##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2005
 o
    
    TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 0-27423
 Golden Telecom, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    51-0391303(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 REPRESENTATION OFFICE OF GOLDEN TELESERVICES, INC.
1 Kozhevnichesky Proezd
Moscow, Russia 115114
 (011-7-501) 797-9300
 
 o þ
 o þ
 þ o
 o
  o þ o
 o þ
   Item of Form 10-K
    
    Documents Incorporated By ReferencePart III, Items 10-14
    
    Portions of the Registrants proxy statement for the 2006 annual meeting of shareholders to be held in May 2006.




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##### 



GOLDEN TELECOM, INC.
FORM 10-K
Year Ended December 31, 2005
 TABLE OF CONTENTS
 PagePART IITEM 1.
    
    Business
    
    3ITEM 1A.
    
    Risk Factors
    
    29ITEM 1B.
    
    Unresolved Staff Comments
    
    41ITEM 2.
    
    Properties
    
    41ITEM 3.
    
    Legal Proceedings
    
    41ITEM
4.
    
    Submission of Matters to a Vote of Security Holders
    
    41PART IIITEM 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    41ITEM 6.
    
    Selected Financial Data
    
    42ITEM 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    44ITEM 7A.
    
    Qualitative and Quantitative Disclosures About Market Risk
    
    65ITEM 8.
    
    Financial Statements and Supplementary Data
    
    67ITEM 9.
    
    Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
    
    100ITEM 9A.
    
    Control and Procedures
    
    100ITEM 9B.
    
    Other Information
    
    102PART IIIITEM 10.
    
    Directors and Executive Officers of the Registrant
    
    103ITEM 11.
    
    Executive Compensation
    
    103ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    103ITEM 13.
    
    Certain Relationships and Related Transactions
    
    103ITEM 14.
    
    Principal Accountant Fees and Services
    
    103PART IVITEM 15.
    
    Exhibits and Financial Statement Schedules
    
    104SIGNATURES
    
    
    
    107Employment Agreement - Derek Bloom, SVP and General CounselSchedule of Compensation Arrangements with DirectorsList of SubsidiariesConsent of Ernst & Young LLC, Independent Registered Public Accounting FirmCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I
 
 ITEM 1. Business
 Introduction
   
    
    Business and Corporate Services. Using our fiber optic and satellite-based networks in
and between major metropolitan areas of Russia, Ukraine and other countries of the CIS, we
provide business and corporate services including voice and data services to corporate
clients across all geographical markets and all industry segments, other than
telecommunications operators;
    
    Carrier and Operator Services.Using our fiber optic and satellite-based networks in and
between major metropolitan areas of Russia, Ukraine and other countries of the CIS, we
provide a range of carrier and operator services including voice and data services to
foreign and Russian telecommunications and mobile operators;
    
    Consumer Internet Services.Using our fiber optic and satellite-based networks, we
provide Internet access to the consumer market and web content offered through a family of
Internet portals throughout Russia, Ukraine, Kazakhstan, and Uzbekistan; and
    
    Mobile Services. Using our mobile networks in Kiev and Odessa, Ukraine, we provide mobile
services with value-added features, such as voicemail, roaming and messaging services on a
subscription and prepaid basis.
  Business Section Overview
  Business Strategy
  
    
    Increase Market Share by Offering Bundled Data and Voice Services Over an Integrated
Network
  
    
    Extend Our Leading Position in High Growth Data and Internet Markets
  3




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
    
    Reduce Operating Costs and Satisfy Capacity Needs through Network Planning and Optimization
  
    
    Focus Operating Activities and Capital Investments in Major Metropolitan Areas
  
    
    Pursue Consolidation Opportunities
  Our Position in the Russian and CIS Markets
  
    
    our early market entry and local market experience;
    
    our focus on service, quality and reliability;
    
    our strong infrastructure position in major cities throughout Russia, Ukraine, Kazakhstan and Uzbekistan;
    
    our extensive customer base;
    
    our extensive range of integrated voice, data and Internet telecommunications services;
    
    our diverse and influential shareholder base; and
    
    our strong balance sheet position.
 Corporate History and Development
 Golden Telecom, Inc.,
    4




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Regulatory
Environment
    5




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Customer Base
   Corporate Network Customers.
 Corporate End-Users.
 Small
and Medium Businesses (SMB).
 Fixed-Line Operators.
 Cellular Operators.
 Mass
Market.
  6




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Pricing
  Our Service Groups
  Business and Corporate Services (BCS)
 BCS Services in Russia
  Services and Customers
 Local Access Services.
 International and Domestic Long Distance Services.
  Dedicated Internet and Data Services.
 Integrated Voice and Data Services.
 7




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Value-Added Services.
 Equipment Sales.
  Marketing and Pricing
  ,
   Competition
  
    
    the Sistema Telecom group of companies, including alternative operators such as Comstar,
MTU-Inform, Telmos and Golden Line, for all services provided to corporate customers within
Moscow and Moscow City Telephone Network (MGTS), for services provided to the SMB market
in Moscow;
    
    Equant, currently owned by Equant France, for corporate data networking services across Russia;
    
    TransTelecom, currently owned by the Russian Railways, for
corporate data networking services across Russia;
    
    Peterstar, an affiliate of Telecominvest, for services provided in St. Petersburg; and
 8




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
    
    Regional subsidiaries of Svyazinvest, a holding group with a majority government
ownership, for services provided in St. Petersburg and within Russian regional cities.
 BCS Services in Ukraine
      Services and Customers
 Local Access Services.
 International and Domestic Long Distance Services.
 Dedicated Internet and Data Services.
 Voice over Data Services.
 9




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Information Services.
 Call Center Services.
 Residential Telecommunications Services.
  Marketing and Pricing
   Competition
    Carrier and Operator Services
 Carrier and Operator Services in Russia
   10




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Services and Customers
 Voice Services:
    11




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Data Services:
    Marketing and Pricing
      12




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Competition
    Carrier and Operator Services in Ukraine
 Services and Customers.
 International and Domestic Long Distance Services.
     Marketing and Pricing
  13




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Competition
  Consumer Internet Services
 Services and Customers
 Dial-up Internet Services.
   Asymmetric Digital Subscriber Line (ADSL) Services.
 14




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Broadband
Internet Access
   Marketing and Pricing
     Competition
  Mobile Services
 Golden Telecom GSM
  15




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Services and Customers
 Mobile Services.
  Marketing and Pricing
     Competition
    16




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Website Access to Company Filings
 http://www.goldentelecom.com. http://www.sec.gov.
 Employees
   17




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Our Licenses and Network Facilities
 Significant Licenses
  Switched Voice Services
    Leased Circuits .
 Data Services.
 Local Access Services.
 18




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Telematics Services.
 Mobile Services.
 Network Facilities
      Russia
 Backbone Network
  International backbone
  19




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Domestic backbone
    Satellite
  Voice Services
    Metropolitan Area Networks
  Moscow
  Transport.
 Voice.
   20




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Wireless Local Loop (WLL)
 Data and IP services .
   St. Petersburg
    Nizhny Novgorod
  Voronezh
  Ekaterinburg
  Krasnoyarsk
  21




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Samara
  Kaliningrad
  Sakhalin
  Other Regional Local Networks
  Dial-up Internet Local Access Network.
 Commonwealth of Independent States
 Ukraine
  Kiev
  Other Regional Local Networks
  Kazakhstan
  Uzbekistan
  22




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The Environment in Which We Operate
  
    
    An overview of the telecommunications markets;
    
    An overview of the political and economic environment; and
    
    An overview of the legal, tax and regulatory regimes.
 Overview of Telecommunications Markets in Russia and Ukraine
 The Telecommunications Market in Russia
      23




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The Telecommunications Market in Ukraine.
      Overview of the Political and Economic Environments in Russia and Ukraine
 Russias Political Environment.
 24




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Russias Economic Environment.
 Ukraines Political Environment.
    Ukraines Economic Environment.
 25




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Overview of the Legal, Tax and Regulatory Regimes in Russia and Ukraine
 Russias Legal, Tax and Regulatory Regime.
        26




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Ukraines Legal, Tax, and Regulatory Regime
     27




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28




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ITEM 1A . Risk Factors
 Factors That May Adversely Affect Future Results
 Risks Associated With Doing Business in Russia, Ukraine and
Other Countries of the CIS
  Political instability in the countries in which we operate could depress foreign and local
investment and spending, which could adversely affect our results of operations
  There is a volatile political situation in Ukraine which may negatively impact our business
  Economic instability in Russia and Ukraine could adversely affect the demand for our services and
our ability to collect on our invoices
     29




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The currency control system of Russia and Ukraine could adversely affect our ability to convert
rubles and hryvnas to hard currency and manage cash flows
  The Russian banking and financial system remains underdeveloped, and another banking crisis could
place liquidity constraints on our business and adversely affect our financial condition
   Russian and Ukrainian telecommunications policies could affect our competitive position
   
    
    Restrictions on how and where we can provide our services;
    
    Restrictions or delays in receiving approvals on our applications and communications for
necessary regulatory approvals for rolling out our network in the regions for which we have
licenses;
    
    Significant additional costs;
    
    Delays in implementing our operating or business plans; or
    
    Increased competition.
  30




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Any changes in regulations, costs or confusion from the Telecommunications Law may affect our
business
   The Telecommunications Law and regulations provide scope for the incumbent operators to raise
access costs
  Our operating licenses may not clearly authorize us to provide all of the services that we offer
  Russian anti-trust policies may limit our ability to expand our businesses and to establish market
rates for our service offerings
   31




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Special fees and taxes levied against telecommunications operators could adversely affect our
results of operations
   Russian and Ukrainian legislation may not adequately protect against expropriation and
nationalization
  
    
    The lack of state budgetary resources;
    
    The lack of an independent judiciary and sufficient mechanisms to enforce judgments; and
    
    Corruption among government officials.
   We may be unable to enforce our rights due to ambiguity in the laws and legal structures of the
countries where we operate
  32




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Any unforeseen changes in the tax laws in Russia or Ukraine could have a material adverse effect on
our business
    Russian and Ukrainian laws may expose us to liability for actions taken by our subsidiaries or
venture entities
  
 
    
    The subsidiary or venture entity concluded the transaction pursuant to our mandatory instructions.
  
