/Templates/Index.aspx?id=610&epslanguage=en/Templates/Index.aspx?id=603&epslanguage=en/Templates/Index.aspx?id=3081&epslanguage=en Loaded page
VimpelCom announces fourth quarter and annual 2003 financial and operating results

  • 74% year-on-year increase in net operating revenues
  • 81% year-on-year increase in net income
  • 90% year-on-year increase in OIBDA
  • approximately 13.2 million subscribers including 7.2 million regional subscribers as of today


Moscow and New York (March 25, 2004) - 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 fourth quarter of 2003 and year ended December 31, 2003. During the fourth quarter of 2003, as it did throughout the year 2003, the Company continued its rapid growth in new subscribers and strengthened its financial performance, 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.

Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "2003 was a great year for both the Russian cellular industry and VimpelCom. With an increase of our subscriber base from 5.15 million to 11.44 million in 2003, VimpelCom significantly contributed to the growth of the Russian cellular industry, one of the fastest growing cellular markets in the world. In 2003, while more than doubling our total number of subscribers, we were able to substantially improve our financial condition, positioning ourselves well as we enter 2004. We are confident that we will continue to benefit from the growth in the Russian cellular market and from our strategy of profitable growth with an emphasis on high quality services, customer satisfaction and efficient marketing."

 

Key Financial and Operating Indicators

(Definitions as well as reconciliation of each of OIBDA and
OIBDA margin to its most directly comparable U.S. GAAP
financial measurement are presented below in the attachment)

  Three months ended Years ended
Dec. 31,
2003
Dec. 31,
2002
Change
(%)
Dec. 31,
2003
Dec. 31,
2002
Change
(%)
Net operating revenues (US$,000) 407,740 228,978 78.1% 1,335,598 768,496 73.8%
OIBDA (US$,000) (1) 186,893 84,615 120.9% 613,230 322,209 90.3%
OIBDA margin (2) 45.8% 37.0%   45.9% 41.9%  
Gross margin (US$,000) (3) 334,329 181,209 84.5% 1,090,113 615,345 77.2%
Gross margin percentage (4) 82.0% 79.1%   81.6% 80.1%  
Net income (US$,000) 67,738 39,078 73.3% 233,962 129,552 80.6%
Net income per share (US$) 1.75 1.03   6.12 3.41  
Net income per ADS (US$) (5) 1.31 0.77   4.59 2.56  
ARPU (US$) (6) 12.5 16.0 -21.9% 13.6 18.3 -25.7%
MOU (min) (7) 89.3 89.3 0.0% 89.8 92.3 -2.7%
SAC (US$) (8) 18.1 20.9 -13.4% 19.3 25.7 -24.9%

 

Significant improvements in VimpelCom's financial and operating results in the fourth quarter and full year 2003, as compared with the fourth quarter and full year 2002, were achieved largely as a result of rapid subscriber growth combined with the effects of economies of scale, efficient cost control and lower acquisition costs per subscriber in the regions outside of Moscow. In the fourth quarter of 2003 we experienced expected seasonal effects (reduced roaming revenue and reduced minutes of use), which resulted in a reduced rate of growth in net operating revenues compared with the third quarter of 2003.

The Company's financial results include the activities in the Moscow license area and in the regions. Net operating revenues, excluding inter-company transactions, for Moscow stand-alone and the regions in the fourth quarter of 2003 were $263.0 million and $144.7 million, respectively. For the year ended December 31, 2003, net operating revenues were $918.7 million and $416.8 million, respectively. Net income for Moscow stand-alone and in the regions in the fourth quarter of 2003 was $48.6 million and $35.5 million, respectively. For the year ended December 31, 2003, net income in Moscow stand-alone and in the regions was $197.2 million and $62.4 million, respectively. These figures reflect the growing importance of regional operations for the Company's business.

