ReportNo. 16625-AM Republic of TransportSector Review (In ThreeVolumes) Volume 11:Statistical Appendix Public Disclosure Authorized May 30, 1997

InfrastructureOperations Division Country Department IV Europeand Central Asia Region Public Disclosure Authorized Public Disclosure Authorized

D6C4M)W.tf'the:WorldBank Public Disclosure Authorized CURRENCY UNITS and EQUIVALENTS

Dr Dram - Introduced Nov. 22, 1993 US$1 = 14 Dr (November, 1993) US$1 =425 Dr (October, 1996) Rbl Ruble US$1 = 2,600 Rbl (October 1993) US$ US Dollar USc US cent

WEIGHTS, MEASURES and OTHER UNITS

bln billion inh inhabitant kg kilogram km kilometer mln million pass passenger sq km, km square kilometer t ton (metric, 1,000 kg) th thousand toe ton oil equivalent vpd vehicles per day

CONVERSION FACTORS

1 mile = 1.609 meters 1 kg = 2.205 lbs 1 US gallon = 3.785 liters 1 sq km = 0.386 square miles

CHEMICAL COMPOUNDS

CXHpHC Hydrocarbons CO Carbon Monoxide CO2 Carbon Dioxide NOX Nitrogen Oxides S02 Sulfur Dioxide

FISCAL YEAR

January 1 - December 31

Vice President: Johannes Linn, ECAVP Director: Basil G. Kavaksly, EC4DR Division Chief: Dominique Lallement, EC4IN Task Manager: Pedro N. Taborga, EC4IN Table 2.1 REPUBLIC OF ARMENIA: BALANCE OF PAYMENTS Million US$

=1994 1995 1996*

CURRENT ACCOUNT (excluding official transfers) (231.3) (483.0) (270.8)

Trade Balance (191.9) (402.0) (256.3) Exports 209.3 270.9 104.6 Imports (401.2) (672.9) (360.9) of which gas (69.4) (129.2) (36.4)

Services (75.4) (99.4) (28.5) Non-Factor Services (net) (68.7) (89.9) (24.5) Credit 47.8 33.5 15.5 of which Transport and Freight Credit 39.3 21.5 8.1 Debit (116.5) (123.4) (40.0) of which Transport and Freight Debit (71.7) (92.2) (34.6) Interest (net) (6.7) (9.5) (4.0)

Private Transfers 36.0 18.4 14.0

CAPITAL FLOWS (1.0) 6.1 (20.5)

Amortization (0.6) (50.1) (36.0) Foreign Direct Investment 2.6 19.1 15.5 Short-Term Flows (7.1) 0.7 Trade Credits 4.1 36.4

OVERALL BALANCE OF PAYMENTS (232.3) (476.9) (291.3)

Sources: IMF, Armenian Authorities, Multilateral and Bilateral Donors *Actual, January-June 1996 Table 4.1 ArmenianTraffic at CustomsPoints

FLOW OF TRAFFICFOR 1995 Cars Buses Trucks Total Vehicles Bavra Iborder with Georgia) September 771 80 320 1,171 October 900 118 344 1,362 November 813 83 422 1,318 December 569 53 176 798 Tashir (border with Georgia) September 692 43 353 1,088 October 1,593 65 531 2,189 November 1,940 58 429 2,427 December 1,837 47 649 2,533 Bagratashen (border with Georgia) September 2,467 118 648 3,233 October 1,842 79 351 2,272 November 2,210 102 476 2,788 December 2,543 125 760 3,428 Meghri (border with Iran) November 5241 131 2951 832 December 621 151 4001 1,036 Source: Ministry of Transport

FLOWOF TRAFFICFOR 1996 Cars Buses Trucks Total Vehicles

______Bavra (border with Georgia) January 472 47 177 696 February 445 53 211 709 March 617 51 223 891 April 1,709 180 732 2,621 May 1,118 191 654 1,963 June 1,034 128 391 1,553 Tashir (border with Georgia) January 1,8151 88 633 2,536 February 1,762 55 654 2,471 March I 1,645 59 638 2,342 April 2,721 161 1,552 4,434 May 2,945 2661 2,183 5,394 Bagratashen (border with Georgia) January 1,597 48 274 1,919 February 2,446 119 665 3,230 March 1,907 72 480 2,459 April 1,880 83 444 2,407 May 1,782 75 364 2,221 Meghri (border with Iran) January 306 4 185 495 February 323 6 158 487 March 335 4 227 566 April 407 11 369 787 May 518 18 542 1,078 June 781 161 4521 1,249 Source: Ministry of Transport Table 5.1 Traffic Flows on Selected Roads (vehicles/day)

Road 1994 1995 1996 -Ashtarak 4,512 1,017 9,561 Ashtarak-Talin 1,794 2,688 2,610 Talin-Ghunri 1,794 2,650 2,891 Ghumri-Ashotsk 1,371 1,293 1,392 Ashotsk-Bavra 584 1,521 1,405 Yerevan-Astashat 7,397 7,840 6,951 Arstashat-Ararat 2,901 6,727 6,034 Ararat-Yegkegnadzor 1,294 2,171 1,786 Yegkegnadzor-Goris 1,314 1,670 1,735 Goris-Kapan 869 963 1,229 Kapan-Meghri 871 670 583

Ashtarak-Spitak -- 2,286 3,021 Spitak-Vanadzor 2,784 3,972 Vanadzor-Stepanavan 1,560 1,655

Tashir-Georgian Border -- 2,058 3,435 Alaverdi-Bagratashen 3,451 2,929 2,447 Source: Ministry of Transport Estimates

Table 5.2 Road Accidents on Armenian Public Roads

Year No. of Reported Injuries Fatalities Accidents 1989 382 426 230 1990 666 760 328 1991 530 647 256 1992 359 453 224 1993 222 262 113 1994 169 200 85 1995 277 348 120 Source: Ministry of Transport Table 5.3 a Vehicle Fleet in Armenia and Yerevan, 1994

Type of Vehicle Armenia in bad repair Yerevan in bad repair

Cars 238,560 30% 118,260 20% Small Trucks/Lorries 28,165 35% 12,215 35% Trailers and Semi-Trailers 1,440 35% n.a. n.a. Buses (diesel/gas) 3,980 45% 2,885 35%

Total RoadTransport (excl. trolley) 272,145 30% 133,360 25%

Trolley buses 290 n.a. 270 n.a. Tramways 125 n.a. 125 n.a. Metro 70 n.a. 70 n.a.

Source: State Administration for Statistics and Energy ResearchInstitute-TAC/S Table 5.3 b Estimated Vehicle Operating Costs (US$ per 1,000 vehicle.km)

Road Category 1 2 3 4 5 6 IRI (Roughness Index) 3 4.3 5 6.5 10 15 Vehicle Type Cars 78 81 83 87 98 119 Light Trucks/Pick-ups 73 75 77 80 90 107 Buses 267 275 279 288 313 355 2-Axle Trucks 116 124 128 138 164 210 3-Axle Trucks 201 215 223 241 289 376 Articulated Trucks 369 392 404 432 506 633 Source: EU-Tacis - Amenagement de l'axe routier Erevan-Batoumi, Rapport Final, July 1996

Note on Road Category Descriptions: 1= good condition; 2=relatively good condition; 3=fair condition; 4=relatively poor condition; 5=poor condition; 6=very poor condition

Table 5.3 c Estimated Unit Costs of Vehicles (All Prices and Costs in US$) Input Car Pick-up Bus 2-Axle 3-Axle Articulated Truck Truck Truck Price of Vehicle 7,000 4,500 77,000 8,000 20,000 40,000 Number & Price of 4x 40 4x 40 6x 150 6x 150 10x 150 22x 150 Tires Price of Liter of 0.33 0.33 0.25 0.25 0.25 0.25 Petrol/Diesel Mechanic Labour 0.4 0.4 0.5 0.5 0.5 0.4 (cost per hour) Cost of Spare Parts 7,000 4,500 77,000 8,000 20,000 40,000 per Vehicle Price of Liter of 1 1 1 1 1 1 Lubricating Oil Source: EU-Tacis - Amenagement de l'axe routier Erevan-Batoumi, Rapport Final, July 1996 Table 5.4 ArmoniaTransport Sector Review - Road Infrastructuro Needs World Bank Prellminary Estimates, October 1996 Key Assumptions for Cashflow Projections -- Based on Armenian Road Directorate Estimates for Mai tenancoend Rehabilitation Needs 1996 1997 1998 1999 2000 2001 2002 2003 Unit Cost 1*/km) Fuel Imports Petrol itl 145,666 148,579 151,550 154,582 157.673 160,827 164,043 167,324 Diesel Fuel (t) 71.717 73,151 74,614 76,106 77,629 79,181 80,765 82,380 Uquid GasIt) 1,698 1,732 1,767 1,802 1,838 1,875 1,912 1,951 Natural Gas (lOOOm31 1,447.000 1,475,940 1,505,459 1,535,568 1,566,279 1,597,605 1,629,557 1,662,148 Pressudzed Gas (OOOrn3) 5899 6,017 6,138 6,260 6.385 6,513 6,643 6.776

Fuel Ujnit Prices Petrol (h/t) 250 250 250 250 250 250 250 250 Diesel Fuel 1/ti 180 180 180 180 180 180 180 180 Uquid Gas iS/ti 342 342 342 342 342 342 342 342 Natural Gas i$rOOOm3) 85 85 85 85 85 85 85 85 Pressurized Gas (S/tOOOm3) 74 74 74 74 74 74 74 74

Fuel Tax (%) Petrol 0% 12% 12% 12% 12% 12% 12% 12% Diesel Fuel 0% 12% 12% 12% 12% 12% 12% 12% Liquid Gas 0% 12% 12% 12% 12% 12% 12% 12% Natural Gas 0% 0% 0% 0% 0% 0% 0% 0% Pressurized Gas 0% 12% 12% 12% 12% 12% 12% 12%

Road Maintenance and Rehabiliation Needs - Interstate Roads Surface Dressing (km) 145 118 118 118 118 118 11,850 Asphalt Concrete Overiay (km) 114 73 73 73 73 73 10 10 38,290 2-Layer Asphalt Concrete (km) 33 33 33 33 33 105,100 Reconstruction (km) 3 23 23 23 23 23 180,000 Routine Repair and.,Maintenance (km) 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,300 Winter Maintenance (km) 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 670 Bridge Routine Maintenance & Repair (min $) 0.35 0.35 0.34 0.30 Traffic Safety (min S) 3.61 3.61 3.61 2.40 2.40 2.40 2.40 2.40

Road Maintenance and Rehabiliation Needs - Republic Roads Surface Dressing (km) 169 169 169 169 169 115 115 10,500 Asphalt Concrete Overlay (km) 128 128 128 128 128 128 128 33,600 2-Layer Asphalt Concrete (km) 40 40 40 40 40 40 40 80,000 Reconstruction (km) 25 25 25 25 25 25 25 150,000 Routine Repair and Maintenance (km) 2,500 2,500 2,500 2,500 2,500 2,500 2,500 1,100 Winter Maintenance (km) 2,500 2,500 2.500 2,500 2,500 2,500 2,500 450 Bfidge Routine Maintenance & Repair (min $S 0.35 0.35 0.35 0.30 Traffic Safety (min S) 1.75 1.75 1.75 0.85 0.85 0.85 0.85

Road Maintenance and Rehabiliation Needs - Secondary Roads Surface Dressing (km) 125 125 125 125 125 125 125 8,500 Asphalt Concrete Overlay (km) 84 84 84 84 84 84 84 30,000 2-Layer Asphalt Concrete (km) 43 43 43 43 43 43 80,000 Reconstruction (km) 31 31 31 31 31 31 130,000 Routine Repair and Maintenance (km) 3,500 3,500 3,500 3,500 3,500 3,500 3,500 1,000 Winter Maintenance (km) 3,500 3,500 3,500 3,500 3,500 3.500 3,500 350 Bridge Routine Maintenance & Repair (mln Si 0.30 0.30 0.30 0.30 0.30 Traffic Safety (min S) 0.77 0.77 0.77 1.09 1.09 1.1O 1,11

