Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document And Entity Information | |
Entity Registrant Name | PARTNER COMMUNICATIONS CO LTD |
Entity Central Index Key | 1,096,691 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 168,243,913 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ₪ in Millions, $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016ILS (₪) | ||
CURRENT ASSETS | |||||
Cash and cash equivalents | [1] | ₪ 867 | ₪ 716 | ||
Short-term deposits | 150 | [1] | 452 | ||
Trade receivables | 808 | [1] | 990 | ||
Other receivables and prepaid expenses | 48 | [1] | 57 | ||
Deferred expenses - right of use | 43 | [1] | 28 | ||
Inventories | 93 | [1] | 96 | ||
CURRENT ASSETS, TOTAL | 2,009 | [1] | 2,339 | ||
NON CURRENT ASSETS | |||||
Trade receivables | 232 | [1] | 333 | ||
Prepaid expenses and other | 5 | [1] | 2 | ||
Deferred expenses - right of use | 133 | [1] | 75 | ||
Property and equipment | 1,180 | [1] | 1,207 | ||
Intangible and other assets | 697 | [1] | 793 | ||
Goodwill | 407 | [1] | 407 | ||
Deferred income tax asset | 55 | [1] | 41 | ||
NON CURRENT ASSETS, TOTAL | 2,709 | [1] | 2,858 | ||
TOTAL ASSETS | 4,718 | [1] | 5,197 | ||
CURRENT LIABILITIES | |||||
Current maturities of notes payable and borrowings | 705 | [1] | 498 | ||
Trade payables | 787 | [1] | 681 | ||
Payables in respect of employees | 91 | [1] | 101 | ||
Other payables (mainly institutions) | 31 | [1] | 28 | ||
Income tax payable | 50 | [1] | 45 | ||
Deferred income with respect to settlement agreement with Orange | 108 | ||||
Deferred revenues from HOT mobile | 31 | [1] | 31 | ||
Other deferred revenues | 41 | [1] | 38 | ||
Provisions | 75 | [1] | 77 | ||
CURRENT LIABILITIES, TOTAL | 1,811 | [1] | 1,607 | ||
NON CURRENT LIABILITIES | |||||
Notes payable | 975 | [1] | 646 | ||
Borrowings from banks and others | 243 | [1] | 1,550 | ||
Liability for employee rights upon retirement, net | 40 | [1] | 39 | ||
Dismantling and restoring sites obligation | 27 | [1] | 35 | ||
Deferred revenues from HOT mobile | 164 | [1] | 195 | ||
Other non-current liabilities | 24 | [1] | 14 | ||
NON CURRENT LIABILITIES, TOTAL | 1,473 | [1] | 2,479 | ||
TOTAL LIABILITIES | 3,284 | [1] | 4,086 | ||
EQUITY | |||||
Share capital - ordinary shares of NIS 0.01 par value: authorized - December 31, 2016 and 2017 - 235,000,000 shares; issued and outstanding - December 31, 2016 - *156,993,337 shares December 31, 2017 - *168,243,913 shares | 2 | [1] | 2 | ||
Capital surplus | 1,164 | [1] | 1,034 | ||
Accumulated retained earnings | 491 | [1] | 358 | ||
Treasury shares, at cost - December 31, 2016 - **3,603,578 shares December 31, 2017 - **2,850,472 shares | (223) | [1] | (283) | ||
TOTAL EQUITY | 1,434 | [1] | 1,111 | ||
TOTAL LIABILITIES AND EQUITY | ₪ 4,718 | [1] | ₪ 5,197 | ||
Convenience translation into U.S. dollars [Member] | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | $ | [1] | $ 250 | |||
Short-term deposits | $ | [1] | 43 | |||
Trade receivables | $ | [1] | 233 | |||
Other receivables and prepaid expenses | $ | [1] | 14 | |||
Deferred expenses - right of use | $ | [1] | 12 | |||
Inventories | $ | [1] | 27 | |||
CURRENT ASSETS, TOTAL | $ | [1] | 579 | |||
NON CURRENT ASSETS | |||||
Trade receivables | $ | [1] | 68 | |||
Prepaid expenses and other | $ | [1] | 1 | |||
Deferred expenses - right of use | $ | [1] | 38 | |||
Property and equipment | $ | [1] | 340 | |||
Intangible and other assets | $ | [1] | 201 | |||
Goodwill | $ | [1] | 117 | |||
Deferred income tax asset | $ | [1] | 17 | |||
NON CURRENT ASSETS, TOTAL | $ | [1] | 782 | |||
TOTAL ASSETS | $ | [1] | 1,361 | |||
CURRENT LIABILITIES | |||||
Current maturities of notes payable and borrowings | $ | [1] | 203 | |||
Trade payables | $ | [1] | 227 | |||
Payables in respect of employees | $ | [1] | 26 | |||
Other payables (mainly institutions) | $ | [1] | 9 | |||
Income tax payable | $ | [1] | 14 | |||
Deferred revenues from HOT mobile | $ | [1] | 9 | |||
Other deferred revenues | $ | [1] | 12 | |||
Provisions | $ | [1] | 22 | |||
CURRENT LIABILITIES, TOTAL | $ | [1] | 522 | |||
NON CURRENT LIABILITIES | |||||
Notes payable | $ | [1] | 281 | |||
Borrowings from banks and others | $ | [1] | 69 | |||
Liability for employee rights upon retirement, net | $ | [1] | 12 | |||
Dismantling and restoring sites obligation | $ | [1] | 9 | |||
Deferred revenues from HOT mobile | $ | [1] | 47 | |||
Other non-current liabilities | $ | [1] | 7 | |||
NON CURRENT LIABILITIES, TOTAL | $ | [1] | 425 | |||
TOTAL LIABILITIES | $ | [1] | 947 | |||
EQUITY | |||||
Share capital - ordinary shares of NIS 0.01 par value: authorized - December 31, 2016 and 2017 - 235,000,000 shares; issued and outstanding - December 31, 2016 - *156,993,337 shares December 31, 2017 - *168,243,913 shares | $ | [1] | 1 | |||
Capital surplus | $ | [1] | 336 | |||
Accumulated retained earnings | $ | [1] | 142 | |||
Treasury shares, at cost - December 31, 2016 - **3,603,578 shares December 31, 2017 - **2,850,472 shares | $ | [1] | (65) | |||
TOTAL EQUITY | $ | [1] | 414 | |||
TOTAL LIABILITIES AND EQUITY | $ | [1] | $ 1,361 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - ₪ / shares | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of financial position [abstract] | |||
Ordinary shares, par value | ₪ 0.01 | ₪ 0.01 | |
Ordinary shares, Authorized | 235,000,000 | 235,000,000 | |
Ordinary shares, Issued | [1] | 168,243,913 | 156,993,337 |
Ordinary shares, Outstanding | [1] | 168,243,913 | 156,993,337 |
Treasury shares | [2] | 2,850,472 | 3,603,578 |
[1] | Net of treasury shares. | ||
[2] | Including shares held by trustee under the Company's Equity Incentive Plan, see note 21(a), such shares will become outstanding upon completion of vesting conditions, see note 21(b) |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME ₪ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017ILS (₪)₪ / shares | [1] | Dec. 31, 2016ILS (₪)₪ / shares | Dec. 31, 2015ILS (₪)₪ / shares | ||
Statement Line Items [Line Items] | ||||||
Revenues, net | ₪ | ₪ 3,268 | ₪ 3,544 | ₪ 4,111 | |||
Cost of revenues | ₪ | 2,627 | 2,924 | 3,472 | |||
Gross profit | ₪ | 641 | 620 | 639 | |||
Selling and marketing expenses | ₪ | 269 | 426 | 417 | |||
General and administrative expenses | ₪ | 196 | 263 | 223 | |||
Income with respect to settlement agreement with Orange | ₪ | 108 | 217 | 61 | |||
Other income, net | ₪ | 31 | 45 | 47 | |||
Operating profit | ₪ | 315 | 193 | 107 | |||
Finance income | ₪ | 4 | 13 | 13 | |||
Finance expenses | ₪ | 184 | 118 | 156 | |||
Finance costs, net | ₪ | 180 | 105 | 143 | |||
Profit (loss) before income tax | ₪ | 135 | 88 | (36) | |||
Income tax expenses | ₪ | 21 | 36 | 4 | |||
Profit (loss) for the year | ₪ | ₪ 114 | ₪ 52 | ₪ (40) | |||
Earnings (loss) per share | ||||||
Basic | ₪ / shares | ₪ 0.7 | ₪ 0.33 | ₪ (0.26) | |||
Diluted | ₪ / shares | ₪ 0.69 | ₪ 0.33 | ₪ (0.26) | |||
Convenience translation into U.S. dollars [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Revenues, net | $ | [1] | $ 943 | ||||
Cost of revenues | $ | [1] | 758 | ||||
Gross profit | $ | [1] | 185 | ||||
Selling and marketing expenses | $ | [1] | 78 | ||||
General and administrative expenses | $ | [1] | 56 | ||||
Income with respect to settlement agreement with Orange | $ | [1] | 31 | ||||
Other income, net | $ | [1] | 9 | ||||
Operating profit | $ | [1] | 91 | ||||
Finance income | $ | [1] | 1 | ||||
Finance expenses | $ | [1] | 53 | ||||
Finance costs, net | $ | [1] | 52 | ||||
Profit (loss) before income tax | $ | [1] | 39 | ||||
Income tax expenses | $ | [1] | 6 | ||||
Profit (loss) for the year | $ | [1] | $ 33 | ||||
Earnings (loss) per share | ||||||
Basic | $ / shares | [1] | $ 0.2 | ||||
Diluted | $ / shares | [1] | $ 0.2 | ||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ₪ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | [1] | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | ||
Statement Line Items [Line Items] | ||||||
Profit (loss) for the year | ₪ | ₪ 114 | ₪ 52 | ₪ (40) | |||
Other comprehensive income (loss), items that will not be reclassified to profit or loss | ||||||
Remeasurements of post-employment benefit obligations | ₪ | (2) | (8) | 5 | |||
Income taxes relating to remeasurements of post-employment benefit obligations | ₪ | 1 | 2 | (1) | |||
Other comprehensive income (loss) for the year, net of income taxes | ₪ | (1) | (6) | 4 | |||
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR | ₪ | ₪ 113 | ₪ 46 | ₪ (36) | |||
Convenience translation into U.S. dollars [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Profit (loss) for the year | $ | [1] | $ 33 | ||||
Other comprehensive income (loss), items that will not be reclassified to profit or loss | ||||||
Remeasurements of post-employment benefit obligations | $ | [1],[2] | |||||
Income taxes relating to remeasurements of post-employment benefit obligations | $ | [1],[2] | |||||
Other comprehensive income (loss) for the year, net of income taxes | $ | [1],[2] | |||||
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR | $ | [1] | $ 33 | ||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | |||||
[2] | Representing an amount of less than 1 million |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ₪ in Millions, $ in Millions | Share Capital [Member]ILS (₪)shares | Share Capital [Member]Convenience translation into U.S. dollars [Member]USD ($)shares | Capital surplus [Member]ILS (₪) | Capital surplus [Member]Convenience translation into U.S. dollars [Member]USD ($) | Accumulated earnings [Member]ILS (₪) | Accumulated earnings [Member]Convenience translation into U.S. dollars [Member]USD ($) | Treasury shares [Member]ILS (₪) | Treasury shares [Member]Convenience translation into U.S. dollars [Member]USD ($) | ILS (₪)shares | Convenience translation into U.S. dollars [Member]USD ($) | |||||||
BALANCE at Dec. 31, 2014 | ₪ | ₪ 2 | ₪ 1,102 | ₪ 286 | ₪ (351) | ₪ 1,039 | ||||||||||||
BALANCE, Shares at Dec. 31, 2014 | shares | [1] | 156,072,945 | |||||||||||||||
CHANGES DURING THE YEAR ENDED | |||||||||||||||||
Total comprehensive income loss for the year | ₪ | (36) | (36) | |||||||||||||||
Exercise of options and vesting of restricted shares granted to employees | ₪ | [2] | ||||||||||||||||
Exercise of options and vesting of restricted shares granted to employees, Shares | shares | 14,511 | ||||||||||||||||
Employee share-based compensation expenses | ₪ | 17 | 17 | |||||||||||||||
BALANCE at Dec. 31, 2015 | ₪ | ₪ 2 | 1,102 | 267 | (351) | ₪ 1,020 | ||||||||||||
BALANCE, Shares at Dec. 31, 2015 | shares | [1] | 156,087,456 | 156,087,456 | ||||||||||||||
CHANGES DURING THE YEAR ENDED | |||||||||||||||||
Total comprehensive income loss for the year | ₪ | 46 | ₪ 46 | |||||||||||||||
Exercise of options and vesting of restricted shares granted to employees | ₪ | [2] | (68) | 68 | [2] | |||||||||||||
Exercise of options and vesting of restricted shares granted to employees, Shares | shares | 905,881 | ||||||||||||||||
Employee share-based compensation expenses | ₪ | 45 | 45 | |||||||||||||||
BALANCE at Dec. 31, 2016 | ₪ 2 | $ 1 | 1,034 | $ 298 | 358 | $ 103 | (283) | $ (82) | ₪ 1,111 | $ 320 | |||||||
BALANCE, Shares at Dec. 31, 2016 | shares | [1] | 156,993,337 | 156,993,337 | 156,993,337 | |||||||||||||
CHANGES DURING THE YEAR ENDED | |||||||||||||||||
Total comprehensive income loss for the year | 113 | 33 | ₪ 113 | [3] | 33 | [3] | |||||||||||
Issuance of shares to shareholders (see note 21) | [2] | [2] | 190 | [4] | 55 | [4] | 190 | 55 | |||||||||
Issuance of shares to shareholders (see note 21), Shares | shares | 10,178,211 | 10,178,211 | |||||||||||||||
Exercise of options and vesting of restricted shares granted to employees | [2] | (60) | (17) | 60 | 17 | ||||||||||||
Exercise of options and vesting of restricted shares granted to employees, Shares | shares | 1,072,365 | 1,072,365 | |||||||||||||||
Employee share-based compensation expenses | 20 | 6 | 20 | 6 | |||||||||||||
BALANCE at Dec. 31, 2017 | ₪ 2 | $ 1 | ₪ 1,164 | $ 336 | ₪ 491 | $ 142 | ₪ (223) | $ (65) | ₪ 1,434 | [3] | $ 414 | [3] | |||||
BALANCE, Shares at Dec. 31, 2017 | shares | 168,243,913 | [1] | 168,243,913 | 168,243,913 | [1] | ||||||||||||
[1] | Net of treasury shares. | ||||||||||||||||
[2] | Representing an amount of less than 1 million. | ||||||||||||||||
[3] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||||||||||||
