RAMAT GAN, Israel, Aug. 4,
2016 /PRNewswire/ -- B Communications Ltd. (NASDAQ
Global Select Market and TASE: BCOM), a holding company with a
controlling interest in Israel's
largest telecommunications provider, Bezeq, The Israel
Telecommunication Corp. (TASE: BEZQ), today reported its financial
results for the second quarter of 2016.
"During the first half of 2016, we continued to execute our
business plan by paying an 11% dividend to our shareholders while
continuing to reduce our LTV[1] ratio to 35%. We intend
to continue to improve our debt structure in order to create more
value for our shareholders in the quarters ahead," said
Doron Turgeman, CEO of B
Communications.
Dividend Distribution: On May 25,
2016, the Company's Board of Directors declared a cash
dividend of NIS 355 million
($92 million), or NIS 11.88 ($3.09)
per share. The dividend was paid to the Company's shareholders on
June 29, 2016.
Tender Offer: On May 26,
2016, the Company announced that its wholly-owned
subsidiary, B Communications (SP4) LP, had invited holders of the
Company's 7⅜% Senior Secured Notes due 2021 (the "Notes") to submit
tenders to purchase their Notes for cash within a purchase price
range of $1.00 to $1.07 per
$1.00 nominal amount of Notes. On
June 27, the tender offer expired and
the clearing price for the tender offer was $1.07 per $1.00 par
value of the Notes. The aggregate par value of the Notes tendered
and purchased by B Communications (SP4) LP was approximately
$18.6 million.
Dividend from Bezeq: On May 30,
2016, Bezeq distributed NIS 776
Million ($202 million) to
shareholders of record as of May 17,
2016. B Communications' share of the dividend distribution
was NIS 204 million ($53 million).
On August 3, 2016, the Board of
Directors of Bezeq resolved to recommend to the general meeting of
its shareholders the distribution of a cash dividend of
NIS 665 million ($173 million), representing Bezeq's profits for
the first half of 2016. The dividend will be paid on October 6, 2016 to shareholders of record as of
September 20, 2016. B Communications'
share of the dividend distribution is anticipated to be
NIS 175 million ($46 million).
Notes Repurchase Program: On August 10, 2014 the Company announced that its
Board of Directors had approved the buyback of up to $50 million of its Notes. On January 20, 2016, the Company announced the
completion of the $50 million
repurchase program and the approval by its Board of Directors to
extend and increase the program by an additional $50 million. Through August 4, 2016, the Company purchased a total of
$83 million par value of the Notes
(including the Notes that were tendered in connection with the
Company's tender offer that expired in June
2016).
Cash and Debt Position: As of June
30, 2016, B Communications' unconsolidated liquidity
balances (comprised of cash and cash equivalents and short term
investments) totaled NIS 1.35 billion
($351 million) and its financial
liabilities totaled NIS 3.27 billion
($849 million) including NIS 2.5
billion ($650 million) of the
Notes, NIS 696 million ($181 million) of Series B Debentures (both
include accrued interest and unamortized premiums, discounts and
debt issuance costs), and a NIS 71
million ($18 million) tax
liability.
B Communications'
Unconsolidated Balance Sheet
Data
|
|
(In
millions)
|
|
Convenience
|
|
|
|
|
translation
into
|
|
|
|
|
U.S.
dollars
|
|
|
|
|
(Note
A)
|
|
|
|
June
30,
|
June
30,
|
June
30,
|
December
31,
|
|
2016
|
2016
|
2015
|
2015
|
|
NIS
|
US$
|
NIS
|
NIS
|
Financial
liabilities
|
|
|
|
|
7⅜% Senior Secured Notes
(1)
|
2,500
|
650
|
2,770
|
2,718
|
Series B
Debentures
|
696
|
181
|
710
|
710
|
Tax
liability
|
71
|
18
|
117
|
79
|
Total
debt
|
3,267
|
849
|
3,597
|
3,507
|
|
|
|
|
|
Liquidity
balances
|
|
|
|
|
Lockbox
account(2)
|
1,096
|
285
|
456
|
532
|
Unrestricted
cash(3)
|
252
|
66
|
510
|
421
|
Total
liquidity
|
1,348
|
351
|
966
|
953
|
|
|
|
|
|
Net
debt
|
1,919
|
498
|
2,631
|
2,554
|
|
(1) The NIS amount equivalent to $717 million
par value of the Notes which were hedged on the date the Notes were
issued plus accrued interest and unamortized debt issuance
costs.
|
(2) Lockbox account - one or more accounts
designated as a lockbox account and maintained by B Communications
(SP-2) Ltd. (or any of its successors) and pledged as collateral to
the security agent for the benefit of the holders of the Notes.