In the fourth quarter of 2003, income before income taxes and minority interest reached approximately $122.2 million, an increase of 9.3% compared with $111.8 million reported for the third quarter of 2003. However, net income in the fourth quarter of 2003 fell approximately 6.2%, from $72.2 million reported for the third quarter of 2003 to $67.7 million. This was largely due to growth in minority interest in net earnings of subsidiaries, from approximately $7.5 million reported for the third quarter of 2003 to approximately $15.7 million reported for the fourth quarter of 2003. The growth in minority interest was caused by the growing profitability of regional operations as well as the increase in a minority stake (from approximately 35% to 45%) in VimpelCom-Region after the completion of the third tranche of investments by Alfa Group in August 2003. This effect will disappear after the merger between VimpelCom and VimpelCom-Region is completed, which the Company expects to take place in the second quarter of 2004.

Selling, general and administrative ("SG&A") expenses, as a percentage of net operating revenues, decreased from 39.2% reported in the fourth quarter of 2002 to 36.5% in the fourth quarter of 2003. SG&A for the year 2003, as a percentage of net operating revenues, was 35.0%, practically unchanged from the 35.4% reported for 2002. The increase in SG&A from $126.9 million in the third quarter of 2003 to $148.8 million in the fourth quarter of 2003 was in part due to traditional Christmas and New Year sales campaigns as well as expenses related to the opening of new branch offices in the regions.

For the year ended December 31, 2003, the Company recorded a $9.2 million provision for doubtful accounts receivable, a 56.6% decrease compared with $21.2 million reported in 2002. As a percentage of net operating revenues, this reflects an improvement from approximately 2.8% in 2002 to 0.7% in 2003. The reduction in provision for doubtful accounts was the result of improved cash collection and credit control procedures as well as the increased proportion of prepaid subscribers in the Company's subscriber base.

VimpelCom's total capital investments for 2003 were approximately $770.5 million, with $728.0 million of capital expenditures for purchase of property and equipment and $42.5 million of acquisitions of new entities. Capital expenditures for the Moscow license area in 2003 were approximately $234.6 million.

In 2003, the Company's MOU became more stable despite the rapid growth in subscribers, with 89.3 minutes of use for the fourth quarter of 2003 and 89.8 minutes of use for the year 2003. MOU for the fourth quarter of 2003 showed no change as compared with the fourth quarter of 2002 and MOU for the year 2003 showed a 2.7% decline as compared with 92.3 minutes reported for the year 2002. Primarily due to seasonal effects, MOU in the fourth quarter of 2003 fell by 3.7% compared with the third quarter of 2003. ARPU for 2003 was approximately $13.6, a 25.7% decline from $18.3 reported for 2002. The decline in ARPU in 2003 compared to 2002 was primarily due to a change in the Company's subscriber mix (including a significant increase in regional subscribers) and increased competition, which resulted in the reduction of tariffs. The decline in ARPU in the fourth quarter of 2003 compared to the third quarter of 2003 was primarily caused by seasonal effects and the growing proportion of subscribers in the regions where tariffs are approximately 20% lower than in Moscow.

Key Subscriber Statistics

 

  As of
Dec. 31, 2003
As of
Dec. 31, 2002
Change,
Y-on-Y
(%)
As of
Sept. 30, 2003
Change
Q-on-Q
(%)
Moscow license area 5,659,600 3,712,700 52.4% 5,076,200 11.5%
Contract 819,900 725,200 13.1% 799,000 2.6%
Prepaid 4,839,700 2,987,500 62.0% 4,277,200 13.2%
Regions 5,777,300 1,440,400 301.1% 4,183,000 38.1%
Total Number of Subscribers 11,436,900 5,153,100 121.9% 9,259,200 23.5%
 
Churn (quarterly) 9.7% 8.7% -- 9.6% --

 

Rapid subscriber growth continued in the first quarter of 2004. As of March 25, 2004, VimpelCom's total number of subscribers reached approximately 13.21 million, with approximately 6.05 million subscribers in the Moscow license area and 7.16 million in the regions outside Moscow.

Using independent sources to estimate the number of subscribers of the Company's competitors, VimpelCom estimates that its market share in the Moscow license area was 49.0% at the end of 2003, compared to the Company's estimated market share of 51.6% reported at the end of 2002. On a nationwide basis, independent sources estimate VimpelCom's market share at 31.0% at the end of 2003, compared to the 28.0% recorded at the end of 2002.

