of TNL and TMAR will submit for approval
to their respective Annual Shareholders' Meeting, to be held in
April 2005, the payment of dividends/interest on capital on 2004
results, totaling R$ 1.1 billion and R$ 1.35 billion,
respectively Considering the amounts already announced as
interest on capital during the year, complementary dividends
amounted to R$ 1.0 billion for TNL shareholders and R$ 590
million for TMAR shareholders.

2. OPERATING PERFORMANCE REVIEW:

2.1 CUSTOMER BASE

At the end of 2004, the Telemar Group had 22,575 thousand
customers (compared to 19,257 thousand at year-end 2003, or a
17.2% increase), including 15,216 thousand fixed-line, 6,863
thousand mobile, and 496 thousand broadband (ADSL) customers.
During the period, the Company grew in all segments, with net
additions of 3,318 thousand customers in 2004, as follows:
wireless - 2,970 thousand (+76.3%), ADSL - 279 thousand
(+128.6%), and wireline - 69 thousand (+0.5%).

2.2 WIRELINE SERVICES - TMAR

The installed plant comprised 17,393 thousand at the end of the
quarter, of which 15,216 thousand are in service, including 662
thousand public telephones (TUP). Year-on-year, the plant in
service grew by 0.5%. The average wireline customer base
amounted to 15,188 thousand lines in 2004 (+1.1% from 2003). The
utilization rate of the installed plant was 87.5% and the
digitalization rate of the network was 99.1%.

2.3 BROADBAND SERVICES - TMAR

Broadband internet accesses (ADSL) grew 15.6% compared to the
previous quarter, totaling 496 thousand Velox users at year-end,
with net additions of 67 thousand subscribers during the quarter
and 279 thousand during the year (+128.6%). The average customer
base increased from 127 thousand in 2003 to 389 thousand in 2004
(+206.3%). At the end of 2004, the Velox customer base share of
Telemar's total lines in service was 3.3%, compared to 2.8% in
3Q04 and 1.4% at the end of 2003.

2.4 WIRELESS SERVICES

At the end of 2004, Oi had 6,863 thousand customers (+76.3% on
2003), with an estimated market share of 23.5% in its region
(Sep/04 - 22.1%), reflecting growth of 19.6% from the previous
quarter. The customer mix at Dec/2004 comprised 86.1% and 13.9%
customers under prepaid and postpaid plans, respectively.

During the quarter, 1,201 thousand handsets (3Q04 - 1,127
thousand as a way of building inventories for 4Q04) were sold
through our distribution channels, while 1,468 thousand users
were activated and 344 thousand were disconnected, leading to
net additions of 1,123 thousand customers (3Q04 - 647 thousand,
and 4Q03 - 1,043 thousand), of which 10.8% were under postpaid
plans. Oi accounted for approximately 35.8% of net additions in
its region during 4Q04 (37.1% for the full year and 49.0% in
2003).

The average customer base totaled 6,301 thousand in 4Q04 (+16.3%
quarter-on-quarter and +86.9% on 4Q03) and 5,378 thousand in
2004 (+103.2%). With 344 thousand disconnections during the
quarter, the churn rate represented 5.5% of the average
subscriber base of 4Q04 (5.4% in 3Q04).

The wireless penetration rate in Oi's Region was 29.9% in
Dec/04, against the national average of 36.6%.

2.5 CONTACT CENTER

At the end of the year, Contax had 17,507 customer service
positions (PA's), growing by 9.7% and 35.6% from Sep/04 and
Dec/03, respectively. The acquisition of new accounts was the
main driver in the expansion of Contax's activities in 2004.

3. CONSOLIDATED RESULTS:

3.1 REVENUES

Consolidated gross revenues for the quarter reached R$ 5,991
million, increasing 5.6% from 3Q04 (R$ 317 million), on account
of the strong expansion in wireless and data communication
services, as well as the growth in local, long-distance and
public telephone services, mostly driven by wireline tariff
increases implemented during the quarter.

In comparison with 4Q03, gross revenues grew by 14.1% (R$ 739
million), again due to the increased revenues from wireless and
data transmission services, in addition to the tariff rises
mentioned above.

Consolidated gross revenues amounted to R$ 22,125 million in
2004 (+13.9%). Consolidated net revenues added up to R$ 4,271
million in the quarter, growing by 4.6% and 16.3% on 3Q04 and
4Q03, respectively. During the quarter, the lower change in net
revenues compared to gross revenues is chiefly due to the
provision recorded as of 4Q04 for ICMS on IP access port
rentals.

The higher variation of net revenues compared to gross revenues
year over year is due to the improved criterion used to account
for services not yet billed in 4Q03.

During 2004, consolidated net revenues totaled R$ 15,842
million, a 13.1% increase on 2003.

3.1.1 Wireline Services

Gross revenues from wireline services increased by 5.0% on the
previous quarter and 10.8% on 4Q03, primarily due to tariff
adjustments implemented in the period and the expansion in data
services. In 2004, the 9.9% increase was also driven by the
growth in data transmission services, in particular broadband
and package switching services, as well as market share gains in
the long-distance segment and tariff adjustments.

Local

Local fixed-to-fixed (monthly subscription, pulse, installation
fee): gross revenues from local services increased by 4.3% on
3Q04, primarily due to the tariff adjustment of the local
basket, of 5.8% in the quarter. Compared to 4Q03, local service
revenues grew by 8.7%. During 2004, revenues increased by 8.5%
also as a result of the combined effect of the tariff adjustment
while the plant in service remained stable and the decrease in
local traffic, as described below:

- Monthly subscription fees amounted to R$ 1,610 million in the
quarter, up 5.7% from 3Q04, mainly because of the average rate
increase (6.1%). Compared to 4Q03, these revenues grew by 13.6%,
mostly due to the average rate adjustment of 15.7% in the
period. For the full year, monthly subscription fees added up to
R$ 5,966 million, up 12.4% from 2003, representing 30.2% of
gross revenues from wireline services (2003 - 29.5%).

- Revenues from Pulses reached R$ 710 million, increasing by
1.1% in comparison with 3Q04, as a result of the 4.7% average
rate adjustment during the quarter and the decreased local
traffic. These revenues grew by 1.4% from 4Q03. In 2004,
revenues from pulses grew by 2.9% to reach R$ 2,674 million,
driven by the rate adjustment (14.0%) and traffic reduction,
mostly due to the migration of dialed-up internet accesses to
ADSL (Velox) services. Revenues from pulses accounted for 13.5%
of wireline gross revenues (2003 -14.5%).

Local fixed-to-mobile calls (VC1): these revenues totaled R$ 701
million, a 0.9% increase quarter-on-quarter. When compared to
4Q03, the 7.7% reduction stemmed from the decreased traffic,
arising in part from the migration to calls originating in
wireless lines.

