REG-JSFC Sistema Final Results

MOSCOW--(Business Wire)--

Sistema Announces Unaudited Financial Results forthe Fourth Quarter and the Full
YearEnded December 31, 2008

Sistema (the "Group") (LSE: SSA), the largest diversified public corporation in
Russia and the CIS, which manages companies operating in the telecommunications,
high-tech, oil and energy, radio and aerospace, banking, real estate, retail,
mass-media, tourism and healthcare sectors, today announced its unaudited
consolidated US GAAP financial results for the fourth quarter and the twelve
months ended December 31, 2008.

FOURTH QUARTER HIGHLIGHTS

* Consolidated revenues of US$ 4.0 billion
* OIBDA decreased by 39.1% year on year to US$ 873.2 million with OIBDA margin
of 21.7%
* Operating income decreased by 63.2% year on year to US$ 319.2 million with
operating margin of 7.9%
* Net loss of US$ 713.9 million

FULL YEAR HIGHLIGHTS

* Consolidated revenues up 24.3% year on year to US$ 16.7 billion
* OIBDA up 11.1% year on year to US$ 5.5 billion with OIBDA margin of 32.9%
* Operating income was stable year on year and amounted to US$ 3.2 billion with
operating margin of 19.0%
* Net income of US$ 62.0 million
* Total assets up 2.7% year on year to US$ 29.2 billion

KEY CORPORATE HIGHLIGHTS AFTER THE END OF THE REPORTING PERIOD

* Acquired controlling stakes in Bashkir Oil and Energy Group for US$ 2.5
billion
* Signed an agreement with VTB Bank to sell a stake in Sistema-Hals and
restructure debt of Sistema-Hals
* Sold 50% of voting shares in MTT to Synterra Group
* Successfully repaid a put option in the amount of RUB 4.5 billion
(approximately US$ 130 million) on 75% of outstanding RUB 6 billion
(approximately US$ 170 million) local bonds

Leonid Melamed, President and Chief Executive Officer, commented: "Sistema
demonstrated strong revenue and OIBDA growth in 2008, both at a Group level and
across our business units. Despite the challenging market conditions, our core
businesses reported strong operating and financial results. We had already
introduced and begun implementing a programme to increasing efficiency levels
across the Group prior to the downturn. As a result, our key businesses have
increased their profitability levels and maintained or strengthened their
leading positions in their respective markets.

The cost optimisation programme has already saved a total of approximately US$
700 million. Part of our dollar-denominated debt has also been converted into
roubles, with the share of ruble-denominated loans increasing year on year from
20% to 35%. This has reduced our dependence on foreign exchange fluctuations. In
addition, our capital investment programmes have been reduced by US$ 700
million. We continue to actively manage our investment portfolio and to focus on
projects that generate attractive returns on invested capital and healthy cash
flows."

FINANCIAL SUMMARY

(US$ millions, 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
except per share amounts)
Revenues 4,017.4 4,159.5 (3.4%) 16,670.8 13,410.7 24.3%
OIBDA 873.2 1,433.0 (39.1%) 5,489.6 4,942.1 11.1%
Operating income 319.2 866.4 (63.2%) 3,173.3 3,194.9 (0.7%)
Net income / (loss) (713.9) 466.8 - 62.0 1,571.9 (96.1%)
Basic and diluted (loss)/income per share (US cents) (7.7) 5.0 - 0.7 16.9 (96.0%)

GROUP OPERATING REVIEW

Sistema`s consolidated revenues declined by 3.4% year on year in the fourth
quarter as a result of Russian rouble devaluation, however were up by 24.3% year
on year in 2008. Sistema`s performance for the full year reflected healthy
results across the Group. The businesses outside of the Telecommunications unit
accounted for 28.8% of total Group consolidated revenues in the fourth quarter
and for 27.6% in 2008, compared to 32.2% and 28.2%, for the corresponding
periods in 2007. Organic year on year growth for 2008, when excluding businesses
acquired or divested since the end of the fourth quarter of 2007, was 23.1% year
on year and amounted to US$ 3.1 billion.

Selling, general and administrative expenses decreased by 7.8% year on year to
US$ 874.7 million in the fourth quarter as a result of appreciation of the US
dollar in the fourth quarter of 2008, and increased by 45.1% year on year to US$
3,435.9 million for the full year 2008.

Group OIBDA declined by 39.1% in the fourth quarter, and was up by 11.1% year on
year in 2008. The Group OIBDA margin decreased from 34.5% in the fourth quarter
of 2007 to 21.7% in the reporting quarter. The Group OIBDA in the fourth quarter
was impacted by non-cash losses from asset impairment of US$ 239.4 million, and
US$ 162.5 million of provision for doubtful debts. The Group OIBDA margin was
lower at 32.9% for the full year 2008, compared to 36.9% for 2007.

Depreciation and amortization expenses decreased by 2.2% year on year in the
fourth quarter mainly due to appreciation of the US dollar and were up 32.6%
year on year for the full year 2008, following the growth in the depreciable
assets of the Group.

Group operating income decreased by 63.2% year on year in the fourth quarter and
by 0.7% in 2008, with an operating margin of 7.9% in the fourth quarter and
19.0% for the full year 2008, compared to 20.8% and 23.8% for the corresponding
periods of 2007.

Group interest expense was US$ 191.5 million in the fourth quarter and US$ 554.9
million for the full year 2008, compared to US$ 182.9 million and US$ 409.8
million for the corresponding periods of 2007.

The effective tax rate was 43.1% for the full year 2008, compared to 29.4% for
the corresponding period of 2007. The increase in the effective tax rate was due
to the non-deductible losses from the impairment of long-term assets as well as
goodwill and losses incurred by Sistema Hals.

The Group reported a net loss of US$ 713.9 million in the fourth quarter and net
income of US$ 62.0 million for the full year 2008, compared to net income of US$
466.8 million and US$ 1,571.9 million for the corresponding periods of 2007. The
Group net loss in the fourth quarter excluding of US$ 239.4 million of non-cash
asset impairment losses and a US$ 794.8 million loss from foreign currency
exchange amounted to US$ 56.0 million, after adjustment for minority interest.

