FORM 6-K/A

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Report of Foreign Issuer

December 17, 2002

 

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

 

Commission file number: 333-12032

 

MOBILE TELESYSTEMS OJSC
(Exact name of Registrant as specified in its charter)

RUSSIAN FEDERATION
(Jurisdiction of incorporation or organization)

4 Marksistskaya Street, Moscow 109147  Russian Federation
(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F ý   Form 40-F o

 

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes o   No ý

 

 

On December 4, 2002, Mobile TeleSystems OJSC, or MTS, announced that MTS would restate its consolidated financial statements for the year and three months ended December 31, 2001 and the first and second quarters of 2002.   

 

This Form 6-K/A amends the Form 6-K filed by MTS on June 3, 2002 (the "Form 6-K"), which contained our financial statements for the first quarter of 2002 and a press release announcing our financial results for such period.   Certain information contained in both the press release and the financial statement filed as part of the Form 6-K has been affected by the restatement of MTS’ financial statements.  This Form 6-K/A contains our restated financial statements for the first quarter of 2002 and a description of the effect of the restatement on our financial results for such period.

 

Restatement

MTS has restated its financial statements for the three months ended March 31, 2002 as a result of a review of its financial statements conducted by MTS management.  The restatement primarily relates to the allocation of the purchase price for MTS’ acquisitions of a 51% stake in Kuban GSM CJSC in March 2002, and a reclassification of goodwill to licenses.  As a result of this review, MTS has restated approximately $91 million previously allocated to licenses to property, plant and equipment and other intangible assets.  This reallocation resulted in restatements of property, plant and equipment, licenses, depreciation and amortization expense and certain related items of our balance sheet and statement of operations as of and for the three months ended March 31, 2002.

 

In addition, effective January 1, 2002 the Company adopted FAS 141, Business Combination and FAS 142, Goodwill and Other Intangible Assets.  As a result, MTS has reclassified $22 million of goodwill relating to its August 1998 acquisition of Rosico CJSC as licenses. This reclassification resulted in a restatement of amortization expenses and deferred taxes for the three months ended March 31, 2002.

 

The effects of this restatement on financial statements for the three months ended March 31, 2002 were as follows (in thousands except per share amounts):

 

		As previously reported		Adjustments		As restated
At March 31, 2002:
Property plant and equipment, net		962,005		67,970		1,029,975
Licenses, net		426,033		(69,371	)	356,662
Goodwill, net		22,411		(21,878	)	533
Other intangible assets, net		84,578		7,658		92,236
Total assets		1,935,533		(15,621	)	1,919,912
Deferred connection fees		46,765		(1,141	)	45,624
Deferred taxes		107,439		(15,645	)	91,794
Minority interest		36,919		3,744		40,663
Retained earnings		506,488		(2,579	)	503,909
Total liabilities and shareholders equity		1,935,533		(15,621	)	1,919,912
For the three months ended March 31, 2001:
Depreciation and Amortization		41,008		581		41,589
Net operating income		82,500		(581	)	81,919
Provision for Income taxes		26,159		(244	)	25,915
Minority Interest		3,594		705		4,299
Net income		43,860		(1,042	)	42,818

 

In addition, as a result of the restatement, EBITDA which represents income before provision for income taxes, interest, depreciation and amortization, for the three months ended March 31, 2002 decreased to $116.5 million from the $117.2 originally reported.