[4] | Net of issuance costs. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ₪ in Millions, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Cash generated from operations (Appendix) | ₪ 1,002 | [1] | ₪ 975 | ₪ 955 | |||
Income tax paid | (29) | [1] | (30) | (33) | |||
Net cash provided by operating activities | 973 | [1] | 945 | 922 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Acquisition of property and equipment | (223) | [1] | (127) | (216) | |||
Acquisition of intangible and other assets | (153) | [1] | (69) | (143) | |||
Proceeds from (investment in) short-term deposits, net | 302 | [1] | (452) | ||||
Interest received | 2 | [1] | 2 | 3 | |||
Proceeds from sale of property and equipment | [1],[2] | 7 | 1 | ||||
Investment in PHI | [1] | (1) | |||||
Net cash used in investing activities | (72) | [1] | (639) | (356) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Share issuance | 190 | [1] | |||||
Proceeds from issuance of notes payable, net of issuance costs | 650 | [1] | |||||
Interest paid | (165) | [1] | (108) | (137) | |||
Non-current borrowings received | 350 | [1] | 250 | 675 | |||
Repayment of non-current borrowings | (1,332) | [1] | (15) | (533) | |||
Repayment of notes payable | (443) | [1] | (643) | (308) | |||
Net cash used in financing activities | (750) | [1] | (516) | (303) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 151 | [1] | (210) | 263 | |||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 716 | [1] | 926 | 663 | |||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 867 | [1] | 716 | [1] | 926 | ||
Cash generated from operations: | |||||||
Profit (loss) for the year | 114 | [1] | 52 | (40) | |||
Adjustments for: | |||||||
Depreciation and amortization (including impairment) | 540 | [1] | 565 | 641 | |||
Amortization (including impairment) of deferred expenses - Right of use | 40 | [1] | 30 | 112 | |||
Employee share based compensation expenses | 20 | [1] | 45 | 17 | |||
Liability for employee rights upon retirement, net | (1) | [1] | (3) | (12) | |||
Finance costs, net | (2) | [1] | 1 | (8) | |||
Change in fair value of derivative financial instruments | [1] | [2] | (2) | ||||
Interest paid | 165 | [1] | 108 | 137 | |||
Interest received | (2) | [1] | (2) | (3) | |||
Deferred income taxes | (13) | [1] | 10 | (40) | |||
Income tax paid | 29 | [1] | 30 | 33 | |||
Decrease (increase) in accounts receivable: | |||||||
Trade | 283 | [1] | 226 | (183) | |||
Other | 6 | [1] | (9) | (13) | |||
Increase (decrease) in accounts payable and accruals: | |||||||
Trade | 69 | [1] | (38) | (5) | |||
Other payables | (3) | [1] | [2] | (12) | |||
Provisions | (2) | [1] | [2] | 19 | |||
Deferred income with respect to settlement agreement with Orange | (108) | [1] | (217) | 325 | |||
Deferred revenues from HOT mobile | (31) | [1] | 227 | ||||
Other deferred revenues | 3 | [1] | 10 | (6) | |||
Increase in deferred expenses - Right of use | (113) | [1] | (80) | (34) | |||
Current income tax | 5 | [1] | (4) | 11 | |||
Decrease in inventories | 3 | [1] | 24 | 18 | |||
Cash generated from operations: | 1,002 | [1] | 975 | 955 | |||
Supplementary information | |||||||
Acquisition of intangible assets and property and equipment | 165 | [1] | 134 | 126 | |||
Cost obtaining contracts with customers | 8 | [1] | |||||
Convenience translation into U.S. dollars [Member] | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Cash generated from operations (Appendix) | $ | [1] | $ 288 | |||||
Income tax paid | $ | [1] | (8) | |||||
Net cash provided by operating activities | $ | [1] | 280 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Acquisition of property and equipment | $ | [1] | (64) | |||||
Acquisition of intangible and other assets | $ | [1] | (44) | |||||
Proceeds from (investment in) short-term deposits, net | $ | [1] | 87 | |||||
Interest received | $ | [1] | 1 | |||||
Proceeds from sale of property and equipment | $ | [1],[2] | ||||||
Investment in PHI | [1] | ||||||
Net cash used in investing activities | $ | [1] | (20) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Share issuance | $ | [1] | 55 | |||||
Proceeds from issuance of notes payable, net of issuance costs | $ | [1] | 187 | |||||
Interest paid | $ | [1] | (48) | |||||
Non-current borrowings received | $ | [1] | 101 | |||||
Repayment of non-current borrowings | $ | [1] | (384) | |||||
Repayment of notes payable | $ | [1] | (128) | |||||
Net cash used in financing activities | $ | [1] | (217) | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $ | [1] | 43 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | $ | [1] | 207 | |||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | [1] | 250 | |||||
Cash generated from operations: | |||||||
Profit (loss) for the year | $ | [1] | 33 | |||||
Adjustments for: | |||||||
Depreciation and amortization (including impairment) | $ | [1] | 156 | |||||
Amortization (including impairment) of deferred expenses - Right of use | $ | [1] | 12 | |||||
Employee share based compensation expenses | $ | [1] | 6 | |||||
Liability for employee rights upon retirement, net | $ | [1] | ||||||
Finance costs, net | $ | [1] | (1) | |||||
Change in fair value of derivative financial instruments | $ | [1],[2] | ||||||
Interest paid | $ | [1] | 47 | |||||
Interest received | $ | [1] | (1) | |||||
Deferred income taxes | $ | [1] | (4) | |||||
Income tax paid | $ | [1] | 8 | |||||
Decrease (increase) in accounts receivable: | |||||||
Trade | $ | [1] | 82 | |||||
Other | $ | [1] | 2 | |||||
Increase (decrease) in accounts payable and accruals: | |||||||
Trade | $ | [1] | 20 | |||||
Other payables | $ | [1] | (1) | |||||
Provisions | $ | [1] | (1) | |||||
Deferred income with respect to settlement agreement with Orange | $ | [1] | (31) | |||||
Deferred revenues from HOT mobile | $ | [1] | (9) | |||||
Other deferred revenues | $ | [1] | 1 | |||||
Increase in deferred expenses - Right of use | $ | [1] | (33) | |||||
Current income tax | $ | [1] | 1 | |||||
Decrease in inventories | $ | [1] | 1 | |||||
Cash generated from operations: | $ | [1] | 288 | |||||
Supplementary information | |||||||
Acquisition of intangible assets and property and equipment | $ | [1] | $ 48 | |||||
Cost obtaining contracts with customers | |||||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||
[2] | Representing an amount of less than 1 million |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of general [Abstract] | |
GENERAL | NOTE 1 - GENERAL a. Reporting entity Partner Communications Company Ltd. ("the Company", "Partner") is a leading Israeli provider of telecommunications services (cellular, fixed-line telephony, internet and television services) under the orange™ brand until February 15, 2016, and under the Partner brand thereafter, and cellular services also under the 012 Mobile brand. The Company is incorporated and domiciled in Israel and its principal executive office’s address is 8 Amal Street, Afeq Industrial Park, Rosh-Ha'ayin 48103, Israel. The Company's share capital consists of ordinary shares, which are traded on the Tel Aviv Stock Exchange Ltd. ("TASE") under the symbol "PTNR". American Depositary Shares ("ADSs"), each representing one of the Company’s ordinary shares, are quoted on the NASDAQ Global Select Market™, under the symbol "PTNR". See also note 21(a). On January 29, 2013, S.B. Israel Telecom Ltd., an affiliate of Saban Capital Group Inc., became the Company's principal shareholder. These consolidated financial statements of the Company as of December 31, 2017, are comprised of the Company and its subsidiaries and consolidated partnerships (the "Group"). See the list of subsidiaries and consolidated partnerships and principles of consolidation in note 2(c)(1), see also 2(c)(2) with respect to investment in PHI. The Group has early adopted IFRS 15, Revenues from contracts with customers, b. Operating segments The operating segments were determined based on the reports reviewed by the Chief Executive Officer (CEO) who is responsible for allocating resources and assessing performance of the operating segments, and therefore is the Chief Operating Decision Maker ("CODM"), and supported by budget and business plans structure, different regulations and licenses (see (d) below). The CEO considers the business from two operating segments, as follows (see also note 5): (1) Cellular segment: The cellular segment includes basic cellular telephony services, text messaging, internet browsing and data transfer, content services, roaming services, and services provided to other operators that use the Company's cellular network. The two payment methods offered to our customers are pre-paid and post-paid. Pre-paid services are offered to customers that purchase credit in advance of service use. Post-paid services are offered to customers with bank and credit arrangements. Most of the post-paid cellular tariff plans are bundles which include unlimited volumes of calls time and text messaging (with fair use limits), as well as limited data packages. Cellular content and value-added services offered include multimedia messaging, cyber protection, cloud backup, ringtones, the Apple Music streaming service, and a range of advanced business services. International roaming services abroad for the Company’s customers include airtime calls, text messaging and data services on networks with which the Company has a commercial roaming relationship. Partner also provides inbound roaming services to the customers of foreign operators with which the Company has a commercial roaming relationship. Optional services such as equipment extended warranty plans and international calling plans are also provided for an additional monthly charge or included in specific tariff plans. We also provide cellular phone repair services for independent merchants. In addition, the cellular segment includes wholesale cellular services provided to virtual operators who use the Partner cellular network to provide services to their customers. (2) Fixed-line segment The fixed-line segment includes: (a) Internet services that provide access to the internet through both fiber optics and wholesale broadband access, ISP services and internet Value Added Services (“VAS”) such as cyber protection, anti-virus and anti-spam filtering; and fixed-line voice communication services provided through Voice Over Broadband (“VOB”); (b) For business customers, SIP voice trunks, Network Termination The cellular segment and the fixed-line segment also include sales and leasing of telecommunications, audio visual and related devices: mainly cellular handsets, tablets (handheld computers), laptops, landline phones, modems, datacards, domestic routers, servers, smartboxes and related equipment, and a variety of digital audio visual equipment including televisions, digital cameras, games consoles, audio accessories and related equipment, and integration projects. Each segment is divided into services and equipment revenues, and the related cost of revenues. The operating segments c. Main recent regulatory developments (1) As part of the Economic Program Law for the years 2017-2018, that was published at the end of December 2016 it was determined, among others, that Bezeq and HOT Telecom will be required to allow other domestic operators including Partner, access to passive infrastructures. Following the enactment of this legislation, Bezeq has begun to partially observe its duty to provide access to its passive infrastructures and deployed several fiber optic cables for licensees using its own personnel. In October 2017, the Ministry of Communications instructed Bezeq to comply with its existing policy and clarified that it must allow other domestic operators (including Partner) to deploy fiber optic cables with their own contractors (without the need for the use of Bezeq personnel). (2) See information in respect of frequency fees in note 17(1). (3) See information in respect of corporate tax rates in note 25. d. Group licenses The Group operates under the following licenses that were received from the Israeli Ministry of Communications ("MOC") and from the Israeli Civil Administration ("CA"): Type of services Area of service License owner Granted by Valid through Guarantees made (1) Cellular Israel Partner Communications Company Ltd. MOC Feb, 2022 80 (2) Cellular West Bank Partner Communications Company Ltd. CA Feb, 