SEGMENTAL OPERATING REVIEW1

TELECOMMUNICATIONS BUSINESS UNIT

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
Revenues 2,867.0 2,724.9 5.2% 12,081.5 9,748.5 23.9%
OIBDA 1,211.0 1,359.9 (11.0%) 5,723.4 4,892.9 17.0%
Operating income 691.4 731.9 (5.5%) 3,564.9 3,260.6 9.3%
Net (loss)2/income (121.4) 280.2 - 869.5 1,179.5 (26.3%)

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
MTS
Revenues 2,418.3 2,326.4 4.0% 10,245.3 8,252.4 24.2%
OIBDA 1,162.2 1,126.9 3.1% 5,140.3 4,223.4 21.7%
Operating income 706.2 643.8 9.7% 3,203.5 2,733.8 17.2%
Net income 113.9 245.6 (53.6%) 1,075.4 1,105.4 (2.7%)
Comstar UTS
Revenues 391.9 401.6 (2.4%) 1,647.7 1,481.8 11.2%
OIBDA 162.1 149.4 8.5% 690.1 618.0 11.7%
Operating income 120.2 88.5 35.8% 494.5 440.1 12.4%
Net income 31.2 30.8 1.1% 94.5 26.0 263.2%
SSTL
Revenues 4.2 - - 21.9 - -
OIBDA (28.1) - - (39.7) - -
Operating loss (40.3) - - (68.1) - -
Net loss (18.2) - - (63.6) - -
Mass Media
Revenues 65.4 41.6 57.2% 223.9 130.1 72.2%
OIBDA 20.5 11.2 82.5% 60.6 21.4 182.8%
Operating income/ (loss) 2.8 0.5 416.4% (5.8) 0.2 -
Net income / (loss) 6.0 0.1 5273.2% (13.6) 1.2 -

The Telecommunications business unit comprises MTS; Comstar UTS; Sistema Shyam
TeleServices Ltd. (SSTL) and Sistema Mass Media. The unit`s revenues increased
by 5.2% year on year in the fourth quarter and 23.9% in 2008, primarily due to
the robust performance of MTS. The Telecommunications business unit accounted
for 72.4% of the Group`s consolidated revenues for the full year 2008. MTS
continued to be the main contributor accounting for 84.3% of the unit`s revenues
for the full year 2008.

The Telecommunications business unit`s OIBDA declined 11.0% year on year in the
fourth quarter, but was up 17.0% year on year for the full year 2008, with OIBDA
margin of 42.2% in the fourth quarter and 47.4% in 2008, compared to 49.9% and
50.2% for the corresponding periods of 2007.

The Telecommunications business unit reported a net loss in the fourth quarter
and its net income decreased 26.3% year on year in 2008 largely as a result of
non-cash losses due to the translation of US dollar-denominated debt and losses
from the impairment of the investment in MTT.

MTS added approximately 3.9 million subscribers during the fourth quarter of
2008 resulting in the total consolidated base of approximately 95.7 million
customers as at December 31, 2008. MTS revenues increased 4.0% year on year in
the fourth quarter of 2008 and were up by 24.2% year on year in 2008. This
growth reflected an increase in average monthly service revenue per subscriber
("ARPU") in Russia from RUB 247.2 in the fourth quarter of 2007 to RUB 258.3 in
the fourth quarter of 2008. Russian subscribers` monthly Minutes of Use (MOU)
increased to 218 in the fourth quarter of 2008 from 187 in the previous period
of 2007.

MTS` OIBDA rose by 3.1% year on year in the fourth quarter and 21.7% year on
year in 2008 due to the robust ARPU growth and the increase in its subscriber
base. The OIBDA margin in the fourth quarter was 48.1% and 50.2% in 2008,
compared to 48.4% and 51.2% for the corresponded periods in 2007.

Comstar UTS` revenues declined by 2.4% year on year in the fourth quarter,
however revenues increased by 11.2% year on year in 2008. This growth reflected
the mixed effect of the ongoing growth in fixed-to-mobile traffic, the scaling
of the regional business, acquisition of Interlink and Urals Telephone Company,
the effects of changes in regulatory tariffs, as well as the significant
movement in the Russian rouble / US dollar exchange rate in the fourth quarter
of 2008. Comstar UTS` broadband subscriber base increased by 31% year on year to
925 thousand customers in the fourth quarter of 2008. The number of premium
residential subscribers in Moscow increased by 14% year on year to 664 thousand,
however premium segment ARPU was down year on year in the fourth quarter from
RUB 437.2 to RUB 321.0. The number of double-play (Internet & Pay-TV)
subscribers increased by 19% year on year to 145 thousand in the fourth quarter
of 2008.

Comstar UTS` OIBDA increased by 8.5% year on year in the fourth quarter and was
up by 11.7% in 2008. The OIBDA margin improved to 41.4% in the fourth quarter
and was 41.9% in 2008, compared to 37.2% and 41.7% in the corresponding periods
of 2007.

SSTL`s revenues decreased by 14.3% quarter on quarter in the fourth quarter of
2008 due to continued decline in fixed line traffic volumes. Shyam`s fixed line
subscriber base totaled 258 thousand subscribers as at December 31, 2008. SSTL
connected 250 thousand mobile customers to its CDMA 800 MHz mobile network in
the state of Rajasthan since its launch in September 30, 2008. Mobile ARPU
declined to US$ 3.9 in the fourth quarter of 2008 compared to US$ 6.3 in the
third quarter as a result of the devaluation of the Indian rupee and the growth
in prepaid customers. Mobile subscribers` MOU were 189.3 in the fourth quarter
of 2008. SSTL began construction of a CDMA mobile network in five additional
telecommunications circles, including Tamil Nadu, Kerala, West Bengal, Bihar and
Kolkata. During the fourth quarter SSTL signed a number of interconnect
agreements with large telecom operators in these circles for the joint usage of
infrastructure.

Sistema Mass Media revenues were up 57.2% year on year in the fourth quarter and
72.2% year on year in 2008 primarily as a result of the robust growth in the
Internet and Stream-TV subscribers. The segment more than doubled the total
number of programming hours sold to 614 in the fourth quarter, compared to the
third quarter of 2008. Stream-TV` subscriber base was up by 9.8% year on year to
1.8 million subscribers as at December 31, 2008, whilst its Internet subscriber
base has increased by 74.1% year on year to more than 205 thousand subscribers.
Stream-TV ARPU was up to US$ 3.9 (RUB 98) and Internet ARPU increased slightly
to US$ 15.1 (RUB 376) in 2008, compared to US$ 3.1 (RUB 78) and US$ 13.9 (RUB
355), respectively, for the full year 2007.

