KPN’s segment reporting is driven by the internal structure and reporting to KPN’s Chief Executive Officer (CEO), who is KPN’s chief operating decision-maker according to IFRS 8. KPN’s operating segments are summarized below.
In 2014, KPN made the following organizational changes:
ý IT Solutions, the segment with focus on datacenters, consulting services and workspace solutions, has been integrated into the Business Segment as of January 1, 2014. The internal reporting structure was changed and comparative segment information has been restated accordingly.
ý Germany Segment included E-Plus, Blau Mobilfunk and Magnum – a challenger network operator with its own brands and partners in Germany. E-Plus classified as ‘disposal group held for sale’ as of July 23, 2013. The sale was completed at October 1, 2014. E-Plus has been eliminated from the segment disclosures in this Note. The remaining activities of KPN’s Germany segment do not qualify for separate disclosure and have therefore been merged into Mobile International Other Segment as of January 1, 2014. Comparable information has been restated. Refer to Note 19 for more information on E-Plus.
The Netherlands
The Netherlands consists of the following:
ý Consumer Mobile Segment – providing mobile telephony and mobile data. KPN offers retail customers a broad package of services in the areas of communication, information, entertainment and commercial services;
ý Consumer Residential Segment – providing internet and TV and fixed telephony. KPN offers retail customers a broad range of services in the areas of communication, information, entertainment and commercial services;
ý Business Segment – KPN offers its business customers (small, medium-sized, large and corporate) a complete portfolio of service from fixed and mobile telephony and internet to a range of end-to-end solutions in infrastructure, workspace management and data network and datacenter services;
ý NetCo Segment is responsible for KPN’s operational activities for the Dutch networks (both fixed and mobile), IT services and for KPN’s wholesale customers; and
ý The Netherlands’ Other Segment.
Mobile International
Mobile International comprises:
ý Belgium Segment, consists of BASE Company, a challenger network operator with own brands and partners in Belgium; and ý Mobile International Other Segment, including continuing operations from KPN’s Germany activities.
iBasis Group
Through iBasis, KPN is a leading player in the international wholesale voice market. iBasis carries international phone calls worldwide.
Other activities Segment
Other activities comprise the results of KPN’s Corporate Center (support) and the call center activities of SNT Germany.
Due to the fact that KPN neither allocates interest expenses to all segments nor accounts for taxes in the segments, the disclosure is limited to operating profit for the year.
FINANCIAL STATEMENTS — CONSOLIDATED FINANCIAL STATEMENTS Other Notes to the Consolidated Financial Statements
Key Consolidated Financial
Statements General Notes Notes to
Profit or Loss Notes to
Financial Position Other Notes
Corporate Financial
Statements Other Information
< Notes to Financial Position 28 29 30 31 32 33 34 35 Corporate Financial Statements >
The basis for inter-segment pricing for wireless services is as follows:
1. KPN’s mobile terminating services are regulated in some aspects. The price level of the mobile terminating services to external wholesale operators has been set in consultation with and approved by the Dutch competition and telecommunications regulators.
The mobile terminating tariffs are applied on a non-discriminatory basis within the segment Consumer, Business and NetCo and to other (external) operators; and
2. Roaming tariffs between KPN’s Mobile operators are based on bilateral agreements and contain generally similar terms as bilateral agreements with third parties.
3. The basis for inter-segment pricing within the Netherlands, other than mentioned in categories 1) and 2) above can be described as follows:
ý For identical products which are also sold to external parties, KPN uses wholesale prices;
ý For non-regulated retail products which do not fall within the scope of category 3, KPN uses cost-based prices; and
ý For regulated retail products which do not fall within the scope of category 3, KPN uses external purchase costs and an additional charge which is equal to a predetermined percentage of the difference between the gross external retail revenues and external purchase costs; this method is also referred to as ‘retail-minus’.
The Netherlands
Amounts in millions of EUR, unless otherwise stated
Consumer Mobile Residential Business NetCo Other (including
eliminations) Total the Netherlands
2014 2013 2014 2013 2014 2013
(restated) 2014 2013 2014 2013
(restated) 2014 2013
Statement of Profit or Loss
External revenues1 1,346 1,440 1,800 1,839 2,695 2,972 494 482 2 3 6,337 6,736
Other income 2 – – – 5 25 – 4 76 1 83 30
Inter-division
revenues 59 70 116 123 220 204 1,768 1,857 -2,128 -2,218 35 36
Total revenues 1,407 1,510 1,916 1,962 2,920 3,201 2,262 2,343 -2,050 -2,214 6,455 6,802 Total operating
expenses excluding depreciation, amortization and
impairments -1,216 -1,100 -1,512 -1,587 -2,330 -2,495 -1,021 -1,046 2,074 2,181 -4,005 -4,047
EBITDA2 191 410 404 375 590 706 1,241 1,297 24 -33 2,450 2,755
Depreciation, amortization and
impairments -166 -242 -299 -297 -206 -221 -938 -907 -21 -12 -1,630 -1,679
Operating profit 25 168 105 78 384 485 303 390 3 -45 820 1,076
Total assets 1,261 1,805 1,940 2,003 3,478 3,492 11,498 10,081 -447 -286 17,730 17,095
Total liabilities 1,179 1,492 1,824 1,929 3,054 3,171 11,457 10,083 -447 -287 17,067 16,388 Other
Investments in
intangible assets 1 60 6 54 37 84 319 1,439 270 – 633 1,637
Investments in property, plant
and equipment 17 170 179 221 53 81 623 672 19 – 891 1,144
Investments in associates and
joint ventures – – – – – – 17 294 – – 17 294
Results associates
and joint ventures – – – – – 1 -4 -3 – – -4 -2
Employees end of
period (FTEs) 1,194 1,296 3,054 3,167 6,516 7,259 2,168 2,113 1,180 612 14,112 14,447
Employees
average (FTEs) 1,245 1,320 3,111 3,342 6,887 8,020 2,141 2,562 896 512 14,280 15,756
1) External revenues mainly consist of rendering of services.
