1.
|
Cellcom Israel Announces Third Quarter 2012 Results
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2.
|
Cellcom Israel Ltd. and Subsidiaries - Financial Statements as at September 30, 2012
|
§
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Free cash flow1 totaled NIS 414 million ($106 million), a 58% increase
|
§
|
Total Revenues totaled NIS 1,448 million ($370 million), a 13% decrease
|
§
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Service revenues totaled NIS 1,148 million ($293 million), a 3.8% decrease
|
§
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EBITDA1 totaled NIS 430 million ($110 million), a 19.9% decrease
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§
|
EBITDA margin 29.7%, down from 32.3%
|
§
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Operating profit totaled NIS 239 million ($61 million), a 31.5% decrease
|
§
|
Net income totaled NIS 124 million ($32 million), a 37.7% decrease
|
§
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Cellular Subscriber base totaled approx. 3.338 million at the end of September 2012
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1
|
Please see "Use of Non-IFRS financial measures" section in this press release.
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2
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Based on a comparison of third quarter 2012 expenses to fourth quarter 2011 expenses.
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3
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The Company consolidated financial results for the third quarter 2012 include the results of Netvision Ltd., or Netvision, for the full quarter, while the consolidated financial results for the third quarter 2011 include Netvision's results for September 2011 only (due to the completion of Netvision's acquisition by the Company on August 31, 2011).
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Q3/2012
|
Q3/2011 (*)
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% Change
|
Q3/2012
|
Q3/2011
|
|
million NIS
|
million US$
(convenience translation)
|
||||
Total revenues
|
1,448
|
1,665
|
(13.0%)
|
370.1
|
425.6
|
Operating profit
|
239
|
349
|
(31.5%)
|
61.1
|
89.2
|
Net income
|
124
|
199
|
(37.7%)
|
31.7
|
50.9
|
Free cash flow
|
414
|
262
|
58.0%
|
105.8
|
67.0
|
EBITDA
|
430
|
537
|
(19.9%)
|
109.9
|
137.3
|
EBITDA, as percent of total revenues
|
29.7%
|
32.3%
|
(8.0%)
|
(*)
|
Since the merger transaction with Netvision was completed on August 31, 2011, Q3/2011 consolidated financial results include Netvision's results for September 2011 only.
|
Cellcom Israel without
Netvision
|
Netvision
|
Consolidation adjustments (*)
|
Consolidated results
|
|||
Q3/2012
|
Q3/2011
|
Change (%)
|
Q3/2012
|
Q3/2012
|
||
Total revenues
|
1,187
|
1,567
|
(24.3%)
|
291
|
(30)
|
1,448
|
Total service revenues 4
|
902
|
1,101
|
(18.1%)
|
276
|
(30)
|
1,148
|
Equipment revenues
|
285
|
466
|
(38.8%)
|
15
|
-
|
300
|
Operating profit
|
220
|
350
|
(37.1%)
|
45
|
(26)
|
239
|
EBITDA
|
355
|
517
|
(31.3%)
|
75
|
-
|
430
|
EBITDA, as percent of total revenues
|
29.9%
|
33.0%
|
(9.4%)
|
25.8%
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-
|
29.7%
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(*)
|
Include elimination of inter-company revenues between Cellcom Israel and Netvision, and amortization expenses attributable to the merger.
|
Q3/2012
|
Q3/2011
|
Change (%)
|
|
Cellular subscribers at the end of period (in thousands)
|
3,338
|
3,391
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(1.6%)
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Churn Rate for cellular subscribers (in %)
|
8.6%
|
5.7%
|
50.9%
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Monthly cellular ARPU5 (in NIS)
|
86.7
|
105.1
|
(17.5%)
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Average Monthly cellular MOU (in minutes)
|
399
|
357
|
11.7%
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US Dial-in Number: 1 888 668 9141
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UK Dial-in Number: 0 800 917 5108
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Israel Dial-in Number: 03 918 0610
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International Dial-in Number: +972 3 918 0610
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at: 9:00 am EST; 6:00 am PST; 14:00 UK time; 16:00 Israel Time
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Company Contact
Yaacov Heen
Chief Financial Officer
investors@cellcom.co.il
Tel: +972 52 998 9755
|
IR Contacts
Porat Saar
CCG Investor Relations Israel & US
cellcom@ccgisrael.com
Tel: +1 646 233 2161
|
Convenience
|
||||||||||||||||
translation
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||||||||||||||||
Into
|
||||||||||||||||
U.S. dollar
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
December 31,
|
|||||||||||||
2011
|
2012
|
2012
|
2011
|
|||||||||||||
NIS millions
|
NIS millions
|
US$ millions
|
NIS millions
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
869 | 1,139 | 291 | 920 | ||||||||||||
Current investments, including derivatives
|
479 | 493 | 126 | 290 | ||||||||||||
Trade receivables
|
1,862 | 1,912 | 489 | 1,859 | ||||||||||||
Other receivables
|
87 | 87 | 22 | 93 | ||||||||||||
Inventory
|
135 | 125 | 32 | 170 | ||||||||||||
Total current assets
|
3,432 | 3,756 | 960 | 3,332 | ||||||||||||
Trade and other receivables
|
1,282 | 1,291 | 330 | 1,337 | ||||||||||||
Property, plant and equipment, net
|
2,141 | 2,084 | 533 | 2,168 | ||||||||||||
Intangible assets, net
|
1,720 | 1,552 | 397 | 1,680 | ||||||||||||
Deferred tax assets
|
37 | 60 | 15 | 40 | ||||||||||||
Total non-current assets
|
5,180 | 4,987 | 1,275 | 5,225 | ||||||||||||
Total assets
|
8,612 | 8,743 | 2,235 | 8,557 | ||||||||||||
Liabilities
|
||||||||||||||||
Short-term credit and current maturities of long-term loans and debentures
|
681 | 1,142 | 292 | 674 | ||||||||||||
Trade payables and accrued expenses
|
1,016 | 859 | 220 | 1,026 | ||||||||||||
Current tax liabilities
|
58 | 114 | 29 | 69 | ||||||||||||
Provisions
|
112 | 169 | 43 | 148 | ||||||||||||
Other payables, including derivatives
|
478 | 424 | 109 | 547 | ||||||||||||