Bndges, Tunnels, Yerevan-Batumi Road, Spares and Equipment Landslide (mIn S) 10.50 10.50 5.50 5.50 6.00 Sevan Tunnel (mmnS) 2.00 4.00 2.00 Pushkin Tunnel (min S) 2.15 2.00 Spitak Tunnel (mln S) 2.00 2.00 3 Other Small Tunnels (min Si 1.00 1.00 1.00 Bridges (min Sl 0.25 0.95 1.50 1.50 1.50 1.50 Meghri Yerevan-Batumi(min Si 10.00 15.00 15.00 15.00 15,00 Sparesand Equip. for Armavtodor - Road Works imin$) 1.00 1.00

Road Directorate Staff 3,245 2,035 825 750 700 700 700 700 Average Wage iS/month) 30 50 60 72 86 104 124 149 Table5.5 ArmeniaTransport Sector Review - RoadInfrastructure Needs World BankPreliminary Estimates, October 1996 Cashflow Projections, 1996 US$ 1996 1997 1998 1999 2000 2001 2002 2003

Sourcesof Funds

BudgetAllocation 4,950,000 Divestiturefrom Assets 2,000,000 2,000,000 FuelTax Revenues 0 6,161,954 6,285,193 6,410,897 6,539,115 6,669,897 6,803,295 6,939,361 Total. InternalSources 4,950.000 8161.1954 8.285.193 6.410.897 6.539.115 6.669.897 6.803.295 6.939.361

HighwayProject Loan (WB) 10,500,000 3,000,000 2,500,000 Additional LoanBorrowing (EBRD) 7,000,000 6,500,000 1,500,000

Total, Sources 15.450.000 18.161.954 17.285.193 7.910.897 6.539.115 6.669.897 6.803.295 6.939.361

Applicationof Funds

RoadDirectorate Operational Expenses Salariesand Wages 1,168,200 1,221,000 594,000 648,000 725,760 870,912 1,045,094 1,254,113 Severances 0 0 0 64,800 51,840 0 0 0 Other Expenses 1,000,000 1,000,000 850,000 750,000 750,000 750,000 750,000 750,000 Total. RoadDirectorate Operational Expenses 2.168.200 2.221,000 1.444.000 1.462.800 1.527.600 1.620.912 1.795.094 2,004.113

RoadMaintenance and Rehabilitation Plan InterstateRoads 13,188,310 18,716,770 18,716,770 17,491,770 17,456,770 17,156,770 5,737,900 5,737,900 RepublicRoads 0 19,000,300 19,000,300 18,995,300 18,050,300 17,750,300 17,183,300 17,183,300 SecondaryRoads 0 9,377,500 15,987,500 15,987,500 16,307,500 16,307,500 16,017,500 16,027,500 Bridges,Tunnels, Yerevan-Batumi Road 0 0 15,395,000 33,450,000 30,000,000 24,000,000 24,000,000 7,500,000 Total. RoadMaintenance and Rehabilitation 13.188.310 47.094.570 69.099.570 85.924.570 81814.570 75.214.570 62.938.700 46.448.700

Sparesand Equip.for "Armavtodor" - RoadWorks 0 1,000,000 1,000,000 0 0 0 0 0

Debt Service Interest 73,500 514,500 922,000 1,012,000 1,012,000 1,012,000 1,012,000 1,012,000 Principal 0 0 0 0 0 0 0 0 Total. Debt Service 73 500 514.,500 922.000 1.012.0Q 1.012.000 1.012.000 1.012.000 1.012.000

TotalApplications 15.430.010 50.830.070 72.465.570 88.399.370 84.354,170 77.847.482 65.745.794 49.464.813

SurplusFunds 19,990 (32,668,116) (55,180,377) (80,488,473) (77,815,055) (71,177,585) (58,942,499) (42,525,452) OpeningCash Balance 0 19,990 (32,648,126) (87,828,503) (168,316,975) (246,132,030) (317,309,615) (376,252,114) ClosingCash Balance 19,990 (32,648,126) (87,828,503) (168,316,975) (246,132,030) (317,309,615) (376,252,114) (418,777,566) Table 5.6 ROAD TRANSPORT BASIC DATA, 1991-1995 FREIGHTTRANSPORT Source: Ministry of Transport and Communications 1991 1992 1993 1994 1995

FREIGHTTRANSPORT ACTIVITY

Total Traffic Ith. ton) 68.854 13.780 2.692 2.611 2.499 Freight Companies 36,805 7,967 1,865 1,681 1,245 Mixed Bus, Taxi & Freight Companies 32,049 5,813 827 930 1,254

Total Freight Turnover (th. ton.km) 1.139.838 264.262 67.563 73.115 59.940 Freight Companies 611,349 141,635 43,041 44,110 33,269 Mixed Bus, Taxi & Freight Companies 528,489 122,627 24,522 29,005 26,671

Averaae Trip (km) 17 19 25 28 24 Freight Companies 17 18 23 26 27 Mixed Bus, Taxi & Freight Companies 16 21 30 31 21

Total Number of Trucks 1 9955 . 8561 7.782 6.805 5.624 Freight Companies 5,766 4,836 4,249 3,871 3,217 Mixed Bus, Taxi & Freight Companies 4,189 3,725 3,533 2,934 2,407

FREIGHTTRANSPORT INCOME

Total Income Ith. Rbl before 1993. th. Dram afte 791.. 3.117 209.12 698.106 1.021.167 Freight Companies 428 1,696 12,489 420,688 609,391 Mixed Bus, Taxi & Freight Companies 363 1,421 8,423 277,418 411,776

Total Income (th.US$ equivalent) 791 289 279 2.429 2.514 Freight Companies 428 157 167 1,464 1,500 Mixed Bus, Taxi & Freight Companies 363 132 112 965 1,014

Averaae Revenue (USc/ton.km) 0.1 0.1 0.4 3.3 4.2 Freight Companies 0.1 0.1 0.4 3.3 4.5 Mixed Bus, Taxi & Freight Companies 0.1 0.1 0.5 3.3 3.8

Average Exchange Rate (Rbl per US$) 1.0 10.8 - - Average Exchange Rate (Dram per US$SJ 75.0 287.4 406.2

Notes: Does not include private sector traffic & activity, which is not recorded Table 5.7 ROAD TRANSPORT BASIC DATA, 1991-1995 BUSTRANSPORT (excluding Yerevan Urban Transport) Source: Ministry of Transport and Communications 1991 1992 1993 1994 1995

BUSTRANSPORT ACTIVITY

Total Traffic Ith. pass.) 183.294 85.830 24.078 29.846 38.272 Bus Companies 91,179 53,512 18,761 24,739 30,436 Mixed Bus, Taxi & FreightCompanies 92,115 32,318 5,317 5,107 7,836

Total Pass.Turnover (th. oass.kml 2.359.039 1.114.850 378.116 442.351 606.074 Bus Companies 1,269,197 727,078 284,836 328,371 429,703 Mixed Bus, Taxi & FreightCompanies 1,089,842 387,772 93,280 113,980 176,371

AverageTrip (km) 13 13 16 15 16 Bus Companies 14 14 15 13 14 Mixed Bus, Taxi & FreightCompanies 12 12 18 22 23

Total Numberof Buses 2.854 2,.889 2.789 2.664 2.470 Bus Companies 1,289 1,352 1,272 1,201 1,102 Mixed Bus, Taxi & FreightCompanies 1,565 1,537 1,517 1,463 1,368

BUS TRANSPORT INCOME

Total Income(Ith. Rbl before 1993. th. Dram aftet 286 1.470 16.865 753.166 2.024.063 Bus Companies 191 1,015 13,885 622,455 1,531,121 Mixed Bus,Taxi & Freight Companies 95 455 2,980 130,711 492,942

Total Income(th.US$ equivalent) 286 136 225 2.621 4.983 Bus Companies 191 94 185 2,166 3,769 Mixed Bus,Taxi & FreightCompanies 95 42 40 455 1,214

Averaae Revenue(USc/pass.km) 0.01 0.01 0.06 0.59 0.82 Bus Companies 0.02 0.01 0.06 0.66 0.88 Mixed Bus, Taxi & FreightCompanies 0.01 0.01 0.04 0.40 0.69

Average Exchange Rate (Rb/per US$) 1.0 10.8 - - Average ExchangeRate (Dramper US$J - 75.0 287.4 406.2

Nots Doesnot include YerevanUrban Transport Doesnot include private sector traffic & activity, which is not recorded Table 5.8 ROADTRANSPORT BASIC DATA. 1991-1995 TAXI TRANSPORT(excluding Yerevan Urban Transport) Source: Ministry of Transport and Communications | 1991 1992 1993 1994 1995

TAXI TRANSPORTACTIVITY

Total Distanceof Trips (th. km) 142.921 30.010 10.546 10.390 3.400 Taxi Companies 108,919 25,323 10,227 9,880 3,238 Mixed Bus,Taxi & FreightCompanies 34,002 4,687 319 510 162

Total Numberof Taxis 3.075 2.105 1.61S 1.426 1.379 Taxi Companies 2,223 1,680 1,388 1,285 1,278 Mixed Bus,Taxi & FreightCompanies 852 425 231 141 101

AverageYearly Utilization(km/vehicle) 46.478 14.257 6.514 7.286 2,466 Taxi Companies 48,996 15,073 7,368 7,689 2,534 Mixed Bus, Taxi & FreightCompanies 39,908 11,028 1,381 3,617 1,604

TAXI TRANSPORTINCOME.

Total IncomeIth. Rbl before 1993. th. Dram afte 225 365 1.278 48.964 307.918 Taxi Companies 173 324 1,178 47,626 303,318 Mixed Bus, Taxi & FreightCompanies 52 41 100 1,338 4,600

Total Income (th.US$ equivalent) 226 34 17 170 758 Taxi Companies 173 30 16 166 747 Mixed Bus,Taxi & FreightCompanies 52 4 1 5 11

AveraaeRevenue (USc/km) 0.2 0.1 0.2 1.6 22.3 Taxi Companies 0.2 0.1 0.2 1.7 23.1 Mixed Bus, Taxi & FreightCompanies 0.2 0.1 0.4 0.9 7.0

Average Exchange Rate (Rblper US$) 1.0 10.8 - - Average ExchangeRate (Dramper US$S 75.0 287.4 406.2

Notes: Does not include YerevanUrban Transport Does not include private sector traffic & activity, which is not recorded Table 5.9 ROADTRANSPORT BASIC DATA, 1991-1995 AGGREGATEDINCOME & EXPENDITURE(excluding Yerevan Urban Transport) Source: Ministry of Transport and Communications 1991 1992 1993 1994 1995

INCOME& EXPENDITURE

Total FreightIncome (th. Rbl before 1993. th. Dram afte, 791 3.117 209.12 698.106 1.021.167 FreightCompanies 428 1,696 12,489 420,688 609,391 Mixed Bus, Taxi & FreightCompanies 363 1,421 8,423 277,418 411.776

Total Bus IncomeIth. Rb)before 1993. th. Dram after) 286 1.470 16.865 753.166 2.024.063 Bus Companies 191 1,015 13,885 622,455 1,531,121 Mixed Bus, Taxi & FreightCompanies 95 455 2,980 130,711 492,942

Total Taxi Income(th. Rbl before 1993. th. Dram after) 225 365 1,278 48.964 307918 Taxi Companies 173 324 1,178 47,626 303,318 Mixed Bus, Taxi & FreightCompanies 52 41 100 1,338 4,600

Total Income(th. RbI before 1993, th. Dram after) 1,302 4,952 39,055 1,500,236 3,353,148

Total Expenditure(th. RbIbefore 1993. th. Dram after) 1,197 4,664 33.576 1,333,469 2,968,724

Total Profit (th. Rbl before 1993, th. Dram after) 105 288 5,479 166,767 384,424

ROADTRANSPORT INCOME & EXPENDITURE (th.US$ Equivalent)

Total Income 1,302 459 521 5,220 8,255 Total Expenditure 1,197 432 448 4,640 7,309 Total Profit 105 27 73 580 946

