1. See Attachment A for definitions and reconciliation of adjusted OIBDA and adjusted OIBDA margin to their most directly comparable US GAAP financial measures.
2. Here and below in the release, net income stands for net income attributable to the Group.
3. See Attachment B for reconciliation of free cash-flow to net cash provided by operating activity.
Mr. Alexey Kornya, MTS Vice President and Chief Financial Officer, said, "In 2012, Group adjusted OIBDA increased by 3% to $5.3 billion. Throughout the year we showed faster adjusted OIBDA growth relative to revenues due to rising contribution from data services and sustained focus on reducing costs. Group adjusted OIBDA margin came in above our guidance for 2012 at 42.6%, despite the suspension of our business in Uzbekistan, which had historically demonstrated a higher adjusted OIBDA margin than elsewhere. For the quarter, Group adjusted OIBDA increased by 1% year-over-year despite on-going costs in Uzbekistan and strategic decisions made by the company to increase our retail network. In Russia, OIBDA rose by 11% to RUB 148 billion. Sustained improvements in OIBDA throughout the year reflected on-going efforts by the Company to manage costs, while we realized benefits from decreased competitive activity." He continued, "CAPEX for the year came in line with our guidance at $2.9 billion or roughly 23% of sales. In 2012, we continued build-out of our 3G networks, which has reached 28,000 base stations with over 90% sites connected via IP-channels. We invested in backbone and backhaul roll-out in the regions as well as in our GPON project in Moscow, bringing the total length of our fiber-optic networks up to over 140,000 km." Mr. Dubovskov added, "With the near completion of our aggressive roll-out of 3G in 2012, we foresee a decrease in 3G-related CAPEX in 2013. However, we need to direct sufficient funds towards LTE network build-out to ensure we are able to offer our customers cutting edge solutions and seize commercial opportunities, which LTE provides. Overall, we expect to spend 20% of sales on capital investments. For the period 2013 to 2015, we expect cumulative CAPEX/sales ratio in the range of 18-19%. We are confident that in 2013 we will be able to realize our goal of 5 to 7% revenue growth in local currencies. We believe that macroeconomic factors, the changing revenue mix within the Group and improvement in the competitive environment will allow us to sustain our OIBDA margin in the range of 41 to 42% for 2013."