Dividend declared
|
232 | - | - | 189 | ||||||||||||
Total current liabilities
|
2,577 | 2,708 | 693 | 2,653 | ||||||||||||
Long-term loans from banks
|
23 | 10 | 3 | 19 | ||||||||||||
Debentures
|
5,464 | 5,399 | 1,380 | 5,452 | ||||||||||||
Provisions
|
21 | 21 | 5 | 21 | ||||||||||||
Other long-term liabilities
|
84 | 35 | 9 | 41 | ||||||||||||
Liability for employee rights upon retirement, net
|
- | 13 | 3 | 10 | ||||||||||||
Deferred tax liabilities
|
151 | 157 | 40 | 174 | ||||||||||||
Total non- current liabilities
|
5,743 | 5,635 | 1,440 | 5,717 | ||||||||||||
Total liabilities
|
8,320 | 8,343 | 2,133 | 8,370 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
- | 3 | 1 | 7 | ||||||||||||
Retained earnings
|
287 | 395 | 101 | 175 | ||||||||||||
Non-controlling interest
|
4 | 1 | - | 4 | ||||||||||||
Total equity
|
292 | 400 | 102 | 187 | ||||||||||||
Total liabilities and equity
|
8,612 | 8,743 | 2,235 | 8,557 |
Nine-month period ended
September 30,
|
Three-month period ended
September 30,
|
Year ended
December 31,
|
||||||||||||||||||||||||||
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
4,481 | 4,531 | 1,158 | 1,665 | 1,448 | 370 | 6,506 | |||||||||||||||||||||
Cost of revenues
|
(2,434 | ) | (2,590 | ) | (662 | ) | (880 | ) | (853 | ) | (218 | ) | (3,408 | ) | ||||||||||||||
Gross profit
|
2,407 | 1,941 | 496 | 785 | 595 | 152 | 3,098 | |||||||||||||||||||||
Selling and marketing expenses
|
(700 | ) | (671 | ) | (172 | ) | (259 | ) | (215 | ) | (55 | ) | (990 | ) | ||||||||||||||
General and administrative expenses
|
(489 | ) | (474 | ) | (121 | ) | (176 | ) | (141 | ) | (36 | ) | (685 | ) | ||||||||||||||
Other expenses, net
|
(1 | ) | - | - | (1 | ) | - | - | (1 | ) | ||||||||||||||||||
Operating profit
|
1,217 | 796 | 203 | 349 | 239 | 61 | 1,422 | |||||||||||||||||||||
Financing income
|
87 | 149 | 39 | 35 | 66 | 17 | 116 | |||||||||||||||||||||
Financing expenses
|
(319 | ) | (366 | ) | (94 | ) | (125 | ) | (130 | ) | (33 | ) | (409 | ) | ||||||||||||||
Financing expenses, net
|
(232 | ) | (217 | ) | (55 | ) | (90 | ) | (64 | ) | (16 | ) | (293 | ) | ||||||||||||||
Profit before taxes on income
|
985 | 579 | 148 | 259 | 175 | 45 | 1,129 | |||||||||||||||||||||
Taxes on income
|
(236 | ) | (161 | ) | (41 | ) | (60 | ) | (51 | ) | (13 | ) | (304 | ) | ||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Profit for the period attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
749 | 418 | 107 | 199 | 124 | 32 | 824 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share in NIS
|
7.53 | 4.20 | 1.07 | 2.00 | 1.25 | 0.32 | 8.28 | |||||||||||||||||||||
Diluted earnings per share in NIS
|
7.53 | 4.20 | 1.07 | 2.00 | 1.25 | 0.32 | 8.28 |
Nine-month period ended
September 30,
|
Three-month period ended
September 30,
|
Year ended
December 31,
|
||||||||||||||||||||||||||
Convenience
|
Convenience | |||||||||||||||||||||||||||
translation
|
translation | |||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2011 | 2012 | 2012 | 2011 | 2012 | 2012 | 2011 | ||||||||||||||||||||||
NIS millions | US$ millions | NIS millions | US$ millions | NIS millions | ||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
519 | 579 | 148 | 183 | 190 | 48 | 738 | |||||||||||||||||||||
Share based payment
|
4 | 4 | 1 | 3 | 1 | - | 6 | |||||||||||||||||||||
Loss (gain) on sale of property, plant and equipment
|
1 | - | - | 1 | (1 | ) | - | - | ||||||||||||||||||||
Income tax expense
|
236 | 161 | 41 | 60 | 51 | 13 | 304 | |||||||||||||||||||||
Financing expenses, net
|
232 | 217 | 55 | 90 | 64 | 16 | 293 | |||||||||||||||||||||
Other expenses (income)
|
- | - | - | - | (1 | ) | - | 2 | ||||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
(31 | ) | 41 | 11 | 7 | 3 | 1 | (67 | ) | |||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(515 | ) | 64 | 16 | (189 | ) | 98 | 25 | (585 | ) | ||||||||||||||||||
Change in other receivables (including long-term amounts)
|
43 | (42 | ) | (11 | ) | 49 | - | - | 61 | |||||||||||||||||||
Change in trade payables, accrued expenses and provisions
|
166 | (30 | ) | (8 | ) | 48 | 59 | 15 | 146 | |||||||||||||||||||
Change in other liabilities (including long-term amounts)
|
13 | (13 | ) | (3 | ) | 1 | (29 | ) | (7 | ) | (52 | ) | ||||||||||||||||
Proceeds from (payments for) derivative hedging contracts, net
|
(15 | ) | 17 | 4 | (6 | ) | 9 | 2 | (14 | ) | ||||||||||||||||||
Income tax paid
|
(292 | ) | (165 | ) | (42 | ) | (86 | ) | (48 | ) | (12 | ) | (325 | ) | ||||||||||||||
Income tax received
|
- | 15 | 4 | - | - | - | - | |||||||||||||||||||||
Net cash from operating activities
|
1,110 | 1,266 | 323 | 360 | 520 | 133 | 1,332 |
Nine-month period ended
September 30,
|
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||||||
Convenience
|
Convenience | ||||||||||||||||||||
translation
|
translation | ||||||||||||||||||||
into
US dollar
|
into
US dollar
|
||||||||||||||||||||
2011 | 2012 | 2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
NIS millions | US$ millions | NIS millions | US$ millions | NIS millions | |||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) |
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(219 | ) | (376 | ) | (96 | ) | (84 | ) | (92 | ) | (24 | ) | (333 | ) | ||||||||||||||
Acquisition of intangible assets
|
(75 | ) | (82 | ) | (21 | ) | (23 | ) | (30 | ) | (8 | ) | (99 | ) | ||||||||||||||
Acquisition of subsidiary, net of cash acquired
|
(1,458 | ) | - | - | (1,458 | ) | - | - | (1,458 | ) | ||||||||||||||||||
Change in current investments, net
|
3 | (204 | ) | (52 | ) | (4 | ) | 468 | 120 | 197 | ||||||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(7 | ) | 11 | 3 | 2 | 8 | 2 | 1 | ||||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2 | 3 | 1 | - | 2 | 1 | 3 | |||||||||||||||||||||
Interest received
|
27 | 24 | 6 | 7 | 16 | 4 | 33 | |||||||||||||||||||||
Loan to equity accounted investee
|
- | - | - | - | 1 | - | - | |||||||||||||||||||||
Proceeds from sale of shares in a consolidated company
|
- | 7 | 2 | - | - | - | - | |||||||||||||||||||||
Net cash from (used in) investing activities
|
(1,727 | ) | (617 | ) | (157 | ) | (1,560 | ) | 373 | 95 | (1,656 | ) | ||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Proceeds from (payments for) derivative contracts, net