    
    The subsidiary or venture entity becomes insolvent or bankrupt due to our actions or our failure to act; and
    
    We have the ability to make decisions for the subsidiary or venture entity as a result
of our ownership interest, the terms of a contract between us and them, or in any other
way.
   33




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The
implementation of Ukraines new Civil and Commercial Codes may
cause instability of Ukrainian business legal enviroment
  Risks Associated with Our Business
 We may encounter difficulties expanding and operating our business, including the integration of
acquired companies
   §
    
    The consolidation of the operations and personnel of the acquired companies;§
    
    The potential disruption of our ongoing business and distraction of management;§
    
    The introduction of acquired technology content or rights into our products and
unanticipated expenses related to such integration;§
    
    The potential negative impact on reported earnings;§
    
    The possibility that revenues from acquired businesses and other synergies may not materialize as anticipated;§
    
    The deterioration of relationships with employees and customers as a result of any
integration of new management personnel; and§
    
    Contingent liabilities associated with acquired businesses, especially in the markets
where we operate.
   §
    
    Delivering services that are technically and economically feasible;§
    
    Financing increases in the regional network construction and development area;§
    
    Obtaining in a timely manner and maintaining licenses, permissions to operate
telecommunications equipment, frequency allocations and other governmental permissions
sufficient to provide services to our customers;§
    
    Marketing our services in a large geographic area to new potential customers;§
    
    Obtaining sufficient interconnect arrangements;§
    
    Meeting demands of local special interest groups;§
    
    Obtaining compliance certificates for our telecommunications equipment in a timely and cost-efficient manner; and§
    
    Obtaining adequate supplies of network equipment.
 Reorganization of the Russian telecommunications industry may affect our competitive position
  34




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Reorganizations in the Ukrainian telecommunications sector may have strengthened the position of
the monopoly incumbent and encouraged unfair competition
   
    
    We have no effective recourse against the state monopoly carrier since the state
regulator controls and manages the monopoly carrier and the judiciary system is severely
underdeveloped and cannot be relied upon to protect and enforce unfair competition;
    
    A single Ukrainian self-regulating monopoly is able to create favorable market conditions
for itself and cause unfavorable conditions for us;
    
    Our ability to negotiate reasonable interconnection agreements and rates may suffer; and
    
    Any subsequent privatization of Ukrtelecom may bring in strong management and resources
from a major telecommunications operator, increasing its competitive strengths.
 Failure to obtain sufficient and reliable transmission capacity at reasonable costs could cause us
to incur losses
    35




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Our ability to provide our services is dependent on securing and maintaining interconnection
agreements with Rostelecom, Ukrtelecom and other facilities providers
    Our network may not be able to support the growing demands of our customers
   Russian companies may be required to adopt a plan of liquidation when their net assets are negative
  36




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We may have difficulty scaling and adapting our existing architecture to accommodate increased
traffic and technology advances
  We are in a competitive industry and our competitors may be more successful in attracting and
retaining customers
     §
    
    Greater resources, market presence and network coverage;§
    
    Greater brand name recognition, customer loyalty and goodwill;§
    
    Control over domestic transmission lines and over access to these lines by other participants; and§
    
    Close ties to national and local regulatory authorities which may be reluctant to adopt
policies that would give rise to increased competition for Rostelecom or Ukrtelecom.
  Our partners are often also our competitors
   Our existing billing and management information systems may not be able to meet our future needs
  37




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We may encounter difficulties in fully complying with applicable laws due to confusion in the laws
and legal structures of the countries where we operate
    Our telecommunications licenses may not be extended or may be suspended or revoked
   38




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We may fail to obtain renewals or extensions of our frequency allocations for our earth stations
and other radio frequency equipment that we use in our operations
   Risks
Associated With Our Shareholder Structure
 Our significant shareholders have other interests which may conflict with our interests
  The current governments well-publicized campaign against Russias so-called oligarchs could have
adverse effects on us
   Alfas dispute with the Russian Ministry of Telecommunications may adversely affect our business
  Certain disagreements between our shareholders may adversely affect our business
  39




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Our significant shareholders have entered into a Shareholders Agreement whereby these shareholders
exercise substantial control over our Board of Directors
  Risks Associated With Our Shares of Common Stock
 Our ability to pay dividends on our common stock may be limited
  Our share price has been and may continue to be highly volatile
  
    
    Issues concerning the perceived risks of investing in Russia and the CIS, including
significant ownership of our shares by a company that is part of a large Russia-based
financial and industrial concern;
    
    The limited number of our shares available for trading in public markets;
    
    The potential sale of any large blocks of our shares by our management or large shareholders;
    
    Mergers and strategic alliances in the telecommunications industry; and
    
    Inconsistent or restrictive government regulation in the Russian and Ukrainian telecommunications industries.
  40




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
           
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
 a) Market Information
  High
    
    Low2004:First quarter
    
    $
    36.63
    
    
    $
    28.24Second quarter
    
    
    35.93
    
    
    
    22.77Third quarter
    
    
    30.97
    
    
    
    23.61Fourth quarter
    
    
    31.45
    
    
    
    25.942005:First quarter
    
    $
    30.37
    
    
    $
    24.69Second quarter
    
    
    30.32
    
    
    
    24.82Third quarter
    
    
    31.34
    
    
    
    27.13Fourth quarter
    
    
    31.39
    
    
    
    25.40
 b) Holders
  c) Dividends
  d) Recent Sales of Unregistered Securities
   41




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Item 6. Selected Financial Data
   For the Years Ended December 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(in thousands, except per share data)Statement of Operations Data:Revenues
    
    $
    140,038
    
    
    $
    198,727
    
    
    $
    360,534
    
    
    $
    583,978
    
    
    $
    667,379Cost of revenues (excluding depreciation and amortization)
    
    
    63,685
    
    
    
    91,189
    
    
    
    181,085
    
    
    
    300,588
    
    
    
    347,532Gross margin
    
    
    76,353
    
    
    
    107,538
    
    
    
    179,449
    
    
    
    283,390
    
    
    
    319,847Selling, general and administrative (excluding depreciation
and amortization)
    
    
    48,935
    
    
    
    46,147
    
    
    
    64,384
    
    
    
    112,855
    
    
    
    119,890Depreciation and amortization
    
    
    41,398
    
    
    
    29,961
    
    
    
    45,334
    
    
    
    74,999
    
    
    
    84,015Impairment charge
    
    
    31,291
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from operations
    
    
    (45,271
    )
    
    
    31,430
    
    
    
    69,731
    
    
    
    95,536
    
    
    
    115,942Equity in earnings of ventures
    
    
    8,155
    
    
    
    4,375
    
    
    
    4,687
    
    
    
    278
    
    
    
    460Interest income (expense), net
    
    
    777
    
    
    
    (667
    )
    
    
    (872
    )
    
    
    559
    
    
    
    1,677Foreign currency gain (loss)
    
    
    (647
    )
    
    
    (1,174
    )
    
    
    (232
    )
    
    
    660
    
    
    
    (1,212
    )Minority interest
    
    
    117
    
    
    
    527
    
    
    
    480
    
    
    
    1,506
    
    
    
    2,978Provision for income taxes
    
    
    1,902
    
    
    
    4,627
    
    
    
    17,399
    
    
    
    30,744
    
    
    
    37,816Net income (loss) before cumulative effect of change in
accounting principle
    
    
    (39,005
    )
    
    
    28,810
    
    
    
    55,435
    
    
    
    64,783
    
    
    
    76,073Cumulative effect of change in accounting principle
    
    
    
    
    
    
    974
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (39,005
    )
    
    
    29,784
    
    
    
    55,435
    
    
    
    64,783
    
    
    
    76,073Net income (loss) per share before cumulative effect of
change in accounting principle  basic
    
    
    (1.65
    )
    
    
    1.20
    
    
    
    1.95
    
    
    
    1.79
    
    
    
    2.09Cumulative effect of change in accounting principle
    
    
    
    
    
    
    0.04
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss) per share  basic
    
    
    (1.65
    )
    
    
    1.24
    
    
    
    1.95
    
    
    
    1.79
    
    
    
    2.09Weighted average shares  basic
    
    
    23,605
    
    
    
    24,102
    
    
    
    28,468
    
    
    
    36,226
    
    
    
    36,378Net income (loss) per share before cumulative effect of
change in accounting principle  diluted
    
    
    (1.65
    )
    
    
    1.17
    
    
    
    1.90
    
    
    
    1.77
    
    
    
    2.08Cumulative effect of change in accounting principle
    
    
    
    
    
    
    0.04
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss) per share  diluted
    
    
    (1.65
    )
    
    
    1.21
    
    
    
    1.90
    
    
    
    1.77
    
    
    
    2.08Weighted average shares  diluted
    
    
    23,605
    
    
    
    24,517
    
    
    
    29,107
    
    
    
    36,553
    
    
    
    36,605Cash dividends per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.80
    
    
    
    0.80
 42




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At December 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    37,404
    
    
    $
    59,625
    
    
    $
    65,180
    
    
    $
    53,699
    
    
    $
    67,176Investments available for sale
    
    
    8,976
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property and equipment, net
    
    
    98,590
    
    
    
    166,121
    
    
    
    283,110
    
    
    
    347,891
    
    
    
    407,907Investments in and advances to ventures
    
    
    45,981
    
    
    
    721
    
    
    
    251
    
    
    
    742
    
    
    
    10,889Goodwill and intangible assets, net
    
    
    57,146
    
    
    
    127,669
    
    
    
    248,843
    
    
    
    247,570
    
    
    
    243,129Total assets
    
    
    300,384
    
    
    
    435,810
    
    
    
    729,226
    
    
    
    805,768
    
    
    
    882,211Long-term debt, including long-term capital lease obligations
    
    
    10,733
    
    
    
    29,732
    
    
    
    3,963
    
    
    
    1,738
    
    
    
    2,367Minority interest
    
    
    5,967
    
    
    
    2,187
    
    
    
    2,722
    
    
    
    11,738
    
    
    
    19,693Shareholders equity
    
    
    224,892
    
    
    
    311,506
    
    
    
    584,279
    
    
    
    626,381
    
    
    
    675,103
         43




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ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
   
    
    Business and Corporate Services (BCS). Using our fiber optic and satellite-based
networks in and between major metropolitan areas of Russia, Ukraine and other countries of
the CIS, we provide business and corporate services including voice and data services to
corporate clients across all geographical markets and all industry segments, other than
telecommunications operators;
    
    Carrier and Operator Services.Using our fiber optic and satellite-based networks in and
between major metropolitan areas of Russia, Ukraine and other countries of the CIS, we
provide a range of carrier and operator services including voice and data services to
foreign and Russian telecommunications and mobile operators;
    
    Consumer Internet Services.Using our fiber optic and satellite-based networks, we
provide Internet access to the consumer market and web content offered through a family of
Internet portals throughout Russia, Ukraine, Kazakhstan, and Uzbekistan; and
    
    Mobile Services. Using our mobile networks in Kiev and Odessa, Ukraine, we provide mobile
services with value-added features, such as voicemail, roaming and messaging services on a
subscription and prepaid basis.
     44




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Recent Acquisitions
           Regulatory Developments
  45




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46




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Other Developments
      47




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Highlights and Outlook
         48




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Critical Accounting Policies
  Revenue recognition policie
 Allowance for doubtful accounts policies
 Long-lived asset recovery policies;
 49




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Goodwill and assessment of impairment;
 Valuation allowance for deferred tax asset;
 Business segment information;
 Functional currency;
 Critical Accounting Estimates
  Allowance for doubtful accounts;
 Tax provisions;
 Useful lives of property and equipment and certain intangible assets;
 Business combinations;
 Recent Accounting Pronouncements
    50




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Results of Operations
    The discussion of our results of operations is organized as follows:
 
    
    Consolidated Results.Consolidated Results of Operations for the Year
Ended December 31, 2005, compared to the Consolidated Results of
Operations for the Year Ended December 31, 2004
    
    Consolidated Financial Position.Consolidated Financial Position at
December 31, 2005, compared to Consolidated Financial Position at
December 31, 2004
    
    Consolidated Results.Consolidated Results of Operations for the Year
Ended December 31, 2004, compared to the Consolidated Results of
Operations for the Year Ended December 31, 2003
    
    Consolidated Financial Position. Consolidated Financial Position at
December 31, 2004, compared to Consolidated Financial Position at
December 31, 2003
 51




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##### Table of Contents



Consolidated Results  Consolidated Results of Operations for the Year Ended December 31, 2005,
Compared to the Consolidated Results of Operations for the Year Ended December 31, 2004
 Revenue
  Consolidated Revenue
    
    
    Consolidated RevenueFor the Year
    
    
    For the YearEnded December 31, 2004
    
    
    Ended December 31, 2005(in millions)REVENUEBusiness and Corporate Services
    
    $
    324.8
    
    
    $
    387.4Carrier and Operator Services
    
    
    198.9
    
    
    
    221.4Consumer Internet Services
    
    
    45.5
    
    
    
    44.5Mobile Services
    
    
    15.8
    
    
    
    14.1Eliminations
    
    
    (1.0
    )
    
    
    TOTAL REVENUE
    
    $
    584.0
    
    
    $
    667.4
 Business and Corporate Services.
 1
 (in whole numbers)
    
    2004
    
    2005
    
    % ChangeBCS Moscow customer statistics on Dec 31:Total clients
    
    
    22,657
    
    
    
    23,013
    
    
    
    2
    %Business centers
    
    
    686
    
    
    
    791
    
    
    
    15
    %Trade centers
    
    
    50
    
    
    
    68
    
    
    
    36
    %Hotels
    
    
    45
    
    
    
    48
    
    
    
    7
    %Direct inward dialing lines
    
    
    116,668
    
    
    
    127,000
    
    
    
    9
    %Ethernet / Metropolitan Ethernet Network connections
    
    
    1,138
    
    
    
    1,708
    
    
    
    50
    %High speed Internet active contracts
    
    
    251
    
    
    
    485
    
    
    
    93
    %
   
 1
    
    For comparability, the amounts shown for
Sovintel in 2004 include adjustments to combine Sovintel and Comincom for the
full year of 2004 since Comincom was merged into Sovintel in December 2004. 52




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##### Table of Contents



Carrier and Operator Services.
 2
   Consumer Internet Services.
 Mobile Services.
 
 2
    
    For comparability, the amounts shown for
Sovintel in 2004 include adjustments to combine Sovintel and Comincom for the
full year of 2004 since Comincom was merged into Sovintel in December 2004. 53




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##### Table of Contents



Expenses
  Consolidated Expenses
    
    
    Consolidated ExpensesFor the Year Ended
    
    
    For the Year EndedDecember 31, 2004
    
    
    December 31, 2005(in millions)COST OF REVENUEBusiness and Corporate Services
    
    $
    141.2
    
    
    $
    165.7Carrier and Operator Services
    
    
    127.5
    
    
    
    145.7Consumer Internet Services
    
    
    26.9
    
    
    
    29.9Mobile Services
    
    
    6.0
    
    
    
    6.2Eliminations
    
    
    (1.0
    )
    
    
    TOTAL COST OF REVENUE
    
    
    300.6
    
    
    
    347.5Selling, general and administrative
    
    
    112.9
    
    
    
    119.9Depreciation and amortization
    
    
    75.0
    
    
    
    84.0Equity in earnings of ventures
    
    
    (0.3
    )
    
    
    (0.4
    )Interest income
    
    
    (1.1
    )
    
    
    (2.3
    )Interest expense
    
    
    0.6
    
    
    
    0.6Foreign currency (gain)/ loss
    
    
    (0.7
    )
    
    
    1.2Provision for income taxes
    
    $
    30.7
    
    
    $
    37.8
 Cost of Revenue
  Business and Corporate Services.
 3
   Carrier and Operator Services.
 3
  
 3
    
    For comparability, amounts shown for
Sovintel in 2004 include adjustments to combine Sovintel and Comincom for the
full year of 2004 since Comincom was merged into Sovintel in December 2004. 54




---



##### Table of Contents



Consumer Internet Services.
 Mobile Services.
 Selling, General and Administrative
  Depreciation and Amortization
  Equity in Earnings of Ventures
  Interest Income
  Interest Expense
  55




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##### Table of Contents



Foreign Currency Gain (Loss)
  Minority Interest
  Provision for Income Taxes
  Net Income and Net Income per Share
    Consolidated Financial Position  Significant Changes in Consolidated Financial Position at
December 31, 2005, compared to Consolidated Financial Position at December 31, 2004
 Accounts Receivable
  Intangible Assets
  Ohter
Non-Current Liabilities
  56




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##### Table of Contents



Minority Interest
  Stockholders Equity
  Consolidated Results  Consolidated Results of Operations for the Year Ended December 31, 2004,
Compared to the Consolidated Results of Operations for the Year Ended December 31, 2003
 Revenue
  Consolidated Revenue
    
    
    Consolidated RevenueFor the Year
    
    
    For the YearEnded December 31, 2003
    
    
    Ended December 31, 2004(in millions)REVENUEBusiness and Corporate Services
    
    $
    188.9
    
    
    $
    324.8Carrier and Operator Services
    
    
    128.5
    
    
    
    198.9Consumer Internet Services
    
    
    30.8
    
    
    
    45.5Mobile Services
    
    
    13.9
    
    
    
    15.8Eliminations
    
    
    (1.6
    )
    
    
    (1.0
    )TOTAL REVENUE
    
    $
    360.5
    
    
    $
    584.0
 Business and Corporate Service
  Carrier and Operator Services.
 57




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##### Table of Contents



Consumer Internet Services.
 Mobile Services.
 Expenses
  Consolidated Expenses
    
    
    Consolidated ExpensesFor the Year Ended
    
    
    For the Year EndedDecember 31, 2003
    
    
    December 31, 2004(in millions)COST OF REVENUEBusiness and Corporate Services
    
    $
    84.8
    
    
    $
    141.2Carrier and Operator Services
    
    
    74.9
    
    
    
    127.5Consumer Internet Services
    
    
    20.2
    
    
    
    26.9Mobile Services
    
    
    2.8
    
    
    
    6.0Eliminations
    
    
    (1.6
    )
    
    
    (1.0
    )TOTAL COST OF REVENUE
    
    
    181.1
    
    
    
    300.6Selling, general and administrative
    
    
    64.4
    
    
    
    112.9Depreciation and amortization
    
    
    45.3
    
    
    
    75.0Equity in earnings of ventures
    
    
    (4.7
    )
    
    
    (0.3
    )Interest income
    
    
    (1.1
    )
    
    
    (1.1
    )Interest expense
    
    
    2.0
    
    
    
    0.6Foreign currency (gain)/ loss
    
    
    0.2
    
    
    
    (0.7
    )Provision for income taxes
    
    $
    17.4
    
    
    $
    30.7
 Cost of Revenue
  Business and Corporate Services.
  58




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##### Table of Contents



Carrier and Operator Services.
  Consumer Internet Services.
 Mobile Services.
 Selling, General and Administrative
  Depreciation and Amortization
  Equity in Earnings of Ventures
  Interest Income
  59




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##### Table of Contents



Interest Expense
  Foreign Currency Gain (Loss)
  Minority Interest
  Provision for Income Taxes
  Net Income and Net Income per Share
    Consolidated Financial Position  Significant Changes in Consolidated Financial Position at
December 31, 2004, compared to Consolidated Financial Position at December 31, 2003
 Accounts Receivable
  Intangible Assets
  60




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##### Table of Contents



Minority Interest
  Stockholders Equity
    Income Taxes
  Liquidity and Capital Resources
     61




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##### Table of Contents



Minority Interest
            62




---



##### Table of Contents



Payments Due by Period(in thousands)Less
    
    
    1  3
    
    
    4 - 5Total
    
    
    than 1 year
    
    
    years
    
    
    years
    
    
    ThereafterLong-term debt
    
    $
    27
    
    
    $
    
    
    
    $
    27
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    
    4,758
    
    
    
    2,179
    
    
    
    2,245
    
    
    
    334
    
    
    
    Non-cancelable lease
obligations
    
    
    16,782
    
    
    
    9,514
    
    
    
    6,600
    
    
    
    514
    
    
    
    154Purchase obligations  (1)
    
    
    86,841
    
    
    
    28,375
    
    
    
    29,000
    
    
    
    14,473
    
    
    
    14,993Total contractual cash
obligations
    
    $
    108,408
    
    
    $
    40,068
    
    
    $
    37,872
    
    
    $
    15,321
    
    
    $
    15,147
 
 (1)
    
Purchase obligations primarily include our contractual legal obligations for the future
purchase of equipment, interconnect, and satellite transponder
capacity.
 63




---



##### Table of Contents



Special Note Regarding Forward Looking Statements
     64




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##### Table of Contents



ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk
        2005
    
    
    20042006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    TotalCash equivalents
    
    $
    67,176
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    67,176
    
    
    $
    53,699Note receivable
    
    $
    1,494
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,494
    
    
    $
    3,832Fixed rate
    
    
    7.00
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.00
    %
    
    
    7.00
    %Long-term debt,
including current
portionVariable rate
    
    $
    27
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    27
    
    
    $
    200Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 65




---



##### Table of Contents



2005
    
    
    20042006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    TotalAssetsCurrent assetsRussian rubles
    
    $
    73,463
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    73,463
    
    
    $
    57,969Closing foreign
currency exchange rate
    
    
    28.78
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ukrainian Hryvna
    
    $
    7,135
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,135
    
    
    $
    6,692Closing foreign
currency exchange rate
    
    
    5.05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kazakhstan Tenge
    
    $
    1,267
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,267
    
    
    $
    875Closing foreign
currency exchange rate
    
    
    133.77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Uzbekistan Soom
    
    $
    1,073
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,073
    
    
    $
    546Closing foreign
currency exchange rate
    
    
    1,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LiabilitiesCurrent liabilitiesRussian rubles
    
    $
    21,528
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,528
    
    
    $
    25,268Closing foreign
currency exchange rate
    
    
    28.78
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ukrainian Hryvna
    
    $
    3,696
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,696
    
    
    $
    4,906Closing foreign
currency exchange rate
    
    
    5.05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kazakhstan Tenge
    
    $
    57
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    57
    
    
    $
    49Closing foreign
currency exchange rate
    
    
    133.77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Uzbekistan Soom
    
    $
    156
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    156
    
    
    $
    359Closing foreign
currency exchange rate
    
    
    1,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  66




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##### Table of Contents



ITEM 8. Financial Statements and Supplementary Data
 INDEX TO FINANCIAL STATEMENTS
 GOLDEN TELECOM, INC.
 PageFinancial StatementsReport of Independent Registered Public Accounting Firm
    