Amounts from prior periods are shown as comparative data and
reflect amounts that were maintained by B Communications (SP-2)
Ltd. but not in a lockbox
account.
|
(3) Unrestricted cash - any funds, property or
assets (including any property or assets acquired with or earned on
such unrestricted cash) not expressly required by the terms of the
Indenture for the secured Notes to be deposited in or allocated to
the lockbox account and any other funds with respect to which the
Indenture expressly provides constitute unrestricted cash,
including proceeds from indebtedness permitted to be incurred under
the Indenture which are not otherwise expressly required by the
terms of the Indenture to be deposited in or allocated to the
lockbox account; provided that no specified shares or collateral
shall constitute unrestricted
cash.
|
B Communications
Unconsolidated Sources and
Uses
|
|
(In
millions)
|
|
Convenience
|
|
|
translation
into
|
|
|
U.S.
dollars
|
|
|
(Note
A)
|
|
NIS
|
US$
|
|
|
|
Net debt as of December 31,
2015
|
2,554
|
664
|
|
|
|
Dividends received from
Bezeq
|
(204)
|
(53)
|
Net proceeds from the sale
of Bezeq
shares
|
(978)
|
(254)
|
Financial expenses,
net
|
134
|
35
|
Loss from purchase of
Notes
|
25
|
7
|
Tax
provision
|
28
|
7
|
Operating
expenses
|
5
|
1
|
Dividend distributions to
shareholders
|
355
|
92
|
|
|
|
Net debt as of June 30,
2016
|
1,919
|
499
|
B Communications Second Quarter Consolidated Financial
Results
B Communications' consolidated revenues for the second quarter
of 2016 totaled NIS 2.5 billion
($653 million), a 3.5% decrease
compared to the NIS 2.6 billion
reported in the second quarter of 2015. For both the current and
the prior-year periods, B Communications' consolidated revenues
consisted entirely of Bezeq's revenues.
B Communications' consolidated operating income for the second
quarter of 2016 totaled NIS 517
million ($134 million), a
15.5% decrease compared to NIS 612
million reported in the second quarter of 2015.
B Communications' consolidated net income for the second quarter
of 2016 totaled NIS 264 million
($69 million), a 0.8% decrease
compared with NIS 266 million
reported in the second quarter of 2015.
B Communications Second Quarter Unconsolidated Financial
Results
As of June 30, 2016, B
Communications held approximately 26.3% of Bezeq's outstanding
shares. B Communications' interest in Bezeq's net income for the
second quarter of 2016 totaled NIS 99
million ($26 million),
compared to NIS 148 million reported
in the second quarter of 2015 (based on the Company's then 31%
ownership interest in Bezeq as of June 30,
2015).
During the second quarter of 2016, B Communications recorded net
amortization expenses of NIS 19
million ($5 million) related
to its Bezeq purchase price allocation ("Bezeq PPA"). The decrease
in the Company's ownership interest in Bezeq to 26.34% will reduce
the Company's future net amortization expenses. From April 14, 2010, the date of the acquisition of
its interest in Bezeq, until June 30,
2016, B Communications has amortized approximately 73% of
the total Bezeq PPA. The Bezeq PPA amortization expense is a
non-cash expense that is subject to adjustment.
B Communications' unconsolidated net financial expenses for the
second quarter of 2016 totaled NIS 38
million ($10 million) compared
to net financial expenses of NIS 85
million in the second quarter of 2015. Financial expenses
during the second quarter of 2016 included NIS 53 million ($14
million) related to the Company's publicly traded Series B
Debentures and Notes. These expenses were partially offset by
financial income of NIS 15 million
($4 million) generated by short term
investments.
B Communications' net income attributable to shareholders for
the second quarter of 2016 was NIS 40
million ($10 million) compared
to net income of NIS 21 million in
the second quarter of 2015.