During the year, these revenues declined by 6.3% driven by the
decreased traffic, partly offset by the rate adjustment in
Feb/04 (7.0%). Revenues from VC1 calls accounted for 14.0% of
total wireline revenues in 2004 (2003 - 16.4%).

Long-distance

Intra- and inter-regional, international: 7.4% growth (R$ 55
million) from 3Q04, primarily due to the rise in long-distance
rates in the period (7.2%). When compared to 4Q03, the 17.3%
growth (R$ 119 million) was due to the change in LD prices
(+12.6%), as well as to market share gains in the interregional
and international segments.

In 2004, these revenues increased by 26.5% (R$ 625 million),
mostly due to market share gains in the inter-regional calls
originated in Region I, which revenues posted a 103% growth in
the period. Such growth partly offset the lower expansion in
revenues from intra-regional calls (+14.6%), as a result of the
change in rules regarding local areas effective Aug/04. LD
services rates were increased by 10.6% on average during 2004.

Long-distance revenues (ex-VC2/VC3) accounted for 15.1% of total
wireline revenues (2003 - 13.1%).

Fixed-to-mobile calls (VC2/3) revenues remained stable in
comparison with the previous quarter. However, compared to 4Q03,
these revenues increased by 7.2%, chiefly due to the rate
adjustment implemented in Feb/04 (7.0%).

During the year, these revenues posted a 12.0% growth, as a
result of the combined effect of the rate adjustment in Feb/04
and increased traffic. The share of such revenues in total
wireline revenues in 2004 remained stable at 3.5%.

Remuneration for network usage increased by 4.9% (R$ 14 million)
quarter-on-quarter, primarily as a result of the average 7.2%
tariff increase in the quarter. The 14.3% growth from 4Q03 was
partly driven by reversals (arising from revenue challenges) in
the last quarter of 2003.

In 2004, revenues declined by 8.1% due to:

(i) application of the productivity factor of 20% to tariffs
(TU-RL);
(ii) increased footprint of other companies in our region; and
(iii) Telemar market share gains in the long-distance segment.

These revenues now account for 5.9% of total wireline gross
revenues (2003 - 7.1%).

Data transmission services revenues in the quarter increased by
14.9% (R$ 60 million) from 3Q04, as a result of the growth in
all services, in particular Velox (ADSL), rental of dedicated
lines to providers (EILD), and IP services.

When compared to 4Q03, revenues grew by 45.7% (R$ 146 million),
driven by higher revenues from Velox, leased lines - ­ĝEILD­ñ,
package switching, frame relay and IP services. In 2004,
revenues increased by 35.8%, with growth in virtually all
services, in particular Velox (200.8%)and package
switching/frame relay services (52.2%). Revenues from data
services now account for 8.1% of total wireline revenues (2003 -
6.6%).

Public telephones (PT) revenues increased by 4.1% from 3Q04, on
account of the higher tariffs in the quarter.

Compared to 4Q03, these revenues increased by 33.0% as a result
of the rate adjustment (13.1%) and the increased sale of phone
cards, driving card revenues to R$ 57 million. Furthermore,
amounts transferred to other telecommunication companies
declined with the increased usage of the Telemar pick code to
place long-distance calls via public phones.

During the year, these revenues reached R$ 1,017 million, up
25.8% from 2003, on account of the 19.5% increase in revenues
from the sale of cards and lower payments to other telcos and
the improved anti-fraud systems implemented by the Company. PT
revenues now represent 5.1% of total wireline revenues (2003 -
4.5%).

Other services declined by 3.4% and 20.7% from 3Q04 and 4Q03,
respectively. Year-on-year, the main culprit was advanced voice
services (-20.2%), mostly because of the price reduction
resulting from the increased competition in this segment.

The overall reduction in 2004 compared to 2003 was 10.3%, as a
result of lower revenues from advanced voice services (-9.4%).

3.1.2 Wireless Services

Oi's gross revenues amounted to R$ 936 million in the quarter,
of which R$ 852 million was from wireless services. Revenues
from services, excluding handset sales, totaled R$ 608 million,
growing by approximately 25.0% in comparison with 3Q04. Revenue
from services was positively impacted by the increase in
outgoing calls and additional services, in particular wireless
data and network remuneration charges (R$ 39 million of which
relate to adjustments from prior periods). Excluding such
adjustments, revenue services rose by 17.0% during the quarter,
slightly above the average increase in customer base (16.3%).

In fact, the average revenue per user (ARPU) reached R$ 23.50 on
a recurring basis, up 0.9% from the previous quarter (R$ 23.30
when adjusted for the portion of network remuneration in that
quarter).

Revenues from wireless data services added up to R$ 32 million
(+18.5% from 3Q04), accounting for 5.3% of Oi's total service
revenues in the quarter. Net revenues from the sale of 1,201
thousand handsets in the quarter (+6.6% from 3Q04) amounted to
R$ 187 million (+8.7% from 3Q04).

Gross revenues from wireless services, on a consolidated basis,
totaled R$ 658 million in the quarter, growing by 11.7% (R$ 69
million) when compared to 3Q04, chiefly due to increased
revenues from outgoing calls (R$ 41 million) and handset sales
(R$ 13 million).

When compared to 4Q03, consolidated wireless revenues grew by
37.2%, representing a 69.6% increase in service revenues and a
3.6% increase in handset sales. Revenues for 2004 amounted to R$
2,112 million, a 56.0% rise from 2003. All revenue lines posted
a strong expansion, in particular outgoing calls (+105.9%).

Consolidated revenues from the remuneration of the wireless
network amounted to R$ 61 million in 4Q04, after elimination of
R$ 193 million relating to TMAR, up 3.4% from 3Q04, in spite of
the migration of wireless companies (Telemig and Tele Norte) to
the bill & keep rules in 3Q04.

3.1.3 Contact Center Services

During the fourth quarter, Contax posted total gross revenues of
R$ 209 million, surpassing, by 11.0% and 47.5%, the 3Q04 and
4Q03 figures, respectively. Consolidated Contax revenues for
4Q04 remained at the same levels as in the previous quarter (R$
78 million). Compared to 4Q03, the 175.4% increase in revenues
is mostly attributable to the new accounts acquired in the
period.

Contax's gross revenues in 2004 added up to R$ 709 million, up
58.4% from 2003 (R$ 448 million), as new clients were acquired
and the existing ones increased their operations.

3.1.4 Revenue Breakdown

The chart below depicts changes in the breakdown of consolidated
gross revenues for 2004 compared to 2003. Noteworthy is the
increased share of long-distance services to 16.5%, wireless to
9.5%, data to 7.3%, as well as the relative reduction in local
fixed-to-fixed calls to 39.9%, local fixed-to-mobile (VC1) to
12.5%, and network usage to 5.3%.