The Company's annual churn rate in 2003 was 39.3%, compared to the Company's churn rate of 30.8% reported for 2002. The increase in churn was primarily a result of high subscriber growth, particularly in the low-end user segment, as well as internal migration, which is technically regarded as churn, and increased competition.

The Company's management will discuss its fourth quarter and the year 2003 results during a conference call and slide presentation on March 25, 2004 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 April 1, 2004 and April 26, 2004, 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".

 

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 statements also relate to the consummation of the merger between VimpelCom and VimpelCom-Region which is subject to regulatory and certain other approvals, as well as certain other conditions precedent, including the transfer of all of VimpelCom-Region's licenses and permissions to VimpelCom. If any of the approvals are not obtained or any condition precedent is not met, the merger will not be consummated. 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 and its ability to consummate the merger. 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



- Definitions and Tables attached-

Definitions

  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. Our OIBDA calculations are commonly used as bases for some 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 a percentage of net operating revenues, the most directly comparable U.S. GAAP financial measure, 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. Each ADS represents 0.75 of one share of common stock.
  6. 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.
  7. 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.
  8. 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.

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

  Three months ended
December 31,
Years ended
December 31,
2003 2002 2003 2002
Unaudited  
(In thousands of US dollars,
except per share (ADS) amounts)
Operating revenues:  
  Service revenues US$386,120 US$216,763 US$1,265,383 US$725,938
Connection fees 202 382 1,279 1,930
Sales of handsets and accessories 20,256 14,568 64,975 49,934
Other revenues 1,162 654 3,961 1,842
Total operating revenues 407,740 232,367 1,335,598 779,644
  Less revenue based taxes - (3,389) - (11,148)
Net operating revenues 407,740 228,978 1,335,598 768,496
 
Operating expenses:  
  Service costs 57,207 33,244 191,441 111,387
Cost of handsets and accessories sold 16,202 14,515 54,032 41,709
Cost of other revenues 2 10 12 55
Selling, general and administrative expenses 148,764 89,846 467,655 271,963
Depreciation and amortization 51,859 30,155 185,326 97,417
Provision for doubtful accounts (1,328) 6,748 9,228 21,173
Total operating expenses 272,706 174,518 907,694 543,704
 
Operating income 135,034 54,460 427,904 224,792
 
Other income and expenses:  
  Other income 4,237 1,527 3,045 1,761
Interest income 2,512 2,093 8,378 7,169
Interest expense (16,339) (14,128) (68,246) (46,586)
Net foreign exchange loss (3,255) (1,783) (1,279) (9,439)
Total other income and expenses (12,845) (12,291) (58,102) (47,095)
 
Income before income taxes and minority interest 122,189 42,169 369,802 177,697
 
Provision for income taxes 38,454 5,016 108,641 49,939
Minority interest in net earnings (losses) of subsidiaries 15,670 (1,925) 26,872 (1,794)
Cumulative effect of changes in accounting principles (379) - (379) -
Minority interest on cumulative effect of changes in accounting principles 52 - 52 -
 
Net income US$67,738 US$39,078 US$233,962 US$129,552
 
Net income per common share US$1.75 US$1.03 US$6.12 US$3.41
Net income per ADS equivalent US$1.31 US$0.77 US$4.59 US$2.56
Weighted average common shares
outstanding (thousands)
38,722 38,026 38,241 38,014
 
Open Joint Stock Company "Vimpel-Communications"
Condensed Consolidated Balance Sheet
 
  December 31,
2003
December 31,
2002
(In thousand of US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$157,611 US$263,657
Accounts receivable 113,092 75,399
Other current assets 255,540 149,309
Total current assets 526,243 488,365
 
Non-current assets
  Property and equipment, net 1,460,542 957,602
Telecommunication licenses, net 103,817 88,385
Other intangible assets, net 59,369 55,730
Other assets 152,261 102,662
Total non-current assets 1,775,989 1,204,379
 
Total assets US$2,302,232 US$1,692,744
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$158,467 US$80,241
Due to related parties 8,603 4,114
Customer advances and deposits 181,475 106,655
Deferred revenue 2,701 2,016
Ruble denominated bonds payable 101,852 -
Bank loans, current portion 35,343 37,780
Capital lease obligation, current portion 6,587 3,868
Equipment financing obligations, current portion 70,935 134,617
Accrued liabilities 127,689 49,492
Total current liabilities 693,652 418,783
 
