<PAGE>   1

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

                        (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 GOLDEN TELESERVICES, INC.
                               12 TRUBNAYA ULITSA
                              MOSCOW, RUSSIA 103045
                     (Address of principal executive office)

                              (011-7-501) 797-9300
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

    At August 8, 2001 there were 22,349,231 outstanding shares of common stock
of the registrant.


================================================================================


<PAGE>   2


                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                PAGE
                                                                                                ----
<S>             <C>                                                                             <C>
PART I.         FINANCIAL INFORMATION

Item 1(a)       Consolidated Financial Statements of Golden Telecom, Inc. (unaudited) .........  3

                Condensed Consolidated Balance Sheets as of December 31, 2000 and June
                30, 2001 ......................................................................  3

                Condensed Consolidated  Statements of Operations for the Three and Six
                Months Ended June 30, 2000 and 2001 ...........................................  4

                Condensed Consolidated Statements of Cash Flows for the Six Months
                Ended June 30, 2000 and 2001 ..................................................  5

                Notes to Condensed Consolidated Financial Statements ..........................  6

Item 1(b)       Condensed Financial Statements of EDN Sovintel LLC (unaudited) ................ 12

                Condensed Balance Sheets as of December 31, 2000 and June 30, 2001 ............ 12

                Condensed Statements of Income and  Members' Equity for the Three and
                Six Months Ended June 30, 2000 and 2001 ....................................... 13

                Condensed  Statements of Cash Flows for the Six Months Ended June 30,
                2000 and 2001 ................................................................. 14

                Condensed Notes to Financial Statements ....................................... 15

Item 2          Management's Discussion and Analysis of Financial Condition and Results
                of Operations * ............................................................... 16

PART II.        OTHER INFORMATION

Item 4          Submission of Matters to a Vote of Security Holders ........................... 28

Item 6          Exhibits and Reports on Form 8-K .............................................. 28

Signatures .................................................................................... 29
</Table>


* Please refer to the special note regarding forward-looking statements in this
section.


                                       2
<PAGE>   3


                          PART I. FINANCIAL INFORMATION

ITEM 1(A).  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF GOLDEN TELECOM, INC.

                              GOLDEN TELECOM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                                         DECEMBER 31,    JUNE 30,
                                                                             2000          2001
                                                                         ------------    ---------
                                                                           (AUDITED)    (UNAUDITED)
<S>                                                                      <C>             <C>
                                 ASSETS
CURRENT ASSETS
  Cash and cash equivalents ..........................................   $     57,889    $  70,586
  Investments available for sale .....................................         54,344           --
  Accounts receivable, net ...........................................         19,291       19,763
  Prepaid expenses ...................................................          4,413        6,175
  Other current assets ...............................................          5,471        6,691
                                                                         ------------    ---------

TOTAL CURRENT ASSETS .................................................        141,408      103,215

Property and equipment, net of accumulated depreciation of
  $42,253 and $51,068 at December 31, 2000 and June 30, 2001,
  respectively .......................................................         82,377       92,580
Investments in and advances to ventures ..............................         49,629       53,793
Goodwill and intangible assets, net of accumulated
  amortization of $48,420 and $60,420 at December 31, 2000
  and June 30, 2001, respectively ....................................         70,045       88,988
Restricted cash ......................................................          2,519        3,867
Other non-current assets .............................................          2,478        2,609
                                                                         ------------    ---------

TOTAL ASSETS .........................................................   $    348,456    $ 345,052
                                                                         ============    =========

                   LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses ..............................   $     28,256    $  30,141
  Debt maturing within one year ......................................          3,339        8,583
  Related party debt maturing within one year ........................             --        6,250
  Due to affiliates and related parties ..............................          7,957        6,961
  Other current liabilities ..........................................          1,886        2,042
                                                                         ------------    ---------

TOTAL CURRENT LIABILITIES ............................................         41,438       53,977

Long-term debt, less current portion .................................          9,408        4,297
Related party long-term debt .........................................          6,250           --
Other non-current liabilities ........................................          4,830        7,003
                                                                         ------------    ---------

TOTAL LIABILITIES ....................................................         61,926       65,277


Minority interest ....................................................          3,337        3,238

SHAREHOLDERS' EQUITY
  Preferred stock, $0.01 par value (10,000,000 shares authorized;
     none issued and outstanding at December 31, 2000 and
     June 30, 2001) ..................................................             --           --
  Common stock, $0.01 par value (100,000,000 shares
     authorized; 24,479,997 and 24,621,958 shares issued
     and outstanding at December 31, 1999 and June 30, 2001
     respectively) ...................................................            245          246
  Additional paid-in capital .........................................        412,754      413,541
  Accumulated deficit ................................................       (129,806)    (137,250)
                                                                         ------------    ---------

TOTAL SHAREHOLDERS' EQUITY ...........................................        283,193      276,537
                                                                         ------------    ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...........................   $    348,456    $ 345,052
                                                                         ============    =========
</Table>

           See notes to condensed consolidated financial statements.


                                       3
<PAGE>   4


                              GOLDEN TELECOM, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<Table>
<Caption>
                                                        THREE MONTHS ENDED           SIX MONTHS ENDED
                                                             JUNE 30,                    JUNE 30,
                                                     ------------------------    ------------------------
                                                        2000          2001          2000          2001
                                                     ----------    ----------    ----------    ----------
<S>                                                  <C>           <C>           <C>           <C>
REVENUE:
  Telecommunication services .....................   $   24,615    $   30,420    $   46,668    $   59,956
  Revenue from related parties ...................        2,257         3,471         4,513         6,255
                                                     ----------    ----------    ----------    ----------

TOTAL REVENUE ....................................       26,872        33,891        51,181        66,211

OPERATING COSTS AND EXPENSES:
  Access and network services ....................       11,847        15,980        22,141        30,666
  Selling, general and administrative ............       10,707        12,799        20,961        25,506
  Depreciation and amortization ..................        7,706        10,380        14,934        20,133
                                                     ----------    ----------    ----------    ----------

TOTAL OPERATING COSTS AND EXPENSES ...............       30,260        39,159        58,036        76,305
                                                     ----------    ----------    ----------    ----------

LOSS FROM OPERATIONS .............................       (3,388)       (5,268)       (6,855)      (10,094)

OTHER INCOME (EXPENSE):
  Equity in earnings/(losses) of ventures ........         (172)        2,159        (1,083)        2,742
  Interest income ................................        2,638         1,054         4,924         2,536
  Interest expense ...............................         (715)         (640)       (1,451)       (1,271)
  Foreign currency losses ........................          (80)          (13)         (423)         (308)
  Minority interest ..............................         (154)           (3)         (154)           (3)
  Other non-operating expense ....................           --            --          (148)           --
                                                     ----------    ----------    ----------    ----------

TOTAL OTHER INCOME ...............................        1,519         2,557         1,665         3,696
                                                     ----------    ----------    ----------    ----------

Net loss before income taxes .....................       (1,869)       (2,711)       (5,190)       (6,398)
Income taxes .....................................           42           823            55         1,046
                                                     ----------    ----------    ----------    ----------

NET LOSS .........................................   $   (1,911)   $   (3,534)   $   (5,245)   $   (7,444)
                                                     ==========    ==========    ==========    ==========

Net loss per share ...............................   $    (0.08)   $    (0.14)   $    (0.22)   $    (0.30)
                                                     ==========    ==========    ==========    ==========

Weighted average common shares outstanding .......       24,080        24,622        24,070        24,559
                                                     ==========    ==========    ==========    ==========
</Table>

           See notes to condensed consolidated financial statements.


                                       4
<PAGE>   5


                              GOLDEN TELECOM, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                 SIX MONTHS ENDED JUNE 30,
                                                                                --------------------------
                                                                                   2000            2001
                                                                                ----------      ----------
<S>                                                                             <C>             <C>
              OPERATING ACTIVITIES
                Net loss ..................................................     $   (5,245)     $   (7,444)
              Adjustments to Reconcile Net Loss to Net Cash Provided by
                Operating Activities:
                Depreciation ..............................................          6,992           8,501
                Amortization ..............................................          7,942          11,632
                Equity in (earnings) losses of ventures, net of dividends
                   received ...............................................          1,083          (2,742)
                Minority interest .........................................            154               3
                Foreign currency losses ...................................            423             308
                Other .....................................................          1,016           1,374
                Changes in assets and liabilities:
                   Accounts receivable ....................................         (3,347)             13
                   Accounts payable and accrued expenses ..................          1,437           3,563
                   Due from affiliates and related parties ................           (279)         (2,193)
                   Due to affiliates and related parties ..................          1,475          (1,866)
                   Other changes in assets and liabilities ................         (1,261)           (583)
                                                                                ----------      ----------

              NET CASH PROVIDED BY OPERATING ACTIVITIES ...................         10,390          10,566

              INVESTING ACTIVITIES
                Purchases of property and equipment and intangible assets .        (17,803)        (16,351)
                Acquisitions, net of cash acquired ........................         (3,617)        (32,348)
                Restricted cash ...........................................          3,325          (1,348)
                Proceeds from investments available for sale ..............             --          54,344
                Other investing ...........................................          3,028          (1,238)
                                                                                ----------      ----------

              NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES .........        (15,067)          3,059

              FINANCING ACTIVITIES
                Proceeds from debt ........................................          4,767           1,400
                Repayments of debt ........................................         (8,591)         (2,055)
                Other financing ...........................................             32            (155)
                                                                                ----------      ----------

              NET CASH USED IN FINANCING ACTIVITIES .......................         (3,792)           (810)

              Effect of exchange rate changes on cash and cash equivalents            (190)           (118)
                                                                                ----------      ----------
              Net increase (decrease) in cash and cash equivalents ........         (8,659)         12,697
              Cash and cash equivalents at beginning of period ............        162,722          57,889
                                                                                ----------      ----------

              CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................     $  154,063      $   70,586
                                                                                ==========      ==========
</Table>

           See notes to condensed consolidated financial statements.