|
11 | (11 | ) | (3 | ) | 1 | (5 | ) | (1 | ) | 11 | |||||||||||||||||
Repayment of long-term loans from banks
|
- | (9 | ) | (2 | ) | - | (5 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Repayment of debentures
|
(354 | ) | (661 | ) | (169 | ) | (179 | ) | (182 | ) | (47 | ) | (354 | ) | ||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
2,165 | 992 | 253 | 1,132 | - | - | 2,165 | |||||||||||||||||||||
Dividend paid
|
(626 | ) | (391 | ) | (100 | ) | (292 | ) | (130 | ) | (33 | ) | (858 | ) | ||||||||||||||
Interest paid
|
(243 | ) | (350 | ) | (89 | ) | (120 | ) | (168 | ) | (43 | ) | (245 | ) | ||||||||||||||
Net cash from (used in) financing activities
|
953 | (430 | ) | (110 | ) | 542 | (490 | ) | (125 | ) | 715 | |||||||||||||||||
Cash balance presented under assets held for sales/ Cash outflow due to sale of assets held for sale
|
- | - | - | - | - | - | (4 | ) | ||||||||||||||||||||
Changes in cash and cash equivalents
|
336 | 219 | 56 | (658 | ) | 403 | 103 | 387 | ||||||||||||||||||||
Cash and cash equivalents at beginning of the period
|
533 | 920 | 235 | 1,527 | 736 | 188 | 533 | |||||||||||||||||||||
Cash and cash equivalents at end of the period
|
869 | 1,139 | 291 | 869 | 1,139 | 291 | 920 |
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
2011
NIS millions
|
2012
NIS millions
|
Convenience
translation
into US dollar
2012
US$ millions
|
2011
NIS millions
|
|||||||||||||
Profit for the period
|
199 | 124 | 32 | 825 | ||||||||||||
Taxes on income
|
60 | 51 | 13 | 304 | ||||||||||||
Financing income
|
(35 | ) | (66 | ) | (17 | ) | (116 | ) | ||||||||
Financing expenses
|
125 | 130 | 33 | 409 | ||||||||||||
Other expenses
|
2 | - | - | 1 | ||||||||||||
Depreciation and amortization
|
183 | 190 | 48 | 738 | ||||||||||||
Share based payments
|
3 | 1 | - | 6 | ||||||||||||
EBITDA
|
537 | 430 | 110 | 2,167 |
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
2011
NIS millions
|
2012
NIS millions
|
Convenience
translation
into US dollar
2012
US$ millions
|
2011
NIS millions
|
|||||||||||||
Cash flows from operating activities
|
360 | 520 | 133 | 1,332 | ||||||||||||
Cash flows from investing activities
|
(*) (102 | ) | 373 | 95 | (*) (198 | ) | ||||||||||
Short-term Investment in (sale of) tradable debentures and deposits (**)
|
4 | (479 | ) | (122 | ) | (197 | ) | |||||||||
Free cash flow
|
262 | 414 | 106 | 937 |
(*)
|
After elimination of the net cash flows used for the acquisition of Netvision in the amount of NIS 1,458 million (net of cash acquired in the amount of NIS 120 million).
|
(**)
|
Including interest received in relation to such debentures.
|
Series
|
Original Issuance Date
|
Principal on the Date of Issuance
|
As of 30.09.2012
|
As of 13.11.2012
|
Interest
Rate
(fixed)
|
Principal
Repayment
Dates (3)
|
Interest Repayment Dates
|
Linkage
|
Trustee
Contact Details
|
||||||
Principal
Balance on Trade
|
Linked Principal Balance
|
Interest Accumulated in
Books
|
Debenture Balance
Value
in
Books(2)
|
Market
Value
|
Principal
Balance
on
Trade
|
Linked
Principal Balance
|
From
|
To
|
|||||||
A(4)
|
22/12/05
10/01/06*
31/05/06*
|
1,065
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
5.00%
|
05.07.08
|
05.07.12
|
January 5
and July 5
|
Linked to CPI
|
Reznik, Paz, Nevo Trusts Ltd. Accountant Yossi Reznik. 14 Yad Haruzim St., Tel Aviv.
Tel: 03-6393311.
|
B(4) **
|
22/12/05
02/01/06*
05/01/06*
10/01/06*
31/05/06*
|
925.102
|
925.102
|
1,101.919
|
42.924
|
1,144.844
|
1,202.910
|
925.102
|
1,101.919
|
5.30%
|
05.01.13
|
05.01.17
|
January 5
|
Linked to CPI
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St.,
Tel Aviv.
Tel: 03-5274867.
|
C
|
07/10/07
03/02/08*
|
326
|
36.222
|
42.096
|
0.155
|
42.251
|
43.104
|
36.222
|
42.096
|
4.60%
|
01.03.09
|
01.03.13
|
March 1 and September 1
|
Linked to CPI
|
Reznik, Paz, Nevo Trusts Ltd. Accountant Yossi Reznik. 14 Yad Haruzim St., Tel Aviv.
Tel: 03-6393311.
|
D **
|
07/10/07
03/02/08*
06/04/09*
30/03/11*
18/08/11*
|
2,423.075
|
2,423.075
|
2,816.017
|
36.438
|
2,852.455
|
3,011.882
|
2,423.075
|
2,816.017
|
5.19%
|
01.07.13
|
01.07.17
|
July 1
|
Linked to CPI
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St.,
Tel Aviv.
Tel: 03-5274867.
|
E **
|
06/04/09
30/03/11*
18/08/11*
|
1,798.962
|
1,499.135
|
1,499.135
|
68.796
|
1,567.931
|
1,593.731
|
1,499.135
|
1,499.135
|
6.25%
|
05.01.12
|
05.01.17
|
January 5
|
Not linked
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.
|
F(4) (5) **
|
20/03/12
|
714.802
|
714.802
|
729.923
|
1.496
|
731.419
|
719.663
|
714.802
|
729.923
|
4.35%
|
05.01.17
|
05.01.20
|
January 5
and July 5
|
Linked to CPI
|
Strauss Lazar Trust Company (1992) Ltd
17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777
|
G(4) (5)
|
20/03/12
|
285.198
|
285.198
|
285.198
|
0.906
|
286.104
|
284.171
|
285.198
|
285.198
|
6.74%
|
05.01.17
|
05.01.19
|
January 5
and July 5
|
Not linked
|
Strauss Lazar Trust Company (1992) Ltd
17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777
|
Total
|
7,538.139
|
5,883.534
|
6,474.289
|
150.714
|
6,625.004
|
6,855.461
|
5,883.534
|
6,474.289
|
Series
|
Rating Company
|
Rating as of 30.9.2012 (1)
|
Rating as of 13.11.2012
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 13.11.2012
|
Additional ratings between original issuance and the recent date of rating as of 13.11.2012 (2)
|
|
Date
|
Rating
|
||||||
B
|
S&P Ma'alot
|
AA-
|
AA-
|
AA-
|
11/2012
|
5/2006, 9/2007, 1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012
|
AA-, AA,AA- (2)
|
C
|
S&P Ma'alot
|
AA-
|
AA-
|
AA-
|
11/2012
|
1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012
|
AA-, AA,AA- (2)
|
D
|
S&P Ma'alot
|
AA-
|
AA-
|
AA-
|
11/2012
|
1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012
|
AA-, AA,AA- (2)
|
E
|
S&P Ma'alot
|
AA-
|
AA-
|
AA
|
11/2012
|
9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012
|
AA,AA- (2)
|
F
|
S&P Ma'alot
|
AA-
|
AA-
|
AA
|
11/2012
|
5/2012, 11/2012
|
AA,AA- (2)
|
G
|
S&P Ma'alot
|
AA-
|
AA-
|
AA
|
11/2012
|
5/2012, 11/2012
|
AA,AA- (2)
|
|
(1)
|
In May 2012, S&P Ma'alot updated the Company's rating from an "ilAA/negative" to an “ilAA-/negative”.
