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64 VimpelCom / Annual Report 2007 and the consideration of any available tax planning strategies. Each of these approaches to estimating future taxable income includes substantial judgment and assumptions related to, among other things, our expected levels of future taxable profits, the timing pattern of reversing future taxable differences and our abilities to actually implement a tax planning strategy. As of December 31, 2007, our deferred tax asset amounted to US$117.2 million net of allowance of US$10.3 million. Business Combinations We have entered into certain acquisitions in the past and may make additional acquisitions in the future. Our financial statements are impacted by the manner in which we allocate the purchase price in a business combination, as assets that are considered to be wasting will reduce future operating results, whereas goodwill and certain other intangible assets are of a non-amortizing nature, therefore there is no income statement impact. As part of our purchase price allocation, it is necessary to develop the appropriate purchase price paid, which includes the fair value of securities issued and any contingent consideration. In general, we do not issue securities for our acquisitions. However, we did issue securities in connection with the merger of our subsidiary VimpelCom- Region into our company and we may in the future issue securities in connection with acquisitions. After the purchase price is established, we have to allocate that to the underlying assets acquired and liabilities assumed, therefore assets and liabilities that are not originally reflected in the acquired entity need to be assessed and valued. This process requires significant judgment on our part as to what those assets and liabilities are and how they should be valued. The valuation of the individual assets, in particular intangible assets related to assets such as customer intangibles, brands, etc., require us to make significant assumptions, including, among others, the expected future cash flows, the appropriate interest rate to value those cash flows and expected future customer churn rates. All of these factors, which are generally developed in conjunction with the guidance and input of professional valuation specialists, require judgment and estimates. A change in any of these estimates or judgments could change the amount of the purchase price to be allocated to the particular asset or liability. The resulting change in the purchase price allocation to a non-goodwill asset or liability has a direct impact on the residual amount of the purchase price that cannot be allocated, referred to as «goodwill.» Stock-based Compensation Until January 1, 2006 we followed the provisions of SFAS No. 123, Accounting for Stock-Based Compensation, for our stock option plan. SFAS No. 123 generally allowed companies to account for stock-based compensation under either the fair value method of SFAS No. 123 or under the intrinsic value method of Accounting Principles Board Opinion, or APB, No. 25, Accounting for Stock Issued to Employees. Accordingly, we accounted for our stock-based compensation in accordance with the provisions of APB No. 25 and its related Interpretations and presented pro forma disclosures of results of operations as if the fair value method had been adopted. As of January 1, 2006 we adopted SFAS No. 123 (revised 2004) Share Based Payment, or SFAS No. 123R, which is a revision of SFAS No. 123 and SFAS No. 95, Statement of Cash Flows. Under SFAS No. 123R companies must calculate and record the cost of equity instruments, such as stock options or restricted stock, awarded to employees for services received in the income statement; pro forma disclosure is no longer permitted. The cost of the equity instruments is to be measured based on the fair value of the instruments on the date they are granted (with certain exceptions) and is required to be recognized over the period during which the employees are required to provide services in exchange for the equity instruments. The assessment of the fair value of a stock-based compensation award requires us to use a significant amount of judgment as it relates to the variables used in the valuation model. Historically, we have used the Black Scholes option pricing model. The Black Scholes model requires Reconciliation of ARPU to Service Revenues (Unaudited, in thousands of U.S. dollars, except for ARPU and subscriber amounts) Years ended December 31, 2007 2006 2005 2004 2003 Total ARPU: Total service revenues $7,018,470 $4,830,739 $3,175,221 $2,070,720 $1,269,927 Less: Connection fees 1,356 1,752 876 720 1,279 Less: Revenue from rent of fiber optic channels 4,496 1,845 1,370 1,788 1,299 Service revenue used to calculate ARPU 7,012,618 4,827,142 3,172,975 2,068,212 1,267,349 Average number of subscribers (‘000) 48,104 41,383 30,538 – – Total average revenue per subscriber per month $12.1 $9.7 $8.7 $– $– Average number of registered subscribers (‘000) 58,933 50,326 35,393 16,986 7,749 Total average revenue per registered subscriber per month $9.9 $8.0 $7.5 $10.1 $13.6 (Continued on the next page)