                                       5
<PAGE>   6


                              GOLDEN TELECOM, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. FINANCIAL PRESENTATION AND DISCLOSURES

    Golden Telecom, Inc. ("GTI", "Golden Telecom" or the "Company") is a
provider of a broad range of telecommunications services to businesses, other
telecommunications service providers and consumers. The Company provides these
services through its operation of voice, Internet and data networks,
international gateways, local access and various value-added services in the
Commonwealth of Independent States ("CIS"), primarily in Russia, and through its
fixed line and mobile operation in Ukraine. Golden Telecom was incorporated in
Delaware on June 10, 1999 for the purpose of acting as a holding company for
Global TeleSystems, Inc.'s ("GTS") operating entities within the CIS and
supporting non-CIS holding companies (the "CIS Entities"). On September 29,
1999, GTS transferred its ownership rights in the CIS Entities to the Company in
anticipation of the Company's initial pubic offering ("IPO") which closed on
October 5, 1999. After the IPO, GTS retained an approximately 62% interest in
the Company.

    On May 11, 2001, GTS, completed the sale of approximately 12.2 million
shares of GTI's common stock to a group of investors led by Alfa Group, a
leading Russia-based financial and industrial concern ("Alfa"), and two of the
Company's previously existing major shareholders, Capital International Global
Emerging Markets Private Equity Fund L.P. ("Capital") and investment funds
managed by Barings Vostok Capital Partners ("Baring Vostok").

    The financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles in the
United States of America ("US GAAP") for interim financial reporting and
Securities and Exchange Commission ("SEC") regulations. Certain information and
footnote disclosures normally included in complete financial statements prepared
in accordance with US GAAP and SEC rules and regulations have been condensed or
omitted pursuant to such US GAAP and SEC rules and regulations. In the opinion
of management, the financial statements reflect all adjustments of a normal and
recurring nature necessary to present fairly the Company's financial position,
results of operations and cash flows for the interim periods. These financial
statements should be read in conjunction with the Company's 2000 audited
consolidated financial statements and the notes related thereto. The results of
operations for the three and six months ended June 30, 2001 may not be
indicative of the operating results for the full year.

2. POLICIES AND PROCEDURES

    For the three and six months ended June 30, 2000 and 2001, comprehensive
income for the Company is equal to net loss.

    The Company's net loss per share calculation (basic and diluted) is based
upon the Company's weighted average common shares outstanding. There are no
reconciling items in the numerator or denominator of the Company's net loss per
share calculation. Warrants and stock options have been excluded from the net
loss per share calculation because their effect would be antidilutive.

    In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement on Financial and Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which was amended in June
1999. The Company adopted the new statement effective January 1, 2001. The
statement requires the Company to recognize all derivatives on the balance sheet
at fair value. The adoption of the new statement did not have a significant
effect on the Company's results of operations or financial position.

     In July 2001, the FASB issued SFAS's No. 141, "Business Combinations", and
No. 142, "Goodwill and Other Intangible Assets", effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests in accordance with the Statements. Other
intangible assets will continue to be amortized over their useful lives.


                                       6
<PAGE>   7



                              GOLDEN TELECOM, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

     The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. The Company has not
yet completed the evaluation of the impact of these new accounting standards.
Application of the nonamortization provisions of the Statement is expected to
result in an improvement in the Company's results of operation. During 2002, the
Company will perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and financial
position of the Company.

3. SHAREHOLDERS' EQUITY

Common Stock

    In March 2001, 141,961 restricted shares of the Company's common stock, par
value $0.01, were issued to senior management and employees to be held in escrow
by the Company. The restricted shares were issued in accordance with restricted
stock agreements dated October 1, 1999 concluded as part of the Company's IPO
and will be held in escrow by the Company until such restriction lapse on
October 1, 2001.

    When the 1999 GTI Equity Participation Plan (the "Equity Plan") was adopted,
the number of shares available for issuance under the Equity Plan was calculated
as 15% of the issued and outstanding shares on a fully diluted basis. Since the
adoption of the Equity Plan, the Company has issued an additional 1,679,872
shares of common stock in connection with fund raising activities and
acquisitions. In March 2001, the Compensation Committee of the Board of
Directors approved an increase in shares available for issuance under the Equity
Plan from 4,023,551 to 4,320,000 in order to preserve the 15% ratio referenced
above. The decision of the Compensation Committee of the Board of Directors was
ratified by GTI shareholders on June 26, 2001.

    In March 2001, in connection with the finalization of the MCT Corp.
transaction, the Compensation Committee of the Board of Directors adopted a
resolution providing that the Stock Option Award Agreements executed by the
Company and certain terminated employees shall be amended to provide that the
term of the options held by the employees that transferred from GTI to MCT Corp.
shall be extended from ninety days after the employees termination date to one
year after the termination date of the employees or until their termination date
with MCT Corp., whichever occurs earlier.

    In April 2001, in accordance with the Equity Plan, the Compensation
Committee of the Board of Directors adopted a resolution providing generally
that the Stock Option Award Agreements executed by the Company to employees
shall be amended to provide that the term of the options held by the employees
shall be extended from ninety days after the employees termination date to
eighteen months after the termination date.

    In May 2001, GTS completed the transaction contemplated by the Share
Purchase Agreement (the "Share Purchase Agreement"), entered into in April 2001
with Alfa, Capital, and Baring Vostok, (collectively, the "Purchasers") with
respect to the sale to the Purchasers by GTS of approximately 12.2 million
shares of common stock, par value $0.01 per share of GTI. The aggregate purchase
price paid by the Purchasers for the common stock was $125.0 million. In
addition, as specified in the Share Purchase Agreement, at the time of the
consummation of the sale and purchase, the Purchasers entered into separate
stock option agreements with GTS which gave the Purchasers an option to purchase
up to approximately 2.3 million of the remaining approximately 2.9 million
shares of common stock beneficially owned by GTS at the purchase price of $11.00
per share during the 60-day period after the closing of the transaction. In
addition, if certain other conditions are met, during the twelve-month period
after the closing, the Purchasers have an option to purchase the remaining
shares of common stock beneficially owned by GTS at a purchase price equal to
the greater of $11.00 per share or 120% of the average closing share price for
the 60-day period preceding the purchase date. As part of the transaction, the
Purchasers and the Company entered into a Standstill Agreement and a
Shareholders Agreement. Generally, the Standstill Agreement provides that for a
period of two years from the date of closing the transaction, neither Alfa nor
GTS may acquire over 49% of GTI's outstanding stock. The Shareholder Agreement
includes a voting arrangement between the Purchasers for the election of certain
nominees to the Company's Board of Directors, among other provisions.


                                       7
<PAGE>   8


                              GOLDEN TELECOM, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

4. INVESTMENT TRANSACTIONS

     In June 2001, the Company acquired Internet Service Provider ("ISP") ZAO
Cityline, 51% of ISP OOO Uralrelcom and infrastructure company PTK for cash
consideration of approximately $29.0 million. The Company's financial statements
reflect the preliminary allocation of the purchase price, and as such, the
Company has recorded goodwill in the amount of approximately $26.1 million. In
addition, the Company incurred approximately $0.9 million in consulting fees
related to these investment transactions from an affiliate of Alfa, a
shareholder of the Company.

     The following unaudited pro forma combined results of operations for the
Company gives effect to the Cityline, Uralrelcom and PTK business combinations
as if they had occurred at the beginning of 2000. For the six months ended June
30, 2000 and 2001, pro forma revenue would have been $53.0 million and $69.0
million, respectively. The pro forma net loss would have been $8.0 million, or
$0.33 per common share for the six months ended June 30, 2000 and $11.0 million,
or $0.45 per share common share, for the six months ended June 30, 2001. These
pro forma amounts are provided for informational purposes only and do not
purport to present the results of operations of the Company had the transactions
assumed therein occurred on or as of the date indicated, nor is it necessarily
indicative of the results of operations which may be achieved in the future:

5. CONTINGENCIES

Tax Matters

     The Company's policy is to accrue for contingencies in the accounting
period in which a liability is deemed probable and the amount is reasonably
determinable. In this regard, because of the uncertainties associated with the
Commonwealth of Independent States Taxes ("CIS Taxes"), the Company's final CIS
Taxes may be in excess of the estimated amount expensed to date and accrued at
June 30, 2001. It is the opinion of management that the ultimate resolution of
the Company's liability for CIS Taxes, to the extent not previously provided
for, will not have a material effect on the financial condition of the Company.
However, depending on the amount and timing of an unfavorable resolution of any
contingencies associated with CIS Taxes, it is possible that the Company's
future results of operations or cash flows could be materially affected in a
particular period.

6. SEGMENT INFORMATION

LINE OF BUSINESS DATA

     The Company operates in four segments within the telecommunications
industry. The four segments are: Competitive Local Exchange Carrier (CLEC)
Services using our local access overlay networks in Moscow, Kiev, and St.
Petersburg; Long Distance Services using our fiber optic and satellite-based
network throughout the CIS; Data and Internet Services using our fiber optic and
satellite-based network; and Mobile Services consisting of mobile networks in
Kiev and Odessa, Ukraine. The following tables present financial information for
both consolidated subsidiaries and equity investee ventures, segmented by the
Company's lines of businesses for the periods ended June 30, 2000 and 2001.
Transfers between lines of businesses are included in the adjustments to
reconcile segment to consolidated results. The Company evaluates performance
based on the operating income (loss) of each strategic business unit.