3.2 OPERATING COSTS AND EXPENSES

Operating costs and expenses (ex-depreciation and amortization)
increased by 6.3% (R$ 150 million) from 3Q04. The main drivers
were "third-party services" and "other operating expenses",
offset by lower provisions for doubtful accounts.

When compared to 4Q03, the 24.1% growth is chiefly due to other
operating expenses (changes in provisions for contingencies),
third-party services (plant maintenance, consultants, legal
counsel), and personnel (Contax). Those items also accounted for
a large portion of the changes in 2004 (18.9%).

- Interconnection Costs decreased by 1.4% (R$ 9 million) from
3Q04, primarily due to the migration of wireless companies
(Telemig and Tele Norte) during 3Q04 to the "bill & keep" rules.
Compared to 4Q03, the 3.7% increase was mainly due to the mobile
interconnection rate adjustment implemented in Feb/04, partly
offset by the decline in fixed-to-mobile traffic. During the
year, interconnection costs amounted to R$ 2,516 million (-0.6%
from 2003), accounting for 15.9% of net revenues for 2004,
compared to 18.1% in 2003. This decline was driven by the
reduced fixed-to-mobile traffic, as well as Oi's market share
gains (which reduced the amount of interconnection paid by
Telemar to other mobile operators).

- Personnel Expenses grew by 8.6% (R$ 24 million) from 3Q04, in
line with the increased number of employees at Contax. The
growth at TMAR during the quarter was due to adjustments in the
amounts provisioned for vacations and other charges (in
accordance with the collective labor agreement of Dec/04), as
well as layoff expenses. When compared to 4Q03, personnel
expenses grew by 17.9%, primarily as a result of the increased
staff of Contax.

Personnel expenses for the year rose by R$ 184 million (20.1%),
also due to the increase in the number of Contax employees.

- Handset costs and Other (COGS) increased by 10.7% compared to
3Q04, while the volume of handset sales grew by 6.6%. Compared
to the same period of the previous year, the increase was 6.5%.
In 2004, these costs increased by R$ 191 million, or 25.8%,
slightly below the growth in handset sales (28.3%).

- Third-party services increased by 17.1% (R$ 103 million)
quarter-on-quarter, mostly due to higher selling expenses (R$ 37
million), advisory and legal counsel (R$ 26 million), plant
maintenance (R$ 11 million), and electricity (R$ 10 million).
Compared to 4Q03, the increase was 24.7% (R$ 140 million), also
due to higher selling expenses, plant maintenance costs and
utilities (electricity tariff adjustment and ICMS tax expenses).
Such expenses also led the 19.5% increase for the year.

- Marketing expenses declined by 7.6% (R$ 5 million) from 3Q04
and remained almost unaltered compared to 4Q03 (+1.7%) due to
the use of joint marketing with mobile handset suppliers. The
26.0% increase for the year was mainly due to higher media,
promotion and events, mostly relating to wireline products and
services (Velox and LD "pick code").

- Rental/Leasing/ Insurance: the 6.6% rise in the quarter (R$ 9
million) derived from a termination fine with respect to the
lease of satellite capacity with Star One (Embratel) due to the
migration of our operations to the Amazonas satellite
(Hispamar). Compared to 4Q03, the 20.8% increase is primarily
due to higher satellite rental expenses, as well as the site
leases for installation of Oi's base stations. The 18.5%
increase for the year (R$ 85 million) is also attributable to an
increase in expenses with rights of way and line leases.

- Provisions for doubtful accounts (PDA) decreased by 25.4% from
3Q04, accounting for 1.8% of gross revenues for the quarter
(3Q04 - 2.5% and 4Q03 - 2.7%). The reduction arises from
continuing improvements in collections in the corporate and
wholesale segments. Consolidated PDA for 2004 amounted to 2.6%
of gross revenues, against 3.1% in 2003. PDA amounted to 1.0% in
the quarter at Oi (3Q04 - 1.6% and 2.0% in 2004) and to 1.8% at
TMAR (3Q04 - 2.6% and 2.5% in 2004).

- Other operating expenses (revenues) increased by R$ 26 million
from the previous quarter, chiefly due to higher provisions for
tax contingencies, in particular:

(i) a R$114 million provision for ICMS on revenues from the
rental of IP network access ports: this issue - which affects
all the telecom sector in Brazil - was reassessed by the Company
based on unfavorable rulings; and

(ii) a R$ 45 million provision for ICMS arising from credits
recorded on electricity services, after a judicial challenge in
certain states of our Region.

In Nov/04, the Company entered into an agreement with Embratel
in order to terminate administrative and judicial litigation
between the two parties and settle for the respective amounts.

The total restated net amount of such disputes was R$ 302
million payable to TMAR, of which R$ 179 million was already
recorded in the Company's books. Accordingly, from the R$ 123
million balance, R$ 55 million were recorded as "recovered
expenses", and R$ 51 million as "reversal of contingencies" both
as "other operating expenses (revenues)". A monetary restatement
of approximately R$ 17 million was accounted for as "other
financial revenues".

Up to 3Q04, TNL and its subsidiaries recorded the employees'
profit sharing in a specific statement of income account, after
the provision for income tax. As of 4Q04, the Company decided to
revise its accounting policies for 2004 and started to record
the amounts as "Other operating expenses", in line with the best
practices already adopted by other companies. In 4Q04, revenues
of R$ 19.7 million were recorded under other operating expenses.

These revenues in the quarter are due to the alignment of the
profit sharing with the targets set and then accomplished during
2004. In this connection, adjustments were made to the amounts
recorded in this line in prior 2004 quarters: 1Q04 - R$ 47.7
million; 2Q04 - R$ 51.3 million; 3Q04 - R$ 29.6 million.

Therefore, in 2004, the total impact of this line on the item
"other operating expenses (revenues)" was a R$ 108.9 million
expense.

Compared to 4Q03 and 2003, the increase in "other operational
expenses" amounted to R$ 255 million and R$ 533 million,
respectively, chiefly driven by the increase in provisions for
contingencies, in particular tax- and labor-related ones.

3.3 EBITDA

Consolidated EBITDA amounted to R$ 1,721 million, up 2.1% from
the previous quarter, with a 40.3% margin. If the 4Q04 EBITDA
were adjusted for non-recurring events in the quarter (provision
for ICMS on rental of IP network ports and credits recorded on
electricity services, the agreement with Embratel, and change in
the criterion for appropriating the restatement of contingencies
and tax credits), the amount recorded would have been R$ 1,762
million, with a margin of 41.3%.