Average Exchange Rate (Rblper US$) 1.0 10.8 - Average ExchangeRate (Dramper US$) - 75.0 287.4 406.2

Noe Does not include Yerevan Urban Transport Does not include private sector traffic & activity, which is not recorded Table 5.10 MINISTRYOF TRANSPORT-- YEREVANURBAN TRANSPORT BUS TRANSPORT(diesel & gas) ANALYSISOF OPERATIONSAND FINANCIALACTIVITY 1995US$ equivalent __ 1991 1992 1993 1994 1995

I ACTIVITYand REVENUES

Average Tariff(UScents per passenger.km) 3.40 1.44 0.07 0.49 0.63 TransportedPassengers (min) 130.2 88.7 46.3 34.1 42.5 Passenger Turnover(min passenger.km) 744.0 449.3 234.1 182.5 215.7 Average Trip (km) 5.7 5.1 5.1 5.4 5.1 Fleet, of which: 1,200 993 949 892 813 New buses Utilization Coefficient(% of operating buses to total fleet) 51.0% 38.7% 17.8% 18.6% 22.6%

Revenues-- excludingbudget allocations(mln US$) 25.30 6.51 0.17 0.90 1.36

II EXPENSES

Wages and Salaries 14.20 3.98 0.08 0.08 0.22 SocialAllocation 5.20 1.18 0.03 0.03 0.08 Fuel 12.50 9.73 0.27 0.58 0.78 Lubricants 0.80 0.39 0.01 0.02 0.03 Repair and Maintenance(includes Tires) 4.40 3.67 0.13 0.19 0.28 Depreciation 0.10 0.03 0.00 0.00 0.01 Other (misc, taxes... ) 1.20 0.47 0.02 0.04 0.06

Expenses (US$ mln) 38.40 19.44 0.52 0.95 1.47

Profit/Loss (US$ miln)* -13.10 -12.94 -0.35 -0.05 -0.1C Source: Ministry of Transport and Mission Estimates * Losses were at least partially covered by State subsidies until 1994

|AverageExchange Rate (Rblper USS) 1 10.8 2,600 - I l IAverageExchange Rate (Dramper US$) I - | 75 I 287.4 I 406.2 Table 5.11 MINISTRYOF TRANSPORT-- YEREVANURBAN TRANSPORT ELECTRICTRAMWAYS and TROLLEYBUSES ANALYSISOF OPERATIONSAND FINANCIALACTIVITY 1995 US$ equivalent 1991 1992 1993 1994 1995

I ACTIVITY and REVENUES

AverageTariff (UScents per passenger.km) 2.30 1.67 0.07 0.17 0.48 TransportedPassengers (mln) 39.0 33.7 28.1 33.2 30.4 PassengerTurnover (mln passenger.km) 175.5 151.7 126.4 149.7 136.5 AverageTrip (km) 4.5 4.5 4.5 4.5 4.5 Fleet, of which: 516 469 454 397 362 New Units 7 Utilization Coefficient (% of operating units to total fleet) 53.0% 52.0% 44.2% 40.9% 36.9%

Revenues -- excludingbudget allocations (min US$) 4.50 2.46 0.09 0.25 0.65

II EXPENSES

Wages and Salaries 7.20 2.63 0.09 0.11 0.29 Social Allocation 0.40 0.35 0.03 0.04 0.11 Power 7.50 8.08 0.13 0.58 0.67 Lubricants 0.10 0.05 0.00 0.00 0.01 Repair and Maintenance(includes Tires) 3.40 4.33 0.12 0.40 0.56 Depreciation 0.10 0.03 0.00 0.00 0.19 Other (misc, taxes... ) 4.00 0.69 0.03 0.07 0.08

Expenses (US$ mln) 22.70 16.16 0.39 1.20 1.91 = _. _ __E

Profit/Loss(US$ mln) * -18.201 -13.69 _ 0_ -0.95 -1.251 Source:Ministry of Transport and Mission Estimates * Losses were at least partially covered by State subsidies until early 1995

|AverageExchange Rate (Rblper US$) 1 10.8 2,600 - l

IAverageExchange Rate (Dram per US$) I - I - | _ 287.4 | 406.2 l Table 5.12 MINISTRYOF TRANSPORT - YEREVAN URBAN TRANSPORT METRO OF YEREVAN ANALYSISOF OPERATIONS AND FINANCIAL ACTIVITY 1995USS equivalent 1991 1992 1993 1994 1995 1996*

I ACTIVITY and REVENUES

Average Tariff(UScents per trip) 12.50 7.56 0.39 1.08 4.01 7.14 TransportedPassengers (mln) 49.2 52.2 73.9 71.4 55.4 40.0 Passenger Turnover (min passenger.km) 187.0 198.6 280.8 271.3 210.4 152.0 Average Trip (kIn) 3.8 3.8 3.8 3.8 3.8 3.8 Fleet, of which: 61 58 62 70 70 70 New Units Utilization Coefficient(% of operating units to total fleet) 79.6% 77.8% 79.0% 74.9% 65.2% 76.5%

Revenues - excluding budget allocations (mln US$) 6.11 3.94 0.22 0.58 1.70 2.36

II EXPENSES

Wages and Salaries 4.60 1.98 0.10 0.12 0.39 0.57 Social Allocation 1.80 0.63 0.04 0.05 0.15 0.21 Materials 0.22 0.10 0.02 0.08 0.14 0.18 Power 1.42 2.69 0.16 0.76 0.84 1.05 Repair and Maintenance(includes Tires) 2.63 1.65 0.05 0.21 0.80 1.31 Depreciation 2.20 0.20 0.00 0.01 0.07 0.18 Other (misc,taxes ... ) 2.34 1.03 0.09 0.13 0.19 0.19

Expenses (US$ min) 15.20 8.28 0.45 1.36 2.58 3.69

Profit/Loss before Budget Allocation (US$ min) -9.10 -4.34 -0.23 -0.78 -0.87 -1.33

Budget Allocation (USS mln) 7.00 5.60 0.27 0.65 0.78 0.95

Total Profit/Loss (US$ mln) -2.10 1.26 0.05 -0.13 -0.09 -0.38

Source: Ministry of Transport and MissionEstimates Note: * Estimatesfor 1996, based on 6 months of actual information

|verageExchangeRate(RblperUSS) | 1 10.8 2,600 - I- l |AverageExchange Rate (Dram per US$) I - I - | 75 | 287.4 | 406.2 I 420.0 Table 5.13 METRO of Yerevan - World Bank Preliminary Forecasts, October 1996 Key Assumptions and Income Statement Projections (1995 US$)

Actual .. ------Projected ------1995 1996 1997 1998 1999 2000 2001 2002 2003 KEY ASSUMPTIONS

Traffic Passenger (pass) 55,400,000 40,000,000 39,000,000 39,390,000 39,783,900 40,181,739 40,583,556 40,989,392 41,399,286 Passenger.km (min pass.km) 210.4 151.9 148.1 149.6 151.1 152.6 154.1 155.7 157.2 Average trip (km) 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8

Tariff per trip (USc) 4.01 7.14 16.00 23.00 25.00 25.00 26.00 27.00 28.00 Average passenger tariff (USc / pass.km) 0.81 1.60 3.79 6.06 6.58 6.58 6.85 7.11 7.37 Privileged and non-paying passengers I Total passengers I%) 20% 20% 10% 0% 0% 0% 0% 0% 0%

Total Metro of Yerevan Staff 1,440 1,440 1,320 1,200 1,200 1,200 1,200 1,200 1,200

Average Salary 1S/month) 22.8 34.2 50.0 60.0 72.0 86.4 103.7 124.4 149.3

OPERATING REVENUES(1995 US$1

Passenger Income 1,701,132 2,437,223 5,616,000 9,059,700 9,945,975 10,045,435 10,551,725 11,067,136 11,591,800 Budget Allocation 784,097 492,368 246,184 0 0 0 0 0 0

Total Operating Revenue 2,485,229 2,929,591 5,862,184 9,059,700 9,945,975 10,045,435 10,551,725 11,067,136 11,591,800

OPERATINGEXPENSES (1995 US$)

Salary and Wages 394,350 590,842 792,000 864,000 1,036,800 1,244,160 1,492,992 1,791,590 2,149,908 Social Benefits 152,991 221,566 297,000 324,000 388,800 466,560 559,872 671,846 806,216 Operation and Maintenance 935,323 1,538,651 1,615,583 1,696,363 1,781,181 1,870,240 1,963,752 2,061,939 2,165,036 Power 835,591 1,083,210 1,584,195 1,600,037 1,616,037 1,632,198 1,648,520 1,665,005 1,681,655 Severance O 0 144,000 172,800 0 0 0 0 0 Other Expenses (incl. taxes) 191,706 196,947 206,795 217,134 227,991 239,391 251,360 263,928 277,125

Total Operating Expenses 2,509,961 3,631,216 4,639,573 4,874,334 5,050,809 5,452,548 5,916,496 6,454,309 7,079,940

Operating Profit Before Depreciation, Interest and Taxes -24,732 -701,625 1,222,611 4,185,366 4,895,166 4,592,887 4,635,229 4,612,827 4,511,860 Depreciation 65,532 3,361,138 3,361,138 3,367,138 3,628,138 3,721,138 3,814,138 3,910,138 4,006,138 Operating Profit Before Interest and Taxes -90,263 -4,062,763 -2,138,527 818,228 1,267,028 871,749 821,091 702,689 505,722 Interest on Borrowings and Other 0 90,000 0 0 500,000 400,000 300,000 200,000 100,000 Operating Profit Before Taxes -90,263 -4,152,763 -2,138,527 818,228 767,028 471,749 521,091 502,689 405,722 Profit Tax (30%) 0 0 0 245,468 230,108 141,525 156,327 150,807 121,717

Net Profit after Tax -90,263 -4,152,763 -2,138,527 572,760 536,919 330,224 364,764 351,882 284,005

Notes: Average 1995 Exchange Rate (US$/Dram): 406.2 (Source: IMF) Table 5.14 METRO of Yerevan - World Bank PreliminaryForecasts, October 1996 Sourcesand Applicationsof Funds (1995 US$)

------Projected ------1996 1997 1998 1999 2000 2001 2002 2003 SOURCES

Internal Sources Net Operating Profit Before Interest and Taxes -4,062,763 -2,138,527 818,228 1,267,028 871,749 821,091 702,689 505,722 Depreciation 3,361,138 3,361,138 3,367,138 3,628,138 3,721,138 3,814,138 3,910,138 4,006,138 Total. Internal Sources -701.625 1.222.611 4.185.366 4.895.166 4.592.887 4.635.229 4.612.827 4.511.860

Long Term Loan 0 0 5,000,000 0 0 0 0 0

Total Sources -701,625 1,222,611 9,185,366 4,895,166 4,592,887 4,635,229 4,612,827 4,511,860

APPLICATIONS

Capital Investments Projects Financed by Internal Sources 0 200,000 3,700,000 3,100,000 3,100,000 3,200,000 3,200,000 3,300,000 Projects Financed by Long Term Loan 5,000,000 Total. Capital Investments Q 200.000 8.700.000 3.100.000 3.100.000 3.200.000 3.200.000 3,300.000

Debt Service Interest 90,000 0 0 500,000 400,000 300,000 200,000 100,000 Principal 387 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Total. Debt Service 90.387 0 Q 1.500.000 1.400.000 1.300.000 1.200.000 1,100,000

Profit Tax 0 0 245,468 230,108 141,525 156,327 150,807 121,717

Increase (Decrease) in Non-Cash Working Capital -799,696 978,850 113,666 22,222 -29,334 -17,567 -23,342 -30,275

Total Applications -709,310 1,178,850 9,059,135 4,852,330 4,612,190 4,638,760 4,527,464 4,491,442

Surplus Funds 7,685 43,761 126,231 42,836 -19,304 -3,531 85,362 20,418 Opening Cash Balance 27,220 34,905 78,666 204,897 247,733 228,429 224,898 310,260 Closing Cash Balance 34,905 78,666 204,897 247,733 228,429 224,898 310,260 330,678