In
millions
|
|
Convenience
|
|
|
|
|
translation
into
|
|
|
|
|
U.S.
dollars
|
|
|
|
|
(Note
A)
|
|
|
|
Three-month
|
Three-month
|
Three-month
|
|
|
period
ended
|
period
ended
|
period
ended
|
Year
ended
|
|
June
30,
|
June
30,
|
June
30,
|
December
31,
|
|
2016
|
2016
|
2015
|
2015
|
|
NIS
|
US$
|
NIS
|
NIS
|
Revenues
|
-
|
-
|
-
|
-
|
Financing expenses,
net
|
(38)
|
(10)
|
(85)
|
(293)
|
Operating and tax
expenses
|
(2)
|
(1)
|
(2)
|
(8)
|
Income tax
benefit
|
-
|
-
|
-
|
101
|
PPA amortization,
net
|
(19)
|
(5)
|
(40)
|
(119)
|
Interest in Bezeq's net
income
|
99
|
26
|
148
|
529
|
Net
income
|
40
|
10
|
21
|
210
|
Bezeq Group Results (Consolidated)
To provide further insight into its results, the Company is
providing the following summary of the consolidated financial
report of the Bezeq Group for the quarter ended June 30, 2016. For a full discussion of Bezeq's
results for the quarter ended June 30,
2016, please refer to its website:
http://ir.bezeq.co.il.
Bezeq Group
(consolidated)
|
Q2
2016
|
Q2
2015
|
%
change
|
|
(NIS
millions)
|
|
|
|
|
|
Revenues
|
2,511
|
2,603
|
(3.5%)
|
Operating
income
|
616
|
794
|
(22.4%)
|
Operating
margin
|
24.5%
|
30.5%
|
|
Net
income
|
377
|
482
|
(21.8%)
|
EBITDA
|
1,056
|
1,245
|
(15.2%)
|
EBITDA
margin
|
42.1%
|
47.8%
|
|
Diluted EPS
(NIS)
|
0.14
|
0.17
|
(17.6%)
|
Cash flow from operating
activities
|
870
|
840
|
3.6%
|
Payments for
investments
|
387
|
511
|
(24.3%)
|
Free cash flow
1
|
539
|
413
|
30.5%
|
Net
debt
|
9,254
|
9,543
|
(3.0%)
|
Net debt/EBITDA (end of
period)
2
|
2.24
|
2.30
|
|
|
|
|
|
1 Free cash flow
is defined as cash flow from operating activities less net payments
for
investments.
|
2 EBITDA in this
calculation refers to the trailing twelve
months.
|
Revenues of the Bezeq Group in the second quarter of 2016
were NIS 2.51 billion ($653 million) compared to NIS 2.60 billion in the corresponding quarter of
2015, a decrease of 3.5%. The decrease was due to lower revenues in
all of the Bezeq Group's segments (primarily at Pelephone).
Salary expenses of the Bezeq Group in the second quarter of 2016
were NIS 495 million ($128 million) compared to NIS 497 million in the corresponding quarter of
2015, a decrease of 0.4%.
Operating expenses of the Bezeq Group in the second quarter of
2016 were NIS 972 million
($253 million) compared to
NIS 1.00 billion in the corresponding
quarter of 2015, a decrease of 3.0%. The decrease was
primarily due to a reduction in interconnect payments to telecom
operators and lower building maintenance expenses.
Other operating income of the Bezeq Group in the second quarter
of 2016 amounted to NIS 12 million
($3 million) compared to NIS 141 million in the corresponding quarter of
2015. Other operating income was impacted by the recording of
capital gains from the sale of fixed assets in the amount of
NIS 148 million in the second quarter
of 2015.
Operating income of the Bezeq Group in the second quarter of
2016 was NIS 616 million
($160 million) (operating margin of
24.5%) compared to NIS 794 million
(operating margin of 30.5%) in the corresponding quarter of 2015, a
decrease of 22.4%.
Tax expenses of the Bezeq Group in the second quarter of 2016
were NIS 133 million ($35 million) compared to NIS 183 million in the corresponding quarter of
2015, a decrease of 27.3%. The decrease in tax expenses was
primarily due to a reduction in profit before tax as well as a
decrease in the corporate tax rate from 26.5% to 25% beginning
January 1, 2016.
Net income of the Bezeq Group in the second quarter of 2016 was
NIS 377 million ($98 million) compared to NIS 482 million in the corresponding quarter of
2015, a decrease of 21.8%.