In 2004, EBITDA stood at R$ 6,531 million, increasing by 5.8%
from 2003, with a 41.2% margin. The adjustments for non-
recurring events in 4Q04 previously mentioned would give rise to
an annual margin of 41.5% (2003 - 44.1%). EBITDA for the quarter
was retroactively adjusted to reflect the change in the
accounting criterion for profit sharing, which is now recorded
in other operating expenses(revenues).

- TMAR's consolidated EBITDA was R$ 1,680 million (+2.0% and
+6.3% from 3Q04 and 4Q03, respectively). EBITDA margin for the
period stood at 40.0% versus 41.0% in 3Q04. In the year, EBITDA
reached R$ 6,353 million (+5.6% from 2003) with a 40.7% margin
(2003 - 44.0%).

- Oi's EBITDA was R$ 69 million, with a margin of 9.3% (-3.1%
from 3Q04 and -2.0% from 4Q03). EBITDA margin for the year stood
at 4.1% versus 6.2% in 2003.

- Contax's EBITDA for the quarter was R$ 20 million, with a
margin of 10.2% (3Q04 - 7.4% and 4Q03 - 12.6%). Annual EBITDA
amounted to R$ 58 million, a 2.7% decrease from 2003, with a
8.9% margin (2003 - 14.5%).

3.4 DEPRECIATION / AMORTIZATION

Depreciation and amortization expenses amounted to R$ 830
million, decreasing by 6.2% and 9.1% from 3Q04 and 4Q03,
respectively. In 2004, these expenses totaled R$ 3,502 million,
a 6.8% decline compared to 2003,

3.5 EBIT

EBIT for the quarter totaled R$ 1,007 million, up 26.7% and
38.9% on 3Q04 and 4Q03, respectively. The main drivers were the
decline in depreciation, and the increase in equity adjustments,
chiefly due to tax benefits (IR/CS) on investments. In 2004,
EBIT amounted to R$ 3,148 million, growing by 26.3% from 2003,
primarily due to the increased EBITDA and lower
depreciation/amortization expenses.

3.6 FINANCIAL RESULTS

Net financial expenses amounted to R$ 355 million in 4Q04,
totaling R$ 1,641 million in 2004, down R$ 63 million from 3Q04
and R$ 537 million from 2003. Financial revenues grew R$ 108
million compared to the previous quarter, basically due to
rebates on ICMS credits, interest on financial investments and
monetary restatement of credits received. Financial expenses
increased by R$ 45 million from the prior quarter. The main
items are as follows:

i) Interest on loans and financing amounted to R$ 203 million,
in line with the previous quarter.

(ii) Exchange results on loans and financing totaled R$ 153
million (R$ 9 million increase quarter-on-quarter), arising
from:

(a) Foreign exchange and monetary variation revenues of R$ 418
million, due to exchange revenues of R$ 439 million on foreign
currency loan, brought about by the 7.1% appreciation of the
real in the quarter - compared to revenues of R$ 674 million in
3Q04 - and monetary variation expenses (R$ 21 million);

(b) Currency swap results (R$ 571 million), arising from
expenses of R$ 300 million from exchange variations due to the
appreciation of the real during 4Q04 (3Q04 - R$ 339 million) and
interest expenses, CDI-based, amounted to R$ 270 million (3Q04 -
R$ 261 million).

(iii) Other financial expenses increased by R$ 35 million
compared to 3Q04, mainly due to higher banking fees, monetary
restatement of provisions and other expenses.

3.7 NET INCOME

Consolidated net income for the quarter amounted to R$ 293
million (3Q04 - R$ 159 million and 4Q03 - R$ 514 million),
equivalent to R$ 0.77 per share (US$ 0.28 per ADR). Consolidated
net income for the year added up to R$ 751 million (versus R$
213 million in 2003), equivalent to earnings per share of R$
1.98 (US$ 0.68 per ADR).

4. DEBT

Consolidated gross debt, including swap contract results,
totaled R$ 12,014 million at the end of 2004, of which 70% was
denominated in foreign currencies. The cash position reached R$
5,472 million. Net debt of R$ 6,542 million, is down R$ 458
million (6.5%) from Sep/04, and R$ 1,292 million from the end of
2003, representing a 16.5% reduction in the period. The cash
position was impacted by the Share Buyback Program. The
consolidated amount repurchased under this program since Jun/04
is R$ 349 million (4Q04 - R$ 140 million and 2003 - R$ 23
million).

At the end of 2004, cash and cash equivalents exceeded short-
term debt by 78.9%. At the end of 2004, local currency loans
amounted to R$ 3,549 million (30% of total debt), consisting of
R$ 2,123 million due to BNDES, at an average cost of TJLP + 4.4%
p.a., and R$ 1,225 million relating to local non-convertible
debentures, bearing interest at CDI + 0.7% p.a. and maturing in
2006.

Foreign currency loans, in the amount of R$ 8,465 million -
including swap results of R$ 1,417 million - bear interest at
contractual average rates of 5.6% p.a. for transactions in U.S.
dollar, 1.5% p.a. fixed for transactions in Japanese yen, and
11.1% p.a. for a basket of currencies (BNDES). Approximately
74.2% of the original foreign currency loans were subject to
floating interest rates.

Of the total foreign currency debt, approximately 91% had some
kind of hedge, with 74.8% in foreign exchange swap transactions
(87% of which contracted through final maturity of the related
debts), and 16.2% in financial investments linked to exchange
variations.

Under the exchange swap transactions, exposure to foreign
currency fluctuations is transferred to local interest rates
(CDI). The average cost of swap transactions, at the end of the
quarter, was equal to 100.4% of the CDI rate (which stood at
16.9% on average in the quarter).

During 4Q04, TMAR obtained funds amounting to R$ 535 million, of
which R$ 315 million was allocated to Oi's Capex program and
working capital needs, and R$ 210 million was used to finance
the wireline acquisition of equipments and services. In 2004,
Telemar obtained credit lines from BNB - Banco do Nordeste do
Brasil - in the amount of R$ 307 million to finance both the
Velox (ADSL) project expansion in the Northeast region and the
Universalization Program. During the quarter, R$ 19 million was
drawn under this facility (2Q04 - R$ 64 million).

Amortization in the quarter totaled R$ 677 million, of which R$
354 million relates to principal repayments and R$ 323 million
to cash interest expenses. At the end of 2004, loans owed by
TMAR to TNL amounted to R$ 829 million.


5. CAPITAL EXPENDITURES:

During the quarter, Capex totaled R$ 862 million, of which R$
449 million was allocated to the wireline and R$ 382 million to
the wireless business.

In 2004, Capex amounted to R$ 1,996 million (12.6% of revenues,
being 37% allocated to the wireless business - and 60% to the
wireline business. Funds designated to expand Contax's capacity
amounted to some R$ 64 million.

