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JSFC Sistema (SSA)

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Tuesday 20 December, 2005

JSFC Sistema

3rd Quarter Results

JSFC Sistema

Sistema Announces Financial and Operating Results for the Nine Months Ended
                          September 30, 2005

Sistema (LSE:SSA), the largest private sector consumer services company in
Russia and the CIS, today announced its unaudited consolidated US GAAP financial
results for the nine months ended September 30, 2005.


--  Consolidated revenues grew 31% to US$ 5.4 billion

--  OIBDA(a) increased 25% to US$ 2.3 billion

--  Operating income up 19% to US$ 1.6 billion

--  Net income grew 29% to US$ 434 million

--  Total consolidated assets increased 57% to US$ 12.1 billion

Vladimir Evtushenkov, President and Chief Executive Officer of Sistema,
commented on the nine month results: 'Once again we are pleased to report strong
overall financial results as we continue to fulfill our commitments to
investors. Sistema's various existing business segments have continued to
perform well, and we are also pleased with the results of those operating assets
which are new to our Group. We will continue to add to our portfolio on a
selective basis as well as to effect disposals, partially or entirely, according
to market opportunities. Our strategy for 2006 will continue to be driven by
these goals whilst at all times seeking to deliver attractive performance for
our shareholders.'


 (US$ millions)                    9m 2005  9m 2004  Growth    FY 2004
Revenues                           5,410.6  4,135.9     31%   5,711.3
Operating income                   1,553.4  1,306.5     19%   1,664.7
Margin                                  29%      32%     -         29%
Net Income                           434.2    336.7     29%     411.2
OIBDA                              2,302.3  1,847.2     25%   2,464.6
Margin                                  42%      45%     -         43%

(a)OIBDA is operating income before depreciation and amortization. Please see
Appendix for full definition of OIBDA and its reconciliation to operating


Sistema's consolidated revenues increased by 31% period-on-period to US$ 5.4
billion in the nine month period ended September 30, 2005, from US$ 4.1 billion
in the same period of 2004. This growth was mainly organic - revenues from
existing businesses grew by US$ 1.121 billion, or 27%. The consolidation of
Gorizont RT, Sibintertelecom, Barash, Kvant and others contributed a total of
US$ 153.9 million to the increase.

The Telecommunications segment represented 79.3% of total aggregated revenues
for the period, compared with 81% in the same period of last year, while the
contribution of the Technology segment to the Group's aggregated revenues
increased to 12.1% from 7.7% for the same period last year. Sistema also
continued to expand its business outside of Russia, capturing continued strong
growth in the economies of the CIS countries. Revenues generated by the Group's
operations in Ukraine for the nine months of 2005 were US$ 1,129 million, which
is close to 20% of Sistema's total revenues.

Consolidated OIBDA increased by 24.6% period-on-period to US$ 2.3 billion from
US$ 1.8 billion for the first nine month period of 2004. The OIBDA margin
decreased to 42.5% for the reporting period, compared to 44.6% for the same
period of 2004, both through some margin contraction in the Telecommunications
segment, and the growth of the proportion of lower-margin segments in total

Sistema's operating income increased by 19% to US$ 1.6 billion from US$ 1.3
billion in the same period for the previous year. Importantly, in the first nine
months of 2005 Sistema continued to benefit from ongoing growth in scale and
profitability of the Group's non-telecom businesses. MTS contributed US$ 1.3
billion, or 83%, of the Group's aggregated operating income in the nine month
period ended September 30, 2005, vs. 90% in the first nine months of 2004.

Group net income increased by 29% period-on-period to US$ 434.2 million for the
nine months ended September 30, 2005, from US$ 336.7 million for same period in
2004, with net income margin declining slightly to 8.0% from 8.1%.

Our total long-term indebtedness increased to US$ 3.0 billion as at September
30, 2005 from US$ 2.0 billion as at the same date last year, while current debt
remained virtually unchanged at US$ 562.8 million (vs. US$ 563.0 million as at
September 30, 2004). The ratio of total debt to annualized OIBDA as of September
30, 2005, stood at 1.2x vs. 1.0x at the end of the first nine months of the
previous year.

In the reporting period, Sistema invested US$ 1.6 billion in capital
expenditures (excluding acquisitions), which is a 55% increase compared with US$
1.1 billion in the first nine months of 2004.


Revenues from the Telecommunications segment grew by 28% period-on-period to US$
4.3 billion from US$ 3.4 billion. MTS' revenues grew by 28% or US$ 813.2 million
to US$ 3.7 billion, reflecting continued subscriber growth in Russia and the

Combined revenues of Comstar, MTU-Inform, Telmos, MTU-Intel and Golden Line, now
united under the umbrella of Comstar UTS, grew by 16% to US$ 243.4 million from
US$ 209.0 million in the first nine months of 2004, with operating income
increasing by almost 12% to US$ 49.3 million from US$ 44.1 million.

MGTS demonstrated a 31% growth in its top line to US$ 466.8 million from US$
357.3 million in the first nine months of 2004. The company's operating income
increased by 135% to US$ 159 million from US$ 67.8 million for the same period
in 2004. This growth in revenues and profitability was driven by an increase in
regulated tariffs, growth in unregulated value-added services (including
broadband Internet access services), and the effects of the monetization of
social benefits.


Technology remained one of Sistema's fastest-growing segment in the first nine
months of 2005, with revenues more than doubling in the period to US$ 652.8
million from US$ 319.8 million in the first nine months of 2004, and operating
income growing by more than 10 times to US$ 143.1 million from US$ 13.9 million.
The acquisition of Kvant and Videophone and consolidation of Mediatel
(previously not included in Technology) contributed US$ 33.1 million to the
increase in revenues, while organic growth came mainly from the
infocommunication technology business with 342% growth to US$ 210.0 million from
US$ 47.6 million in revenue and 653% increase in operating profit to $125.6
million from $16.7 million. System integration and hardware distribution
business revenue increased by 51% to $312.9 million from $206.4 million, while
operating profit increased by more than 30 times to $9.4 million from $0.3
million for the same period last year. Consumer electronics business showed 217%
growth to US$ 89.1 million from US$ 28.1 million in revenue and 148% increase in
operating income to $1.2 million for the first nine months 2005 from an
operating loss of $2.6 million for the first nine months 2004. The revenues of
the semiconductor design and manufacturing business declined by 8% to US$ 38.3
million against US$ 41.6 million, however, operating income increased by 129% to
$9.7 million from $4.2 million for the same period last year, making this
business line the second-largest contributor to the segment's operating income.


Revenues for the Insurance segment increased by 58.3% period-on-period to US$
287.2 million from US$ 181.6 million on the back of a 68.7% increase in gross
premiums written to US$ 438.0 million from US$ 259.6 million in the first nine
months of 2004 and continuing enhanced returns on the investment portfolio
managed by Allianz-ROSNO Asset Management. Operating income for the segment rose
to US$ 19.5 million from US$ 11.4 million as a result of continued improvements
in operating efficiencies during the reporting period.


The Banking segment revenues grew by 57% period-on-period to US$ 77.3 million
from US$ 49.2 million in the first nine months of 2004. The growth in revenues
was primarily attributable to interest on loans to customers, which increased by
65%. However, operating costs increased at a higher rate due to the increase in
loan servicing cost, which reduced operating margin to 12.3% from 29.2% in the
first nine months of 2004.

Real Estate

Revenues in the real estate business are recognized upon completion of
development projects. Revenues for the nine month period ended September 30,
2005, as for the previous reporting period to June 30, 2005, showed a decrease
compared with the nine months ended September 30, 2004. For the first nine
months of this year revenues decreased by US$ 53.9 million to US$ 27.9 million,
which represents a 66% decline compared to the same period in 2004. The reason
for the decrease is the continued high level of work in progress which resulted
in no sales of completed premises during the reporting period. Consequently,
operating income for the period decreased to US$ 8.4 million from US$ 26.9
million in the same period of 2004.


Revenues for the retail business more than doubled to US$ 103.1 million, for the
nine month period ended September 30, 2005 from US$ 50.9 million for the same
period in 2004. The increase was mostly generated by revenues of our new retail
outlets. Another component of growth was consolidation of companies previously
not included in our consolidated financial statements, such as NeuKoln with
revenues of US$ 9.7 million, and DM-Orel previously accounted for by the equity
method with revenues of US$ 2.3 million. The acquisition of Chudo-Ostrov-Neva,
S-Toys and Virastay-ka contributed US$ 7.6 million, US$ 8.6 million and US$ 0.7
million in revenues, respectively. Operating income during the reporting period
increased marginally by 0.85% to US$ 4.74 million, compared with US$ 4.69
million in the nine month period ended September 30, 2004. The total number of
Detsky Mir stores as at September 30, 2005 stood at 35, and this number further
increased to 47 as at December 20, 2005.