                                       8
<PAGE>   9





                              GOLDEN TELECOM, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                                       ADJUSTMENTS TO RECONCILE
                                                                                                          BUSINESS SEGMENT TO
                                                                                                        CONSOLIDATED RESULTS
                                                                                                       ------------------------
                                    DATA &                                     BUSINESS                 EQUITY
                                   INTERNET    LONG     MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED   METHOD       AFFILIATE
                           CLEC    SERVICES  DISTANCE  SERVICES  ELIMINATIONS   TOTAL      RESULTS     VENTURES     ADJUSTMENTS
                         --------  --------  --------  --------  ------------  --------  ------------  --------     -----------
                                                                  (IN THOUSANDS)
<S>                      <C>       <C>       <C>       <C>       <C>           <C>       <C>           <C>          <C>
THREE MONTHS ENDED JUNE 30, 2000

Revenue................. $ 30,954  $  9,205  $  3,636  $  8,760  $     (1,385) $ 51,170  $     26,872  $(28,406)    $     4,108
Operating income
  (loss)................    8,672      (269)     (977)     (509)       (6,316)      601        (3,388)   (3,898)            (91)
Identifiable assets.....  110,915    34,234    22,653    53,477       246,556   467,835       357,465  (110,370)             --
Capital expenditures....    4,334     1,581       741     3,184          (189)    9,651         6,093    (3,558)             --
</Table>


<Table>
<Caption>
                                                                                                       ADJUSTMENTS TO RECONCILE
                                                                                                          BUSINESS SEGMENT TO
                                                                                                        CONSOLIDATED RESULTS
                                                                                                       ------------------------
                                    DATA &                                     BUSINESS                 EQUITY
                                   INTERNET    LONG     MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED   METHOD       AFFILIATE
                           CLEC    SERVICES  DISTANCE  SERVICES  ELIMINATIONS   TOTAL      RESULTS     VENTURES     ADJUSTMENTS
                         --------  --------  --------  --------  ------------  --------  ------------  --------     -----------
                                                                          (IN THOUSANDS)
<S>                      <C>       <C>       <C>       <C>       <C>           <C>       <C>           <C>          <C>
THREE MONTHS ENDED JUNE 30, 2001

Revenue...............   $ 37,044  $ 14,841  $  5,217  $  3,660  $     (1,934) $ 58,828  $     33,891  $(29,359)    $     4,422
Operating income
   (loss).............     11,598    (2,127)     (887)     (222)       (6,222)    2,140        (5,268)   (7,507)             99
Identifiable assets...    145,790    97,662    27,163    23,509       150,676   444,800       345,052   (99,748)             --
Capital expenditures..      3,948     3,462       649       469            94     8,622         5,975    (2,647)             --
</Table>


<Table>
<Caption>
                                                                                                       ADJUSTMENTS TO RECONCILE
                                                                                                          BUSINESS SEGMENT TO
                                                                                                        CONSOLIDATED RESULTS
                                                                                                       ------------------------
                                    DATA &                                     BUSINESS                 EQUITY
                                   INTERNET    LONG     MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED   METHOD       AFFILIATE
                           CLEC    SERVICES  DISTANCE  SERVICES  ELIMINATIONS   TOTAL      RESULTS     VENTURES     ADJUSTMENTS
                         --------  --------  --------  --------  ------------  --------  ------------  --------     -----------
                                                                          (IN THOUSANDS)
<S>                      <C>       <C>       <C>       <C>       <C>           <C>       <C>           <C>          <C>
SIX MONTHS ENDED JUNE 30, 2000

Revenue...............   $ 60,555  $ 17,707  $  6,526  $ 16,576  $     (2,877)  $ 98,487    $51,181     $(55,436)     $8,130
Operating income
   (loss).............     17,506       (43)   (2,577)   (1,998)      (12,922)       (34)    (6,855)      (7,076)        255
Identifiable assets...    110,915    34,234    22,653    53,477       246,557    467,836    357,466     (110,370)         --
Capital expenditures..      9,023     7,890     1,852     4,996           185     23,946     17,803       (6,143)         --
</Table>


<Table>
<Caption>
                                                                                                       ADJUSTMENTS TO RECONCILE
                                                                                                          BUSINESS SEGMENT TO
                                                                                                        CONSOLIDATED RESULTS
                                                                                                       ------------------------
                                    DATA &                                     BUSINESS                 EQUITY
                                   INTERNET    LONG     MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED   METHOD       AFFILIATE
                           CLEC    SERVICES  DISTANCE  SERVICES  ELIMINATIONS   TOTAL      RESULTS     VENTURES     ADJUSTMENTS
                         --------  --------  --------  --------  ------------  --------  ------------  --------     -----------
                                                                          (IN THOUSANDS)
<S>                      <C>       <C>       <C>       <C>       <C>           <C>       <C>           <C>          <C>
SIX MONTHS ENDED  JUNE 30, 2001

Revenue...............   $ 70,375  $ 28,845  $  9,614  $  7,190  $     (3,648) $112,376  $     66,211  $(55,965)    $     9,800
Operating income
  (loss)..............     20,550    (3,331)   (1,946)     (771)      (12,071)    2,431       (10,094)  (12,611)             86
Identifiable assets...    145,790    97,662    27,163    23,509       150,676   444,800       345,052   (99,748)             --
Capital expenditures..     10,531    10,481     1,465       902           119    23,498        16,351    (7,147)             --
</Table>




                                       9
<PAGE>   10


                              GOLDEN TELECOM, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

GEOGRAPHIC DATA

    Revenues are based on the location of the operating company providing the
service.

    The following tables present financial information segmented by the
Company's geographic regions for the three and six month periods ended June 30,
2000 and 2001.


<Table>
<Caption>
                                                                                  CORPORATE &    CONSOLIDATED
                                                              RUSSIA    UKRAINE   ELIMINATIONS      RESULTS
                                                             ---------  --------  ------------   ------------
<S>                                                          <C>        <C>       <C>            <C>

                        THREE MONTHS ENDED JUNE 30, 2000
                          Revenue.........................   $  18,014  $  8,910  $        (52)  $     26,872
                          Long-lived assets...............     125,963    37,753         1,816        165,532
</Table>

<Table>
<Caption>
                                                                                  CORPORATE &    CONSOLIDATED
                                                              RUSSIA    UKRAINE   ELIMINATIONS      RESULTS
                                                             ---------  --------  ------------   ------------
<S>                                                          <C>        <C>       <C>            <C>
                        THREE MONTHS ENDED JUNE 30, 2001
                          Revenue.........................   $  24,360  $  9,773  $       (242)  $     33,891
                          Long-lived assets...............     197,020    39,755         1,195        237,970
</Table>

<Table>
<Caption>
                                                                                  CORPORATE &    CONSOLIDATED
                                                              RUSSIA    UKRAINE   ELIMINATIONS      RESULTS
                                                             ---------  --------  ------------   ------------
<S>                                                          <C>        <C>       <C>            <C>
                        SIX MONTHS ENDED JUNE 30, 2000
                          Revenue.........................   $  34,817  $ 16,538  $       (174)  $     51,181
                          Long-lived assets...............     125,963    37,753         1,816        165,532
</Table>

<Table>
<Caption>
                                                                                  CORPORATE &    CONSOLIDATED
                                                              RUSSIA    UKRAINE   ELIMINATIONS      RESULTS
                                                             ---------  --------  ------------   ------------
<S>                                                          <C>        <C>       <C>            <C>
                        SIX MONTHS ENDED JUNE 30, 2001
                          Revenue.........................   $  47,803  $ 19,111  $       (703)  $     66,211
                          Long-lived assets...............     197,020    39,755         1,195        237,970
</Table>

7. SIGNIFICANT EQUITY METHOD SUBSIDIARY INFORMATION

    The following table presents summarized income statement information from
the Company's significant equity investee, EDN Sovintel LLC, for the three and
six months ended June 30, 2000 and 2001.

<Table>
<Caption>
                                                 THREE MONTHS ENDED   SIX MONTHS ENDED
                                                      JUNE 30,            JUNE 30,
                                                 ------------------  ------------------
                                                   2000      2001      2000      2001
                                                 --------  --------  --------  --------
                                                                              (IN
                                                              THOUSANDS)
<S>                                              <C>       <C>       <C>       <C>
   Revenues..................................    $ 23,060  $ 28,403  $ 45,286  $ 53,755
   Gross Margin..............................      10,765    12,897    21,270    23,464
   Income from operations....................       4,560     7,208     8,970    11,858
   Net income................................       2,339     4,777     4,440     8,408
</Table>



                                       10
<PAGE>   11


                              GOLDEN TELECOM, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

8. DEBT AND CAPITAL LEASE

    Some of the Company's operating companies have received debt financing
through direct loans from affiliated companies. In addition, certain operating
companies have borrowed funds under a $2.5 million back-to-back, seven-year
credit facility from a Western-owned bank licensed to operate in Russia. Under
this facility, the Company provides full cash collateral, held in London and
recorded on our balance sheet as restricted cash, for onshore loans made by the
bank to the Company's Russian registered joint ventures. Previously, this was a
$22.7 million facility, which in part related to the Company's former Russian
mobile properties involved in the MCT transaction. In a second, similar
facility, the Company provides full cash collateral for a $10.0 million short
term back-to-back, revolving, credit facility from the same bank for two of the
Company's larger Russian operating companies. These two facilities replaced the
previous $30.0 million back to back facility that expired on September 30, 2000.

    In the first quarter of 2000, the Company entered into a lease for fiber
capacity, including facilities and maintenance, from Moscow to Stockholm. The
lease has a term of ten years with an option to renew for an additional five
years. Prepayments were made to the lessor in April 2000, August 2000 and
February 2001. These prepayments have been offset in the balance sheet against
the capital lease obligation.

    The sale by GTS of approximately 12.2 million, or approximately 50%, of the
Company's common stock triggered an acceleration of $5.9 million, including
accrued interest, of our long-term debt under change of control provisions in
promissory notes. As part of the transaction, an additional $6.3 million of
pre-existing long-term debt due from GTI to GTS is now payable on May 11, 2002.
For other third party debt agreements, held at the subsidiary level, the lenders
have agreed that this transaction will not affect the terms of those agreements.

9. SUPPLEMENTAL CASH FLOW INFORMATION

    The following table summarizes significant non-cash investing and financing
activities for the Company.

<Table>
<Caption>
                                                                 SIX MONTHS ENDED
                                                                       JUNE,
                                                               --------------------
                                                                  2000       2001
                                                               ---------   --------
                                                                  (IN THOUSANDS)
<S>                                                            <C>         <C>
               Issuance of common stock to affiliate of ING    $     360   $     --
                 Barings.....................................
               Business acquisitions.........................        580         --
               Consulting fee to Alfa........................         --        870
</Table>


10. SUBSEQUENT EVENTS

     In July 2001, the Company completed a buy-back of $25.0 million, or
approximately 2.3 million shares, of the Company's common stock at $11.00 per
share, from a subsidiary of GTS. After this sale, GTS continues to own
approximately 0.6 million shares, or approximately 2.6 percent, of GTI's common
stock. To effect the buy-back, GTI acted as designated purchaser and exercised
the options held by Alfa, Capital, and Baring Vostok to acquire GTI common stock
for $11.00 per share from GTS. Alfa, Capital, and Baring Vostok acquired these
options in conjunction with their acquisition of $125.0 million in GTI shares
from GTS in May 2001.


                                       11
<PAGE>   12


ITEM 1(b).   CONDENSED FINANCIAL STATEMENTS OF EDN SOVINTEL LLC.