- -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Table 5.15 METRO of Yerevan - World Bank Preliminary Forecasts, October 1996 Balance Sheets at Years Ending December 31 11995 US$) End of 1996 Asset Revaluation Coefficient: 15 Depreciation Coefficient: 3.0% Actual ------Projected ------...... 1995 1996 1997 1998 1999 2000 2001 2002 2003 ASSETS

Fixed Assets Gross Fixed Assets 7,469,195 112,037,932 112,037,932 112,237,932 120,937,932 124,037,932 127,137,932 130,337,932 133,537,932 Less Accumulated Depreciation -736,201 -14,404,155 -17,765,293 -21,132,431 -24,760,569 -28,481,707 -32,295,845 -36,205,983 -40,212,121 Net Fixed Assets 6,732,994 97,633,777 94,272,639 91,105,501 96,177,363 95,556,225 94,842,087 94,131,949 93,325,811 Capital Work in Progress 0 0 200,000 8,700,000 3,100,000 3,100,000 3,200,000 3,200,000 3,300,000 Total. Fixed Assets 6.732.994 97.633.777 94.472.639 99.805.501 99,277.363 98.656.225 98.042.087 97,331 949 96,625.811

Long-Term Investments 0 0 0 0 0 0 0 0 0

Current Assets Cash and Bank Notes 27,220 34,905 78,666 204,897 247,733 228,429 224,898 310,260 330,678 Short-Term Investments 0 0 0 0 0 0 0 0 0 Accounts Receivable 32,593 81,378 244,258 377,488 414,416 418,560 439,655 461,131 482,992 Inventories 95,616 95,616 95,616 95,616 95,616 95,616 95,616 95,616 95,616 Other Assets 15,836 15,836 15,836 15,836 15,836 15,836 15,836 15,836 15,836 Total Current Assets 171.266 227.735 434,376 693.837 773.601 758.441 776.005 882.843 925.122

Total Assets 6,904,260 97,861,512 94,907,015 100,499,338 100,050,964 99,414,666 98,818,092 98,214,792 97,550,933

EQUITY and LIABILITIES

Equity Capital 6,519,786 6,519,786 6,519,786 6,519,786 6,519,786 6,519,786 6,519,786 6,519,786 6,519,786 Capital Reserve 0 0 0 0 0 0 0 0 0 Retained Earnings 0 -4,152,763 -6,291,290 -5,718,530 -5,181,611 -4,851,387 -4,486,623 -4,134,741 -3,850,735 Revaluation Reserve 14,962 94,276,882 94,276,882 94,276,882 94,276,882 94,276,882 94,276,882 94,276,882 94,276,882 Total Eauitv 6.534.747 96.643.905 94.505.378 95.078.138 95 615 058 95.945.282 96.310.045 96.661.927| 96.945933

Long-Term Debt 387 0 0 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0

Liabilities Accounts Payable 354,121 302,601 386,631 406,194 420,901 454,379 493,041 537,859 589,995 Advances 1,741 1,741 1,741 1,741 1,741 1,741 1,741 1,741 1,741 Short-Term Borrowing 0 900,000 0 0 0 0 0 0 0 Other Current Liabilities 13,265 13,265 13,265 13,265 13,265 13,265 13,265 13,265 13,265 Total, Liabilities 369.126 1.217.607 401.637 421.200 435.906 469.384 508.047 552.865 605.000

Total Equity and Uabilities 6,904,260 97,861,512 94,907,015 100,499,338 100,050,964 99,414,666 98,818,092 98,214,792 97,550,933

Notes: Average 1995 ExchangeRate (US$/Dram): 406.2 (Source: IMF) Table 5.16 METROof Yerevan - Would Bank Prelimnary Forecast, Octobe 1996 Ratios of Fiancial Performance

Actual ------Projected------._ -...- . . ______.____ 1996 1996 1997 1998 1999 2000 2001 2002 2003 Uquldity Current Assets/Current Liabilities 0.46 0.19 1.08 1.65 1.77 1.62 1.53 1.60 1.53 Quick Assets/Current Liabilities 0.07 0.03 0.20 0.49 0.57 0.49 0.44 0.56 0.55

OperatingPerformance (Working,ExpnssepreciatioriffiRvenuem 104% 239% 136% 91% 87% 91% 92% 94% 96%

Profitability Return on Gross Fixed Assets -1.2% -3.7% -1.9% 0.5% 0.4% 0.3% 0.3% 0.3% 0.2% Return on Net Fixed Assets -1.3% -4.3% -2.3% 0.6% 0.6% 0.3% 0.4% 0.4% 0.3%

Long Term Debt. FinancialLeverage Debt Service Coverage na na na na 3.26 3.28 3.57 3.84 4.10 Interest Coverage na na na na 2.53 2.18 2.74 3.51 5.06

Receivablesand Payables Receivables/AnnualBillings (Days) 5 10 15 15 15 15 15 15 15 Total Payables/AnnualExpenditures (Days) 53 31 31 31 31 31 31 31 31 Table 6.1 OrganizationalChart of the

|.DIRECTOR.1 |GIFNEtRAL(4) |l TCIIA

FINANCAL E-XPLOITATION SPECIALSERVICE BUILDINGSERVICE SERVICE(2) SERVICE(2) (2) (2)

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VP-I VP-2 T-1 E-1 G-1 P-I (135) B:D 1 S' h -(7 o (28) (24) (115) (201) (149) P-2.(177) 12I) A NG-i NG-2 (27) VP-3 T-2 E-2 G-2 P-3 (195) B D T (1.7) (135)(I M4 (46) (8) (291). (160) (163) P-4(139) (29) 11 T-3 E-3 P-5 (25) NOffice (47), (253) ,(1.96) slibrary (2), (1108 l | l | [ |- lflilos)l l l l l | trackrecor- ding cars (4)

BALLASTFACTORY FfiTRACKBUILDINGUNIT FWAThERSUPPLY UNIT

Under Ministry of Transport Under Ministry of Transport TRADING(132)DEP. SECURITY Table 6.2 ARMENIAN RAILWAYS STAFFSTRUCTURE, 1988-1995

Number of People Activity 1988 1991 1993 1994 1995

OperationalStaff Train Operatorsand Assistants 698 668 440 390 375 Rolling Stock Repair Staff 400 384 253 224 235 Train Service Staff 405 387 255 226 220 Track RepairStaff 517 495 326 289 290 Contact Network Electricians 263 252 166 147 150 Station Staff 710 680 448 398 390 Wagon Stewards 742 710 467 414 400 Other (Carpenters,Blacksmiths, Drivers, etc... ) 3,200 3,064 2,016 1,765 1,850 Overheadsand Administration 500 480 460 408 400 Total. Operational Staff 7.435 7.120 4,831 4,261 4,310

Non-Operationalor Non-RailwayActivity Staff Doctors and Teachers 825 790 520 462 450 Other* 3,679 3,512 2,165 1,827 1,887 Total. Non-Operationaland Non-RailwayActivity Staff 4.504 4 302 2.685 2,289 2.337

Total Staff 11,939 11,422 7,516 6,550 6,647

Source: Armenian Railways * Includes Other Non-RailwayActivity Staff and Cahiers, Secretaries,etc. Taole 6.3 RAILWAY Depaetment - WouldBank PreliminaryForecasts. October 1996 Key Assumptions and Income Statement Projections (1995 US$)

Actual ------Projeted ------1995 1996 1997 1998 1999 2000 2001 2002 2003 KEY ASSUMPTIONS

Traffic Passenger (pass) 2,969.400 1,715.000 857,500 0 0 0 0 0 0 Passenger.km(min pass.km) 165 95 48 0 0 0 0 0 0 Average trip (km) 56 56 56 56 56 56 56 56 56

Freight It) 2,203,200 1,725,000 1,742,250 1,759,673 1,777,269 1,812,815 1.849,071 1,886,052 1,923,773 Freight (min t.km) 403 345 348 343 347 353 351 358 366 Average trip (km) 183 200 200 195 195 195 190 190 190

Average passengertarff IUSc / pass.km) 0.19 0.28 3.00 - - - Average freight tariff (USc I t.km) 1.90 2.00 5.00 6.00 6.75 7.00 7.25 7.50 7.50

Tadff for paying pass.km (UScipass.kml 0.36 0.52 3.92 . Non-paying pass.km / Total pass.km (Estimate, %) 47% 47% 23% .

Total Railway Staff 6,647 6,647 5,324 4,000 3,000 3,000 3,000 3,000 3,000

Average Salary 11/month) 11.4 20.0 35.0 42.0 50.4 60.5 72.6 87.1 104.5

OPERATINGREVENUES 11995 USS1

Passenger Operations 310,684 262,839 1,429.455 0 0 0 0 0 0 Freight Operations 7,636,140 6,900,000 17,422,500 20,588,168 23,393,306 24,744,919 25,470,952 26,876,246 27,413,770

Total Operating Revenue 7,946,824 7,162,839 18,851.955 20,588,168 23,393,306 24,744,919 25,470,952 26,876,246 27,413,770

OPERATINGEXPENSES (1995 US$1

Salary and Wages 909,158 1,595,280 2,235,870 2,016,000 1,814,400 2,177,280 2,612,736 3,135,283 3,762,340 Social Benefits 329,394 577,981 810,072 730,411 657,370 788,844 946,613 1,135,935 1,363,122 Operation and Maintenance 3,852,043 4,044,645 4,246,878 3,877,584 4,071,463 4,275,036 4,488,788 4,713,228 4,948,889 Fuel & Power 2,740,276 3,025,168 2,721,492 2,050,087 2,070,588 2,112,000 2,099,003 2,140,983 2,183,803 Severance 0 0 1,111,740 1,334,088 1,209,600 0 0 0 0 Other Expenses (incl. Excess Wage Tax and Other Taxes) 592,811 622,452 653,575 623,867 655,060 687,813 722,204 758,314 796,230

Total Operating Expenses 8,423.683 9,865,527 11,779,625 10,632,037 10,478,482 10,040,973 10,869,344 11,883,743 13,054,384 of which Passenger 1,306.831 1,140,143 756,629 0 0 0 0 0 0 Freight 7,116,852 8,725,384 11,022,996 10,632,037 10,478,482 10,040,973 10,869,344 11,883,743 13,054,384

Operating Profit Before Depreciation, Interest and Taxes -476,859 -2,702,688 7,072,330 9,956,131 12,914,825 14,703,946 14,601,608 14,992,502 14,359,387 Depreciation 255,785 8,689,205 8,694,205 8,856,705 9,756,705 10,216,705 10,754,205 11,336,705 11,929,205 Operating Profit Before Interest and Taxes -732,644 -11,391,893 -1,621,875 1,099,426 3,158,119 4,487,241 3,847,403 3,655,797 2,430,182 Interest on Borrowings and Other 0 150,000 0 0 1,000,000 800,000 600,000 400,000 200,000 Operating Profit Before Taxes -732,644 -11,541,893 -1,621,875 1,099,426 2,158,119 3,687,241 3,247,403 3,255,797 2,230,182

Non-Transport Activity Profit (Loss) 763,663 381,832 0 0 0 0 0 0 0 Total Profit Before Taxes 31,019 - 11,160,062 -1,621,875 1,099,426 2,158,119 3,687,241 3,247,403 3,255,797 2,230,182 Profit Tax (30%) 9,306 0 0 329,828 647,436 1,106,172 974,221 976,739 669,054

Net Profit after Tax 21,713 -11,160,062 -1,621,875 769,598 1,510,684 2,581,068 2,273,182 2,279,058 1,561,127

Nots Average 1995 Exchange Rate (US$/Dram): 406.2 (Source: IMF) All estimates net of VAT Table6.4 RAILWAYDepartment - World Bank Preliminary Forecasts, October 1996 Sourcesand Applications of Funds(1996 US$)

------~ ---~ ------Proj !cted ------, ------1996 1997 1998 1999 2000 2001 2002 2003 SOURCES

InternalSources Net Operating Profit Before Interest and Taxes -11,010,062 -1,621,875 1,099,426 3,158,119 4,487,241 3,847,403 3,655,797 2,430,182 Depreciation 8,689,205 8,694,205 8,856,705 9,756,705 10,216,705 10,754,205 11,336,705 11,929,205 Total. InternalSources -2.320.856| 7072.330 9.956.131 12.914.825 14.703.946 14.601.608 14992.502

