The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

VimpelCom Ltd Announces Third Quarter 2010 Operating and Financial Results

Thursday, December 02, 2010

VimpelCom Ltd Announces Third Quarter 2010 Operating and Financial Results04:46 EST Thursday, December 02, 2010AMSTERDAM and NEW YORK, Dec. 2, 2010 /PRNewswire-FirstCall/ -- "VimpelCom Ltd" ("VimpelCom" or the "Company") (NYSE: VIP), a leading international provider of telecommunications services, today announced its operating and financial results for the quarter ended September 30, 2010.Third Quarter Highlights:Number of mobile subscriptions increased to 92.0 million (up 40.7% y-o-y); broadband subscriptions grew to 3.1 million (up 58.8% y-o-y)Net operating revenues increased by 24.1% y-o-y to $2.8 billion Adjusted OIBDA* reached $1.4 billion (up 20.0% y-o-y); consolidated OIBDA margin was 48.8%Net income attributable to VimpelCom Ltd was $495.9 million (up 14.1% y-o-y)Net cash from operating activities was $1,096.8 million (up 3.1% y-o-y)Capex was $520.1 million and year-to-date Capex was $1,080.9 million Net debt during the quarter increased by $46 million primarily as a result of payment for the OJSC VimpelCom squeeze out, partially offset by cash generated by operating activities.Recent Developments:The Ukrainian Anti-Monopoly Committee confirmed its prior approval of the transaction to combine OJSC VimpelCom and Kyivstar GSM under VimpelCom LtdVimpelCom Group issued ruble bonds with five-year maturity in the amount of approximately $658 million to refinance its US dollar denominated debtCommercial launch of 3G networks in Kazakhstan and Kyrgyzstan Signed an agreement to combine VimpelCom and Weather to create a new global telecom groupThe Supervisory Board of VimpelCom Ltd declared the payment of an interim dividend in 2010 of US$0.46 per American depositary share *  Hereafter Adjusted OIBDA is referred to as OIBDA and Adjusted OIBDA margin is referred to as OIBDA margin (See definitions of Adjusted OIBDA and Adjusted OIBDA margin in Attachment A)Consolidated Financial Results*CONSOLIDATED OPERATIONS  (US$, millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues2,824.42,275.824.1%2,641.66.9%Adjusted OIBDA1,377.71,148.320.0%1,261.89.2%Adjusted OIBDA margin, % 48.8%50.5%47.8%SG&A799.1599.233.4%766.44.3%SG&A percentage28.3%26.3%29.0%Net income attributable to VimpelCom Ltd.495.9434.514.1%334.748.2%Net income attributable to VimpelCom Ltd. per ADS, basic (US$) 0.390.440.28Net cash from operating activities1,096.81,064.13.1%1,000.99.6%Capital expenditures520.1123.2322.2%381.436.4%ROCE, %21.5%19.8%22.7%Commenting on the results, VimpelCom's Chief Executive Officer, Alexander Izosimov, said, "Our third quarter results reflect the macroeconomic situation in the countries where we operate, consolidation of Kyivstar and seasonal effects typical for the summer period. Our quarterly revenues reached $2.8 billion, while the OIBDA margin remained in the high 40's. Our focus on profitability and cash flow generation helped to substantially increase net income, while keeping ROCE above 20%. The strength of our cash flows allowed us to declare a sizeable interim dividend of $600 million.Our increased scale and financial strength position us well to capture opportunities and strategic benefits of industry consolidation. Our recently announced agreement with Weather Investments is a significant step in this direction. Given the size and complexity of the transaction, we are satisfied with the progress made thus far. We remain committed and continue to move forward as outlined in our October 4th announcement. We are working towards fulfilling all necessary conditions precedent, including obtaining approval of VimpelCom's Supervisory Board and securing the necessary regulatory approvals and anticipate the closing in the first half of 2011."Mr. Izosimov continued, "However, while scale is an important strength in a rapidly evolving telecom industry, it is critical to sustain competitive positions in the core markets.  We are clearly dissatisfied with our recent loss of market share in the Russian mobile market. The new management team in Russia already started to implement a set of measures to regain momentum in our business development. This includes prioritized network expansion, distribution optimization and pricing efficiency with focused plans for each region, to strengthen and facilitate the development of our business. We understand that our strategy requires certain time, strong focus on execution and resources, but we are confident that VimpelCom will restore its market positions."*  Please see the consolidated results on a pro-forma basis in the Attachment G.CONSOLIDATED OPERATIONS(US$, millions)3Q 103Q 10/3Q 093Q 09YTD 3Q 10YTD3Q 10/YTD 3Q 09YTD 3Q 09YTD 3Q 08Consolidated revenue2,824.424.1%2,275.87,697.220.4%6,394.37,561.6Russia2,099.47.5%1,953.06,059.911.1%5,452.26,462.4Ukraine426.0652.7%56.6781.4403.8%155.1210.2CIS361.021.5%297.0992.015.0%862.3934.6Consolidated adjusted OIBDA1,377.720.0%1,148.33,680.715.6%3,184.63,735.9%48.8%50.5%47.8%49.8%49.4%Russia987.9-0.7%995.02,862.54.2%2,748.03,267.7%47.1%50.9%47.2%50.4%50.6%Ukraine242.21901.7%12.1416.91362.8%28.511.0%56.9%21.4%53.4%18.4%5.2%CIS176.013.8%154.7477.510.1%433.8459.2%48.8%52.1%48.1%50.3%49.1%Consolidated net operating revenues increased by $548.6 million or 24.1% year-on-year mainly due to the consolidation of Kyivstar, which contributed $376.6 million, as well as organic revenue growth of $146.4 million in Russia and $34.7 million in the CIS.Quarterly, net operating revenue increased by $182.8 million or 6.9%, mainly due to $115.4 million growth from Ukraine and $82.4 million revenue growth from Russia and the CIS. Sequential growth in key areas was mainly driven by increases in the active customer base, coupled with growing usage and seasonally higher roaming revenues.Consolidated OIBDA improved year-on-year by $229.4 million. Ukraine and the CIS were the main contributors adding $230.1 million and $21.3 million respectively. Overall OIBDA margin decreased 1.7 percentage points from 50.5% to 48.8% year-on-year primarily due to resumed market investments in Russia partly offset by margin improvement in Ukraine. OIBDA increased on a sequential basis by $115.9 million or 9.2%. This growth reflects decline in interconnect costs in Ukraine and ongoing cost control measures. The current consolidated OIBDA margin in high 40's reflects the steady state of our business and is in line with our expectations.Consolidated Capex increased by $396.8 million or 