Deferred income taxes 34,380 35,227
Bank loans, less current portion 330,112 306,080
Capital lease obligations, less current portion 9,154 899
Accrued liabilities, less current portion 4,046 3,265
5.5% Senior convertible notes due July 2005 - 85,911
Equipment financing obligation, less current portion 53,008 81,425
 
Minority Interest 179,664 98,491
 
Shareholders' equity 998,216 662,663
 
Total liabilities and shareholders' equity US$2,302,232 US$1,692,744
 
Condensed Consolidated Statements of Cash Flows
 
  Years ended
December 31,
2003 2002
(In thousands of US dollars)
 
Net cash provided by operating activities US$511,877 US$221,723
 
Proceeds from bank and other loans 160,285 331,082
Proceeds from issuance of ruble denominated bonds 97,119 -
Capital contributions in a consolidated subsidiary by minority shareholders 58,520 116,960
Repayment of senior convertible notes (1,300) -
Payments of fees in respect of debt issue (4,207) (6,203)
Payments of fees in respect of capital contributions (2,478) -
Repayment of bank and other loans (86,261) (30,461)
Repayment of equipment financing obligations (256,902) (115,473)
Repayment of capital lease obligations (917) (1,450)
Net cash provided by financing activities (36,141) 294,455
 
Purchase of property and equipment (506,716) (291,437)
Proceeds from sale of property and equipment 12,433 -
Purchase of Orensot stock, net of cash acquired of US$344 - (17,758)
Purchase of StavTeleSot stock, net of cash acquired of US$658 (42,455) -
Purchase of Bee-Line Samara, net of cash acquired of US$449 - (231)
Purchase of Extel, net of cash acquired of US$713 - (24,599)
Purchase of Vostok-Zapad Telecom, net of cash acquired of US$31 - (26,577)
Purchase of intangible assets (18,654) (14,769)
Purchase of other assets (38,561) (26,560)
Net cash used in investing activities (593,953) (401,938)
 
Effect of exchange rate changes on cash 12,171 5,238
 
Net increase in cash (106,046) 119,485
Cash and cash equivalents at beginning of year 263,657 144,172
 
Cash and cash equivalents at end of year US$157,611 US$263,657
 
Supplemental cash flow information
 
Non-cash activities:
  Equipment acquired under financing and capital lease agreements US$88,689 US$140,367
Accounts payable for equipment and other long-lived assets 78,032 50,117
Operating activities financed by sale of treasury stock 4,729 1,917
Conversion of Senior convertible notes 91,236 -
Acquisitions:
  Fair value of assets acquired 73,290 121,388
Difference between the amount paid and the fair value of net assets acquired (4,699) -
Carrying value of equity method investment in Beeline-Samara before the acquisition of controlling interest - (6,540)
Cash paid for the capital stock (43,113) (70,702)
  Liabilities assumed US$25,478 US$ 44,146

 

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

 

  Three months ended Years ended
December 31,
2003
December 31,
2002
December 31,
2003
December 31,
2002
OIBDA 186,893 84,615 613,230 322,209
Less: Depreciation (42,776) (26,679) (151,262) (85,204)
Less: Amortization (9,083) (3,476) (34,064) (12,213)
Operating income 135,034 54,460 427,904 224,792

 

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

 

  Three months ended Years ended
December 31, 2003 December 31, 2002 December 31, 2003 December 31, 2002
OIBDA margin 45.8% 37.0% 45.9% 41.9%
Less: Depreciation as percentage of net operating revenues (10.5)% (11.7)% (11.3)% (11.0)%
Less: Amortization as percentage of net operating revenues (2.2)% (1.5)% (2.6)% (1.6)%
Operating income as percentage of net operating revenues 33.1% 23.8% 32.0% 29.3%