EBITDA of the Bezeq Group in the second quarter of 2016 was
NIS 1.06 billion ($275 million) (EBITDA margin of 42.1%) compared
to NIS 1.25 billion (EBITDA margin of
47.8%) in the corresponding quarter of 2015, a decrease of
15.2%.
Payments for investments (Capex) of the Bezeq Group in the
second quarter of 2016 were NIS 387
million ($101 million)
compared to NIS 511 million in the
corresponding quarter of 2015, a decrease of 24.3%. The decrease
was primarily due to the payment of NIS 96
million by Pelephone to the Ministry of Communications for
LTE 4G frequencies in the second quarter of 2015.
Cash flow from operating activities of the Bezeq Group in the
second quarter of 2016 was NIS 870
million ($226 million),
compared to NIS 840 million in the
corresponding quarter of 2015, an increase of 3.6%. The increase
was primarily due to an improvement in working capital.
Free cash flow of the Bezeq Group in the second quarter of 2016
was NIS 539 million ($140 million) compared to NIS 413 million in the corresponding quarter of
2015, an increase of 30.5%.
Total debt of the Bezeq Group was NIS
11.5 billion ($3 billion) as
of June 30 2016 compared to
NIS 11.4 billion as of June 30, 2015. Net debt of the Bezeq Group was
NIS 9.25 billion ($2.41 billion) as of June
30, 2016 compared to NIS 9.54
billion as of June 30,
2015.
Notes:
A. Convenience Translation to Dollars: For
the convenience of the reader, certain of the reported NIS figures
of June 30, 2016 have been presented
in millions of U.S. dollars, translated at the representative rate
of exchange as of June 30, 2016
(NIS 3.846 = U.S. $ 1.00). The U.S. dollar ($) amounts presented
should not be construed as representing amounts receivable or
payable in U.S. dollars or convertible into U.S. dollars, unless
otherwise indicated.
B. Use of non-IFRS Measurements: We and the
Bezeq Group's management regularly use supplemental non-IFRS
financial measures internally to understand, manage and evaluate
its business and make operating decisions. We believe these
non-IFRS financial measures provide consistent and comparable
measures to help investors understand the Bezeq Group's current and
future operating cash flow performance. These non-IFRS financial
measures may differ materially from the non-IFRS financial measures
used by other companies.
In the press release and accompanying supplemental information,
we use the following non-IFRS financial measures: EBITDA, LTV, net
debt and free cash flow.
Management of the Company believes that free cash flow (defined
as net cash flow from operating activities, less net capital
expenditures) is an important measure of its liquidity as well as
its ability to service long-term debt, fund future growth and to
provide a return to shareholders. We also believe this free cash
flow definition does not have any material limitations.
The following non-IFRS measures are provided because management
believes these measurements are useful for investors and financial
institutions to analyze and compare companies on the basis of
operating performance:
- EBITDA - defined as net income plus net interest expense,
provision for income taxes, depreciation and
amortization;
- Free Cash Flow (FCF) - defined as cash from operating
activities less cash for the purchase/sale of property, plant and
equipment, and intangible assets, net;
- Net debt - reflects the Company's long and short term
liabilities minus cash and cash equivalents and short term
investments; and
- LTV (loan to value) - defined as the ratio of our
unconsolidated net debt to market value of the Company's holdings
in Bezeq as of the balance sheet date.
Reconciliations between the Bezeq Group's results on an IFRS and
non-IFRS basis with respect to these non-IFRS measurements are
provided in tables immediately following the Company's consolidated
results. The non-IFRS financial measures are not meant to be
considered in isolation or as a substitute for comparable IFRS
measures, and should be read only in conjunction with its
consolidated financial statements prepared in accordance with
IFRS.
About B Communications Ltd.
B Communications is a
holding company with a controlling interest in Israel's largest telecommunications provider,
Bezeq, The Israel Telecommunication Corp. (TASE: BEZQ). B
Communications shares are traded on NASDAQ and the TASE under the
symbol "BCOM." For more information please visit the following
Internet sites:
www.bcommunications.co.il
http://ir.bezeq.co.il
www.eurocom.co.il
www.igld.com
Forward-Looking Statements
This press release contains
forward-looking statements that are subject to risks and
uncertainties. Factors that could cause actual results to
differ materially from these forward-looking statements include,
but are not limited to, general business conditions in the
industry, changes in the regulatory and legal compliance
environments, the failure to manage growth and other risks detailed
from time to time in B Communications' filings with the Securities
Exchange Commission. These documents contain and identify
other important factors that could cause actual results to differ
materially from those contained in our projections or
forward-looking statements. Stockholders and other readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are
made. We undertake no obligation to update publicly or revise
any forward-looking statement.
