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VimpelCom announces third quarter and nine months 2003 financial and operating results

  • 71% year-on-year increase in net operating revenues
  • 78% year-on-year increase in net income
  • approximately 10.4 million subscribers as of today

Moscow and New York (November 20, 2003) - Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP), a leading provider of wireless telecommunications services in Russia, today announced its financial and operating results for the quarter and nine months ended September 30, 2003. During the third quarter of 2003, VimpelCom showed strong subscriber growth and substantial improvement in net operating revenues and net income. These positive trends characterized the Company's growth both in Moscow and in the regions, with the regions growing faster than Moscow. Consolidated financial statements of VimpelCom and consolidated financial statements of VimpelCom-Region, VimpelCom's subsidiary for regional development, are attached.

For the quarter ended September 30, 2003, VimpelCom reported net operating revenues of $379.0 million, a 71.4% increase from the $221.1 million reported for the same period in 2002; OIBDA of $178.5 million, a 74.0% increase from the $102.6 million reported for the same period in 2002; and net income of $72.2 million, an increase of 78.3% from the $40.5 million reported for the same period in 2002. The Company's OIBDA margin for the third quarter of 2003 was approximately 47.1% compared to approximately 46.4% for the same period of 2002. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation and amortization. OIBDA margin is defined as OIBDA expressed as a percentage of net operating revenues. For more details, see note 1 to the table "Key Financial and Operating Indicators."

Net operating revenues, excluding inter-company transactions, for the Moscow license area and the regions in the third quarter of 2003 were $259.7 million and $119.3 million, respectively. Net income, excluding inter-company transactions, for the Moscow license area and the regions in the third quarter of 2003 was $61.6 million and $17.9 million, respectively.

As of September 30, 2003, there were approximately 9.26 million subscribers on wireless networks operated by VimpelCom and its subsidiaries, an increase of approximately 130% compared to September 30, 2002, including approximately 5.08 million subscribers in the Moscow license area and approximately 4.18 million subscribers in the regions. As of today, there are approximately 10.37 million subscribers on wireless networks operated by VimpelCom and its subsidiaries, with approximately 5.39 million subscribers in the Moscow license area and approximately 4.98 million subscribers in the regions.

Based on independent sources, VimpelCom estimates that its market share in the Moscow license area was 49.0% as of September 30, 2003, compared to 52.7% as of September 30, 2002 and that its overall market share in Russia was 31.0% as of September 30, 2003, compared to 26.5% as of September 30, 2002.

Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "We are very pleased with our third quarter results. Subscriber growth continued to beat market expectations and our financial figures again showed substantial progress, particularly in the regions. These developments reflect our continued success in executing our expansion strategy which was facilitated by the steady growth in the Russian economy and the positive seasonal effects typical for the third quarter." Mr. Izosimov concluded: "VimpelCom intends to continue implementing its market-oriented strategy, focusing on organic growth, innovative product development, efficient marketing and customer satisfaction."

Key Financial and Operating Indicators

 

  Three months ended Nine months ended
Sept. 30,
2003
Sept. 30,
2002
Change
(%)
Sept. 30,
2003
Sept. 30,
2002
Change
(%)
Net operating revenues (US$,000) 378,981 221,077 71.4% 927,858 539,518 72.0%
OIBDA (US$,000) (1) 178,472 102,567 74.0% 426,337 237,594 79.4%
OIBDA margin (2) 47.1% 46.4% - 45.9% 44.0% -
Gross margin ($,000) (3) 310,192 177,200 75.1% 755,784 434,136 74.1%
Gross margin percentage (4) 81.8% 80.2% - 81.5% 80.5% -
Net income (US$,000) 72,190 40,487 78.3% 166,224 90,474 83.7%
ARPU(US$) (5) 14.4 19.8 -27.3% 14.1 19.4 -27.3%
MOU (min) (6) 92.7 97.2 -4.6% 90.0 93.8 -4.1%
SAC (US$) (7) 18.8 24.6 -23.6% 20.0 28.4 -29.6%

 

Notes:

  1. OIBDA is a non-U.S. GAAP financial measure. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation and amortization. The Company believes that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under U.S. GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. OIBDA calculations are commonly used as some of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the wireless telecommunications industry. OIBDA should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U.S. GAAP. OIBDA does not include our need to replace our capital equipment over time. Reconciliation of OIBDA to operating income, the most directly comparable U.S. GAAP financial measure, is presented below in the tables' section.
  2. OIBDA margin is OIBDA expressed as a percentage of net operating revenues. Reconciliation of OIBDA margin to operating income as percentage of net revenues, the most directly comparable U.S. GAAP financial measures, is presented below in the tables' section.
  3. Gross margin is defined as net operating revenues less selected operating costs (specifically, service costs, cost of handsets and accessories sold and cost of other revenues).
  4. Gross margin percentage is gross margin expressed as a percentage of net operating revenues.
  5. ARPU (Monthly Average Revenue per User) is calculated for each month in the relevant period by dividing the Company's service revenue during that month, including roaming revenue, but excluding revenue from connection fees and sales of handsets and accessories, by the average number of the Company's subscribers during the month.
  6. MOU (Monthly Average Minutes of Use per User) is calculated for each month of the relevant period by dividing the total number of billable minutes of usage for incoming and outgoing calls during that month (excluding guest roamers) by the average number of subscribers during the month.
  7. SAC (Average Acquisition Cost Per User) is calculated as dealer commissions, advertising expenses and handset subsidies for the relevant period divided by the number of gross sales during the relevant period.

Selling, general and administrative expenses ("SG&A") were $126.9 million in the third quarter of 2003, an increase of 85.6% compared to $68.4 million in the same period of 2002. In the third quarter of 2003, SG&A expenses as a percentage of net operating revenues were 33.5% compared to 30.9% in the same period of 2002 and 35.1% in the second quarter of 2003. The Company's average acquisition cost per subscriber (SAC) for the third quarter of 2003 was $18.8 compared to $24.6 in the same period of 2002. The decrease in SAC was primarily attributable to the increase in regional sales as a percentage of total sales, as SAC is lower in the regions due to the relatively lower dealer commissions and larger proportion of sales through the Company's own offices.

VimpelCom's total capital investments for the third quarter of 2003 were approximately $170 million, with $165.3 million of capital expenditures for purchase of property and equipment and $4.3 million for the acquisition of additional shares in a subsidiary. Capital expenditures for the Moscow license area in the third quarter of 2003 were approximately $51 million.

MOU decreased in the third quarter of 2003 to 92.7 minutes, compared to 97.2 minutes in the third quarter of 2002 and 93.8 minutes in the second quarter of 2003. The decrease in MOU was primarily caused by the declining MOU in Moscow as a result of the growing proportion of prepaid subscribers in the Moscow network. ARPU decreased in the third quarter of 2003 by approximately 27.3% to $14.4, compared to $19.8 in the third quarter of 2002, due to a reduction in tariffs as a result of increased competition and the growing proportion of regional subscribers (who generate lower ARPU than Moscow subscribers). However, the seasonal rise in roaming revenues contributed to a slight increase in ARPU in the third quarter compared with the second quarter of 2003 when the Company reported ARPU of $14.3.

 

Key Subscriber Statistics

 

 

As of
Sept. 30, 2003

As of
Sept. 30, 2002
Change
Y-on-Y
(%)
As of
June 30, 2003
Change
Q-on-Q
(%)
Moscow license area 5,076,200 3,305,200 53.6% 4,428,800 14.6%
Contract 799,000 714,958 11.8% 763,200 4.7%
Prepaid 4,277,200 2,590,242 65.1% 3,665,600 16.7%
Regions 4,183,000 723,100 478.5% 3,004,800 39.2%
Total Number of Subscribers 9,259,200 4,028,300 129.9% 7,433,600 24.6%
 
Churn (quarterly) 9.6% 8.5% - 10.5% -

 

The Company's regional subscribers increased approximately 478.5% between September 30, 2002 and September 30, 2003 to reach the figure of approximately 4.2 million subscribers, including growth of 39.2% in the third quarter of 2003. The third quarter of 2003 was also marked by a further increase in the number of VimpelCom's prepaid subscribers in the Moscow license area as a percentage of its total subscribers in the Moscow license area, from approximately 82.8% at the end of the second quarter of 2003 to 84.3% at the end of the third quarter of 2003.

The Company's quarterly churn rate in the third quarter of 2003 was 9.6%, compared to 8.5% for the same period in 2002. The increase in churn was primarily the result of high subscriber growth rates in previous periods, particularly in the low-end user segment, as well as internal migration, which is technically regarded as churn, and increased competition. The Company's measures to reduce churn resulted in a decrease in churn in the third quarter of 2003 as compared with the churn figure of 10.5% reported for the second quarter of 2003.

The Company's management will discuss its third quarter 2003 results during a conference call and slide presentation on November 20, 2003 at 6:30 pm Moscow time (10:30 am ET in New York). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay and the slide presentation webcast will be available through November 27, 2003 and December 21, 2003, respectively. The slide presentation will also be available for download on VimpelCom's website http://www.vimpelcom.com.

VimpelCom is a leading provider of telecommunications services in Russia, operating under the "Bee Line" brand, which is one of the most recognized brand names in Russia. The VimpelCom Group's license portfolio covers approximately 92% of Russia's population (134 million people), including the City of Moscow, the Moscow Region and the City of St. Petersburg. VimpelCom was the first Russian company to list its shares on The New York Stock Exchange ("NYSE"). VimpelCom's ADSs are listed on the NYSE under the symbol "VIP". VimpelCom's convertible notes are listed on the NYSE under the symbol "VIP 05".

 

This press release contains "forward-looking statements", as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the Company's development plans. These and other forward-looking statements are based on management's best assessment of the Company's strategic and financial position and of future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of unforeseen developments from competition, governmental regulation of the wireless telecommunications industry, general political uncertainties in Russia and general economic developments in Russia, the Company's ability to continue to grow its overall subscriber base, continued volatility in the world economy and other factors. As a result of such risks and uncertainties, there can be no assurance that the effects of competition or current or future changes in the political, economic and social environment or current or future regulation of the Russian telecommunications industry will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2002 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

 

For more information, please contact:

Valery Goldin
VimpelCom (Moscow)
Tel: 7(095) 974-5888
vgoldin@vimpelcom.com

Christopher Mittendorf
Edelman Financial Worldwide
Tel: 1(212) 704-8134
christopher.mittendorf@edelman.com

 

- Tables attached -

Open Joint Stock Company "Vimpel-Communications"
Unaudited Condensed Consolidated Statements of Income

  Three months ended
Sept. 30,
Nine months ended
Sept. 30,
2003 2002 2003 2002
(In thousands of US dollars , except per share (ADS) amounts)
Operating revenues:  
  Service revenues and connection fees US$359,815 US$211,642 US$880,340 US$510,723
Sales of handsets and accessories 18,337 12,098 44,719 35,366
Other revenues 829 394 2,799 1,188
Total operating revenues 378,981 224,134 927,858 547,277
  Less revenue based taxes   (3,057)   (7,759)
Net operating revenues 378,981 221,077 927,858 539,518
 
Operating expenses:  
  Service costs 54,300 32,841 134,234 78,143
Cost of handsets and accessories sold 14,485 11,023 37,830 27,194
Cost of other revenues 4 13 10 45
Selling, general and administrative expenses 126,860 68,354 318,891 182,117
Depreciation and amortization 51,765 26,431 133,467 67,262
Provision for doubtful accounts 4,860 6,279 10,556 14,425
Total operating expenses 252,274 144,941 634,988 369,186
 
Operating income 126,707 76,136 292,870 170,332
 
Other income and expenses:  
  Interest income 1,590 2,030 5,866 5,076
Loss (gain) on trading in securities (4) 0 13 58
Interest expense (17,910) (13,852) (51,907) (32,458)
Net foreign exchange gain (loss) 1,935 2,225 1,976 (7,656)
Other (expenses) income (470) (937) (1,205) 176
Total other income and expenses (14,859) (10,534) (45,257) (34,804)
 
Income before income taxes and minority interest 111,848 65,602 247,613 135,528
 
Income taxes expense 32,146 24,974 70,187 44,923
Minority interest in net earnings of subsidiaries 7,512 141 11,202 131
 
Net income US$72,190 US$40,487 US$166,224 US$90,474
 
Net income per common share US$1.89 US$1.06 US$4.37 US$2.38
Net income per ADS equivalent US$1.42 US$0.80 US$3.28 US$1.79
Weighted average common shares outstanding (thousands) 38,103 38,021 38,079 38,010
 

 

Open Joint Stock Company "Vimpel-Communications"
Unaudited Condensed Consolidated Balance Sheet
 