2022 4 (3) ISP Israel Partner Communications Company Ltd. MOC Mar, 2023 (4) ISP West Bank Partner Communications Company Ltd. CA Mar, 2023 (5) ISP Israel 012 Smile Telecom Ltd. MOC Jun, 2020 (6) ISP West Bank 012 Smile Telecom Ltd. CA Jun, 2020 (7) ILD (*) Israel 012 Smile Telecom Ltd. MOC Dec, 2029 5 (8) ILD (**) West Bank 012 Smile Telecom Ltd. CA Dec, 2029 0.25 (9) Fixed (*) Israel 012 Telecom Ltd. MOC Dec, 2025 5 (10) Fixed (**) West Bank 012 Telecom Ltd. CA Dec, 2025 0.25 (11) Fixed (*) (incl. ISP, ILD, NTP) Israel Partner Land-line Communication Solutions - Limited Partnership MOC Jan, 2027 5 (12) Fixed (**) (incl. ISP, ILD, NTP) West Bank Partner Land-line Communication Solutions - Limited Partnership CA Jan, 2027 0.25 (13) NTP Israel 012 Smile Telecom Ltd. MOC Dec, 2020 The Group also has a trade license that regulates issues of servicing and trading of equipment, and a number of encryption licenses that permits dealing with means of encryption within the framework of providing radio telephone services to the public. With respect to license (1), the Company is entitled to request an extension of the license for additional periods of six years, at the discretion of the MOC. Should the license not be renewed, the new license-holder is obliged to purchase the communications network and all the rights and obligations of the subscribers for a fair price, as agreed between the parties or as determined by an arbitrator. (*) In February 2016, these licenses were replaced by the MoC with a general-unified license. The term of the new license is similar to the term of the previous license. (**) In July 2016, these licenses were replaced with a general-unified license. The general conditions of the general-unified license granted by the MoC, generally apply to these licenses, subject to certain modifications. As part of the unification of the Group’s licenses, in January 2018, the Group filed requests to terminate licenses (5),(6),(7),(8),(9),(10),(13). Other licenses may be extended for various periods, at the discretion of the MOC or CA, respectively. See also note 17(5) as to additional guarantees made to third parties. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES a. Basis of preparation of the financial statements (1) Basis of preparation The consolidated The principal (2) Use of estimates and judgments The preparation of financial statements in conformity with IFRS requires the use of certain critical b. Foreign currency translations (1) Functional and presentation currency The consolidated financial statements are measured and presented in New Israeli Shekels ("NIS"), which is the Group's functional and presentation currency as it is the currency of the primary (2) Transactions and balances Foreign currency transactions are translated into NIS using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement in finance costs, net. (3) Convenience translation into U.S. Dollars (USD or $ or dollar) The NIS figures at December 31, 2017 and for the period then ended have been translated into dollars using the representative exchange rate of the dollar at December 31, 2017 (USD 1 = NIS c. Interests in other entities (1) Subsidiaries The consolidated financial statements include the accounts of the Company and entities controlled by the Company. Control exists when the Company has the power over the investee; has exposure, or rights, to variable returns from involvement in the investee; and has the ability to use its power over the investee to affect its returns. Subsidiaries and partnerships are fully consolidated from the date on which control is transferred to the Company. Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated in preparing the consolidated financial statements. List of wholly owned Subsidiaries and partnerships: 012 Smile Telecom Ltd. 012 Telecom Ltd. Partner Land-Line Communication Solutions - Limited Partnership Partner Future Communications 2000 Ltd. ("PFC") Partner Communication Products 2016 - Limited Partnership Partner Business Communications Solution - Limited Partnership – not active (2) Investment in PHI In November 2013, the Company and Hot Mobile Ltd entered into a network sharing agreement ("NSA") and a right of use agreement. Pursuant to the NSA, the parties created a 50-50 limited partnership - P.H.I. Networks (2015) Limited Partnership ("PHI"), which operates and develops a radio access network shared by both parties, starting with a pooling of both parties' radio access network infrastructures creating a single shared pooled radio access network. PHI began its operations in July 2015, managing the networks. See also note 9. As described in note 4(b)(3) the Company does not control PHI nor does it have joint control over it, and the Company accounts for its investment in PHI according to the equity method as PHI is considered an associate. An associate is an entity over which the group has significant influence but not control. Investment in associate is accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and adjusted thereafter to recognize the investor’s share of the post-establishment profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee in other comprehensive income. Unrealized gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. See also note 26(d) for information about transactions and balances with respect to the investment in PHI – as a related party. d. Inventories Inventories of equipment: cellular handsets and fixed telephones, tablets, laptops, datacards, servers, spare parts, ISP modems, related equipment, accessories and other inventories are stated at the lower of cost or net realizable value. Cost is determined on the "first-in, first-out" basis. The Group determines its allowance for inventory obsolescence and slow moving inventory based upon past experience, expected inventory turnover, inventory ageing and current and future expectations with respect to product offerings. e. Property and equipment Property and equipment are initially stated at cost. Costs are included in the assets' carrying amounts or recognized as separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance that do not meet the above criteria are charged to the statement of income during the financial period in which they are incurred. Costs include expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Changes in the obligation to dismantle and remove assets on sites and to restore the sites, on which they are located, other than changes deriving from the passing of time, are added or deducted from the cost of the assets in the period in which they occur. The amount deducted from the cost of the asset shall not exceed the balance of the carrying amount on the date of change, and any balance is recognized immediately in profit or loss, See (m)(2). Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. Property and equipment is presented less accumulated depreciation, and accumulated impairment losses. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (see (i)). Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows: years Communications network: Physical layer and infrastructure 10 - 25 (mainly 15, 10) Other Communication network 3 - 15 (mainly 5, 10, 15) Computers, software and hardware for information systems 3-10 (mainly 3-5) Office furniture and equipment 7-15 Optic fibers and related assets 7-25 (mainly 20) Subscribers equipment and installations 2 - 4 Property 25 Leasehold improvements are depreciated by the straight-line method over the term of the lease (including reasonably assured option periods), or the estimated useful life (5‑10 years) of the improvements, whichever is shorter. See note 13(2) with respect of impairment charges in 2015. f. Licenses and other intangible assets (1) Licenses costs and amortization (see also note 1 (d)): (a) The licenses to operate cellular communication services were recognized at cost. Borrowing costs which served to finance the license fee - incurred until the commencement of utilization of the license - were capitalized to cost of the license. (b) Partner Land-line Communication solutions – limited partnership's license for providing fixed-line communication services is stated at cost. (c) 012 Smile and its subsidiaries' licenses were recognized at fair value in a business combination as of the acquisition date of 012 Smile March 3, 2011. The other licenses of the Group were received with no significant costs. The licenses (2) Computer software: Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and to bring to use the specified software. Development costs, including employee costs, that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the capitalization criteria under IAS 38 are met. Other development expenditures that do not meet the capitalization criteria, such as software maintenance, are recognized as an expenses as incurred. Computer software costs are amortized over their estimated useful lives (3 to 10 years) using the straight-line method, see also note 11. (3) Customer relationships: The Company has recognized as intangible assets customer relationships that were acquired in a business combination and recognized at fair value as of the acquisition date. Customer relationships are amortized to selling and marketing expenses over their estimated useful economic lives (5 to 10 years) based on the straight line method. See note 13(2) with respect of impairment charges in 2015. (4) 012 Smile trade name: Trade name was acquired in a business combination. In 2015, the Group decided to cease the usage of the "012 Smile" trade name in 2017.As a result the Group revised its expected useful life to end in 2017 as a change in accounting estimate. As a result the amortization expenses of the 012 Smile trade name increased by NIS 1 million, NIS 16 million, and NIS 6 million in 2015, 2016, 2017 respectively, see also notes 4(a)(2), and 13(2). As of December 31, 2017 the trade name was fully amortized. (5) Capitalization of contract costs according to IFRS15 (see note 2(n)): According to IFRS 15 (see note 2(n)) incremental costs of obtaining contracts with customers are recognized as assets when the costs are incremental to obtaining the contracts, and it is probable that the Group will recover these costs, instead of recognizing these costs in the statement of income as incurred (mainly direct commissions paid to resellers and sales employees for sales and upgrades). The assets are amortized in accordance with the expected service period (mainly over 2-3 years), using the portfolio approach, see also note 4(a)(1). IFRS 15 also determines that direct costs of fulfilling a contract which the Group can specifically identify and which produce or improve the Group’s resources that are used for its future performance obligation (and it is probable that the Group will recover these costs) are recognized as assets (together: "contract costs"), see note 11. Contract costs that were recognized as assets are presented in the statements of cash flows as part of cash flows used in investing activities. Other costs incurred that would arise regardless of whether a contract with a customer was obtained are recognized as an expense when incurred. g. Right Of Use (ROU) Right of use (ROU) of international fiber optic cables was acquired in a business combination, subsequent additions and right of use in PHI's assets are recognized at cost. The ROU with respect of fiber optic cables is presented as deferred expenses (current and non-current) and is amortized on a straight line basis over a period beginning each acquisition of additional ROU in this framework and until 2030 (including expected contractual extension periods). See also notes 12 and 17(4). See note 13(2) with respect to impairment charges to ROU in 2015 in an amount of NIS 76 million. Other costs of right to use PHI's assets are presented as deferred expenses and amortized on a straight line basis over the assets useful lives. h. Goodwill Goodwill acquired in a business combination represents the excess of the consideration transferred over the net fair value of the identifiable assets acquired, and identifiable liabilities and contingent liabilities assumed. The goodwill has an indefinite useful economic life and is not subject to amortization; rather is measured at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to a group of CGUs under the fixed line segment that is expected to benefit from the synergies of the combination. The group of CGUs represents the lowest level within the entity which the goodwill is monitored for internal management purposes. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment loss would be recognized for the amount by which the carrying amount of goodwill exceeded its recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs to sell. Value-in-use is determined by discounting expected future cash flows using a pre-tax discount rate. Any impairment is recognized immediately as an expense and is not subsequently reversed. See also note 13(1) with respect to impairment tests. i. Impairment of non-financial assets with finite useful economic lives Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indications exist an impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs. The recoverable amount is the higher of an asset's fair value less costs to sell and value-in-use. Value-in-use is determined by discounting expected future cash flows using a pre-tax discount rate. An impairment loss recognized in prior periods for an asset (or CGU) other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset's (or CGU's) recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset (or CGU) shall be increased to its recoverable amount. The increased carrying amount of an asset (or CGU) other than goodwill attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in the statement of income. The Group recorded in 2015 impairment charges of intangible assets, deferred expenses – right of use, and fixed assets, see note 13(2) and note 4(a)(2). j. Financial instruments The Group classifies its financial instruments in the following categories: (1) at fair value through profit or loss, (2) loans and receivables, and (3) liabilities at amortized cost. See note 6(c) as to classification of financial instruments to the categories. Financial assets are classified as current if they are expected to mature within 12 months after the end of the reporting period; otherwise they are classified as non-current. Financial liabilities are included in current liabilities, except for maturities greater than 12 months after the end of the reporting period, which are classified as non-current liabilities. Financial assets and liabilities are offset and the net amount reported in the statement of financial position when the Group has currently a legal enforceable right to offset the recognized amounts and has an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legal enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty. (1) Financial instruments at fair value through profit or loss category Gains or losses arising from changes in the fair value of derivative financial instruments are presented in the income statement within "finance costs, net" in the period in which they arise. These financial instruments are classified into 2 levels based on their valuation method (see also note 6(c)): Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within level 1 that are observable for the assets or liabilities, either directly (as prices) or indirectly (derived from prices). (2) Loans and receivables category Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are recognized initially at fair value and subsequently measured at amortized costs The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated income statement. Trade receivables are presented net of allowance for doubtful accounts. Individual receivables which are known to be uncollectable are written off by reducing the carrying amount directly. The other receivables are assessed collectively. For these receivables the allowance is determined based on percentage of doubtful debts in collection, considering the likelihood of recoverability based on the age of the balances, the historical write-off experience net of recoveries, changes in the credit worthiness, and collection trends. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership of the assets. The Group factored trade receivables resulting from sales of equipment by credit cards. The factoring was on a non-recourse basis. The factoring of accounts receivable was recorded by the Company as a sales transaction . (3) Financial liabilities and borrowings at amortized cost category: Financial liabilities at amortized cost are non-derivative financial instruments with fixed or determinable payment, including trade payables. Financial liabilities at amortized cost are recognized initially at fair value, net of transaction costs, and subsequently measured at amortized costs The Group revised its estimates of payments with respect to long term borrowings L and K due to early repayments (see note 15 (5)), therefore the Group adjusted the carrying amount of the financial liabilities to reflect the actual and revised estimated cash flows. The Group recalculated the carrying amount by computing the present value of estimated future cash flows at the financial instrument's original effective interest rate. The adjustment was recognized in profit or loss as interest expense of NIS 18 million for 2017. k. Employee benefits (i) Post-employment benefits 1. Defined contribution plan According to Section 14 of the Israeli Severance Pay Law the Group's liability for some of the employee rights upon retirement is covered by regular contributions to various pension schemes. The schemes are generally funded through payments to insurance companies or trustee-administered funds. These plans are defined contribution plans, since the Group pays fixed contributions into a separate and independent entity. The Group has no legal or constructive obligations to pay further contribution if the fund does not hold sufficient assets to pay all employees the benefit relating to employee service in the current or prior periods. The amounts funded as above are not reflected in the statement of financial position. Obligations for contributions to defined contribution pension plans are recognized as an expense in the statement of income when they are due. 2. Defined benefit plan Labor laws, agreements and the practice of the Group, require paying retirement benefits to employees dismissed or retiring in certain other circumstances (except for those described in 1 above), measured by multiplying the years of employment by the last monthly salary of the employee (i.e. one monthly salary for each year of tenure), the obligation of the Group to pay retirement benefits is treated as a defined benefit plan. The liability recognized in the statement of financial position in respect of the defined benefit plan is the present value of the defined benefit obligation at end of the reporting period less the fair values of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. According to IAS 19 employee benefits Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity (ii) Termination benefits Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably legally or constructively committed either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. (iii) Short term employee benefits 1. Vacation and recreation benefits The employees are legally entitled to vacation and recreation benefits, both computed on an annual basis. This entitlement is based on the term of employment. This obligation is treated as a short term benefit under IAS 19. The Group charges a liability and expense due to vacation and recreation pay, based on the benefits that have been accumulated for each employee, on an undiscounted basis. 2. Profit-sharing and bonus plans The Group recognizes a liability and an expense for bonuses based on consideration of individual performance and the Group's overall performance. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. 3. Other short term benefits The Group recognized expenses for other short term benefits provided by the collective employment agreement (see note 28). l. Share based payments The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Group. The fair value of the employee services received in exchange for the grant of the equity instruments is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted, at the grant date. Non-market vesting conditions are included The proceeds received net of any directly attributable transactions costs are credited to share capital and capital surplus when the equity instruments are exercised. m. Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will require settling the obligation, and the amount has been reliably estimated, See note 14. (1) In the ordinary course of business, the Group is involved in a number of lawsuits and litigations. The costs that may result from these lawsuits are only accrued for when it is probable 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, and events arising during the course of legal proceedings that may require a reassessment of this risk, and where applicable discounted at a pre-tax discount rate that (2) The Company is required to incur certain costs in respect of a liability to dismantle and remove assets and to restore sites on which the assets were located. The dismantling costs are calculated according to best estimate of future expected payments discounted at a pre-tax discount rate that (3) Provisions for equipment warranties include obligations to customers in respect of equipment sold. Where there are a number of similar obligations, the likelihood that an outflow will be required in a settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any item included in the same class of obligations may be small. (4) Group's share in provisions recognized by PHI is recognized to the extent probable that the Group will be required to cover, see also note 9. n. Revenues Early adoption of IFRS 15 Revenue from Contracts with Customers – change in accounting policy: In the third quarter of 2017 the Group has early adopted (the standard is effective from January 1, 2018, earlier application is permitted) with a date of initial application of January 1, 2017 (the transition date) IFRS 15, Revenue from Contracts with Customers Revenue Construction contracts 1) Identifying the contract with the customer. 2) Identifying separate performance obligations in the contract. 3) Determining the transaction price. 4) Allocating the transaction price to separate performance obligations. 5) Recognizing revenue when the performance obligations are satisfied. In accordance with the model, the Group recognizes revenue when it satisfies performance obligations by transferring control over the goods or services to the customers. Revenue is measured based on the consideration that the Group expects to receive for the transfer of the goods or services specified in a contract with the customer, taking into account rebates and discounts, excluding amounts collected on behalf of third parties, such as value added taxes. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component (such as sales of equipment with non-current credit arrangements, mainly in 36 monthly installments) and for any consideration payable to the customer. With respect to sales that constitute a revenue arrangement with multiple performance obligations, the transaction price is allocated to separate performance obligations based of their relative stand-alone selling prices, see also note 4(b)(2). The performance obligations are separately identifiable where the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and the Group’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The performance obligations are mainly services, equipment and options to purchase additional goods or services that provide a material right to the customer. Revenues from services and from providing rights to use the Group's assets, (see note 1(b)) (either month-by-month or long term arrangements) are recognized over time, as the services are rendered to the customers, and all other revenue recognition criteria are met. Revenue from sale of equipment (see note 1(b)) is recognized at a point of time when the control over the equipment is transferred to the customer (mainly upon delivery) and all other revenue recognition criteria are met. The Group determines whether it is acting as a principal or as an agent. The Group is acting as a principal if it controls a promised good or service before they are transferred to a customer. Indicators for acting as a principal include: (1) the Group is primarily responsible for fulfilling the promise to provide the specified good or service, (2) the Group has inventory risk in the specified good or service and (3) the Group has discretion in establishing the price for the specified good or service. On the other hand, the Group is acting as an agent or an intermediary, if these criteria are not met. When the Group is acting as an agent, revenue is recognized in the amount of any fee or commission to which the Group expects to be entitled in exchange for arranging for the other party to provide its goods or services. A Group’s fee or commission might be the net amount of consideration that the Group retains after paying the other party the consideration received in exchange for the goods or services to be provided by that party. The Group determined that it is acting as an agent in respect of certain content services provided by third parties to customers; therefore the revenues recognized from these services are presented on a net basis in the statement of income. The application of IFRS 15 did not have a material effect on the measurement and timing of the Group’s revenue in the reporting period, compared to the provisions of the previous standards. Capitalization of contract costs resulted in a significant impact from the adoption, see below. Transition to the new revenue recognition model: The Group applied IFRS 15 using the cumulative effect approach as from the transition date, without a restatement of comparative figures. As part of the initial implementation of IFRS 15, the Group has chosen to apply the expedients in the transitional provisions, according to which the cumulative effect approach is applied only for contracts not yet complete at the transition date, and therefore there is no change in the accounting treatment for contracts completed at the transition date. The Group also applied the practical expedient of examining the aggregate effect of contracts changes that occurred before the transition date, instead of examining each change separately. Contracts that are renewed on a monthly basis and may be cancelled by the customer at any time, without penalty, were considered completed contracts at the transition date. The transition resulted in an immaterial amount on the statement of financial position as of the transition date, as the cumulative effect as of the transition date was immaterial. Other practical expedients implemented: The Group applies IFRS 15 practical expedient to the revenue model to a portfolio of contracts with similar characteristics if the Group reasonably expects that the financial statement effects of applying the model to the individual contracts within the portfolio would not differ materially. The Group applies a practical expedient in the standard and measures progress toward completing satisfaction of a performance obligation and recognizes revenue based on billed amounts if the Group has a right to invoice a customer at an amount that corresponds directly with its performance to date; for which, or where the original expected duration of the contract is one year or less, the group also applies the practical expedient in the standard and does not disclose the transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations, such as constrained variable consideration. The Group applies a practical expedient in the standard and does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the Group expects the period between customer payment and the transfer of goods or services to be one year or less (see note 23 – unwinding of trade receivables and note 7(a)). The Group applies in certain circumstances where the customer has a material right to acquire future goods or services and those goods or services are similar to the original goods or services in the contract and are provided in accordance with the same terms of the original contract, a practical alternative to estimating the stand-alone selling price of the customer option, and instead allocates the transaction price to the optional goods or services by reference to the goods or services expected to be provided and the corresponding expected consideration. Recognition of receivables: A receivable is recognized when the control over the goods or services is transferred to the customer, and the consideration is unconditional because only the passage of time is required before the payment is due. See note 7 and also note 6(a)(3) regarding trade receivables credit risk. Recognition of contract assets and contract liabilities: A contract asset is a Group’s right to consideration in exchange for goods or services that the entity has transferred to a customer A contract liability is a Group’s obligation to transfer goods or services to a customer Capitalization of contract costs: The main effect of the Group’s application of IFRS 15 is the accounting treatment for the incremental costs of obtaining |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of recently issued accounting pronouncements [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 3 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The following relevant new standards, amendments to standards or interpretations have been issued, but are not effective for the financial periods beginning January 1, 2017, and have not been early adopted: (1) IFRS 9, Financial Instruments (2) IFRS 16, Leases |
CRITICAL ACCOUNTING ESTIMATES A
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of critical accounting estimates and judgements [Abstract] | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS | NOTE 4 –CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. a. Critical accounting estimates and assumptions (1) Assessing the useful lives of assets: The useful economic lives of the Group's assets are an estimate determined by management. The Group defines useful economic life of its assets in terms of the assets' expected utility to the Group. This estimation is based on assumptions of future changes in technology or changes in the Group's intended use of these assets, and experience of the Group with similar assets, and legal or contract periods where relevant. The assets estimated economic useful lives are reviewed, and adjusted if appropriate, at least annually. See also note 2(e) and note 2(f). See also information with respect to the change in estimate of the useful life of the "012 Smile" trade name in note 4(2) below. The useful economic lives of contract costs (see notes 2(n), 2(f)(5)) are an estimate determined by management. Contract costs are amortized in accordance with the expected service period (mainly over 2-3 years), using the portfolio approach. The assets estimated economic useful lives are reviewed, and adjusted if appropriate, at least annually. See also note 11. (2) Assessing the recoverable amount for impairment tests of assets with finite useful lives: The Group is required to determine at the end of each reporting period whether there is any indication that an asset may be impaired. If indicators for impairment are identified the Group estimates the assets' recoverable amount, which is the higher of an asset's fair value less costs to sell and value in use. The value-in-use calculations require management to make estimates of the projected future cash flows. Determining the estimates of the future cash flows is based on management past experience and best estimate for the economic conditions that will exist over the remaining useful economic life of the Cash Generating Unit (CGU). See also note 2(i). No indicators for an impairment or reversal of impairment of assets with finite useful lives were identified in 2017. In the fourth quarter of 2015, the Group decided to cease the usage of the "012 Smile" trade name in 2017, this change in business induced the Group to determine that an indicator of impairment existed in 2015 for the fixed-line segment. See note 13(2). An Impairment test in the fourth quarter of 2015 for the VOB/ISP CGU of the fixed line segment resulted in an impairment charge to certain assets in a total amount of NIS 98 million, based on the key assumptions described in note 13(2). The recoverable amount of the VOB/ISP CGU assets as of December 31, 2015 was assessed by management with the assistance of an external independent expert ("Giza Singer Even. Ltd") based on value-in-use calculations, which was NIS 250 million. The value in use calculations use pre-tax cash flow projections covering a five-year period and using extrapolation with specific adjustments expected until 2027, which was the economic life of the main asset of the CGU: the deferred expenses – Right of Use, and a pre-tax discount rate of 12.9%. The value-in-use calculations included all factors in real terms. The value-in-use of the assets of the CGU was estimated to exceed the fair value less costs to sale. The impairment test in the fourth quarter of 2015 was based on assessments of financial performance and future strategies in light of current and expected market and economic conditions. Trends in the economic and financial environment, competition and regulatory authorities' decisions, or changes in competitors’ behavior in response to the economic environment may affect the estimate of recoverable amounts in future periods. See also note 2(i). As a result of the decision to cease the usage of the "012 Smile" trade name the Group revised in 2015 its expected useful life to end in 2017 as a change in accounting estimate. As a result the amortization expenses of the trade name increased in 2015, 2016 and 2017 by NIS 1 million, NIS 16 million and NIS 6 million, respectively (compared with the amortization rate in 2014). See also note 11. Further increase in the level of competition that might continue to push downward prices may require the Group to perform further impairment tests of assets. Such impairment tests may lead to recording significant impairment charges, which could have a material negative impact on the Group's operating profit and profit. (3) Assessing the recoverable amount of goodwill for impairment tests: Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. The recoverable amount of the fixed line segment to which goodwill has been allocated to have been determined based on value-in-use calculations. For the purpose of the goodwill impairment tests as of December 31, 2015, 2016 and 2017 the recoverable amount was assessed by management with the assistance of an external independent experts (2015: "Giza Singer Even. Ltd", 2016 and 2017: BDO Ziv Haft Consulting & Management Ltd.) based on value-in-use calculations. The value-in-use calculations use pre-tax cash flow projections covering a five-year period. Cash flows beyond the five-year period to be generated from continuing use are extrapolated using estimated growth rates. The growth rate represents the long-term average growth rate of the fixed-line communications services business. The key assumptions used in the December 31, 2017 test were as follows: Terminal growth rate 0.9 % After-tax discount rate 9.3 % Pre-tax discount rate 11.2 % The impairment test as of December 31, 2017 was based on assessments of financial performance Sensitivity The headroom of the fixed line segment recoverable amount over the carrying amount as of December 31, 2015, 2016 and 2017 was approximately 9%, 23% and 23% respectively. Sensitivity (4) Assessing allowance for doubtful accounts: The allowance is established when there is objective evidence that the Group will not be able to collect amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, or delinquency or default in debtor payments are considered indicators that a trade receivable is impaired. Individual receivables which are known to be uncollectable are written off by reducing the carrying amount directly. The other receivables are assessed collectively. For these receivables the allowance is determined based on percentage of doubtful debts in collection, considering the likelihood of recoverability based on the age of the balances, the historical write-off experience net of recoveries, changes in the credit worthiness, and collection trends. The trade receivables are periodically reviewed for impairment. See note 7. (5) Considering uncertain tax positions: The assessment of amounts