§
|
Total Revenues increased
1.5% reaching
NIS 1,675 million ($446 million)
|
§
|
Total Revenues from services
increased 0.9% to NIS 1,493 million ($397
million)
|
§
|
Revenues from content and value
added services (including SMS) increased 32.4%, representing 15.3%
of services revenues
|
§
|
EBITDA3 increased
2.6% to NIS 670 million ($178 million); EBITDA margin 40%3,
up from 39.6%
|
§
|
Operating income
increased 5.4% to NIS 468 million ($125
million)
|
§
|
Net income4 increased 19.4% to
NIS 289 million ($77 million)
|
§
|
Free cash flow1
totaled NIS 454 million ($121
million)
|
§
|
Subscriber base
increased by approx. 31,000 net subscribers during the quarter,
mostly post-paid subscribers; reaching approx. 3.259 million at the end of
September 2009
|
§
|
3G subscribers reached
approx. 941,000 at the end of September 2009, net addition of approx.
64,000 in the third quarter 2009
|
§
|
The Company declared a
third quarter dividend of NIS 2.90 per
share
|
Q3/2009
|
Q3/2008
|
%
Change
|
Q3/2009
|
Q3/2008
|
|
million
NIS
|
million
US$
(convenience
translation)
|
||||
Total
Services revenues
|
1,493
|
1,480
|
0.9%
|
397.3
|
393.8
|
Revenues from
content and value added services
|
229
|
173
|
32.4%
|
60.9
|
46.0
|
Handset and
accessories revenues
|
182
|
170
|
7.1%
|
48.4
|
45.2
|
Total
revenues
|
1,675
|
1,650
|
1.5%
|
445.7
|
439.1
|
Operating
income
|
468
|
444
|
5.4%
|
124.5
|
118.1
|
Net
Income
|
289
|
242
|
19.4%
|
76.9
|
64.4
|
EBITDA, after
elimination of a one-time provision3
in Q3/2009
|
670
|
653
|
2.6%
|
178.3
|
173.8
|
EBITDA, as
percent of Revenues, after elimination of a one-time provision3
in Q3/2009
|
40.0%
|
39.6%
|
1.0%
|
||
Subscribers
end of period
(in
thousands)
|
3,259
|
3,157
|
3.2%
|
||
Monthly
ARPU
|
150.4
|
154.3
|
(2.5%)
|
40.0
|
41.1
|
Average
Monthly MOU *
|
338.1
|
336.3
|
0.5%
|
*
|
Following the
regulatory requirement to change the basic airtime charging unit from
twelve-seconds to one-second units commencing January 1, 2009, MOU for the
third quarter of 2008 has been adjusted to the same per-one second unit
basis to enable a comparison. MOU for the third quarter of 2008 based on
the former charging units was 357.4
minutes.
|
US Dial-in
Number: 1 888 407 2553
|
UK Dial-in
Number: 0 800 917 9141
|
|
Israel
Dial-in Number: 03 918 0650
|
International
Dial-in Number: +972 3 918 0650
|
|
at: 09:00 am
Eastern Time; 06:00 am Pacific Time; 02:00 pm UK Time; 04:00 pm Israel
Time
|
Company
Contact
Yaacov
Heen
Chief
Financial Officer
investors@cellcom.co.il
Tel: +972 52
998 9755
|
Investor Relations
Contact
Ehud Helft /
Ed Job
CCGK Investor
Relations
ehud@gkir.com
/ ed.job@ccgir.com
Tel: (US) 1
866 704 6710 / 1 646-213-1914
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into
US dollar
|
||||||||||||||||
September
30,
|
September
30,
|
September
30,
|
December
31,
|
|||||||||||||
2009
|
2009
|
*2008
|
*2008
|
|||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash
equivalents
|
976 | 260 | 195 | 275 | ||||||||||||
Current
investments, including derivatives
|
213 | 57 | **72 | **68 | ||||||||||||
Trade
receivables
|
1,584 | 421 | 1,503 | 1,478 | ||||||||||||
Other
receivables
|
73 | 19 | **59 | **44 | ||||||||||||
Inventory
|
123 | 33 | 137 | 119 | ||||||||||||
Total
current assets
|
2,969 | 790 | 1,966 | 1,984 | ||||||||||||
Trade and
other receivables
|
622 | 165 | 610 | 602 | ||||||||||||
Property,
plant and equipment, net
|
2,066 | 550 | 2,186 | 2,159 | ||||||||||||
Intangible
assets, net
|
707 | 188 | 739 | 743 | ||||||||||||
Total
non- current assets
|
3,395 | 903 | 3,535 | 3,504 | ||||||||||||
Total
assets
|
6,364 | 1,693 | 5,501 | 5,488 | ||||||||||||
Liabilities
|
||||||||||||||||
Debentures
current maturities
|
341 | 91 | 331 | 329 | ||||||||||||
Trade
payables and accrued expenses
|
788 | 210 | 708 | 677 | ||||||||||||
Current tax
liabilities
|
127 | 34 | 84 | 85 | ||||||||||||
Provisions
|
78 | 20 | 77 | 47 | ||||||||||||
Other current
liabilities, including derivatives
|
345 | 92 | 319 | 385 | ||||||||||||
Total
current liabilities
|
1,679 | 447 | 1,519 | 1,523 | ||||||||||||
Debentures
|
4,179 | 1,112 | 3,417 | 3,401 | ||||||||||||
Provisions
|
17 | 5 | 15 | 17 | ||||||||||||
Other
long-term liabilities
|
1 | - | 1 | 1 | ||||||||||||
Deferred
taxes
|
99 | 26 | 141 | 156 | ||||||||||||
Total
non- current liabilities
|
4,296 | 1,143 | 3,574 | 3,575 | ||||||||||||
Total
liabilities
|
5,975 | 1,590 | 5,093 | 5,098 | ||||||||||||
Shareholders’
equity
|
||||||||||||||||
Share
capital
|
1 | - | 1 | 1 | ||||||||||||