Sistema Mass Media` OIBDA increased by 82.5% year on year in the fourth quarter
and nearly tripled year on year for the full year 2008. The OIBDA margin
increased to 31.3% in the fourth quarter and to 27.0% in 2008, compared to 27.0%
and 16.5% in the corresponding periods of 2007.

In November 2008, Comstar UTS completed the transfer of rights in relation to
exercising the put option held by Access Telecommunications Coöperatief U.A.
Comstar UTS subsidiary MGTS Finance S.A. thereby acquired 46,232,000 Comstar UTS
shares at US$ 10.03 per share for a total cash consideration of US$ 463.6
million.

In November 2008, Comstar UTS exercised its share options allocated under its
2006-2008 incentive programme. The programme was discontinued in April 2008 due
to the launch of a new long-term incentive programme. Comstar UTS paid US$ 1.8
million for the repurchase of the shares from the programme participants.

In October 2008, Sistema Mass Media launched film and TV production at Russian
World Studios (RWS) in St Petersburg.

In October 2008, MTS and Vodafone signed a strategic, non-equity partnership to
provide customers with high quality communications services and to collaborate
jointly on future technological developments.

CONSUMER BUSINESS UNIT

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
Revenues 599.9 767.8 (21.9%) 2,596.5 1,844.5 40.8%
OIBDA (197.8) 193.5 - (94.7) 173.1 -
Operating (loss)/ income (202.2) 193.1 - (159.4) 141.5 -
Net (loss) /income (327.4) 131.6 - (394.4) 65.2 -
Real Estate
Revenues 36.2 244.7 (85.2%) 362.2 452.2 (19.9%)
OIBDA (159.3) 120.9 - (127.4) 56.7 -
Operating (loss)/ income (167.3) 114.8 - (151.7) 41.8 -
Net (loss)/ income (244.7) 86.1 - (304.1) 26.6 -
Banking
Revenues 192.5 139.5 38.0% 725.4 410.0 76.9%
OIBDA (8.2) 17.7 - 55.8 51.7 8.0%
Operating (loss)/ income (3.0) 14.2 - 41.0 43.0 (4.7%)
Net (loss)/ income (1.9) 7.5 - 23.5 27.6 (14.7%)

CONSUMER BUSINESS UNIT (continued)

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
Retail
Revenues 240.7 263.5 (8.7%) 802.0 597.2 34.3%
OIBDA 36.3 45.1 (19.6%) 16.8 36.1 (53.5%)
Operating income 37.7 40.7 (8.4%) 2.0 25.6 -
Net income/ (loss) 4.5 29.6 - (36.1) 6.4 -
Tourism
Revenues 107.2 99.1 8.2% 615.6 374.0 64.6%
OIBDA 9.1 5.2 75.3% 37.7 28.0 34.4%
Operating income 7.4 7.5 (1.4) 30.9 20.4 51.2%
Net (loss) / income (6.7) 3.2 - 0.8 10.7 (92.8%)
Healthcare
Revenues 35.0 22.8 53.7% 124.8 68.7 81.8%
OIBDA (1.9) 2.9 - 4.6 9.6 (51.8%)
Operating income (3.0) 2.7 - 0.7 8.0 (91.6%)
Net (loss) / income (4.8) 2.7 - (4.3) 5.0 -

The Consumer business unit comprises Real Estate segment; the Banking segment;
the Retail segment; the Tourism segment and the Healthcare segment. The Consumer
business unit`s revenues declined 21.9% year on year in the fourth quarter and
were up 40.8% year on year in 2008.

The Consumer business unit reported OIBDA loss in the fourth quarter of 2008 and
for the full year 2008 and was impacted by difficult market conditions primarily
in the Real Estate segment.

The Consumer business unit reported a net loss in the fourth quarter of 2008 and
for the full year 2008 largely due to foreign currency exchange losses and the
increase in operating losses of Sistema-Hals.

Revenues in the Real Estate segment, which comprises Sistema Hals, decreased by
85.2% year on year in the fourth quarter and by 19.9% in 2008 primarily due to a
decline in revenues of the development division. In November 2008, Sistema-Hals
sold its 51% stakes in PSO «Sistema-Hals» and Organizator LLP. The decrease in
revenues of the development division was partially offset by residential
property sales during the reporting period.

The Banking segment`s revenues increased by 38.0% year on year in the fourth
quarter and increased by 76.9% year on year in 2008, following the acquisition
of Dalcombank and the robust growth of the loan portfolio. The loan portfolio,
including leases, increased by 11.3% year on year to US$ 4,938 billion as at
December 31, 2008. Interest income received from retail and corporate lending
operations more than doubled year on year to US$ 155.7 million in the fourth
quarter of 2008.

The Banking segment generated OIBDA loss in the fourth quarter while its OIBDA
in 2008 was up by 8.0% year on year to US$ 55.8 million, following the changes
in the segment`s reserves in accordance with the requirements of the Central
Bank of Russia.

Revenues in the Retail segment, which comprises Detsky Mir, the largest
children`s goods chain of retail stores in Russia, declined by 8.7% year on year
in the fourth quarter and increased by 34.3% in 2008. Retail revenues accounted
for 93.7% of total revenues in 2008 and amounted to US$ 751.4 million. By year
end the network of retail outlets grew by 35 stores year on year to 130 in total
with stores located in 49 Russian cities and 2 cities in Ukraine, whilst the
aggregate retail space increased by 27.2% year on year to 220,800 square metres.

The Retail segment`s OIBDA decreased by 19.6% year on year in the fourth quarter
and by 53.5% in 2008.

The Tourism segment`s revenues increased by 8.2% year on year in the fourth
quarter and increased by 64.6% in 2008 as a result of the rapid growth and
strong performance of its tour operating division, particularly on routes to
Egypt and Turkey. The segment serviced 269,000 customers in the fourth quarter
of 2008 compared to 236,000 in the corresponding period of 2007. The hotel group
more than doubled year on year the total number of rooms under management to
5,753 as at December 31, 2008.

The Tourism segment`s OIBDA increased by 75.3% year on year in the fourth
quarter and by 34.4% in 2008, due to an increase in sales of rooms in its five
leased hotel accommodations in Turkey.