Media business revenues grew by 96.1% to US$ 56.7 million during the nine month
period ended September 30, 2005 compared to US$ 28.9 million for the same period
in the previous year, primarily owing to regional expansion and an acquisition.
The newly acquired group of companies ESTA, a cable television operator,
contributed US$ 4.7 million to the revenues growth. Thema Production, a film
producing company, previously excluded from Media operating results, had
revenues of US$ 1.6 million in the nine month period ended September 30, 2005.
The segment's aggregated operating losses increased to US$ 1.6 million in the
nine month period ended September 30, 2005 from US$ 1.1 million in the nine
month period ended September 30, 2004 (this includes operating income of US$ 1.2
million generated by ESTA).


In August 2005, Sistema Mass Media acquired 100% minus 1 share of ESTA for a
cash consideration of approximately US$ 8.6 million. ESTA operates cable TV
networks in Tver, Kaluga and three cities in the Arkhangelsk Region
(Severodvinsk, Koryazhma and Mirny). Sistema Mass Media acquired 50.05% of the
company's shares from individual investors and 49.95% from the European Bank for
Reconstruction and Development.

In August 2005, Sistema acquired minority shareholdings in seven energy
companies in the Republic of Bashkortostan against an advance payment of US$
502.9 million and subsequently increased its stake in five of these seven
companies in October as discussed below.

In September 2005, Sistema's fixed-line telecommunications provider subsidiary
Comstar United TeleSystems acquired a 45% equity stake in Metrocom, a leading
alternative fixed-line telecommunications company in St. Petersburg, for a total
cash consideration of US$ 12.2 million. In addition, Sistema refinanced the loan
of US$ 10.0 million previously obtained by Metrocom with the support of Antel
Holdings Ltd. The stake has been acquired from Antel Holdings Ltd., a subsidiary
of MENATEP Group. The remaining 55% of Metrocom is held by the St. Petersburg
City Property Management Committee (KUGI).


In September 2005, the ordinary shares of Comstar United TeleSystems were
admitted to the Moscow Stock Exchange (MSE) under the symbol CMST.

In October 2005, Sistema increased its stakes in five out of seven energy
companies in the Republic of Bashkortostan in which it had acquired minority
shareholdings in August. Sistema increased its voting stake in OAO Novoil from
19.9% to 28.17%, in OAO Ufimsky NPZ from 19.9% to 25.52%, in OAO Ufaneftekhim
from 19.9% to 22.43%, in OAO Ufaorgsintez from 19.9% to 24.87% and in OAO
Bashneft from 19.9% to 25%, while at the same time reaching an agreement to
cancel the acquisition of a 10.08% stake in OAO Bashkirenergo.

In November 2005, Sistema reached an agreement with Oboronprom to sell its 100%
stake in Kamov-Holding, official distributor of Kamov helicopters, and the owner
of 49.46% of Kamov, designer and manufacturer of helicopters, for a total cash
consideration of US$ 11.8 million.

In November 2005, Sistema completed the consolidation of its fixed-line
telecommunications operators under Comstar United TeleSystems. As a result of
this consolidation, Comstar UTS now owns majority stakes in Sistema's fixed-line
businesses, including 99% of MTU-Inform, 100% of Telmos, 100% of MTU-Intel
(including 100% of Golden Line) and 55.62% of MGTS. Acquisition was effected
through additional share issuance by Comstar UTS. Upon completion of
restructuring Sistema and its 100%-owned subsidiaries own 79.3% of Comstar UTS
shares; MGTS and its 100%-owned subsidiary own 20.7% of Comstar UTS shares.
Following this restructuring, in December 2005 Comstar UTS launched a public
share purchase offer to the holders of MGTS ordinary shares at RUR 490 per share
(equivalent to approximately US$ 17.065 at the official exchange rate as of the
announcement date).

In November 2005, Sistema Mass Media acquired a 74% stake in Cifrovoe
Teleradioveshanie (CTV), a digital television broadcasting company, for a cash
consideration of approximately US$ 7 million.

Earlier this month, Sistema's CEO and controlling shareholder, Vladimir
Evtushenkov, distributed a part of his stake representing total of 1% of
outstanding shares to the company's directors and top management. In this way,
Mr. Evtushenkov made a personal contribution towards the incentive program for
the company's Board members and top executives.