of current and deferred taxes requires the Group's management to take into consideration uncertainties that its tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on interpretation of tax laws and regulations, and the Group's past experience. It is possible that new information will become known in future periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. See also notes 2(p) and note 25. b. Critical judgments in applying the Group's accounting policies (1) Considering the likelihood of contingent losses and quantifying possible settlements: Provisions are recorded when a loss is considered probable and can be reasonably estimated. Judgment is necessary in assessing the likelihood that a pending claim or litigation against the Group will succeed, or a liability will arise, quantifying the possible range of final settlement. These judgments are made by management with the support of internal specialists, or with the support of outside consultants such as legal counsel. Because of the inherent uncertainties in this evaluation process, actual results may be different from these estimates. See notes 2(m), 14 and 20. (2) Considering contracts with customers with multiple performance obligations: Some contracts with customers include several performance obligations, and consideration (including any discounts) is allocated to them based their relative stand-alone selling prices. Management estimates the stand-alone selling price at contract inception based on observable prices of the type of goods and services in similar circumstances to similar customers. Where these are not directly observable, they are estimated based on cost-plus expected margin or adjusted market approach. See also note 2(n). (3) Accounting treatment for the investment in PHI: The board of directors of Net 4 P.H.I Ltd. consists of 3 directors nominated by the Company, 3 directors nominated by Hot Mobile and one independent director who acts as a chairman. Net 4 P.H.I Ltd controls PHI. This governance provides that the Company does not control PHI nor does it have joint control over it, and the Company accounts for its investment in PHI according to the equity method, see also note 2(c)(2) and note 9. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of operating segments [abstract] | |
SEGMENT INFORMATION | NOTE 5 – SEGMENT INFORMATION New Israeli Shekels Year ended December 31, 2017* In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 1,960 622 2,582 Inter-segment revenue - Services 18 155 (173 ) Segment revenue - Equipment 610 76 686 Total revenues 2,588 853 (173 ) 3,268 Segment cost of revenues - Services 1,470 613 2,083 Inter-segment cost of revenues- Services 154 19 (173 ) Segment cost of revenues - Equipment 490 54 544 Cost of revenues 2,114 686 (173 ) 2,627 Gross profit 474 167 641 Operating expenses (3) 367 98 465 Income with respect to settlement agreement with Orange 108 108 Other income, net 29 2 31 Operating profit 244 71 315 Adjustments to presentation of segment Adjusted EBITDA 445 135 –Other (1) 21 1 Segment Adjusted EBITDA (2) 710 207 New Israeli Shekels Year ended December 31, 2017* In millions Reconciliation of segments subtotal Adjusted EBITDA to profit for the year Segments subtotal Adjusted EBITDA (2) 917 Depreciation and amortization (580 ) Finance costs, net (180 ) Income tax expenses (21 ) Other (1) (22 ) Profit for the year 114 * See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts New Israeli Shekels Year ended December 31, 2016 In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 2,080 672 2,752 Inter-segment revenue - Services 19 194 (213 ) Segment revenue - Equipment 729 63 792 Total revenues 2,828 929 (213 ) 3,544 Segment cost of revenues - Services 1,659 617 2,276 Inter-segment cost of revenues- Services 192 21 (213 ) Segment cost of revenues - Equipment 596 52 648 Cost of revenues 2,447 690 (213 ) 2,924 Gross profit 381 239 620 Operating expenses (3) 571 118 689 Income with respect to settlement agreement with Orange 217 217 Other income, net 41 4 45 Operating profit 68 125 193 Adjustments to presentation of segment Adjusted EBITDA –Depreciation and amortization 447 148 –Other (1) 47 (1 ) Segment Adjusted EBITDA (2) 562 272 New Israeli Shekels Year ended December 31, 2016 In millions Reconciliation of segments subtotal Adjusted EBITDA to profit for the year Segments subtotal Adjusted EBITDA (2) 834 Depreciation and amortization (595 ) Other (1) (46 ) Finance costs, net (105 ) Income tax expenses (36 ) Profit for the year 52 New Israeli Shekels Year ended December 31, 2015 In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 2,275 717 2,992 Inter-segment revenue - Services 22 189 (211 ) Segment revenue - Equipment 1,051 68 1,119 Total revenues 3,348 974 (211 ) 4,111 Segment cost of revenues - Services 1,856 736 (*) 2,592 Inter-segment cost of revenues- Services 187 24 (211 ) Segment cost of revenues - Equipment 832 48 880 Cost of revenues 2,875 808 (211 ) 3,472 Gross profit 473 166 639 Operating expenses (3) 506 134 (*) 640 Income with respect to settlement agreement with Orange 61 61 Other income, net 44 3 47 Operating profit 72 35 107 Adjustments to presentation of segment Adjusted EBITDA –Depreciation and amortization 510 243 –Other (1) 15 1 Segment Adjusted EBITDA (2) 597 279 New Israeli Shekels Year ended December 31, 2015 In millions Reconciliation of segments subtotal Adjusted EBITDA to loss for the year Segments subtotal Adjusted EBITDA (2) 876 Depreciation and amortization (including impairment charges, see note 13) (753 ) Other (1) (16 ) Finance costs, net (143 ) Income tax expenses (4 ) Loss for the year (40 ) (*) Includes impairment charges in the fixed line segment, see note 13. (1) Mainly amortization of employee share based compensation. (2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses – right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods. (3) Operating expenses include selling and marketing expenses and general and administrative expenses. |
FINANCIAL INSTRUMENTS AND FINAN
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments [abstract] | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | NOTE 6 – FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT a. Financial risk factors The Group is exposed to a variety of financial risks: credit, liquidity and market risks as part of its normal course of business. The Group's risk management objective is to monitor risks and minimize the possible influence that results from this exposure, according to its evaluations and expectations of the parameters that affect the risks. 1. Risk Management Risk management is carried out by the financial division under policies and/or directions resolved and approved by the audit committee and the board of directors. 2. Market risks (a) Description of market risks Cash flow risk due to interest rate changes and CPI changes The Group is exposed to fluctuations in the Israeli Consumer Price index (CPI) notes payable which are linked to the CPI. The Group did not enter into CPI hedging transactions in 2015, 2016 and 2017. Furthermore, the Group's notes payable bearing variable interest rate cause cash flow risks. Based on simulations performed, an increase (decrease) of 1% interest rates during 2017 in respect of the abovementioned financial instruments would have resulted in an annual increase (decrease) in interest expenses of NIS 5 million. The Group does not enter into interest rate hedging transactions. Foreign exchange risk The Group's operating income and cash flows are exposed to currency risk, mainly due to trade receivables and trade payables denominated in USD. The Group did not enter into free standing forward transactions in 2015, 2016 and 2017. Data regarding the US Dollar and Euro exchange rate and the Israeli CPI: Exchange Exchange rate of one rate of one Israeli Dollar Euro CPI* At December 31: 2017 NIS 3.467 NIS 4.153 221.57 points 2016 NIS 3.845 NIS 4.044 220.68 points 2015 NIS 3.902 NIS 4.247 221.13 points Increase (decrease) during the year: 2017 (9.8 )% 2.7 % 0.4 % 2016 (1.5 )% (4.8 )% (0.2 )% 2015 0.3 % (10.1 )% (1.0 )% * Index for each reporting period's last month, on the basis of 1993 average = 100 points. Sensitivity analysis: An increase (decrease) of 2% in the CPI as at December 31, 2015, 2016 and 2017 would have decreased (increased) equity and profit by NIS 20 million, NIS 9 million, and NIS 3 million, for the years ended December 31, 2015, 2016, 2017 respectively, assuming all other variables remain constant. An increase (decrease) of 5% in the USD exchange rate as at December 31, 2015, 2016 and 2017 would have decreased (increased) equity and profit by NIS 5 million, NIS 3 million, and NIS 3 million, for the years ended December 31, 2015, 2016, 2017 respectively, assuming that all other variables remain constant. (b) Analysis of linkage terms of financial instruments balances December 31, 2017 In or linked to USD In or linked to other foreign currencies NIS linked to CPI NIS unlinked Total New Israeli Shekels in millions Current assets Cash and cash equivalents 2 4 861 867 Short term deposits 150 150 Trade receivables * 62 34 712 808 Other receivables 9 9 Non- current assets Trade receivables 232 232 Total assets 64 38 1,964 2,066 Current liabilities Current maturities of notes payable and borrowings 213 491 704 Trade payables * 143 32 612 787 Payables in respect of employees 78 78 Other payables 21 21 Non- current liabilities Notes payable 972 972 Borrowings from banks and others 243 243 Total liabilities 143 32 213 2,417 2,805 In or linked to foreign currencies New Israeli Shekels in millions *Accounts that were set-off under enforceable netting arrangements Trade receivables gross amounts 281 Set-off (185 ) Trade receivables, net 96 Trade payables gross amounts 360 Set-off (185 ) Trade payables, net 175 December 31, 2016 In or linked to USD In or linked to other foreign currencies NIS linked to CPI NIS unlinked Total New Israeli Shekels in millions Current assets Cash and cash equivalents 2 1 713 716 Short term deposits 452 452 Trade receivables * 58 35 897 990 Other receivables 39 39 Non- current assets Trade receivables 333 333 Total assets 60 36 2,434 2,530 Current liabilities Current maturities of notes payable and borrowings 212 287 499 Trade payables * 132 19 530 681 Payables in respect of employees 90 90 Other payables 10 10 Non- current liabilities Notes payable 212 437 649 Borrowings from banks and others 197 1,353 1,550 Total liabilities 132 19 621 2,707 3,479 In or linked to foreign currencies New Israeli Shekels in millions *Accounts that were set-off under enforceable netting arrangements Trade receivables gross amounts 267 Set-off (174 ) Trade receivables, net 93 Trade payables gross amounts 325 Set-off (174 ) Trade payables, net 151 (c) Details regarding the derivative financial instruments The notional amounts of derivatives as of December 31, 2016 and 2017 are as follows, based on the amounts of currencies to be received, translated into NIS at the exchange rates prevailing at each of the reporting dates, respectively: New Israeli Shekels December 31 2016 2017 In millions Embedded derivatives pay USD, receive NIS 11 3 3. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument The face amount of financial assets represents the maximum credit exposure, see note 6(c). The cash and cash equivalents are held in leading Israeli commercial banks, rated by Standard & Poor's Maalot at between ilAA+/Stable to ilAAA/stable. The See also note 7 as to the assessment by aging of the trade receivables and related allowance for doubtful accounts. a. Financial risk factors 4. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group's reputation. The Group's policy is to ensure that it has sufficient cash and cash equivalents to meet expected operational expenses and financial obligations. Maturities of financial liabilities as of December 31, 2017: 2018 2019 2020 2021 to 2022 2023 to 2024 Total New Israeli Shekels in millions Principal payments of long term indebtedness: Notes payable series C (1) 213 213 Notes payable series D 109 109 109 110 437 Notes payable series F 129 258 257 644 Borrowing K (2) 75 75 Borrowing L (3) 200 200 Borrowing O (3) 100 100 Borrowing P 7 29 29 60 125 Borrowing Q 23 23 45 34 125 Expected interest payments of long term borrowings and notes payables (1) (2) 68 23 19 23 7 140 Trade and other payables 865 865 Total 1,637 184 309 496 298 2,924 Add offering expenses and discounts and premiums 4 2,928 (1) Linked to the CPI as of December 31, 2017. (2) The Company intends to early repay the borrowings in 2018.