The statement of cash flows reflects the Company’s operating, investing and financing activities derived from accounting records prepared in accordance with Brasilian Corporate Law and has been presented in accordance with International Accounting Standards (IAS) No. 7 - “Cash Flow Statements”.

	2005	2004
Cash flow from operating activities:
Net income for the year	865,647	513,028
Adjustments to reconcile net income:
Deferred taxes and contributions	(32,470)	340
Deducted taxes	-	(43,096)
Provisions for contingencies	135,714	91,183
Social security liabilities	68,665	89,906
Residual value of the asset written-off	19,051	34,440
Write-off of deferred assets	6,700	-
Provision for investments	4,360	-
Depreciation and amortization	595,981	595,981
Interests calculated on loans and credit facilities payable	677,921	693684
Monetary and foreign exchange variations on loans and credit facilities	(230,797)	(103,640)
Monetary variation on interest on own capital	715	9,794
Interests and monetary variations in liabilities	24,852	28,128
Interests and monetary variations in assets	(21,343)	(36,000)
Bad debt expense	255,292	241,577
Adjusted net income	2,370,288	2,118,255
Variation in assets:
Accounts receivable net – short-term	(363,110)	(244,047)
Accounts receivable from shareholders	(27,991)	(166,627)
Inventories	(6,466)	(7,296)
Other accounts receivable	9,265	(20,273)
Accounts receivable, net – long-term	(122,935)	(169,839)
Accounts receivable from shareholder	(96,388)	(104,977)
Escrow deposits	(11,737)	1,387
Other accounts receivable	(4,944)	(1,753)
	(624,306)	(713,425)
Variation in liabilities:
Accounts payable to suppliers and contractors	26,203	(356)
Salaries and social payroll charges	10,061	(28,066)
Interest on shareholders’ equity	(727)	(1,865)
Taxes and contributions payable	(50,064)	49,735
Other accounts payable – short-term	35,776	25,811
Pension fund	(14,283)	(13,270)
Provisions for contingencies	(13,921)	(4,416)
Other long term accounts payable	15,801	3,723
	8,846	31,296
Net cash provided by operating activities:	1,754,828	1,436,126

	2005	2004
Cash flow from investment activities:
Purchases of property, plant and equipment	(660,373)	(670,257)
Proceeds from the sale of property, plant and equipment	-	176
Increase in deferred assets	(106)	(444)
Net cash used in investment activities	(660,479)	(670,525)
Cash flow from financing activities:
Loans and financing – short-term
Funds raised	-	130,000
Repayments	-	(133,787)
Loans and financing – long-term
Funds raised	1,153,479	780,722
Repayments	(1,991,370)	(1,585,496)
Payment of interest on shareholders’ equity	(81,842)	(132,496)
Net cash used in financial activities	(919,733)	(941,057)
Increase (decrease) in cash/cash equivalents	174,616	(175,456)
Cash and cash equivalents at the beginning of the fiscal year	105,557	281,013
Cash and cash equivalents at the end of the fiscal year	280,173	105,557
Net increase (decrease) in cash and cash equivalents	174,616	(175,456)
Supplementary cash flow information:
Interests paid on loans and financing	701,641	701,261
Capitalization of interests and financial charges	4,335	4,907
Income tax and social contribution paid	359,826	129,973
Property, plant & equipment received as donation and/or paid as shares	13,529	14,552
Cofins and Pasep paid	378,932	216,699
Settlement of accounts	(715)	(126,814)