Cash flow
hedge reserve
|
(24 | ) | (6 | ) | (44 | ) | (11 | ) | ||||||||
Retained
earnings
|
412 | 109 | 451 | 400 | ||||||||||||
Total
shareholders’ equity
|
389 | 103 | 408 | 390 | ||||||||||||
Total
liabilities and shareholders’ equity
|
6,364 | 1,693 | 5,501 | 5,488 |
Nine-
month period ended
|
Three-
month period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008
|
2009
|
2009
|
*2008
|
*2008
|
||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Revenues
|
4,844 | 1,289 | 4,845 | 1,675 | 446 | 1,650 | 6,417 | |||||||||||||||||||||
Cost of
revenues
|
2,486 | 662 | 2,549 | 856 | 228 | 852 | 3,396 | |||||||||||||||||||||
Gross
profit
|
2,358 | 627 | 2,296 | 819 | 218 | 798 | 3,021 | |||||||||||||||||||||
Selling and
marketing expenses
|
520 | 138 | 521 | 185 | 49 | 188 | 701 | |||||||||||||||||||||
General and
administrative expenses
|
485 | 129 | 491 | 166 | 44 | 164 | 659 | |||||||||||||||||||||
Other
(income) expenses, net
|
4 | 1 | (16 | ) | - | - | 2 | (29 | ) | |||||||||||||||||||
Operating
income
|
1,349 | 359 | 1,300 | 468 | 125 | 444 | 1,690 | |||||||||||||||||||||
Financing
income
|
141 | 37 | 94 | 29 | 7 | 14 | 83 | |||||||||||||||||||||
Financing
expenses
|
(302 | ) | (80 | ) | (357 | ) | (151 | ) | (40 | ) | (123 | ) | (393 | ) | ||||||||||||||
Financing
expenses, net
|
(161 | ) | (43 | ) | (263 | ) | (122 | ) | (33 | ) | (109 | ) | (310 | ) | ||||||||||||||
Income
before income tax
|
1,188 | 316 | 1,037 | 346 | 92 | 335 | 1,380 | |||||||||||||||||||||
Income
tax
|
277 | 74 | 291 | 57 | 15 | 93 | 391 | |||||||||||||||||||||
Net
income
|
911 | 242 | 746 | 289 | 77 | 242 | 989 | |||||||||||||||||||||
Earnings
per share
|
||||||||||||||||||||||||||||
Basic
earnings per share in NIS
|
9.26 | 2.46 | 7.64 | 2.94 | 0.78 | 2.48 | 10.12 | |||||||||||||||||||||
Diluted
earnings per share in NIS
|
9.17 | 2.44 | 7.52 | 2.91 | 0.77 | 2.44 | 9.96 |
Nine-month
period ended
|
Three-month
period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008
|
2009
|
2009
|
*2008
|
*2008
|
||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Cash
flows from operating activities
|
||||||||||||||||||||||||||||
Net income
for the period
|
911 | 242 | 746 | 289 | 77 | 242 | 989 | |||||||||||||||||||||
Adjustments
to reconcile net income to funds generated from
operations:
|
||||||||||||||||||||||||||||
Depreciation
|
353 | 94 | 428 | 115 | 31 | 142 | 570 | |||||||||||||||||||||
Amortization
|
213 | 57 | 182 | 72 | 19 | 65 | 251 | |||||||||||||||||||||
Capital gain
on sale of land
|
- | - | (9 | ) | - | - | - | (9 | ) | |||||||||||||||||||
Loss (gain)
on sale of assets
|
5 | 1 | (6 | ) | 1 | - | 2 | (9 | ) | |||||||||||||||||||
Income tax
expense
|
277 | 74 | 291 | 57 | 15 | 93 | 391 | |||||||||||||||||||||
Financial
(income) costs, net
|
161 | 43 | 263 | 122 | 33 | 109 | 310 | |||||||||||||||||||||
Share based
payments
|
1 | - | 20 | 1 | - | 3 | 28 | |||||||||||||||||||||
Changes
in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Changes in
inventories
|
(57 | ) | (15 | ) | 40 | (29 | ) | (8 | ) | (11 | ) | 36 | ||||||||||||||||
Changes in
trade receivables (including long-term amounts)
|
(85 | ) | (23 | ) | (163 | ) | (34 | ) | (9 | ) | (50 | ) | (117 | ) | ||||||||||||||
Changes in
other receivables (including long-term amounts)
|
(45 | ) | (12 | ) | (44 | ) | 43 | 12 | (2 | ) | (34 | ) | ||||||||||||||||
Changes in
trade payables and accrued expenses
|
182 | 49 | (175 | ) | 58 | 16 | 93 | (271 | ) | |||||||||||||||||||
Changes in
other liabilities (including long-term amounts)
|
(4 | ) | (1 | ) | 77 | 5 | 1 | 43 | 99 | |||||||||||||||||||
Proceeds
(payments) for inventory hedging contracts, net
|
22 | 6 | (34 | ) | 5 | 1 | (14 | ) | (38 | ) | ||||||||||||||||||
Proceeds
(payments) for derivative contracts, net
|
19 | 5 | (8 | ) | (15 | ) | (4 | ) | (4 | ) | 18 | |||||||||||||||||
Income tax
paid
|
(290 | ) | (77 | ) | (355 | ) | (101 | ) | (27 | ) | (95 | ) | (451 | ) | ||||||||||||||
Net
cash provided by operating activities
|
1,663 | 443 | 1,253 | 589 | 157 | 616 | 1,763 |
Nine-month
period ended
|
Three-month
period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008
|
2009
|
2009
|
*2008
|
*2008
|
||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Cash
flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition
of property, plant, and equipment
|
(285 | ) | (76 | ) | (323 | ) | (89 | ) | (24 | ) | (98 | ) | (429 | ) | ||||||||||||||
Acquisition
of intangible assets
|
(137 | ) | (37 | ) | (129 | ) | (48 | ) | (13 | ) | (35 | ) | (175 | ) | ||||||||||||||