(see note 15 (5)). (3) The Company early repaid the borrowings in March 2018 (see note 15(5)). See note 15 in respect of borrowings and notes payable. b. Capital risk management Credit rating: According to Standard & Poor's Maalot ("S&P Maalot") credit rating, of July 27, 2017, the Company's ilA+/Stable credit rating was unchanged. See note 15(7) regarding financial covenants. As detailed in note 2(j) the financial instruments are categorized as following: Fair Value through Profit or Loss (FVTPL); Loans and Receivables (L&R); Amortized Cost (AC). The financial instruments that are categorized FVTPL are derivative financial instruments. Their fair values are calculated by discounting estimated future cash flows based on the terms and maturity of each contract and using forward rates for a similar instrument at the measurement date. All significant inputs in this technique are observable market data and rely as little as possible on entity specific estimates – this method matches the "Level 2" fair value measurement level hierarchy. There were no transfers between fair value levels during the year. Carrying amounts and fair values of financial assets and liabilities, and their categories: December 31, 2016 December 31, 2017 Category Carrying amount Fair value Interest rate used (**) Carrying amount Fair value Interest rate used (**) New Israeli Shekels in millions Assets Cash and cash equivalents L&R 716 716 867 867 Short term deposits L&R 452 452 150 150 Trade receivables L&R 1,323 1,318 4.72 % 1,040 1,040 4.47 % Other receivables (*) L&R 9 9 9 9 Liabilities Notes payable series C AC 423 440 Market quote 213 219 Market quote Notes payable series D AC 543 548 Market quote 435 443 Market quote Notes payable series E AC 121 127 Market quote Notes payable series F AC 650 659 Market quote Trade and other payables (*) AC 771 771 865 865 Borrowing C AC 75 81 3.43 % Borrowing D AC 75 81 3.43 % Borrowing E (*) AC 152 152 Borrowing F AC 197 199 3.17 % Borrowing G AC 100 98 3.85 % Borrowing H AC 100 97 3.85 % Borrowing I AC 120 120 3.43 % Borrowing J AC 62 62 3.23 % Borrowing K AC 76 76 3.43 % 75 75 3.71 % Borrowing L AC 200 204 3.98 % 200 200 4.25 % Borrowing M AC 200 201 3.85 % Borrowing N AC 250 260 3.67 % Borrowing O AC 100 110 4.34 % Borrowing P AC 125 125 2.38 % Borrowing Q AC 125 125 2.5 % Interest payable (*) AC 9 9 21 21 Derivative financial instruments FVTPL Level 2 * * * * (*) The fair value of these financial instruments equals their carrying amounts, as the impact of discounting is not significant. (**) The fair values of the notes payable quoted market prices at the end of the reporting period are within level 1 of the fair value hierarchy. The fair values of other instruments under AC categories were calculated based on observable weighted average of interest rates derived from quoted market prices of the Group's notes payable and bank quotes of rates of similar terms and nature, are within level 2 of the fair value hierarchy. See also note 15 in respect of borrowings and notes payable. |
TRADE RECEIVABLES
TRADE RECEIVABLES | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current receivables [abstract] | |
TRADE RECEIVABLES | NOTE 7 – TRADE RECEIVABLES (a) Composition: New Israeli Shekels December 31 2016 2017 In millions Trade (current and non-current) 1,545 1,260 Deferred interest income (note 2(n)) (32 ) (27 ) Allowance for doubtful accounts (190 ) (193 ) 1,323 1,040 Current 990 808 Non – current 333 232 Non-current trade receivables bear no interest. These balances are in respect of equipment sold in installments (13-36 monthly payments (mainly 36)). The amount is computed on the basis of the interest rate relevant at the date of the transaction (2016: 3.72% - 4.72%) (2017: 4.47% - 4.72%). During 2016 the Company factored some trade receivables resulting from sales of equipment through credit cards in an amount of NIS 72 million. The factoring was executed through a clearing company, on a non-recourse basis. The factoring of accounts receivable was recorded by the Company as a sale transaction under the provisions of IAS 39. The resulting costs were charged to "finance expenses" in the statement of income, as incurred. The Group does not have continuing involvement in the factored trade receivables. (b) Allowance for doubtful accounts: The changes in the allowance for the years ended December 31, 2015, 2016 and 2017 are as follows: New Israeli Shekels Year ended 2015 2016 2017 In millions Balance at beginning of year 166 169 190 Receivables written-off during the year as uncollectible (61 ) (61 ) (49 ) Charge or expense during the year 64 82 52 Balance at end of year 169 190 193 Doubtful accounts expenses are recorded in the statement of income under General and administrative expenses. See note 6(a)(3) regarding trade receivables credit risk. Allowance for doubtful accounts resulting from services provided under operating lease are not separately disclosed due to immateriality. The aging of gross trade receivables and their respective allowance for doubtful accounts as of December 31, 2016 and 2017 is as follows: New Israeli Shekels December 31 2016 2017 In millions Gross Allowance Gross Allowance Less than one year 1,420 101 1,089 69 More than one year 125 89 171 124 1,545 190 1,260 193 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2017 | |
Classes of current inventories [abstract] | |
INVENTORY | NOTE 8 – INVENTORY New Israeli Shekels December 31 2016 2017 In millions Handsets and devices 60 60 Accessories and other 9 8 Spare parts 22 19 ISP modems, routers, servers and related equipment 5 6 96 93 Write-offs recorded 6 5 Cost of inventory recognized as expenses and included in cost of revenues for the year ended 673 558 |
INVESTMENT IN PHI
INVESTMENT IN PHI | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of associates [abstract] | |
INVESTMENT IN PHI | NOTE 9 – INVESTMENT IN PHI Network sharing agreement and right of use On November 8, 2013 the Company and Hot Mobile Ltd. ("Hot Mobile") entered into a 15-year network sharing agreement (“NSA”), which was approved by the Antitrust Commissioner as described below, and by the Ministry of Communications. Pursuant to the NSA, the parties created a 50-50 limited partnership - P.H.I. Networks (2015) Limited Partnership (hereinafter "PHI"), which operates and develops a radio access network shared by both parties, starting with a pooling of both parties' radio access network infrastructures creating a single shared pooled radio access network (the "Shared Network"). The parties also established a 50-50 company limited by shares under the name Net 4 P.H.I Ltd., to be the general partner of the limited partnership. In May 2014, the Antitrust Commissioner (the "Commissioner") approved the NSA, subject to conditions that include: (a) Prohibition on exchange of information that is not required for the activities of PHI; (b) Limitations with respect to the serving as an officer or employee in either of the companies concurrent with serving as an officer or employee in PHI and certain cooling off periods were set in case of transition of officers and employees from PHI to the companies. However, this should not prevent PHI from employing employees or officers, that are currently serving as employees or officers in the companies (that is, employees will move to PHI and work for PHI only); (c) As of April 2021, the Commissioner will be allowed to notify the parties of the cancellation of his resolution, if at that time it will be of his opinion that the establishment of PHI, its existence or operations are liable to be substantively detrimental to competition, in which case the parties will be required to cease sharing the active part of the shared network within two years and the passive parts within five years from the Antitrust Commissioner's notice to that effect. In February 2016, HOT Mobile exercised its option under the NSA to advance the payment date of a onetime amount of NIS 250 million ("Lump Sum"), which was received by the Group in 2016. Therefore in accordance the NSA from April 2016 onward (i) each party bears half of the expenditures relating to the Shared Network, and (ii) the bearing of the operating costs of the Shared Network is according to a pre-determined mechanism, according to which one half of the operating costs is shared equally by the parties, and one half is divided between the parties according to the relative volume of traffic consumption of each party in the Shared Network (the "Capex-Opex Mechanism"). The Lump Sum is treated by the Group as payments for rights of use of the Group's network and therefore recognized as deferred revenue which is amortized to revenues in the income statement over a period of eight years, which is determined to be the shorter of the expected period of the arrangement or the expected life of the related assets, see note 22(a). The NSA term will be automatically extended for consecutive terms of five years each, unless either party provided the other party with prior notice of at least two years prior to the commencement of the respective extended term. At any time after the eighth anniversary of the NSA's effective date (i.e. following April 2023), either party may provide the other party with two years termination notice, and terminate the NSA, without cause, effective as of the end of the said two-year period. On the expiry of the NSA, other than following a material breach, the parties shall divide the network between themselves according to a mechanism provided by the NSA, based on the parties then-respective interests in PHI, with priority that each party shall first receive its own assets. On November 8, 2013, the Company and Hot Mobile entered into a separate Right of Use agreement which was valid until March 2016 ("ROU"), under which the Company provided services to Hot Mobile, in the form of access to use its cellular network. According to the ROU, Hot Mobile paid the Company fixed base payments together with additional variable payments which were based, among other things, on traffic exceeding a defined threshold. Hot Mobile ceased making payments under the ROU from April 2016. In 2015 and 2016, the Company recorded revenues relating to the ROU in amounts of approximately NIS 120 million and NIS 51 million, respectively. See also note 26(d) with respect to transactions and balances with PHI. The associates of the Group as at December 31, 2017, of which the Group holds 50% of ownership interests are: P.H.I. Networks (2015) Limited Partnership ("PHI"), and Net 4 P.H.I Ltd. (see also note 2(c)(2) and note 4(b)(3)). Both are incorporated and operate in Israel. Set out below is summarized financial information for the associates which are accounted for by the Group using the equity method. As at December 31 2016 2017 NIS in millions NIS in millions Current assets 122 119 Non-current assets 115 218 Current liabilities 110 117 Non-current liabilities 125 218 Net assets 2 2 Supplemental information relating to associates: Commitments for operating leases and operating expenses 364 443 Commitments to purchase fixed assets 3 2 Guarantees made to third parties 1 Year ended December 31 2016 2017 NIS in millions NIS in millions Summarized statement of income Revenue 432 477 Pre-tax Profit * - After-tax profit * - Total comprehensive income * - Reconciliation to carrying amount: Opening net assets of PHI 2 2 Profit for the period * - Closing net assets of PHI 2 2 Carrying amount: Group's share (50%) 1 1 * Representing an amount of less than NIS 1 million. See also note 26(d) with respect to transactions and balances with PHI. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