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

  Three months ended
December 31,
Years ended
December 31,
2003 2002 2003 2002
Unaudited  
(In thousands of US dollars)
Operating revenues:  
  Service revenues and connection fees 143,698 32,263 401,488 66,891
Sales of handsets and accessories 10,340 7,127 35,505 17,000
Other revenues 1,123 228 3,880 530
Total operating revenues 155,161 39,618 440,873 84,421
  Less revenue based taxes - (443) - (914)
Net operating revenues 155,161 39,175 440,873 83,507
 
Operating expenses:  
  Service costs 25,168 8,647 81,405 18,939
Cost of handsets and accessories sold 9,055 8,745 32,374 18,675
Equipment lease 3,458 2,626 10,357 2,626
Selling, general and administrative expenses 51,047 17,574 142,489 41,486
Network maintenance 3,954 1,300 11,200 4,292
Depreciation and amortization 17,734 4,584 61,887 10,880
Provision for doubtful accounts 135 309 2,282 553
Total operating expenses 110,551 43,785 341,994 97,451
 
Operating income (loss) 44,610 (4,610) 98,879 (13,944)
 
Other income and expenses:  
  Interest income (696) (122) (1,480) (381)
Interest expense 7,030 1,372 23,075 3,809
Net foreign exchange (gain) loss (315) 1,969 (767) 5,013
Other expenses (income) (3,166) 92 (2,668) 259
Total other income and expenses 2,853 3,311 18,160 8,700
 
Income (loss) before income taxes and minority interest 41,757 (7,921) 80,719 (22,644)
 
Income taxes expense 5,914 1,029 18,764 646
Minority interest in net earnings of subsidiaries 93 (1) 729 142
Cumulative effect of changes in accounting principles (148) - (148) -
 
Net income (loss) 35,602 (8,949) 61,078 (23,432)

 

*) Net income of VimpelCom-Region as a legal entity differs from the $35.461 million net income reported in the fourth quarter 2003 and $62.422 million net income reported for the year ended December 31, 2003 for the regional segment reported above in this press release. The difference is caused by the fact that the financial statements of Bee-Line Samara are included in the regions for segment reporting purposes, but are not included in the consolidated financial statements of VimpelCom-Region. Bee-Line Samara operates in the Samara region but, for historical reasons, is owned directly by VimpelCom. The following table provides reconciliation between these figures (all numbers are in thousands of US$):

  Three months ended Year ended
  December 31,
2003
December 31,
2003
 
Net income of VimpelCom-Region 35,602 61,078
Net income of BeeLine-Samara 59 3,063
Net effect of transactions
between VimpelCom-Region and BeeLine-Samara
(82) (1,719)
Net income of VimpelCom's regional segment 35,461 62,422

 

Operating revenue of VimpelCom-Region as a legal entity differs from the $144.736 million and $416.849 million operating revenues for the regional segment excluding inter-company transactions, reported above in this press release for the fourth quarter of 2003 and for the year ended December 31, 2003, respectively. The following table provides reconciliation between these figures (all numbers are in thousands of US$):

  Three months ended Year ended
  December 31,
2003
December 31,
2003
 
Operating revenue of VimpelCom-Region 155,161 440,873
Operating revenue of BeeLine-Samara 8,098 28,883
Net effect of transactions between VimpelCom-Region and Bee-Line-Samara (3,814) (10,401)
Operating revenue of VimpelCom's regional segment 159,445 459,355
Inter-company operating revenue of VimpelCom-Region and Bee-Line-Samara (14,709) (42,506)
Regional segment operating revenue excluding inter-company transactions 144,736 416,849




Open Joint Stock Company "VimpelCom-Region"
Condensed Consolidated Balance Sheets
 
  December 31,
2003
December 31,
2002
(In thousands of US dollars)
Assets  
Current assets:
  Cash and cash equivalents US$42,729 US$52,703
Trade accounts receivable 22,726 2,768
Other current assets 137,529 68,348
Total current assets 202,984 123,819
 
Non-current assets:
  Property and equipment, net 624,306 277,480
Telecommunication licenses and allocation of frequencies, net 87,175 72,322
Other intangible assets, net 20,383 10,780
Other assets 62,995 22,975
Total non-current assets 794,859 383,557
 