Long Term Loan 0 0 10,000,000 0 0 0 0 0

Total Sources -2,320,856 7,072,330 19,956,131 12,914,825 14,703,946 14,601,608 14,992,502 14,359,387

APPLICATIONS

Capital Investments Projects Financed by Internal Sources 100,000 3,250,000 8,000,000 9,200,000 10,750,000 11,650,000 11,850,000 11,500,000 Projects Financed by Long Term Loan 10,000,000 Total. Capital Investments 100.000 3.250.000 18.000.000 9.200.000 10.750.000 11.650.000 11.850.000 11.500.000

Debt Service Interest 150,000 0 0 1,000,000 800,000 600,000 400,000 200,000 Principal 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Total. Debt Service 150.000 Q 0 3000.000 2 600.000 2.400.000 2.200,000

Profit Tax 0 0 329,828 647,436 1,106,172 974,221 976,739 669,054

Increase (Decrease) in Non-Cash Working Capital -2,630,276 3,811,267 1,274,553 -23,234 34,115 -534,820 -195,339 4,618

Total Applications -2,380,276 7,061,267 19,604,380 12,824,201 14,690,287 14,689,401 15,031,400 14,373,673

Surplus Funds 59,420 11,063 351,751 90,623 13,659 -87,793 -38,897 -14,286 Opening Cash Balance 165,601 225,020 236,084 587,834 678,458 692,117 604,324 565,426 Closing Cash Balance 225,020 236,084 587,834 678,458 692,117 604,324 565,426 551,140 Table 6.6 RAILWAY Department - World Bank Preliminary Forecasts, October 1996 Balance Sheets at Years Ending December 31 (1995 US$) End of 1996 Asset Revaluation Coefficient: 8.7 Depreciation Coefficient: 5.0% Actual ----- ProJected ------1995 1996 1997 1998 1999 2000 2001 2002 2003 ASSETS

Fixed Assets Gross Fixed Assets 19,975,185 173,784,106 173,884,106 177,134,106 195,134,106 204,334,106 215,084,106 226,734,106 238,584,106 Less Accumulated Depreciation -6,153,619 -62,225,690 -70,919,895 -79,776,600 -89,533,306 -99,750,011 -110,504,216 -121,840,922 -133,770,127 Net Fixed Assets 13,821,566 111,558,417 102,964,211 97,357,506 105,600,801 104,584,095 104,579,890 104,893,185 104,813,979 Capital Work in Progress 0 100,000 3,250,000 18,000,000 9,200,000 10,750,000 11,650,000 11,850,000 11,500,000 Total, Fixed Assets 13.821.566 111.658.417 106.214.211 115 357,506 114.800.801 115.334.095 116.229.890 116.743.185 116.313.979

Long-Term Investments 0 0 0 0 0 0 0 0 0

Current Assets Cash and Bank Notes 165,601 225,020 236,084 587,834 678,458 692,117 604,324 565,426 551,140 Short-Term Investments 0 0 0 0 0 0 0 0 0 Accounts Receivable 3,663,715 2,785,549 5,236,654 5,147,042 4,548,698 4,124,153 3,537,632 3,359,531 3,426,721 Inventories 1,177,181 1,177,181 1,177,181 1,177,181 1,177,181 1,177,181 1,177,181 1,177,181 1,177,181 Other Assets 120,355 120,355 120,355 120,355 120,355 120,355 120,355 120,355 120,355 Total Current Assets 5.126.851 4.308.105 6.770.274 7.032.412 6.524.692 6.113.806 5.439.492 5222.493 5,275,398

Total Assets 18,948,417 115,966,521 112,984,485 122,389,918 121,325,492 121,447,901 121,669,382 121,965,677 121,589,377

EQUITY and LIABILITIES

Equity Capital 14,397,297 14,397,297 14,397,297 14,397,297 14,397,297 14,397,297 14,397,297 14,397,297 14,397,297 Capital Reserve 0 0 0 0 0 0 0 0 0 Retained Earnings 0 -11,160,062 -12,781,937 -12,012,339 -10,501,655 -7,920,587 -5,647,405 -3,368,347 -1,807,220 Revaluation Reserve 34,892 106,460,948 106,460,948 106,460,948 106,460,948 106,460,948 106,460,948 106,460,948 106,460,948 Total Eauit 14.432.189 109.698.183 108.076.308 108.845.906 110.356.589 112.937.658 115.210,839 117.489.897 119.051.024

Long-Term Debt 0 0 0 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0

Liabilities Accounts Payable 970,229 822,127 981,635 886,003 873,207 836,748 905,779 990,312 1,087,865 Advances 0 0 0 0 0 0 0 0 0 Short-Term Borrowing 0 1,500,000 0 0 0 0 0 0 0 Other Current Liabilities 3,546,000 3,946,211 3,926,542 2,658,009 2,095,696 1,673,496 1,552,763 1,485,468 1,450,487 Total. Liabilities 4.516.228 6.268.338 4.908.177 3.544.012 2.968.903 2.,510.243 2.458542 2.475.780 2.538.352

Total Equity and Liabilities 18,948,417 115,966,521 112,984,485 122,389,918 121,325,492 121,447,901 121,669,382 121,965,677 121,589,377

Notes: Average 1995 Exchange Rate (US$/Dram): 406.2 All estimates net of VAT Table 6.6 RAILWAYDepartment - World Bank Preliminary Forecasts, October 1996 Ratios of FinancialPerformance

Actual ------Projected------1995 1996 1997 1998 1999 2000 2001 2002 2003 Liquidity Current AssetslCurrent Liabilities 1.14 0.69 1.38 1.98 2.20 2.44 2.21 2.11 2.08 Quick Assets/Current Liabilities 0.04 0.04 0.05 0.17 0.23 0.28 0.25 0.23 0.22

Operating Performance (Working Expenses+Depreciation)/Revenues 109% 259% 109% 95% 86% 82% 85% 86% 91%

Profitability Return on GrossFixed Assets 0.1 % -6.4% -0.9% 0.4% 0.8% 1.3% 1.1% 1.0% 0.7% Return on Net Fixed Assets 0.2% -10.0% -1.6% 0.8% 1.4% 2.5% 2.2% 2.2% 1.5%

Debt, FinancialLeverage Debt Service Coverage na na na na 4.30 5.25 5.62 6.25 6.53 Interest Coverage na na na na 3.16 5.61 6.41 9.14 12.15

Receivablesand Payables ReceivablestAnnualBillings (Daysl 166 140 100 90 70 60 50 45 45 Total Payables/AnnualExpenditures (Days) 193 174 150 120 102 90 81 75 70 Table7.1 Arrivalsand departures,Yerevan (000's) - 1994 Departure Arrival AAL** AAL** Month Total Other Total Other airlines airlines Pax. Share % Pax. Share % I 41.1 16.5 24.6 60% 23.2 9.3 13.9 60% 11 36.6 14.4 22.2 60% 22.1 8.6 13.5 61% 11 32.6 12.7 19.9 61% 34.8 13.6 21.2 60% IV 31.3 11.9 19.4 62% 31.1 11.8 19.3 62% V 43.4 17.9 25.5 59% 30.5 12.5 18 59% VI 38.7 15.3 23.4 60% 31.5 12.6 18.9 60% VIl 41.2 16.4 24.8 62% 36.7 14.7 22 60% Vil 45.8 18.9 26.9 59% 30.8 6.0 24.8 80% IX 41.1 15.9 25.2 61% 35.6 10.2 25.4 71% X 37.3 15.6 21.7 58% 30.6 6.9 23.7 77% Xi 36.7 15.5 21.2 58% 29.9 9.0 20.9 70% XII 40.1 18.2 21.9 55% 32.0 9.7 22.3 69%

Table 7.2 Arrivals and departures, Yerevan (000's) - 1995 Departure Arrival AAL** AAL* Month Total Other Total Other airlines airlines Pax. Share % Pax. Share % I 28.7 12.2 16.5 57% 15.6 5.1 10.5 67% 11 28.6 14.0 14.6 51% 20.5 8.4 12.1 59% 11 34.4 15.7 18.7 54% 29.8 12.0 17.8 59% IV 30.5 14.9 15.6 51% 27.4 13.0 14.4 53% V 36.5 18.7 17.8 49% 29.4 15.3 14.1 48% VI 33.6 15.9 17.7 53% 33.4 14.3 19.1 57% VIl 35.9 16.0 19.9 55% 39.4 16.7 22.7 58% VIII 46.7 22.7 24.0 51% 42.2 17.5 24.7 59% IX 37.7 17.9 19.8 53% 41.3 18.5 22.8 55% X 33.2 15.3 17.9 54% 37.8 17.0 20.8 55% XI 32.5 18.0 14.5 45% 36.9 19.5 17.4 47% XII 33.3 18.9 14.4 43% 43.9 24.0 19.9 45%

Table 7.3 Arrivals and departures,Yerevan (O0O's) - 1996 Departure Arrival AAL** AAL** Month Total Other Total Other airlines airlines Pax. Share % Pax. Share % I 29.2 16.4 12.8 44% 22.1 11.6 10.5 48% 11 24.5 15.2 9.3 38% 21.1 12.1 9.0 43% 11 26.5 14.0 12.5 47% 27.6 13.4 14.2 51% IV 26.8 12.8 14.0 52% 23.5 10.7 12.8 54% V 29.0 16.3 17.6 12.5 VI 18.2 15.2 19.4 17.2 Table7.4 Organizationalstructure of the ArmenianAirlines Group

Boardof Auditing 'Ararat Directors Committee Airlines' tate Daughter Enterprise I (431 employees)

Flight Operations General Center Director "Giumri Airlines" State Daughter Enterprise I (214 employees) LJ|

Flight Safety | i al ght Thicl Finncial Corporate Inspection | Directorate Directorate Directorate Directorate Directorate (44 employees) (474 employees)(524employees) (98 employees) (27 employees)

Business Management

Deputy Director Deputy Director Financial (56 employees) (75 employees) Inspection

Data processing

Transportation Fuel Communications Special Buildings and Department Catering Supply and Power Transport Structures Li 1 lService Supply Means Operations

Source: ArmenianAirlines Table 7.5 Armenian airlines fleet

Type of aircraft Number Capacity Average in fleet (seats) age max/min

llyushin 11-86 (1) 3 332/350 8 Tupolev Tu-154B (2) 10 145/168 18 Tupolev Tu-134A/A (3) 8 72/80 23 Yakovlev Yak-40 (4) 9 27 19