6. CASH FLOW:

Consolidated cash flow from operations reached R$ 1,850 million
in the quarter (3Q04 - R$ 1,428 million). The consolidated free
cash flow after investing activities amounted to R$ 898 million,
increasing by R$ 70 million when compared to 3Q04, in spite of
the increased investment activities in the last quarter of the
year (R$ 352 million).

Disbursements under the Share Buyback Program amounted to R$ 140
million in 4Q04 and R$ 349 million since Jun/04.

In 2004, the consolidated cash flow after investing activities
reached R$ 3,995 million, versus R$ 4,048 million in 2003.

7. MAIN EVENTS OF THE QUARTER:

Dividends proposed for 2004: TNL and TMAR TNL management will
submit to the Annual Shareholders' Meeting the distribution of
R$1.10 billion as dividends/interest on capital (IOC) for fiscal
year 2004. Of this total, R$ 100 million will be distributed as
IOC (already attributed to shareholders on 01/30/2004), and R$
1.0 billion as complementary dividends to be distributed after
the approval at the shareholders' meeting.

TMAR management will submit to its Annual Shareholders' Meeting
the distribution of R$ 1.35 billion as annual dividends/interest
on own capital. Of this total, R$ 760 million will be
distributed as IOC (already attributed to shareholders) and R$
590 million as complementary dividends to be distributed after
the approval at the shareholders' meeting.

SPIN-OFF OF CONTAX PARTICIPACOES

On November 26, 2004, TNL announced, as a Relevant Fact, the
spin-off of Contax Participacoes, aligning TNL's and TMAR's
interests, which will be focused on the core telecommunication
business. Shares in Contax S.A. held by TNL (equivalent to R$
126 million) were first transferred to Contax Participacoes, via
a capital increase; subsequently, a R$ 58 million credit
recorded by TNL against Contax was capitalized; and finally, the
capital of Contax Participacoes was further increased by R$ 90
million.

The Shareholders' Meeting held in Dec/04 approved the spin-off
transaction involving TNL's capital reduction by R$ 278 million
and future delivery to TNL shareholders of shares in Contax
Participacoes.

The Company decided to implement a new "ADR - American
Depositary Receipt" program for the preferred shares in Contax
Participacoes, in order to facilitate the trading of the
securities in the over the counter U.S. markets by investors
holding Tele Norte Leste Participacoes ADRs. As soon as the
related listings are completed, Contax shares and ADRs will be
traded on Bovespa and U.S. stock markets, respectively.

SHARE BUYBACK PROGRAM

Since its inception in Jun/04 through to the end of Dec/04,
disbursements under the Share Buyback Program amounted to R$ 349
million. Of this total, R$ 248 million was disbursed by TNL to
repurchase 6,271,463 shares (861,200 common and 5,410,263
preferred shares), and R$ 102 million by TMAR to repurchase
1,890,289 shares (113,173 common and 1,777,116 preferred
shares). The amount of shares repurchased represent
approximately 24% of the authorized total.

On 11/26/04, following the announcement of the Contax spin-off
transaction, TNL closed the share buyback program. The program
was reinstated on 01/26/05 for a 90-day period, since the
listing of Contax shares (ADRs) with SEC will not likely be
completed before then. The TMAR program continues as originally
announced.

TARIFF ADJUSTMENTS

The Superior Court of Justice ratified the use of the IGP-DI
index to adjust tariffs as of June 2003, with the difference -
8.7% for the local basket and 10.9% for long distance - being
applied in two installments (to the adjusted tariffs effective
on 06/30/04). On 09/01/04, the Company applied the first
installment, of 4.4% for the local basket and 5.5% for long
distance rates. On 11/01/04, the second installment was applied,
increasing local basket tariffs by 4.2% and long-distance rates
by 5.2%.

AGREEMENT WITH EMBRATEL

In Nov/04, the Company management entered into an agreement with
Embratel in order to settle administrative and judicial
litigation between the parties, in particular litigation
relating to the payment of interconnection tariffs. The net
restated amount of the litigation was a R$ 302 million credit to
TMAR, of which R$ 179 million had already been recorded.

Accordingly, R$ 55 million were recognized in "Other operating
revenues - Recovered expenses" and R$ 17 million was recorded as
monetary restatement, in "Other financial revenues".

Besides this, the termination of the litigation entailed the
withdrawal of all administrative and judicial claims, with the
ensuing reversal of the provision for contingencies in the
amount of R$ 51 million ("other operating revenues").

In December 2004, those amounts which had been deposited in
court by Embratel with respect to the litigation mentioned, in
the amount of R$ 188 million, inured to TMAR. The agreement also
provides that TMAR receive the remaining balance in six monthly,
consecutive installments restated by the CDI rate. The first one
matured in December 2004.

NEW DEALS, PRODUCTS AND SERVICES

Telemar enters into an agreement with Vale do Rio Doce (CVRD)
Under this R$ 62 million agreement, all CVRD activities
involving national and international data and voice network,
0800, local voice, internet access and videoconference services,
in addition to remote network management, will be outsourced to
Telemar.

TELEMAR - SMS IN FIXED LINES

The "Smart Phone Telemar" launched in December enables text
messages to be sent to, and received from Telemar fixed lines,
as well as to Oi mobile lines, at a monthly subscription cost of
R$ 12.90 where the receiving phone does not have the SMS
feature, the service platform automatically converts the text
message into a voice message. Additionally, messages can be sent
to any e-mail address by using the telephone as a computer.

OI SMS

During the year, Oi customers sent approximately 382 million
text messages (SMS), a 124.3% increase from 2003. This growth
was driven by the development of products and promotions, such
as services specifically designed for the Olympic Games and TV
shows (Big Brother Brasil), in addition to "Oi Torpedo
Premiado", a promotion where text messages sent entitle
customers to awards offered. Additional inter-operability
agreements with other wireless companies also helped to expand
this traffic.

OI CONTROLE

The "Oi Controle" plan was launched in 3Q04, combining post and
prepaid plan features. At the end of December/04, 135 thousand
customers had subscribed to this plan, with 81 thousand net
additions in the 4Q04.

FREE ROAMING FOR OI CUSTOMERS IN REGION II

Effective January 2005, free roaming became available to Oi
customers - which pay only local rates to place local calls when
connected to the BRT GSM network (10 states in Region II). BRT
GSM customers are also offered free roaming in Oi's network.

2004/2005 COLLECTIVE LABOR AGREEMENT

In December/04, TMAR and local labor unions entered into labor
agreements for 2005. Wage and salary increases are as follows:

                Nominal Wages (R$)     %
                  from    up to
                   up to  3,000.00    6.0%
                3,000.01  5,000.00    5.0%
              Higher than 5,000.00    0.0%


The average impact on monthly payroll is estimated by management
at 3%.