B Communications Ltd.
|
|
Condensed Consolidated
Statements of Financial Position as
at
|
|
|
(In
millions)
|
|
|
Convenience
|
|
|
|
|
|
translation
into
|
|
|
|
|
|
U.S.
dollars
|
|
|
|
|
|
(Note
A)
|
|
|
|
|
June
30,
|
June
30,
|
June
30,
|
December
31,
|
|
|
2016
|
2016
|
2015
|
2015
|
|
|
NIS
|
US$
|
NIS
|
NIS
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,357
|
353
|
865
|
581
|
Restricted
cash
|
|
658
|
171
|
29
|
155
|
Investments
|
|
1,584
|
412
|
1,897
|
1,535
|
Trade receivables,
net
|
|
2,029
|
527
|
2,256
|
2,058
|
Other
receivables
|
|
239
|
63
|
244
|
286
|
Inventory
|
|
109
|
28
|
96
|
115
|
|
|
|
|
|
|
Total current
assets
|
|
5,976
|
1,554
|
5,387
|
4,730
|
|
|
|
|
|
|
Long-term trade and other
receivables
|
|
647
|
168
|
656
|
674
|
Property, plant and
equipment
|
|
7,120
|
1,851
|
7,345
|
7,197
|
Intangible
assets
|
|
6,859
|
1,784
|
*7,419
|
7,118
|
Deferred expenses and
investments
|
|
636
|
165
|
537
|
643
|
Broadcasting
rights
|
|
455
|
118
|
471
|
456
|
Investment in
equity-accounted
investee
|
|
21
|
6
|
28
|
25
|
Deferred tax
assets
|
|
1,099
|
286
|
*1,194
|
1,279
|
|
|
|
|
|
|
Total non-current
assets
|
|
16,837
|
4,378
|
17,650
|
17,392
|
|
|
|
|
|
|
Total
assets
|
|
22,813
|
5,932
|
23,037
|
22,122
|
|
*
Reclassified
|
B Communications Ltd.
|
|
Condensed Consolidated
Statements of Financial Position as at
(cont'd)
|
|
(In
millions)
|
|
|
Convenience
|
|
|
|
|
|
translation
into
|
|
|
|
|
|
U.S.
dollars
|
|
|
|
|
|
(Note
A)
|
|
|
|
|
June
30,
|
June
30,
|
June
30,
|
December
31,
|
|
|
2016
|
2016
|
2015
|
2015
|
|
|
NIS
|
US$
|
NIS
|
NIS
|
Liabilities
|
|
|
|
|
|
Bank loans and credit and
debentures
|
|
2,184
|
568
|
2,110
|
2,089
|
Trade and other
payables
|
|
1,607
|
418
|
1,820
|
1,694
|
Related
party
|
|
208
|
54
|
*217
|
233
|
Current tax
liabilities
|
|
698
|
182
|
777
|
705
|
Provisions
|
|
90
|
23
|
90
|
100
|
Employee
benefits
|
|
370
|
96
|
272
|
378
|
Total current
liabilities
|
|
5,157
|
1,341
|
5,286
|
5,199
|
|
|
|
|
|
|
Bank loans and
debentures
|
|
12,716
|
3,307
|
12,890
|
12,290
|
Employee
benefits
|
|
239
|
62
|
238
|
240
|
Other
liabilities
|
|
252
|
66
|
202
|
227
|
Provisions
|
|
46
|
12
|
70
|
46
|
Deferred tax
liabilities
|
|
667
|
173
|
805
|
729
|
Total non-current
liabilities
|
|
13,920
|
3,620
|
14,205
|
13,532
|
|
|
|
|
|
|
Total
liabilities
|
|
19,077
|
4,961
|
19,491
|
18,731
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Total equity attributable
to equity holders of the
Company
|
|
1,426
|
371
|
972
|
1,045
|
|
|
Non-controlling
interests
|
|
2,310
|
600
|
2,574
|
2,346
|
|
|
|
|
|
|
Total
equity
|
|
3,736
|
971
|
3,546
|
3,391
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
22,813
|
5,932
|
23,037
|
22,122
|
|
*
Reclassified
|
B Communications Ltd.