The Healthcare Services segment`s revenues were up 53.7% year on year in the
fourth quarter and nearly doubled for the full year 2008. The total number of
visits of medical clinics reached 2 million for the full year 2008. The segment
provided 5.4 million medical services in 2008, including preventive and
diagnostic, as well as treatment of patients. As at December 31, 2008 the
network consisted of 26 medical clinics, including 17 in Moscow and 9 in the
regions.

The Healthcare Services segment reported OIBDA loss in the fourth quarter and
its OIBDA declined 51.8% year on year in 2008.

TECHNOLOGY & INDUSTRY BUSINESS UNIT

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
Revenues 768.6 794.3 (3.2%) 2,532.4 2,082.8 21.6%
OIBDA 71.8 21.1 239.6% 180.2 (56.7) 417.7%
Operating income/ (loss) 44.1 1.8 2384.4% 96.3 (120.8) -
Net loss (16.0) (31.6) - (50.0) (164.6) -

TECHNOLOGY & INDUSTRY BUSINESS UNIT (continued)

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
High Technology
Revenues 612.3 603.9 1.4% 2,000.9 1,619.6 23.6%
OIBDA 63.8 5.3 1113.3% 135.7 (102.5) -
Operating income/ (loss) 39.7 (10.7) - 61.9 (158.9) -
Net loss (5.3) (35.5) - (41.5) (176.8) -
Radars and Aerospace
Revenues 140.6 168.3 (16.4%) 471.5 375.0 25.7%
OIBDA 8.8 17.1 (48.2%) 55.1 45.9 20.0%
Operating income 5.7 12.3 (53.4%) 47.3 41.9 12.9%
Net income/ (loss) (8.3) 6.4 - 5.8 17.0 (65.7%)
Pharmaceuticals
Revenues 7.4 10.6 (29.7%) 41.7 63.0 (33.8%)
OIBDA (1.7) (2.0) - (12.2) (1.3) -
Operating loss (2.2) (2.9) - (14.5) (4.1) -
Net loss (2.6) (3.2) - (15.7) (5.5) -

The Technology and Industry business unit comprises the High Technology segment,
including Sitronics, the Radars and Aerospace segment and the Pharmaceuticals
segment. The unit`s revenues declined 3.2% year on year in the fourth quarter,
but increased 21.6% in 2008. The unit contributed 12.5% of the Group`s
consolidated revenues in 2008. Sitronics accounted for 79% of the unit`s
revenues in 2008.

The Technology and Industry business unit`s OIBDA more than tripled year on year
in the fourth quarter and increased substantially from a loss in 2007 for the
full year.

The Technology and Industry business unit reported a significantly reduced net
loss in the fourth quarter and for the full year 2008 due to the continued
improvement in the High Technology segment`s performance.

The High Technology segment revenues increased 1.4% year on year in the fourth
quarter and by 23.6% in 2008. The Microelectronics Solutions and Information
Technology Solutions divisions exhibited a healthy performance year on year,
with the Telecommunications Solutions division showing continued growth year on
year in top line revenues.

The High Technology segment OIBDA increased substantially to US$ 63.8 million in
the fourth quarter of 2008, compared to US$ 5.3 million in the corresponding
period in 2007, and amounted to US$ 135.7 million in 2008, compared to a loss
for the same period in 2007. The OIBDA margin increased to 6.9% in 2008 compared
to negative amount in 2007.

The Radars and Aerospace segment revenues decreased by 16.4% year on year in the
fourth quarter but were up by 25.7% year on year in 2008.

The Pharmaceuticals segment`s revenues declined 29.7% year on year in the fourth
quarter and 33.8% in 2008 as a result of US dollar appreciation and continuing
scaling down the low margin business of drugs distribution.

CORPORATE & OTHER

(US$ millions) 4Q 2008 4Q 2007 Year on Year Change FY 2008 FY 2007 Year on Year Change
OIBDA3 (75.0) (94.7) - (109.1) (155.5) -
Net income (107.1) 476.4 - (25.3) 477.5 -

The Corporate & Other segment comprises the companies that control and manage
the Group`s interests in its subsidiaries. The segment reported an OIBDA loss of
US$ 75.0 million in the fourth quarter and US$ 109.1 million in 2008. The
segment also incorporates Sistema`s equity participations in other companies,
including the Bashkir Oil and Energy Group`s assets. The results of these equity
participations are included in the net income but below the OIBDA line in the
statement of operations. Segment net loss of US$ 25.3 million for the full year
2008 therefore included the US$ 241.9 million proportional share of the Bashkir
assets` net income.

Following the acquisition of a controlling stake in Bashkir Oil and Energy Group
in April 2009, Sistema expects to consolidate the results of the oil and energy
group in the second quarter of 2009 under a separate business unit.

FINANCIAL REVIEW

Net cash provided by operations increased by 92.8% year on year in the fourth
quarter and by 40.5% year on year in 2008 to US$ 778.6 million and to US$
3,825.8 million, respectively, as a result of change in working capital.

Net cash used in investing activities totaled US$ 931.8 million in the fourth
quarter and US$ 5,874.8 million for the full year 2008, including US$ 1,189.4
million and US$ 4,270.9 million of capital expenditure, respectively, compared
to US$ 1,578.0 million and US$ 3,110.9 million for the corresponding periods in
2007. The Group spent US$ 312.8 million and US$ 1,940.7 million in the fourth
quarter and for the full year 2008, respectively, on the acquisition of
businesses including US 1,059.1 million spent on purchase of MTS treasury
shares, US$ 110.1 million for the acquisition of a 6.79% stake in Comstar UTS,
US$ 460.7 million for the purchase of 73.7% in SSTL, US$ 107.5 million for the
purchase of a 49.0% stake in Kvazar Micro, US$ 44.6 million for the purchase of
a 25.0% stake in Detsky Mir, US$ 51.1 million for the purchase of a 18.0% stake
in Sahles and other purchases.

