Note 6- Operating segments
The Group has three reportable segments, as described below, which are based on the dominant source and nature of the Group's risk and returns as well as the Group's internal reporting structure. These strategic segments offer the same types of services, however they are managed separately because they operate in different geographical locations and are affected by different economical conditions.
The Group comprises the following main operating segments: Turkcell, Euroasia and Belarusian Telecom, all of which are GSM operators in their countries.
Other operations mainly include companies operating in telecommunication and betting businesses and companies provide internet and broadband services, call center and value added services.
Information regarding the operations of each reportable segment is included below. Adjusted EBITDA is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Adjusted EBITDA definition includes revenue, direct cost of revenues excluding depreciation and amortization, selling and marketing expenses and administrative expenses. Adjusted EBITDA is not a financial measure defined by IF RS as a measurement of financial performance and may not be comparable to other similarly-titled indicators used by other companies.
The accounting policies of operating segments are the same as those described in the summary of significant accounting policies.
Reconciliations of reportable segment revenues, adjusted EBITDA, assets and liabilities and other material items:
| 2010 | 2009 | 2008 | |
| Revenues | |||
| Total revenue for reportable segments | 5,697,025 | 5,567,399 | 6,651,438 |
| Other revenue | 691,469 | 550,584 | 655,196 |
| Elimination of inter-segment revenue | (406,401) | (328,011) | (336,226) |
| Consolidated revenue | 5,982,093 | 5,789,972 | 6,970,408 |
| 2010 | 2009 | 2008 | |
| Adjusted EBITDA | |||
| Total adjusted EBITDA for reportable segments | 1,782,985 | 1,801,082 | 2,410,443 |
| Other adjusted EBITDA | 213,655 | 144,989 | 181,671 |
| Elimination of inter-segment adjusted EBITDA | (39,268) | (20,738) | (11,833) |
| Consolidated adjusted EBITDA | 1,957,372 | 1,925,333 | 2,580,281 |
| Finance income | 277,130 | 329,550 | 442,099 |
| Finance costs | (102,662) | (187,514) | (136,769) |
| Other income | 14,668 | 978 | 14,136 |
| Other expense | (64,233) | (111,220) | (17,990) |
| Share of profit of equity accounted investees | 122,839 | 78,448 | 102,990 |
| Depreciation and amortization | (757,354) | (590,678) | (679,927) |
| Consolidated profit before income tax | 1,447,760 | 1,444,897 | 2,304,820 |
| 2010 | 2009 | 2008 | |
| Finance income | |||
| Total finance income for reportable segments | 256,933 | 307,825 | 673,762 |
| Other finance income | 60,213 | 75,783 | 81,423 |
| Elimination of inter-segment finance income | (40,016) | (54,058) | (313,086) |
| Consolidated finance income | 277,130 | 329,550 | 442,099 |
| 2010 | 2009 | 2008 | |
| Finance costs | |||
| Total finance costs for reportable segments | 107,070 | 230,373 | 364,877 |
| Other finance costs | 66,143 | 32,975 | 76,006 |
| Elimination of inter-segment finance costs | (70,551) | (75,834) | (304,114) |
| Consolidated finance costs | 102,662 | 187,514 | 136,769 |
| 2010 | 2009 | 2008 | |
| Depreciation and amortization | |||
| Total depreciation and amortization for reportable segments | 675,936 | 528,882 | 638,373 |
| Other depreciation and amortization | 92,034 | 67,920 | 42,885 |
| Elimination of inter-segment depreciation and amortization | (10,616) | (6,124) | (1,331) |
| Consolidated depreciation and amortization | 757,354 | 590,678 | 679,927 |
| 2010 | 2009 | 2008 | |
| Capital expenditure | |||
| Total capital expenditure for reportable segments | 725,564 | 1,543,860 | 1,111,339 |
| Other capital expenditure | 386,119 | 291,020 | 277,251 |
| Elimination of inter-segment capital expenditure | (33,101) | (65,606) | (24,012) |
| Consolidated capital expenditure | 1,078,582 | 1,769,274 | 1,364,578 |
| 2010 | 2009 | |
| Assets | ||
| Total assets for reportable segments | 4,993,860 | 4,950,985 |
| Other assets | 1,045,535 | 773,103 |
| Investments in equity accounted investees | 399,622 | 383,490 |
| Other unallocated assets | 3,355,545 | 3,213,188 |
| Consolidated total assets | 9,794,562 | 9,320,766 |
| 2010 | 2009 | |
| Liabilities | ||
| Total liabilities for reportable segments | 1,329,584 | 1,552,063 |
| Other liabilities | 198,780 | 143,607 |
| Other unallocated liabilities | 2,032,601 | 1,728,895 |
| Consolidated total liabilities | 3,560,965 | 3,424,565 |
Geographical information
In presenting the information on the basis of geographical segments, segment revenue is based on the geographical location of operations and segment assets are based on the geographical location of the assets.
| 2010 | 2009 | |
| Revenues | ||
| Turkey | 5,522,387 | 5,348,500 |
| Ukraine | 334,006 | 350,045 |
| Belarus | 48,918 | 17,356 |
| Turkish Republic of Northern Cyprus | 76,782 | 74,071 |
| 5,982,093 | 5,789,972 |
| 2010 | 2009 | |
| Non-current assets | ||
| Turkey | 3,746,557 | 3,437,909 |
| Ukraine | 607,704 | 634,068 |
| Belarus | 497,798 | 507,729 |
| Turkish Republic of Northern Cyprus | 65,222 | 66,656 |
| Unallocated non-current assets | 439,743 | 420,303 |
| 5,357,024 | 5,066,665 |