Change in
current investments, net
|
(124 | ) | (33 | ) | - | (124 | ) | (33 | ) | - | - | |||||||||||||||||
Payments for
derivative hedging contracts, net
|
- | - | (17 | ) | - | - | (7 | ) | (17 | ) | ||||||||||||||||||
Proceeds from
sales of property, plant, and equipment
|
2 | 1 | 13 | 2 | 1 | - | 19 | |||||||||||||||||||||
Interest
received
|
4 | 1 | 15 | - | - | 2 | 17 | |||||||||||||||||||||
Proceeds from
sale of long term assets
|
- | - | 39 | - | - | 2 | 39 | |||||||||||||||||||||
Net
cash used in
investing
activities
|
(540 | ) | (144 | ) | (402 | ) | (259 | ) | (69 | ) | (136 | ) | (546 | ) | ||||||||||||||
Cash
flows from financing activities
|
||||||||||||||||||||||||||||
Proceeds from
derivative contracts, net
|
9 | 2 | 17 | 5 | 1 | 2 | 31 | |||||||||||||||||||||
Repayment of
long-term loans from banks
|
- | - | (648 | ) | - | - | - | (648 | ) | |||||||||||||||||||
Repayment of
Debentures
|
(332 | ) | (88 | ) | (125 | ) | (168 | ) | (44 | ) | (125 | ) | (125 | ) | ||||||||||||||
Proceeds from
issuance of debentures, net of issuance costs
|
989 | 263 | 589 | - | - | - | 589 | |||||||||||||||||||||
Dividend
paid
|
(898 | ) | (239 | ) | (1,225 | ) | (302 | ) | (80 | ) | (270 | ) | (1,525 | ) | ||||||||||||||
Interest
paid
|
(190 | ) | (50 | ) | (175 | ) | (112 | ) | (30 | ) | (87 | ) | (175 | ) | ||||||||||||||
Net
cash provided by (used in) financing activities
|
(422 | ) | (112 | ) | (1,567 | ) | (577 | ) | (153 | ) | (480 | ) | (1,853 | ) | ||||||||||||||
Changes
in cash and cash equivalents
|
701 | 187 | (716 | ) | (247 | ) | (65 | ) | - | (636 | ) | |||||||||||||||||
Balance
of cash and cash equivalents at beginning of the period
|
275 | 73 | 911 | 1,223 | 325 | 195 | 911 | |||||||||||||||||||||
Balance
of cash and cash equivalents at end of the period
|
976 | 260 | 195 | 976 | 260 | 195 | 275 |
Three-month
period ended
September
30,
|
Year
ended
December
31,
|
|||||||||||||||
2009
NIS
millions
|
Convenience
translation
into US
dollar
2009
US$
millions
|
2008
NIS
millions
|
2008
NIS
millions
|
|||||||||||||
Net
income
|
289 | 77 | 242 | 989 | ||||||||||||
Income
taxes
|
57 | 15 | 93 | 391 | ||||||||||||
Financing
income
|
(29 | ) | (8 | ) | (14 | ) | (83 | ) | ||||||||
Financing
expenses
|
151 | 40 | 123 | 393 | ||||||||||||
Other
expenses (income)
|
- | - | 2 | (29 | ) | |||||||||||
Depreciation
and amortization
|
187 | 50 | 207 | 821 | ||||||||||||
EBITDA
|
655 | 174 | 653 | 2,482 |
Three-month
period ended
September
30,
|
Year
ended
December
31,
|
|||||||||||||||
2009
NIS
millions
|
Convenience
translation
into US
dollar
2009
US$
millions
|
2008
NIS
millions
|
2008
NIS
millions
|
|||||||||||||
Cash flows
from operating activities
|
589 | 157 | 616 | 1,763 | ||||||||||||
Cash flows
from investing activities
|
(259 | ) | (69 | ) | (136 | ) | (546 | ) | ||||||||
short-term
Investment in marketable debentures
|
124 | 33 | - | - | ||||||||||||
Free cash
flow
|
454 | 121 | 480 | 1,217 |
Cellcom
Israel Ltd.
and
Subsidiaries
Financial
Statements
As
at September 30, 2009
(Unaudited)
|
Page
|
|
Interim
Consolidated Statements of Financial position
|
3
|
Interim
Consolidated Statements of Income
|
4
|
Interim
Consolidated Statements of Comprehensive Income
|
5
|
Interim
Consolidated Statements of Changes in shareholders' equity
|
6
|
Interim
Consolidated Statements of Cash Flows
|
8
|
Condensed
notes to the Interim Consolidated Financial Statements
|
10
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into
US dollar
|
||||||||||||||||
(Note
2D)
|
||||||||||||||||
September
30,
|
September
30,
|
September
30,
|
December
31,
|
|||||||||||||
2009
|
2009
|
*2008 | *2008 | |||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|||||||||||||
Assets
|
||||||||||||||||
Cash
and cash equivalents
|
976 | 260 | 195 | 275 | ||||||||||||
Current
investments, including derivatives
|
213 | 57 | **72 | **68 | ||||||||||||
Trade
receivables
|
1,584 | 421 | 1,503 | 1,478 | ||||||||||||
Other
receivables
|
73 | 19 | **59 | **44 | ||||||||||||
Inventory
|
123 | 33 | 137 | 119 | ||||||||||||
Total
current assets
|
2,969 | 790 | 1,966 | 1,984 | ||||||||||||
Trade
and other receivables
|
622 | 165 | 610 | 602 | ||||||||||||
Property,
plant and equipment, net
|
2,066 | 550 | 2,186 | 2,159 | ||||||||||||
Intangible
assets, net
|
707 | 188 | 739 | 743 | ||||||||||||
Total
non- current assets
|
3,395 | 903 | 3,535 | 3,504 | ||||||||||||
Total
assets
|
6,364 | 1,693 | 5,501 | 5,488 | ||||||||||||
Liabilities
|
||||||||||||||||
