registration document France Telecom 2009 - Orange.com

20 CONSOLIDATED
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
STATEMENTS
Statement of comprehensive income
This statement reconciles the consolidated net income to
the comprehensive income for the period. It presents other
items of income and expense before tax (“ components of
other comprehensive income”) which are not recognized in
consolidated net income for the period:
■ remeasurement of assets held for sale;
■ remeasurement of cash fl ow hedge instruments;
■ remeasurement of net investment hedge instruments;
■ currency translation adjustment;
■ total amount of tax relating to the above items;
■ other comprehensive income of the entities accounted for
under equity method (post-tax).
Statement of financial position
Current and non-current items are presented separately in
the statement of fi nancial position: assets and liabilities with a
term of no more than twelve months are classifi ed as current;
whereas, assets and liabilities with a term of more than twelve
months are classifi ed as non-current.
Assets and liabilities held for sale are reported on a separate line
under non- current items in the statement of fi nancial position.
Statement of cash flows
The statement of cash fl ows is reported using the indirect
method from the consolidated net income and is broken down
into three categories:
■ cash fl ows arising from operating activities;
■ cash fl ows arising from investing activities;
■ cash fl ows arising from fi nancing activities.
Financial interests and income taxes are included in the cash
fl ows arising from operating activities.
On the acquisition date, a fi nance lease has no effect on cash
fl ows since the transaction is non-monetary. As well, lease
payments over the fi nancing period are separated between
interest (cash fl ows from operating activities) and reimbursement
of principal amount (cash fl ows arising from fi nancing activities).
Besides, the Group uses the Organic Cash Flow (OCF) as a
measurement of fi nancial performance. The OCF is net cash
provided by operating activities minus purchases of property,
plant and equip ment and intangible assets (net of the change
in amounts due to fi xed asset suppliers) plus proceeds from
sales of property, plant and equipment and intangible assets.
The OCF is not a fi nancial measure defi ned by IFRS and may
therefore not be comparable to other similarly-titled indicators
used by other companies.
Segment reporting
The Group reports 7 operating segments: France, United
Kingdom, Poland, Spain, Rest of the World, Enterprise and
International Carriers and Shared Services (IC & SS).
Each of the segments defi ned by the Group has its own
resources, although they may also share certain resources in
the areas of networks and information systems, research and
development, and other shared competencies; for instance it is
the role of the IC & SS segment.
The use of shared resources is taken into account in segment
results based either on the terms of contractual agreements
between legal entities, or external benchmarks, or by allocating
costs among all the segments. The supply of shared resources
is included in other revenues of the service provider, and use
of the resources is included in expenses taken into account for
the calculation of the service user’s EBITDA (Earnings Before
Interest, Tax, Depreciation and Amortization). The cost of
shared resources may be affected by changes in contractual
relationship or organization and may therefore impact the
segment results disclosed from one year to another.
Unallocated assets and liabilities comprise external net fi nancial
debt, current and deferred tax assets and liabilities as well as
equity. Internal net fi nancial debt is eliminated.
EBITDA is one of the key measures of operating profi tability used
by the Group internally to i) manage and assess the results of its
operating segments, ii) implement its investments and resourceallocation
strategy, and iii) assess the performance of the Group
Executive Management. The Group’s management believes
that EBITDA is meaningful for investors because it provides an
analysis of its operating results and segment profi tability using
the same measure used by management. As a consequence
and in accordance with IFRS 8 provisions, EBITDA is presented
in the analysis by operating segment, in addition to operating
income.
EBITDA is not a fi nancial measure defi ned by IFRS as a
measurement of fi nancial performance and may not be
comparable to other similarly-titled indicators used by other
companies. EBITDA is provided as additional information only
and should not be considered as a substitute for or net cash
provided by operating activities.
2.2 Earnings per share
The Group discloses both basic earnings per share and diluted
earnings per share for continuing operations and discontinued
operations. Basic earnings per share are calculated by dividing
net income for the year attributable to the equity holders
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM