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Comstar
Equity Business Venture:
Comstar, in which the Communications Group owns a 50% interest, operates a
fully digital, fiber optic telecommunications network in Moscow, Russia. Comstar
provides integrated, high quality, digital telecommunications services with
modern transmission equipment, including local, national and international long
distance and value-added services, to businesses in Moscow.
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Three Months Ended Six Months Ended Six Months
June 30, June 30, Percent Change
------- ------ ------- ----
2002 2001 2002 2001 2001 to 2002
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(In millions,
except subscriber
data)
Subscribers 54,576 56,976 54,576 56,976 -4.2%
Revenue $15.7 $16.5 $31.7 $33.2 -4.5%
Gross Margins $9.2 $9.2 $17.8 $18.4 -3.3%
Selling, general
& administrative $4.2 $4.8 $8.3 $8.9 -6.7%
Depreciation and
amortization $4.6 $4.0 $9.2 $8.5 8.2%
Operating Income $0.4 $0.4 $0.3 $1.0 -70.0%
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Comstar
revenues decreased for the three months ended June 30, 2002 in comparison to the
same period last year. The decrease in revenues is due to continued reductions
of long distance tariffs to match competition offset by increases in data
services and line rentals. Gross margin remained constant at $9.2 million
despite this reduction in revenues. SG&A expenses decreased in 2002 due to
decreases in advertising and marketing costs.
Revenues for the six months ended June 30, 2002 decreased by 4.5% as compared
to the prior year. Gross margin also decreased, but by a lesser degree due to
the reduction of sales offset by cost reductions for terminating traffic.
SG&A expenses decreased in 2002 due to savings in advertising and marketing,
salaries and wages and security expenses.
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