                                EDN SOVINTEL LLC

                            CONDENSED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                              DECEMBER 31,      JUNE 30,
                                                                 2000             2001
                                                              ------------     ----------
<S>                                                           <C>              <C>
                                                                (AUDITED)      (UNAUDITED)
                          ASSETS
CURRENT ASSETS
  Cash ..................................................     $      4,013     $   13,996
  Accounts receivable, net of allowance for doubtful
    accounts of $4,981 and $5,051, respectively .........           13,138         15,413
  Due from affiliated companies .........................              524            986
  Due from employees ....................................              578            514
  Inventories ...........................................            3,592          5,083
  VAT receivable, net ...................................            2,325            301
  Prepaid expenses and other current assets .............            1,763          3,688
                                                              ------------     ----------

TOTAL CURRENT ASSETS ....................................           25,933         39,981

Property and equipment, net .............................           51,340         53,829
Deferred expenses .......................................              540             --
Other noncurrent assets .................................            1,615          1,962
                                                              ------------     ----------

TOTAL ASSETS ............................................     $     79,428     $   95,772
                                                              ============     ==========

                LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
  Trade payables ........................................     $      6,922     $    9,207
  Accrued expenses ......................................            2,192          5,580
  Due to affiliated companies ...........................            2,117          7,457
  Amount due to partner in commercial arrangement .......              659             --
  Deferred income taxes .................................              686          1,921
                                                              ------------     ----------

TOTAL CURRENT LIABILITIES ...............................           12,576         24,165

  Other noncurrent liabilities ..........................            1,615          1,962
                                                              ------------     ----------

TOTAL LIABILITIES .......................................           14,191         26,127

MEMBERS' EQUITY .........................................           65,237         69,645
                                                              ------------     ----------

TOTAL LIABILITIES AND MEMBERS' EQUITY ...................     $     79,428     $   95,772
                                                              ============     ==========
</Table>


                  See notes to condensed financial statements.


                                       12
<PAGE>   13


                                EDN SOVINTEL LLC

               CONDENSED STATEMENTS OF INCOME AND MEMBERS' EQUITY
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<Table>
<Caption>
                                                   THREE MONTHS ENDED               SIX MONTHS ENDED
                                                        JUNE 30,                        JUNE 30,
                                               --------------------------      --------------------------
                                                  2000            2001            2000            2001
                                               ----------      ----------      ----------      ----------
<S>                                            <C>             <C>             <C>             <C>
REVENUE:
  Telecommunication services .............     $   21,719      $   26,698      $   42,815      $   50,199
  Revenue from affiliates ................          1,341           1,705           2,471           3,556
                                               ----------      ----------      ----------      ----------

TOTAL REVENUE ............................         23,060          28,403          45,286          53,755

OPERATING COSTS AND EXPENSES:
  Service costs ..........................         12,295          15,506          24,016          30,291
  Selling, general and administrative ....          4,161           3,544           8,242           6,812
  Depreciation and amortization ..........          2,044           2,145           4,058           4,794
                                               ----------      ----------      ----------      ----------

TOTAL OPERATING COSTS AND EXPENSES .......         18,500          21,195          36,316          41,897
                                               ----------      ----------      ----------      ----------

INCOME FROM OPERATIONS ...................          4,560           7,208           8,970          11,858

OTHER INCOME (EXPENSE):
  Interest income ........................             25              64              59             118
  Interest expense .......................            (62)             (5)           (152)             (9)
  Foreign currency (losses) gains ........           (119)           (290)           (276)           (117)
                                               ----------      ----------      ----------      ----------

TOTAL OTHER INCOME (EXPENSE) .............           (156)           (231)           (369)             (8)
                                               ----------      ----------      ----------      ----------

Income before income taxes ...............          4,404           6,977           8,601          11,850
Income taxes .............................          2,065           2,200           4,161           3,442
                                               ----------      ----------      ----------      ----------

NET INCOME ...............................     $    2,339      $    4,777      $    4,440      $    8,408
                                               ==========      ==========      ==========      ==========

Dividends ................................     $   (2,001)     $   (4,000)     $   (2,001)     $   (4,000)
Members' equity, opening balance .........         59,166          68,868          57,065          65,237
                                               ----------      ----------      ----------      ----------

Members' equity, closing balance .........     $   59,504      $   69,645      $   59,504      $   69,645
                                               ==========      ==========      ==========      ==========
</Table>


                  See notes to condensed financial statements.


                                       13
<PAGE>   14


                                EDN SOVINTEL LLC

                       CONDENSED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


<Table>
<Caption>
                                                             SIX MONTHS ENDED JUNE 30,
                                                            --------------------------
                                                               2000            2001
                                                            ----------      ----------
<S>                                                         <C>             <C>
OPERATING ACTIVITIES
Net income ............................................     $    4,440      $    8,408
Adjustments  to reconcile net income to net cash
  provided by
  operating activities:
  Depreciation and amortization .......................          4,058           4,794
  Provision for doubtful accounts .....................            848             624
  Deferred income taxes ...............................             --           1,235
  Foreign exchange (gain) loss ........................            276             117
Changes in operating assets and liabilities:
  Accounts receivable .................................           (312)         (3,246)
  Inventories .........................................            (16)         (1,181)
  VAT receivable, net .................................            380           2,091
  Prepaid expenses and other assets ...................            535          (1,972)
  Trade payables ......................................         (2,326)          1,354
  Taxes accrued or  payables ..........................            594              --
  Accrued liabilities and other payables ..............           (275)          3,201
  Increase (Decrease) in amounts due to affiliated
    companies, net ....................................            140           1,431
                                                            ----------      ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES .............          8,342          16,856

INVESTING ACTIVITIES Purchases of property and
 Equipment ............................................         (4,251)         (6,778)
                                                            ----------      ----------

FINANCING ACTIVITIES Repayments of debt ...............         (3,187)             --
                                                            ----------      ----------

Effect of exchange rate changes on cash ...............           (138)            (95)
                                                            ----------      ----------
Net increase in cash ..................................            766           9,983
Cash at beginning of period ...........................          2,644           4,013
                                                            ----------      ----------

CASH AT END OF PERIOD .................................     $    3,410      $   13,996
                                                            ==========      ==========
</Table>

                  See notes to condensed financial statements.


                                       14
<PAGE>   15


                                EDN SOVINTEL LLC

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. FINANCIAL PRESENTATION AND DISCLOSURES

    EDN Sovintel LLC (the "Company") is a joint venture between Sovinet, which
is a wholly owned subsidiary of Golden Telecom, Inc. ("GTI") and Open Joint
Stock Company "Rostelecom". EDN Sovintel was created in 1990 to design,
construct, and operate a telecommunications network in Moscow and later expanded
its operations to other regions of Russia, including St. Petersburg, Pskov and
Kaliningrad. This network provides worldwide communications services,
principally to major hotels, business offices and mobile communication
companies.

    The financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles in the
United States of America ("US GAAP") for interim financial reporting and
Securities and Exchange Commission ("SEC") regulations. Certain information and
footnote disclosures normally included in complete financial statements prepared
in accordance with US GAAP and SEC rules and regulations have been condensed or
omitted pursuant to such US GAAP and SEC rules and regulations. In the opinion
of management, the financial statements reflect all adjustments of a normal and
recurring nature necessary to present fairly the Company's financial position,
results of operations and cash flows for the interim periods. These financial
statements should be read in conjunction with the Company's 2000 audited
financial statements and the notes related thereto. The results of operations
for the three and six months ended June 30, 2001 may not be indicative of the
operating results for the full year.

2. POLICIES AND PROCEDURES

     For the three and six months ended June 30, 2000 and 2001, comprehensive
income for the Company is equal to net income.

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement on Financial Accounting Standard ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which was amended in June 1999.
The Company adopted the new statement effective January 1, 2001. The statement
requires the Company to recognize all derivatives on the balance sheet at fair
value. The adoption of this new statement did not have a significant effect on
the Company's results of operations or financial position.

     In July 2001, the FASB issued SFAS's No. 141, "Business Combinations", and
No. 142, "Goodwill and Other Intangible Assets", effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests in accordance with the Statements. Other
intangible assets will continue to be amortized over their useful lives. The
Company will apply the new rules on accounting for goodwill and other intangible
assets beginning in the first quarter of 2002. The Company does not anticipate
that the adoption of the new statements will have an effect on the Company's
results of operations or financial position.

3. CONTINGENCIES

Tax Matters

    The Company's policy is to accrue for contingencies in the accounting period
in which a liability is deemed probable and the amount is reasonably
determinable. In this regard, because of the uncertainties associated with
Russian taxation, including income tax and value added tax, the Company's final
Russian taxes may be in excess of the estimated amount expensed to date and
accrued at June 30, 2001. It is the opinion of management that the ultimate
resolution of the Company's Russian tax liability, to the extent not previously
provided for, will not have a material effect on the financial condition of the
Company. However, depending on the amount and timing of an unfavorable
resolution of any contingencies associated with Russian taxes, it is possible
that the Company's future results of operations or cash flows could be
materially affected in a particular period.


                                       15
<PAGE>   16


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    The following discussion and analysis relates to our financial condition and
results of operations of the Company for the three and six month periods ended
June 30, 2001 and June 30, 2000. This information should be read in conjunction
with the Company's Condensed, Consolidated Financial Statements and the notes
related thereto appearing elsewhere in the document.

OVERVIEW

    We are a leading facilities-based provider of integrated telecommunications
and Internet services in major population centers throughout Russia, Ukraine and
other countries of the Commonwealth of Independent States ("CIS"). We organize
our operations into four business groups, as follows:

o    Competitive Local Exchange Carrier ("CLEC") Services, using local access
     overlay networks in Moscow, Kiev and St. Petersburg;

o    Data and Internet Services, using a fiber optic and satellite-based
     networks with more than 135 points of presence in Russia and the CIS. Our
     data and Internet services product portfolio is currently comprised of: (a)
     Business to Business services, such as data communications, dedicated
     Internet access, web design, web-hosting, co-location and data-warehousing:
     and (b) Business to Consumer services, such as dial-up Internet access, web
     content and a family of Internet portals; and

o    Long Distance Services using a fiber optic and satellite-based network;

o    Mobile Services using mobile networks in Kiev and Odessa, Ukraine.

    Additionally, we hold a minority interest in MCT Corp. ("MCT"), which in
turn has ownership interests in mobile operations located throughout Russia and
in Uzbekistan and Tajikistan. We treat our ownership interest in MCT as an
investment and are not actively involved in the day-to-day management of the
operations.