  Sept. 30,
2003
December 31,
2002
(In thousand US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$272,950 US$263,657
Trade accounts receivable 94,592 75,399
Other current assets 212,938 149,309
Total current assets 580,480 488,365
 
Non-current assets:
  Property and equipment, net 1,310,007 957,602
Other intangible assets, net 55,796 55,730
 
Telecommunication licenses and allocation of frequencies, net 104,825 88,385
Other assets 113,489 102,662
Total non-current assets 1,584,117 1,204,379
 
Total assets US$2,164,597 US$1,692,744
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$100,819 US$80,241
Due to related parties 2,902 4,114
Customer deposits and advances 151,833 106,655
Deferred revenue 2,931 2,016
Ruble denominated bonds payable 98,001 -
Bank loans, current portion 35,054 37,780
Capital lease obligation, current portion 8,420 3,868
Equipment financing obligations, current portion 124,411 134,617
Accrued liabilities 107,944 49,492
Total current liabilities 632,315 418,783
 
Deferred income taxes 39,445 35,227
Bank loans, less current portion 330,619 306,080
Capital lease obligation, less current portion 10,050 899
Accrued liabilities 863 3,265
5.5% Senior convertible notes due July 2005 84,369 85,911
Equipment financing obligations, less current portion 59,989 81,425
 
Minority Interest 163,184 98,491
 
Shareholders' equity 843,763 662,663
 
Total liabilities and shareholders' equity US$2,164,597 US$1,692,744
 
Unaudited Condensed Consolidated Statements of Cash Flows
 
  Nine months ended
Sept. 30,
2003 2002
(In thousands of US dollars)
 
Net cash provided by operating activities US$364,152 US$174,917
 
Proceeds from bank and other loans 144,800 251,472
Proceeds from issuance of ruble denominated bonds 97,119  
Capital contribution by minority shareholders 58,520  
 
Payments of fees in respect of debt issue (1,815) (6,203)
Repayment of bank and other loans (70,646) (9,793)
 
Repayment of equipment financing obligations (182,468) (50,179)
Repayment of capital lease obligations (860) (1,240)
Net cash provided by financing activities 44,650 184,057
 
Purchase of property and equipment (341,512) (162,657)
Proceeds from sale of property and equipment 12,432  
Purchase of Orensot stock, net of cash acquired of US$344   (13,860)
Purchase of StavTeleSot stock, net of cash acquired of US$658 (42,455)  
Purchase of intangible assets (15,083) (7,140)
Purchase of other assets (18,774) (28,629)
Net cash used in investing activities (405,392) (212,286)
 
Effect of exchange rate changes on cash 5,883 2,482
 
Net increase in cash 9,293 149,170
Cash and cash equivalents at beginning of period 263,657 144,172
 
Cash and cash equivalents at end of period US$272,950 US$293,342
 
Supplemental cash flow information
 
Non-cash activities:
  Equipment acquired under financing and capital lease agreements US$89,562 US$104,621
Accounts payable for equipment and other long-lived assets 36,356 39,368
 
Operating activities financed by sale of treasury stock 3,171 14
Acquisitions:
  Fair value of assets acquired 73,290 22,804
Difference between the amount paid and the fair value of net assets acquired (4,699)  
Cash paid for the capital stock (43,113) (14,204)
  Liabilities assumed US$25,478 US$8,600


Reconciliation of VimpelCom OIBDA to operating income
(In thousands of US dollars)

  Three months ended
Sept. 30, 2003 June 30, 2003 Sept. 30, 2002
OIBDA US$178,472 US$139,929 US$102,567
Less: Depreciation (42,894) (33,914) (23,182)
Less: Amortization (8,871) (8,738) (3,249)
Operating income US$126,707 US$97,277 US$76,136


Reconciliation of VimpelCom OIBDA margin to operating income as percentage of net operating revenues

  Three months ended
Sept. 30, 2003 June 30, 2003 Sept. 30, 2002
OIBDA margin 47.1% 46.0% 46.4%
Less: Depreciation as percentage of net operating revenues (11.3%) (11.1%) (10.5%)
Less: Amortization as percentage of net operating revenues (2.4%) (2.9%) (1.5%)
Operating income as percentage of net operating revenues 33.4% 32.0% 34.4%


Reconciliation of VimpelCom OIBDA to operating income
(In thousands of US dollars)

