29. Segment information

Rostelecom Management Body which is the chief operating decision maker started to analyze operating results of OJSC Rostelecom by macroregional branches. The results of subsidiaries are analyzed on standalone basis. Consequently, the Group has determined its macroregional branches and subsidiaries as operating segments. However, subsidiaries with the exception of Skylink do not meet quantitative threshold defined by IFRS 8 and financial information of these operating segments are combined and presented under the heading Other. Currently Group has eleven reportable segments, which are the Group’s strategic business units. While differentiated geographically, the strategic business units offer mainly the same services to the customers.

Management of the Group assesses the performance of the operating segments based on the accounting data that is prepared using Russian statutory accounting principles on unconsolidated basis. A measure of segment profit or loss reported to the management of the company is earnings before interest, taxes, depreciation and amortization (EBITDA).

The tables below illustrate financial information of reportable segment required for disclosure by IFRS 8 for the year ended 31 December 2013, 2012 and 2011.

The following table illustrates information about reportable segment revenue and EBITDA for the year ended 31 December 2013:


2013 Corp. Center IRC North–West IRC Center IRC South IRC Volga IRC Ural IRC Sibir IRC Far East IRC Moscow Sky Link Other operations and reconciliation Total segments Adjustment and eliminations Total 
Revenue    
Third party revenue 31,319 33,054 33,928 27,931 32,872 45,740 30,299 19,976 21,298 3,097 50,028 329,542 (3,838) 325,704
Revenue from other segments 2,950 430 111 383 942 191 1,103 232 924 3,062 11,107 21,435 (21,435)
Total revenue 34,269 33,484 34,039 28,314 33,814 45,931 31,402 20,208 22,222 6,159 61,135 350,977 (25,273) 325,704
EBITDA (8,437) 15,390 14,748 11,819 16,030 19,195 13,301 7,846 9,081 (566) (9,724) 88,683 24,202 112,885

The following table illustrates reconciliation of reportable segment EBITDA to profit before income tax for the year ended 31 December 2013:


EBITDA of reportable segments 98,407
EBITDA of other segments (9,724)
Adjustments  
Depreciation, amortization and impairment losses (61,396)
Finance costs and other investing and financial gain (12,352)
Net gain for defined benefit plan (1,863)
Net gain for defined contribution plan (124)
Income from associates 177
Share–based remuneration
Intragroup dividends (5,013)
Adjustments to loss on disposal of property, plant and equipment and intangible assets 318
Reversal of income from revaluation of subsidiaries recognized in statutory books (910)
Reversal of material expenses recognized in statutory books and capitalized in property, plant and equipment under IFRS 888
Treasure shares revaluation at OJSC Svyazinvest 24,730
Other adjustments (1,019)
Profit before income tax 32,119

The following table illustrates information about reportable segment revenue and EBITDA for the year ended 31 December 2012:


2012 Corp. Center IRC North–West IRC Center IRC South IRC Volga IRC Ural IRC Sibir IRC Far East IRC Moscow Sky Link Other operations and reconciliation Total segments Adjustment and eliminations Total 
Revenue    
Third party revenue 26,146 33,420 35,857 29,118 35,390 46,673 32,824 20,672 18,498 4,349 53,303 336,250 (3,815) 332,435
Revenue from other segments 936 389 145 326 559 152 988 160 372 204 7,090 11,321 (11,321)
Total revenue 27,082 33,809 36,002 29,444 35,949 46,825 33,812 20,832 18,870 4,553 60,393 347,571 (15,136) 332,435
EBITDA (18,343) 16,240 14,882 12,043 17,401 20,032 14,523 7,790 9,010 (1,576) 22,216 114,218 6,667 120,885

The following table illustrates reconciliation of reportable segment EBITDA to profit before income tax for the year ended 31 December 2012:


EBITDA of reportable segments 92,002
EBITDA of other segments 22,216
Adjustments  
Depreciation, amortization and impairment losses (58,945)
Finance costs and other investing and financial gain (11,852)
Net gain for defined benefit plan (166)
Income from associates 53
Share–based remuneration (18)
Intragroup dividends (6,152)
Adjustments to loss on disposal of property, plant and equipment and intangible assets 57
Reversal of income from revaluation of associates and available–for–sale investments recognized  in statutory books 1,148
Reversal of material expenses recognized in statutory books and capitalized in property, plant and equipment under IFRS 3,203
Other adjustments 957
Profit before income tax 42,503

The following table illustrates information about reportable segment revenue and EBITDA for the year ended 31 December 2011:


2011 Corp. Center IRC North–West IRC Center IRC South IRC Volga IRC Ural IRC Sibir IRC Far East IRC Moscow Skylink Other operations and reconciliation Total segments Adjustment and eliminations Total 
Revenue    
Third party revenue 21,439 31,507 33,471 26,538 32,702 45,571 31,425 20,215 16,439 6,538 46,274 312,119 211 312,330
Revenue from other segments 1,724 937 1,031 998 1,060 823 1,398 355 704 159 5,495 14,684 (14,684)
Total revenue 23,163 32,444 34,502 27,536 33,762 46,394 32,823 20,570 17,143 6,697 51,769 326,803 (14,473) 312,330
EBITDA 303 14,833 13,544 11,363 14,163 20,636 12,769 6,413 8,312 (1,793) 11,836 112,379 6,799 119,178

The following table illustrates reconciliation of reportable segment EBITDA to profit before income tax for the year ended 31 December 2011:


EBITDA of reportable segments 100,543
EBITDA of other segments 11,836
Adjustments
Depreciation, amortization and impairment losses (55,550)
Finance costs and other investing and financial gain (12,378)
Net gain for defined benefit plan 4,589
Income from associates 198
Share–based remuneration (589)
Intragroup dividends (381)
Adjustments to loss on disposal of property, plant and equipment and intangible assets (1,227)
Reversal of material expenses recognized in statutory books and capitalized in property, plant and equipment under IFRS 1,814
Reversal of income from revaluation of associates of available–for–sale investments recognized  in statutory books (760)
Other adjustments (617)
Profit before income tax 47,478