For further information, please visit or contact:

Sistema Investor Relations               Shared Value Limited
Alexei Kurach                            Matthew Hooper
Tel: +7 495 629 2741                     Tel. +44 (0) 20 7321 5023              

Sistema is the largest private sector consumer services company in Russia and
the CIS, with over 50 million customers. Sistema develops and manages
market-leading businesses in selected service-based industries, including
telecommunications, technology, insurance, banking, real estate, retail and
media. Founded in 1993, the company reported revenues of US$ 5.4 billion for the
first nine months of 2005, and total assets of US$ 12.1 billion as at September
30, 2005. Sistema's shares are listed under the symbol 'SSA' on the London Stock
Exchange, under the symbol 'AFKS' on the Russian Trading System (RTS), and under
the symbol 'SIST' on the Moscow Stock Exchange (MSE).

Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Sistema. You can identify forward looking statements by terms
such as 'expect,' 'believe,' 'anticipate,' 'estimate,' 'intend,' 'will,'
'could,' 'may' or 'might' the negative of such terms or other similar
expressions. We wish to caution you that these statements are only predictions
and that actual events or results may differ materially. We do not intend to
update these statements to reflect events and circumstances occurring after the
date hereof or to reflect the occurrence of unanticipated events. Many factors
could cause the actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others, general
economic conditions, our competitive environment, risks associated with
operating in Russia, rapid technological and market change in our industries, as
well as many other risks specifically related to Sistema and its operations.


This results statement includes financial information prepared in accordance
with United States Generally Accepted Accounting Principles (US GAAP), as well
as other non-GAAP financial information. The non-GAAP financial information
should be considered as an addition to, but not as a substitute for, information
prepared in accordance with US GAAP.

OIBDA is operating income before depreciation and amortization and the OIBDA
margin is defined as OIBDA as a percentage of net revenues. These measures are
included in this results statement in order to provide additional information
regarding the Group's ability to meet future debt service payments, capital
expenditure and working capital requirements, and as a metric to evaluate
profitability. OIBDA is not a measure of financial performance under US GAAP,
and is not an alternative to net income as a measure of operating performance,
or to cash flows from operating activities as a measure of liquidity. While
depreciation and amortization are considered operating costs under GAAP, these
items primarily represent the non-cash current period allocation of costs
arising from the acquisition or development of long term assets in prior
periods. OIBDA is commonly used as a criterion for evaluation of operating
performance by credit and equity investors and analysts. The calculation of
OIBDA may be different from the calculation used by other companies and
comparability may therefore be limited. OIBDA can be reconciled to the Group's
consolidated statements as follows:

US$ thousands                           9m 2005      9m 2004     FY 2004

Operating Income                        1,553,433    1,306,545   1,664,706

Add depreciation and amortization       748,829      540,679     799,885

OIBDA                                   2,302,262    1,847,224   2,464,591

                                   January 01, January 01,   FY 2004
                                      2005        2004 -
                                    -September September
                                       30,         30,
                                      2005        2004

Sales                             $ 5,056,002 $ 3,914,312 $ 5,392,827
Revenues from financial services      354,581     221,608     318,459

                                   ----------- ----------- -----------
TOTAL REVENUES                      5,410,583   4,135,920   5,711,286
                                   ----------- ----------- -----------

Cost of sales, exclusive of
 depreciation and amortization
 shown separately below            (1,950,179) (1,440,155) (2,020,124)
Financial services related costs,
 exclusive of depreciation and
 amortization shown separately
 below                               (258,541)   (149,378)   (201,631)

                                   ----------- ----------- -----------
TOTAL COST OF SALES                (2,208,720) (1,589,533) (2,221,755)
                                   ----------- ----------- -----------

Selling, general and
 administrative expenses             (928,736)   (679,629) (1,009,716)
Depreciation and amortization        (748,829)   (540,679)   (799,885)
Other operating expenses, net         (28,583)    (30,614)    (44,529)
Equity in net income of investees      54,381      12,942      27,121
Gain/(loss) on disposal of
 interests in subsidiaries              3,337      (1,862)      2,184

                                   ----------- ----------- -----------
OPERATING INCOME                    1,553,433   1,306,545   1,664,706
                                   ----------- ----------- -----------

Interest income                        56,857      17,370      18,061
Interest expense, net of amounts
 capitalized                         (189,892)   (163,316)   (213,943)
Currency exchange and translation
 (loss)/gain                          (14,412)      9,496      12,620