Total assets US$997,843 US$507,376
 
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable US$73,345 US$20,523
Due to related parties 71,420 25,157
Customer advances and deposits 41,916 14,046
Deferred revenue 713 699
Rouble denominated bonds payable 101,852 -
Bank loans, current portion 4,710 1,157
Capital lease obligations, current portion 0 3,196
Equipment financing obligation, current portion 17,078 74,295
Accrued liabilities 16,076 3,103
Total current liabilities 327,110 142,176
 
Deferred income taxes 24,713 18,689
Bank loans, less current portion 66,500 39,380
Long-term loans due to VimpelCom 176,231 40,000
Equipment financing obligations, less current portion 16,097 6,563
Accrued liabilities 2,718 -
 
Minority interest 350 188
 
Shareholders' equity 384,124 260,380
 
Total liabilities and shareholders' equity US$997,843 US$507,376
 
Open Joint Stock Company "VimpelCom - Region"
Condensed Consolidated Statements of Cash Flows
 
  Years ended
December 31,
2003 2002
(In thousands of US dollars)
 
Net cash provided by (used in) operating activities US$146,565 US$(10,273)
 
Proceeds from bank and other loans 118,933 78,521
Proceeds from loans from VimpelCom 136,231 98,500
Proceeds from issuance of ruble denominated bonds 97,119 -
Proceeds from sale of capital stock 58,520 175,440
Repayment of bank and other loans (36,076) (70,080)
Payment of fee in respect of debt issue (1,740) -
Repayment of equipment financing obligations (195,460) (60,694)
Repayment of capital lease obligations - (1,025)
Net cash provided by financing activities 177,527 220,662
 
Purchase of property and equipment (260,087) (107,107)
Purchase of Orensot stock, net of cash acquired of US$344 - (17,758)
Purchase of StavTeleSot stock, net of cash acquired of US$658 (42,455) -
Purchase of Extel, net of cash acquired of US$713 - (24,599)
Purchase of Vostok-Zapad Telecom, net of cash acquired of US$31 - (26,577)
Purchase of intangible assets (15,445) (6,340)
Purchase of other assets (18,931) (4,173)
Net cash used in investing activities (336,918) (186,554)
 
Effect of exchange rate changes on cash 2,852 266
 
Net (decrease) increase in cash (9,974) 24,101
Cash and cash equivalents at beginning of year 52,703 28,602
 
Cash and cash equivalents at end of year US$42,729 US$52,703
 
Supplemental cash flow information
 
Non-cash activities:
  Equipment acquired under financing agreements US$74,468 US$64,048
Accounts payable for equipment and other long-lived assets 50,092 8,532
Acquisitions:
  Fair value of assets acquired 73,290 107,963
Difference between the amount paid and the fair value of net assets acquired (4,699) -
Cash paid for the capital stock (43,113) (70,022)
  Liabilities assumed US$25,478 US$37,941



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

 

  Three months ended Years ended
December 31,
2003
December 31,
2002
December 31,
2003
December 31,
2002
OIBDA 62,345 (26) 160,766 (3,064)
Less: Depreciation (11,740) (3,871) (39,917) (9,350)
Less: Amortization (5,995) (713) (21,970) (1,530)
Operating income 44,610 (4,610) 98,879 (13,944)

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

 

  Three months ended Years ended
December 31, 2003 December 31, 2002 December 31, 2003 December 31, 2002
OIBDA margin 40.2% (0.1)% 36.5% (3.7)%
Less: Depreciation as percentage of net operating revenues (7.6)% (9.9)% (9.1)% (11.2)%
Less: Amortization as percentage of net operating revenues (3.9)% (1.8)% (5.0)% (1.8)%
Operating income as percentage of net operating revenues 28.7% (11.8)% 22.4% (16.7)%





/Templates/Index.aspx?id=608&epslanguage=en/Templates/Index.aspx?id=2910&epslanguage=en/Templates/Index.aspx?id=3441&epslanguage=en/Templates/IndexCareers.aspx?id=3579&epslanguage=en/Templates/Index.aspx?id=609&epslanguage=en/Templates/MyVimpelcom.aspx?id=745&epslanguage=enhttp://www.theguardian.com/uk