  Nine months ended
Sept. 30, 2003 Sept. 30, 2002
OIBDA US$426,337 US$237,594
Less: Depreciation (108,486) (58,525)
Less: Amortization (24,981) (8,737)
Operating income US$292,870 US$170,332


Reconciliation of VimpelCom OIBDA margin to operating income as percentage of net operating revenues

  Nine months ended
Sept. 30, 2003 Sept. 30, 2002
OIBDA margin 45.9% 44.0%
Less: Depreciation as percentage of net operating revenues (11.6%) (10.8%)
Less: Amortization as percentage of net operating revenues (2.7%) (1.6%)
Operating income as percentage of net operating revenues 31.6% 31.6%

 

Open Joint Stock Company "VimpelCom - Region"
Unaudited Condensed Consolidated Statements of Income

  Three months ended
Sept. 30,
Nine months ended
Sept. 30,
2003 2002 2003 2002
(In thousands of US dollars)
Operating revenues:  
  Service revenues and connection fees US$118,676 US$19,184 US$257,790 US$34,628
Sales of handsets and accessories 8,742 4,475 25,165 9,873
Other revenues 1,330 126 2,757 302
Total operating revenues 128,748 23,785 285,712 44,803
  Less revenue based taxes   (235)   (471)
Net operating revenues 128,748 23,550 285,712 44,332
 
Operating expenses:  
  Service costs 22,980 5,326 56,237 10,292
Cost of handsets and accessories sold 7,894 4,455 23,319 9,930
Equipment lease 2,445   6,899  
Selling, general and administrative expenses 41,269 10,523 91,442 23,912
Network maintenance 3,139 877 7,246 2,992
Depreciation and amortization 18,681 3,110 44,152 6,296
Provision for doubtful accounts 1,233 245 2,148 244
Total operating expenses 97,641 24,536 231,443 53,666
 
Operating income (loss) 31,107 (986) 54,269 (9,334)
 
Other income and expenses:  
  Interest income 393 18 784 259
Interest expense (6,814) (1,320) (16,045) (2,437)
Net foreign exchange gain (loss) 375 57 452 (3,044)
Other (expenses) income (276) (209) (498) (167)
Total other income and expenses (6,322) (1,454) (15,307) (5,389)
 
Income (loss) before income taxes and minority interest 24,785 (2,440) 38,962 (14,723)
 
Income taxes expense (benefit) 6,904 (145) 12,850 (383)
Minority interest in net earnings of subsidiaries 331 143 636 143
 
Net income (loss) US$17,550 US$(2,438) US$25,476 US$(14,483)
 

*) Net income of VimpelCom-R as a legal entity differs from the $17.899 million net income for the regional segment reported above in this press release. The difference is caused by the contribution from BeeLine-Samara which operates in the Samara region but, for historical reasons, is owned by VimpelCom (and therefore is not reflected in the VimpelCom-R financials). The following table provides reconciliation between the two figures (all numbers are in thousands of US$ and relate to the third quarter of 2003):

Net income of VimpelCom-R 17,550
Net income of BeeLine-Samara 889
Net effect of transactions between VimpelCom-R and BeeLine-Samara (540)
Net income of VimpelCom's regional segment 17,899



Operating revenue of VimpelCom-R as a legal entity differs from the $119,329 operating revenue for the regional segment excluding inter-company transactions, reported above in this press release. The following table provides reconciliation between the two figures (all numbers are in thousands of US$ and relate to the third quarter of 2003):

Operating revenue of VimpelCom-R 128,748
Operating revenue of BeeLine-Samara 7,579
Net effect of transactions between VimpelCom-R and BeeLine-Samara (2,951)
Operating revenue of VimpelCom's regional segment 133,376
Inter-company operating revenue of VimpelCom-R and Beeline-Samara (14,047)
Regional segment operating revenue excluding inter-company transactions 119,329

 

Open Joint Stock Company "VimpelCom - Region"
Unaudited Consolidated Condensed Balance Sheet
 
  Sept. 30,
2003
December 31,
2002
(In thousand US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$91,789 US$52,703
Trade accounts receivable 6,985 2,768
Other current assets 120,469 68,348
Total current assets 219,243 123,819
 
Non-current assets:
  Property and equipment, net 536,724 277,480
Other intangible assets, net 15,277 10,780
 
Telecommunication licenses and allocation of frequencies, net 90,950 72,322
Other assets 34,241 22,975
Total non-current assets 677,192 383,557
 