Debentures
current maturities
|
341 | 91 | 331 | 329 | ||||||||||||
Trade
payables and accrued expenses
|
788 | 210 | 708 | 677 | ||||||||||||
Current
tax liabilities
|
127 | 34 | 84 | 85 | ||||||||||||
Provisions
|
78 | 20 | 77 | 47 | ||||||||||||
Other
current liabilities, including derivatives
|
345 | 92 | 319 | 385 | ||||||||||||
Total
current liabilities
|
1,679 | 447 | 1,519 | 1,523 | ||||||||||||
Debentures
|
4,179 | 1,112 | 3,417 | 3,401 | ||||||||||||
Provisions
|
17 | 5 | 15 | 17 | ||||||||||||
Other
long-term liabilities
|
1 | - | 1 | 1 | ||||||||||||
Deferred
taxes
|
99 | 26 | 141 | 156 | ||||||||||||
Total
non- current liabilities
|
4,296 | 1,143 | 3,574 | 3,575 | ||||||||||||
Total
liabilities
|
5,975 | 1,590 | 5,093 | 5,098 | ||||||||||||
Shareholders’
equity
|
||||||||||||||||
Share
capital
|
1 | - | 1 | 1 | ||||||||||||
Cash
flow hedge reserve
|
(24 | ) | (6 | ) | (44 | ) | (11 | ) | ||||||||
Retained
earnings
|
412 | 109 | 451 | 400 | ||||||||||||
Total
shareholders’ equity
|
389 | 103 | 408 | 390 | ||||||||||||
Total
liabilities and shareholders’ equity
|
6,364 | 1,693 | 5,501 | 5,488 |
Nine-
month period ended
|
Three-
month period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
(Note
2D)
|
(Note
2D)
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008 |
2009
|
2009
|
*2008 | *2008 | ||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Revenues
|
4,844 | 1,289 | 4,845 | 1,675 | 446 | 1,650 | 6,417 | |||||||||||||||||||||
Cost
of revenues
|
2,486 | 662 | 2,549 | 856 | 228 | 852 | 3,396 | |||||||||||||||||||||
Gross
profit
|
2,358 | 627 | 2,296 | 819 | 218 | 798 | 3,021 | |||||||||||||||||||||
Selling
and marketing expenses
|
520 | 138 | 521 | 185 | 49 | 188 | 701 | |||||||||||||||||||||
General
and administrative expenses
|
485 | 129 | 491 | 166 | 44 | 164 | 659 | |||||||||||||||||||||
Other
(income) expenses, net
|
4 | 1 | (16 | ) | - | - | 2 | (29 | ) | |||||||||||||||||||
Operating
income
|
1,349 | 359 | 1,300 | 468 | 125 | 444 | 1,690 | |||||||||||||||||||||
Financing
income
|
141 | 37 | 94 | 29 | 7 | 14 | 83 | |||||||||||||||||||||
Financing
expenses
|
(302 | ) | (80 | ) | (357 | ) | (151 | ) | (40 | ) | (123 | ) | (393 | ) | ||||||||||||||
Financing
expenses, net
|
(161 | ) | (43 | ) | (263 | ) | (122 | ) | (33 | ) | (109 | ) | (310 | ) | ||||||||||||||
Income
before income tax
|
1,188 | 316 | 1,037 | 346 | 92 | 335 | 1,380 | |||||||||||||||||||||
Income
tax
|
277 | 74 | 291 | 57 | 15 | 93 | 391 | |||||||||||||||||||||
Net
income
|
911 | 242 | 746 | 289 | 77 | 242 | 989 | |||||||||||||||||||||
Earnings
per share
|
||||||||||||||||||||||||||||
Basic
earnings per share in NIS
|
9.26 | 2.46 | 7.64 | 2.94 | 0.78 | 2.48 | 10.12 | |||||||||||||||||||||
Diluted
earnings per share in NIS
|
9.17 | 2.44 | 7.52 | 2.91 | 0.77 | 2.44 | 9.96 |
Nine-
month period ended
|
Three-
month period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
(Note
2D)
|
(Note
2D)
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008 |
2009
|
2009
|
*2008 | *2008 | ||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Net
change in fair value of cash flow hedges transferred to profit and
loss
|
(14 | ) | (4 | ) | 35 | (6 | ) | (2 | ) | 17 | 44 | |||||||||||||||||
Changes
in fair value of cash flow hedges
|
(3 | ) | (1 | ) | (37 | ) | (9 | ) | (3 | ) | 3 | (10 | ) | |||||||||||||||
Income
tax on other comprehensive income
|
4 | 1 | (9 | ) | 2 | 1 | (4 | ) | (12 | ) | ||||||||||||||||||
Other
comprehensive income, net of income tax
|
(13 | ) | (4 | ) | (11 | ) | (13 | ) | (4 | ) | 16 | 22 | ||||||||||||||||
Net
income for period
|
911 | 242 | 746 | 289 | 77 | 242 | 989 | |||||||||||||||||||||
Total
comprehensive income for the period
|
898 | 238 | 735 | 276 | 73 | 258 | 1,011 |
Share
capital amount
|
Cash
flow hedge reserve
|
Retained
Earnings
|
Total
|
Convenience
translation
into
U.S.
dollar
(Note
2D)
|
||||||||||||||||
NIS
millions
|
US$
millions
|
|||||||||||||||||||
For
the nine-month period
ended
September 30,
2009
(Unaudited)
|
||||||||||||||||||||
Balance
as of January 1, 2009
(Audited)*
|
1 | (11 | ) | 400 | 390 | 104 | ||||||||||||||
Comprehensive
income for the period
|
- | (13 | ) | 911 | 898 | 238 | ||||||||||||||
Share
based payments
|
- | - | 1 | 1 | - | |||||||||||||||
Cash
dividend paid
|
- | - | (900 | ) | (900 | ) | (239 | ) | ||||||||||||
Balance
as of September 30, 2009
(Unaudited)
|
1 | (24 | ) | 412 | 389 | 103 |
Share
capital amount
|
Cash
flow hedge reserve
|
Retained
Earnings
|
Total
|
Convenience
translation
into
U.S.
