Revision of accounting treatment of the Mandatorily Exchangeable Notes

MILLICOM INTERNATIONAL CELLULAR S.A. FOR IMMEDIATE RELEASE November 4, 2003 REVISION OF ACCOUNTING TREATMENT OF THE MANDATORILY EXCHANGEABLE NOTES New York, London and Luxembourg - November 4, 2003 - Millicom International Cellular S.A. ("Millicom") (Nasdaq: MICC) announced its results for the quarter and nine months ended September 30, 2003 on October 22, 2003. Prior to that release, the accounting treatment of its approximately $310 million 5% Mandatorily Exchangeable Notes (the "Notes") and the Tele2 AB shares into which the Notes are exchangeable was reviewed by PricewaterhouseCoopers, Millicom's auditors. Subsequently, PricewaterhouseCoopers has advised Millicom that there should be a change of accounting treatment relating to the Notes and the Tele2 AB shares. Based upon this revised professional advice, and to ensure compliance with IFRS, Millicom has decided to adopt this change. As a result, Millicom will mark-to-market on a quarterly basis the value of its holding of Tele2 AB shares, with any resulting changes in fair value being recorded in Millicom's profit and loss statement for such period under the heading "valuation movement on securities". Millicom will also account for the embedded derivative relating to the corresponding Note revaluation and to the potential 30% premium if the price of the Tele2 AB shares is above the reference price of SEK 285 in accordance with the terms of the Notes, at fair value with any subsequent change in its fair value being recorded in the profit and loss statement. The net impact on Millicom's results reflects an economic hedge against a decrease in the price of Tele2 AB shares and the premium that Millicom would realize at maturity if the price of the Tele2 AB shares is above the reference price in accordance with the terms of the Notes. Accordingly, Millicom is reissuing its results for the quarter and nine months ended September 30, 2003 to reflect the change in accounting treatment relating to the Notes, which results in an increase of $10.7 million in its profit and net shareholders' equity for the nine months ended September 30, 2003. Although changes in the market value of the Tele2 AB shares will impact Millicom's net income on a quarterly basis until the Notes mature in August 2006, the aggregate net impact over this period cannot result in a loss to Millicom. Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 16 cellular operations and licenses in 15 countries. The Group's cellular operations have a combined population under license of approximately 382 million people. In addition, MIC provides high-speed wireless data services in five countries. This press release may contain certain "forward-looking statements" with respect to Millicom's expectations and plans, strategy, management's objectives, future performance, costs, revenues, earnings and other trend information. It is important to note that Millicom's actual results in the future could differ materially from those anticipated in forward-looking statements depending on various important factors. Please refer to the documents that Millicom has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Millicom's most recent annual report on Form 20-F, for a discussion of certain of these factors. All forward-looking statements in this press release are based on information available to Millicom on the date hereof. All written or oral forward-looking statements attributable to Millicom International Cellular S.A., any Millicom International Cellular S.A. members or persons acting on Millicom's behalf are expressly qualified in their entirety by the factors referred to above. Millicom does not intend to update these forward-looking statements. CONTACTS: Marc Beuls Telephone: +352 27 759 101 President and Chief Executive Officer Millicom International Cellular S.A., Luxembourg Andrew Best Telephone: +44 20 7321 5022 Investor Relations Shared Value Ltd, London Visit our web site at: www.millicom.com Millicom International Cellular S.A. Consolidated statements of profit and loss for the three months ended September 30, 2003 and 2002 Quarter ended Quarter ended Sept 30, 2003 Sept 30, 2002 (Unaudited) (Unaudited) US$ '000 US$ '000 Revenues 156,668 155,826 Operating expenses Cost of sales (excluding (36,900) (40,410) depreciation and amortization) Sales and marketing (20,558) (20,093) General and administrative expenses (16,348) (24,234) Corporate and license acquisition (5,829) (3,559) costs Write-down of assets, net - (7,841) Depreciation and amortization (32,266) (37,380) Operating profit 44,767 22,309 Loss on exchange and disposal of - (59,737) investments Valuation movement on securities 17,532 (17,462) Fair value result on financial (26,440) - instruments Profit/ (loss) from associated 91 (860) companies Profit (loss) before financing and 35,950 (55,750) taxes Interest expense (36,044) (49,709) Interest income 3,396 3,188 Income for financial instruments - 22,911 Exchange loss, net (1,796) (2,199) Profit (Loss) before taxes 1,506 (81,559) Taxes (10,749) (5,844) Loss after taxes (9,243) (87,403) Minority interest (3,962) (2,417) Loss for the quarter (13,205) (89,820) Basic and diluted loss per common (0.81) (5.51) share (US$) Weighted average number of shares and diluted potential shares in the period 16,325 16,287 (in thousands) Millicom International