    
    
    69Consolidated Balance Sheets as of December 31, 2004 and 2005
    
    
    
    70Consolidated Statements of Operations for the years ended December 31, 2003, 2004 and 2005
    
    
    
    73Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2004 and 2005
    
    
    
    74Consolidated Statements of Shareholders Equity for the years ended December 31, 2003, 2004 and 2005
    
    
    
    75Notes to Consolidated Financial Statements
    
    
    
    76
 67




---



##### Table of Contents



AUDITED FINANCIAL STATEMENTS
 GOLDEN TELECOM, INC.
Years Ended December 31, 2003, 2004 and 2005
With Report of Independent Registered Public Accounting Firm
 68




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 69




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##### Table of Contents



GOLDEN TELECOM, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In Thousands, Except Share Data)
 December 31,2004
    
    
    2005ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    53,699
    
    
    $
    67,176Accounts receivable, net of allowance for doubtful accounts of
$23,205 and $27,327 at December 31, 2004 and 2005, respectively
    
    
    89,177
    
    
    
    91,709VAT receivable
    
    
    19,022
    
    
    
    21,986Prepaid expenses
    
    
    13,793
    
    
    
    8,083Deferred tax asset
    
    
    7,863
    
    
    
    8,994Other current assets
    
    
    16,738
    
    
    
    13,009TOTAL CURRENT ASSETS
    
    
    200,292
    
    
    
    210,957Property and equipment:Telecommunications equipment
    
    
    396,060
    
    
    
    494,097Telecommunications network held under capital leases
    
    
    28,958
    
    
    
    32,538Furniture, fixtures and equipment
    
    
    34,721
    
    
    
    41,524Other property
    
    
    12,797
    
    
    
    16,374Construction in progress
    
    
    61,136
    
    
    
    70,470533,672
    
    
    
    655,003Accumulated depreciation
    
    
    (185,781
    )
    
    
    (247,096
    )Net property and equipment
    
    
    347,891
    
    
    
    407,907Goodwill and intangible assets:Goodwill
    
    
    146,254
    
    
    
    149,249Telecommunications service contracts, net of accumulated amortization of
$21,917 as of December 31, 2004 and $32,009 as of December 31, 2005
    
    
    70,333
    
    
    
    67,357Contract-based customer relationships, net of accumulated amortization of
$10,883 as of December 31, 2004 and $18,241 as of December 31, 2005
    
    
    25,966
    
    
    
    18,608Licenses, net of accumulated amortization of $2,515 as of December 31, 2004
and $3,182 as of December 31, 2005
    
    
    1,843
    
    
    
    3,994Other intangible assets, net of accumulated amortization of $6,684 as of
December 31, 2004 and $7,216 as of December 31, 2005
    
    
    3,174
    
    
    
    3,921Net goodwill and intangible assets
    
    
    247,570
    
    
    
    243,129Restricted cash
    
    
    1,012
    
    
    
    566Other non-current assets
    
    
    9,003
    
    
    
    19,652TOTAL ASSETS
    
    $
    805,768
    
    
    $
    882,211
  70




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##### Table of Contents



GOLDEN TELECOM, INC.
 CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
 December 31,2004
    
    
    2005LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
    
    $
    81,474
    
    
    $
    89,404VAT Payable
    
    
    14,235
    
    
    
    17,190Current capital lease obligations
    
    
    2,301
    
    
    
    1,941Deferred revenue
    
    
    11,761
    
    
    
    16,799Due to affiliates and related parties
    
    
    3,199
    
    
    
    2,470Other current liabilities
    
    
    3,572
    
    
    
    4,079TOTAL CURRENT LIABILITIES
    
    
    116,542
    
    
    
    131,883Long-term debt, less current portion
    
    
    200
    
    
    
    27Long-term deferred tax liability
    
    
    24,244
    
    
    
    22,287Long-term deferred revenue
    
    
    23,124
    
    
    
    30,878Long-term capital lease obligations
    
    
    1,538
    
    
    
    2,340Other non-current liabilities
    
    
    2,001
    
    
    
    TOTAL LIABILITIES
    
    
    167,649
    
    
    
    187,415Minority interest
    
    
    11,738
    
    
    
    19,693SHAREHOLDERS EQUITYPreferred stock, $0.01 par value (10,000,000 shares
authorized; none issued and outstanding at December 31, 2004 and 2005)
    
    
    
    
    
    
    Common stock, $0.01 par value (100,000,000 shares authorized;
36,322,490 and 36,458,490 shares issued and outstanding at December 31,
2004 and 2005, respectively)
    
    
    363
    
    
    
    365Additional paid-in capital
    
    
    669,777
    
    
    
    671,998Deferred equity compensation
    
    
    
    
    
    
    (455
    )Retained earnings (accumulated deficit)
    
    
    (43,759
    )
    
    
    3,195TOTAL SHAREHOLDERS EQUITY
    
    
    626,381
    
    
    
    675,103TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    805,768
    
    
    $
    882,211
  71




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##### Table of Contents



GOLDEN TELECOM, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In Thousands, Except Per Share Data)
 Year Ended December 31,2003
    
    
    2004
    
    
    2005REVENUE:Telecommunication services
    
    $
    358,724
    
    
    $
    581,521
    
    
    $
    662,742Revenue from affiliates and related parties
    
    
    1,810
    
    
    
    2,457
    
    
    
    4,637TOTAL REVENUE
    
    
    360,534
    
    
    
    583,978
    
    
    
    667,379OPERATING COSTS AND EXPENSES:Access and network services (excluding
depreciation
and amortization)
    
    
    181,085
    
    
    
    300,588
    
    
    
    347,532Selling, general and administrative (excluding
depreciation and amortization)
    
    
    64,384
    
    
    
    112,855
    
    
    
    119,890Depreciation and amortization
    
    
    45,334
    
    
    
    74,999
    
    
    
    84,015TOTAL OPERATING EXPENSES
    
    
    290,803
    
    
    
    488,442
    
    
    
    551,437INCOME FROM OPERATIONS
    
    
    69,731
    
    
    
    95,536
    
    
    
    115,942OTHER INCOME (EXPENSE):Equity in earnings of ventures
    
    
    4,687
    
    
    
    278
    
    
    
    460Interest income
    
    
    1,084
    
    
    
    1,131
    
    
    
    2,295Interest expense
    
    
    (1,956
    )
    
    
    (572
    )
    
    
    (618
    )Foreign currency gain (loss)
    
    
    (232
    )
    
    
    660
    
    
    
    (1,212
    )TOTAL OTHER INCOME
    
    
    3,583
    
    
    
    1,497
    
    
    
    925Income before minority interest and income taxes
    
    
    73,314
    
    
    
    97,033
    
    
    
    116,867Minority interest
    
    
    480
    
    
    
    1,506
    
    
    
    2,978Income taxes
    
    
    17,399
    
    
    
    30,744
    
    
    
    37,816NET INCOME
    
    $
    55,435
    
    
    $
    64,783
    
    
    $
    76,073Basic earnings per share of common stock:Net income per share  basic
    
    $
    1.95
    
    
    $
    1.79
    
    
    $
    2.09Weighted average common shares
outstanding  basic
    
    
    28,468
    
    
    
    36,226
    
    
    
    36,378Diluted earnings per share of common stock:Net income per share  diluted
    
    $
    1.90
    
    
    $
    1.77
    
    
    $
    2.08Weighted average common shares
outstanding  diluted
    
    
    29,107
    
    
    
    36,553
    
    
    
    36,605Cash dividends per share
    
    $
    
    
    
    $
    0.80
    
    
    $
    0.80
  73




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##### Table of Contents



GOLDEN TELECOM, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In Thousands)
 Year Ended December 31,2003
    
    
    2004
    
    
    2005OPERATING ACTIVITIESNet income
    
    $
    55,435
    
    
    $
    64,783
    
    
    $
    76,073Adjustments to Reconcile net income to Net Cash Provided by
Operating Activities:Depreciation
    
    
    34,837
    
    
    
    56,818
    
    
    
    65,329Amortization
    
    
    10,497
    
    
    
    18,181
    
    
    
    18,686Equity in earnings of ventures
    
    
    (4,687
    )
    
    
    (278
    )
    
    
    (460
    )Minority interest
    
    
    480
    
    
    
    1,506
    
    
    
    2,978Foreign currency (gain) loss
    
    
    232
    
    
    
    (660
    )
    
    
    1,212Deferred tax benefit
    
    
    (3,117
    )
    
    
    (4,606
    )
    
    
    (3,815
    )Bad debt expense
    
    
    3,592
    
    
    
    10,065
    
    
    
    7,967Other
    
    
    (54
    )
    
    
    (41
    )
    
    
    1,223Changes in assets and liabilities:Accounts receivable
    
    
    (15,302
    )
    
    
    (22,964
    )
    
    
    (10,316
    )Accounts payable and accrued expenses
    
    
    (3,928
    )
    
    
    26,288
    
    
    
    4,295Other assets and liabilities
    
    
    9,031
    
    
    
    (3,908
    )
    
    
    11,134NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    87,016
    
    
    
    145,184
    
    
    
    174,306INVESTING ACTIVITIESPurchases of property and equipment and intangible assets
    
    
    (63,737
    )
    
    
    (114,649
    )
    
    
    (118,170
    )Acquisitions, net of cash acquired
    
    
    (12,282
    )
    
    
    (15,522
    )
    
    
    (18,085
    )Restricted cash
    
    
    510
    
    
    
    (7
    )
    
    
    446Distribution received from affiliated company
    
    
    4,733
    
    
    
    
    
    
    
    Other investing
    
    
    2,704
    
    
    
    1,705
    
    
    
    2,743NET CASH USED IN INVESTING ACTIVITIES
    
    
    (68,072
    )
    
    
    (128,473
    )
    
    
    (133,066
    )FINANCING ACTIVITIESRepayments of debt
    
    
    (35,132
    )
    
    
    (950
    )
    
    
    (253
    )Contribution from minority partner
    
    
    
    
    
    
    
    
    
    
    3,840Net proceeds from exercise of employee stock options
    
    
    23,737
    
    
    
    4,895
    
    
    
    1,435Cash dividends paid
    
    
    
    
    
    
    (28,998
    )
    
    
    (29,119
    )Other financing
    
    
    (1,910
    )
    
    
    (3,385
    )
    
    
    (3,210
    )NET CASH USED IN FINANCING ACTIVITES
    
    
    (13,305
    )
    
    
    (28,438
    )
    
    
    (27,307
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (84
    )
    
    
    246
    
    
    
    (456
    )Net increase (decrease) in cash and cash equivalents
    
    
    5,555
    
    
    
    (11,481
    )
    
    
    13,477Cash and cash equivalents at beginning of period
    
    
    59,625
    
    
    
    65,180
    
    
    