    Most of our revenue is derived from high-volume business customers and
carriers. Our business customers include large multinational companies, local
enterprises, financial institutions, hotels and government agencies. We believe
that the carriers, including mobile operators, which contribute a substantial
portion of our revenues, in turn derive a portion of their business from
high-volume business customers. Thus, we believe that the majority of our
ultimate end-users are businesses that require access to highly reliable and
advanced telecommunications facilities to sustain their operations.

    We have traditionally competed for customers on the basis of network
quality, customer service and range of service offered. In the past several
years, other telecommunications operators have also introduced high-quality
services to the segments of the business market in which we operate. Competition
with these operators is intense, resulting in declining prices, which adversely
affect our revenues. In addition, some of our competitors do not link their
prices to the dollar/ruble exchange rate, so when the ruble devalues, their
prices effectively become relatively cheaper than our prices. In order to
compete with these carriers in the regions outside Moscow and St. Petersburg, we
were forced to lower our tariffs, which resulted in reduced revenues and reduced
margins. Since the ruble exchange rate with the dollar has become relatively
stable since early 2000 and thus far in 2001, despite increasing inflation,
price pressures associated with devaluation have eased considerably. We cannot
be certain that the exchange rate will remain stable in the future.

    Since early 2000, we appear to have witnessed a recovery in the Russian
market, but with downward pricing pressures persisting. The downward pricing
pressures result from increased competition in Russia and the global trend
toward lower telecommunications tariffs. In early 2000, the increases in traffic
volume did not keep pace with the reduction in prices. However, in recent months
our volume increases are beginning to exceed the reduction in tariffs on certain
types of voice traffic. This is a contributory factor to the increases in our
quarterly revenue during 2000 and 2001. We expect that this trend of year over
year increases will continue as long as there are improvements in the Russian
economy.

    Although we expect competition to continue to force the general level of
tariffs downward, we expect to mitigate partially the effects of this pressure
by seeking, where possible, further reductions in the settlement and
interconnection rates that we pay to other telecommunications operators. In
general, we expect settlement and interconnection rates to continue to decline
in line with tariffs.


                                       16
<PAGE>   17


    We have expanded and will continue to expand our fiber optic capacity along
our heavy traffic and high cost routes to reduce our unit transmission costs and
ensure sufficient capacity to meet the growing demand for Internet and data
services. As part of this strategy, during 2000, we acquired the rights to use
up to STM-16 fiber optic capacity on the Moscow to Stockholm route,
significantly reducing our unit cost per E-1 fiber optic link on this route.

    Our mobile operations in Ukraine continue to be under strong competitive
pressure and we foresee that average revenue per subscriber will continue to
decline. In Kiev, Ukraine we are also experiencing issues relating to obtaining
further numbering capacity for our business services operations. In this regard,
we are currently negotiating with Ukrtelecom, the state-owned operator for
further numbering capacity. Our ability to grow our business services operations
in Kiev will be limited if we do not have access to further numbering capacity.

    In addition to the traditional voice and data service provision, we are
actively pursuing a strategy of developing non-traditional telecom service
offerings including those related to the Internet, such as web hosting, web
design, and vertical and horizontal Internet portal development. To this end, we
acquired InfoArt Stars and the Agama family of Web properties to add to our
Russia-On-Line Internet portal, which also incorporates some of our other
acquisitions in the year ended December 31, 2000, referat.ru, Absolute Games and
Fintek. We have seen a significant increase in our dial-up Internet subscriber
numbers and we expect the increase to continue, albeit with an increasing
emphasis on regional subscribers, as additional dialup capacity in Moscow has
not been readily available. On June 1, 2001 we completed the purchase of a
leading Russian Internet Service Provider ("ISP"), Cityline, together with ISP
Uralrelcom and infrastructure company PTK, and together, these entities allow us
to increase our regional dial-up Internet presence and increase our access to
dial up capacity in Moscow.

RECENT ACQUISITIONS

    In June 2001, we completed the purchase of 100% of leading ISP, Cityline,
 together with 51% of Ekaterinburg-based, ISP Uralrelcom, and 100% of
 infrastructure company PTK. Cityline operates primarily in Moscow, but also
 operates in other major Russian cities, including Saint Petersburg, Nizhny
 Novgorod, Tyumen and Kaliningrad. Together these acquisitions allow us to
 increase our regional dial-up Internet presence and increase our access to dial
 up capacity in Moscow.

SHARES AND OWNERSHIP

    In March 2001, 141,961 restricted shares of common stock, par value $0.01,
were issued to senior management and employees to be held in escrow by us. The
restricted shares were issued in accordance with restricted stock agreements
dated October 1, 1999 concluded as part of our Initial Public Offering ("IPO")
and will be held in escrow by us until such restriction lapse on October 1,
2001.

    When the 1999 Golden Telecom, Inc. ("GTI") Equity Participation Plan (the
"Equity Plan") was adopted, the number of shares available for issuance under
the Equity Plan was calculated as 15% of the issued and outstanding shares on a
fully diluted basis. Since the adoption of the Equity Plan, the Company has
issued an additional 1,679,872 shares of common stock in connection with fund
raising activities and acquisitions. In March 2001, the Compensation Committee
of the Board of Directors approved an increase in shares available for issuance
under the Equity Plan from 4,023,551 to 4,320,000 in order to preserve the 15%
ratio referenced above. The decision of the Compensation Committee of the Board
of Directors was ratified by GTI shareholders on June 26, 2001.

    In March 2001, in connection with the finalization of the MCT transaction,
the Compensation Committee of the Board of Directors adopted a resolution
providing that the Stock Option Award Agreements executed by us and certain
terminated employees shall be amended to provide that the term of the options
held by the employees that transferred from GTI to MCT shall be extended from
ninety days after the employees termination date to one year after the
termination date of the employees or until their termination date with MCT,
whichever occurs earlier.

    In April 2001, in accordance with the Equity Plan, the Compensation
Committee of the Board of Directors adopted a resolution providing generally
that the Stock Option Award Agreements executed by us to employees shall be
amended to provide that the term of the options held by the employees shall be
extended from ninety days after the employees termination date to eighteen
months after the termination date.

    In May 2001, Global TeleSystems, Inc. ("GTS") our former majority owner
completed the sale of approximately 12.2 million shares of our common stock to a
group of investors led by Alfa Group, a leading Russia-based financial and
industrial concern


                                       17
<PAGE>   18


("Alfa"), and two of our then existing shareholders, Capital International
Global Emerging Markets Private Equity Fund L.P. ("Capital") and investment
funds managed by Barings Vostok Capital Partners ("Baring Vostok"). Upon
closure, affiliates of Alfa acquired approximately 10.7 million, or about 43.6%,
shares of our common stock, Baring Vostok increased its ownership position in
the company to approximately 1.9 million, or about 7.6% shares of our common
stock, and Capital increased its ownership position in the company to 2.2
million, or about 8.8%, of our common stock. Upon closure, these purchasers also
acquired options from GTS under which they could, under certain circumstances
and subject to the terms and conditions of a Standstill Agreement executed by
the purchasers, GTS and us on April 2, 2001, acquire GTS' remaining shareholding
in the Company, consisting of approximately 2.9 million, or 11.6%, shares of
GTI's common stock. In July 2001, under the Standstill Agreement, the Company
completed the buy-back of $25.0 million, or approximately 2.3 million shares of
GTI common stock. To effect the buy-back, we acted as designated purchaser and
exercised the options held by Alfa, Capital, and Baring Vostok to acquire our
common stock for $11.00 per share from GTS. Alfa, Capital, and Baring Vostok
acquired these options in conjunction with their acquisition of $125 million in
our common shares from GTS in May 2001

     In July 2001, the Financial Accounting Standards Board issued Statements on
Financial Accounting Standards No. 141, "Business Combinations", and No. 142,
"Goodwill and Other Intangible Assets", effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized but will be subject
to annual impairment tests in accordance with the Statements. Other intangible
assets will continue to be amortized over their useful lives.

     We will apply the new rules on accounting for goodwill and other intangible
assets beginning in the first quarter of 2002. We have not yet completed the
evaluation of the impact of these new accounting standards. Application of the
nonamortization provisions of the Statement is expected to result in an
improvement our results of operations. During 2002, we will perform the first of
the required impairment tests of goodwill and indefinite lived intangible assets
as of January 1, 2002 and we have not yet determined what the effect of these
tests will be on our earnings and financial position.


RESULTS OF OPERATIONS

    GTI was formed in June 1999 to be the holding company for all of GTS's
 businesses in the Commonwealth of Independent States and supporting operations.
 The results of our four business groups from the operations of both our
 consolidated entities combined with the non-consolidated entities where we are
 actively involved in the day-to-day management, are shown in footnote 6
 "Segment Information - Line of Business Data" to our consolidated financial
 statements.

    In addition, we have included a discussion of EDN Sovintel LLC, our primary
non-consolidated operation, which entity is material to our business. We believe
that this discussion is helpful to develop an understanding of the factors
contributing to our overall financial condition and results of operations.

    The discussion of our results of operations is organized as follows:

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

    o    Consolidated Results. Results of Operations for the Three Months Ended
         June 30, 2001 compared to the Results of Operations for the Three
         Months Ended June 30, 2000

    o    Non-Consolidated Results. Results of Non-Consolidated Operations of EDN
         Sovintel LLC for the Three Months Ended June 30, 2001 compared to the
         Results of Non-Consolidated Operations of EDN Sovintel LLC for the
         Three Months Ended June 30, 2000


SIX MONTHS JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

    o    Consolidated Results. Results of Operations for the Six Months Ended
         June 30, 2001 compared to the Results of Operations for the Six Months
         Ended June 30, 2000


                                       18
<PAGE>   19


    o    Non-Consolidated Results. Results of Non-Consolidated Operations of EDN
         Sovintel LLC for the Six Months Ended June 30, 2001 compared to the
         Results of Non-Consolidated Operations of EDN Sovintel LLC for the Six
         Months Ended June 30, 2000


CONSOLIDATED RESULTS-- CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2001 COMPARED TO THE CONSOLIDATED RESULTS OF OPERATIONS FOR THE
THREE MONTHS ENDED JUNE 30, 2000


REVENUE

    Our revenue increased by 26% to $33.9 million for the three months ended
June 30, 2001 from $26.9 million for the three months ended June 30, 2000. The
breakdown of revenue by business group was as follows:



<Table>
<Caption>
                                             CONSOLIDATED REVENUE      CONSOLIDATED REVENUE
                                             FOR THE THREE MONTHS      FOR THE THREE MONTHS
                                              ENDED JUNE 30, 2000      ENDED JUNE 30, 2001
                                             --------------------      --------------------
                                                              (IN MILLIONS)
<S>                                          <C>                       <C>

           REVENUE
             CLEC services...............           $  9.9                   $ 11.3
             Data and Internet services..              9.6                     15.4
             Long distance services......              3.5                      5.2
             Mobile services.............              4.4                      3.7
             Eliminations................             (0.5)                    (1.7)
                                                    ------                   ------
           TOTAL REVENUE.................           $ 26.9                   $ 33.9
</Table>

    CLEC Services. Revenue from CLEC Services increased by 14% to $11.3 million
for the three months ended June 30, 2001 from $9.9 million for the three months
ended June 30, 2000.