322.2% year-on-year following a return to our normal investment profile. The last twelve months Capex-to-revenue ratio was 15.0%.Russia - Business Context, Operations and Financial ResultsRussia is the largest and most important part of our business. During 2010, our competitive position in the mobile segment weakened due to insufficient investments in network development made in the past six quarters. In addition, lack of focused activities on the market led to stagnation and quality erosion of our active customer base. As a result, mobile revenue growth rates year-on-year and quarter-on-quarter, although solid for a saturated market, were lower than those of our competitors. Our key priority is to regain momentum and reverse the negative trend in the quality of our active customer base in the mobile segment. We intend to close the gap in the mobile data segment and see it not only as a new source of revenue, but increasingly as an important element influencing the loyalty of our customers. We are revising our approach to distribution, focusing on smart pricing and loyalty programs backed by further strengthening of our presence in retail and properly balanced capital investments. Our fixed-line business performed well during the quarter with strong sequential growth in the wholesale business and corporate segment, reflecting our increased sales efforts and growing demand for data services. The consumer side of the fixed segment, mainly represented by FTTB technology, also showed positive dynamics with revenue growth of 30% year-on-year and 4% quarter-on-quarter. We continue to expand our unique high-quality IPTV product, which is currently available to customers in 13 cities.Russian consolidated fixed and mobile OIBDA margin decreased year-on-year from 50.9% to 47.0%, which we see as the normal operational level after we resumed our investments into the market and new products, limited during 2009. Our mobile OIBDA margin, although slightly down quarter-on-quarter, remains above 50%. We have already accelerated our investments in scale and quality of our networks. CAPEX in 3Q2010 increased 59% sequentially and more than threefold year-on-year. Despite much higher investments, our ROIC remained stable, reflecting our continued efforts in profitability and cash generation.RUSSIA (RUR millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues64,28461,2115.0%61,7384.1%Adjusted OIBDA30,24431,166-3.0%29,1143.9%Adjusted OIBDA margin, % 47.0%50.9%47.2%SG&A 17,26315,42711.9%16,8912.2%  including Sales & Marketing Expenses6,0574,94022.6%5,5948.3%  including General & Administrative Costs11,20610,4876.9%11,297-0.8%SG&A percentage26.9%25.2%27.4%Capital expenditures11,7152,829314.1%7,36459.1%ROIC, %32.2%27.6%33.0%RUSSIA REVENUES* (RUR millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues64,28461,2115.0%61,7384.1%Mobile 53,80451,2774.9%51,8253.8%including data revenue3,1962,65420.4%2,9976.6%Fixed-line10,4809,9345.5%9,9135.7%Business segment4,8045,011-4.1%4,6144.1%Wholesale3,9853,50513.7%3,6688.6%Residential 1,6911,41819.3%1,6313.7%including FTTB revenue 1,24195330.2%1,1963.8%RUSSIA OIBDA DEVELOPMENT* (RUR millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA Total30,24431,166-3.0%29,1143.9%Mobile 27,13028,047-3.3%26,4372.6%Fixed-line3,1143,119-0.2%2,67716.3%Adjusted Total OIBDA margin, %47.0%50.9%47.2%Mobile, % 50.4%54.7%51.0%Fixed-line, % 29.7%31.4%27.0%RUSSIA OPERATING DEVELOPMENT3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile operationsSubscriptions  ('000)51,61551,0281.2%50,9121.4%including mobile broadband subscriptions1,50089667.4%1,30015.4%MOU, min222.1213.64.0%219.31.3%Adjusted MOU**, min227.8216.75.1%224.11.7%ARPU, RUR342.5331.83.2%329.93.8%Fixed-line operationsFTTB subscriptions ('000)1,19385040.4%1,1315.5%FTTB ARPU, RUR360.1389.8-7.6%356.61.0%*   Mobile and fixed revenues for all periods were adjusted; see definition of reportable segments in Attachment A.**  Adjusted MOU is calculated for mobile subscriptions excluding mobile broadband subscriptions using USB modems.Ukraine - Business Context, Operations and Pro-forma Financial Results*In Ukraine, the macroeconomic situation continues to improve. In the telecom market, we observe a more stable competitive situation. This environment has supported a reversal in the previous negative revenue trend and we reported 3.6% year-on-year growth in consolidated revenues in Ukraine on a pro-forma basis. Sequentially, revenues increased 9.6% driven by increased subscriptions, usage and seasonally higher roaming.After the Ukrainian Anti-Monopoly Committee's final decision on October 19th related to the Kyivstar transaction, we began the active phase of integrating our operations. We remain confident that we will be able to achieve the synergies as initially anticipated. Quarterly operating highlights in Ukraine:Our marketing activities focused on the price sensitive segment helped to reverse the trend and increase our active customer base, which was up 4.1% quarter-on-quarterARPU increased quarter-on-quarter by 7.3% and 4.4% year-on-year driven by continuous increase in usage and seasonal trends Consolidated mobile OIBDA margin was up to 58.5% on the back of revenue growth and operational excellenceWe remain one of the leaders in the Ukrainian broadband market in terms of new broadband subscriptions adding 50,000 customers, a 205.0% increase compared to 3Q09SG&A costs decreased by 75.5 million UAH or 8.0% year-on-year as a result of the ongoing operational excellence program started in 2009, and helped drive substantial improvements in the OIBDA margin. Quarter-on-quarter SG&A costs grew just 2.3% despite the substantial growth in revenues.Capital expenditures were up 6.7% year-on-year but down quarter-on-quarter mostly due to delayed deliveries, which we expect in the fourth quarter of 2010. We continue to invest in the development of our business with Capex/Revenue expected to be at around 15% calculated on an actual annualized basis. We see the development of our fixed data networks as a priority.Overall, we see further recovery of the Ukrainian telecom market and are confident in sustaining our leadership position.* Ukraine reporting segment includes operations of Kyivstar, URS and GTI.  "Pro forma basis" means that the numbers are presented assuming that the business combination with Kyivstar had taken place on January 1, 2009UKRAINE PRO-FORMA (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues3,365.43,247.03.6%3,071.09.6%Adjusted OIBDA1,913.21,629.017.4%1,663.015.0%Adjusted OIBDA margin, % 56.8%50.2%54.2%SG&A 873.5949.0-8.0%854.02.3%  including Sales & Marketing Expenses167.3223.0-25.0%165.01.4%  including General & Administrative Costs706.2726.0-2.7%689.02.5%SG&A percentage26.0%29.2%27.8%Capital expenditures403.3378.06.7%538.0-25.0%UKRAINE PRO-FORMA REVENUES (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues3,365.43,247.03.6%3,071.09.6%Mobile 3,239.43,093.04.7%2,928.010.6%Fixed-line 126.0154.0-18.2%143.0-11.9%Business segment74.983.0-9.8%73.02.6%Wholesale27.258.0-53.1%47.0-42.1%Residential 23.913.083.8%23.03.9%UKRAINE PRO-FORMA OIBDA DEVELOPMENT (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA Total1,913.21,629.017.4%1,663.015.0%Mobile 1,896.51,585.019.7%1,614.017.5%Fixed-line16.744.0-62.0%49.0-65.9%Adjusted Total OIBDA margin, %56.8%50.2%54.2%Mobile, % 58.5%51.2%55.1%Fixed-line, % 13.3%28.6%34.3%UKRAINE ACTUAL (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues3,365.4441.7661.9%2,461.336.7%Adjusted OIBDA Total1,913.294.51924.6%1,304.446.7%Net income/(loss) attributable to VimpelCom Ltd.587.3-296.6n/a236.1148.8%UKRAINE PRO-FORMA OPERATING DEVELOPMENT 3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile operationsSubscriptions  ('000)25,05724,4842.3%24,0594.1%MOU, min433.2330.631.0%426.71.5%ARPU mobile, UAH42.640.84.4%39.77.3%ARPU mobile, US$5.45.31.9%5.08.0%Fixed-line operationsBroadband subscriptions ('000)213.870.1205.0%164.030.4%Broadband ARPU, UAH38.053.1-28.4%42.8-11.2%Broadband ARPU, US$4.86.8-29.4%5.4-11.1%CIS - Business Context, Operations and Financial Results *In the CIS, we achieved considerable organic revenue growth both on a year-on-year and quarter-on-quarter basis. The results from our largest CIS market, Kazakhstan, continued to demonstrate strong dynamics, with robust revenue growth and high OIBDA margin. During the quarter, we achieved double-digit revenue growth in Georgia and Tajikistan, and we saw a reversal of negative market trends in Uzbekistan and accelerated recovery in Kyrgyzstan. CIS mobile subscriptions grew to almost 15 million representing a 22.8% increase year-on-yearNet operating revenues reached $361.0 million, an increase of 21.5% year-on-year including a 11.7% organic growth; consolidated CIS OIBDA margin remains strong at 48.8%, in line with our targeted level of high 40'sIn Kazakhstan, growth in revenue was over 12% in local currency year-on-year and 7.6% quarter-on-quarter, reflecting growth in both mobile and fixed operationsTotal number of broadband subscriptions increased 178.7% year-on-year and 15.0% quarter-on-quarter as we continue to develop our broadband projects in Kazakhstan, Uzbekistan and ArmeniaYear-on-year growth of selling and marketing expenses is due to consolidation of Kyrgyzstan and substantial growth in subscription base there. Sequential increase addresses competitive situation in Armenia and Uzbekistan and ongoing business expansion in our core marketsCapex for the CIS markets increased substantially both year-on-year and quarter-on-quarter to support our network expansion, which is mainly focused on increasing mobile penetration and investments in fixed networks.Overall, we are pleased with the results from our CIS business unit. We continue to invest in the region and expect to benefit from growing penetration of voice and data services. CIS OPERATIONS (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues361.0297.021.5%336.27.4%Adjusted OIBDA176.0154.713.8%161.98.7%Adjusted OIBDA margin, % 48.8%52.1%48.2%SG&A94.673.329.1%90.15.0%  including Sales & Marketing Expenses26.220.527.8%21.422.4%  including General & Administrative Costs68.452.829.5%68.7-0.4%SG&A percentage26.2%24.7%26.8%Capital expenditures78.321.5264.2%70.610.9%ROIC, %10.8%11.5%10.0%Mobile subscriptions ('000)14,78212,03622.8%13,8756.5%including mobile broadband subscriptions20.30.0n/a17.118.7%Broadband fixed-line subscriptions ('000)74.426.7178.7%64.715.0%* CIS operations include operations in Kazakhstan, Uzbekistan, Armenia, Kyrgyzstan (since 1Q10), Tajikistan, and Georgia. South-East Asia ? OverviewOur Vietnamese joint-venture maintained its operations on a limited level during the third quarter as shareholders' negotiations continued on the optimal way of further financing and expanding the business. We do not consolidate the Vietnamese operations in our financial reporting.In Cambodia, recently we managed to reverse the negative trends stemming from regulatory action earlier this year. Although the quarterly results were slightly below our expectations, we are confident that our business in Cambodia will be on track by the end of the year.SEA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating mobile revenues 5.02.4108.3%5.5-9.1%Adjusted mobile OIBDA  -8.8-13.2n/a-8.1n/aContent of the attachment tables: Attachment A: Definitions12Attachment B: VimpelCom Ltd financial Statements15Attachment C: Reconciliation Tables (Unaudited)19Attachment D:Capex Development21Attachment E: Financial and Operational Highlights in Functional Currencies21Attachment F: Key Financial Results in US Dollars Russia25Attachment G: VimpelCom Ltd Financial and Operational Highlights on Pro-Forma Basis29Attachment H: Average Rates of Functional Currencies to USD29For more information on financial and operating data for specific countries, as well as reconciliation of OIBDA, please refer to the supplementary file FinancialOperatingQ32010.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.The Company's management will discuss its third quarter 2010 results during a conference call and slide presentation on December 2, 2010 at 4:30 pm CET, (10:30 am US ET). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay will be available through December 9, 2010. The slide presentation webcast will also be available for download on VimpelCom's website http://www.vimpelcom.com.VimpelCom consists of telecommunications operators providing voice and data services through a range of wireless, fixed and broadband technologies. The VimpelCom group is headquartered in Amsterdam and has operations in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia, covering territory with a total population of about 345 million. VimpelCom operating companies provide services under the "Beeline" and "Kyivstar" brands. VimpelCom's ADSs are listed on the New York Stock Exchange 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 include those relating to our transaction with Weather Investments, realization of synergies in Ukraine and the expected growth and development of our operations. 