    53,699CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    65,180
    
    
    $
    53,699
    
    
    $
    67,176
  74




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##### Table of Contents



GOLDEN TELECOM, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 For the Years Ended December 31, 2003, 2004, and 2005
 (In Thousands)
 RetainedAdditional
    
    
    Deferred
    
    
    EarningsCommon Stock
    
    
    Paid-In
    
    
    Equity
    
    
    (Accumulated
    
    
    TotalShares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Deficit)
    
    
    EquityBalance at December 31, 2002
    
    
    27,021
    
    
    $
    270
    
    
    $
    446,215
    
    
    $
    
    
    
    $
    (134,979
    )
    
    $
    311,506Exercise of employee stock options
    
    
    1,919
    
    
    
    19
    
    
    
    23,834
    
    
    
    
    
    
    
    
    
    
    
    23,853Acquisition of OAO Comincom
    
    
    7,008
    
    
    
    70
    
    
    
    193,415
    
    
    
    
    
    
    
    
    
    
    
    193,485Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,435
    
    
    
    55,435Balance at December 31, 2003
    
    
    35,948
    
    
    $
    359
    
    
    $
    663,464
    
    
    $
    
    
    
    $
    (79,544
    )
    
    $
    584,279Exercise of employee stock options
    
    
    374
    
    
    
    4
    
    
    
    4,775
    
    
    
    
    
    
    
    
    
    
    
    4,779Sale of 20% of Golden Telecom
(Ukraine) (see note 17)
    
    
    
    
    
    
    
    
    
    
    1,538
    
    
    
    
    
    
    
    
    
    
    
    1,538Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,998
    )
    
    
    (28,998
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,783
    
    
    
    64,783Balance at December 31, 2004
    
    
    36,322
    
    
    $
    363
    
    
    $
    669,777
    
    
    $
    
    
    
    $
    (43,759
    )
    
    $
    626,381Issuance of
restricted shares (See note 9)
    
    
    27
    
    
    
    1
    
    
    
    771
    
    
    
    (772
    )
    
    
    
    
    
    
    Compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    317Exercise of employee stock options
    
    
    109
    
    
    
    1
    
    
    
    1,450
    
    
    
    
    
    
    
    
    
    
    
    1,451Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,119
    )
    
    
    (29,119
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,073
    
    
    
    76,073Balance at December 31, 2005
    
    
    36,458
    
    
    $
    365
    
    
    $
    671,998
    
    
    $
    (455
    )
    
    $
    3,195
    
    
    $
    675,103
  75




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##### Table of Contents



GOLDEN TELECOM, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1: Nature of Business Operations
  Note 2: Summary of Significant Accounting Policies and Recent Accounting Pronouncements
 Principles of Consolidation
   Sale of Subsidiary Stock
  Foreign Currency Translation
  76




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Cash and Cash Equivalents and Restricted Cash
  Accounts Receivable
  Inventories
  Property and Equipment
  77




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Goodwill and Intangible Assets
  Goodwill Impairment Assessment
  Long-Lived Assets Impairment
  Income Taxes
  78




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Revenue Recognition
    Advertising
  Government Pension Funds
  Comprehensive Income
  Off Balance Sheet Risk and Concentration of Credit Risk
  79




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Stock-Based Compensation
     Twelve Months EndedDecember 31,2003
    
    
    2004
    
    
    2005(in thousands, except per share data)Net income, as reported
    
    $
    55,435
    
    
    $
    64,783
    
    
    $
    76,073Deduct: total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects
    
    
    3,183
    
    
    
    1,922
    
    
    
    620Pro forma net income
    
    $
    52,252
    
    
    $
    62,861
    
    
    $
    75,453Net income per share:Basic  as reported
    
    $
    1.95
    
    
    $
    1.79
    
    
    $
    2.09Basic  pro forma
    
    
    1.84
    
    
    
    1.74
    
    
    
    2.07Diluted  as reported
    
    
    1.90
    
    
    
    1.77
    
    
    
    2.08Diluted  pro forma
    
    
    1.80
    
    
    
    1.72
    
    
    
    2.06
 80




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Consolidation of Variable Interest Entities
  Fair Value of Financial Instruments
  81




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Exchanges of Nonmonetary Assets
  Asset Retirement Obligations
  Accounting Changes and Error Corrections
  Change in Accounting Estimate
  Use of Estimates in Preparation of Financial Statements
  Comparative Figures
  Note 3: Net Income Per Share
  82




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Twelve Months EndedDecember 31,2003
    
    
    2004
    
    
    2005(in thousands, except per share data)Net Income
    
    $
    55,435
    
    
    $
    64,783
    
    
    $
    76,073Weighted average shares outstanding of:Common stock
    
    
    28,468
    
    
    
    36,226
    
    
    
    36,378Dilutive effect of:Employee stock options
    
    
    639
    
    
    
    327
    
    
    
    227Common stock and common stock equivalents
    
    
    29,107
    
    
    
    36,553
    
    
    
    36,605Net Income per share:Basic
    
    $
    1.95
    
    
    $
    1.79
    
    
    $
    2.09Diluted
    
    $
    1.90
    
    
    $
    1.77
    
    
    $
    2.08
 Note 4: Goodwill and Intangible Assets
  As of December 31, 2004
    
    
    As of December 31, 2005(in thousands)Weighted Average


    
    
    
    
    Accumulated
    
    
    
    
    
    
    AccumulatedAmortization
Lives


    Cost
    
    
    Amortization
    
    
    Cost
    
    
    AmortizationAmortized intangible assets:Telecommunications service contracts
    
10 years


    $
    92,250
    
    
    $
    (21,917
    )
    
    $
    99,366
    
    
    $
    (32,009
    )Contract-based customer relationships
    
5 years


    
    36,849
    
    
    
    (10,883
    )
    
    
    36,849
    
    
    
    (18,241
    )Licenses
    
8 years


    
    4,358
    
    
    
    (2,515
    )
    
    
    7,176
    
    
    
    (3,182
    )Other intangible assets
    
4 years


    
    9,858
    
    
    
    (6,684
    )
    
    
    11,137
    
    
    
    (7,216
    )Total
    



    $
    143,315
    
    
    $
    (41,999
    )
    
    $
    154,528
    
    
    $
    (60,648
    )
   Business&
    
    
    Carrier &
    
    
    ConsumerCorporate
    
    
    Operator
    
    
    InternetSegment
    
    
    Segment
    
    
    Segment
    
    
    Total(in thousands)Balance as of December 31, 2003
    
    $
    84,892
    
    
    $
    59,116
    
    
    
    
    
    
    $
    144,008Goodwill related to acquisitions
    
    
    1,932
    
    
    
    314
    
    
    
    
    
    
    
    2,246Balance as of December 31, 2004
    
    $
    86,824
    
    
    $
    59,430
    
    
    
    
    
    
    $
    146,254Goodwill related to acquisitions
    
    
    1,563
    
    
    
    302
    
    
    
    1,130
    
    
    
    2,995Balance as of December 31, 2005
    
    $
    88,387
    
    
    $
    59,732
    
    
    $
    1,130
    
    
    $
    149,249
 83




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 5: Business Combinations
 Acquisitions in 2003
   August 31, 2003(in thousands)ASSETS:Current assets
    
    $
    1,792Property and equipment
    
    
    7,057Telecommunications service contracts
intangible assets, net
    
    
    11,175Total assets
    
    $
    20,024LIABILITES:Current liabilities
    
    $
    1,519Non-current liabilities
    
    
    3,121Net assets
    
    $
    15,384Consideration and acquisition costs:Cash consideration
    
    
    15,000Direct transaction costs
    
    
    384Total purchase consideration and transaction costs
    
    $
    15,384
   84




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  December 1, 2003(in thousands)ASSETS:Current assets
    
    $
    38,191Property and equipment
    
    
    84,749Telecommunications service contracts
intangible assets, net
    
    
    17,344Contract-based customer relationship
intangible assets, net
    
    
    26,847Licenses, net
    
    
    546Goodwill
    
    
    72,305Other assets
    
    
    1,575Total assets
    
    $
    241,557LIABILITES:Current liabilities
    
    $
    28,678Non-current liabilities
    
    
    17,535Net assets
    
    $
    195,344Consideration and acquisition costs:GTI shares consideration
    
    
    193,485Direct transaction costs
    
    
    1,859Total purchase consideration and acquisition costs
    
    $
    195,344
   85




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Twelve MonthsEndedDecember31, 2003(in thousands, exceptper share data)Revenue
    
    $
    458,276Net income
    
    $
    61,802Basic earnings per share of common stock:Net income per share  basic
    
    $
    1.77Weighted average common shares  basic
    
    
    34,990Diluted earnings per share of common stock:Net income per share  diluted
    
    $
    1.74Weighted average common shares  diluted
    
    
    35,539
 Acquisitions in 2004
   Acquisitions in 2005
  86




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
      Note 6: Investments in and Advances to Ventures
   December 31,2004
    
    
    2005(in thousands)Equity in net assets acquired
    
    $
    1,236
    
    
    $
    11,565Goodwill as part of investment
    
    
    
    
    
    
    1,313Difference between fair value and historical value of
assets acquired
    
    
    
    
    
    
    (1,095
    )Cash advances and other
    
    
    (494
    )
    
    
    (894
    )Total investments in and advances to ventures
    
    $
    742
    
    
    $
    10,889
   87




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note 7: Supplemental Balance Sheet Information
 December 31,2004
    
    
    2005(in thousands)Other current assets consist of:Inventory
    
    $
    8,911
    
    
    $
    5,310Notes receivable
    
    
    2,338
    
    
    
    1,494Other current assets
    
    
    5,489
    
    
    
    6,205Total other current assets
    
    $
    16,738
    
    
    $
    13,009Other non-current assets consist of:Notes receivable
    
    $
    1,494
    
    
    $
    Investments in and advances to ventures
    
    
    742
    
    
    
    10,889Other non-current assets
    
    
    6,767
    
    
    
    8,763Total other non- current assets
    
    $
    9,003
    
    
    $
    19,652Accounts payable and accrued expenses consists of:Accounts payable
    
    $
    57,566
    
    
    $
    60,043Accrued compensation
    
    
    5,605
    
    
    
    11,322Accrued other taxes
    
    
    2,856
    
    
    
    3,132Accrued access and network services
    
    
    11,791
    
    
    
    12,196Other accrued expenses
    
    
    3,656
    
    
    
    2,711Total accounts payable and accrued expenses
    
    $
    81,474
    
    
    $
    89,404Other current liabilities consists of:Non-trade liabilities to GTS
    
    $
    2,904
    
    
    $
    2,904Other current liabilities
    
    
    668
    
    
    
    1,175Total other current liabilities
    
    $
    3,572
    
    
    $
    4,079
 Note 8: Debt Obligations and Capital Leases
    88




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Lease payments(in thousands)2006
    