Cellular S.A. Consolidated statements of profit and loss for the nine months ended September 30, 2003 and 2002 9 months ended 9 months ended Sept 30, 2003 Sept 30, 2002 (Unaudited) (Unaudited) US$ '000 US$ '000 Revenues 445,249 449,907 Operating expenses Cost of sales (excluding (107,571) (123,898) depreciation and amortization) Sales and marketing (57,286) (59,995) General and administrative (52,557) (66,918) expenses Corporate and license acquisition (17,100) (16,822) costs Write-down of assets, net (310) (9,449) Depreciation and amortization (90,654) (105,915) Operating profit 119,771 66,910 Gain (loss) on exchange and 2,965 (33,039) disposal of investments Valuation movement on securities 117,405 (305,471) Fair value result on financial (26,440) - instruments Profit/ (loss) from associated 217 (2,540) companies Profit before financing and taxes 213,918 (274,140) Interest expense (91,764) (143,849) Interest income 4,976 9,126 Gain realized on debt exchange 97,052 - Other income - 13,571 Income for financial instruments - 20,562 Exchange gain/ (loss), net 6,313 (18,408) Profit (loss) before taxes 230,495 (393,138) Taxes (29,101) (19,549) Profit (loss) after taxes 201,394 (412,687) Minority interest (12,338) (5,520) Profit (loss) for the period 189,056 (418,207) Profit (loss) on a diluted basis 191,188 (418,207) Basic earnings (loss) per common 11.60 (25.62) share (US$) Diluted earnings (loss) per common 9.80 (25.62) shares (US$) Weighted average number of shares in the period (in thousands) 16,298 16,326 Weighted average number of shared and diluted potential shares in the 19,510 16,326 period (in thousands) Millicom International Cellular S.A. Consolidated balance sheets as at September 30, 2003 and December 31, 2002 Sept 30, Dec 31, 2003 2002 (Unaudited) (Audited) US$ '000 US$ '000 Assets Non-current assets Intangible assets Goodwill, net 54,813 10,172 Licenses, net 34,139 84,471 Deferred costs and other 5,624 4,919 non-current assets, net Tangible assets, net 481,691 458,933 Financial assets Investment in securities 397,708 220,386 Investment in associated company 1,013 1,013 Pledged deposits 20,507 32,921 Deferred taxation 6,179 8,470 Total non-current assets 1,001,674 821,285 Current assets Investment in securities - 101,540 Inventories 10,403 6,962 Debtors Trade debtors, net 106,932 113,221 Amounts due from joint ventures 12,385 14,053 Amounts due from other related parties 4,416 6,806 Prepaid and accrued income 26,456 14,148 Other current assets 32,319 38,453 Time deposits 16,034 16,200 Cash and cash equivalents 134,631 70,451 Total current assets 343,576 381,834 Total assets 1,345,250 1,203,119 Millicom International Cellular S.A. Consolidated balance sheets as at September 30, 2003 and December 31, 2002 Sept 30, Dec 31, 2003 2002 (Unaudited) (Audited) US$ '000 US$ '000 Shareholders' equity and liabilities Shareholders' equity Share capital and premium 239,633 281,989 Treasury stock (8,705) (54,521) 2% PIK notes 16,053 - Legal reserve 4,256 4,256 Retained loss brought forward (453,563) (57,719) Profit (loss) for the period 189,056 (385,143) Currency translation reserve (91,312) (84,121) Total shareholders' equity (104,582) (295,259) Minority interest 23,984 23,733 Liabilities Non-current liabilities Deferred taxation 36,574 26,874 Corporate 13.5% debt 136,443 912,539 Corporate 11% debt 395,219 - 2% PIK notes 50,022 - 5% Mandatory Exchangeable 283,173 - Bond - Debt Component 5% Mandatory Exchangeable 45,320 - Bond - Embedded Derivative Other debt and financing 125,932 159,370 1,072,683 1,098,783 Current liabilities Other debt and financing 105,616 156,666 Trade creditors 93,688 90,945 Amounts due to shareholders - 4,021 Amounts due to other related parties 779 6,487 Accrued interest and other expenses 55,241 42,745 Other current liabilities 97,841 74,998 353,165 375,862 Total liabilities 1,425,848 1,474,645 Total shareholders' 1,345,250 1,203,119 equity and liabilities Millicom International Cellular S.A. Consolidated statements of cash flows for the nine months ended September 30, 2003 and 2002 Sept 30, Sept 30, 2003 2002 (Unaudited) (Unaudited) US$ '000 US$ '000 Net cash provided by operating activities 128,322 54,693 Cash flow from investing activities (14,173) 17,206 Cash flow from financing activities (50,464) (79,516) Cash effect of exchange rate changes 495 (301) Net increase (decrease) in cash and cash 64,180 (7,918) equivalents Cash and cash equivalents, beginning 70,451 56,276 Cash and cash equivalents, ending 134,631 48,358 Millicom International Cellular S.A. Consolidated statements of changes in shareholders' equity for the nine months ended September 30, 2003 and the year ended December 31, 2002 Sept 30, Dec 31, 2003 2002 (Unaudited) (Audited) US$ '000 US$ '000 Shareholders' equity at January 1 (295,259) 68,894 New shares issued 937 - Treasury shares used to offset liability to 2,523 - shareholders Purchase of treasury stock - (2,488) Profit (loss) for the period 189,056 (4 (385,143) 0, 37 8) Effect of consolidation of El Salvador (10,701) Prolonged decrease in market value - 61,325 Movement in currency translation reserve (7,191) (37,847) Issuance of equity instruments (2% PIK Notes) 16,053 - Shareholders' equity (104,582) (295,259) ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/11/04/20031104BIT00850/wkr0001.doc http://www.waymaker.net/bitonline/2003/11/04/20031104BIT00850/wkr0002.pdf