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 continued volatility in the economies in the markets in which the Company operates, unforeseen developments from competition, governmental regulation of the telecommunications industries, general political uncertainties in the markets in which the Company operates and/or litigation with third parties. In addition, there can be no assurance that all of the conditions precedent to completion of our transaction with Weather Investments will be satisfied.  The actual outcome may also differ materially if the Company is unable to obtain all necessary corporate approvals relating to its business, if the Company is unable to successfully integrate its Ukrainian operations and other newly-acquired businesses and other factors. There can be no assurance that such risks and uncertainties will not have a material adverse effect on the Company. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risk factors described in the Company's registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the "SEC"), OJSC VimpelCom's public filings with the SEC, including its Annual Report on Form 20-F for the year ended December 31, 2009, and other public filings made by the Company with the SEC, which risk factors are incorporated herein by reference. The Company 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.Attachment A: Definitions Adjusted OIBDA is a non-U.S. GAAP financial measure. Adjusted OIBDA, previously referred to as EBITDA or OIBDA by OJSC VimpelCom, is defined as operating income before depreciation, amortization and impairment loss.  Our management uses adjusted OIBDA and adjusted OIBDA margin as supplemental performance measures and believes that adjusted OIBDA and adjusted OIBDA margin provide useful information to investors because they are indicators of the strength and performance of the Company's business operations, including its ability to fund discretionary spending, such as capital expenditures, acquisitions and other investments, as well as indicating its ability to incur and service debt. In addition, the components of adjusted OIBDA include the key revenue and expense items for which the Company's operating managers are responsible and upon which their performance is evaluated.  Adjusted OIBDA also assists management and investors by increasing the comparability of the Company's performance against the performance of other telecommunications companies that provide OIBDA or EBITDA (earnings before interest, taxes, depreciation and amortization) information. This increased comparability is achieved by excluding the potentially inconsistent effects between periods or companies of depreciation, amortization and impairment loss, which items may significantly affect operating income between periods. However, our adjusted OIBDA results may not be directly comparable to other companies' reported OIBDA or EBITDA results due to variances and adjustments in the components of OIBDA (including our calculation of adjusted OIBDA) or calculation measures.  Additionally, a limitation of adjusted OIBDA's use as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues or the need to replace capital equipment over time. Reconciliation of adjusted OIBDA to net income, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section as well as in the supplementary file FinancialOperatingQ22010.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.Adjusted OIBDA margin is a non-U.S. GAAP financial measure.  We calculate adjusted OIBDA margin as adjusted OIBDA divided by net operating revenues, expressed as a percentage.  Reconciliation of adjusted OIBDA margin to net income as a percentage of net operating revenues, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section as well as in the supplementary file FinancialOperatingQ12010.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.ARPU (Monthly Average Revenue per User) is calculated by dividing service revenue during the relevant period, including roaming revenue and interconnect revenue, but excluding revenue from connection fees, sales of handsets and accessories and other non-service revenue, by the average number of subscriptions during the period and dividing by the number of months in that period. Broadband subscriptions are the customer contracts that served as a basis for revenue generating activity in the three months prior to the measurement date, as a result of activities including monthly internet access using FTTB, xDSL and WiFi technologies as well as mobile internet access  via USB modems using 3G/HSDPA technologies.Capital expenditures (Capex) - purchases of new equipment, new construction, upgrades, software, other long lived assets and related reasonable costs incurred prior to intended use of the non current asset, accounted at the earliest event of advance payment or delivery. Long-lived assets acquired in business combinations are not included in capital expenditures.CIS Geographic Segment for the purpose of VimpelCom's reporting includes our operations in the following countries: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Armenia and Georgia. Starting from the second quarter 2010 OJSC VimpelCom's operation in Ukraine was included into a separate reporting segment together with Kyivstar and reported on a pro-forma basis for all periods starting from the first quarter of 2010.Free cash flow is a non-U.S. GAAP financial measure and is calculated as net income plus depreciation and amortization minus capital expenditures for the reported period (a quarter or a year, respectively). The Company believes that free cash flow provides useful information to investors because it is an indicator of our company's operational and financial performance and represents our ability to generate cash to maintain or expand our asset base. The Company also refers to free cash flow in determining its dividends. Free cash flow should not be considered in isolation as an alternative to operating cash flow or any other measure of the company's cash flows management. Reconciliation of free cash flow to net income, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section (Attachment C).General and administrative costs (G&A) include salaries and outsourcing costs, including related social contributions required by law; stock price-based compensation expenses; repair and maintenance expenses; rent, including lease payments for base station sites; utilities; other miscellaneous expenses, such as insurance, operating taxes, license fees, and accounting, audit and legal fees.Households passed are households located within buildings, in