    $
    2,1792007
    
    
    8722008
    
    
    7422009
    
    
    6312010
    
    
    3344,758Less: amount representing
interest
    
    
    477Total principal payments
    
    $
    4,281
 Note 9: Shareholders Equity
 Common Stock
    Preferred Stock
  Additional Paid-In Capital
  Dividends
  Note 10: Stock Option and Stock Appreciation Rights Plans
  89




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Twelve Months Ended December 31,2003
    
    2004
    
    2005Risk free interest rate
    
    
    2.89  3.55
    %
    
    
    4.39
    %
    
    
    3.86
    %Dividend yield
    
    
    0.0
    %
    
    
    3.0
    %
    
    
    3.0
    %Expected life (years)
    
    
    3.0
    
    
    
    3.0
    
    
    
    3.0Volatility
    
    
    104 - 108
    %
    
    
    95
    %
    
    
    88
    %
  Year Ended December 31,2004
    
    2005Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceOutstanding at beginning of
year
    
    
    904,272
    
    
    $
    13.48
    
    
    
    517,013
    
    
    $
    14.18Options granted
    
    
    5,000
    
    
    
    26.61
    
    
    
    2,500
    
    
    
    26.32Options exercised
    
    
    (374,396
    )
    
    
    12.76
    
    
    
    (109,000
    )
    
    
    13.31Options expired
    
    
    
    
    
    
    
    
    
    
    (12,500
    )
    
    
    20.88Options forfeited
    
    
    (17,863
    )
    
    
    12.00
    
    
    
    (25,001
    )
    
    
    14.00Outstanding at end of
year
    
    
    517,013
    
    
    
    14.18
    
    
    
    373,012
    
    
    
    14.31Options exercisable at end
of year
    
    
    448,818
    
    
    $
    14.07
    
    
    
    369,817
    
    
    $
    14.22
  Options Outstanding
    
    Options ExercisableWeightedAverageRemaining
    
    Weighted
    
    
    
    
    
    WeightedContractual
    
    Average
    
    
    
    
    
    AverageExercise Prices
    
    Number
    
    Life
    
    Exercise
    
    Number
    
    Exerciseat December 31, 2005:
    
    Outstanding
    
    (In Years)
    
    Price
    
    Exercisable
    
    Price$12.00
    
    
    142,856
    
    
    
    4.3
    
    
    $
    12.00
    
    
    
    142,856
    
    
    $
    12.0014.00
    
    
    149,899
    
    
    
    2.1
    
    
    
    14.00
    
    
    
    149,204
    
    
    
    14.0015.63
    
    
    55,257
    
    
    
    3.6
    
    
    
    15.63
    
    
    
    55,257
    
    
    
    15.6319.45
    
    
    10,000
    
    
    
    2.4
    
    
    
    19.45
    
    
    
    10,000
    
    
    
    19.4526.32
    
    
    2,500
    
    
    
    4.4
    
    
    
    26.32
    
    
    
    
    
    
    
    26.61
    
    
    2,500
    
    
    
    3.4
    
    
    
    26.61
    
    
    
    2,500
    
    
    
    26.6133.25
    
    
    10,000
    
    
    
    4.4
    
    
    
    33.25
    
    
    
    10,000
    
    
    
    33.25
  90




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note 11: Income Taxes
   Year Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Pretax
income (loss):Domestic
    
    $
    5,754
    
    
    $
    (4,853
    )
    
    $
    (8,405
    )Foreign
    
    
    67,560
    
    
    
    101,886
    
    
    
    125,272$
    73,314
    
    
    $
    97,033
    
    
    $
    116,867
  Year Ended December 31,2003
    
    
    2004
    
    
    2005(in thousands)Domestic  current
    
    $
    
    
    
    $
    
    
    
    $
    Domestic  deferred
    
    
    (1,861
    )
    
    
    (373
    )
    
    
    2,234Foreign  current
    
    
    20,516
    
    
    
    35,350
    
    
    
    41,630Foreign  deferred
    
    
    (1,256
    )
    
    
    (4,233
    )
    
    
    (6,048
    )$
    17,399
    
    
    $
    30,744
    
    
    $
    37,816
   91




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year Ended December 31,2003
    
    
    2004
    
    
    2005Tax expense at US statutory rates
    
    
    (35.0
    )%
    
    
    (35.0
    )%
    
    
    (35.0
    )%Non-deductible expenses
    
    
    (4.9
    )
    
    
    (7.3
    )
    
    
    (4.8
    )Foreign exchange differences
    
    
    (0.1
    )
    
    
    0.2
    
    
    
    (0.3
    )Different foreign tax rates
    
    
    9.3
    
    
    
    11.4
    
    
    
    11.9Change in valuation allowance
    
    
    3.1
    
    
    
    0.0
    
    
    
    (4.2
    )Other permanent differences
    
    
    3.9
    
    
    
    (1.0
    )
    
    
    0.0Tax expense
    
    
    (23.7
    )%
    
    
    (31.7
    )%
    
    
    (32.4
    )%
  December 31,2004
    
    
    2005(in thousands)Deferred Tax Assets:Net operating loss carry-forwards
    
    $
    2,793
    
    
    $
    5,581Accrued expenses
    
    
    2,173
    
    
    
    3,314Deferred revenue
    
    
    7,639
    
    
    
    11,056Intangible assets
    
    
    2,832
    
    
    
    2,595Other deferred tax assets
    
    
    1,180
    
    
    
    2,550Valuation allowance
    
    
    (3,537
    )
    
    
    (8,441
    )Total deferred tax asset
    
    $
    13,080
    
    
    $
    16,655Deferred Tax Liabilities:Accrued revenue
    
    $
    16
    
    
    $
    Deferred expenses
    
    
    1,958
    
    
    
    2,812Intangible assets
    
    
    23,472
    
    
    
    21,337Fixed assets
    
    
    3,720
    
    
    
    5,500Other deferred tax liabilities
    
    
    295
    
    
    
    299Total deferred tax liability
    
    $
    29,461
    
    
    $
    29,948Net deferred tax liability
    
    $
    (16,381
    )
    
    $
    (13,293
    )
  December 31,2004
    
    
    2005(in thousands)Deferred Tax Assets:US tax component
    
    $
    2,234
    
    
    $
    Foreign tax component
    
    
    10,846
    
    
    
    16,655Total deferred tax asset
    
    $
    13,080
    
    
    $
    16,655Deferred Tax Liability:US tax component
    
    $
    
    
    
    $
    Foreign tax component
    
    
    29,461
    
    
    
    29,948Total deferred tax liability
    
    $
    29,461
    
    
    $
    29,948Net deferred tax liability
    
    $
    (16,381
    )
    
    $
    (13,293
    )
  92




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 12: Commitments and Contingencies
 Leases
   Other Commitments and Contingencies
   Major Customers
  Tax Matters
    93




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Russian Environment and Current Economic Situation
      94




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Other Matters
  Note 13: Related Party Transactions
  2003
    
    
    2004
    
    
    2005(in thousands)Revenue from equity investees
    
    $
    98
    
    
    $
    116
    
    
    $
    363Revenue from Rostelecom
    
    
    575
    
    
    
    404
    
    
    
    646Revenue from Telenor
    
    
    3
    
    
    
    139
    
    
    
    470Revenue from Alfa
    
    
    1,134
    
    
    
    1,798
    
    
    
    3,158$
    1,810
    
    
    $
    2,457
    
    
    $
    4,637Cost of revenue from equity investees
    
    
    4,790
    
    
    
    4,798
    
    
    
    3,038Cost of revenue from Rostelecom
    
    
    16,860
    
    
    
    25,809
    
    
    
    23,979Cost of revenue from Telenor
    
    
    27
    
    
    
    332
    
    
    
    605Cost of revenue from Alfa
    
    
    
    
    
    
    56
    
    
    
    $
    21,677
    
    
    $
    30,995
    
    
    $
    27,622
        95




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note 14: Segment Information
 Line Of Business Data
  96




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Adjustments to ReconcileBusiness Segment toConsolidated ResultsBusiness
    
    Carrier
    
    
    
    
    
    
    
    
    
    
    
    
    
    Business
    
    
    
    
    
    Equityand
    
    and
    
    Consumer
    
    Mobile
    
    Corporate &
    
    Segment
    
    Consolidated
    
    Method
    
    AffiliateCorporate
    
    Operator
    
    Internet
    
    Services
    
    Eliminations
    
    Total
    
    Results
    
    Ventures
    
    Adjustments(in thousands)Twelve Months Ended
December 31, 2003Revenue from external
customers
    
    $
    188,087
    
    
    $
    128,048
    
    
    $
    30,775
    
    
    $
    13,895
    
    
    $
    
    
    
    $
    360,805
    
    
    $
    360,534
    
    
    $
    (4,861
    )
    
    $
    4,590Intersegment revenue
    
    
    649
    
    
    
    793
    
    
    
    
    
    
    
    
    
    
    
    (1,442
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    47,603
    
    
    
    26,503
    
    
    
    (2,457
    )
    
    
    5,278
    
    
    
    (6,976
    )
    
    
    69,951
    
    
    
    69,731
    
    
    
    (220
    )
    
    
    Identifiable assets
    
    
    385,087
    
    
    
    236,635
    
    
    
    52,584
    
    
    
    6,566
    
    
    
    52,042
    
    
    
    732,914
    
    
    
    729,226
    
    
    
    (3,688
    )
    
    
    Capital expenditures
    
    
    40,231
    
    
    
    20,317
    
    
    
    2,851
    
    
    
    569
    
    
    
    90
    
    
    
    64,058
    
    
    
    63,737
    
    
    
    (321
    )
    
    
    Adjustments to ReconcileBusiness Segment toConsolidated ResultsBusiness
    
    Carrier
    
    
    
    
    
    
    
    
    
    
    
    
    
    Business
    
    
    
    
    
    Equityand
    
    and
    
    Consumer
    
    Mobile
    
    Corporate &
    
    Segment
    
    Consolidated
    
    Method
    
    AffiliateCorporate
    
    Operator
    
    Internet
    
    Services
    
    Eliminations
    
    Total
    
    Results
    
    Ventures
    
    Adjustments(in thousands)Twelve
Months Ended
December 31, 2004Revenue from external
customers
    
    $
    324,814
    
    
    $
    198,027
    
    
    $
    45,515
    
    
    $
    15,808
    
    
    $
    
    
    
    $
    584,164
    
    
    $
    583,978
    
    
    $
    (4,710
    )
    
    $
    4,524Intersegment revenue
    
    
    
    
    
    
    1,016
    
    
    
    
    
    
    
    
    
    
    
    (1,016
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    72,345
    
    
    
    28,637
    
    
    
    2,159
    
    
    
    4,729
    
    
    
    (11,756
    )
    
    
    96,114
    
    
    
    95,536
    
    
    
    (578
    )
    
    
    Identifiable assets
    
    
    435,276
    
    
    
    261,424
    
    
    
    57,732
    
    
    
    5,693
    
    
    
    49,562
    
    
    
    809,687
    
    
    
    805,768
    
    
    
    (3,919
    )
    
    
    Capital expenditures
    
    
    80,107
    
    
    
    33,223
    
    
    