 

 

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MOBILE TELESYSTEMS

CONSOLIDATED BALANCE SHEET

AT DECEMBER 31, 2001 and MARCH 31, 2002

(Amounts in thousands of U.S. dollars)

 

		December 31			March 31
		2001			2002 (as restated)
CURRENT ASSETS:
Cash and cash equivalents		$	219,629		$	46,037
Short-term investments		85,304			165,166
Trade receivables, net		24,258			31,980
Accounts receivable, related parties		2,377			4,907
Inventory, net		26,184			25,874
Prepaid expenses		22,712			24,935
VAT receivable		82,216			113,772
Deferred tax asset		12,040			13,910
Other current assets		8,374			8,749
Total current assets		483,094			435,330
PROPERTY, PLANT AND EQUIPMENT		856,056			1,029,975
OTHER INTANGIBLE ASSETS		84,245			92,236
LICENSES		276,949			356,662
GOODWILL		22,411			533
DEBT ISSUANCE COSTS		3,997			4,251
INVESTMENTS IN AND ADVANCES TO AFFILIATES		740			925
Total assets		$	1,727,492		$	1,919,912

 

 

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MOBILE TELESYSTEMS

CONSOLIDATED BALANCE SHEET

AT DECEMBER 31, 2001 and MARCH 31, 2002

(Amounts in thousands of U.S. dollars)

 

		December 31			March 31
		2001			2002 (as restated)
CURRENT LIABILITIES:
Accounts payable, related parties		$	6,142		$	7,489
Trade accounts payable		106,068			69,998
Deferred connection fees		21,419			21,656
Subscriber prepayments and deposits		63,741			79,693
Debt, current portion		18,245			18,425
Promissory Notes, current portion		580			—
Capital lease obligation, current portion		14,401			12,211
Income tax payable		23,078			40,632
Accrued liabilities		51,626			66,834
Other payables		3,357			5,905
Total current liabilities		308,657			322,843
LONG-TERM LIABILITIES:
Notes payable, net of discount		248,976			306,856
Debt, net of current portion		30,150			64,307
Capital lease obligation, net of current portion		7,696			6,340
Promissory notes payable, net of current portion		5,792			1,023
Deferred connection fees, net of current portion		25,993			23,968
Deferred taxes		67,505			91,794
Total long-term liabilities		386,112			494,288
Total liabilities		694,769			817,131
COMMITMENTS AND CONTINGENCIES		—			—
MINORITY INTEREST		14,444			40,663
SHAREHOLDERS’ EQUITY:
Common stock: (2,096,975,792 shares with a par value of 0.1 rubles authorized and 1,993,326,138 shares issued as of March 31, 2002 and December 31, 2001, 345,244,080 of which are in the form of ADS)		50,558			50,558
Treasury stock (9,966,631 common shares at cost)		(10,206		)	(10,206		)
Additional paid-in capital		555,794			556,145
Shareholder receivable		(38,958		)	(38,288		)
Retained earnings		461,091			503,909
Total shareholders’ equity		1,018,279			1,062,118
Total liabilities and shareholders’ equity		1,727,492			1,919,912

 

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MOBILE TELESYSTEMS
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2002

(Amounts in thousands of U.S. dollars)

		March 31
		2001			2002 (as restated)
NET REVENUES:
Service revenues, net		$	155,315		$	228,072
Connection fees		4,146			6,541
Equipment sales		6,842			12,991
		166,303			247,604
COST OF SERVICES AND PRODUCTS
Interconnection and line rental		14,415			23,715
Roaming expenses		13,497			17,116
Cost of equipment		7,299			18,118
		35,211			58,949
OPERATING EXPENSES		30,584			39,846
SALES AND MARKETING EXPENSES		20,770			25,301
DEPRECIATION AND AMORTIZATION		27,304			41,589
Net operating income		52,434			81,919
CURRENCY EXCHANGE AND TRANSLATION LOSSES		624			831
OTHER EXPENSES (INCOME):
Interest income		(3,917		)	(3,404		)
Interest expenses, net of amounts capitalized		950			9,603
Other expenses		561			1,857
Total other expenses (income), net		(2,406		)	8,056
Income before provision for income taxes and minority interest		54,216			73,032
PROVISION FOR INCOME TAXES		23,001			25,915
MINORITY INTEREST		—			4,299
NET INCOME		$	31,215		$	42,818
Weighted average number of shares outstanding		1,993,326,138			1,983,399,507

 

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SIGNATURES

 

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

 

 

 

 

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