dollar
(Note
2D)
|
||||||||||||||||
NIS
millions
|
US$
millions
|
|||||||||||||||||||
For
the nine-month period
ended
September 30,
2008
(Unaudited)
|
||||||||||||||||||||
Balance
as of January 1, 2008
(Audited)*
|
1 | (33 | ) | 913 | 881 | 234 | ||||||||||||||
Comprehensive
income for the period*
|
- | (11 | ) | 746 | 735 | 196 | ||||||||||||||
Share
based payments
|
- | - | 20 | 20 | 5 | |||||||||||||||
Cash
dividend paid
|
- | - | (1,228 | ) | (1,228 | ) | (326 | ) | ||||||||||||
Balance
as of September 30, 2008
(Unaudited)
|
1 | (44 | ) | 451 | 408 | 109 |
Share
capital amount
|
Cash
flow hedge reserve
|
Retained
earnings
|
Total
|
Convenience
translation
into
U.S.
dollar
(Note
2D)
|
||||||||||||||||
NIS
millions
|
US$
millions
|
|||||||||||||||||||
For
the three-month period
ended
September 30,
2009
(Unaudited)
|
||||||||||||||||||||
Balance
as of June 30, 2009
(Unaudited)*
|
1 | (11 | ) | 422 | 412 | 110 | ||||||||||||||
Comprehensive
income for the period
|
- | (13 | ) | 289 | 276 | 73 | ||||||||||||||
Share
based payments
|
1 | 1 | - | |||||||||||||||||
Cash
dividend paid
|
- | - | (300 | ) | (300 | ) | (80 | ) | ||||||||||||
Balance
as of September 30, 2009
(Unaudited)
|
1 | (24 | ) | 412 | 389 | 103 |
Share
capital amount
|
Cash
flow hedge reserve
|
Retained
earnings
|
Total
|
Convenience
translation
into
U.S.
dollar
(Note
2D)
|
||||||||||||||||
NIS
millions
|
US$
millions
|
|||||||||||||||||||
For
the three-month period
ended
September 30,
2008
(Unaudited)
|
||||||||||||||||||||
Balance
as of June 30, 2008
(Unaudited)*
|
1 | (60 | ) | 476 | 417 | 111 | ||||||||||||||
Comprehensive
income for the period
|
- | 16 | 242 | 258 | 69 | |||||||||||||||
Share
based payments
|
- | - | 3 | 3 | 1 | |||||||||||||||
Cash
dividend paid
|
- | - | (270 | ) | (270 | ) | (72 | ) | ||||||||||||
Balance
as of September 30, 2008
(Unaudited)
|
1 | (44 | ) | 451 | 408 | 109 |
Share
capital amount
|
Cash
flow hedge reserve
|
Retained
earnings
|
Total
|
Convenience
translation
into
U.S.
dollar
(Note
2D)
|
||||||||||||||||
NIS
millions
|
US$
millions
|
|||||||||||||||||||
For
the year ended
December 31, 2008
(Audited)
|
||||||||||||||||||||
Balance
as of January 1, 2008
(Audited)*
|
1 | (33 | ) | 913 | 881 | 234 | ||||||||||||||
Comprehensive
income for the period*
|
- | 22 | 989 | 1,011 | 269 | |||||||||||||||
Share
based payments
|
- | - | 28 | 28 | 7 | |||||||||||||||
Cash
dividend paid
|
- | - | (1,530 | ) | (1,530 | ) | (406 | ) | ||||||||||||
Balance
as of December 31, 2008
(Audited)
|
1 | (11 | ) | 400 | 390 | 104 |
Nine-
month period ended
|
Three-
month period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
(Note
2D)
|
(Note
2D)
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008 |
2009
|
2009
|
*2008 | *2008 | ||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Cash
flows from operating activities
|
||||||||||||||||||||||||||||
Net
income for the period
|
911 | 242 | 746 | 289 | 77 | 242 | 989 | |||||||||||||||||||||
Adjustments
to reconcile net income to funds generated from
operations:
|
||||||||||||||||||||||||||||
Depreciation
|
353 | 94 | 428 | 115 | 31 | 142 | 570 | |||||||||||||||||||||
Amortization
|
213 | 57 | 182 | 72 | 19 | 65 | 251 | |||||||||||||||||||||
Capital
gain on sale of land
|
- | - | (9 | ) | - | - | - | (9 | ) | |||||||||||||||||||
Loss
(gain) on sale of assets
|
5 | 1 | (6 | ) | 1 | - | 2 | (9 | ) | |||||||||||||||||||
Income
tax expense
|
277 | 74 | 291 | 57 | 15 | 93 | 391 | |||||||||||||||||||||
Financial
(income) costs, net
|
161 | 43 | 263 | 122 | 33 | 109 | 310 | |||||||||||||||||||||
Share
based payments
|
1 | - | 20 | 1 | - | 3 | 28 | |||||||||||||||||||||
Changes
in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Changes
in inventories
|
(57 | ) | (15 | ) | 40 | (29 | ) | (8 | ) | (11 | ) | 36 | ||||||||||||||||
Changes
in trade receivables (including long-term amounts)
|
(85 | ) | (23 | ) | (163 | ) | (34 | ) | (9 | ) | (50 | ) | (117 | ) | ||||||||||||||
Changes
in other receivables (including long-term amounts)
|
(45 | ) | (12 | ) | (44 | ) | 43 | 12 | (2 | ) | (34 | ) | ||||||||||||||||
Changes
in trade payables and accrued expenses