    4,920
    
    
    
    1,025
    
    
    
    178
    
    
    
    119,453
    
    
    
    118,101
    
    
    
    (1,352
    )
    
    
    Adjustments to ReconcileBusiness Segment toConsolidated ResultsBusiness
    
    Carrier
    
    
    
    
    
    
    
    
    
    
    
    
    
    Business
    
    
    
    
    
    Equityand
    
    and
    
    Consumer
    
    Mobile
    
    Corporate &
    
    Segment
    
    Consolidated
    
    Method
    
    AffiliateCorporate
    
    Operator
    
    Internet
    
    Services
    
    Eliminations
    
    Total
    
    Results
    
    Ventures
    
    Adjustments(in thousands)Twelve Months Ended
December 31, 2005Revenue from external
customers
    
    $
    387,532
    
    
    $
    222,904
    
    
    $
    44,484
    
    
    $
    14,103
    
    
    $
    
    
    
    $
    669,023
    
    
    $
    667,379
    
    
    $
    (4,449
    )
    
    $
    2,805Intersegment revenue
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    102,415
    
    
    
    27,894
    
    
    
    (1,322
    )
    
    
    3,523
    
    
    
    (16,268
    )
    
    
    116,242
    
    
    
    115,942
    
    
    
    (300
    )
    
    
    Identifiable assets
    
    
    494,266
    
    
    
    323,278
    
    
    
    67,511
    
    
    
    2,855
    
    
    
    21,759
    
    
    
    909,669
    
    
    
    882,211
    
    
    
    (27,458
    )
    
    
    Capital expenditures
    
    
    89,386
    
    
    
    32,879
    
    
    
    8,360
    
    
    
    367
    
    
    
    132
    
    
    
    131,124
    
    
    
    130,775
    
    
    
    (349
    )
    
    
    
 97




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##### Table of Contents



GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Geographic Data
   Corporate,OtherCountries &
    
    ConsolidatedRussia
    
    Ukraine
    
    Eliminations
    
    Results(in thousands)Year ended December 31, 2003Revenue
    
    $
    318,426
    
    
    $
    44,524
    
    
    $
    (2,416
    )
    
    $
    360,534Long-lived assets
    
    
    509,339
    
    
    
    24,236
    
    
    
    2,886
    
    
    
    536,461Year ended December 31, 2004Revenue
    
    $
    522,018
    
    
    $
    64,455
    
    
    $
    (2,495
    )
    
    $
    583,978Long-lived assets
    
    
    563,856
    
    
    
    27,995
    
    
    
    11,116
    
    
    
    602,967Year ended December 31, 2005Revenue
    
    $
    593,640
    
    
    $
    73,816
    
    
    $
    (77
    )
    
    $
    667,379Long-lived assets
    
    
    611,788
    
    
    
    44,801
    
    
    
    14,092
    
    
    
    670,681
 Note 15: Supplemental Cash Flow Information
  Twelve Months EndedDecember 31,2003
    
    2004
    
    2005(in thousands)Issuance of common stock in connection
with acquisitions
    
    $
    193,485
    
    
    $
    
    
    
    $
    Amounts payable in connection with
business acquisitions
    
    
    
    
    
    
    400
    
    
    
    885Capitalized leased assets
    
    
    420
    
    
    
    
    
    
    
    3,580
 Note 16: Long Term Incentive Bonus Program
  Note 17: Sale of Minority Interest in Subsidiary
  98




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GOLDEN TELECOM, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Note 18: Quarterly Financial Data (Unaudited)
  For the Three Months EndedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2004
    
    2004
    
    2004
    
    2004(in thousands, except per share data)Revenues
    
    $
    133,174
    
    
    $
    138,873
    
    
    $
    152,713
    
    
    $
    159,218Cost of Revenues
    
    
    68,279
    
    
    
    70,215
    
    
    
    77,953
    
    
    
    84,141Gross Margin
    
    
    64,895
    
    
    
    68,658
    
    
    
    74,760
    
    
    
    75,077Selling, general and administrative
    
    
    26,393
    
    
    
    25,118
    
    
    
    29,518
    
    
    
    31,826Net income
    
    
    14,651
    
    
    
    16,909
    
    
    
    16,111
    
    
    
    17,112Net income per share(1)- basic
    
    
    0.41
    
    
    
    0.47
    
    
    
    0.44
    
    
    
    0.47Net income per share(1)- diluted
    
    
    0.40
    
    
    
    0.46
    
    
    
    0.44
    
    
    
    0.47
 For the Three Months EndedMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2005
    
    2005
    
    2005
    
    2005(in thousands, except per share data)Revenues
    
    $
    156,465
    
    
    $
    165,509
    
    
    $
    169,930
    
    
    $
    175,475Cost of Revenues
    
    
    79,997
    
    
    
    86,191
    
    
    
    88,345
    
    
    
    92,999Gross Margin
    
    
    76,468
    
    
    
    79,318
    
    
    
    81,585
    
    
    
    82,476Selling, general and administrative
    
    
    27,586
    
    
    
    28,828
    
    
    
    30,967
    
    
    
    32,509Net income
    
    
    20,027
    
    
    
    19,767
    
    
    
    18,395
    
    
    
    17,884Net income per share(1)-basic
    
    
    0.55
    
    
    
    0.54
    
    
    
    0.51
    
    
    
    0.49Net income per share(1)- diluted
    
    
    0.55
    
    
    
    0.54
    
    
    
    0.50
    
    
    
    0.49
 
 (1)
    
    The sum of the earnings per share for the four quarters will generally not equal earnings
per share for the total year due to changes in the average number of common shares
outstanding. Note 19: Subsequent Events
   99




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##### Table of Contents



ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 ITEM 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
   Changes in Internal Control over Financial Reporting
  100




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##### Table of Contents



REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
         
 101




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##### Table of Contents



ITEM 9B. Other Information
  102




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##### Table of Contents



PART III
 
 ITEM 10. Directors and Executive Officers of the Registrant
   
 ITEM 11. Executive Compensation
  
 ITEM
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
   Equity Compensation Plan Information
  (a)
    
    
    (b)
    
    
    (c)Number of securitiesremaining available forNumber of securities to
    
    
    Weighted-average
    
    
    future issuance underbe issued upon exercise
    
    
    exercise price of
    
    
    equity compensationof outstanding options,
    
    
    outstanding options,
    
    
    plans (excluding securitiesPlan category
    
    warrants and rights
    
    
    warrants and rights
    
    
    reflected in column (a)).Equity compensation plan
approved by security
holders
    
    
    373,012
    
    
    $
    14.31
    
    
    
    852,699Equity compensation plan not
approved by security
holders
    
    
    200,000
    
    
    $
    26.81
    
    
    
    Total
    
    
    573,012
    
    
    
    
    
    
    
    852,699
  
 ITEM 13. Certain Relationships and Related Transactions
  
 ITEM 14 Principal Accountant Fees and Services
  103




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##### Table of Contents



PART IV
 
 ITEM 15. Exhibits and Financial Statement Schedules
  1. Financial Statements
  
    
    Report of Independent Registered Public Accounting Firm
    
    Consolidated Balance Sheets as of December 31, 2004 and 2005
    
    Consolidated Statements of Operations for the years ended December 31, 2003, 2004 and 2005
    
    Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2004 and 2005
    
    Consolidated Statements of Changes in Shareholders Equity for the years ended December 31, 2003, 2004 and 2005
    
    Notes to Consolidated Financial Statements
 Consolidated Financial Statement Schedules
    ExhibitNumber
    
    Description of Exhibit3.1
    
    
    Amended and Restated Certificate of Incorporation of Golden
Telecom, Inc. (Incorporated herein by reference to Exhibit
3.1 to the Companys registration statement on Form S-1 dated
July 14, 1999 and amendments (Commission File No.
333-82791)).3.2
    
    
    Amended and Restated By-laws of Golden Telecom, Inc.
(Incorporated by reference to Exhibit 3.1 to the Companys
current report on Form 8-K dated December 12, 2005).4.1
    
    
    Specimen certificate representing shares of Common Stock.
(Incorporated by reference to Exhibit 4.1 to the Companys
registration statement on Form S-1 dated July 14, 1999
(Commission File No. 333-82791)).10.1
    
    
    Shareholders Agreement among Golden Telecom, Inc., Alfa
Telecom Limited, Nye Telenor East Invest AS, OAO Rostelecom,
Capital International Global Emerging Markets Private Equity
Fund, L.P., Cavendish Nominees Limited and First NIS Regional
Fund SICAV. (Incorporated by reference to Exhibit 99.7 to the
Companys current report on From 8-K dated August 19, 2003).10.2
    
    
    Registration Rights Agreement among Golden Telecom, Inc.,
Alfa Telecom Limited, Nye Telenor East Invest AS, OAO
Rostelecom, Capital International Global Emerging Markets
Private Equity Fund, L.P., Cavendish Nominees Limited and
First NIS Regional Fund SICAV. (Incorporated by reference to
Exhibit 99.5 to the Companys current report on From 8-K
dated August 19, 2003).10.3
    
    
    Golden Telecom, Inc. 1999 Equity Participation Plan.
(Incorporated by reference to the Companys definitive proxy
statement on Form DEF-14A dated April 25, 2000).
 104




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.4
    
    
    Amendment to the Golden Telecom, Inc. 1999 Equity
Participation Plan. (Incorporated by reference to the
Companys definitive proxy statement on Form DEF-14A dated
May 23, 2001).10.5
    
    
    Form of Stock Option Award Agreement. (Incorporated by
reference to Exhibit 10.8 to the Companys annual report on
Form 10-K for the year ended December 31, 2004).10.6
    (a)
    
    Golden Telecom, Inc. 2005 Stock Appreciation Rights Plan.
(Incorporated by reference to Exhibit 10.1 to the Companys
current report on Form 8-K dated November 22, 2005).10.6
    (b)
    
    Amendment to the Golden Telecom, Inc. 2005 Stock Appreciation
Rights Plan. (Incorporated by reference to Exhibit 10.1 to
the Companys current report on Form 8-K dated December 12,
2005).10.7
    (a)
    
    Form of Award Agreement under the Golden Telecom, Inc. 2005
Stock Appreciation Rights Plan. (Incorporated by reference to
Exhibit 10.2 to the Companys current report on Form 8-K
dated November 22, 2005).10.7
    (b)
    
    Amended Form of Award Agreement under the Golden Telecom,
Inc. 2005 Stock Appreciation Rights Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys current report on
Form 8-K dated December 12, 2005).10.8
    
    
    EDN Sovintel 2005 Stock Appreciation Rights Bonus Plan.
(Incorporated by reference to Exhibit 10.3 to the Companys
current report on Form 8-K dated November 22, 2005).10.9
    
    
    Form of Award Agreement under the EDN Sovintel 2005 Stock
Appreciation Bonus Rights Plan. (Incorporated by reference to
Exhibit 10.4 to the Companys current report on Form 8-K
dated November 22, 2005).10.10
    