which indoor installation of all the FTTB equipment necessary to install terminal residential equipment has been completed. SEA Geographic segment ? VimpelCom's operations in South-East Asia, which include operations in Cambodia and VimpelCom's respective equity in net results of operations of its Vietnamese associate entity GTEL-Mobile JSC ("GTEL-Mobile"). Mobile subscriptions are SIM-cards registered in the system as of a measurement date, users of which generated revenue at any time during the three months prior to the measurement date. This includes revenue coming from any incoming and outgoing calls, subscription fee accruals, debits related to service, outgoing SMS, Multimedia Messaging Service (referred to as MMS), data transmission and receipt sessions, but does not include incoming SMS and MMS sent by VimpelCom or abandoned calls. VimpelCom's total number of mobile subscriptions also includes SIM-cards for use of mobile Internet service via USB modems.Mobile services are wireless voice and data transmission services excluding WiFi.MOU (Monthly Average Minutes of Use per User) is calculated by dividing the total number of minutes of usage for incoming and outgoing calls during the relevant period (excluding guest roamers) by the average number of mobile subscriptions during the period and dividing by the number of months in that period.Net debt is a non-U.S. GAAP financial measure and is calculated as the sum of interest bearing long-term debt and short-term debt minus cash and cash equivalents. The Company believes that net debt provides useful information to investors because it shows the amount of debt outstanding to be paid after using available cash and cash equivalent, as well as short-term investments. Net debt should not be considered in isolation as an alternative to long-term debt and short-term debt, or any other measure of the company financial position. Reconciliation of net debt to long-term debt and short-term debt, the most directly comparable U.S. GAAP financial measures, is presented below in the reconciliation tables section.Reportable segments ? The Company identified Russia mobile, Russia fixed-line, CIS mobile, CIS fixed-line, Ukraine mobile, Ukraine fixed-line and Asia mobile reporting segments based on the business activities in different geographical areas. Although Georgia is no longer a member of the CIS, consistent with VimpelCom's historic reporting practice VimpelCom continues to include Georgia in its CIS reporting segment. Mobile lines include activities for the providing of wireless telecommunication services to the Company's subscribers; fixed-line includes all activities for providing wireline telecommunication services, broadband and consumer Internet. Revenues and expenses are shown net of intercompany transactions within one geographical segment. Intersegment revenues and expenses between different geographical segments are eliminated at the consolidated level. Starting second quarter of 2010 VimpelCom also started to consider VimpelCom's respective equities in net results of operations of the Company's associates Morefront Holdings Ltd. and GTEL-Mobile as part of operations of Russia mobile and Asia mobile reporting segments, respectively, as well as VimpelCom's DVB-T and DVB-H activities were allocated to Russia fixed-line and Russia mobile segments, respectively. The comparative information was retrospectively adjusted.ROCE is a non-U.S. GAAP financial measure and is calculated as operating income for the last twelve months divided by the sum of net debt, total equity and redeemable noncontrolling interest calculated as an average of the quarter-end balances for the last four quarters. The Company believes that ROCE (return on capital employed) provides useful information to management of our company and investors because it is an indicator of our company's operational performance and represents a return on employed capital at the end of each reported period. Calculation of ROCE on the basis of U.S. GAAP financial measures is presented in the reconciliation tables section below (Attachment C).ROIC is a non-U.S. GAAP financial measure and is calculated as operating income for the last twelve months divided by the sum of property and equipment, licenses, intangible assets, goodwill, software and frequency permissions as reflected on the balance sheet as of the end of the period. The Company believes that ROIC (return on invested capital) provides useful information to management of our company because it is an indicator of our company's operational performance and provides a useful indication of how profitably our company used its resources in each reportable segment over the reported period. Calculation of ROIC on the basis of U.S. GAAP financial measures is presented below in the reconciliation tables section below (Attachment C).Sales and marketing costs (S&M) include marketing, advertising and dealer commissions expenses.Ukraine segment ? Due to change in the reporting structure of VimpelCom and in line with intentions made public by the Company in the previous quarter, Ukraine was considered to be a separate reporting segment apart from the CIS and includes the operations of VimpelCom's indirect Ukrainian subsidiaries Closed Joint Stock Company "Ukrainian Radio Systems" ("URS") and "Golden Telecom" Limited Liability Company ("GT LLC"), as well as Kyivstar.VAS (value added services) includes short messages ("SMS"), multimedia messages ("MMS"), caller number identification, call waiting, data transmission, mobile Internet, downloadable content and other services.Voice revenue ? for the purpose of press-release voice revenue includes voice revenue generated by our subscribers, roaming revenues generated by our subscribers and guest roamers and interconnect revenue. In our annual report and annual report on Form 20-F we report each of these types of revenues separately.Attachment B: VimpelCom Ltd financial statements VimpelCom Ltd Unaudited Condensed Consolidated Statements of IncomeThree months ended September 30,Nine months ended September 30,2010200920102009(In thousands of US dollars, except share amounts)Operating revenues:Service revenues$2,785,966$2,245,967$7,567,961$6,298,463Sales of equipment and accessories35,07226,130106,19086,998Other revenues3,3515,52322,99914,694Total operating revenues2,824,3902,277,6207,697,1516,400,155Revenue based tax-(1,823)-(5,839)Net operating revenues2,824,3902,275,7977,697,1516,394,316Operating expenses:Service costs594,687488,4251,649,2971,370,952Cost of equipment and