Totallaverage 30 112 19

Source: ITA Databank, World Bank mission

(1) of which 1 is out of operation (2) of which 2 are out of operation, one full cargo and one combi (62 passengers) (3) of which 2 are operated by Shirak daughter company (Giumri Airlines) (4) all operated by daughter company Ararat Airlines Table 7.6 Armenian Airlines services to and from Zvartnots Airport Summer 1996 Country/City Weekly Aircraft Fares Distance Fares 1,995 flights type (US$)}(m (UScent/km) Traffic IATA CIS citizens IATA CIS citizens (1) (1) 12) Central and Westem Europe 33,225 Amsterdam 2 TU-154 1,200 750 3,280 36.6 22.9 6,805 Athens 1 TU-134 920 320 1,797 51.2 17.8 2,957 Athens 1 TU-134 920 320 1,797 51.2 17.8 Frankfurt 1 TU-154 1,037 802 2,983 34.8 26.9 Istanbul 1 TU-134 n.d. n.d. 1,317 n.d. n.d. Paris 1 IL-86 1,135 750 3,419 33.2 21.9 16,180 Sofia/Burgas 1 TU-134 555 n.d. 1,768 31.4 n.d. 7,283 CIS Countries 284,486 Ashgabad 1 TU-134 245 130 1,230 19.9 10.6 8,013 Kharkov 1 TU-134 200 110 1,266 15.8 8.7 3,217 Krasnodar 3 TU-134 135 95 705 19.1 13.5 n.d. Lvov 1 TU-154 210 130 1,923 10.9 6.8 n.d. Minsk 1 TU-154 205 110 1,979 10.4 5.6 3,121 Moscow 11 TU-154 680 111 1,795 37.9 6.2 166,764 Novosibirsk 2 TU-154 335 225 3,273 10.2 6.9 23,680 Odessa 1 TU-134 200 120 1,316 15.2 9.1 3,667 Rostov 3 TU-134 156 92 882 17.7 10.4 15,818 Simferopol 1 TU-134 190 115 1,002 19.0 11.5 3,197 Simferopol 1 TU-154 190 115 1,002 19.0 11.5 Sochi 4 TU-134 125 90 550 22.7 16.4 37,746 Volgograd 1 TU-134 145 115 956 15.2 12.0 2,957 Yekaterinburg 1 TU-154 300 190 2,194 13.7 8.7 16,306 Others 10,176 Beirut 1 TU-134 230 145 1,057 21.8 13.7 1,981 Dubai 2 TU-154 320 230 1,942 16.5 11.8 4,134 Tehran 7 TU-134 159 95 783 20.3 12.1 4,061 L Total flights (perweek): 40 | Average flight length: 1,905 887 (1) Only fares to other CIS countries show real discrimination on nationality (CIS citizenship or not) On IATA western destinations, fares indicated here do not refer to nationality but correspond to tour operator distribution which, in practice, represents the main airline ticket booking system used by Armenian citizens (2) Lines non operated in 1995 when traffic is not indicated Does not include Mineral Vody (disrupted in 1996), in spite of 25 955 passengersin 1995 Table 7.7 Air services by foreign airlines to and from Zvartnots Airport Summer 1996 Country/City Airline Weekly Aircraft flights type Central and Western Europe Aleppo YS 1 TU-1 54 Table 7.8 - Air services to and from Yerevan, Erebuni Airport Almaty Ys 1 TU-154 Summer 1996 Astrakhan IOA 1 TU-134 Chimkent Y5 1 TU-1 54 Country/City Airline Weekly Aircraft Dnepkopetrovsk YPH 1 YAK-42 flights type Donetsk 6Y 1 YAK-42 Kiev Y5 1 TU-154 Kiev 6Y 1 TU-134 Min Vody R3 7 YAK-40 Kharkov 6Y 1 TU-134 Min Vody R3 7 YAK-40 Krasnodar IOK 3 YAK-42 Stavropol R3 7 YAK-40 Kustanay K3A I AN-24 Tbilisi R3 3 YAK-40 Lugansk 6Y 1 AN-24 Vladikovkas R3 2 YAK-40 Lvov YKP 1 YAK-42 Min Vody AHK 7 YAK-40 Mln Vody AHK 3 YAK-40 Minsk BY 4 TU-154 Table 7.9 - Air services to and from Yerevan, Moscow CY 4 IL-62 Summer 1996 Moscow CY 4 TU-154 Moscow YK 3 IL-86 Country/City Airline Weekly Aircraft Ni/hni Novgorod HH 2 TU- 154 flights type Novosbirsk C7 1 TU-154 Odessa 6Y 1 TU-154 Perm YH 1 TU-134 Rostov D9 4 TU-134 Krasnodar R3 2 TU-134 Samara Y5 3 TU-154 Moscow R3 4 TU-134 Samara E5 1 TU-154 Rostov R3 1 TU-134 Saratov COX 1 YAK-42 Samara R3 2 TU-134 Simferopol YKP 7 YAK-42 Sochi IOH 3 AN-24 Sochi IOH 2 AN-24 St Petersburg IOH 1 TU- 154 St Petersburg Y5 1 TU-1 54 Tyumen YS 1 TU-1 54 Volgograd IOH 1 YAK-42 Voronejh BK 2 YAK-42 Yekaterinburg Y6 1 TU- 154 Zaporojhye 6Y 1 TU- 134

Others Larnaca Y5 1 TU-1 54 Y5 Arax Airlines Table 7.10 ARMENIAN AIRLINES- World Bank Preliminary Forecasts, May 1997 Key Assumptions and Income Statement Projections 11996 US$)

Actual ...... Projected.------1995 1996 1997 1998 1999 2000 2001 2002 2003 KEYASSUMPTIONS

Traffic Passenger (passl 428,000 358,100 340,195 340,195 343,597 347,033 350,503 354,008 357,548 Passenger.km(mln pass.kml 849 747 723 738 760 783 807 831 856 Average trip (km) 1,984 2,085 2,127 2,169 2,213 2,257 2,302 2,348 2,395

Freight it) 7.406 5,419 5.148 6,148 5,199 5,251 5,304 5,357 5,410 Freight (min t.kml 16.2 12.0 10.9 11.2 11.5 11.9 12.2 12.6 13. Average trip (km) 2,188 2,214 2,127 2,169 2,213 2,257 2,302 2,348 2,396

Average passengertariff lUSc / pass.km) 4.59 6.50 6.80 7.40 7.60 7.60 7.60 7.60 7.76 Average freight tariff tUSc I t.kml 26.62 60.63 63.00 65.00 65.00 68.00 70.00 70.00 70.00

Total Armenian Airlines Staff 1,850 1,950 1,550 1,460 1,300 1,150 1,000 1,000 1,000

Average Salary l$/monthl 104.7 142.2 175.0 201.3 231.4 266.2 306.1 352.0 404,8

OPERATINGREVENUES (1996 US*$

Passenger Operations 39,002,941 48,509,156 49,194,967 54,606,414 57,775,947 59.520,781 61,318,308 63,170,121 66,362,290 Freight Operations 2,973,412 7,273,689 6.896.855 7,258,119 7,477,314 8.058,658 8,546,207 8,804,303 9,070,192 Excess 8aggage 1,765,485 1,928,159 1,759.612 1,794,804 1.849.007 1,904,848 1.962,374 2,021,638 2,082,691 Other lincl. mail 2,718,034 2,573,588 2,491,511 2,541,341 2,618.090 2,697.156 2.778,610 2,862,524 2.948,972

Total Operating Revenue 46.459,872 60,284,592 60,342,946 66,200,678 69,720,358 72,181,442 74,605,499 76,858,585 80,464,146

OPERATINGEXPENSES (1996 US$I

Salary and Wages 2,324,188 3,327,286 3,255,000 3,501,750 3,610,425 3,672,913 3.672,913 4,223,850 4,857,428 Social 6enefits 859,417 1,151,418 1.126,403 1,211,792 1,249,399 1,271,023 1,271,023 1,461,677 1,680,928 Operation and Maintenance (including airport expensesl 27,567,408 29,177,403 29,659,218 31.008,713 31,146,547 32,087,172 33,056,205 34,054,502 35,082,948 Fuel & Petrol 13,936,041 15,760,576 15,639,387 15,154,566 14,051,010 14,475,351 14,912,506 15,362,864 15,826,823 Severance 0 0 1,680,000 483,000 833,175 958,151 1.101,874 0 0 Leasing of Aircraft 5,250,000 8,400,000 8,400,000 8,400,000 8,400,000 8.400,000 Expenses Not Tax-exempted' n/a 1,057,223 1.067.795 1,078,473 1.089,258 1,100.150 1,111,152 1,122,264 1,133,486 Other Expenses(incl. taxes other than 30% profit tax) 1,591,073 1,388,607 1,458,037 1.530,939 1,607,486 1.687860 1,772,254 1,860,866 1,953,909

Total Operating Expenses 46,278,126 51,862,5131 53,885,841 59,219,233 61,987,300 63,652,622 65.297,927 66,486,023 68,935,523

Operating Profit Before Depreciation, Interest and Tax 181,746 8,422,079 6,457,105 6.981,445 7,733,058 8,528,820 9,307,572 10,372,562 11,528,623 Depreciation 140,226 1,024,958 5,858,267 6,398,267 7,073,267 7,833,267 8,623,267 9,498,267 10,468,267 Operating Profit Before Interest and Tax 41,620 7,397,121 598,837 583,178 659,791 695,553 684,304 874,295 1,060,356 FinancialCharges and Other" -288,565 -201,595 0 0 0 0 0 0 0 Operating Profit Before Tax 330,085 7,598,716 598,837 583,178 659,791 695,553 684,304 874,295 1,060,356 Profit Tax (30%l' 99,025 2,596,782 499,990 498,495 524,715 538,711 538,637 598,967 658,153

Net Profit after Tax 231,059 5,001,934 98,847 84,683 135,076 156,842 145,667 275,327 402,203

Notes: Includes Medical Services, Per Diems, Training, Allocations to Students of the Aviation School, Catering for Crew, Transportation of Staff, Parking and Bonuses In 1995, exchange differences generated a positive financial charge 30% on Profit Before Tax + Expenses Not Tax-exempted Average 1995 Exchange Rate 1US$/Dram): 406.2 (Source: IMF) Average 1996 Exchange Rate (US$/Dram): 415.0 (Source: Armenian Airlines) All estimates net of VAT Table 7.11 ARMENIAN AIRLINES - World Bank PreliminaryForecasts, May 1997 Sources and Applicationsof Funds (1996 US$)

Actual ------Projected ------1996 1997 1998 1999 2000 2001 2002 2003 SOURCES

Internal Sources Net Operating Profit Before Interest and Taxes 7,397,121 598,837 583,178 659,791 695,553 684,304 874,295 1,060,356 Depreciation 1,024,958 5,858,267 6,398,267 7,073,267 7,833,267 8,623,267 9,498,267 10,468,267 Total. Internal Sources 8.422.079 6.457.105 6.981.445 7.733.058 8.528.820 9.307.572 10.372.562 11.528.623

Long Term Loan 0 0 0 0 0 0 0 0

Total Sources 8,422,079 6,457,105 6,981,445 7,733,058 8,528,820 9,307,572 10,372,562 11,528,623

APPLICATIONS

Capital Investments Projects Financed by Internal Sources 3,480,332 5,400,000 6,750,000 7,600,000 7,900,000 8,750,000 9,700,000 10,800,000 Projects Financed by Long Term Loan 0 Total. Capital Investments 3.480.332 5,400,000 6.750.000 7.600.000 7.900.000 8.750.000 9.700.000 10.800.000

Debt Service Interest -201,595 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 Total. Debt Service -201.595 Q Q 0 Q 0 0

Profit Tax 2,596,782 499,990 498,495 524,715 538,711 538,637 598,967 658,153

Increase (Decrease) in Non-Cash Working Capital 2,548,873 558,289 -344,935 -457,073 32,132 31,229 57,456 46,261

Total Applications 8,424,391 6,458,278 6,903,561 7,667,641 8,470,843 9,319,865 10,356,424 11,504,414

Surplus Funds -2,312 -1,174 77,885 65,417 57,978 -12,294 16,138 24,210 Opening Cash Balance 192,558 190,246 189,072 266,957 332,374 390,351 378,058 394,196 Closing Cash Balance 190,246 189,072 266,957 332,374 390,351 378,058 394,196 418,405 Table 7.12 ARMENIAN AIRLINES - Wofld Bank Preliminary Forecasts, May 1997 Balance Sheets at Years Ending December 31 (1996 US$1 End of 1997 Asset Revaluation Coefficient: 1 Depreciation Coefficient: 10.0% Actual ------Projected ------1995 1996 1997 1998 1999 2000 2001 2002 2003 ASSETS

Fixed Assets Gross Fixed Assets 4,917,090 58,582,675 58,582,675 63,982,675 70,732,675 78,332,675 86,232,675 94,982,675 104,682,675 Less Accumulated Depreciation -1,868,816 -43,945,913 -49,804,181 -56,202,448 -63,275,716 -71,108,983 -79,732,251 -89,230,518 -99,698,786 Net Fixed Assets 3,048,274 14,636,761 8,778,494 7,780,227 7,456,959 7,223,692 6,500,424 5,752,157 4,983,889 Capital Work in Progress 0 0 5,400,000 6,750,000 7,600,000 7,900,000 8,750,000 9,700,000 10,800,000 Total. Fixed Assets 3.048.274 14.636.761 14.178.494 14.530.227 15.056.959 15.123.692 15250.424 15.452.157 15.783.889