    The CLEC Services division of TeleRoss revenue increased by 19% to $7.0
million for the three months ended June 30, 2001 from $5.9 million for the three
months ended June 30, 2000. This increase is mainly due to increases in monthly
recurring revenue resulting from an increase in numbering capacity in active
service.

    The CLEC Services division of Golden Telecom BTS revenue increased by 8% to
$4.3 million for the three months ended June 30, 2001 from $4.0 million for the
three months ended June 30, 2000. The increase in revenue was in part due to an
increase in outgoing traffic.

    Data and Internet Services. Revenue from Data and Internet Services
increased by 60% to $15.4 million for the three months ended June 30, 2001 from
$9.6 million for the three months ended June 30, 2000. The increase is largely
the result of increases in Internet revenue from both dial-up and dedicated
Internet subscribers, increases in private line channel revenue, increases in
Internet traffic and other Internet related revenues. Dial-up Internet revenues
increased by $0.5 million as a result of our recent acquisitions of Cityline and
Uralrelcom.

    Long Distance Services. Revenue from Long Distance Services increased by 49%
to $5.2 million for the three months ended June 30, 2001 from $3.5 million for
the three months ended June 30, 2000. Recurring fees, traffic and equipment
sales revenues increased due to an expanding end-user customer base in Moscow.

    Mobile Services. Revenue from Mobile Services decreased by 16% to $3.7
million for the three months ended June 30, 2001 from $4.4 million for the three
months ended June 30, 2000. Despite an increase of approximately 26% in the
number of active subscribers at Golden Telecom GSM, pricing competition has
reduced average revenue per active subscriber by 38% to approximately $30 per
month. Additionally $0.2 million of the decrease was attributable to Vostok
Mobile Novgorod no longer being consolidated as a result of the MCT transaction.


                                       19
<PAGE>   20


EXPENSES

    The following table shows our principal expenses for the three months ended
June 30, 2001 and June 30, 2000:

<Table>
<Caption>
                                             CONSOLIDATED EXPENSES    CONSOLIDATED EXPENSES
                                             FOR THE THREE MONTHS     FOR THE THREE MONTHS
                                              ENDED JUNE 30, 2000      ENDED JUNE 30, 2001
                                             ---------------------    ---------------------
                                                              (IN MILLIONS)
<S>                                          <C>                      <C>
           COST OF REVENUE
             CLEC services................           $  3.5                   $  4.5
             Data and Internet services...              5.1                      8.8
             Long distance services.......              2.7                      3.5
             Mobile services..............              1.0                      0.9
             Eliminations.................             (0.5)                    (1.7)
                                                     ------                   ------
           TOTAL COST OF REVENUE..........             11.8                     16.0
           Selling, general and
             administrative...............             10.7                     12.8
           Depreciation and amortization..              7.7                     10.4
           Equity in losses (earnings)
             of ventures..................              0.2                     (2.2)
           Interest income................             (2.6)                    (1.0)
           Interest expense...............              0.7                      0.7
           Foreign currency loss..........               --                       --
           Provision for income taxes.....           $  0.1                   $  0.8
</Table>

Cost of Revenue

    Our cost of revenue increased by 36% to $16.0 million for the three months
ended June 30, 2001 from $11.8 million for the three months ended June 30, 2000.

    CLEC Services. Cost of revenue from CLEC Services increased by 29% to $4.5
million, or 40% of revenue, for the three months ended June 30, 2001 from $3.5
million, or 35% of revenue, for the three months ended June 30, 2000.

    The CLEC Services division of TeleRoss' cost of revenue increased by 24% to
$2.1 million, or 30% of revenue, for the three months ended June 30, 2001 from
$1.7 million, or 29% of revenue, for the three months ended June 30, 2000. The
increase as a percentage of revenue resulted from settlements to other operators
not decreasing in line with the pricing concessions to customers.

    The CLEC Services division of Golden Telecom BTS cost of revenue increased
by 33% to $2.4 million, or 56% of revenue, for the three months ended June 30,
2001 and was $1.8 million, or 45% of revenue, for the three months ended June
30, 2000. Cost of revenue increased as a percentage of revenue due to the
increase in lower margin carriers' carrier traffic.

    Data and Internet Services. Cost of revenue from Data and Internet Services
increased by 73% to $8.8 million, or 57% of revenue, for the three months ended
June 30, 2001 from $5.1 million, or 53% of revenue, for the three months ended
June 30, 2000. The increase as a percentage of revenue was mainly due to the
increase of lower margin dial up Internet revenue as a percentage of the mix of
revenue.

    Long Distance Services. Cost of revenue from Long Distance Services
increased by 30% to $3.5 million, or 67% of revenue, for the three months ended
June 30, 2001 from $2.7 million, or 77% of revenue, for the three months ended
June 30, 2000. The improvement in cost of revenue as a percentage of revenue is
partly due to an increase in end-users in the long distance traffic mix.

    Mobile Services. Cost of revenue from Mobile Services decreased by 10% to
$0.9 million, or 24% of revenue, for the three months ended June 30, 2001 from
$1.0 million, or 23% of revenue, for the three months ended June 30, 2000. The
cost of revenue was maintained at the same level as a percentage of revenue
despite increased competition.

Selling, General and Administrative

    Our selling, general and administrative expenses increased by 20% to $12.8
million, or 38% of revenue, for the three months ended June 30, 2001 from $10.7
million, or 40% of revenue, for the three months ended June 30, 2000. There were
increases in employee related costs and advertising largely due to acquisitions
and our Internet related strategy. These were partly offset by reductions in
revenue related taxes and other costs.


                                       20
<PAGE>   21


Depreciation and Amortization

    Our depreciation and amortization expenses increased by 35% to $10.4 million
for the three months ended June 30, 2001 from $7.7 million for the three months
ended June 30, 2000. This increase is due to the continuing capital expenditures
of the consolidated entities and increased goodwill and intangible asset
amortization due to acquisitions.

Equity in Earnings/Losses of Ventures

    The earnings after interest and tax charges from our investments in
non-consolidated ventures were $2.2 million for the three months ended June 30,
2001 up from losses of $0.2 million for the three months ended June 30, 2000. We
recognized earnings at Sovintel of $2.4 million for the three months ended June
30, 2001, which more than offset our recognized losses in MCT. In the three
months ended June 30, 2000, our recognized earnings at Sovintel were $1.2
million which were more than offset by our recognized losses of $1.6 million
from our Russian mobile ventures.

Interest Income

    Our interest income was $1.0 million for the three months ended June 30,
2001 down from $2.6 million for the three months ended June 30, 2000. The
decrease in interest income mainly reflects the reduced balance of cash, cash
equivalents and investments available for sale following the use of part of the
proceeds from our IPO for acquisitions and capital expenditure.

Interest Expense

    Our interest expense was $0.7 million for the three months ended June 30,
2001 compared to $0.7 million for the three months ended June 30, 2000.

Foreign Currency Loss

    Our foreign currency loss was a negligible amount for the three months ended
June 30, 2001, compared to a negligible amount for the three months ended June
30, 2000.

Provision for Income Taxes

    Our charge for income taxes was $0.8 million for the three months ended June
30, 2001 compared to $0.1 million for three months ended June 30, 2000. The
increase was due to increasing levels of income taxes being incurred in Russia
and Ukraine.

Net Loss and Net Loss per Share

    Our net loss for the three months ended June 30, 2001 was $3.5 million,
compared to $1.9 million for the three months ended June 30, 2000.

    Our net loss per share of common stock increased to $0.14 for the three
months ended June 30, 2001, compared to $0.08 in the three months ended June 30,
2000. The increase in net loss per share of common stock was due to the increase
in net loss, partially offset by an increase in the number of weighted average
shares to 24,621,958 at June 30, 2001, compared to 24,080,125 at June 30, 2000.


NON-CONSOLIDATED RESULTS -- NON-CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE
MONTHS ENDED JUNE 30, 2001 COMPARED TO THE NON-CONSOLIDATED RESULTS OF
OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2000

    This section is comprised of a limited discussion of the results of
operations of our principal non-consolidated entity, Sovintel, in which we own a
50% interest.


                                       21
<PAGE>   22


SOVINTEL

Revenue

    Sovintel's revenue increased by 23% to $28.4 million for the three months
ended June 30, 2001 from $23.1 million, for the three months ended June 30,
2000. Increases in traffic volumes, particularly incoming traffic, more than
offset reductions in tariffs. Also increases in recurring fees, equipment sales
and other service offerings contributed to the increase in revenue.

Cost of Revenue

    Sovintel's cost of revenue increased by 26% to $15.5 million for the three
months ended June 30, 2001 from $12.3 million for the three months ended June
30, 2000. The increase of cost of revenue to 55% of revenue from 53% of revenue
was primarily the result of increases in lower margin traffic in the revenue
mix.

Selling, General and Administrative

    Sovintel's selling, general and administrative expenses decreased by 17% to
$3.5 million, or 12% of revenue, for the three months ended June 30, 2001 from
$4.2 million, or 18% of revenue for the three months ended June 30, 2000. The
decrease was largely due to a reduction in the rate of revenue related taxes
incurred, offset by increases in employee related and other costs.


