Accounting Business Reporting for Decision Making

(Ron) #1
CHAPTER 1 Introduction to accounting and business decision making 7

ILLUSTRATIVE EXAMPLE 1.1


Operating segments for the Qantas Group


(C) ANALYSIS BY OPERATING SEGMENT^1
2015
$M

Qantas
Domestic

Qantas
International

Qantas
Freight

Jetstar
Group

Qantas
Loyalty Corporate

Unallocated
Eliminations^5 Consolidated
REVENUE AND OTHER
INCOME
External segment revenue
and other income
Inter-segment revenue and
other income

5 291

537

4 878

589

1 059

8

3 283

181

1 244

118

49

(40)

12

(1 393)

15 816


Total segment revenue and
other income 5 828 5 467 1 067 3 464 1 362 9 (1 381 ) 15 816
Share of net profit/(loss) of
investments accounted for
under the equity method^244 — (37) — — — (29)
Underlying EBITDAR^3 1 171 706 156 625 323 (149) (8) 2 824
Non-cancellable aircraft
operating lease rentals
Depreciation and amortisation

(219
(472

)
)

(42
(397

)
)

(5
(37

)
)

(229
(166

)
)


(8)


(14)


(2)

(495
(1 096

)
)
Underlying EBIT 480 267 114 230 315 (163) (10) 1 233
Underlying net finance costs (258) (258)
Underlying PBT (421) 975
ROIC %^4 16.2%
1 Qantas Domestic, Qantas International, Qantas Freight, Jetstar Group, Qantas Loyalty and Corporate are the operating segments of the
Qantas Group.
2 Share of net profit/(loss) of investments accounted for under the equity method excluding share of losses in Jetstar Hong Kong which have
been recognised as items outside of Underlying PBT.
3 Underlying EBITDAR represents Underlying earnings before income tax expense, depreciation, amortisation, non-cancellable aircraft operating
lease rentals and net finance costs.
4 ROIC % represents Return on Invested Capital (ROIC) EBIT divided by Average Invested Capital (Refer to Note 3(G)).
5 Unallocated/Eliminations represent other businesses of Qantas Group which are not considered to be significant reportable segments and
consolidation elimination entries.
Source: Qantas Airways Ltd 2015, annual report, p. 57.

Qantas is widely regarded as the world’s leading long-distance airline and one of the strongest brands in Australia.
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