Long-Term Investments 4,924 4,819 4,819 4,819 4,819 4,819 4,819 4,819 4,819

Current Assets Cash and Bank Notes 192,558 190,246 189,072 266,957 332,374 390,351 378,058 394,196 418,405 Short-Term Investments 0 0 0 0 0 0 0 0 0 Accounts Receivable 3,661,302 7,005,643 5,866,675 5,516,723 4,841,692 5,012,600 5,180,937 5,337,402 5,587,788 Inventories 898,400 1,444,443 1,444,443 1,444,443 1,444,443 1,444,443 1,444,443 1,444,443 1,444,443 Other Assets 9,183 11,993 11,993 11,993 11,993 11,993 11,993 11,993 11,993 Total, Current Assets 4.761.443 8652.325 7.512.183 7.240.116 6.630.501 6.859.387 7.015431 7.188.034 7.462.630

Total Assets 7,814,641 23,293,906 21,695,497 21,775,162 21,692,280 21,987,898 22,270,674 22,645,010 23,251,338

EQUITY and LIABILITIES

Equity Capital 486,302 475,990 475,990 475,990 475,990 475,990 475,990 475,990 475,990 Capital Reserve 1,355.761 13,560,164 13,560,164 13,560,164 13,560,164 13,560,164 13,560,164 13,560,164 13,560,164 Retained Earnings 231,059 2,171,911 2,270,758 2,355,441 2,490,517 2,647,359 2,793,026 3,068,354 3,470,557 Revaluation Reserve 0 0 0 0 0 0 0 0 0 Total Eouitv 2.073.122 16.208.065| .16.306.912 16.391.595| 16.526.671 16.683.513| 16.829.181 17.104.508 17.506-7g11

Long-Term Debt 0 0 0 0 0 0 0 0 0

Liabilities Accounts Payable 5.012,312 6,561,660 5,388,584 5,383,567 5,165,608 5,304,385 5,441,494 5,540,502 5,744,627 Advances 0 0 0 0 0 0 0 0 0 Short-Term Borrowing 0 524,181 0 0 0 0 0 0 0 Other Current Liabilities 729,207 0 0 0 0 0 0 0 0 Total U.abilities 5.741.519 7.085.841 | 5.388584 5,383L567 5.165.608 5.304.385 | 5441.494 5.540.502 LZA4i6Z|

Total Equity and LiabDities 7,814,641 23,293,906 21,695,497 21,775,162 21,692,280 21,987,898 22,270,674 22,645,010 23,251,338 Table 7.13 ARMENIANAIRLINES - World Bank PreliminaryForecasts, May 1997 Ratios of FinancialPerformance

Actual ------Projected ------1995 1996 1997 1998 1999 2000 2001 2002 2003 Liquidity Current Assets/Current Liabilities 0.83 1.22 1.39 1.34 1.28 1.29 1.29 1.30 1.30 Quick Assets/Current Liabilities 0.03 0.03 0.04 0.05 0.06 0.07 0.07 0.07 0.07

Operating Performance (Working Expenses+ Depreciation)/Revenues 100% 88% 99% 99% 99% 99% 99% 99% 99%

Profitability Return on Gross Fixed Assets 4.7% 8.5% 0.2% 0.1 % 0.2% 0.2% 0.2% 0.3% 0.4% Returnon Net Fixed Assets 7.6% 34.2% 1.1% 1.1% 1.8% 2.2% 2.2% 4.8% 8.1%

Debt & FinancialLeverage Debt Service Coverage na na na na na na na na na Interest Coverage na na na na na na na na na Lease Payment Coverage na na na 2.33 1.92 2.02 2.11 2.23 2.37

Receivablesand Payables Receivables/AnnualBillings (Days) 28 42 35 30 25 25 25 25 25 Total Payables/AnnualExpenditures (Days) 45 46 36 33 30 30 30 30 30 Table7.14 ZVARTNOTS AIRPORT - World Bank Preliminarv Forecast. October 19968 May 1997 Key As umptions and Income Statement Projections (1995 UtS1)

Actual ...... Prolee ...... Aa1995 1996 1997 1998 1999 2000 2001 2002 2003 KEY ASSUMPTIONS

Traffic Aircraft Take-offs 7,094 6,771 6.961 7,163 7,378 7.673 7,987 8,314 8.655 Average Aircraft Weight (t) 75 76 75 75 75 75 75 75 75 Cargo Turnover ft) 42,800 20,510 20,715 21,129 21,763 22,633 23,765 24,953 26,201 Passenger Traffic (departing, pass) 403,615 430,425 443.338 456,638 470,337 489,151 508,717 529,065 550.228

Tariffs Take-off Charge (S l tl 8.3 8.3 10.0 11.0 11.0 11.0 11.0 11.0 11.0 Cargo Handling Tariff IS / t) 6.0 52.5 120.0 170.0 220.0 250.0 250.0 250.0 250.0 Passenger Tax (S / pass.) 4.8 4.8 5.0 6.0 7.0 7.0 7.0 7.0 7.0

Total Airport Staff 1,918 1,810 1,750 1,400 1,300 1,200 1 110 1,050 1,000 Average Salary fS/monthl 31.4 65.7 78.9 90.7 104.3 120.0 138.0 158.7 182.5

AIRPORT REVENUES (1995 USfI

Take-off & Landing' 4,412,755 4,211,694 5,220,696 5,909,647 6,086,936 6,330,414 6,589,533 6,859,312 7,140,191 Cargo Handling" 256,800 1,076,760 2,485,777 3,591,948 4,787,855 5,658,374 5,941,293 6,238,358 6,550,276 Passenger Tax 1,930,231 2,058,447 2,216,690 2,739,828 3,292,361 3,424,055 3,561,017 3,703,458 3,851,596 Rentals (incl. of cargo terminal facilities in 1995 and 19961 659,084 549,237 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Security 427,137 407,675 419,125 431,304 444.243 462.013 480,924 500,613 521,113 Parking 364,045 347,458 357,216 367,596 378,624 393,769 409,887 426,668 444,140 Other fincl. mail, baggage handling and other non-operating) 272,408 290.502 299,217 308,194 317,440 330,137 343,343 357,077 371,360

Total Airport Revenues 8,322,460 8,941,773 11,498,721 13,848,518 15,807,460 17,098.763 17,825,997 18,585,485 19,378,675

AIRPORT EXPENSES f 1995 US$) ...

Salary and Wages 722,169 1,427,868 1,656.642 1,524,111 1,627,533 1,727,689 1,837,829 1,999,260 2,189,666 Sscial Benefits 267,191 528,289 612,931 563,897 602,161 639,217 679,968 739,694 810,142 Operating Expenses 1,323,117 1.325,972 1,192,811 1,288,847 1,367,337 1,464,692 1,570,384 1,683,717 1,805,243 Maintenance 2,118,607 2,123,179 1,909,957 2,063,732 2,189,414 2,345,300 2.514,538 2,696,009 2,890,599 Transportation 467,883 446.564 382,588 393,706 405,517 421,738 439,001 456,974 475,686 Communication 251,305 239,854 205,492 211,464 217,808 226,520 235,792 245,445 255,496 Severance 170,398 113,598 762,056 250,390 287,948 298.026 228,487 218,967 Other Expenses (incl. overheads & taxes other than profit tax) 448,560 428,122 366,788 377,447 388,770 404.321 420,871 438,101 456,041

Total Airport Expenses 5,598,831 6,690,246 6,440,809 7,185,259 7,048,930 7,517,425 7.996,408 8,487,687 9,101,839

Profit Before Depreciation, Interests and Taxes 2,723,629 2,251,527 5,057,912 6,663,259 8,758,530 9,581,338 9,829,588 10,097,798 10,276,837 Depreciation 48.875 6.005,908 6,147,608 7,505,203 7,706,308 7,951,558 8,237,683 8,559,233 8,908,033 Profit Before Interests and Taxes 2,674,754 -3,754,381 -1,089,696 -841,944 1,052,221 1,629,780 1,591,906 1,538,565 1,368,804 Interests on non-EBRO Borrowings and Financial Charges-' -144,399 0 0 0 0 0 0 0 0 Profit Before Taxes 2,819,164 -3,754,381 -1.089,696 -841,944 1,052,221 1,629,780 1,591,906 1,538,565 1,368,804 Profit Tax (30%) 845,746 0 0 0 315,666 488,934 477,572 461,570 410,641

Not Profit after Tax 1,973,407 -3,754,381 -1,089,696 -841,944 736,555 1,140,846 1,114,334 1,076,996 958,163

Interests and Financial Charges on EBRD Loan----- 100,000 1,204,040 1,438,880 1,353,200 1.190,000 1,026,800 863,600 700,400

Net Profit after tax and EBRD Loan Interest 1,973,407 -3,854,381 -2,293,736 -2,280,824 -616,645 -49,154 87,534 213,396 257,763

Average 1995 Exchange Rate (US$/Draml: 406.2 Source: IMF) All estimates net of VAT Notes- * Excluding Air Traffic Control Cargo handling was not an exclusive airport activity before 1996 ** Operating Expenses include Air Traffic Control (representing about 20% of total operating expenses) in 1996; ATC becomes a separeted entity by 1997 In 1995, exchange rate differences generated a positive financial charge Paid from Profit after .....Tax Table 7.15 ZVARTNOTSAIRPORT - World Bank PreliminaryForecasts, October 1996 / May 1997 Sourcesand Applicationsof Funds(1995 US$)

1996 1997 1998 1999 2000 2001 2002 2003 SOURCES

InternalSources Net OperatingProfit BeforeInterest and Taxes -3,754,381 -1,089,696 -841,944 1,052,221 1,629,780 1,591,906 1,538,565 1,368,804 Depreciation 6,005,908 6,147,608 7,505,203 7,706,308 7,951,558 8,237,683 8,559,233 8,908,033 Total. InternalSources 2251.527| 5,057.912 6.663.259 8.758.530 9.581.338 9.829.589 10.097.798 10.276.837

EBRDLoan 500,000 21,160,000 1,140,000 0 0 0 0 0 Other Loan 0 0 0 0 0 0 0 0

Total Sources 2,751,527 26,217,912 7,803,259 8,758,530 9,581,338 9,829,589 10,097,798 10,276,837

APPLICATIONS

CapitalInvestments CargoTerminal Project, Local Financing 1,000,000 3,000,000 1,000,000 0 0 0 0 0 CargoTerminal Project, Foreign (EBRD) Financing 500,000 21,160,000 1,140,000 0 0 0 0 0 Other ProjectsFinanced by InternalSources 1,100,000 750,000 1,550,000 4,500,000 5,250,000 5,900,000 6,400,000 6,750,000 Other ProjectsFinanced by LongTerm Loan 0 0 0 0 0 0 0 0 Total. CapitalInvestments _600.000 |24910.000 3.690.000C 4.450 000 5.250,00QQ0 5900000 6.400.000 6.750.000

Debt Service EBRDLoan Interest 100,000 1,204,040 1,438,880 1,353,200 1,190,000 1,026,800 863,600 700,400 EBRDLoan Principal 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 Other LoanInterest 0 0 0 0 0 0 0 0 Other LoanPrincipal 0 0 0 0 0 0 0 0 Total. Debt Service 100.°°° 1.204.040 3.838.880| 3753 200 3.590.000 3.426.800 3.263.600 3.100.400

Profit Tax 0 0 0 315,666 488,934 477,572 461,570 410,641

Increase(Decrease) in Non-CashWorking Capital 33,325 36,433 241,898 233,136 208,512 -7,823 -6,892 -21,637

Total Applications 2,733,325 26,150,473 7,770,778 8,802,001 9,537,446 9,796,549 10,118,278 10,239,404

SurplusFunds 18,202 67,439 32,480 -43,472 43,892 33,041 -20,479 37,432 OpeningCash Balance 73,966 92,168 159,607 192,087 148,616 192,507 225,548 205,069 ClosingCash Balance 92,168 159,607 192,087 148,616 192,507 225,548 205,069 242,501 - - Table 7.16 ZVARTNOTS AIRPORT- World Bank Preliminary Forecasts, October 1996 / May 1997 Balance Sheeta at Years Ending December 31 (1995 US$) End of 1996 Asset Revaluation Coefficient: 69 Depreciation Coefficient: 5.45% Actual ------Projected------1995 1996 1997 1998 1999 2000 2001 2002 2003 ASSETS