CONSOLIDATED RESULTS-- CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 2001 COMPARED TO THE CONSOLIDATED RESULTS OF OPERATIONS FOR THE
SIX MONTHS ENDED JUNE 30, 2000


REVENUE

    Our revenue increased by 29% to $66.2 million for the six months ended June
30, 2001 from $51.2 million for the six months ended June 30, 2000. The
breakdown of revenue by business group was as follows:



<Table>
<Caption>
                                             CONSOLIDATED REVENUE      CONSOLIDATED REVENUE
                                              FOR THE SIX MONTHS        FOR THE SIX MONTHS
                                              ENDED JUNE 30, 2000      ENDED JUNE 30, 2001
                                             --------------------      --------------------
                                                              (IN MILLIONS)
<S>                                          <C>                       <C>
           REVENUE
             CLEC services..............            $ 19.4                   $ 22.1
             Data and Internet services.              17.7                     29.9
             Long distance services.....               6.3                     10.0
             Mobile services............               8.6                      7.2
             Eliminations...............              (0.8)                    (3.0)
                                                    ------                   ------
           TOTAL REVENUE................            $ 51.2                   $ 66.2
</Table>

    CLEC Services. Revenue from CLEC Services increased by 14% to $22.1 million
for the six months ended June 30, 2001 from $19.4 million for the six months
ended June 30, 2000.

    The CLEC Services division of TeleRoss revenue increased by 12% to $13.6
million for the six months ended June 30, 2001 from $12.1 million for the six
months ended June 30, 2000. This is mainly due to increases in monthly recurring
revenue due to an increase in numbering capacity in active service.

    The CLEC Services division of Golden Telecom BTS revenue increased by 16% to
$8.5 million for the six months ended June 30, 2001 from $7.3 million for the
six months ended June 30, 2000. The increase in revenue was mainly due to an
increase in termination of incoming traffic from other carriers.

    Data and Internet Services. Revenue from Data and Internet Services
increased by 69% to $29.9 million for the six months ended June 30, 2001 from
$17.7 million for the six months ended June 30, 2000. The increase is largely
the result of increases in Internet revenue from both dial-up and dedicated
Internet subscribers, increases in private line channel revenue, increases in
Internet traffic and other Internet related revenues. Dial-up Internet revenues
increased by $0.5 million as a result of our recent acquisitions of Cityline
and Uralrelcom.



                                       22
<PAGE>   23

    Long Distance Services. Revenue from Long Distance Services increased by 59%
to $10.0 million for the six months ended June 30, 2001 from $6.3 million for
the six months ended June 30, 2000. Recurring fees, traffic and equipment
revenues increased due to an expanding end-user customer base in Moscow.

    Mobile Services. Revenue from Mobile Services decreased by 16% to $7.2
million for the six months ended June 30, 2001 from $8.6 million for the six
months ended June 30, 2000. Despite an increase of approximately 26% in the
number of active subscribers at Golden Telecom GSM, pricing competition has
reduced average revenue per active subscriber by 38% to approximately $30 per
month. Additionally $0.4 million of the decrease was attributable to Vostok
Mobile Novgorod no longer being consolidated as a result of the MCT transaction.


EXPENSES

    The following table shows our principal expenses for the six months ended
June 30, 2001 and June 30, 2000:

<Table>
<Caption>
                                             CONSOLIDATED EXPENSES    CONSOLIDATED EXPENSES
                                              FOR THE SIX MONTHS       FOR THE SIX MONTHS
                                              ENDED JUNE 30, 2000      ENDED JUNE 30, 2001
                                             ---------------------    ---------------------
                                                              (IN MILLIONS)
<S>                                          <C>                      <C>
           COST OF REVENUE
             CLEC services...............           $  6.6                   $  8.7
             Data and Internet services..              9.1                     15.6
             Long distance services......              5.1                      7.5
             Mobile services.............              2.1                      1.9
             Eliminations................             (0.8)                    (3.0)
                                                    ------                   ------
           TOTAL COST OF REVENUE.........             22.1                     30.7
           Selling, general and
             administrative..............             21.0                     25.5
           Depreciation and amortization              14.9                     20.1
           Equity in losses (earnings)
             of ventures.................              1.1                     (2.7)
           Interest income...............             (4.9)                    (2.5)
           Interest expense..............              1.4                      1.3
           Foreign currency loss.........              0.4                      0.3
           Other non-operating expense...              0.1                       --
           Provision for income taxes....           $  0.1                   $  1.0
</Table>

Cost of Revenue

    Our cost of revenue increased by 39% to $30.7 million for the six months
ended June 30, 2001 from $22.1 million for the six months ended June 30, 2000.

    CLEC Services. Cost of revenue from CLEC Services increased by 32% to $8.7
million, or 39% of revenue, for the six months ended June 30, 2001 from $6.6
million, or 34% of revenue, for the six months ended June 30, 2000.

    The CLEC Services division of TeleRoss' cost of revenue increased by 27% to
$4.2 million, or 31% of revenue, for the six months ended June 30, 2001 from
$3.3 million, or 27% of revenue, for the six months ended June 30, 2000. The
increase as a percentage of revenue resulted from settlements to other operators
not decreasing in line with the pricing concessions to customers.

    The CLEC Services division of Golden Telecom BTS cost of revenue increased
by 36% to $4.5 million, or 53% of revenue, for the six months ended June 30,
2001 and was $3.3 million, or 45% of revenue, for the six months ended June 30,
2000. Cost of revenue increased as a percentage of revenue due to the increase
in lower margin carriers' carrier traffic.

    Data and Internet Services. Cost of revenue from Data and Internet Services
increased by 71% to $15.6 million, or 52% of revenue, for the six months ended
June 30, 2001 from $9.1 million, or 51% of revenue, for the six months ended
June 30, 2000. The slight increase as a percentage of revenue was mainly due to
the increase of lower margin dial up Internet revenue as a percentage of the mix
of revenue.


                                       23
<PAGE>   24


    Long Distance Services. Cost of revenue from Long Distance Services
increased by 47% to $7.5 million, or 75% of revenue, for the six months ended
June 30, 2001 from $5.1 million, or 81% of revenue, for the six months ended
June 30, 2000. The improvement in cost of revenue as a percentage of revenue is
partly due to an increase in end-users in the long distance traffic mix.

    Mobile Services. Cost of revenue from Mobile Services decreased by 10% to
$1.9 million, or 26% of revenue, for the six months ended June 30, 2001 from
$2.1 million, or 24% of revenue, for the six months ended June 30, 2000. The
cost of revenue increased as a percentage of revenue due to increased
competition, which has in turn led to lower traffic and equipment margins.

Selling, General and Administrative

    Our selling, general and administrative expenses increased by 21% to $25.5
million, or 39% of revenue, for the six months ended June 30, 2001 from $21.0
million, or 41% of revenue, for the six months ended June 30, 2000. There were
increases in employee related costs and advertising, largely due to acquisitions
and our Internet related strategy. Bad debt also increased but the increases
were partially offset by a reduction in revenue related taxes.

Depreciation and Amortization

    Our depreciation and amortization expenses increased by 35% to $20.1 million
for the six months ended June 30, 2001 from $14.9 million for the six months
ended June 30, 2000. This increase is due to the continuing capital expenditures
of the consolidated entities and increased goodwill and intangible asset
amortization due to acquisitions.

Equity in Earnings/Losses of Ventures

    The earnings after interest and tax charges from our investments in
non-consolidated ventures were $2.7 million for the six months ended June 30,
2001 up from losses of $1.1 million for the six months ended June 30, 2000. We
recognized earnings at Sovintel of $4.2 million for the six months ended June
30, 2001, which more than offset our recognized losses in MCT. In the six months
ended June 30, 2000, our recognized earnings at Sovintel were $2.2 million which
were more than offset by our recognized losses of $3.5 million from our Russian
mobile ventures.

Interest Income

    Our interest income was $2.5 million for the six months ended June 30, 2001
down from $4.9 million for the six months ended June 30, 2000. The decrease in
interest income mainly reflects the reduced balance of cash, cash equivalents
and investments available for sale following the use of part of the proceeds
from our IPO for acquisitions and capital expenditure.

Interest Expense

    Our interest expense was $1.3 million for the six months ended June 30, 2001
down slightly from $1.4 million for the six months ended June 30, 2000.

Foreign Currency Loss

    Our foreign currency loss was $0.3 million for the six months ended June 30,
2001, compared to a $0.4 million loss for the six months ended June 30, 2000.
This decreased loss in part reflects the reduced level of the devaluation of the
ruble for the three months ended June 30, 2001, as compared to the three months
ended June 30, 2000.

Other Non-operating Expense

    No other non-operating expense was recorded in the six months ended June 30,
2001. Our other non-operating expense was $0.1 million for the six months ended
June 30, 2000 due to losses on certain fixed assets disposals by our operating
companies.


                                       24
<PAGE>   25


Provision for Income Taxes

    Our charge for income taxes was $1.0 million for the six months ended June
30, 2001 compared to $0.1 million for the six months ended June 30, 2000. The
increase was due to increasing levels of income taxes being incurred in Russia
and Ukraine.

Net Loss and Net Loss per Share

    Our net loss for the six months ended June 30, 2001 was $7.4 million,
compared to $5.2 million for the six months ended June 30, 2000.

    Our net loss per share of common stock increased to $0.30 for the six months
ended June 30, 2001, compared to $0.22 in the six months ended June 30, 2000.
The increase in net loss per share of common stock was due to the increase in
net loss, partially offset by an increase in the number of weighted average
shares to 24,559,213 at June 30, 2001, compared to 24,070,070 at June 30, 2000.


NON-CONSOLIDATED RESULTS -- NON-CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 2001 COMPARED TO THE NON-CONSOLIDATED RESULTS OF
OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000

    This section is comprised of a limited discussion of the results of
operations of our principal non-consolidated entity, Sovintel, in which we own a
50% interest.


SOVINTEL

Revenue

    Sovintel's revenue increased by 19% to $53.8 million for the six months
ended June 30, 2001 from $45.3 million, for the six months ended June 30, 2000.
Increases in traffic volumes, particularly incoming traffic, more than offset
reductions in tariffs. Also increases in recurring fees, equipment sales and
other service offerings contributed to the increase in revenue.

Cost of Revenue

    Sovintel's cost of revenue increased by 26% to $30.3 million for the six
months ended June 30, 2001 from $24.0 million for the six months ended June 30,
2000. The increase of cost of revenue to 56% of revenue from 53% of revenue was
primarily the result of increases in lower margin traffic in the revenue mix.

Selling, General and Administrative

Sovintel's selling, general and administrative expenses decreased by 17% to $6.8
million, or 13% of revenue, for the six months ended June 30, 2001 from $8.2
million, or 18% of revenue for the six months ended June 30, 2000. The decrease
was largely due to a reduction in the rate of revenue related taxes incurred,
offset by increases in employee related and other costs.