|
182 | 49 | (175 | ) | 58 |
16
|
93 | (271 | ) | |||||||||||||||||||
Changes
in other liabilities (including long-term amounts)
|
(4 | ) | (1 | ) | 77 | 5 | 1 | 43 | 99 | |||||||||||||||||||
Proceeds
(payments) for derivatives hedging contracts, net
|
22 | 6 | (34 | ) | 5 | 1 | (14 | ) | (38 | ) | ||||||||||||||||||
Proceeds
(payments) for derivative contracts, net
|
19 | 5 | (8 | ) | (15 | ) | (4 | ) | (4 | ) | 18 | |||||||||||||||||
Income
tax paid
|
(290 | ) | (77 | ) | (355 | ) | (101 | ) | (27 | ) | (95 | ) | (451 | ) | ||||||||||||||
Net
cash provided by operating activities
|
1,663 | 443 | 1,253 | 589 | 157 | 616 | 1,763 |
Nine-
month period ended
|
Three-
month period ended
|
Year
ended
|
||||||||||||||||||||||||||
September
30,
|
September
30,
|
December
31,
|
||||||||||||||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
(Note
2D)
|
(Note
2D)
|
|||||||||||||||||||||||||||
2009
|
2009
|
*2008 |
2009
|
2009
|
*2008 | *2008 | ||||||||||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
NIS
millions
|
US$
millions
|
US$
millions
|
NIS
millions
|
||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||
Cash
flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition
of property, plant, and equipment
|
(285 | ) | (76 | ) | (323 | ) | (89 | ) | (24 | ) | (98 | ) | (429 | ) | ||||||||||||||
Acquisition
of intangible assets
|
(137 | ) | (37 | ) | (129 | ) | (48 | ) | (13 | ) | (35 | ) | (175 | ) | ||||||||||||||
Change
in current investments, net
|
(124 | ) | (33 | ) | - | (124 | ) | (33 | ) | - | - | |||||||||||||||||
Payments
for derivative hedging contracts, net
|
- | - | (17 | ) | - | - | (7 | ) | (17 | ) | ||||||||||||||||||
Proceeds
from sales of property, plant, and equipment
|
2 | 1 | 13 | 2 | 1 | - | 19 | |||||||||||||||||||||
Interest
received
|
4 | 1 | 15 | - | - | 2 | 17 | |||||||||||||||||||||
Proceeds
from sale of long term assets
|
- | - | 39 | - | - | 2 | 39 | |||||||||||||||||||||
Net
cash used in
investing
activities
|
(540 | ) | (144 | ) | (402 | ) | (259 | ) | (69 | ) | (136 | ) | (546 | ) | ||||||||||||||
Cash
flows from financing activities
|
||||||||||||||||||||||||||||
Proceeds
from derivative contracts, net
|
9 | 2 | 17 | 5 | 1 | 2 | 31 | |||||||||||||||||||||
Repayment
of long-term loans from banks
|
- | - | (648 | ) | - | - | - | (648 | ) | |||||||||||||||||||
Repayment
of debentures
|
(332 | ) | (88 | ) | (125 | ) | (168 | ) | (44 | ) | (125 | ) | (125 | ) | ||||||||||||||
Proceeds
from issuance of debentures, net of issuance costs
|
989 | 263 | 589 | - | - | - | 589 | |||||||||||||||||||||
Dividend
paid
|
(898 | ) | (239 | ) | (1,225 | ) | (302 | ) | (80 | ) | (270 | ) | (1,525 | ) | ||||||||||||||
Interest
paid
|
(190 | ) | (50 | ) | (175 | ) | (112 | ) | (30 | ) | (87 | ) | (175 | ) | ||||||||||||||
Net
cash used in financing activities
|
(422 | ) | (112 | ) | (1,567 | ) | (577 | ) | (153 | ) | (480 | ) | (1,853 | ) | ||||||||||||||
Changes
in cash and cash equivalents
|
701 | 187 | (716 | ) | (247 | ) | (65 | ) | - | (636 | ) | |||||||||||||||||
Balance
of cash and cash equivalents at beginning of the period
|
275 | 73 | 911 | 1,223 | 325 | 195 | 911 | |||||||||||||||||||||
Balance
of cash and cash equivalents at end of the period
|
976 | 260 | 195 | 976 | 260 | 195 | 275 |
A.
|
Statement
of compliance
|
B.
|
Functional
and presentation currency
|
C.
|
Basis
of measurement
|
D.
|
Convenience
translation into U.S. dollars (“dollars” or
“$”)
|
E.
|
Use
of estimates and judgments
|
F.
|
Exchange
rates and Consumer Price Indexes are as
follows:
|
Exchange
rates
of
US$
|
Consumer
Price
Index
(points)
|
|||||||
As
of September 30, 2009
|
3.758 | 205.2 | ||||||
As
of September 30, 2008
|
3.421 | 199.5 | ||||||
As
of December 31, 2008
|
3.802 | 198.4 | ||||||
Increase
(decrease) during the period:
|
||||||||
Nine
months ended September 30, 2009
|
(1.2 | %) | 3.4 | % | ||||
Nine
months ended September 30,
2008
|
(11.1 | %) | 4.3 | % | ||||
Three
months ended September 30, 2009
|
(4.1 | %) | 1.2 | % | ||||
Three
months ended September 30,
2008
|
2.1 | % | 2.1 | % | ||||
Year
ended December 31, 2008
|
(1.1 | %) | 3.8 | % |
A.