Net cash used in financing activities amounted to US$ 1,123.4 million in the
fourth quarter and US$ 3,269.6 million in 2008, compared to US$ 2,173.8 million
and US$ 3,378.3 million, respectively, for the correspondent periods in 2007.
Major changes in financing in the fourth quarter included two RUB 10 billion
bonds each placed by MTS with maturity dates in 2013 and 2015; a RUB 7 billion
credit facility received by Sistema-Hals from VTB Bank which is repayable in 2
years; a US$ 230 million credit facility signed by Sitronics with
Vnesheconombank and a repayment of US$ 125 million credit facility by Sitronics;
US$ 159.0 million proceeds received from Skandinaviska Enskilda Bank and
proceeds from other loans. Payments to shareholders of subsidiaries amounted to
US$ 566.2 million and constituted a major outflow from financing activities.

The Group`s cash balances stood at US$ 1,991.3 million as at December 31, 2008,
compared to US$ 1,061.7 million as at December 31, 2007. The Group`s net debt
(short-term and long-term debt minus cash and cash equivalents) amounted to US$
8,670.4 million as at December 31, 2008, compared to US$ 7,288.0 million as at
December 31, 2007.

SIGNIFICANT EVENTS FOLLOWING THE END OF THE REPORTING PERIOD

Telecommunications Business Unit

In April 2009, MTS has acquired a 100% stake in the Eldorado mobile phone retail
chain for US$ 22.9 million, of which US$ 5.0 million will be paid after 12
months based on certain performance criteria.

In March 2009, SSTL rebranded its mobile services under MTS brand with the
launch of its operations in Tamil Nadu.

In February 2009, MTS acquired the remaining 25.01% stake in Dagtelecom, LLC,
for US$ 41.6 million as Glaxen Corp. (BVI) exercised its put option. Purchase
price shall be reduced by US$ 12.5 million to offset the loan extended by MTS to
Glaxen Corp. in spring 2008. In addition, following the review and assessment of
the subsidiary`s performance during the period of the joint shareholding of MTS
and Glaxen Corp. in Dagtelecom, MTS may potentially pay a premium in the amount
not exceeding US$ 10 million.

In February 2009, MTS acquired a 100% stake in Narico Holdings Limited (Cyprus),
a sole owner of Telefon.Ru, one of the largest mobile phone and electronics
retail chains in Russia, for US$ 60.0 million, including approximately US$ 22.4
million of inventory reserves. Telefon.Ru operates 512 stores in 180 Russian
cities.

In February 2009, Comstar UTS commenced the reorganisation of its regional
operations, which will be consolidated under Comstar-Regions, Comstar`s 100%
owned subsidiary, by the end of 2009. Comstar has completed the acquisition of
the regional operators of STREAM-TV Group, which were owned by Sistema Mass
Media, and provide pay-TV and broadband internet access services in 40 Russian
cities with a combined population of over 15 million people. Within the
framework of the reorganization, Comstar and STREAM-TV Group`s subsidiaries will
be consolidated under Comstar-Regions. As a result of consolidation,
Comstar-Regions will comprise 6 enlarged branches in 6 macro-regions of Russia -
Central, North-West, Southern, Volga, Ural and Siberian Federal Districts.
Comstar expects to consolidate Comstar-Regions following the completion of the
reorganisation.

In January 2009, MTS secured a EUR 300 million credit facility with Gazprombank
for 2.5 years.

In January 2009, Comstar UTS completed the consolidation of a 100% stake in ZAO
Comstar-Direct with effect from December 30, 2008.

In January 2009, Shyam Telelink Ltd. was renamed Sistema Shyam TeleServices
Ltd., following the decision made at the EGM of shareholders of Shyam.

Consumer Business Unit

In April 2009, Sistema-Hals placed two rouble-denominated bonds for RUB 3
billion and RUB 2 billion, respectively, maturing in 2014 with a 15% coupon
rate.

In February 2009 Sistema Hals increased its share in Sib-Brok LLC (a project
company for the elite apartments in Yalta) from 75% to 100%. The purchase price
amounted to US$ 7.8 million.

In February 2009, MBRD increased its stake in Dalcombank to 100%.

In January 2009, MBRD repaid EUR 40 million syndicated loan.

Technology & Industry Business Unit

In April 2009, SITRONICS sold part of its IT distribution division. In line with
its stated strategy the company focused on higher margin and less capital
intensive businesses.

In April 2009, SITRONICS opened a subsidiary in New Delhi, India. The company
started its operations in the Indian market in May 2008.

In March 2009, Sitronics redeemed 99% of its RUB-denominated bonds, issued in
September 2007 for the total amount of RUB 2.9 billion.

In February 2009, SITRONICS signed a two year agreement with MTS Uzbekistan to
supply a MEDIO IN/OCS convergent services platform for over US$ 18 million.

Corporate & Other

In April 2009, Sistema acquired a controlling stake in Bashkir Oil and Energy
Group for a total cash consideration of US$ 2.5 billion with a first tranche of
US$ 2.0 billion paid upon signing of the agreement and the second tranche in the
amount of US$ 500 million to be paid on a deferred basis after 14 months. As a
result of this transaction, Sistema now owns a 76.52% stake in ANK Bashneft JSC,
a 65.78% stake in Ufaneftechim JSC, a 87.23% stake in Novoil JSC, a 73.02% stake
in Ufaorgsintez JSC, a 78.49% stake in Ufimskiy NPZ JSC and a 73.33% stake in
Bashkirnefteproduct JSC.

In April 2009,Sistema signed an agreement with VTB Bank to sell a controlling
stake in Sistema-Hals. VTB Bank acquired a 19.5% stake in Sistema-Hals for RUB
30 and also received a call option to acquire a further 31.5% stake in the
company for RUB 30. Furthermore, both parties have agreed the terms for the
restructuring of Sistema-Hals` debt to VTB.

In April 2009, Sistema Board of Directors set the date for the Annual General
Meeting of Shareholders ("AGM") for June 27, 2009. The record date for the
Company`s share and GDR holders entitled to participate in the AGM has been set
for May 15, 2009.

In March 2009, Sistema redeemed 75% of its RUB-denominated bonds, issued in
March 2008 for the total amount of RUB 4.5 billion.

In March 2009, Sistema sold 50% of voting shares in MTT to Synterra Group. In
addition, Synterra Group assumed MTT`s intercompany debt obligations to Sistema.
The deal is expected to be reached for a total cash consideration of
approximately US$ 54 million.