|
|
Condensed Consolidated Statements of Income for
the
|
|
|
|
|
Year
ended
|
|
Six months period ended
June
30,
|
Three months period
ended June
30,
|
December
31,
|
|
|
Convenience
|
|
|
Convenience
|
|
|
|
|
translation
|
|
|
translation
|
|
|
|
|
into
|
|
|
into
|
|
|
|
|
U.S.
dollars
|
|
|
U.S.
dollars
|
|
|
|
|
(Note
A)
|
|
|
(Note
A)
|
|
|
|
2016
|
2016
|
2015
|
2016
|
2016
|
2015
|
2015
|
|
NIS
|
US$
|
NIS
|
NIS
|
US$
|
NIS
|
NIS
|
|
|
|
|
|
|
|
|
Revenues
|
5,070
|
1,318
|
4,777
|
2,511
|
653
|
2,603
|
9,985
|
|
|
|
|
|
|
|
|
Cost and
expenses
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
1,083
|
281
|
1,011
|
538
|
140
|
572
|
2,131
|
Salaries
|
1,008
|
262
|
937
|
494
|
129
|
498
|
1,958
|
General and operating
expenses
|
1,995
|
519
|
1,804
|
974
|
253
|
1,003
|
3,876
|
Other operating income,
net
|
(7)
|
(2)
|
(93)
|
(12)
|
(3)
|
(82)
|
3
|
|
|
|
|
|
|
|
|
|
4,079
|
1,060
|
3,659
|
1,994
|
519
|
1,991
|
7,968
|
|
|
|
|
|
|
|
|
Operating
income
|
991
|
258
|
1,118
|
517
|
134
|
612
|
2,017
|
|
|
|
|
|
|
|
|
Financing expenses,
net
|
335
|
87
|
306
|
143
|
37
|
209
|
535
|
|
|
|
|
|
|
|
|
Income after
financing
|
|
|
|
|
|
|
|
expenses,
net
|
656
|
171
|
812
|
374
|
97
|
403
|
1,482
|
|
|
|
|
|
|
|
|
Share of income (loss)
in
|
|
|
|
|
|
|
|
equity-accounted
investee
|
(2)
|
(1)
|
16
|
(1)
|
*
|
-
|
12
|
|
|
|
|
|
|
|
|
Income before income
tax
|
654
|
170
|
828
|
373
|
97
|
403
|
1,494
|
|
|
|
|
|
|
|
|
Income
tax
|
230
|
60
|
256
|
109
|
28
|
137
|
358
|
|
|
|
|
|
|
|
|
Net income for the
period
|
424
|
110
|
572
|
264
|
69
|
266
|
1,136
|
|
|
|
|
|
|
|
|
Income (loss)
attributable
to:
|
|
|
|
|
|
|
|
Owners of the
company
|
17
|
4
|
69
|
40
|
10
|
21
|
210
|
Non-controlling
interests
|
407
|
106
|
503
|
224
|
59
|
245
|
926
|
|
|
|
|
|
|
|
|
Net income for the
period
|
424
|
110
|
572
|
264
|
69
|
266
|
1,136
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Net income (loss),
basic
|
0.59
|
0.15
|
2.31
|
1.35
|
0.35
|
0.72
|
7.04
|
Net income (loss),
diluted
|
0.59
|
0.15
|
2.27
|
1.35
|
0.35
|
0.70
|
6.97
|
|
|
|
|
|
|
|
|
* Represents an amount less
than US$1.
|
Bezeq, The Israel Telecommunication
Corp.
|
|
|
Reconciliation for NON-IFRS
Measures
|
EBITDA
|
|
|
The following is a reconciliation of the Bezeq
Group's net income to EBITDA:
|
|
|
(In
millions)
|
Three months period
ended June
30,
|
|
|
Convenience
|
|
|
|
translation
|
|
|
|
into
|
|
|
|
U.S.