|
Intangible
assets
|
September
30,
|
December
31,
|
|||||||||||||||
2009
|
2008
|
2008
|
2007
|
|||||||||||||
NIS
millions
|
NIS
millions
|
NIS
millions
|
NIS
millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
(Audited)
|
|||||||||||||
Intangible
assets prior to the accounting policy change
|
647 | 672 | 675 | 685 | ||||||||||||
Effect
of retrospective application
|
60 | 67 | 68 | 62 | ||||||||||||
Intangible
assets after retrospective application
|
707 | 739 | 743 | 747 | ||||||||||||
Current
tax liabilities prior to the accounting policy change
|
110 | 65 | 65 | 122 | ||||||||||||
Effect
of retrospective application
|
17 | 19 | 20 | 18 | ||||||||||||
Current
tax liabilities after retrospective application
|
127 | 84 | 85 | 140 |
September
30,
|
December
31,
|
|||||||||||||||
2009
|
2008
|
2008
|
2007
|
|||||||||||||
NIS
millions
|
NIS
millions
|
NIS
millions
|
NIS
millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
(Audited)
|
|||||||||||||
Retained
earnings prior to the accounting policy change
|
370 | 403 | 352 | 869 | ||||||||||||
Effect
of retrospective application
|
42 | 48 | 48 | 44 | ||||||||||||
Retained
earnings after retrospective application
|
412 | 451 | 400 | 913 |
Nine-month period
ended
|
Year
ended
|
|||||||||||
September
30,
|
December
31,
|
|||||||||||
2009
|
2008
|
2008
|
||||||||||
NIS
millions
|
NIS
millions
|
NIS
millions
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||
Cost
of revenues prior to the accounting policy change
|
2,477 | 2,554 | 3,402 | |||||||||
Effect
of retrospective application
|
9 | (5 | ) | (6 | ) | |||||||
Cost
of revenues after retrospective application
|
2,486 | 2,549 | 3,396 | |||||||||
Income
tax prior to the accounting policy change
|
280 | 290 | 389 | |||||||||
Effect
of retrospective application
|
(3 | ) | 1 | 2 | ||||||||
Income
tax after retrospective application
|
277 | 291 | 391 | |||||||||
Net
income for the period prior to the accounting policy
change
|
917 | 742 | 985 | |||||||||
Effect
of retrospective application
|
(6 | ) | 4 | 4 | ||||||||
Net
income for the period after retrospective application
|
911 | 746 | 989 | |||||||||
Basic
earnings (loss) per share (in NIS) prior to the accounting policy
change
|
9.32 | 7.60 | 10.08 | |||||||||
Effect
of retrospective application
|
(0.06 | ) | 0.04 | 0.04 | ||||||||
Basic
earnings (loss) per share (in NIS) after retrospective
application
|
9.26 | 7.64 | 10.12 | |||||||||
Diluted
earnings (loss) per share (in NIS) prior to the accounting policy
change
|
9.24 | 7.48 | 9.92 | |||||||||
Effect
of retrospective application
|
(0.07 | ) | 0.04 | 0.04 | ||||||||
Diluted
earnings (loss) per share (in NIS ) after retrospective
application
|
9.17 | 7.52 | 9.96 |
|
1.
|
Revised
IAS 23 Borrowing Costs. Starting January 1, 2009, the Company applies
IAS23 revised. The revised standard is applied for qualifying assets for
which the commencement of capitalization started on January 1, 2009 or
after. The revised standard had no material impact on the Company's
financial statements.
|
|
2.
|
Revised
IAS 1 Presentation of Financial Statements. Starting January 1, 2009, the
Company applies IAS1 revised. The revised standard allows presentation of
total comprehensive income in either a single statement of comprehensive
income (effectively combining both the income statement and all non-owner
changes in equity in single statement), or in an income statement and a
separate statement comprehensive income. The Company elected to present a
separate statement on comprehensive income. In addition, the Company
presents statement of changes in shareholders' equity as part of its
financial statements, rather than in the notes of the financial statements
as was presented prior to the adoption of the revised standard. The
revised standard was applied
retrospectively.
|
|
3.
|
IFRIC
13 Customers Loyalty Programs. Starting January 1, 2009, the Company
applies IFRIC 13 which addresses how companies, that grant their customers
loyalty award credits (often called ‘points’) when buying goods or
services, should account for their obligation to provide free or
discounted goods or services if and when the customers redeem the points.
The interpretation is based on a view that customers are implicitly paying
for the points they receive when they buy other goods or services, and
hence that some revenue should be allocated to the points. IFRIC 13
requires companies to estimate the value of the points to the customer and
defer this amount of revenue as a liability until they have fulfilled
their obligations to supply awards. IFRIC 13 had no material impact on the
Company's financial statement.
|
|
4.
|
IFRS
8 Operating Segments introduces the “management approach” to segment
reporting. IFRS 8, which becomes mandatory for the Company's 2009
consolidated financial statements, requires the disclosure of segment
information based on the internal reports regularly reviewed by the
Company's Chief Operating Decision Maker in order to assess each segment’s
performance and to allocate resources to them. Currently, the Company
presents one business segment
information.
|
Nine-month
period ended
|
Three-month
period ended
|
|||||||||||||||
September
30, 2009
|
September
30, 2009
|
|||||||||||||||
Convenience
translation
|
Convenience
translation
|
|||||||||||||||
into
US dollars
|
into
US dollars
|
|||||||||||||||
(Note
2D)
|
(Note
2D)
|
|||||||||||||||
NIS
millions
|
US$
millions
|
NIS
millions
|
US$
millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
2.75
NIS per share
|
270 | 72 | - | - | ||||||||||||
3.36
NIS per share
|
330 | 87 | - | - | ||||||||||||
3.05
NIS per share
|
300 | 80 | 300 | 80 | ||||||||||||
900 | 239 | 300 | 80 |
|
1.
|
In
November 2006, a purported class action lawsuit was filed against the
Company, a third party that had provided services to customers of the
Company (“the Supplier”) and other parties allegedly related to the
Supplier, in the District Court of Tel-Aviv–Jaffa by a subscriber of the
Company. The lawsuit is in connection with sums allegedly charged by the
Company in respect of content services of the Supplier without the
subscriber’s consent. The request to certify the lawsuit as a class action
was approved in March 2009, and the claim will be considered as a class
action. The total amount claimed from the Company, the Supplier and other
parties is estimated by the plaintiffs as approximately NIS 18 million, in
addition to another NIS 10 million for mental
anguish.
|
|
2.