To view financial statements:
http://bankrupt.com/misc/Telemar.pdf

CONTACT: Relacoes com Investidores
         (IR Team)
         Carlos Lacerda/Sara/Jose Carlos/Carolina
         E-mail: invest@telemar.com.br
         Phone: 55(21) 3131-1314/1313/1315/1316

         Global Consulting Group
         Mr. Kevin Kirkeby
         E-mail: kkirkeby@hfgcg.com
         Phone: 1(646) 284-9416



===================================
D O M I N I C A N   R E P U B L I C
===================================

* Analysts Expect Debt Swap Bill Approval Soon
----------------------------------------------
The congressional deadlock that has delayed the restructuring of
the Dominican Republic's external debt will be solved soon,
reports DR1 Daily News, citing Commerzbank analyst Beat
Siegenthaler. He expressed optimism that Congress would approve
the debt swap legislation within days after the restart of its
sessions on March 8.

"We expect congress to approve the bill possibly by the end of
next week and the government to announce the details of the debt
exchange shortly thereafter", Mr. Siegenthaler said.

The announcement of the debt swap details was delayed when
President Leonel Fernandez resent to Congress the same bill that
the Senate had refused to approve.

Mr. Siegenthaler added: "The government has expressed its desire
to implement the debt swap in the first quarter and we believe
this is still just about possible. While we do not see any more
upside to prices until after the exchange, we believe that once
it has been concluded, bond yields should tighten in line with
DR peers."


===========
M E X I C O
===========

ALFA: Subsidiary Completes Purchase of New Dairy Asset
------------------------------------------------------
ALFA, S.A. de C.V. (ALFA) announced Thursday that its subsidiary
Sigma Alimentos, S. A. de C. V. (Sigma), a company involved in
the food business, has completed the acquisition of New Zealand
Milk Mexico.

As announced at the end of 2004, Sigma had reached an agreement
with Fonterra, from New Zealand, regarding the acquisition of
New Zealand Milk Mexico, the company which represented
Fonterra's interests in Mexico in the dairy business. Such
agreement was subject to approval from the Mexican Federal Trade
Commission, which has already been obtained.

"This acquisition allows us to advance on our strategy of
strengthening the competitive position in our country. We are
now the market leaders in the production and commercialization
of cheese," commented Mario Paez, Sigma's President. "The
Mexican cheese market is still quite fragmented and the product
offer is quite wide. This brings ample opportunity for further
growth and development," he added.

The acquisition strengthens Sigma's portfolio of brands by
adding some with a long tradition in the market place. Such is
the case of "Nochebuena" and "Eugenia," with which Sigma's offer
of premium products for the Mexican consumer is widened.

About New Zealand Milk

New Zealand Milk Mexico has a strong presence in the country's
dairy market. The company produces cheese, sour cream, butter
and margarine. It has production facilities in three Mexican
cities: Mexico DF, Celaya and Guadalajara. New Zealand markets
its products under brands such as: "Nochebuena", "Franja",
"Eugenia" and "Delicia". In 2004, it reported sales equivalent
to US$100 million and employed 1,500 people.

About Sigma

Sigma is the leader in Mexico's refrigerated food market. It is
also present in the United States, Central America and the
Caribbean. Its product offer includes cold cuts, dairy products
and other refrigerated foods. In 2004, Sigma reported sales
equivalent to US$ 1,220 million and employed more than 20,000
people.

About Alfa

ALFA is a Mexican company involved in the petrochemicals,
refrigerated food, aluminum auto components, steel and telecom
businesses. In 2004, ALFA reported sales in excess of US$5
billion and employed more than 38,000 people.

CONTACT: ALFA
         Mr. Enrique Flores
         Director of Corporate Communications
         Phone:(011-52-81) 8748 1207
         E-mail: eflores@alfa.com.mx


PRIDE INTERNATIONAL: Bounces Back To Profit in 4Q04
---------------------------------------------------
Pride International, Inc. (NYSE: PDE) reported income from
continuing operations for the fourth quarter of 2004 of
$16,042,000 ($.11 per diluted share) on revenues of
$448,058,000. For the same period in 2003, Pride reported a loss
from continuing operations of $2,549,000 ($.02 per diluted
share) on revenues of $397,888,000. For the year ended December
31, 2004, Pride reported income from continuing operations of
$14,026,000 ($.10 per diluted share) on revenues of
$1,712,200,000. For the year ended December 31, 2003, Pride
reported income from continuing operations of $42,549,000 ($.31
per diluted share) on revenues of $1,565,806,000. Results for
the first three quarters of 2004 and for 2003 have been restated
as described below.

Results for the fourth quarter of 2004 were affected by certain
pre-tax items netting to $17,903,000 which increased diluted
earnings per share by $.04. The items included a gain on sale of
assets of $50,325,000 reduced by an asset impairment charge
relating to certain land rigs and platform rigs of $24,897,000,
executive severance costs of $1,084,000 and refinancing costs of
$6,441,000.

Results for the year ended December 31, 2004 were affected by
pre-tax items totaling $19,257,000 which reduced earnings per
share by $.13. The items included a total charge for executive
severance costs of $3,933,000, total refinancing costs of
$37,239,000 and damage costs from Hurricane Ivan of $3,513,000,
together with the gain on sale of assets and asset impairment
charge described above.

Discontinued Operations

The Company has classified as "discontinued operations" in each
period its fixed-fee rig construction business, which has now
completed construction of four deepwater platform rigs for third
parties. The Company does not intend to enter into additional
business of this nature. During the fourth quarter, the Company
realized an after tax gain of $1,379,000 related to positive
commercial resolutions of certain contractual issues.

Reclassification and Prior Period Restatements

The results in all periods also reflect a reclassification of
certain costs from general and administrative costs to operating
costs. The Company has changed its classification of these costs
to more closely align its presentation to that of its industry
peers.

In addition, the quarterly and full-year results for 2004 and
2003 have been restated to correct certain errors related
primarily to transactions initially recorded in periods from
1999 to 2002, but affecting periods from 1999 through 2004. The
Company currently estimates that the cumulative effect for the
nine months ended September 30, 2004 and the years ended
December 31, 2003 and 2002 will result in an increase in net
income or a reduction of net loss, as the case may be, for the
periods of approximately $1,266,000, $2,495,000 and $812,000,
respectively. The Company estimates that these items also will
result in a cumulative decrease in net income for the years 1999
to 2001 of approximately $3,977,000 in the aggregate and a
cumulative increase in net income for all years from 1999 to
2004 of approximately $596,000 in the aggregate. Because the
Company has determined to restate its prior financial statements
to correct the errors, it expects to file amendments to certain
of its previously filed periodic reports. The Company is to
complete its evaluation of these matters prior to the filing of
its 2004 annual report on Form 10-K and such amendments. As a
result of the evaluation, the Company could make further
adjustments to the 2004 and 2003 results presented in this press
release.