Fixed Assets Gross Fixed Assets 1,597,103 110,200,147 112,800,147 137,710,147 141,400,147 145,900,147 151,150,147 157,050,147 163,450,147 Less Accumulated Depreciation -515,734 -41,591,545 -47,739,153 -55,244,356 -62,950,665 -70,902,223 -79,139,906 -87,699,139 -96,607,172 Net Fixed Assets 1,081,369 68,608,602 65,060,994 82,465,791 78,449,483 74,997,925 72,010,242 69,351,009 66,842,976 Capital Work in Progress 64 2,600,000 24,910,000 3,690,000 4,500,000 5,250,000 5,900,000 6,400,000 6,750,000 Total, Fixed Assets 1,081,433 71.208.602 89,970.994 86.155.791 82.949.483 80.247.925 77.910,242 75,751.009 73.592.976

Long-Term Investments 0 0 0 0 0 0 0 0 0

Current Assets Cash and Bank Notes 73,966 92,168 159,607 192,087 148,616 192,507 225,548 205,069 242,501 Short-Term Investments 0 0 0 0 0 0 0 0 0 Accounts Receivable 1,162,694 1,117,722 1,277,636 1,346,384 1,317,288 1,424,897 1,485,500 1,548,790 1,614,890 Inventories 958,968 958,968 958,968 958,968 958,968 958,968 958,968 958,968 958,968 Other Assets 29,232 29,232 29,232 29,232 29,232 29,232 29,232 29,232 29,232 Total, Current Assets 2.224,859 2.198.089 2.425.442 2.526 67Q 2A64.103 2.605.603 2.6992472 2742.058| 2.845.590

Total Assets 3,306,292 73,406,691 92,396,436 88,682,461 85,403,586 82,853,528 80,609,489 78,493,067 76,438,566

EQUITY and UABILITIES

Equity Capital 678,173 678,173 678,173 678,173 678,173 678,173 678,173 678,173 678,173 Capital Reserve 913,101 913,101 913,101 913,101 913,101 913,101 913,101 913,101 913,101 Retained Earnings 0 -3,854,381 -6,148,117 -8,428,941 -9,045,586 -9,094,740 -9,007,206 -8,793,810 -8,536,048 Revaluation Reserve 0 73,533,077 73,533,077 73,533,077 73,533,077 73,533,077 73,533,077 73,533,077 73,533,077 Total Eauity 1.691.274 71.269.97C 68976234 66.695.410 66078.765 66.029.611 66.117.145| 66.330.540 66.588303

Long-Term Debt 0 500,000 21,660,000 20,400,000 18,000,000 15,600,000 13,200,000 10,800,000 8,400,000

Liabilities Accounts Payable 1,580,254 1,486,721 1,610,202 1,437,052 1,174,822 1,073,918 1,142,344 1,212,527 1,300,263 Advances 0 0 0 0 0 0 0 0 0 Short-Term Borrowing 134,765 0 0 0 0 0 0 0 0 Other Current Liabilities 0 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 Total, Liabilities 1.715.018 1.636.721 1.760.202 1.587.052 1.324.822 1.223.918 1.292.344 1362527 1,450.263

Total Equity and Uabilities 3,306,292 73,406,691 92,396,436 88,682,461 85,403,586 82,853,528 80,609,489 78,493,067 76,438,566

Average 1995 Exchange Rate (US$/Dram): 406.2 (Source: IMF) Table 7.17 ZVARTNOTSAIRPORT - World Bank PreliminaryForecasts, October 1996 / May 1997 Ratios of FinancialPerformance

Actual ------Proje ed ------1995 1996 1997 1998 1999 2000 2001 2002 2003 Liquidity Current Assets/Current Liabilities 1.30 1.34 1.38 1.59 1.85 2.13 2.09 2.01 1.96 Quick Assets/Current Liabilities 0.04 0.06 0.09 0.12 0.11 0.16 0.17 0.15 0.17

OperatingPerformance (Working Expenses+ Depreciation)/Revenues 68% 142% 109% 106% 93% 90% 91% 92% 93%

Profitability Return on Gross Fixed Assets 123.6% -3.4% -1.0% -0.6% 0.5% 0.8% 0.7% 0.7% 0.6% Return on Net Fixed Assets 182.5% -5.5% -1.7% -1.0% 0.9% 1.5% 1.5% 1.6% 1.4%

Debt, FinancialLeverage Debt Service Coverage na 22.52 4.20 1.74 2.33 2.67 2.87 3.09 3.31 Interest Coverage na -37.54 -0.91 -0.59 0.78 1.37 1.55 1.78 1.95

Receivablesand Payables Receivables/AnnualBillings (Days) 50 45 40 35 30 30 30 30 30 Total Payables/AnnualExpenditures (Days) 102 88 98 80 68 59 58 58 57 Tabe 9.1 a TRANSPORTSECTOR PUBUCREVENUES and EXPENDITURES - BORDEROPENING SCENARIO 1995 US* Actual------______d -.--. __ 1996 1996* 1997 1998 1999 2000 2001 2002 2003

REVENUES

Urban Transport (Metro of Yerevan) 2,485,229 2,929,591 5,862,184 9,059,700 9,945,975 10,045,435 10,551,725 11,067,136 11,591,800 ArmenianRailways 8,710,487 7,544,671 18,851,955 20,588,168 23,393,306 24,744,919 25,470,952 26,876,246 27,413,770 ArmenianAirlines 46,459,872 54,081,300 57,348,420 66,371,516 69,052,717 71,840,472 78,400,085 81,921,724 85,594,222 Zvartnots Airport 8,322,460 8,941,773 11,498,721 13,425,936 15,372,200 17,098,763 17,825,997 18,585,485 19,378,675

Total Revenues 65,978,048 73,497,335 93,561,281 109,445,320 117,764,198 123,729,589 132,248,759 138,450,591 143,978,468

EXPENSES (includingdepreciation end financial charges)

Urban Transport (Metro of Yerevan) 2,575,492 7,082,354 8,000,711 8,241,472 9,178,947 9,573,686 10,030,634 10,564,447 11,186,078 ArmenianRailways 8,679,468 18,704,732 20,473,831 19,488,743 21,235,187 21,057,679 22,223,549 23,620,449 25,183,589 ArmenianAirlines 46,129,787 51,529,243 54,211,327 65,744,076 68,305,378 71,008,806 77,818,082 81,319,051 85,098,431 Zvartnots Airport 5,503,306 12,625,756 13,943,825 15,668,829 16,048,671 16,315,181 16,903,574 17,415,624 18,352,365

Total Expenses 62,888,054 89,942,085 96,629,694 109,143,119 114,768,184 117,955,352 126,975,838 132,919,571 139,820,463

GrossProfit 3,089,994J-16,444,751I -3,068,414j 302,20112,996,014I 5,774,236j 5,272,921L5,531,0201 4,158,005

Souces. Minist,yof Transport,all transportsub-sectoral entities and mission estimates - - Nots * Based on 6 months of actual information Average 1995 ExchangeRate (US$/Dram): 406.2 (Source:IMF) All estimatesnet of VAT Table 9.1 b TRANSPORTSECTOR PUBLICREVENUES and EXPENDITURES-- STATUS QUO SCENARIO 1996 US$ Actual ------Projected------1996 1996* 1997 1998 1999 2000 2001 2002 2003

REVENUES

Urban Transport (Metro of Yerevan) 2,485,229 2,929,591 3,018,184 3,080,000 3,850,000 3,888,500 4,712,862 4,759,991 4,807,591 Armenian Railways 8,710,487 7,544,671 8,596,040 8,909,375 9,750,313 10,692,163 10,530,133 10,630,435 10,731,739 Armenian Airlines 46,459,872 54,081,300 53,704,190 56,681,096 59,773,283 61,880,291 64,061,571 66,319,741 68,657,512 ZvartnotsAirport 8,322,460 8,941,773 10,475,293 11,217,536 11,660,081 11,980,902 12,307,023 12,758,701 13,223,724

Total Revenues 65,978,048 73,497,335 75,793,706 79,888,007 85,033,676 88,441,855 91,611,589 94,468,868 97,420,566

EXPENSES (including depreciation and financial charges)

Urban Transport (Metro of Yerevan) 2,575,492 7,082,354 7,966,557 8,247,483 9,382,206 9,824,834 10,339,214 10,941,907 11,646,146 Armenian Railways 8,679,468 18,704,732 20,556,417 21,475,447 24,203,957 25,800,839 27,631,886 29,825,577 32,335,717 Armenian Airlines 46,129,787 51,529,243 54,294,856 66,171,702 69,288,633 72,787,336 80,779,933 84,888,129 89,336,605 ZvartnotsAirport 5,503,306 12,625,756 13,863,160 15,333,564 15,922,325 16,522,770 17,255,110 18,134,113 19,140,660

Total Expenses 62,888,054 89,942,085 96,680,990 111,228,197 118,797,122 124,935,779 136,006,143 143,789,725 152,459,128

Gross Profit 3,089,994 -16,444,751 -20,887,283 -31,340,190 -33,763,445 -36,493,924 .44,394,554 -49,320,858 -55,038,562

Sources: Ministry of Transpoit,all transportsub-sectoral entities and missionestimates Nlotes: & * Based on 6 months of actual information Average 1996 ExchangeRate (US$/Dram): 406.2 (Source:IMF) All estimatesnet of VAT All projectionsindude same investmentplans and provisionsfor depreciationas under the border-openingscenario Table 9.1 c TRANSPORTSECTOR PUBLICREVENUES and EXPENDITURES-- PEACEIN TRANSCAUCASIASCENARIO 1995 US$ Actual , ----- ProJected ------1995 1996* 1997 1998 1999 2000 2001 2002 2003

REVENUES

Urban Transport (Metro of Yerevan) 2,485,229 2,929,591 5,934,184 9,266,700 10,273,950 10,582,169 11,335,619 12,124,752 12,951,032 Armenian Railways 8,710,487 7,544,671 19,024,455 21,203,735 24,808,369 26,756,286 28,081,359 30,211,669 31,420,136 Armenian Airlines 46,459,872 54,081,300 58,461,981 68,336,886 71,801,417 76,179,352 84,781,380 90,343,910 96,263,156 Zvartnots Airport 8,322,460 8,941,773 11,606,091 13,679,245 15,908,802 17,958,372 19,005,874 20,116,226 21,293,200

Total Revenues 65,978,048 73,497,335 95,026,712 112,486,565 122,792,539 131,476,177 143,204,232 152,796,558 161,927,523

EXPENSES (including depreciation and financial charges)

Urban Transport (Metro of Yerevan) 2,575,492 7,082,354 8,021,021 8,278,030 9,232,237 9,660,895 10,153,103 10,723,561 11,383,266 Armenian Railways 8,679,468 18,704,732 20,497,535 19,550,038 21,360,437 21,229,351 22,438,667 23,886,151 25,502,739 ArmenianAirlines 46,129,787 51,529,243 54,417,947 66,067,048 68,754,842 71,714,801 78,803,068 82,607,030 86,715,040 Zvartnots Airport 5,503,306 12,625,756 13,983,293 15,753,533 16,224,172 16,594,579 17,301,594 17,948,581 19,038,417

Total Expenses 62,888,054 89,942,085 96,919,796 109,648,650 115,571,688 119,199,625 128,696,432 135,165,324 142,639,462

Gross Profit 3,089,994 -16,444,751 -1,893,084 2,837,916 7,220,851 12,276,552 14,507,800 17,631,234 19,288,062

Sources: Ministry of Transport,all transportsub-sectoral entities and missionestimates - Notes: * Basedon 6 months of actual information Average 1995 ExchangeRate (US$/Dram): 406.2 (Source:IMF) All estimates netof VAT All projectionsindude same investmentplans and provisionsfor depreciationas underthe border-openingscenario

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