accessories 44,27626,876118,50585,564Selling, general and administrative expenses799,122599,1862,208,8351,710,198Depreciation408,284366,0391,137,4861,000,201Amortization137,77171,164321,010213,947Provision for doubtful accounts8,68312,97439,81242,974Total operating expenses1,992,8251,564,6645,474,9454,423,836Operating income831,565711,1332,222,2061,970,480Other income and expenses:Interest income14,5587,70642,18241,310Net foreign exchange (loss)/gain27,26724,5165,808(397,191)Interest expense(125,713)(156,793)(399,637)(434,802)Equity in net gain/(loss) of associates19,2014,86126,505(25,754)Other (expenses)/income, net(26,512)(3,206)(84,868)(8,124)Total other income and expenses(91,199)(122,916)(410,010)(824,561)Income before income taxes740,365588,2171,812,1981,145,919Income tax expense230,303152,336561,310309,665Net income510,062435,8811,250,887836,254Net income/(loss) attributable to the noncontrolling interest14,1611,38438,768(2,136)Net income attributable to VimpelCom$495,901$434,497$1,212,120$838,390Basic EPS :Net income attributable to VimpelCom per common share restated$0.39$0.44$1.05$0.82Weighted average common shares outstanding (thousand)1,291,2321,012,8621,178,6291,012,555VimpelCom Ltd Unaudited Condensed Consolidated Balance Sheets September 30,December 31,20102009(In thousands of US dollars, except share amounts)AssetsCurrent assets:Cash and cash equivalents $     2,467,002$       1,446,949Trade accounts receivable, net of allowance for doubtful accounts 525,659392,365Inventory 83,62061,919Deferred income taxes 99,40591,493Input value added tax 143,90896,994Due from related parties 113,006249,631Other current assets348,501627,257Total current assets3,781,1022,966,608Property and equipment, net 6,480,3855,561,569Telecommunications licenses, net 583,221542,597Goodwill 6,943,1433,284,293Other intangible assets, net 1,629,117700,365Software, net513,459448,255Investments in associates 440,952436,767Other assets 674,367792,087Total assets$   21,045,746$     14,732,541Liabilities, redeemable noncontrolling interest and equityCurrent liabilities:Accounts payable$       749,750$          545,690Due to employees149,032113,368Due to related parties 2,7779,211Accrued liabilities 393,797315,666Taxes payable287,015212,767Customer advances, net of VAT326,956376,121Customer deposits28,41228,386Short-term debt 2,126,1131,813,141Total current liabilities4,063,8523,414,350Deferred income taxes 787,178596,472Long-term debt 4,366,6415,539,906Other non-current liabilities 171,418164,636Commitments, contingencies and uncertainties --Total liabilities9,389,0889,715,364Redeemable noncontrolling interest518,664508,668Equity:Convertible voting preferred stock (0.001 US$ nominal value per share), 200,000,000 shares authorized; 128,532,000 shares issued and outstanding129129Common stock (0.001 US$ nominal value per share), 1,800,000,000 shares authorized;  1,302,559,308 shares issued (December 31, 2009: 1,025,620,440);  1,291,232,105 shares outstanding (December 31, 2009: 1,014,291,580) 1,3031,026Additional paid-in capital6,294,8691,142,594Retained earnings5,286,6124,074,492Accumulated other comprehensive loss(497,816)(488,277)Treasury stock, at cost, 11,327,203  shares of common stock (December 31, 2009: 11,328,860)(223,406)(223,421)Total VimpelCom shareholders' equity10,861,6924,506,543Noncontrolling interest276,3021,966Total equity11,137,9944,508,509Total liabilities, redeemable noncontrolling interest and equity$   21,045,746$     14,732,541VimpelCom Ltd Unaudited Condensed Consolidated Statements of Cash Flows Nine months ended September 30,20102009(In thousands of US dollars)Operating activitiesNet cash provided by operating activities$       2,901,086$                2,761,844Investing activitiesPurchases of property and equipment(750,530)(482,455)Purchases of intangible assets(15,245)(13,067)Purchases of software (145,591)(128,001)Investments in associates-(12,424)Payment for shares in Golden Telecom(143,569)-Cash proceeds from Kyivstar acquisition167,077-Acquisition of Foratec, net of cash acquired (36,372)-Cash increase due to Sky Mobile consolidation4,702-Loan granted (5,305)-Loan receivable repayment22,910-Proceeds from withdrawal of deposits435,166-Purchases of other assets, net(15,065)(29,877)Net cash provided by/(used in) investing activities(481,820)(665,824)Financing activitiesProceeds from bank and other loans738,4501,226,137Repayments of bank and other loans(1,589,976)(1,691,052)Payments of fees in respect of debt issues(2,606)(51,516)Share capital issued and paid905-Share premium contributed(225)5,412Purchase of noncontrolling interest in consolidated subsidiaries(12,594)(439)Payment of dividends (2,049)-Payment of dividends to noncontrolling interest(34,517)(718)Purchase of own shares(479,936)-Net proceeds from employee stock options27-Net cash used in financing activities(1,382,521)(512,176)Effect of exchange rate changes on cash and cash equivalents(16,691)23,788Net  increase in cash and cash equivalents1,020,0531,607,632Cash and cash equivalents at beginning of period1,446,949914,683Cash and cash equivalents at end of period$       2,467,002$                2,522,315VimpelCom Ltd Unaudited Condensed Consolidated Statements of Cash Flows (Continued)Nine months ended September 30,20102009(In thousands of US dollars)Supplemental cash flow informationCash paid during the period:Income tax$              490,468$                  280,774Interest378,872377,568Non-cash activities:Accounts payable for property, equipment and  other long-lived assets293,171128,150Attachment C: Reconciliation Tables (Unaudited)Reconciliation of Consolidated Adjusted OIBDA of VimpelCom (In millions of US$)3Q 103Q 092Q 10Adjusted OIBDA1,377.71,148.31,261.8Depreciation(408.3)(366.0)(376.7)Amortization(137.8)(71.2)(116.5)Operating income831.6711.1768.6Interest income14.67.716.1Net foreign exchange (loss)/gain27.324.5(126.4)Interest expense(125.7)(156.8)(132.3)Equity in net gain/(loss) of associates 19.24.911.1Other (expense)/income, net(26.6)(3.2)(10.0)Income tax expense(230.3)(152.3)(178.0)Net income510.1435.9349.1Reconciliation of Consolidated Adjusted OIBDA Margin of VimpelCom 3Q 103Q 092Q 10Adjusted OIBDA margin48.8%50.5%47.8%Less: Depreciation as a percentage of net operating revenues(14.5%)(16.2%)(14.3%)Less: Amortization as a percentage of net operating revenues(4.9%)(3.1%)(4.4%)Operating income as a percentage of net operating revenues29.4%31.2%29.1%Interest income0.5%0.3%0.6%Net foreign exchange (loss)/gain1.0%1.1%(4.8%)Interest expense(4.5%)(6.9%)(5.0%)Equity in net gain/(loss) of