2) Earnings before interest, tax and depreciation, amortization and impairments.
Key Consolidated Financial
Statements General Notes Notes to
Profit or Loss Notes to
Financial Position Other Notes
Corporate Financial
Statements Other Information
< Notes to Financial Position 28 29 30 31 32 33 34 35 Corporate Financial Statements >
Mobile International
Amounts in millions of EUR, unless otherwise stated
Belgium Other (including
eliminations) Total Mobile
International iBasis
2014 2013 2014 2013 2014 2013 2014 2013
Statement of Profit or Loss
External revenues1 701 720 104 131 805 851 773 777
Other income 2 – – -1 2 -1 – –
Inter-division revenues 8 8 5 12 13 20 175 192
Total revenues 711 728 109 142 820 870 948 969
Total operating expenses excluding
depreciation, amortization and impairments -562 -536 -119 -134 -681 -670 -925 -940
EBITDA2 149 192 -10 8 139 200 23 29
Depreciation, amortization and impairments -166 -151 -6 -10 -172 -161 -9 -12
Operating profit -17 41 -16 -2 -33 39 14 17
Total assets 1,406 2,047 1,359 10,937 2,765 12,984 386 389
Total liabilities 370 410 276 26,369 646 26,779 232 253
Other
Investments in intangible assets 36 226 1 50 37 276 – –
Investments in property, plant and equipment 141 160 2 409 143 569 8 7
Investments in associates and joint ventures 2 2 – – 2 2 – –
Results associates and joint ventures – -2 -5 -11 -5 -13 – –
Employees end of period (FTEs) 808 889 56 65 864 954 311 332
Employees average (FTEs) 849 892 59 119 908 1,011 322 331
1) External revenues mainly consist of rendering of services.
2) Earnings before interest, tax and depreciation, amortization and impairments.
KPN Total
Amounts in millions of EUR, unless otherwise stated
Other activities Segment Total segments Eliminations Consolidated
2014 2013 2014 2013 2014 2013 2014 2013
Statement of Profit or Loss
External revenues1 84 79 7,999 8,443 – – 7,999 8,443
Other income -1 – 84 29 – – 84 29
Inter-division revenues -2 -1 221 247 -221 -247 – –
Total revenues 81 78 8,304 8,719 -221 -247 8,083 8,472
Total operating expenses excluding
depreciation, amortization and impairments 322 -179 -5,289 -5,836 221 247 -5,068 -5,589
EBITDA2 403 -101 3,015 2,883 – – 3,015 2,883
Depreciation, amortization and impairments -9 -5 -1,820 -1,857 – – -1,820 -1,857
Operating profit 394 -106 1,195 1,026 – – 1,195 1,026
Balance sheet
Total assets -2,325 -4,596 18,556 25,872 – – 18,556 25,872
Total liabilities -4,019 -22,851 13,926 20,569 – – 13,926 20,569
Other
Investments in intangible assets 1 1 671 1,914 – – 671 1,914
Investments in property, plant and equipment 2 3 1,044 1,723 – – 1,044 1,723
Investments in associates and joint ventures 23 24 42 320 – – 42 320
Result associates and joint ventures 3 8 -6 -7 – – -6 -7
Employees end of period (FTEs) 3,184 3,216 18,471 18,949 – – 18,471 18,949
Employees average (FTEs) 3,200 3,124 18,710 20,222 – – 18,710 20,222
1) External revenues mainly consist of rendering of services.
2) Earnings before interest, tax and depreciation, amortization and impairments.
FINANCIAL STATEMENTS — CONSOLIDATED FINANCIAL STATEMENTS Other Notes to the Consolidated Financial Statements
Key Consolidated Financial
Statements General Notes Notes to
Profit or Loss Notes to
Financial Position Other Notes
Corporate Financial
Statements Other Information
< Notes to Financial Position 28 29 30 31 32 33 34 35 Corporate Financial Statements >
Geographical information Amounts in millions of
EUR Financial year Total non-current assets1 Total intangible assets Total property, plant and
equipment Revenues and other income Regions
The Netherlands 2014 13,013 3,393 6,072 6,417
2013 9,146 3,055 4,809 6,765
Belgium 2014 887 417 508 706
2013 876 403 511 726
The Americas 2014 66 98 20 773
2013 60 94 17 777
Other 2014 -612 84 6 187
2013 -758 91 3 204
Consolidated 2014 13,354 3,992 6,606 8,083
2013 9,324 3,643 5,340 8,472
1) Excluding deferred tax assets, pensions and financial instruments.
Key Consolidated Financial
Statements General Notes Notes to
Profit or Loss Notes to
Financial Position Other Notes
Corporate Financial
Statements Other Information
< Notes to Financial Position 28 29 30 31 32 33 34 35 Corporate Financial Statements >
For the year ended December 31
Amounts in millions of EUR 2014 2013
Income from subsidiaries after taxes -14,402 403
Other income and expense after taxes 13,804 -625
Profit (loss) attributable to equity holders -598 -222
In 2014, Income from subsidiaries after taxes includes a loss of EUR 14.3 billion, and Other income and expense after taxes a gain of this same amount, due to debt restructurings within KPN Group mainly relating to the sale of E-Plus.