|
|
(2)
|
In September 2007, S&P Ma'alot issued a notice that the AA- rating for debentures issued by the Company was in the process of recheck with positive implications (Credit Watch Positive). In October 2008, S&P Ma'alot issued a notice that the AA- rating for debentures issued by the Company is in the process of recheck with stable implications (Credit Watch Stable). This process was withdrawn upon assignment of AA rating in March 2009. In August 2011, S&P Ma'alot issued a notice that the AA rating for debentures issued by the Company is in the process of recheck with negative implications (Credit Watch Negative). In May 2012, S&P Ma'alot updated the Company's rating from an "ilAA/negative" to an “ilAA-/negative”. In November 2012, S&P Ma'alot affirmed the Company's rating of “ilAA-/negative”. For details regarding the rating of the debentures see S&P Ma'alot's report dated November 4, 2012.
|
*
|
A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating.
|
|
a.
|
Debentures issued to the public by the Company and held by the public, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
783,950
|
290,927
|
-
|
-
|
-
|
336,536
|
Second year
|
744,678
|
290,927
|
-
|
-
|
-
|
278,571
|
Third year
|
744,678
|
290,927
|
-
|
-
|
-
|
221,509
|
Fourth year
|
744,678
|
290,927
|
-
|
-
|
-
|
164,585
|
More than five years
|
1,467,130
|
571,295
|
-
|
-
|
-
|
159,785
|
Total
|
4,485,114
|
1,735,004
|
-
|
-
|
-
|
1,160,985
|
|
b.
|
Private debentures and other non-bank credit, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "solo" financial data (in thousand NIS) – None
|
|
c.
|
Credit from banks in Israel based on the Company's "solo" financial data (in thousand NIS) - None
|
|
d.
|
Credit from banks abroad based on the Company's "solo" financial data (in thousand NIS) - None
|
|
e.
|
Total of sections a - d above, total credit from banks, non-bank credit and debentures based on the Company's "solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
783,950
|
290,927
|
-
|
-
|
-
|
336,536
|
Second year
|
744,678
|
290,927
|
-
|
-
|
-
|
278,571
|
Third year
|
744,678
|
290,927
|
-
|
-
|
-
|
221,509
|
Fourth year
|
744,678
|
290,927
|
-
|
-
|
-
|
164,585
|
More than five years
|
1,467,130
|
571,295
|
-
|
-
|
-
|
159,785
|
Total
|
4,485,114
|
1,735,004
|
-
|
-
|
-
|
1,160,985
|
|
f.
|
Out of the balance sheet Credit exposure based on the Company's "solo" financial data - None
|
|
g.
|
Out of the balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above (in thousand NIS) - None
|
|
h.
|
Total balances of the credit from banks, non-bank credit and debentures of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
16,367
|
-
|
-
|
-
|
1,333
|
Second year
|
-
|
5,041
|
-
|
-
|
-
|
603
|
Third year
|
-
|
5,041
|
-
|
-
|
-
|
303
|
Fourth year
|
-
|
26
|
-
|
-
|
-
|
-
|
More than five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
26,475
|
-
|
-
|
-
|
2,239
|
|
i.
|
Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of debentures offered by the Company held by the parent company or the controlling shareholder (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
12
|
-
|
-
|
-
|
4
|
Second year
|
-
|
12
|
-
|
-
|
-
|
3
|
Third year
|
-
|
12
|
-
|
-
|
-
|
2
|
Fourth year
|
-
|
12
|
-
|
-
|
-
|
1
|
More than five years
|
-
|
12
|
-
|
-
|
-
|
1
|
Total
|
-
|
58
|
-
|
-
|
-
|
11
|
|
j.
|
Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of debentures offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
41,734
|
8,764
|
-
|
-
|
-
|
13,652
|
Second year
|
38,909
|
8,764
|
-
|
-
|
-
|
11,000
|
Third year
|
38,909
|
8,764
|
-
|
-
|
-
|
8,412
|
Fourth year
|
38,909
|
8,764
|
-
|
-
|
-
|
5,826
|
More than five years
|
46,380
|
13,664
|
-
|
-
|
-
|
3,858
|
Total
|
204,842
|
48,720
|
-
|
-
|
-
|
42,749
|
|
k.
|
Total balances of credit granted to the Company by consolidated companies and balances of debentures offered by the Company held by the consolidated companies (in thousand NIS)
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
-
|
-
|
-
|
-
|
1,234
|
Second year
|
-
|
26,371
|
-
|
-
|
-
|
1,234
|
Third year
|
-
|
-
|
-
|
-
|
-
|
-
|
Fourth year
|
-
|
-
|
-
|
-
|
-
|
-
|
More than five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
26,371
|
-
|
-
|
-
|
2,468
|
Cellcom Israel Ltd.
and Subsidiaries
Financial Statements
As at September 30, 2012
(Unaudited)
|
Contents
|
|
Page
|
|
Condensed Consolidated Interim Statements of Financial position
|
3
|
Condensed Consolidated Interim Statements of Income
|
4
|
Condensed Consolidated Interim Statements of Comprehensive Income
|
5
|
Condensed Consolidated Interim Statements of Changes in Equity
|
6
|
Condensed Consolidated Interim Statements of Cash Flows
|
9
|
Notes to the Condensed Consolidated Interim Financial Statements
|
11
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into US dollar
|
||||||||||||||||
(Note 2D)
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
December 31,
|
|||||||||||||
2011
|
2012
|
2012
|
2011
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
869 | 1,139 | 291 | 920 | ||||||||||||
Current investments, including derivatives
|
479 | 493 | 126 | 290 | ||||||||||||
Trade receivables
|
1,862 | 1,912 | 489 | 1,859 | ||||||||||||
Other receivables
|
87 | 87 | 22 | 93 | ||||||||||||
Inventory
|
135 | 125 | 32 | 170 | ||||||||||||
Total current assets
|
3,432 | 3,756 | 960 | 3,332 | ||||||||||||
Trade and other receivables
|
1,282 | 1,291 | 330 | 1,337 | ||||||||||||
Property, plant and equipment, net
|
2,141 | 2,084 | 533 | 2,168 | ||||||||||||
Intangible assets, net
|
1,720 | 1,552 | 397 | 1,680 | ||||||||||||
Deferred tax assets
|
37 | 60 | 15 | 40 | ||||||||||||
Total non- current assets
|
5,180 | 4,987 | 1,275 | 5,225 | ||||||||||||
Total assets
|
8,612 | 8,743 | 2,235 | 8,557 | ||||||||||||
Liabilities
|
||||||||||||||||
Short term credit and current maturities of long term loans and debentures
|
681 | 1,142 | 292 | 674 | ||||||||||||
Trade payables and accrued expenses
|
1,016 | 859 | 220 | 1,026 | ||||||||||||
Current tax liabilities
|
58 | 114 | 29 | 69 | ||||||||||||
Provisions
|
112 | 169 | 43 | 148 | ||||||||||||
Other payables, including derivatives
|
478 | 424 | 109 | 547 | ||||||||||||
Dividend declared
|
232 | - | - | 189 | ||||||||||||
Total current liabilities
|
2,577 | 2,708 | 693 | 2,653 | ||||||||||||
Long-term loans from banks
|
23 | 10 | 3 | 19 | ||||||||||||
Debentures
|
5,464 | 5,399 | 1,380 | 5,452 | ||||||||||||
Provisions
|
21 | 21 | 5 | 21 | ||||||||||||
Other long-term liabilities
|
84 | 35 | 9 | 41 | ||||||||||||
Liability for employee rights upon retirement, net
|
- | 13 | 3 | 10 | ||||||||||||
Deferred tax liabilities
|
151 | 157 | 40 | 174 | ||||||||||||
Total non- current liabilities
|
5,743 | 5,635 | 1,440 | 5,717 | ||||||||||||
Total liabilities
|
8,320 | 8,343 | 2,133 | 8,370 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
- | 3 | 1 | 7 | ||||||||||||
Retained earnings
|
287 | 395 | 101 | 175 | ||||||||||||
Non-controlling interests
|
4 | 1 | - | 4 | ||||||||||||
Total equity
|
292 | 400 | 102 | 187 | ||||||||||||
Total liabilities and equity
|
8,612 | 8,743 | 2,235 | 8,557 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended
September 30,
|
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
4,841 | 4,531 | 1,158 | 1,665 | 1,448 | 370 | 6,506 | |||||||||||||||||||||
Cost of revenues
|
(2,434 | ) | (2,590 | ) | (662 | ) | (880 | ) | (853 | ) | (218 | ) | (3,408 | ) | ||||||||||||||
Gross profit
|
2,407 | 1,941 | 496 | 785 | 595 | 152 | 3,098 | |||||||||||||||||||||
Selling and marketing expenses
|
(700 | ) | (671 | ) | (172 | ) | (259 | ) | (215 | ) | (55 | ) | (990 | ) | ||||||||||||||
General and administrative expenses
|
(489 | ) | (474 | ) | (121 | ) | (176 | ) | (141 | ) | (36 | ) | (685 | ) | ||||||||||||||
Other expenses, net
|
(1 | ) | - | - | (1 | ) | - | - | (1 | ) | ||||||||||||||||||
Operating profit
|
1,217 | 796 | 203 | 349 | 239 | 61 | 1,422 | |||||||||||||||||||||
Financing income
|
87 | 149 | 39 | 35 | 66 | 17 | 116 | |||||||||||||||||||||
Financing expenses
|
(319 | ) | (366 | ) | (94 | ) | (125 | ) | (130 | ) | (33 | ) | (409 | ) | ||||||||||||||
Financing expenses, net
|
(232 | ) | (217 | ) | (55 | ) | (90 | ) | (64 | ) | (16 | ) | (293 | ) | ||||||||||||||
Profit before taxes on income
|
985 | 579 | 148 | 259 | 175 | 45 | 1,129 | |||||||||||||||||||||
Taxes on income
|
(236 | ) | (161 | ) | (41 | ) | (60 | ) | (51 | ) | (13 | ) | (304 | ) | ||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
749 | 418 | 107 | 199 | 124 | 32 | 824 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
7.53 | 4.20 | 1.07 | 2.00 | 1.25 | 0.32 | 8.28 | |||||||||||||||||||||
Diluted earnings per share (in NIS)
|
7.53 | 4.20 | 1.07 | 2.00 | 1.25 | 0.32 | 8.28 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
For the nine
months ended
September 30,
|
(Note 2D)
|
For the three
months ended
September 30,
|
(Note 2D)
|
|||||||||||||||||||||||||
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Changes in fair value of cash flow hedges transferred to profit or loss
|
19 | (12 | ) | (3 | ) | 8 | (6 | ) | (2 | ) | 20 | |||||||||||||||||
Changes in fair value of cash flow hedges
|
9 | 7 | 2 | 18 | (1 | ) | - | 17 | ||||||||||||||||||||
Income tax on other comprehensive income
|
(7 | ) | 1 | - | (6 | ) | 2 | 1 | (9 | ) | ||||||||||||||||||
Other comprehensive income for the period, net of income tax
|
21 | (4 | ) | (1 | ) | 20 | (5 | ) | (1 | ) | 28 | |||||||||||||||||
Total comprehensive income for the period
|
770 | 414 | 106 | 219 | 119 | 31 | 853 | |||||||||||||||||||||
Total comprehensive income attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
770 | 414 | 106 | 219 | 119 | 31 | 852 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Total comprehensive income for the period
|
770 | 414 | 106 | 219 | 119 | 31 | 853 |
Attributable to owners of the Company
|
Non-controlling
interests
|
Total equity
|
Convenience
translation into
US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share
capital
|
Capital
reserve
|
Retained
earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the nine months ended
September 30, 2012 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2012
|
||||||||||||||||||||||||||||
(Audited)
|
1 | 7 | 175 | 183 | 4 | 187 | 48 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | (4 | ) | - | (4 | ) | - | (4 | ) | (1 | ) | |||||||||||||||||
Profit for the period
|
- | - | 418 | 418 | - | 418 | 107 | |||||||||||||||||||||
Share based payments
|
- | - | 4 | 4 | - | 4 | 1 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (202 | ) | (202 | ) | - | (202 | ) | (52 | ) | |||||||||||||||||
Derecognition of non-controlling interests due to loss of control in a consolidated company
|
- | - | - | - | (3 | ) | (3 | ) | (1 | ) | ||||||||||||||||||
Balance as of September 30, 2012 (Unaudited)
|
1 | 3 | 395 | 399 | 1 | 400 | 102 |
Attributable to owners of the Company
|
Non-controlling
interests
|
Total equity
|
Convenience
translation into
US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share
capital
|
Capital
reserve
|
Retained
earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the nine months ended
September 30, 2011 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2011
|
||||||||||||||||||||||||||||
(Audited)
|
1 | (21 | ) | 361 | 341 | - | 341 | 87 | ||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | 21 | - | 21 | - | 21 | 5 | |||||||||||||||||||||
Profit for the period
|
- | - | 749 | 749 | - | 749 | 191 | |||||||||||||||||||||
Share based payments
|
- | - | 4 | 4 | - | 4 | 1 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (595 | ) | (595 | ) | - | (595 | ) | (152 | ) | |||||||||||||||||
Dividend declared
|
- | - | (232 | ) | (232 | ) | - | (232 | ) | (59 | ) | |||||||||||||||||
Non-controlling interests in respect of business combination
|
- | - | - | - | 4 | 4 | 1 | |||||||||||||||||||||
Balance as of September 30, 2011 (Unaudited)
|
1 | - | 287 | 288 | 4 | 292 | 74 |
Attributable to owners of the Company
|
Non-controlling
interests
|
Total equity
|
Convenience
translation into
US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share
capital
|
Capital
reserve
|
Retained
earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions | US$ millions | |||||||||||||||||||||||||||
For the three months ended
September 30, 2012 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of July 1, 2012
|
||||||||||||||||||||||||||||
(Unaudited)
|
1 | 8 | 270 | 279 | 1 | 280 | 71 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | (5 | ) | - | (5 | ) | - | (5 | ) | (1 | ) | |||||||||||||||||
Profit for the period
|
- | - | 124 | 124 | - | 124 | 32 | |||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Balance as of September 30, 2012 (Unaudited)
|
1 | 3 | 395 | 399 | 1 | 400 | 102 |
Attributable to owners of the Company
|
Non-controlling
interests
|
Total equity
|
Convenience
translation into
US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share
capital
|
Capital
reserve
|
Retained
earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the three months ended
September 30, 2011 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of July 1, 2011
|
||||||||||||||||||||||||||||
(Unaudited)
|
1 | (20 | ) | 317 | 298 | - | 298 | 76 | ||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | 20 | - | 20 | - | 20 | 5 | |||||||||||||||||||||
Profit for the period
|
- | - | 199 | 199 | - | 199 | 51 | |||||||||||||||||||||
Share based payments
|
- | - | 3 | 3 | - | 3 | - | |||||||||||||||||||||
Dividend declared
|
- | - | (232 | ) | (232 | ) | - | (232 | ) | (59 | ) | |||||||||||||||||
Non-controlling interests in respect of business combination
|
- | - | - | - | 4 | 4 | 1 | |||||||||||||||||||||
Balance as of September 30, 2011 (Unaudited)
|
1 | - | 287 | 288 | 4 | 292 | 74 |
Attributable to owners of the Company
|
Non-controlling
interests
|
Total equity
|
Convenience
translation into
US dollar
(Note 2D)
|
|||||||||||||||||||||||||
Share
capital
|
Capital
reserve
|
Retained
earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the year ended
December 31, 2011 (Audited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2011
|
||||||||||||||||||||||||||||
(Audited)
|
1 | (21 | ) | 361 | 341 | - | 341 | 87 | ||||||||||||||||||||
Other comprehensive income for
the year, net of tax
|
- | 28 | - | 28 | - | 28 | 7 | |||||||||||||||||||||
Profit for the year
|
- | - | 824 | 824 | 1 | 825 | 211 | |||||||||||||||||||||
Share based payments
|
- | - | 6 | 6 | - | 6 | 2 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (827 | ) | (827 | ) | - | (827 | ) | (211 | ) | |||||||||||||||||
Dividend declared
|
- | - | (189 | ) | (189 | ) | (1 | ) | (190 | ) | (49 | ) | ||||||||||||||||
Non-controlling interests in respect
of business combination
|
- | - | - | - | 4 | 4 | 1 | |||||||||||||||||||||
Balance as of December 31, 2011
(Audited)
|
1 | 7 | 175 | 183 | 4 | 187 | 48 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
into US dollar
|
translation
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended
September 30,
|
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
749 | 418 | 107 | 199 | 124 | 32 | 825 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
519 | 579 | 148 | 183 | 190 | 48 | 738 | |||||||||||||||||||||
Share based payment
|
4 | 4 | 1 | 3 | 1 | - | 6 | |||||||||||||||||||||
Loss (gain) on sale of property, plant and equipment
|
1 | - | - | 1 | (1 | ) | - | - | ||||||||||||||||||||
Income tax expense
|
236 | 161 | 41 | 60 | 51 | 13 | 304 | |||||||||||||||||||||
Financing expenses, net
|
232 | 217 | 55 | 90 | 64 | 16 | 293 | |||||||||||||||||||||
Other expenses (income)
|
- | - | - | - | (1 | ) | - | 2 | ||||||||||||||||||||
Changes in operating assets and
liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
(31 | ) | 41 | 11 | 7 | 3 | 1 | (67 | ) | |||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(515 | ) | 64 | 16 | (189 | ) | 98 | 25 | (585 | ) | ||||||||||||||||||
Change in other receivables (including long-term amounts)
|
43 | (42 | ) | (11 | ) | 49 | - | - | 61 | |||||||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
166 | (30 | ) | (8 | ) | 48 | 59 | 15 | 146 | |||||||||||||||||||
Change in other liabilities (including long-term amounts)
|
13 | (13 | ) | (3 | ) | 1 | (29 | ) | (7 | ) | (52 | ) | ||||||||||||||||
Proceeds from (payments for) derivative hedging contracts, net
|
(15 | ) | 17 | 4 | (6 | ) | 9 | 2 | (14 | ) | ||||||||||||||||||
Income tax paid
|
(292 | ) | (165 | ) | (42 | ) | (86 | ) | (48 | ) | (12 | ) | (325 | ) | ||||||||||||||
Income tax received
|
- | 15 | 4 | - | - | - | - | |||||||||||||||||||||
Net cash from operating activities
|
1,110 | 1,266 | 323 | 360 | 520 | 133 | 1,332 | |||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(219 | ) | (376 | ) | (96 | ) | (84 | ) | (92 | ) | (24 | ) | (333 | ) | ||||||||||||||
Acquisition of intangible assets
|
(75 | ) | (82 | ) | (21 | ) | (23 | ) | (30 | ) | (8 | ) | (99 | ) | ||||||||||||||
Acquisition of subsidiary, net of cash acquired
|
(1,458 | ) | - | - | (1,458 | ) | - | - | (1,458 | ) | ||||||||||||||||||
Change in current investments, net
|
3 | (204 | ) | (52 | ) | (4 | ) | 468 | 120 | 197 | ||||||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(7 | ) | 11 | 3 | 2 | 8 | 2 | 1 | ||||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2 | 3 | 1 | - | 2 | 1 | 3 | |||||||||||||||||||||
Interest received
|
27 | 24 | 6 | 7 | 16 | 4 | 33 | |||||||||||||||||||||
Loan to equity accounted investee
|
- | - | - | - | 1 | - | - | |||||||||||||||||||||
Proceeds from sale of shares in a consolidated company
|
- | 7 | 2 | - | - | - | - | |||||||||||||||||||||
Net cash from (used in) investing activities
|
(1,727 | ) | (617 | ) | (157 | ) | (1,560 | ) | 373 | 95 | (1,656 | ) |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
into US dollar
|
translation
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended
September 30,
|
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Proceeds from (payments for) derivative contracts, net
|
11 | (11 | ) | (3 | ) | 1 | (5 | ) | (1 | ) | 11 | |||||||||||||||||
Repayment of long term loans from banks
|
- | (9 | ) | (2 | ) | - | (5 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Repayment of debentures
|
(354 | ) | (661 | ) | (169 | ) | (179 | ) | (182 | ) | (47 | ) | (354 | ) | ||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
2,165 | 992 | 253 | 1,132 | - | - | 2,165 | |||||||||||||||||||||
Dividend paid
|
(626 | ) | (391 | ) | (100 | ) | (292 | ) | (130 | ) | (33 | ) | (858 | ) | ||||||||||||||
Interest paid
|
(243 | ) | (350 | ) | (89 | ) | (120 | ) | (168 | ) | (43 | ) | (245 | ) | ||||||||||||||
Net cash from (used in) financing activities
|
953 | (430 | ) | (110 | ) | 542 | (490 | ) | (125 | ) | 715 | |||||||||||||||||
Cash balance presented under assets held for sale/ Cash outflow due to sale of assets held for sale
|
- | - | - | - | - | - | (4 | ) | ||||||||||||||||||||
Changes in cash and cash equivalents
|
336 | 219 | 56 | (658 | ) | 403 | 103 | 387 | ||||||||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
533 | 920 | 235 | 1,527 | 736 | 188 | 533 | |||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
869 | 1,139 | 291 | 869 | 1,139 | 291 | 920 |
A.
|
Statement of compliance
|
B.
|
Functional and presentation currency
|
C.
|
Basis of measurement
|
D.
|
Convenience translation into U.S. dollars (“dollars” or “$”)
|
E.
|
Use of estimates and judgments
|
F.
|
Exchange rates and known Consumer Price Indexes are as follows:
|
Exchange rates
of US$
|
Consumer Price
Index (points)*
|
|||||||
As of September 30, 2012
|
3.912 | 220.84 | ||||||
As of September 30, 2011
|
3.712 | 216.68 | ||||||
As of December 31, 2011
|
3.821 | 216.27 | ||||||
Increase (decrease) during the period:
|
||||||||
Nine months ended September 30, 2012
|
2.4% | 2.1% | ||||||
Nine months ended September 30, 2011
|
4.6% | 2.7% | ||||||
Three months ended September 30, 2012
|
(0.3)% | 0.9% | ||||||
Three months ended September 30, 2011
|
8.7% | 0.6% | ||||||
Year ended December 31, 2011
|
7.7% | 2.6% |
|
·
|
It is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
|
|
·
|
The contractual terms of the financial asset, give rise, on specified dates, to cash flows that are solely payments of principal and interest; and
|
|
·
|
The Group has not chosen to designate it at fair value through profit or loss in order to eliminate or significantly reduce an accounting mismatch.
|
|
—
|
Cellcom - the segment includes Cellcom Israel Ltd. and its subsidiaries, excluding Netvision Ltd. and its subsidiaries.
|
|
—
|
Netvision - the segment includes Netvision Ltd. and its subsidiaries.
|
Nine-month period ended September 30, 2012
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
3,735 | 796 | - | 4,531 | ||||||||||||
Inter-segment revenues
|
18 | 47 | (65 | ) | - | |||||||||||
EBITDA*
|
1,164 | 215 | - | 1,379 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period | ||||||||||||||||
Depreciation and amortization
|
(420 | ) | (79 | ) | (80 | ) | (579 | ) | ||||||||
Taxes on income
|
(152 | ) | (29 | ) | 20 | (161 | ) | |||||||||
Financing income
|
149 | |||||||||||||||
Financing expenses
|
(366 | ) | ||||||||||||||
Share based payments
|
(4 | ) | ||||||||||||||
Profit for the period
|
375 | 103 | (60 | ) | 418 |
NIne-month period ended September 30, 2011
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
4,741 | 100 | - | 4,841 | ||||||||||||
Inter-segment revenues
|
2 | 5 | (7 | ) | - | |||||||||||
EBITDA*
|
1,722 | 20 | - | 1,742 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period | ||||||||||||||||
Depreciation and amortization
|
(499 | ) | (9 | ) | (11 | ) | (519 | ) | ||||||||
Taxes on income
|
(238 | ) | (1 | ) | 3 | (236 | ) | |||||||||
Financing income
|
87 | |||||||||||||||
Financing expenses
|
(319 | ) | ||||||||||||||
Other expenses
|
(2 | ) | ||||||||||||||
Share based payments
|
(4 | ) | ||||||||||||||
Profit for the period
|
749 | 8 | (8 | ) | 749 |
Three-month period ended September 30, 2012
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
1,180 | 268 | - | 1,448 | ||||||||||||
Inter-segment revenues
|
7 | 23 | (30 | ) | - | |||||||||||
EBITDA*
|
355 | 75 | - | 430 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period | ||||||||||||||||
Depreciation and amortization
|
(136 | ) | (28 | ) | (26 | ) | (190 | ) | ||||||||
Taxes on income
|
(48 | ) | (9 | ) | 6 | (51 | ) | |||||||||
Financing income
|
66 | |||||||||||||||
Financing expenses
|
(130 | ) | ||||||||||||||
Share based payments
|
(1 | ) | ||||||||||||||
Profit for the period
|
109 | 35 | (20 | ) | 124 |
Three-month period ended September 30, 2011
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
1,565 | 100 | - | 1,665 | ||||||||||||
Inter-segment revenues
|
2 | 5 | (7 | ) | - | |||||||||||
EBITDA*
|
517 | 20 | - | 537 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period | ||||||||||||||||
Depreciation and amortization
|
(163 | ) | (9 | ) | (11 | ) | (183 | ) | ||||||||
Taxes on income
|
(62 | ) | (1 | ) | 3 | (60 | ) | |||||||||
Financing income
|
35 | |||||||||||||||
Financing expenses
|
(125 | ) | ||||||||||||||
Other expenses
|
(2 | ) | ||||||||||||||
Share based payments
|
(3 | ) | ||||||||||||||
Profit for the period
|
199 | 8 | (8 | ) | 199 |
Year ended December 31, 2011
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Audited)
|
||||||||||||||||
Cellcom
|
Netvision**
|
Reconciliation
for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
6,125 | 381 | - | 6,506 | ||||||||||||
Inter-segment revenues
|
7 | 19 | (26 | ) | - | |||||||||||
EBITDA*
|
2,084 | 83 | - | 2,167 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the year | ||||||||||||||||
Depreciation and amortization
|
(652 | ) | (40 | ) | (46 | ) | (738 | ) | ||||||||
Taxes on income
|
(313 | ) | (2 | ) | 11 | (304 | ) | |||||||||
Financing income
|
116 | |||||||||||||||
Financing expenses
|
(409 | ) | ||||||||||||||
Other expenses
|
(1 | ) | ||||||||||||||
Share based payments
|
(6 | ) | ||||||||||||||
Profit for the year
|
821 | 39 | (35 | ) | 825 |
* EBITDA as reviewed by the CODM, represents earnings before interest (financing expenses, net), taxes, other income (expenses), depreciation and amortization and share based payments, as a measure of operating profit. EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies.
|
** Netvision segment represents results of operations for the four month period commencing September 1, 2011.
|
|
·
|
a Net Leverage* exceeding 5, or exceeding 4.5 during four consecutive quarters, shall constitute an event of default;
|
|
·
|
not to distribute more than 95% of the profits available for distribution according to the Israeli Companies law (“Profits”); provided that if the Net Leverage* exceeds 3.5, the Company will not distribute more than 85% of its Profits and if the Net Leverage* exceeds 4, the Company will not distribute more than 70% of its Profits. Failure to comply with this covenant shall constitute an event of default;
|
|
·
|
cross default, excluding following an immediate repayment initiated in relation to a liability of NIS 150 million or less, shall constitute an event of default;
|
|
·
|
Negative pledge, subject to certain exceptions. Failure to comply with this covenant shall constitute an event of default;
|
|
·
|
an obligation to pay additional interest of 0.25% for two-notch downgrade in the debentures' rating in comparison to the rating given to the debentures prior to their issuance and an obligation to pay additional interest of 0.25% for any additional one-notch downgrade up to a maximum addition of 1%;
|
·
|
Failure to have the debentures rated over a period of 60 days, shall constitute an event of default.
|
In the ordinary course of business, the Group is involved in various lawsuits against it. The costs that may result from these lawsuits are only accrued for when it is more likely than not that a liability, resulting from past events, will be incurred and the amount of that liability can be quantified or estimated within a reasonable range. The amount of the provisions recorded is based on a case-by-case assessment of the risk level, while events that occur in the course of the litigation may require a reassessment of this risk. The Group’s assessment of risk is based both on the advice of its legal counsels and on the Group's estimate of the probable settlements amounts that are expected to be incurred, if such settlements will be agreed by both parties. The provision recorded in the condensed consolidated interim financial statements in respect of all lawsuits against the Group amounts to NIS 65 million.
|
|
Consumer claims
In the ordinary course of business, lawsuits have been filed against the Group by its customers. These are mostly requests for approval of class action lawsuits, particularly concerning allegations of illegal collection of funds, unlawful conduct or breach of license, or a breach of agreements with customers, causing monetary and non-monetary damage to them. During the reporting period, fourteen purported class actions for a total sum of approximately NIS 3,468 million (three of which for the total sum of approximately NIS 2,798 million were included in note 31(1) to the annual financial statements) were filed against the Group. In addition, two other purported class actions were filed against the Group, for which no sum claimed was specified. Three additional purported class actions for the total sum of approximately NIS 537 million were filed against the Group and other defendants together without specifying the amount claimed from the Group (one of which was included in note 31(1) to the annual financial statements). In respect of a pending purported class action, with respect to the network malfunction that occurred on December 1, 2010, the amounts claimed were updated from approximately NIS 61 million to NIS 350 per customer in a private calling plan and NIS 700 per customer in a business calling plan, approximately NIS 1.182 billion for non monetary damages as well as the relative portion of the monthly payment relating to the hours of the malfunction.
At this early stage it is not possible to assess the chances of success of five purported class actions for a total sum of approximately NIS 114 million, two purported class actions, for which no sum claimed was specified and two purported class actions for the total sum of approximately NIS 176 million, filed against the Group and other defendants together without specifying the amount claimed from the Group, all filed during the third quarter 2012.
During the reported period, sixteen purported class actions for a total sum of approximately NIS 983 million, were dismissed, of which two, for the total sum of approximately NIS 116 million were included in note 31(1) to the annual financial statements. Two additional purported class actions, for which no sum claimed was specified, were also dismissed.
During the reported period, the Group entered a settlement agreement in relation to: (1) a lawsuit approved as a class action in November 2010 (and appealed to the Israeli supreme Court) against 013 Netvision Ltd., or Netvision, a wholly owned subsidiary of the Company and two other long distance operators, for a total amount claimed of approximately NIS 2.2 billion, of which approximately NIS 818 million was attributed to Netvision and (2) a purported class action filed against the same defendants in February 2012, for an estimated amount claimed of NIS 2.7 billion of each of the defendants. The plaintiffs in both the class action and the purported class action alleged that the defendants misled the purchasers of certain long distance prepaid calling cards as to the amount of minutes included in those cards.
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Note 10 - Regulation and legislation
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A.
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In March 2012, the previously reported bill, proposing to completely annul Early Termination Fees in relation to new cellular customers with less than a certain number of phone lines, was enacted by the Israeli parliament and will apply retroactively to customers joining the cellular operators as of November 2011. In addition, this law prohibits cellular operators to make any linkage between a cellular services transaction and a handset purchase transaction, including by way of offering airtime rebates or refunds for handsets, as of January 1, 2013.
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B.
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In May 2012, the Israeli Minister of Communications published a policy document in relation to the wholesale market in the wireline communications market in Israel. The document adopts the main recommendations of the public committee appointed by the Ministry of Communications to examine Bezeq's tariffs structure and tariffs for wireline wholesale services.
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(1)
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The wholesale market's tariffs and terms of agreement shall be agreed through negotiations between the owners of the wireline infrastructure (Bezeq and Hot) and the other operators. An infrastructure owner that reaches an agreement with such other operator, shall be obligated to offer the same terms, without discrimination, to all operators, including its affiliates. The Ministry of Communications shall intervene in the negotiations or in the terms of the agreement between the parties in case an agreement has not been reached within six months from the date of the policy document or in case the agreement between the parties includes terms that may harm the competition or the public. In addition, the Minister may intervene in a retail tariff that was set by the owner of wireline infrastructure or its affiliate that harms the competition, through changing of the wholesale tariff.
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(2)
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The structural separation between an owner of wireline infrastructure and its international landline operator and internet service provider affiliates shall be annulled within nine months from the date of execution of an agreement between such owner of wireline infrastructure and other operator and shall be replaced by an accounting separation. The Minister shall consider providing leniencies in relation to or annulment of the structural separation between an owner of wireline infrastructure and its cellular operator affiliate according to the pace of development of a wholesale market and the state of competition in the market. In case an effective wholesale market does not develop within twenty four months from the date of the policy document, the Ministry of Communications shall operate to impose a structural separation in the owners of the wireline infrastructure between the infrastructure and the services provided through this infrastructure.
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(3)
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The Minister of Communications shall consider to annul the structural separation in relation to television broadcasting services if there is a reasonable possibility to provide a basic package of television services through the internet. The Minister of Communications shall consider imposing a requirement to provide television broadcasting services for the same price within a package of telecommunications services and separately.
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C.
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Following previous reports as to the expected changes in royalties paid by the Company to the Ministry of Communications, following a petition filed by the Company and two other cellular operators, the Communication Regulations (Bezeq and Transmissions) (Royalties) 2001, were amended on August 1, 2012 as follows:
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• For cellular services - from January 1, 2012 to May 23, 2012 - 2.5%; from May 24, 2012 to July 31, 2012 - 1%; from August 1, 2012 to December 31, 2012 - 0.292% provided the 2012 annual rate shall be 1.3% and as of January 1, 2013 - 0%.
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• For landline and long distance services (for which the Company pays 1% for 2012) - as of January 1, 2013 - 0%.
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D.
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In August 2012, the proposed amendment to the Communications Law, setting gradually increasing financial sanctions on communication operators, for breach of their licenses, the amount of which shall be calculated as a percentage of the operator's income and based on the gravity of the breach, was enacted.
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CELLCOM ISRAEL LTD.
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Date:
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November 13, 2012
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By:
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/s/ Liat Menahemi Stadler
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Name:
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Liat Menahemi Stadler
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Title:
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General Counsel
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