                                   ----------- ----------- -----------
Income before income tax, minority
 interests and cumulative effect
 of a change in accounting
 principle                          1,405,986   1,170,095   1,481,444
                                   ----------- ----------- -----------

Income tax expense                   (404,092)   (326,141)   (445,731)

                                   ----------- ----------- -----------
Income before minority interests
 and cumulative effect of a change
 in accounting principle            1,001,894     843,954   1,035,713
                                   ----------- ----------- -----------

Minority interests                   (567,673)   (471,761)   (589,014)

                                   ----------- ----------- -----------
Income before cumulative effect of
 a change in accounting principle     434,221     372,193     446,699
                                   ----------- ----------- -----------

Cumulative effect of a change in
 accounting principle (net of
 income tax effect of nil)                  -     (35,472)    (35,472)

                                   ----------- ----------- -----------
NET INCOME                        $   434,221 $   336,721 $   411,227
                                   =========== =========== ===========
Weighted average number of common
 shares outstanding                 9,417,216   8,100,000   8,100,000
Earnings per share, basic and
 diluted                                 46.1        41.6        50.8



(Amounts in thousands of U.S. dollars, except share amounts)

                                     September   September  December
                                         30,         30,        31,
                                        2005        2004       2004

  Cash and cash equivalents         $   939,502 $  308,547 $  503,747
  Short-term investments                475,888    178,964    207,293
  Loans to customers and banks, net     657,242    291,629    379,310
  Insurance-related receivables         168,924     95,230    130,278
  Accounts receivable, net              450,774    292,956    327,921
  Other receivables and prepaid
   expenses, net                        822,613    540,328    583,074
  Inventories                           355,860    228,275    276,832
  Deferred tax assets, current
   portion                              103,238     68,334     73,592
                                     ----------- ---------- ----------
     Total current assets             3,974,041  2,004,263  2,482,047
                                     ----------- ---------- ----------

Property, plant and equipment, net    5,346,450  3,990,929  4,435,215
Advance payments for non-current
 assets                                 479,165    161,782    181,281
Long-term receivables                     5,291      1,208      4,513
Long-term investments                   519,019     54,554     45,911
Investments in affiliated companies     285,830    194,643    206,520
Goodwill                                224,134    114,630    174,341
Licenses, net                           627,036    692,460    750,933
Other intangible assets, net            536,775    435,128    467,160
Debt issuance costs, net                 25,591     24,025     27,267
Deferred tax assets                      38,930      5,307      3,482
                                     ----------- ---------- ----------
TOTAL ASSETS                        $12,062,262 $7,678,929 $8,778,670
                                     =========== ========== ==========


  Accounts payable                  $   485,026 $  331,752 $  361,016
  Bank deposits and notes issued        364,012    239,819    326,861
  Insurance-related liabilities         516,407    240,613    344,460
  Taxes payable                         251,443    151,556    117,888
  Deferred tax liabilities, current
   portion                               15,338      5,252     22,071
  Accrued expenses, subscriber
   prepayments and other current
   liabilities                          997,893    643,323    737,394
  Short-term notes payable              127,908     60,556    221,103
  Current portion of long-term debt     432,266    497,654    340,938
                                     ----------- ---------- ----------
     Total current liabilities        3,190,293  2,170,525  2,471,731
                                     ----------- ---------- ----------

  Capital lease obligations               5,000      2,138      3,412
  Long-term debt                      3,004,949  1,974,840  2,494,522
  Subscriber prepayments, net of
   current portion                      177,920    133,209    156,233
  Deferred tax liabilities              207,753    223,761    218,620
  Postretirement benefit obligation      21,691     14,349     16,226
                                     ----------- ---------- ----------
     Total long-term liabilities      3,417,313  2,348,297  2,889,013
                                     ----------- ---------- ----------

Deferred revenue                        128,111    121,878    130,913

                                     ----------- ---------- ----------
TOTAL LIABILITIES                     6,735,717  4,640,700  5,491,657
                                     ----------- ---------- ----------

Minority interests in equity of
 subsidiaries                         2,185,238  1,703,634  1,851,027

Commitments and contingencies                 -          -          -

  Share capital                          30,057     25,090     25,090
  Additional paid-in capital          1,478,564    198,882    198,882
  Retained earnings                   1,589,871  1,089,898  1,164,404
  Accumulated other comprehensive
   income                                42,815     20,725     47,610
                                     ----------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY            3,141,307  1,334,595  1,435,986