associates 0.7%0.2%0.4%Other (expense)/income, net(0.8%)0.0%(0.4%)Income tax expense(8.2%)(6.7%)(6.7%)Net income margin18.1%19.2%13.2%Reconciliation of VimpelCom Consolidated ROCE and Net Debt (In millions of US$)VimpelCom Ltd. Actual ROCE, %2Q '083Q '084Q '081Q '092Q '093Q '094Q '091Q '102Q '103Q '10Consolidated operating income LTM 2,6432,8592,5362,4022,3572,1792,5782,6332,7102,830Net debt6,7727,2767,5286,7296,3255,5475,9065,1183,9804,026Long - term debt6,5036,2556,5345,3075,7325,5935,5405,2924,8014,367Short-term debt1,2481,7481,9092,3882,2422,4761,8131,3561,5322,126Cash and cash equivalents (979)(727)(915)(966)(1,649)(2,522)(1,447)(1,530)(2,353)(2,467)Total equity6,4365,6394,1403,1464,0384,5694,5095,37610,64411,138Redeemable noncontrolling interest0470470500500505509512515519Total capital employed (CE)13,20813,38512,13810,37510,86310,62110,92411,00615,13915,683Average capital employed12,27711,69010,99910,69610,85411,92313,188ROCE consolidated19.6%20.2%19.8%24.1%24.3%22.7%21.5%Reconciliation of ROIC Russia,  ROIC, % (based on RUR millions)3Q 103Q 092Q 10Operating income LTM75,969 66,515 76,048          Property and equipment124,465 126,599 119,880          Licenses4,798 7,102 5,252          Intangible assets13,242 15,533 13,491          Goodwill80,181 78,896 78,897          Software9,825 9,557 9,479          Frequency permissions3,234 3,050 3,172 Total Invested Capital235,745 240,737 230,171 ROIC, %32.2%27.6%33.0%CIS,  ROIC, % (based on US$ millions)3Q 103Q 092Q 10Operating income LTM270.1 261.3 260.7          Property and equipment1,146.0 1,078.1 1,117.9          Licenses216.3 256.8 233.8          Intangible assets176.0 184.6 172.3          Goodwill874.5 666.0 988.9          Software77.5 79.5 76.6          Frequency permissions4.6 2.8 4.6 Total Invested Capital2,494.9 2,267.8 2,594.1 ROIC, %10.8%11.5%10.0%Attachment D:  Capex Development  CAPEX (in US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Total capex 520.1123.2322.2%381.436.4%Russia382.690.4323.2%243.457.2%Ukraine51.03.01600.0%58.6-13.0%Other CIS78.321.6262.5%70.610.9%SEA8.28.20.0%8.8-6.8%Attachment E: Financial and Operational Highlights in Functional Currencies UkraineUKRAINE ACTUAL (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues3,365.4441.7661.9%2,461.336.7%Adjusted OIBDA1,913.294.51924.6%1,304.446.7%Adjusted OIBDA margin, % 56.8%21.4%53.0%SG&A 873.5162.1438.9%691.426.3%  including Sales & Marketing Expenses167.340.9309.0%134.924.0%  including General & Administrative Costs706.2121.2482.7%556.526.9%SG&A percentage26.0%36.7%28.1%Capital expenditures403.323.51616.2%464.1-13.1%UKRAINE ACTUAL REVENUES (UAH millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues3,365.4441.7661.9%2,461.336.7%Mobile 3,239.4251.51188.0%2,309.040.3%Fixed-line 126.0190.2-33.8%152.3-17.3%Business segment74.982.5-9.2%72.82.9%Wholesale27.294.9-71.3%56.8-52.1%Residential 23.912.886.7%22.75.3%UKRAINE ACTUAL ADJUSTED OIBDA DEVELOPMENT (UAH mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA Total1,913.294.51924.6%1,304.446.7%Mobile 1,896.549.13762.5%1,255.151.1%Fixed-line16.745.4-63.2%49.3-66.1%Adjusted Total OIBDA margin, %56.8%21.4%53.0%Mobile, % 58.5%19.5%54.4%Fixed-line, % 13.3%23.9%32.4%CIS - Revenues DevelopmentKAZAKHSTAN (KZT mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues29,10025,92812.2%27,0547.6%Mobile28,42225,53811.3%26,5037.2%Fixed-line67839073.8%55123.0%ARMENIA (AMD mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues17,78519,167-7.2%17,0734.2%Mobile7,6987,5751.6%6,70114.9%Fixed-line10,08711,592-13.0%10,372-2.7%UZBEKISTAN (US$ mln)*3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues53.850.17.4%51.44.7%Mobile51.446.89.8%48.95.1%Fixed-line2.43.3-27.3%2.5-4.0%TAJIKISTAN (US$ mln)*3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues22.214.949.0%20.110.4%Mobile16.514.910.7%14.910.7%Fixed-line5.7-n/a5.29.6%GEORGIA (GEL mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues23.914.960.4%20.814.9%Mobile23.214.955.7%20.016.0%Fixed-line0.7-n/a0.8-12.5%KYRGYZSTAN (KGS mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile net operating revenues1,368-n/a1,2618.5%CIS REVENUES** (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues361.0297.021.5%336.27.4%Mobile320.5260.023.3%297.47.8%Fixed-line40.537.09.5%38.84.4%* US$ is the functional currency in Uzbekistan and Tajikistan. ** Mobile and fixed revenues for all periods were recalculated ? please see definition of reportable segments in Attachment A.CIS ? Adjusted OIBDA DevelopmentKAZAKHSTAN (KZT mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 16,48315,3417.4%15,5266.2%Mobile16,24515,3505.8%15,4065.4%Fixed-line238-9n/a12098.3%Adjusted OIBDA margin, % 56.6%59.2%57.4%ARMENIA (AMD mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 8,0749,812-17.7%7,33110.1%Mobile3,2123,633-11.6%2,71118.5%Fixed-line4,8626,179-21.3%4,6205.2%Adjusted OIBDA margin, % 45.4%51.2%42.9%UZBEKISTAN (US$ mln)*3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 21.923.5-6.8%20.19.0%Mobile20.922.2-5.9%19.28.9%Fixed-line1.01.3-23.1%0.911.1%Adjusted OIBDA margin, % 40.7%46.9%39.1%TAJIKISTAN (US$ mln)*3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total8.85.269.2%6.731.3%Mobile7.85.250.0%5.736.8%Fixed-line1.0-n/a1.00.0%Adjusted OIBDA margin, % 39.6%34.9%33.3%GEORGIA (GEL mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA Total6.41.6300.0%2.7137.0%Mobile6.31.6293.8%2.66136.8%Fixed-line0.12-n/a0.05140.0%Adjusted OIBDA margin, % 26.8%10.7%13.0%KYRGYZSTAN (KGS mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted Mobile OIBDA 569-n/a589-3.4%Adjusted Mobile OIBDA margin, % 41.6%-46.7%CIS OIBDA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total176.0154.713.8%161.98.7%Mobile159.5137.416.1%147.68.1%Fixed-line16.517.3-4.6%14.315.4%Adjusted OIBDA margin, %48.8%52.1%48.2%* US$ is the functional currency in Uzbekistan and Tajikistan.CIS - Operating HighlightsKAZAKHSTAN3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)6,7366,835-1.4%6,3396.3%MOU, min130.398.132.8%125.14.2%ARPU mobile, US$9.68.217.1%9.60.0%ARPU mobile, (KZT)1,4191,24114.3%1,4110.6%Broadband internet subscriptions ('000)6.20.31966.7%4.344.2%ARMENIA3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)58150215.7%5672.5%including mobile broadband subscriptions7.40.0n/a6.612.1%MOU, min286.7269.06.6%270.16.1%ARPU mobile, US$11.413.7-16.8%10.310.7%ARPU mobile, (AMD)4,1765,117-18.4%3,9755.1%Broadband internet subscriptions ('000)57.818.1219.3%49.716.3%UZBEKISTAN3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)4,3983,65220.4%3,99710.0%including mobile broadband