NATS-Annual-Report-2015

Annual Report and Accounts 2015 | NATS Holdings Limited
Financial Statements 102
Notes forming part of the
consolidated accounts
(continued)
5. Business and geographical segments
Operating segments
The group’s Executive team is considered to be the chief operating decision maker as defined by IFRS 8. The segmental analysis is
based on the information that the Executive team uses internally for the purposes of evaluating the performance of operating segments
and determining resource allocation between segments. The business is organised into service lines, each service line provides a core
set of products or services to our customers. The performance of operating segments is assessed based on service line revenue and
contribution.
Service line contribution represents the revenue and costs which are directly attributed to a service line. Costs which are not directly
attributed to a service line include: costs managed outside of service lines, depreciation and amortisation (net of government grants),
pension accrual rate variances to budget, employee share scheme costs, redundancy and relocation costs, the cost of investing in
business growth and any profit/(loss) on disposal of non-current assets. A reconciliation of service line contribution to operating profit is
set out below.
For management reporting purposes, the group is currently organised into service lines: NATS Airspace, NATS Airports, NATS Engineering,
NATS Consultancy, NATS Defence and NATS Information. Reports to the Executive aggregate the performance of NATS Consultancy,
NATS Defence and NATS Information and report these as a single service line, Other NATS Service lines. These service lines have similar
economic characteristics and exhibit similar financial performance, the nature of the products and the services provided is in the support of
air traffic solutions and services and the customer base is drawn predominantly from airport operators and airlines.
Principal activities
The following table describes the activities of each operating segment:
NATS Airspace
This includes all of NATS’ economically regulated activities and encompasses en route, oceanic and
terminal services provided from our Prestwick and Swanwick centres, together with all of the supporting
communications, navigation and surveillance infrastructure and facilities. Airspace includes air traffic
services for helicopters operating in the North Sea, approach services for London airports and the services
to the Ministry of Defence.
NATS Airports
NATS Engineering
Other NATS Service lines
The provision of air traffic control and airport optimisation services at UK and international airports and
engineering support services provided to contract airports.
The provision of engineering services to other airport operators, construction companies and Air Traffic
Management (ATM) industry suppliers, integrating new ATM infrastructure and new airports.
Includes: NATS Defence, providing a range of services to military customers in the UK and internationally;
NATS Consultancy, offering airspace development, capacity improvement and training; and NATS
Information, providing data to enable future efficiency and flight optimisation.
Segment information about these activities is presented below.
Financial
Statements