In February 2009, the EGM of shareholders approved the amendments to the
Regulation of the Board of Directors, to the Regulation on compensations and
reimbursements of members of the Board of Directors and to the Regulation on the
Management Board of Sistema regarding indemnification of the members of the
Board of Directors and the Management Board for their potential legal and other
expenses or losses. The EGM also approved related party transactions in which
Mr. Muratov, member of the Management Board, has an interest and Sistema
provides a guarantee to Vnesheconombank for US$ 230 million loan arranged
between Vnesheconombank and Sitronics.

Conference call information

Sistema management will host a conference call today at 9 am (New York time) / 2
pm (London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and discuss the
fourth quarter and full year results.

The dial-in numbers for the conference call are:

UK/International: + 44 20 8515 2301
US: +1 480 629 9723

A replay will then be available for 7 days after the conference call. To access
the replay, please dial:

UK/International: + 44 20 7154 2833
US: + 1 303 590 3030

PIN number: 4060094#

***

For further information, please visit www.sistema.comor contact:

Sistema Investor Relations
Pavel Kim
Tel: +7 495 692 22 88
ir@sistema.ru
or
Shared Value Limited
Larisa Kogut-Millings
Tel: +44 (0) 20 7321 5010
sistema@sharedvalue.net

Sistema is the largest public diversified financial corporation in Russia and
the CIS, which manages companies serving over 100 million customers in the
sectors of telecommunications, high-tech, oil and energy, radio and aerospace,
banking, real estate, retail, mass-media, tourism and healthcare services.
Founded in 1993, the company reported revenues of US$ 16.7 billion for the full
year of 2008, and total assets of US$ 29.2 billion as at December 31, 2008.
Sistema`s shares are listed under the symbol "SSA" on the London Stock Exchange,
under the symbol "AFKS" on the Russian Trading System (RTS), under the symbol
"AFKC" on the Moscow Interbank Currency Exchange (MICEX), and under the symbol
"SIST" on the Moscow Stock Exchange (MSE).

Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Sistema. You can identify forward looking statements by terms
such as "expect," "believe," "anticipate," "estimate," "intend," "will,"
"could," "may" or "might" the negative of such terms or other similar
expressions. We wish to caution you that these statements are only predictions
and that actual events or results may differ materially. In addition, there is
no assurance that the new contracts entered into by our subsidiaries referenced
above will be completed on the terms contained therein or at all. We do not
intend to update these statements to reflect events and circumstances occurring
after the date hereof or to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially from those contained
in our projections or forward-looking statements, including, among others,
general economic conditions, our competitive environment, risks associated with
operating in Russia, rapid technological and market change in our industries, as
well as many other risks specifically related to Sistema and its operations.

SISTEMA JSFC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

Three months ended Years ended
December 31, December 31, December 31, December 31,
2008 2007 2008 2007

Sales $ 3,834,460 $ 4,024,583 $ 15,979,898 $ 13,016,488
Revenues from financial services 182,964 134,874 690,912 394,167

TOTAL REVENUES 4,017,424 4,159,457 16,670,810 13,410,655

Cost of sales, exclusive of depreciation and amortization shown separately below (1,589,306) (1,662,018) (6,614,527) (5,771,416)
Financial services related costs, exclusive of depreciation and amortization shown separately below (135,106) (61,633) (385,457) (174,378)

TOTAL COST OF SALES (1,724,412) (1,723,651) (6,999,984) (5,945,794)

Selling, general and administrative expenses (874,704) (949,062) (3,435,934) (2,368,554)
Depreciation and amortization (553,965) (566,570) (2,316,295) (1,747,171)
Provision for doubtful accounts (162,490) (5,939) (270,069) (122,938)
Loss from impairment (239,447) (7,616) (240,780) (20,719)
Other operating expenses, net (118,769) (118,789) (269,341) (231,613)
Equity in net income of investees (32,486) (5,234) 4,925 66,007
Gain on disposal of interests in subsidiaries and affiliates 8,078 83,850 29,960 155,069

OPERATING INCOME 319,229 866,446 3,173,292 3,194,942

Interest income 12,879 11,911 72,487 80,405
Change in fair value of derivative instruments (1,525) 162,179 (47,559) (145,800)
Interest expense, net of amounts capitalized (191,479) (182,944) (554,912) (409,826)
Currency exchange and translation (loss)/gain (794,770) 140,410 (894,529) 289,833

Income from continuing operations before income tax, equity in net income of energy companies in the Republic of Bashkortostan and minority interests (655,666) 998,002 1,748,769 3,009,554

Income tax expense (40,173) (219,460) (857,462) (971,766)
Minority interests (24,323) (335,064) (1,019,870) (1,093,095)
Equity in net income of energy companies in the Republic of Bashkortostan, net of minority interests of US $7,751, US$ (2,208), US $49,017 and US 6,280 22,386 192,680 109,855
$14,001, respectively

(Loss)/income from continuing operations (713,882) 465,864 64,117 1,054,548

Income/(loss) from discontinued operations, net of income tax benefit/(expense) of US$ 6,630, US$ 222 and US$ (8,827), respectively - 960 (4,194) (4,612)

Gain from disposal of discontinued operations, net of income tax effect of US$ 280 and US$ 148,809, respectively - - 2,053 521,963

NET INCOME $ (713,882) $ 466,824 $ 61,976 $ 1,571,899

(Loss)/earnings per share, basic and diluted (7.7) 5.0 0.7 16.9
(US cent per share):

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars, except share amounts)

2008 2007

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 1,991,325 $ 1,061,733
Short-term investments 617,424 909,224
Loans to customers and banks, net 3,176,376 2,764,763
Accounts receivable, net 1,197,644 1,383,731
Prepaid expenses, other receivables and 1,342,473 950,104
other current assets, net
VAT receivable 222,356 435,245
Inventories and spare parts 880,198 780,193
Deferred tax assets, current portion 262,989 213,633
Assets of discontinued operations - 545,863

Total current assets 9,690,785 9,044,489

NON-CURRENT ASSETS:
Property, plant and equipment, net 10,327,971 10,412,636
Advance payments for non-current assets 219,119 284,396
Goodwill 1,351,202 860,019
Licenses, net 1,174,521 730,636
Other intangible assets, net 1,723,835 1,665,969
Investments in affiliates 1,427,068 1,336,520
Investments in shares of Svyazinvest 1,240,977 1,485,378
Loans to customers and banks, net of current portion 1,402,298 1,468,088
Debt issuance costs, net 42,315 101,904
Deferred tax assets, net of current portion 181,317 108,637
Other non-current assets 377,419 897,986

Total non-current assets 19,468,042 19,352,169

TOTAL ASSETS $ 29,158,827 $ 28,396,658

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
AS OF DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars, except share amounts)

2008 2007

LIABILITIES
AND
SHAREHOLDERS`
EQUITY

CURRENT
LIABILITIES:
Accounts $ 1,654,035 $ 1,273,487
payable
Bank deposits 3,538,255 2,101,084
and notes
issued,
current
portion
Taxes payable 207,366 223,791
Deferred tax 70,903 77,893
liabilities,
current
portion
Subscriber 496,775 598,014
prepayments,
current
portion
Derivative - 140,563
financial
instruments
Accrued 1,430,933 1,357,277
expenses and
other current
liabilities
Short-term 1,465,647 724,905
loans payable
Current 2,234,507 1,517,902
portion of
long-term
debt
Liabilities - 396,132
of
discontinued
operations

Total current 11,098,421 8,411,048
liabilities

LONG-TERM
LIABILITIES:
Long-term 6,961,551 6,106,937
debt, net of
current
portion
Subscriber 119,722 134,280
prepayments,
net of
current
portion
Bank deposits 803,112 1,401,925
and notes
issued, net
of current
portion
Deferred tax 505,259 428,030
liabilities,
net of
current
portion
Postretiremen 35,464 42,370
t benefits
obligation
Deferred 115,732 139,984
revenue

Total long 8,540,840 8,253,526
-term
liabilities

TOTAL 19,639,261 16,664,574
LIABILITIES

Minority 3,869,499 4,987,220
interests in
equity of
subsidiaries

Commitments - -
and
contingencies

Puttable 92,200 86,100
shares of
SITRONICS

SHAREHOLDERS`
EQUITY:
Share capital 30,057 30,057
(9,650,000,00
0 shares
issued;
9,278,981,940
and
9,276,092,868
shares
outstanding
as of
December 31,
2008 and
2007,
respectively,
with par
value of 0.09
Russian
Rubles)
Treasury (466,345) (469,365)
stock
(371,018,060
and
373,907,132
shares as of
December 31,
2008 and
2007,
respectively,
with par
value of 0.09
Russian
Rubles)
Additional 2,456,140 2,439,069
paid-in
capital
Retained 3,998,247 4,035,157
earnings
Accumulated (460,232) 623,846
other
comprehensive
income

TOTAL 5,557,867 6,658,764
SHAREHOLDERS`
EQUITY

TOTAL $ 29,158,827 $ 28,396,658
LIABILITIES
AND
SHAREHOLDERS`
EQUITY

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 61,976 $ 1,571,899

Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 2,316,295 1,747,171
Gain from disposal of discontinued operations (2,141) (521,963)
Loss from discontinued operations 4,282 4,612
Minority interests 1,019,870 1,093,095
Equity in net income of investees (197,605) (175,874)
Deferred income tax benefit (237,006) (107,501)
Change in fair value of derivative financial instruments 47,559 145,800
Foreign currency transactions gain on non-operating activities 894,539 (289,833)
Debt issuance cost amortization 53,831 26,425
Non-cash compensation to employees of subsidiaries 10,897 155,732
Non-cash expenses associated with asset retirement obligation 6,026 -
Gain on disposal of interests in subsidiaries and affiliates (29,960) (155,069)
Gain on sale of real estate investments (20,530) (157,989)
Gain on disposal of long term investments (30,091) -
Loss from Siemens contract 25,580 -
Loss from impairment 240,780 --
Loss/(gain) on disposal of property, plant and equipment (4,193) 20,070
Gain on change in fair value of trading securities (9,525) -
Amortization of connection fees (56,719) (81,536)
Provision for doubtful accounts receivable 237,963 122,995
Provision for VAT 48,374 -
Provision for post-retirement benefits 3,119 -
Allowance for loan losses 19,918 66,107
Inventory obsolescence expense 21,852 53,714

Changes in operating assets and liabilities,
net of effects from purchase of businesses:
Trading securities (44,209) (48,767)
Loans to banks issued by the Banking segment (167,864) (847,891)
Accounts receivable (95,550) (184,139)
VAT receivable 164,515 16,476
Other receivables and prepaid expenses (200,480) (80,998)
Inventories (137,152) (229,594)
Accounts payable 142,813 75,467
Subscriber prepayments (59,709) 116,421
Taxes payable (17,303) (75,240)
Dividends received 26,693 95,033
Accrued expenses, subscriber prepayments and other liabilities (202,503) 342,540
Postretirement benefit obligation (8,581) 25,979

Net cash provided by operations 3,825,761 2,723,142

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

2008 2007
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of property, plant and equipment (3,171,719) (2,753,186)
Payments for purchases of intangible assets (1,099,181) (309,300)
Payments for purchases of businesses, net of cash acquired (1,940,700) (1,459,149)
Proceeds from sale of subsidiaries, net of cash disposed 224,784 636,683
Payments for purchases of long-term investments (24,369) (154,000)
Payments for purchases of short-term investments (178,532) (693,340)
Payments for purchases of other non-current assets (155,090) (247,676)
Proceeds from sale of other non-current assets 282,370 203,442
Decrease (Increase) in restricted cash 343,218 (242,761)
Proceeds from sale of property, plant and equipment 232,743 58,440
Proceeds from sale of long-term investments 30,091 20,000
Proceeds from sale of short-term investments 529,157 328,600
Net increase in loans to customers of the Banking segment (947,605) (1,141,701)

Net cash used in investing activities (5,874,833) (5,753,948)

CASH FLOWS FROM FINANCING ACTIVITIES:
(Principal payments on)/proceeds from short-term borrowings, net 667,214 (621,820)
Net increase in deposits from customers of the Banking segment 1,224,980 1,932,427
Net decrease in promissory notes issued by the Banking segment 256,223 (69,237)
Proceeds from long-term borrowings, net of debt issuance costs 4,353,464 2,448,502
Debt issuance costs (7,883) (43,173)
Principal payments on long-term borrowings (2,651,447) (396,304)
Principal payments on capital lease obligations (7,849) (7,870)
Proceeds from capital transactions of subsidiaries 131,000 678,841
Proceeds from issuance of stock options 5,554
Proceeds from sale of treasury shares 3,020 16,383
Payments to purchase treasury stock (161,709)
Payments to shareholders of subsidiaries (600,314) (385,374)
Dividends paid (98,795) (17,942)