Asset Sales and Retirements

The Company completed two transactions during the quarter in
which it sold three jackup rigs for $71 million cash. The
Company recorded a $32,738,000 gain (after tax) in connection
with the transactions. The Pride West Virginia was sold for $60
million, and the Pride Kentucky and the Pride Illinois, two
cold-stacked, mechanical mat-supported jackup rigs, were sold
for $11 million, exclusive of specified drilling equipment,
which the Company retained. The purchaser of the two mat-
supported jackup rigs has indicated its intention to use the
rigs as mobile offshore production units. The Company used the
proceeds from these transactions to repay debt.

During the fourth quarter of 2004, the Company retired 16
stacked land rigs as well as nine stacked shallow water platform
rigs resulting in an impairment charge totaling $18,099,000
after tax.

In the first quarter of 2005, one of the Company's French
subsidiaries sold the Energy Explorer IV (Pride Ohio) and
received $40 million in cash. The Company also used the proceeds
from this transaction to repay debt.

Operations

The overall market for the Company's drilling rigs continued to
improve during the fourth quarter of 2004. In the U.S. Gulf of
Mexico, segment results for the quarter improved sequentially
over the third quarter of 2004, as well as over the fourth
quarter of 2003, due to improving dayrates. Average daily jackup
revenues during the fourth quarter of 2004 increased to $35,000,
up from $26,200 during the prior year's quarter and $32,000
during the third quarter of 2004.

As planned, the Company conducted shipyard maintenance on the
drillship Pride Africa and an in-field survey of the semi-
submersible Pride North America during the fourth quarter. In
addition, transit downtime for the mobilization of the jackups
Pride North Dakota and Pride Mississippi significantly impacted
the quarter. Accordingly, results from Eastern Hemisphere and
Western Hemisphere operations declined from their third quarter
levels.

The Company's Latin America Land and E&P Services segments
improved substantially over the fourth quarter of 2003 as a
result of increased utilization and pricing driven by strong
demand. Results for the segments improved modestly on a
sequential basis, as rig utilization remained strong throughout
the quarter, especially in Argentina and Venezuela.

Debt Reduction

As it previously announced, the Company reduced outstanding debt
during the fourth quarter of 2004 by approximately $260 million,
bringing the total debt repayment for the year to approximately
$300 million. Success in the Company's efforts to reduce working
capital yielded approximately $160 million of funds applied to
debt reduction during the fourth quarter. For the full year, a
net working capital reduction of approximately $115 million was
applied to debt reduction, with cash flow from operations
contributing a similar amount, while proceeds from asset sales
contributed $71 million toward the debt reduction results.

Paul A. Bragg, President and Chief Executive Officer, commented,
"The past year was a period of significant transformation and
achievement for the Company. We reduced debt by $300 million. To
further reduce our debt, we are currently pursuing potential
asset sales in excess of $100 million. In addition, the
anticipated conversion of our 2 1/2% convertible debentures
would reduce debt by an additional $300 million along with a
$300 million increase in equity."

Audit/Sarbanes-Oxley

Section 404 of the Sarbanes-Oxley Act of 2002 requires the
Company to include an internal control report in its annual
report on Form 10-K for the year ended December 31, 2004, which
is to include management's assessment of the effectiveness of
the Company's internal control over financial reporting as of
the end of the fiscal year. That report also is required to
include a statement that the Company's independent auditors have
issued an attestation report on management's assessment of
internal control over financial reporting.

As of the date of this press release, the Company expects that
it will report in its 2004 annual report on Form 10-K a material
weakness in internal control over financial reporting related to
the complexity and timeliness of the Company's accounting close
process caused primarily by the Company's decentralization and
manual processes. The Company has performed and may complete
additional substantive testing of its results of operations for
2004 to compensate for these internal control issues. Based upon
such testing to date, the Company believes that these internal
control issues will not have a material impact on the Company's
financial information presented herein. The Company's
independent auditors have not completed their testing, and no
assurances can be given that the Company's completion of its
2004 annual report on Form 10-K, or testing related thereto,
will not result in adjustments to the financial information
provided herein or the identification of additional internal
control deficiencies or material weaknesses.

The Company cannot assure that the steps it has taken or is
taking to address the internal control matters described above
will be adequate, that one or more deficiencies will not
ultimately be determined to be material weaknesses or that
additional control deficiencies will not be identified. If the
Company concludes that the matters identified above constitute a
material weakness as expected, management will be unable to
conclude that the Company's internal control over financial
reporting was effective as of December 31, 2004. A full
discussion of the Company's internal controls will be included
in its 2004 annual report on Form 10-K.

Because preparation and completion of the Company's financial
statements in connection with its 2004 annual report on Form 10-
K are ongoing, the financial information presented in this press
release is preliminary and subject to adjustment.

About Pride International:

Pride International, Inc., headquartered in Houston, Texas, is
one of the world's largest drilling contractors. The Company
provides onshore and offshore drilling and related services in
more than 30 countries, operating a diverse fleet of 290 rigs,
including two ultra-deepwater drillships, 12 semi-submersible
rigs, 29 jackup rigs, 20 tender-assisted, barge and platform
rigs, and 227 land rigs.

To view financial statements:
http://bankrupt.com/misc/Pride.htm

CONTACT: Mr. Robert E. Warren
         Mr. Steven D. Oldham
         Phone:(713) 789-1400


SANLUIS CORPORACI0N: High Steel Cost Dampens 2004 Profit
--------------------------------------------------------
SANLUIS Corporacion, S.A. de C.V. (BMV: SANLUIS), a Mexican
industrial group that manufactures autoparts (Suspension and
Brake components), reported Thursday results for the year ended
December 31, 2004.

- Sales were US$ 152.4 million in the fourth quarter of 2004,
and US$580 million for the full year.

- EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) in the last three months were US$ 13.1 million (9%
to sales), and US$ 57 million (10% to sales) for the twelve
months of 2004.

Compared to the fourth quarter of last year, sales increased 14%
while EBITDA decreased 30%; comparing against the full year
2003, sales increased 20% and EBITDA decreased 16%.

Even with the extraordinary sales levels achieved in 2004,
SANLUIS consolidated results present a lower operating income
level due mainly to the impact generated by the severe and
unprecedented increase in the international price of steel and
steel scrap (+41% and +82% respectively, in 2004) and a 22%
higher domestic cost of electric energy.

In 2004, sales in the Suspension Division (78% of total volume)
were 28% above the previous year levels, with all product lines
having important increases in Dollar terms (Leaf Springs: +27%,
Coil Springs: +45%, and Torsion Bars: +19%); this growth
translated into an extraordinary 92% market share for leaf
springs in the NAFTA region compared with 77% in 2003. In the
Brake Division (22% of total volume), sales remained almost flat
in 2004, but with a richer content based on a more profitable
product mix due to a larger percentage of high value added brake
assemblies.