subscriptions12.90.0n/a10.522.9%MOU, min387.7409.3-5.3%383.01.2%ARPU mobile, US$4.14.5-8.9%4.10.0%Broadband internet subscriptions ('000)10.48.325.3%10.7-2.8%TAJIKISTAN3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)7727069.3%784-1.5%MOU, min191.2173.310.3%167.614.1%ARPU mobile, US$7.17.2-1.4%6.116.4%GEORGIA3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)52934155.1%46613.5%MOU, min147.4129.314.0%140.54.9%ARPU mobile, US$8.19.2-12.0%7.92.5%ARPU mobile, (GEL)14.915.4-3.2%14.52.8%KYRGYZSTAN3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile subscriptions ('000)1,766-n/a1,7222.6%MOU, min288.2-n/a235.922.2%ARPU mobile, US$5.6-n/a5.35.7%ARPU mobile, (KGS)260.0-n/a239.58.6%We no longer provide information on subscriptions market share, because different churn policies used by mobile service providers result in reported subscriptions market share figures that are not representative.Attachment F: Key Financial Results in US Dollars Russia *RUSSIA (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues2,099.41,953.07.5%2,041.82.8%Adjusted OIBDA987.9995.0-0.7%964.02.5%Adjusted OIBDA margin, % 47.1%50.9%47.2%SG&A 563.6493.014.3%558.40.9%  including Sales & Marketing Expenses197.8157.026.0%185.06.9%  including General & Administrative Costs365.8336.08.9%373.4-2.0%SG&A percentage26.8%25.2%27.3%Capital expenditures382.690.3323.7%243.557.1%RUSSIA REVENUES (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues2,099.41,953.07.5%2,041.82.8%Mobile revenues1,757.21,636.07.4%1,714.02.5%Fixed-line revenues 342.2317.07.9%328.04.3%Business segment156.9160.0-1.9%153.02.5%Wholesale130.1112.016.2%121.07.5%Residential 55.245.022.7%54.02.2%RUSSIA ADJUSTED OIBDA DEVELOPMENT (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total987.9995.0-0.7%964.02.5%Mobile886.2895.0-1.0%875.01.3%Fixed-line101.8100.01.8%89.014.4%Adjusted total OIBDA margin, %47.1%50.9%47.2%Mobile, %50.4%54.7%51.1%Fixed-line, % 29.7%31.5%27.1%* Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ32010.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.Ukraine UKRAINE ACTUAL (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues426.056.6652.7%310.637.2%Adjusted OIBDA242.212.11901.7%164.647.1%Adjusted OIBDA margin, % 56.9%21.4%53.0%SG&A 110.620.7434.3%87.326.7%  including Sales & Marketing Expenses21.25.1315.7%17.024.7%  including General & Administrative Costs89.415.6473.1%70.327.2%SG&A percentage26.0%36.6%28.4%Capital expenditures51.03.01600.0%58.6-13.0%UKRAINE ACTUAL REVENUES (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues426.056.6652.7%310.637.2%Mobile 410.032.31169.3%291.440.7%Fixed-line 16.024.3-34.2%19.2-16.7%Business segment9.510.4-8.7%9.23.3%Wholesale3.512.3-71.5%7.1-50.7%Residential 3.01.687.5%2.93.4%UKRAINE ACTUAL ADJUSTED OIBDA DEVELOPMENT (US$ millions)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA Total242.212.11901.7%164.647.1%Mobile 240.16.43651.6%158.451.6%Fixed-line2.15.7-63.2%6.2-66.1%Adjusted Total OIBDA margin, %56.9%21.4%53.0%Mobile, % 58.6%19.8%54.4%Fixed-line, % 13.1%23.5%32.3%CIS Revenues in US$KAZAKHSTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues197.4171.914.8%184.37.1%Mobile192.8169.313.9%180.56.8%Fixed-line4.62.676.9%3.821.1%ARMENIA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues48.751.4-5.3%44.59.4%Mobile21.120.33.9%17.520.6%Fixed-line27.631.1-11.3%27.02.2%UZBEKISTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues53.850.17.4%51.44.7%Mobile51.446.89.8%48.95.1%Fixed-line2.43.3-27.3%2.5-4.0%TAJIKISTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues22.214.949.0%20.110.4%Mobile16.514.910.7%14.910.7%Fixed-line5.70.0n/a5.29.6%GEORGIA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Net operating revenues13.08.946.1%11.513.0%Mobile12.68.941.6%11.113.5%Fixed-line0.40.0n/a0.40.0%KYRGYZSTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Mobile net operating revenues29.30.0n/a27.56.5%CIS Adjusted OIBDA in US$*KAZAKHSTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 111.8101.79.9%105.75.8%Mobile110.2101.78.4%104.95.1%Fixed-line1.60.0n/a0.8100.0%Adjusted OIBDA margin, % 56.6%59.2%57.4%ARMENIA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 22.126.3-16.0%19.115.7%Mobile8.89.8-10.2%7.123.9%Fixed13.316.5-19.4%12.010.8%Adjusted OIBDA margin, % 45.4%51.2%42.9%UZBEKISTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total 21.923.5-6.8%20.19.0%Mobile20.922.2-5.9%19.28.9%Fixed-line1.01.3-23.1%0.911.1%OIBDA Margin, % 40.7%46.9%39.1%TAJIKISTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total8.85.269.2%6.731.3%Mobile7.85.250.0%5.736.8%Fixed-line1.0-n/a1.00.0%Adjusted OIBDA margin, % 39.6%34.9%33.3%GEORGIA (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted OIBDA total3.51.0250.0%1.5133.3%Mobile3.51.0250.0%1.5133.3%Fixed-line0.070.0n/a0.03133.3%Adjusted OIBDA margin, % 26.9%11.2%13.0%KYRGYZSTAN (US$ mln)3Q 103Q 093Q 10/3Q 092Q 103Q 10/2Q 10Adjusted mobile OIBDA  12.2-n/a12.8-4.7%Adjusted mobile OIBDA margin, % 41.6%-46.5%* Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ22010.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.Attachment G: VimpelCom Ltd Financial and Operational Highlights on Pro-Forma Basis*CONSOLIDATED OPERATIONS  (US$, millions)3Q 10 (actual)3Q 09 (pro-forma)3Q 10/3Q 092Q 10 (pro-forma)3Q 10/2Q 10YTD 3Q 10 (pro-forma)YTD 3Q 09 (pro-forma)Net operating revenues2,824.42,622.17.7%2,716.14.0%8,075.47,422.0Adjusted OIBDA1,377.71,345.42.4%1,307.05.4%3,892.43,789.4Adjusted OIBDA margin, % 48.8%51.3%48.1%48.2%51.1%SG&A799.1699.614.2%786.21.6%2,323.61,998.2SG&A percentage28.3%26.7%28.9%28.8%26.9%Net income attributable to VimpelCom Ltd.495.9493.30.5%347.742.6%1,258.91,026.2Net cash from operating activities1,096.8n/a1,029.26.6%3,085.8n/aCapital expenditures520.1229.8126.3%445.316.8%1,198.9619.9*"Pro forma basis" means ? that the numbers are presented assuming that the business combination with Kyivstar had taken place on January 1, 2009Attachment H: Average Rates of Functional Currencies to USD*Functional Currency/1 US$1Q 092Q 093Q 094Q 091Q 102Q 103Q 10Russia RUR33.9332.2131.3329.4729.8930.2430.62KazakhstanKZT138.85150.47150.75149.77147.68146.81147.40UkraineUAH7.707.667.827.997.997.927.90ArmeniaAMD325.11370.46372.66384.40384.26384.49365.57GeorgiaGEL1.671.661.681.681.721.801.84KyrgyzstanKGS----44.5545.7546.74* Functional currencies in Tajikistan, Uzbekistan and Cambodia are US dollars.SOURCE VimpelCom LtdFor further information: Alexey Subbotin of VimpelCom, +31-20-79-77-200 (Amsterdam), +7-495-9545888 (Moscow), Investor_Relations@vimpelcom.com; or Mateo Millett of FD, +1-617-897-1533, mateo.millett@fd.com