                                     ----------- ---------- ----------
 EQUITY                             $12,062,262 $7,678,929 $8,778,670
                                     =========== ========== ==========



(Amounts in thousands of U.S. dollars)

                                   January 01, January 01,   FY 2004
                                      2005        2004 -
                                    -September September
                                       30,         30,
                                      2005        2004
  Net income                      $   434,221 $   336,721 $   411,227

  Adjustments to reconcile net
   income to net cash provided by
     Depreciation and amortization    748,829     540,679     799,885
     (Gain)/loss on disposal of
      property, plant and
      equipment                          (552)      1,219       1,551
     Long-term investments'
      impairment                            -           -       3,070
     (Gain)/loss on disposal of
      interests in subsidiaries        (3,337)      1,862       1,862
     Cumulative effect of a change
      in accounting principle               -      35,472      35,472
     Minority interests               567,673     471,761     589,014
     Equity in net income of
      investees                       (54,381)    (12,942)    (27,121)
     Deferred income tax benefit      (95,225)    (31,410)    (58,903)
     Provision for doubtful
      accounts receivable              36,829      15,179      29,809
     Allowance for loan losses          4,962      (1,452)     13,810
     Inventory obsolescence charge      5,095       4,874       5,868

  Changes in operating assets and
   liabilities, net of effects
   from purchase of businesses:
     Trading securities              (212,042)     22,503      27,142
     Loans to banks                  (152,710)     54,626     (25,661)
     Insurance-related receivables    (38,646)    (25,497)     31,111
     Accounts receivable             (156,400)    (54,598)   (101,567)
     Other receivables and prepaid
      expenses                       (238,160)     46,019      (3,929)
     Inventories                      (72,088)    (64,259)   (112,269)
     Accounts payable                 115,750      37,045      54,110
     Insurance-related liabilities    171,947      59,627      51,985
     Taxes payable                    133,039      33,390      (1,997)
     Accrued expenses, subscriber
      prepayments and other
      liabilities                     146,889      19,552     171,966
     Postretirement benefit
      obligation                        5,465       5,759       7,636

                                   ----------- ----------- -----------
        Net cash provided by
         operations                 1,347,158   1,496,130   1,904,071
                                   ----------- ----------- -----------

  Purchase of property, plant and
   equipment                       (1,409,491)   (978,732) (1,498,098)
  Purchase of intangible assets      (171,741)    (84,594)   (164,577)
  Purchase of businesses, net of
   cash acquired                      (94,168)   (196,860)   (338,906)
  Proceeds from disposal of
   subsidiaries, net of cash
   disposed                             4,859         649         649
  Purchase of long-term
   investments                       (686,594)    (68,394)    (76,217)
  Purchase of short-term
   investments                       (692,550)    (40,926)   (142,696)
  Proceeds from sale of short-term
   investments                        616,687     107,266     187,500
  Proceeds from sale of property,
   plant and equipment                  3,263       5,050       7,807
  Net increase in loans to
   customers                         (124,778)    (30,615)    (39,898)

                                   ----------- ----------- -----------
        Net cash used in investing
         activities                (2,554,513) (1,287,156) (2,064,436)
                                   ----------- ----------- -----------

  Principal payments on short-term
   borrowings, net                    (94,120)   (282,226)   (263,981)
  Net (decrease)/increase in
   deposits from customers            (12,321)     80,009     150,876
  Net increase/(decrease) in bank
   promissory notes issued             42,678     (14,947)     12,838
  Proceeds from grants                    924       2,913       3,285
  Proceeds from long-term
   borrowings, net of debt
   issuance costs                     911,398     623,774       9,445
  Principal payments on long-term
   borrowings                        (311,578)   (513,319)  1,458,082
  Principal payments on capital
   lease obligations                   (6,150)     (5,953)   (868,347)
  Payments to shareholders of
   subsidiaries                      (163,618)    (68,681)     (7,924)
  Proceeds from issuance of common
   stock                            1,284,649           -    (108,165)
  Dividends paid                       (8,752)     (5,162)     (5,162)

                                   ----------- ----------- -----------
        Net cash provided by/(used
         in) financing activities $ 1,643,110 $  (183,592)$   380,947
                                   ----------- ----------- -----------

 EQUIVALENTS                      $   435,755 $    25,382 $   220,582

 beginning of the period              503,747     283,165     283,165
                                   ----------- ----------- -----------
 the period                       $   939,502 $   308,547 $   503,747
                                   =========== =========== ===========