The Consolidated Operating Margin (EBITDA/Sales) in 2004 is four
percentage points lower than the one achieved in the same period
of last year (10% vs. 14%), due to the larger cost of steel that
specially affected our NAFTA related Suspension business (63% of
consolidated sales), whereas our Brazilian Suspension operations
(15% of sales) reported increased EBITDAs due to the successful
negotiations by which cost increases were passed-through to
customers in the form of higher sales prices.

In the Brake division (22% of sales), the EBITDA level is
similar to the 2003 figure due to a richer product mix and
important improvements in productivity that have compensated the
higher steel scrap prices (in average 58% higher than 2003) and
electric energy costs (22% higher). In general, the cost
increase in steel, our major raw material (representing 59% of
our direct cost base in the Suspension division), has not been
fully compensated in spite of the excellent sales volume
achieved in the NAFTA region; however, we expect that larger
volumes in high value added assemblies, lower fixed
manufacturing costs and improved productivity levels at our
production facilities will help us to achieve in the mid-term
the profitability levels of recent years.

In the Income Statement, the lower EBITDA level and the Exchange
Losses recorded due to the Mexican peso devaluation against the
US Dollar (based on our net liability position in foreign
currency), have been fully compensated by the Monetary Gains in
our net monetary liability position and by the important gains
realized on the repurchase of SANLUIS un-restructured debt at a
discount against its face value, producing at the end a Net Loss
for 2004 of US$ 5.3 million, which compares to the US$ 1.8
million profit reported a year earlier.

From December 2003 to December 2004 the company reduced its
outstanding debt in US$ 36 million through debt repurchases at a
discount to face value and scheduled amortizations on its
operating company bank debt.

Higher sales caused additional working capital requirements in
addition to a temporary increase in inventories as a result of
the scarcity in steel availability and the start up of new
products, these effects were almost fully compensated by
additional supplier financing. In terms of cash flow generation,
and in spite of the lower EBITDA recorded and the additional
working capital requirements, the company was able to increase
in Dollar terms its available cash and marketable securities at
the end of the year by 35% compared to the same period of 2003,
even with the relevant and extraordinary negative external
factors that affected the operations of the Company during 2004.

About Sanluis

SANLUIS produces Suspension and Brake components for the global
automotive industry, with a focus on Original Equipment
Manufacturers (OEMs).

Suspension products include Leaf Springs (parabolic and multi-
leaf), Coil Springs, Torsion Bars, Bushings, and Stabilizer
Bars. The Brake Division produces Drums and Rotors.

SANLUIS-Rassini has a 92% share of the NAFTA market (U.S.,
Mexico and Canada) for light truck suspensions. Its solid and
diversified client base includes General Motors, Ford Motor
Company, Daimler-Chrysler, Nissan, Volkswagen and Toyota. In the
Brake division, SANLUIS-Rassini has a 12% market share in the
light truck and automobile segment of the U.S. and Canadian
markets.

To view financial statements:
http://bankrupt.com/misc/SanLuis.pdf

CONTACT: SANLUIS Corporacion S.A. de C.V.
         Mr. Antonio Olivo
         Investor Relations
         E-mail: aolivo@sanluiscorp.com.mx

         Phone: (5255) 5229-58-44
         Fax: (5255) 5202-66-04


=================
V E N E Z U E L A
=================

CERRO NEGRO: ExxonMobil To Discuss Tax Hike With Venezuela
----------------------------------------------------------
Exxon Mobil Corp. (XOM) is set to meet with Venezuelan officials
to discuss the increase the government mandated, without prior
notice, on the royalty tax of its Cerro Negro heavy crude
upgrading project, reveals Dow Jones Newswires. From 1% last
October, the government hiked the royalty rate for Cerro Negro
and three other similar projects in Venezuela's Orinoco tar belt
to 16.6%.

In an e-mailed statement to Dow Jones, the company said the
Venezuelan Ministry of Energy has agreed to meet with its
officials, reiterating that the company wishes to resolve the
issue amicably.

The world's largest oil firm argues the low tax rate compensated
for heavy investment during the initial phases of the project.
Last week, however, Oil Minister Rafael Ramirez said the
increase is justified because of skyrocketing oil prices in the
world market, and ruled out the possibility of the tax hike's
rollback.

Exxon Mobil, whose partners in Cerro Negro are BP PLC (BP) and
state-run Petroleos de Venezuela SA (PVZ.YY), is the first of
five international oil companies operating in the area to
publicly challenge the tax increase. Norway's Statoil ASA (STO),
Houston-based ConocoPhillips (COP) and France's Total SA (TOT)
are also involved in projects to upgrade Venezuela's heavy tar
oil into marketable synthetic crude.


CITGO: Venezuelan Governmant Launches Regulatory Probe
------------------------------------------------------
Ex-Citgo president Luis Marin comes under fire as the Venezuelan
National Assembly begins an inquiry to look into alleged
irregularities at PDVSA's U.S.-based oil refining and
distribution network during his tenure.

Rumors of lobbying costs related to the Company's move from
Tulsa to Houston, supply purchase irregularities and commissions
for debt restructuring programs set off the investigation.

Jesus Alberto Garcia Rojas, head of the assembly's comptroller
commission, told Petroleumworld that several assembly members
will visit Citgo's Houston headquarters this week to oversee the
questioning of some of the Company's present and former
employees.

Mr. Marin, for his part, has claimed that his actions at Citgo
were carried out under legal norms and procedures required by
the corporation. He said that the maligned 2004 restructuring
program had eased the Company's debt load by as much as US$360
million. Further, he justified the changes made on the Company's
standing crude supply contracts by saying that the move
contributed another US$184 million to PDVSA's coffers in 2004.


* S&P Raises Foreign Currency Ratings to 'B' from 'SD'
------------------------------------------------------
Standard & Poor's Ratings Services raised its long- and short-
term foreign currency sovereign credit ratings on the Bolivarian
Republic of Venezuela to 'B' from 'SD' following Thursday's
payment on the government's oil-indexed payment obligations due
Oct. 15, 2004.

According to Standard & Poor's Ratings Services credit analyst
Richard Francis, Venezuela's capacity and willingness to service
its debt is comparable to that of other 'B' rated issuers. No
further delay is expected on payments on the oil-indexed payment
obligations, as the government has reinstated the flow of
information to the calculation agent.

"The ratings on Venezuela remain constrained despite improved
economic and external indicators," Mr. Francis said. "This can
be attributed to high and growing dependence on the oil sector,
weak and less transparent government institutions, and its
relatively high general government fiscal deficit, expected at
over 4% despite the oil boom," he concluded.


                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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