LIQUIDITY AND CAPITAL RESOURCES

    On May 11, 2001, our former majority shareholder, GTS, completed the sale of
approximately 12.2 million, or approximately 50%, of our common stock. This
transaction triggered an acceleration of $5.9 million, including accrued
interest, of our long-term debt under change of control provisions in promissory
notes. As part of the transaction, an additional $6.3 million of pre-existing
long-term debt due from GTI to GTS is now payable on May 11, 2002. For other
third party debt agreements, held at the subsidiary level, the lenders have
agreed that this transaction will not affect the terms of those agreements.

    Our cash, cash equivalents and investments available for sale were $70.6
million and $112.2 million as of June 30, 2001 and December 31, 2000,
respectively. Of these amounts, our cash and cash equivalents were $70.6 million
and $57.9 million as of June 30, 2001 and December 31, 2000, respectively. In
the fourth quarter of 2000, we invested in money market instruments with an
original maturity greater than three months which are classified as investments
available for sale. At June 30, 2001 and December 31, 2000, investments
available for sale were none and $54.3 million, respectively.


                                       25
<PAGE>   26


    Our total restricted cash was $3.9 million and $2.5 million as of June 30,
2001 and December 31, 2000, respectively. The restricted cash is maintained in
connection with certain of our debt obligations as described below.

    During the six months ended June 30, 2001, we had net cash inflows of $10.6
million from our operating activities. During the six months ended June 30,
2000, we had net cash inflows of $10.4 million from our operating activities.
The slight increase in cash inflows was mainly due to an improvement in our
operating income, excluding depreciation and amortization. We had net cash
inflows of $3.1 million at June 30, 2001 and used $15.1 million at June 30, 2000
from our investing activities. During the first quarter of 2001, we liquidated
our total investment available for sale of $54.3 million. Cash used in investing
activities was principally attributable to building our telecommunications
networks and acquisitions.

    We had working capital of $49.2 million as of June 30, 2001 and $100.0
million as of December 31, 2000. At June 30, 2001, we had total debt of
approximately $19.1 million, of which $14.8 million were current maturities. At
December 31, 2000, we had total debt of approximately $19.0 million, of which
$3.3 million were current maturities. Total debt includes amounts that are fully
collateralized by restricted cash. At June 30, 2001 and December 31, 2000, $11.0
million of our long-term debt, including the current portion, was at fixed
rates.

    In the first quarter of 2000, we entered into a lease for fiber capacity,
including facilities and maintenance, from Moscow to Stockholm. The lease has an
initial term of ten years with an option to renew for an additional five years.
Full prepayments were made to the lessor in April and August 2000 and February
2001. These prepayments have been offset against the lease obligation in the
financial statements of the Company.

    Some of our operating companies have received debt financing through direct
loans from affiliated companies. In addition, certain operating companies have
borrowed funds under a $2.5 million back-to-back, seven-year credit facility
from a Western-owned bank licensed to operate in Russia. Under this facility, we
provide full cash collateral, held in London and recorded on our balance sheet
as restricted cash, for onshore loans made by the bank to our Russian registered
joint ventures. Previously, this was a $22.7 million facility which in part
related to our former Russian mobile properties involved in the MCT transaction.
In a second, similar facility, we provide full cash collateral for a $10.0
million short term back-to-back, revolving, credit facility from the same bank
for two of our larger Russian operating companies. These two facilities replaced
the previous $30.0 million back to back facility that expired on September 30,
2000. The funding level as of June 30, 2001 for both these facilities totaled
$3.2 million, of which $2.2 million was funded to our consolidated subsidiaries
and $1.0 was funded to our affiliates.

    In order for us to compete successfully, we will require substantial capital
to continue to develop our networks and meet the funding requirements of our
operations and ventures, including losses from operations. We will also require
significant additional capital for our acquisition and business development
initiatives. The net proceeds from our IPO and our private placement have been
and will continue to be applied to these funding requirements. We also expect to
fund these requirements through our cash flow from operations, proceeds from
additional equity and debt offerings that we may conduct, and debt financing
facilities.

    In the future, we may execute especially large or numerous acquisitions,
which may require us to raise additional funds through a dilutive equity
issuance, through additional borrowings with collaterization and through the
divestment of non-core assets. In the event that these especially large or
numerous acquisitions do not materialize, we expect our current sources of
funding, including the net proceeds from our IPO and private placement, to
finance our capital requirements for the next 12 months. The actual amount and
timing of our future capital requirements may differ materially from our current
estimates because of changes and fluctuations in our anticipated acquisitions,
investments, revenue, operating costs and network expansion plans and access to
alternative sources of financing on favorable terms. However, we may not be able
to obtain additional financing on favorable terms. As a result, we may be
subject to additional or more restrictive financial covenants, our interest
obligations may increase significantly and our shareholders may be adversely
diluted. Our failure to generate sufficient funds in the future, whether from
operations or by raising additional debt or equity capital, may require us to
delay or abandon some or all of our anticipated expenditures, to sell assets, or
both, which could have a material adverse effect on our operations.

    Although we have achieved positive cash flow from operations, we cannot
assure you that our operations will sustain positive operating cash flow or
achieve operating profitability in the future. If we cannot achieve and sustain
operating profitability or positive cash flow from operations, we may not be
able to meet our debt service obligations or working capital requirements, and
the value of our shares of common stock may decline.


                                       26
<PAGE>   27


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

   Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and other parts of this document,
including, without limitation, those concerning (i) projected traffic volume;
(ii) future revenues and costs; (iii) changes in the Golden Telecom's
competitive environment; (iv) our projections concerning our liquidity and
capital resources; and (v) the political and financial situation in the markets
in which we operate, contain forward-looking statements concerning the Company's
operations, economic performance and financial condition. Because such
statements involve risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Among the
key factors that have a direct bearing on the Company's results of operations,
economic performance and financial condition are the commercial and execution
risks associated with implementing the Company's business plan, the political,
economic and legal environment in the markets in which the Company operates,
increasing competitiveness in the telecommunications and Internet-related
businesses that may limit growth opportunities, and the consummation of numerous
or large acquisitions. These and other factors are discussed herein under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this Report.

   Additional information concerning factors that could cause results to differ
materially from those in the forward looking statements are contained in the
Company's filings with the U.S. Securities and Exchange Commission ("SEC") and
especially in the Risk Factor sections therein, including, but not limited to
the Company's report on Form 10-K for the year ended December 31, 2000 and the
Company's Post Effective Amendment No.1 on Form S-3 to Registration Statement
No. 333-39260 on Form S-1. The amendment was filed with the SEC on April 27,
2001.

    In addition, any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, through the use of words or phrases such as
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimated," "intends," "plans," "projection" and "outlook") are not historical
facts and may be forward-looking and, accordingly, such statements involve
estimates, assumptions and uncertainties which could cause actual results to
differ materially from those expressed in the forward-looking statements.
Accordingly, any such statements are qualified in their entirety by reference
to, and are accompanied by, the factors discussed throughout this Report.

    The factors described in this report could cause actual results or outcomes
to differ materially from those expressed in any forward-looking statements of
the Company made by or on behalf of the Company, and investors, therefore,
should not place undue reliance on any such forward-looking statements. Further,
any forward-looking statement speaks only as of the date on which such statement
is made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors may emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot assess the
impact of each such factor on the Company's business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.


                                       27
<PAGE>   28


                           PART II. OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    On June 26, 2001, the Company held its annual meeting of shareholders. In
connection with the meeting, the Company solicited proxies pursuant to
Regulation 14 under the Securities Exchange Act of 1934 from holders of record
of its common stock as of May 15, 2001. Each of the company's nine nominees for
election to its Board of Directors was elected to a term ending at the Company's
annual meeting of shareholders to be held in 2002. Two additional proposals were
submitted to shareholders for approval and were approved. The votes cast on each
such proposal were as follows:

     (1)  Ratification of selection of Ernst & Young (CIS) Limited as the
          Company's independent auditors for 2001 - FOR 21,082,198 shares;
          AGAINST 0 shares; ABSTAIN 100 shares.

     (2)  Approval of an amendment to the 1999 GTI Equity Participation Plan -
          FOR 19,961,051 shares; AGAINST 140,962 shares; ABSTAIN 259 shares.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

          DESIGNATION                   DESCRIPTION
          -----------                   -----------
              3.1              Amendment and Restated Certificate of
                               Incorporation of Golden Telecom, Inc. is
                               incorporated herein by reference to Exhibit 3.1
                               in the Company's Registration Statement on Form
                               S-1 dated July 14, 1999 and amendments thereto
                               (Commission File No. 333-82791).

              3.1a             Amendment to the Company's Amended and Restated
                               Certificate of Incorporation (incorporated herein
                               as Exhibit 3.1) is incorporated herein by
                               reference to the Company's Proxy Statement filed
                               on April 25, 2000 for the annual meeting of
                               Shareholders held on May 17, 2000.


b) Reports on Form 8-K

          DATE OF REPORT               SUBJECT OF REPORT
          --------------               -----------------
          May 11, 2001         Announcement by GTI, that a subsidiary of GTS,
                               completed the transaction contemplated by the
                               Share Purchase Agreement, entered into on
                               April 2, 2001, to sell approximately 50% of
                               its ownership in GTI


                                       28
<PAGE>   29


                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                  GOLDEN TELECOM, INC.
                                  (Registrant)

                                  By:         /s/ David J. Wisher
                                         --------------------------------
                                  Name:  David J. Wisher
                                  Title: Chief Financial Officer and Treasurer
                                         (Principal Financial and Accounting
                                         Officer)


Date:  August 8, 2001



                                       29


<PAGE>   30
                               INDEX TO EXHIBITS


             EXHIBIT
             NUMBER                         DESCRIPTION
             ------                         -----------

              3.1              Amendment and Restated Certificate of
                               Incorporation of Golden Telecom, Inc. is
                               incorporated herein by reference to Exhibit 3.1
                               in the Company's Registration Statement on Form
                               S-1 dated July 14, 1999 and amendments thereto
                               (Commission File No. 333-82791).

              3.1a             Amendment to the Company's Amended and Restated
                               Certificate of Incorporation (incorporated herein
                               as Exhibit 3.1) is incorporated herein by
                               reference to the Company's Proxy Statement filed
                               on April 25, 2000 for the annual meeting of
                               Shareholders held on May 17, 2000.