Financial review

Net cash generated by operating activities decreased by 0.4% year on year for the year to date and amounted to RUB 84.7 billion.

Cash used in investing activities increased more by 65% year on year for the year to date to RUB 114.4 billion, mainly as a result of the acquisition of 71.8% of NTK and 39.9% of Bashinformsvyaz, as well as purchases of property, plant and equipment.

Cash provided by financing activities for the year to date amounted to RUB 24.3 billion, and primarily comprised loans secured to finance the acquisition of NTK and Bashinformsvyaz.

The Group's total borrowings, including current and non-current obligations, were up 18% during the quarter to RUB 163.5 billion, and comprised loans raised by the companies to acquire the 25% stake in Svyazinvest and the 71.8% stake in NTK, as well as RUB 8.9 billion of bonds. More than 97% of the Group's total debt was ruble denominated at the end of the year.

The Group's net debt therefore amounted to RUB 152.4 billion. This was equivalent to 1.3x times OIBDA.

Reconciliation of OIBDA

OIBDA is a non-U.S. GAAP and non-IFRS financial measure, which the Company defines as operating income before depreciation and amortization. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. OIBDA should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U.S. GAAP or IFRS.

RUB million FY 2011 FY 2010 %
Operating income 63,668 50,280 27%
Add: Depreciation and amortization 54,040 55,756 (3%)
OIBDA 117,708 106,036 11%
OIBDA margin, % 39.8% 38.5%