dollars
|
|
|
|
(Note
A)
|
|
|
2016
|
2016
|
2015
|
|
NIS
|
US$
|
NIS
|
|
|
|
|
Net
income
|
377
|
98
|
482
|
Income
tax
|
133
|
35
|
183
|
Share of loss in
equity-accounted
investee
|
1
|
-
|
-
|
Financing expenses,
net
|
105
|
27
|
129
|
Depreciation and
amortization
|
440
|
115
|
451
|
|
|
|
|
EBITDA
|
1,056
|
275
|
1,245
|
|
|
|
|
The Bezeq Group defines EBITDA as net income before financial
income (expenses), net, impairment and other charges, expenses
recorded for stock compensation in accordance with IFRS 2, income
tax expenses and depreciation and amortization. We present the
Bezeq Group's EBITDA as a supplemental performance measure because
we believe that it facilitates operating performance comparisons
from period to period and company to company by backing out
potential differences caused by variations in capital structure,
tax positions (such as the impact of changes in effective tax rates
or net operating losses) and the age of, and depreciation expenses
associated with, fixed assets (affecting relative depreciation
expense).
EBITDA should not be considered in isolation or as a substitute
for net income or other statement of operations or cash flow data
prepared in accordance with IFRS as a measure of profitability or
liquidity. EBITDA does not take into account our debt service
requirements and other commitments, including capital expenditures,
and, accordingly, is not necessarily indicative of amounts that may
be available for discretionary uses. In addition, EBITDA, as
presented in this press release, may not be comparable to similarly
titled measures reported by other companies due to differences in
the way that these measures are calculated.
Bezeq, The Israel Telecommunication
Corp.
|
Reconciliation for NON-IFRS
Measures
|
|
|
Free Cash Flow
|
|
|
The following table shows the calculation of the
Bezeq Group's free cash flow:
|
|
|
(In
millions)
|
Three months period
ended June
30,
|
|
|
Convenience
|
|
|
|
translation
|
|
|
|
into
|
|
|
|
U.S.
dollars
|
|
|
|
(Note
A)
|
|
|
2016
|
2016
|
2015
|
|
NIS
|
US$
|
NIS
|
|
|
|
|
Cash flow from operating
activities
|
870
|
226
|
840
|
Purchase of property, plant
and
equipment
|
(317)
|
(82)
|
(363)
|
Investment in intangible
assets and deferred
expenses
|
(70)
|
(18)
|
(148)
|
Proceeds from the sale of
property, plant and
equipment
|
56
|
14
|
84
|
|
|
|
|
Free cash
flow
|
539
|
140
|
413
|
|
|
|
|
Free cash flow is a financial index which is not based on IFRS.
Free cash flow is defined as cash from operating activities less
cash for the purchase/sale of property, plant and equipment, and
intangible assets, net. The Company presents free cash flow as an
additional index for assessing its business results and cash flows
because the Company believes that free cash flow is an important
liquidity index that reflects cash resulting from ongoing
operations after cash investments in infrastructure and other fixed
and intangible assets.
Net Debt
The following table shows the calculation of the Bezeq Group's
net debt:
(In
millions)
|
As at June
30,
|
|
|
Convenience
|
|
|
|
translation
|
|
|
|
into
|
|
|
|
U.S.
dollars
|
|
|
|
(Note
A)
|
|
|
2016
|
2016
|
2015
|
|
NIS
|
US$
|
NIS
|
|
|
|
|
Non-current bank loans and
debentures
|
1,958
|
509
|
1,924
|
Short term bank loans and
credit and
debentures
|
9,546
|
2,482
|
9,444
|
Cash and cash
equivalents
|
(1,338)
|
(348)
|
(826)
|
Investments
|
(912)
|
(237)
|
(999)
|
|
|
|
|
Net
debt
|
9,254
|
2,406
|
9,543
|
|
|
|
|
Net debt reflects long and short term liabilities minus cash and
cash equivalents and investments.
[1] LTV (loan to value) ratio is calculated as B Communications'
unconsolidated net debt as a percentage of the market value of its
shareholdings in Bezeq as of June 30,
2016.
For further information, please contact:
Idit Cohen – IR Manager
idit@igld.com / Tel: +972-3-924-0000
Investor relations contacts:
Hadas Friedman – Investor
Relations
Hadas@km-ir.co.il / Tel: +972-3-516-7620
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/b-communications-reports-financial-results-for-the-second-quarter-of-2016-300309150.html
SOURCE B Communications Ltd.