    
    Employment Agreement between Golden Telecom, Inc. and
Jean-Pierre Vandromme, Chief Executive Officer. (Incorporated
by reference to Exhibit 99.2 to the Companys current report
on Form 8-K dated July 18, 2005).10.11
    
    
    Employment Agreement between Golden TeleServices, Inc. and
Alexander Vinogradov, President. (Incorporated by reference
to Exhibit 10.5 to the Companys annual report on Form 10-K
for the year ended December 31, 2004).10.12
    
    
    Amendment No. 1 to Employment Agreement between Golden
TeleServices, Inc. and Alexander Vinogradov, President.
(Incorporated by reference to Exhibit 10.1 to the Companys
current report on Form 8-K dated October 24, 2005).10.13
    
    
    Employment Agreement between Golden Telecom, Inc. and Boris
Svetlichny, Senior Vice-President, Chief Finanical Officer
and Treasurer. (Incorporated by reference to Exhibit 10.1 to
the Companys current report on Form 8-K dated January 26,
2006).10.14*
    
    
    Employment agreement between Golden Telecom, Inc. and Derek
Bloom, Senior Vice President and General Counsel.10.15
    
    
    Employment Agreement and Amendments No. 1, 2, 3 and 4
thereto, between EDN Sovintel and Nikolay Tokarev, Interim
Chief Finanical Officer and Treasurer. (Incorporated by
reference to Exhibit 10.1 to the Companys current report on
Form 8-K dated January 11, 2006).10.16
    
    
    Employment Agreement and Amendments No. 1 thereto, between
Golden TeleServices, Inc. and Nikolay Tokarev, Interim Chief
Financial Officer and Treasurer. (Incorporated by reference
to Exhibit 10.2 to the Companys current report on Form 8-K
dated January 11, 2006).10.17*
    
    
    Schedule of Compensation
Arrangements with Directors.21.1*
    
    
    List of subsidiaries of Golden Telecom, Inc.23.1*
    
    
    Consent of Ernst & Young LLC, Independent Registered Public
Accounting Firm.24.1*
    
    
    Powers of Attorney (included on signature page).31.1*
    
    
    Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    
    Certification of the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    
    Certification of the Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 105




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit32.2*
    
    
    Certification of the Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith. 106




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##### Table of Contents



SIGNATURES
  GOLDEN TELECOM, INC.
(Registrant)By:
    
    /s/  NIKOLAY TOKAREVName:
    
    Nikolay TokarevTitle:
    
    Vice President, Interim Chief Financial Officer and Treasurer(Principal Financial Officer)By:
    
    /s/  MICHAEL D. WILSONName:
Title:
    
    Michael D. Wilson
Vice President and Corporate Controller(Principal Accounting Officer)
   Signature
    
    Title
    
    Date/s/ JEAN-PIERRE VANDROMME

Jean-Pierre Vandromme
    
    Chief Executive Officer
(Principal Executive Officer)
    
    March 16, 2006/s/ PETR AVEN

Petr Aven
    
    Chairman of the Board
of Directors
    
    March 16, 2006Vladimir Androsik
    
    DirectorVladimir Bulgak
    
    Director/s/ MICHAEL CALVEY
Michael Calvey
    
    Director
    
    March 16, 2006/s/ DAVID HERMAN

David Herman
    
    Director
    
    March 16, 2006/s/ KJELL MORTEN JOHNSEN

Kjell Morten Johnsen
    
    Director
    
    March 16, 2006/s/ ALEXEY KHUDYAKOV

Alexey Khudyakov
    
    Director
    
    March 16, 2006/s/ DMITRY KOROL

Dmitry Korol
    
    Director
    
    March 16, 2006/s/ OLEG MALIS

Oleg Malis
    
    Director
    
    March 16, 2006/s/ JAN EDVARD THYGESEN

Jan Edvard Thygesen
    
    Director
    
    March 16, 2006/s/ NIKOLAY TOKAREV

Nikolay Tokarev
    
    Vice President, Interim Chief
Financial Officer and Treasurer
(Principal Financial Officer)
    
    March 16, 2006
 107




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##### Table of Contents



Signature
    
    Title
    
    Date/s/MICHAEL D. WILSON

Michael D. Wilson
    
    Vice President and Corporate Controller
(Principal Accounting Officer)
    
    March 16, 2006
 108




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##### Table of Contents



SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 Golden Telecom, Inc.
 COL. A
    
    COL. B
    
    
    COL. C
    
    
    COL. D
    
    
    COL. EAdditionsBalance at
    
    
    Charged to
    
    
    Reserves
    
    
    
    
    
    
    Balance atBeginning
    
    
    Costs and
    
    
    From
    
    
    
    
    
    
    EndDescription
    
    of Period
    
    
    Expenses
    
    
    Acquisitions
    
    
    Deductions
    
    
    of PeriodAllowance for doubtful accounts at
12/31/05
    
    
    23,205
    
    
    
    7,967
    
    
    
    53
    
    
    
    (3,898
    )
    
    
    27,327Allowance for doubtful accounts at
12/31/04
    
    
    13,896
    
    
    
    10,065
    
    
    
    117
    
    
    
    (873
    )
    
    
    23,205Allowance for doubtful accounts at
12/31/03
    
    
    8,686
    
    
    
    3,592
    
    
    
    2,966
    
    
    
    (1,348
    )
    
    
    13,896
 109




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit3.1
    
    
    Amended and Restated Certificate of Incorporation of Golden
Telecom, Inc. (Incorporated herein by reference to Exhibit
3.1 to the Companys registration statement on Form S-1 dated
July 14, 1999 and amendments (Commission File No.
333-82791)).3.2
    
    
    Amended and Restated By-laws of Golden Telecom, Inc.
(Incorporated by reference to Exhibit 3.1 to the Companys
current report on Form 8-K dated December 12, 2005).4.1
    
    
    Specimen certificate representing shares of Common Stock.
(Incorporated by reference to Exhibit 4.1 to the Companys
registration statement on Form S-1 dated July 14, 1999
(Commission File No. 333-82791)).10.1
    
    
    Shareholders Agreement among Golden Telecom, Inc., Alfa
Telecom Limited, Nye Telenor East Invest AS, OAO Rostelecom,
Capital International Global Emerging Markets Private Equity
Fund, L.P., Cavendish Nominees Limited and First NIS Regional
Fund SICAV. (Incorporated by reference to Exhibit 99.7 to the
Companys current report on From 8-K dated August 19, 2003).10.2
    
    
    Registration Rights Agreement among Golden Telecom, Inc.,
Alfa Telecom Limited, Nye Telenor East Invest AS, OAO
Rostelecom, Capital International Global Emerging Markets
Private Equity Fund, L.P., Cavendish Nominees Limited and
First NIS Regional Fund SICAV. (Incorporated by reference to
Exhibit 99.5 to the Companys current report on From 8-K
dated August 19, 2003).10.3
    
    
    Golden Telecom, Inc. 1999 Equity Participation Plan.
(Incorporated by reference to the Companys definitive proxy
statement on Form DEF-14A dated April 25, 2000).




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.4
    
    
    Amendment to the Golden Telecom, Inc. 1999 Equity
Participation Plan. (Incorporated by reference to the
Companys definitive proxy statement on Form DEF-14A dated
May 23, 2001).10.5
    
    
    Form of Stock Option Award Agreement. (Incorporated by
reference to Exhibit 10.8 to the Companys annual report on
Form 10-K for the year ended December 31, 2004).10.6
    (a)
    
    Golden Telecom, Inc. 2005 Stock Appreciation Rights Plan.
(Incorporated by reference to Exhibit 10.1 to the Companys
current report on Form 8-K dated November 22, 2005).10.6
    (b)
    
    Amendment to the Golden Telecom, Inc. 2005 Stock Appreciation
Rights Plan. (Incorporated by reference to Exhibit 10.1 to
the Companys current report on Form 8-K dated December 12,
2005).10.7
    (a)
    
    Form of Award Agreement under the Golden Telecom, Inc. 2005
Stock Appreciation Rights Plan. (Incorporated by reference to
Exhibit 10.2 to the Companys current report on Form 8-K
dated November 22, 2005).10.7
    (b)
    
    Amended Form of Award Agreement under the Golden Telecom,
Inc. 2005 Stock Appreciation Rights Plan. (Incorporated by
reference to Exhibit 10.2 to the Companys current report on
Form 8-K dated December 12, 2005).10.8
    
    
    EDN Sovintel 2005 Stock Appreciation Rights Bonus Plan.
(Incorporated by reference to Exhibit 10.3 to the Companys
current report on Form 8-K dated November 22, 2005).10.9
    
    
    Form of Award Agreement under the EDN Sovintel 2005 Stock
Appreciation Bonus Rights Plan. (Incorporated by reference to
Exhibit 10.4 to the Companys current report on Form 8-K
dated November 22, 2005).10.10
    
    
    Employment Agreement between Golden Telecom, Inc. and
Jean-Pierre Vandromme, Chief Executive Officer. (Incorporated
by reference to Exhibit 99.2 to the Companys current report
on Form 8-K dated July 18, 2005).10.11
    
    
    Employment Agreement between Golden TeleServices, Inc. and
Alexander Vinogradov, President. (Incorporated by reference
to Exhibit 10.5 to the Companys annual report on Form 10-K
for the year ended December 31, 2004).10.12
    
    
    Amendment No. 1 to Employment Agreement between Golden
TeleServices, Inc. and Alexander Vinogradov, President.
(Incorporated by reference to Exhibit 10.1 to the Companys
current report on Form 8-K dated October 24, 2005).10.13
    
    
    Employment Agreement between Golden Telecom, Inc. and Boris
Svetlichny, Senior Vice-President, Chief Finanical Officer
and Treasurer. (Incorporated by reference to Exhibit 10.1 to
the Companys current report on Form 8-K dated January 26,
2006).10.14*
    
    
    Employment agreement between Golden Telecom, Inc. and Derek
Bloom, Senior Vice President and General Counsel.10.15
    
    
    Employment Agreement and Amendments No. 1, 2, 3 and 4
thereto, between EDN Sovintel and Nikolay Tokarev, Interim
Chief Finanical Officer and Treasurer. (Incorporated by
reference to Exhibit 10.1 to the Companys current report on
Form 8-K dated January 11, 2006).10.16
    
    
    Employment Agreement and Amendments No. 1 thereto, between
Golden TeleServices, Inc. and Nikolay Tokarev, Interim Chief
Financial Officer and Treasurer. (Incorporated by reference
to Exhibit 10.2 to the Companys current report on Form 8-K
dated January 11, 2006).10.17*
    
    
    Schedule of Compensation
Arrangements with Directors.21.1*
    
    
    List of subsidiaries of Golden Telecom, Inc.23.1*
    
    
    Consent of Ernst & Young LLC, Independent Registered Public
Accounting Firm.24.1*
    
    
    Powers of Attorney (included on signature page).31.1*
    
    
    Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    
    Certification of the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    
    Certification of the Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit32.2*
    
    
    Certification of the Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.