6. Operating segments

Accounting principles used in operating segments are in line with the accounting principles of the Group, described in note ‎3.4.4 The Management Board of PKN ORLEN and management boards of Group companies assess the segment financial results and decide about allocation of resources based on segment profit from operations plus depreciation and amortisation (EBITDA).
Revenues from transactions with external customers and transactions with other segments are carried out at arm’s length.

6.1 Revenues, costs, financial results, increase in investment expenditures by operating segments

Year 2014

NOTEDownstream SegmentRetail SegmentUpstream SegmentCorporate FunctionsAdjustmentsTotal
Sales revenues from external customers 70 549 35 913 298 72 - 106 832
Sales revenues from transactions with other segments 15 392 191 - 239 (15 822) -
Sales revenues 7 85 941 36 104 298 311 (15 822) 106 832
Operating expenses (85 971) (35 015) (271) (1 007) 15 822 (106 442)
Other operating income 9.1 468 182 4 112 - 766
Other operating expenses 9.2 (5 329) (186) (323) (86) - (5 924)
Share in profit from investments accounted
for under equity method
16 58 - - (1) - 57
Segment profit/(loss) from operations (4 833) 1 085 (292) (671) - (4 711)
Net finance income and costs 10 (1 535)
(Loss) before tax (6 246)
Tax expense 11 418
Net (loss) (5 828)
Depreciation and amortisation 8.2 1 408 355 122 106 - 1 991
EBITDA (3 425) 1 440 (170) (565) - (2 720)
Increases in investment expenditures (including borrowing costs) 2 714 345 499 230 - 3 788

Year 2013

Downstream SegmentRetail SegmentUpstream SegmentCorporate FunctionsAdjustmentsTotal
NOTE(restated data)(restated data)(restated data)(restated data)
Sales revenues from external customers 77 047 36 462 17 71 - 113 597
Sales revenues from transactions with other segments 15 939 162 - 243 (16 344) -
Sales revenues 7 92 986 36 624 17 314 (16 344) 113 597
Operating expenses (92 710) (35 695) (48) (1 078) 16 344 (113 187)
Other operating income 9.1 188 90 83 210 - 571
Other operating expenses 9.2 (399) (102) (90) (123) - (714)
Share in profit from investments accounted
for under equity method
16 41 - - (1) - 40
Segment profit/(loss) from operations 106 917 (38) (678) - 307
Net finance income and costs 10 (150)
Profit before tax 157
Tax expense 11 (67)
Net profit 90
Depreciation and amortisation 8.2 1 633 351 6 121 - 2 111
EBITDA 1 739 1 268 (32) (557) - 2 418
Increases in investment expenditures (including borrowing costs) 1 596 467 304 117 - 2 484

   

6.2. Other segment data

6.2.1. Assets by operating segments

31/12/2014

31/12/2013

(restated data)

Downstream Segment 32 298 40 348
Retail Segment 5 787 5 990
Upstream Segment 2 422 1 375
Segment assets 40 507 47 713
Corporate Functions 6 425 3 888
Adjustments (207) (249)
46 725 51 352

including:

Non - current assets classified as held for saleInvestments accounted for under equity method
NOTE31/12/2014

31/12/2013

(restated data)

31/12/2014

31/12/2013

(restated data)

Downstream Segment 34 9 641 583
Corporate Functions - 6 31 32
16 34 15 672 615

As at 31 December 2014, non-current assets as held for sale in Downstream segment mainly relate to obtained for free of charge yellow energy rights and acquired red and green energy rights.
Operating segments include all assets except for financial assets (disclosed in notes ‎17, 21, 22) and tax assets (note 11.2). Assets used jointly by different operating segments are allocated based on revenues generated by particular operating segments.

6.2.2. Recognition and reversal of impairment allowances

RecognitionReversal
NOTE20142013 (restated data)20142013 (restated data)
Downstream Segment (5 982) (385) 108 96
Retail Segment (100) (47) 119 42
Upstream Segment (322) (89) - -
Impairment allowances by segments (6 404) (521) 227 138
Corporate Functions (29) (43) 26 24
Impairment allowances in operating activities 19.1, 9.1,9.2 (6 433) (564) 253 162
Impairment allowances in financing activities 10.1,10.2 (4) (14) 9 10
(6 437) (578) 262 172

including:

Impairment allowances of property, plant and equipment and intangible assets

RecognitionReversal
NOTE2014

2013

(restated data)

2014

2013

(restated data)

Downstream Segment (5 074) (101) 14 9
Retail Segment (93) (42) 116 38
Upstream Segment (322) (89) - -
Impairment allowances by segments (5 489) (232) 130 47
Corporate Functions (3) (6) 2 6
9.1,9.2,18 (5 492) (238) 132 53

6.2.3. Geographical information

Revenues from sale are disclosed in geographical information by customer’s premises countries

NOTE2014

2013

(restated data)

% share
20142013
Poland 45 095 47 065 42.2% 41.4%
Germany 19 310 18 745 18.1% 16.5%
Czech Republic 12 669 11 193 11.9% 9.9%
Lithuania, Latvia, Estonia 8 802 11 091 8.2% 9.8%
Other countries 20 956 25 503 19.6% 22.4%
7 106 832 113 597 100.0% 100.0%

“Other countries” entry comprises of sales to customers from Switzerland, Ukraine, Denmark, Slovakia, Great Britain and Austria.

Geographical allocation of non-current assets  

31/12/201431/12/2013% share
(restated data)20142013
Poland 17 181 15 637 73.0% 60.3%
Germany 889 862 3.8% 3.3%
Czech Republic 3 219 3 806 13.7% 14.7%
Lithuania, Latvia, Estonia 546 4 829 2.3% 18.6%
Canada 1 712 809 7.2% 3.1%
23 547 25 943 100.0% 100.0%

1) Additional information concerning restatement of revenues by operating segments in relation to changes in operating segments and implemented new IFRS 11 - Joint Agreements is presented in note 3.2.1.

Non-current assets by geographical allocation include non-current assets, intangible assets, investment property and perpetual usufruct of land

6.3. Sales revenues

31/12/201431/12/2013% share
(restated data)20142013
Poland 17 181 15 637 73.0% 60.3%
Germany 889 862 3.8% 3.3%
Czech Republic 3 219 3 806 13.7% 14.7%
Lithuania, Latvia, Estonia 546 4 829 2.3% 18.6%
Canada 1 712 809 7.2% 3.1%
23 547 25 943 100.0% 100.0%

1) Additional information concerning restatement of revenues by operating segments in relation to changes in operating segments and implemented new IFRS 11 - Joint Agreements is presented in note 3.2.1.

6.4. Information about major customers

In 2014 and 2013 no leading customers were identified in the Group, for which turnover would exceeded 10% of total revenues from sale of the ORLEN Group.