27. 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 2014 and 2013.

The following table illustrates information about reportable segment revenue and EBITDA for the year ended 31 December 2014:

2014 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 29,523 36,025 36,022 29,562 35,020 35,976 31,874 21,146 30,990 588 27,637 314,363 (3,446) 310,917
Revenue from other segments 2,095 219 137 151 446 335 354 125 303 1,195 9,069 14,429 (14,429) -
Total revenue 31,618 36,244 36,159 29,713 35,466 36,311 32,228 21,271 31,293 1,783 36,706 328,792 (17,875) 310,917
EBITDA (18,461) 16,433 15,536 13,260 19,537 13,472 16,220 7,931 14,096 (175) 4,422 102,271 921 103,192

The following table illustrates reconciliation of reportable segment EBITDA to profit before income tax for the year ended 31 December 2014:

EBITDA of reportable segments 97,849
EBITDA of other segments 4,422
Adjustments  
Depreciation, amortization and impairment losses (53,126)
Finance costs and other investing and financial gain 5,197
Net gain for defined benefit plan 789
Net gain for defined contribution plan -
The charge of sponsorship contribution the Organisation committee of ХХII Winter Olympic Games and the XI Winter Paralympic Games 2014 (1,321)
Loss from associates (517)
Share-based remuneration (722)
Intragroup dividends (7,395)
Adjustments to loss on disposal of property, plant and equipment and intangible assets (503)
Adjustments to loss on disposal of property, plant and equipment and revenue under lease contracts (154)
Assets impairment (1,300)
Reversal of income from revaluation of subsidiaries recognized in statutory books 2,097
Reversal of material expenses recognized in statutory books and capitalized in property, plant and equipment under IFRS 896
Treasure shares revaluation at OJSC Svyazinvest -
Reversal of expenses recognized in statutory books and capitalized in intangible assets under IFRS 220
Accruals of other operating income and income for traffic 345
Other adjustments 977
Profit before income tax 47,754

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 loss for defined benefit plan (1,863)
Net loss 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

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