ВымпелКом / Годовой отчет 2007 Years ended December 31, 2007 2006 2005 2004 2003 Russia ARPU: Total service revenues $6,082,473 $4,379,534 $2,997,388 $2,025,638 $1,269,927 Less: Connection fees 904 1,744 876 720 1,279 Less: Revenue from rent of fiber optic channels 4,496 1,846 1,370 1,788 1,299 Service revenue used to calculate ARPU 6,077,073 4,375,944 2,995,142 2,023,130 1,267,349 Average number of subscribers (‘000) 40,299 37,996 29,207 – 7,749 Russia average revenue per subscriber per month $12.6 $9.6 $8.5 $– $13.6 Average number of registered subscribers (‘000) 49,457 46,142 33,958 16,734 – Russia average revenue per registered subscriber per month $10.2 $7.9 $7.4 $10.1 $– Kazakhstan ARPU: Total service revenues $610,471 $351,854 $176,924 $45,082 $– Less: Connection fees 0 – – – – Service revenue used to calculate ARPU 610,471 351,854 176,924 45,082 – Average number of subscribers (‘000) 3,875 2,332 1,303 $– $– Kazakhstan average revenue per subscriber per month $13.1 $12.6 $11.3 $– $– Average number of registered subscribers (‘000) 4,880 2,893 1,404 716 – Kazakhstan average revenue per registered subscriber per month $10.4 $10.1 $10.5 $15.7 $– Ukraine ARPU: Total service revenues $110,212 $35,024 $1,952 $– $– Less: Connection fees 153 8 – – – Service revenue used to calculate ARPU 110,059 35,016 1,952 – – Average number of subscribers (‘000) 1,937 582 228 – – Ukraine average revenue per subscriber per month $4.7 $5.0 $4.3 $– $– Average number of registered subscribers (‘000) 2,501 714 239 – – Ukraine average revenue per registered subscriber per month $3.7 $4.1 $4.1 $– $– Tajikistan ARPU: Total service revenues $23,927 $1,218 $– $– $– Less: Connection fees 0 – – – – Service revenue used to calculate ARPU 23,927 1,218 – – – Average number of subscribers (‘000) 205 15 – – – Tajikistan average revenue per subscriber per month $9.7 $6.8 $– $– $– Average number of registered subscribers (‘000) 222 23 – – – Tajikistan average revenue per registered subscriber per month $9.0 $4.4 $– $– $– Uzbekistan ARPU: Total service revenues $111,716 $57,439 $– $– $– Less: Connection fees 0 0 – – – Service revenue used to calculate ARPU 111,716 57,439 – – – Average number of subscribers (‘000) 1,315 402 – – – Uzbekistan average revenue per subscriber per month $7.1 $11.9 $– $– $– Average number of registered subscribers (‘000) 1,360 461 – – – Uzbekistan average revenue per registered subscriber per month $6.8 $10.4 $– $– $– (Continued on the next page) 65
Page 2 and 3:
Contents Содержание Вы
Page 4 and 5:
Группа компаний «В
Page 6 and 7:
ВымпелКом / Годовой
Page 8 and 9:
ОСНОВНЫЕ ФИНАНСОВЫ
Page 10 and 11:
Статистические дан
Page 12 and 13:
37,999,483 TOTAL ACTIVE SUBSCRIBERS
Page 14 and 15: Alexander Izosimov Chief Executive
Page 16 and 17: VimpelCom’s major corporate devel
Page 18 and 19: - Extract maximum value from the Ru
Page 20 and 21: «ВымпелКом» - стрем
Page 22 and 23: ВымпелКом / Годовой
Page 24 and 25: Our Credo: Innovation and Creativit
Page 26 and 27: ВымпелКом / Годовой
Page 28 and 29: Jo Lunder Chief Executive Officer,
Page 30 and 31: Vladimir A. Filippov Vice President
Page 32 and 33: 31 VimpelCom / Annual Report 2007 C
Page 34 and 35: 34 VimpelCom / Annual Report 2007 S
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Page 38 and 39: 38 VimpelCom / Annual Report 2007 (
Page 40 and 41: 40 VimpelCom / Annual Report 2007 M
Page 42 and 43: 42 VimpelCom / Annual Report 2007 O
Page 44 and 45: 44 VimpelCom / Annual Report 2007 b
Page 46 and 47: 46 VimpelCom / Annual Report 2007 I
Page 48 and 49: 48 VimpelCom / Annual Report 2007 Y
Page 50 and 51: 50 VimpelCom / Annual Report 2007 U
Page 54 and 55: 54 VimpelCom / Annual Report 2007 T
Page 58 and 59: 58 VimpelCom / Annual Report 2007 I
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Page 94 and 95: 94 VimpelCom / Annual Report 2007 A
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