|
In
February 2007, a purported class action lawsuit was filed against the
Company (and two other cellular operators) in the District Court of
Tel-Aviv by plaintiffs alleging to be subscribers of the three defendants,
in connection with sums that were allegedly overcharged in breach of the
cellular operators’ licenses, based on charge units larger than the charge
units the defendants were allegedly authorized to charge under their
licenses for calls initiated or received by subscribers while abroad. In
August 2009 the motion for certification as a class action was dismissed
without prejudice and the lawsuit was dismissed with prejudice, at the
plaintiffs' request. Had the lawsuit been certified as a class action, the
total amount claimed from the cellular operators was estimated by the
plaintiffs to be approximately NIS 449 million, of which approximately NIS
193 million was attributed to the
Company.
|
|
3.
|
In
November 2007, a purported class action lawsuit was filed against the
Company in the District Court of Central Region, by a plaintiff alleging
to be a subscriber of the Company in connection with allegations that the
Company charged its subscribers for content services without obtaining
their specific consent in a manner which complies with the provisions of
its general license. In April 2009 the motion for certification as a class
action was dismissed without prejudice and the lawsuit was dismissed with
prejudice, at the plaintiffs' request. Had the lawsuit been certified as a
class action, the amount claimed was estimated by the plaintiff to be NIS
432 million.
|
|
4.
|
In
March 2008, a purported class action lawsuit was filed against the Company
in the District Court of Central Region, by plaintiffs alleging to be the
Company's subscribers in connection with allegations that the Company has
unlawfully charged its' subscribers for providing them with call details
records. In August 2009, the request to try the lawsuit as a class action
was approved in relation to an allegation that the Company breached the
agreements with its subscribers by charging them for the service it
previously provided free of charge, without obtaining their consent. The Company
appealed the decision and requested to withhold proceedings until the
appeal is decided. The Company awaits the courts decision The total amount
claimed from the Company is estimated by the plaintiffs to be
approximately NIS 440 million.
|
|
5.
|
In
March 2009, a purported class action lawsuit was filed against the
Company, its chief executive officer and some of its directors, in the
District Court of Central Region, by a plaintiff alleging to be a
subscriber of the Company in connection with allegations that the Company
unlawfully sent its subscribers commercial messages. On June 2009, the
chief executive officer and the directors were removed
from the list of defendants, with the consent of the plaintiff. If the
lawsuit is certified as a class action, the total amount claimed from the
Company is estimated by the plaintiff to be approximately NIS 800
million.
|
|
6.
|
In
May 2009, a purported class action lawsuit was filed against the Company,
in the District Court of Tel-Aviv-Jaffa, by a plaintiff alleging to be a
subscriber of the Company, in connection with allegations that the Company
has misled its subscribers whose calling plan includes certain reduced
tariff calls, by failing to specify certain limitations in relation
thereof. The plaintiff did not specify the amount claimed if the lawsuit
is certified as a class action.
|
|
7.
|
In
May 2009, a purported class action was filed against the Company in the
District Court of Tel-Aviv-Jaffa, by two plaintiffs alleging to be the
Company's subscribers, in connection with allegations that the Company
unlawfully charged its subscribers for cellular internet "surfing
packages" without obtaining their consent. In November 2009, subsequent to
the balance sheet date, the motion for certification as a class action was
dismissed without prejudice and the lawsuit was dismissed with prejudice,
at the plaintiffs' request. Had the lawsuit been certified as a class
action, the total amount claimed from the Company was estimated by the
plaintiffs to be approximately NIS 1.2 billion. A similar purported class
action for a total amount of approximately NIS 15 million, filed against
the Company in August 2008 was dismissed in July 2009, at the plaintiff's
request.
|
|
8.
|
In
August 2009, a purported class action lawsuit was filed against the
Company, another cellular operator and a third party, in the District
Court of Tel-Aviv–Jaffa by a plaintiff alleging to be a subscriber of the
company and the other cellular operator. The lawsuit is in connection with
sums allegedly charged by the Company in respect of SMS messages sent to
the subscribers by the third party without subscriber's consent. If the
lawsuit is certified as a class action, the total amount claimed from the
defendants is estimated by the plaintiff to be approximately NIS 33
million, without specifying the amount claimed from each defendant, of
which approximately NIS 16.5 million is attributed to the
company.
|
|
9.
|
In
August 2009, a purported class action was filed against the Company,
another cellular operator and two content providers, in the District Court
of Central Region, by two plaintiffs alleging to be subscribers of the
cellular operators, in connection with sums allegedly charged by the
defendants in respect of content services the subscribers allegedly did
not order or which did not comply with certain legal requirements. If the
lawsuit is certified as a class action, the total amount claimed from the
defendants is estimated by the plaintiffs to be approximately NIS 347
million, of which the sum of approximately 119 million is attributed to
the Company.
|
|
10.
|
A
dispute exists between the Company and the Ministry of Communications with
respect to the payment of fees for its use of the GSM and UMTS
frequencies. The amount in dispute as at September 30, 2009, is
approximately NIS 73 million (including interest and CPI linkage
differences). Until a final decision on this matter, the Company has
deposited approximately half of the principal of this amount with the
Ministry of Communications. The Company has applied to the courts
regarding this issue. In November 2009, subsequent to the balance sheet
date, the matter was brought before the Supreme Court and the parties have
accepted the court's recommendation to attempt to reach an
agreed solution outside the court. The Company cannot estimate the chances
of reaching a settlement nor the sum of such settlement, if reached. The
Company estimates, based on advice of its legal counsel, that the
Company's position will more likely than not be accepted by the court, if
the dispute is decided by the court. Nevertheless, given the fact that the
company intends to negotiate a settlement, the Company has recorded a
provision in the amount of NIS 15 million, which the Company estimates to
be an appropriate provision.
|
Year
|
Tax
Rate
|
|
2009
|
26%
|
|
2010
|
25%
|
|
2011
|
24%
|
|
2012
|
23%
|
|
2013
|
22%
|
|
2014
|
21%
|
|
2015
|
20%
|
|
2016
onward
|
18%
|
CELLCOM
ISRAEL LTD.
|
|||||||
Date:
|
November
16, 2009
|
By:
|
/s/ Liat
Menahemi Stadler
|
||||
Name:
|
Liat
Menahemi Stadler
|
||||||
Title:
|
General
Counsel
|