Total assets US$896,435 US$507,376
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$39,711 US$20,523
Due to related parties 69,600 25,157
Customer deposits and advances 17,791 14,046
Deferred revenue 645 699
Rouble denominated bonds payable 98,001 -
Bank loans, current portion 658 1,157
Capital lease obligation, current portion 2,891 3,196
Equipment financing obligations, current portion 66,974 74,295
Accrued liabilities 10,907 3,103
Total current liabilities 307,178 142,176
 
Deferred income taxes 22,952 18,689
Bank loans, less current portion 70,653 39,380
Long-term loans due to VimpelCom 135,689 40,000
Equipment financing obligations, less current portion 12,770 6,563
 
Minority Interest 234 188
 
Shareholders' equity 346,959 260,380
 
Total liabilities and shareholders' equity US$896,435 US$507,376
 
Open Joint Stock Company "VimpelCom - Region"
Unaudited Condensed Consolidated Statements of Cash Flows
 
  Nine months ended
Sept. 30,
2003 2002
(In thousands of US dollars)
 
Net cash provided by (used in) operating activities US$73,883 US$(15,258)
 
Proceeds from bank and other loans 118,933 1,223
Proceeds from loans from VimpelCom 95,688 77,882
Proceeds from issuance of ruble denominated bonds 97,119  
Capital contribution by minority shareholders 58,520  
Repayment of bank and other loans (35,925) (1,444)
 
Repayment of equipment financing obligations (141,015) (9,009)
Repayment of capital lease obligations (119) (1,240)
Net cash provided by financing activities 193,201 67,412
 
Purchase of property and equipment (169,294) (48,934)
Purchase of Orensot stock, net of cash acquired of US$344   (13,860)
Purchase of StavTeleSot stock, net of cash acquired of US$658 (42,455)  
Purchase of intangible assets (11,161) (3,305)
Purchase of other assets (7,416) (5,151)
Net cash used in investing activities (230,326) (71,250)
 
Effect of exchange rate changes on cash 2,328 (325)
 
Net increase (decrease) in cash 39,086 (19,421)
Cash and cash equivalents at beginning of period 52,703 28,602
 
Cash and cash equivalents at end of period US$91,789 US$9,181
 
Supplemental cash flow information
 
Non-cash activities:
  Equipment acquired under financing agreements US$31,238 US$52,937
Accounts payable for equipment and other long-lived assets 17,217 5,646
 
Acquisitions:
  Fair value of assets acquired 73,290 22,804
Difference between the amount paid and the fair value of net assets acquired (4,699)  
Cash paid for the capital stock (43,113) (14,204)
  Liabilities assumed US$25,478 US$8,600


Reconciliation of VimpelCom-Region OIBDA to operating income
(In thousands of US dollars)

  Three months ended
Sept. 30, 2003 June 30, 2003 Sept. 30, 2002
OIBDA US$49,788 US$33,243 US$2,124
Depreciation (12,893) (8,524) (2,564)
Amortization (5,788) (5,637) (546)
Operating income US$31,107 US$19,082 US$(986)


Reconciliation of VimpelCom-Region OIBDA margin to operating income as percentage of net operating revenues

  Three months ended
Sept. 30, 2003 June 30, 2003 Sept. 30, 2002
OIBDA margin 38.7% 36.2% 9.0%
Depreciation as percentage of net revenues (10.0%) (9.3%) (10.9%)
Amortization as percentage of net revenues (4.5%) (6.1%) (2.3%)
Operating income as percentage of net revenues 24.2% 20.8% (4.2%)


Reconciliation of VimpelCom-Region OIBDA to operating income
(In thousands of US dollars)

  Nine months ended
Sept. 30, 2003 Sept. 30, 2002
OIBDA US$98,421 US$(3,038)
Less: Depreciation (28,177) (5,479)
Less: Amortization (15,975) (817)
Operating income US$54,269 US$(9,334)


Reconciliation of VimpelCom-Region OIBDA margin to operating income as percentage of net operating revenues

  Nine months ended
Sept. 30, 2003 Sept. 30, 2002
OIBDA margin 34.4% (6.9%)
Less: Depreciation as percentage of net operating revenues (9.9%) (12.4%)
Less: Amortization as percentage of net operating revenues (5.6%) (1.8%)
Operating income as percentage of net operating revenues 19.0% (21.1%)




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