Net cash provided by financing activities $ 3,269,613 $ 3,378,278

Effects of foreign currency translation on cash and cash equivalents $ (290,949) $ 115,880

Increase IN CASH AND CASH EQUIVALENTS $ 929,592 $ 463,352

CASH AND CASH EQUIVALENTS, beginning of the period 1,061,733 598,381
$
CASH AND CASH EQUIVALENTS, end of the period 1,991,325 $ 1,061,733

CASH PAID DURING THE PERIOD FOR:
Interest, net of amounts capitalized $ (452,904) $ (422,656)
Income taxes (1,088,312) (1,189,487)

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED SEGMENTAL BREAKDOWN
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

For the year ended December 31, 2008 Telecommunications Technology& Industry Consumer Assetss Corporate and Other Total

Net sales to external customers (a) 12,069,329 2,076,157 2,500,489 24,835 16,670,810
Intersegment sales 12,184 456,291 96,018 36,138 600,631
Equity in net income of investees 15,876 (3) (10,948) 241,867 246,792
Interest income 72,707 9,588 10,273 67,702 160,270
Interest expense 258,026 59,540 98,033 172,738 588,337
Net interest revenue (b) - - 51,726 - 51,726
Depreciation and amortization 2,158,424 83,904 64,699 9,268 2,316,295
Operating income 3,564,994 96,320 (159,362) (118,350) 3,383,602
Income tax expense 803,175 22,432 31,439 416 857,462
Investments in affiliates 365,285 814 79,266 980,785 1,426,150
Segment assets 17,478,564 2,584,473 9,113,070 3,444,267 32,620,374
Indebtedness (c) 5,510,790 821,473 2,102,484 2,226,958 10,661,705
Capital expenditures 3,328,370 265,981 588,684 87,865 4,270,900

(a) - Interest income and expenses of the Banking segment are presented as
revenues from financial services in the Group`s consolidated financial statements.

(b) - The Banking segment derives a majority of its revenue from interest. In
addition, management primarily relies on net interest revenue, not the gross
revenue and expense amounts, in managing that segment. Therefore, only the net
amount is disclosed.

(c) - Represents the sum of short-term and long-term debt

(d)- Excluding dividends received by the Corporate segment from the Group`s
subsidiaries in amount of US$ 592.8 million.

For the year ended December 31, 2007 Telecommunications Technology& Industry Consumerg Corporate and Other Total

Net sales to external customers (a) 9,737,934 1,813,769 1,814,508 44,444 13,410,655
Intersegment sales 10,608 269,027 29,958 16,587 326,180
Equity in net income of investees 78,437 (66) 26 123,856 202,253
Interest income 52,587 21,103 9,862 61,114 144,666
Interest expense 196,601 49,697 31,471 145,879 423,648
Net interest revenue (b) - - 51,708 - 51,708
Depreciation and amortization 1,632,350 63,196 43,231 8,394 1,747,171
Operating income 3,260,597 (120,821) 141,549 (163,881) 3,117,444
Income tax expense 896,676 39,555 42,982 (7,447) 971,766
Investments in affiliates 438,198 2,425 50,921 843,465 1,335,009
Segment assets 16,740,266 2,315,437 8,289,191 3,415,018 30,759,912
Indebtedness (c) 4,477,448 617,205 1,779,588 1,610,503 8,484,744
Capital expenditures 1,912,969 260,802 907,823 29,346 3,110,940

(a) - Interest income and expenses of the Banking segment are presented as
revenues from financial services in the Group`s consolidated financial statements.

(b) - The Banking segment derives a majority of its revenue from interest. In
addition, management primarily relies on net interest revenue, not the gross
revenue and expense amounts, in managing that segment. Therefore, only the net
amount is disclosed.

(c) - Represents the sum of short-term and long-term debt

(d)- Excluding dividends received by the Corporate segment from the Group`s
subsidiaries in amount of US$ 378.9 million.

Attachment A

Non-GAAP financial measures. This press release includes financial information
prepared in accordance with accounting principles generally accepted in the
United States of America, or US GAAP, as well as other financial measures
referred to as non-GAAP. The non-GAAP financial measures should be considered in
addition to, but not as a substitute for, the information prepared in accordance
with US GAAP.

Operating Income Before Depreciation and Amortization (OIBDA) and OIBDA margin.
OIBDA represents operating income before depreciation and amortization. OIBDA
margin is defined as OIBDA as a percentage of our net revenues. Our OIBDA may
not be similar to OIBDA measures of other companies; is not a measurement under
accounting principles generally accepted in the United States and should be
considered in addition to, but not as a substitute for, the information
contained in our consolidated statement of operations. We believe that OIBDA
provides useful information to investors because it is an indicator of the
strength and performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital expenditures,
acquisitions of mobile operators and other investments and our ability to incur
and service debt. While depreciation and amortization are considered operating
costs under generally accepted accounting principles, these expenses primarily
represent the non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods. Our OIBDA
calculation is commonly used as one of the bases for investors, analysts and
credit rating agencies to evaluate and compare the periodic and future operating
performance and value of companies within the wireless telecommunications
industry. OIBDA can be reconciled to our consolidated statements of operations
as follows:

4Q 2008 4Q 2007 2008 2007

Operating Income 319.2 866.4 3,173.3 3,194.9

Depreciation and Amortization 554.0 566.6 2,316.3 1,747.2

OIBDA 873.2 1,433.0 5,489.6 4,942.1

1 Here and further, in the comparison of period to period results of operations,
in order to analyze changes, developments and trends in revenues by reference to
individual subsidiary`s revenues, revenues are presented on an aggregated basis,
which is revenues after the elimination of intra-segment (between entities in
the same segment) transactions, but before inter-segment (between entities in
different segments) eliminations, unless accompanied by the word "consolidated".
Amounts attributable to individual companies, where appropriate, are shown prior
to both intra-segment and inter-segment eliminations and may differ from
respective standalone values due to certain reclassifications and adjustments.

2 Here and further net (loss)/ income for the segments are presented after
minority interest.

3 Adjusted for non-recurring items

JSFC Sistema

Copyright Business Wire 2009