PROPERTY AND EQUIPMENT | NOTE 10 – PROPERTY AND EQUIPMENT Communication network Computers and information systems Optic fibers and related assets Subscribers equipment and installations Property, leasehold improvements, furniture and equipment Total New Israeli Shekels in millions Cost Balance at January 1, 2015 2,504 303 469 - 229 3,505 Additions in 2015 106 (1) * 19 12 4 141 Disposals in 2015 423 39 2 * 30 494 Balance atDecember 31, 2015 2,187 (1) 264 486 12 203 3,152 Additions in 2016 51 (1) 17 22 17 9 (1) 116 Disposals in 2016 235 74 78 387 Balance at December 31, 2016 2,003 (1) 207 508 29 134 (1) 2,881 Additions in 2017 55 7 97 109 6 274 Disposals in 2017 165 60 1 3 229 Balance at December 31, 2017 1,893 154 604 138 137 2,926 Accumulated depreciation Balance at January 1, 2015 1,379 178 151 - 136 1,844 Depreciation in 2015 270 (1) 45 34 1 26 376 Impairment charges (2) 5 7 12 Disposals in 2015 423 39 2 30 494 Balance at December 31, 2015 1,231 (1) 191 183 1 132 1,738 Depreciation in 2016 223 (1) 29 35 6 23 316 Disposals in 2016 230 74 76 380 Balance at December 31, 2016 1,224 (1) 146 218 7 79 1,674 Depreciation in 2017 204 22 36 24 15 301 Disposals in 2017 165 60 1 3 229 Balance at December 31, 2017 1,263 108 253 31 91 1,746 Carrying amounts, net At December 31, 2015 956 (1) 73 303 11 71 1,414 At December 31, 2016 779 (1) 61 290 22 55 (1) 1,207 At December 31, 2017 630 46 351 107 46 1,180 (1) Reclassified (2) See note 13(2) (*) Representing an amount of less than 1 million. For New Israeli Shekels Year ended December 31 2015 2016 2017 In millions Cost additions include capitalization of salary and employee related expenses 30 29 33 |
INTANGIBLE AND OTHER ASSETS
INTANGIBLE AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about intangible assets [abstract] | |
INTANGIBLE AND OTHER ASSETS | NOTE 11 – INTANGIBLE AND OTHER ASSETS Intangible assets with finite economic useful lives: Licenses Costs of obtaining contracts with customers (4) Customer relationships Subscriber acquisition and retention costs Computer software (1) Total New Israeli Shekels in millions Cost At January 1, 2015 2,088 73 276 13 646 3,096 Additions in 2015 35 6 89 130 Disposals in 2015 6 73 79 At December 31, 2015 2,123 73 276 13 662 3,147 Additions in 2016 4 82 86 Disposals in 2016 4 110 114 At December 31, 2016 2,123 73 276 13 634 3,119 Transition to IFRS 15 (4) 2 (13 ) (11 ) Additions in 2017 84 59 143 Disposals in 2017 73 128 201 At December 31, 2017 2,123 86 - 276 - 565 3,050 Accumulated amortization At January 1, 2015 1,502 33 188 9 285 2,017 Amortization in 2015 (2) 86 6 23 7 121 243 Impairment charges (3) 2 8 10 Disposals in 2015 6 73 79 At December 31, 2015 1,588 41 219 10 333 2,191 Amortization in 2016 88 21 18 5 117 249 Disposals in 2016 4 110 114 At December 31, 2016 1,676 62 237 11 340 2,326 Transition to IFRS 15 (4) (11 ) (11 ) Amortization in 2017 88 15 11 18 107 239 Disposals in 2017 73 128 201 At December 31, 2017 1,764 15 - 255 - 319 2,353 Carrying amounts, net At December 31, 2015 535 32 57 3 329 956 At December 31, 2016 447 11 39 2 294 793 At December 31, 2017 359 71 - 21 - 246 697 New Israeli Shekels Year ended December 31 2015 2016 2017 In millions (1) Cost additions include capitalization of salary and employee related expenses 35 36 44 (2) See information with respect to change in estimate of economic life of the trade name in 2015 in note 2(f)(4) (3) See note 13(2). (4) See adoption of IFRS 15 Revenues from Contracts with Customers in note 2 (n) and note 2(f)(5) For depreciation and amortization in the statement of income see note 22. |
DEFERRED EXPENSES - RIGHT OF US
DEFERRED EXPENSES - RIGHT OF USE | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of deferred expenses - right of use [Abstract] | |
DEFERRED EXPENSES - RIGHT OF USE | NOTE 12 – DEFERRED EXPENSES – RIGHT OF USE New Israeli Shekels in millions Cost Balance at January 1, 2015 402 Additional payments in 2015 34 Balance at December 31, 2015 436 Additional payments in 2016 80 Balance at December 31, 2016 516 Additional payments in 2017 113 Balance at December 31, 2017 629 Accumulated amortization and impairment Balance at January 1, 2015 271 Amortization in 2015 36 Impairment recorded in 2015 76 Balance at December 31, 2015 383 Amortization in 2016 30 Balance at December 31, 2016 413 Amortization in 2017 40 Balance at December 31, 2017 453 Carrying amount, net at December 31, 2015 53 Carrying amount, net at December 31, 2016 103 Current 28 Non-current 75 Carrying amount, net at December 31, 2017 176 Current 43 Non-current 133 See also notes 17(4) and note 2(g). The amortization and impairment charges are charged to cost of revenues in the statement of income. See also note 13(2) with respect of impairment charges in 2015. |
IMPAIRMENT TESTS
IMPAIRMENT TESTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of impairment loss and reversal of impairment loss [abstract] | |
IMPAIRMENT TESTS | NOTE 13 – IMPAIRMENT TESTS (1) Goodwill impairment tests Goodwill is allocated to a single group of CGUs which constitute all the operations of the fixed-line segment, in an amount of NIS 407 million. For the purpose of the goodwill impairment tests as of December 31, 2015, 2016 and 2017 the recoverable amount was assessed by management with the assistance of an external independent experts (2015: "Giza Singer Even. Ltd", 2016 and 2017: BDO Ziv Haft Consulting & Management Ltd.) based on value-in-use calculations. The value-in-use calculations use pre-tax cash flow projections covering a five-year period. Cash flows beyond the five-year period to be generated from continuing use are extrapolated using estimated growth rates. The growth rate represents the long-term average growth rate of the fixed-line communications services business. The key assumptions used are as follows: As of December 31, 2015 2016 2017 Terminal growth rate ( negative ) 0.5 % 0.9 % After-tax discount rate 10.3 % 9.8 % 9.3 % Pre-tax discount rate 13.4 % 11.9 % 11.2 % The impairment tests as of December 31, 2015, 2016 and 2017 were based on assessments of financial performance and future strategies in light of current and expected market and economic conditions. Trends in the economic and financial environment, competition and regulatory authorities' decisions, or changes in competitors’ behavior in response to the economic environment may affect the estimate of recoverable amounts. As a result of the impairment tests, the Group determined that no goodwill impairment existed as of December 31, 2015, 2016 and 2017. See also note 4(a)(3) and note 2(h). (2) Impairment tests of assets with finite useful lives No indicators for impairment or reversal of impairment of assets with finite useful lives were identified in 2016 and 2017. In 2015, the Group decided to cease the usage of the "012 Smile" trade name in 2017, this change in business induced the Group to determine that an indicator of impairment exist for the fixed-line segment. See also information with respect to change in estimate of useful life of the intangible asset trade name in note 4(a)(2) and 4(a)(1). For the purpose of the impairment test, the assets were grouped to the lowest level for which there are separately identifiable cash flows (CGU). (i) The Group reviewed in 2015 the recoverability of the VOB/ISP CGU assets. As a result, an impairment charge in a total amount of NIS 98 million was recognized in 2015. The impairment charge was allocated to the assets of the CGU pro rata, on the basis of the carrying amount of each asset, provided that the impairment did not reduce the carrying amount of an asset below the highest of its fair value less costs to sell and its value-in-use, and zero. Accordingly, the following impairment charges were recorded in 2015 in the assets of the above CGU: (a) Right of use by NIS 76 million, recorded in cost of revenues (see note 12). (b) Customer relationships by NIS 8 million, recorded in selling and marketing expenses. (c) Computers and information systems by NIS 7 million, recorded in cost of revenues. (d) Communication network by NIS 5 million, recorded in cost of revenues. (e) Trade name by NIS 2 million, recorded in selling and marketing expenses. The recoverable amount of the VOB/ISP CGU assets as of December 31, 2015 was assessed by management with the assistance of an external independent expert ("Giza Singer Even. Ltd") based on value-in-use calculations, which was NIS 250 million. The value in use calculations use pre-tax cash flow projections covering a five-year period and using extrapolation with specific adjustments expected until 2027, which was the economic life of the main asset of the CGU: the deferred expenses – Right of Use, and a pre-tax discount rate of 12.9%. The value-in-use calculations included all factors in real terms. This impairment test was based on assessments of financial performance and future strategies in light of current and expected market and economic conditions. Trends in the economic and financial environment, competition and regulatory authorities' decisions, or changes in competitors’ behavior in response to the economic environment may affect the estimate of recoverable amounts in future periods. See also note 2(i) and note 4(a)(2). (ii) The Group reviewed the recoverability of the ILD CGU of the fixed line segment and determined that no impairment existed as of December 31, 2015. |
PROVISIONS
PROVISIONS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other provisions [abstract] | |
PROVISIONS | NOTE 14 – PROVISIONS Group's share in PHI's provisions Dismantling and restoring sites obligation Legal claims Equipment warranty New Israeli Shekels in millions Balance as at January 1, 2017 - 35 76 1 Additions during the year 7 5 8 7 Reductions during the year (14 ) (12 ) (5 ) Finance costs 1 Balance as at December 31, 2017 7 27 72 3 Non-current 7 27 Current 72 3 Balance as at December 31, 2016 35 76 1 Non-current 35 Current 76 1 |
BORROWINGS AND NOTES PAYABLE
BORROWINGS AND NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about borrowings [abstract] | |
BORROWINGS AND NOTES PAYABLE | NOTE 15 –BORROWINGS AND NOTES PAYABLE (1) Borrowings and Notes Payable The Group has received borrowings from leading Israeli commercial banks and institutions. The Group may, at its discretion early repay the borrowings, subject to certain conditions, including that the Group shall reimburse the lender for losses sustained by it as a result of the early repayment. The reimbursement is mainly based on the difference between the interest rate that the Group would otherwise pay and the current market interest rate on the early repayment date. The notes payable are unsecured, non-convertible and listed for trade on the TASE. The notes payable have been rated ilA+, on a local scale, by Standard & Poor’s Maalot. Composition as of December 31, 2017: Linkage terms (principal and interest) Annual interest rate Notes payable series C Note 15 (4) CPI 3.35% CPI adj. Notes payable series D 'Makam' (*) plus Notes payable series F Note 15 (2), (6) 2.16% fixed Borrowing K (received in 2015) Note 15 (5) 3.71% fixed Borrowing L (received in 2015) Note 15 (5) 4.25% fixed Borrowing O (received in 2017) Note 15 (3), (5) 4.34% fixed Borrowing P (received in 2017) Note 15 (3) 2.38% fixed Borrowing Q (received in 2017) Note 15 (3) 2.5% fixed (*) The interest rates paid (in annual terms, and including the additional interest of 1.2%) for the period from October 1, 2017 to December 30, 2017 was 1.294%. See note 6(a)(4) as to the balances and maturities of the borrowings and the notes payable. See note 6(c) as to the fair value of the borrowings and the notes payable. The following table details the changes in debentures, including cash flows from financing activities: Movement in 2017 As at December 31, 2016 Cash flows from (used in) financing activities, net Non cash movements CPI adjustments and other finance costs Change in estimated cash flows (*) New Israeli Shekels in millions Non-current borrowings, including current maturities 1,607 (982 ) 625 Notes payable, including current maturities 1,087 207 4 1,298 Interest payable 9 (165 ) 159 18 21 2,703 (940 ) 163 18 1,944 (*) See note 15(5) below and note 2(j)(3). (2) Notes payable issuance In July 2017, the Company issued Series F Notes in a principal amount of NIS 255 million, payable in 5 equal annual installments on June 25 of each of the years 2020 through 2024. The principal bears fixed annual interest of 2.16%, payable on a semiannual basis on June 25 and December 25. In December 2017, the Company expanded Series F Notes in a principal amount of NIS 389 million under the same conditions. The Company has engaged to expand Series F Notes in the future, see note 15(6) below. (3) New borrowings received Borrowing O: In December 2017, the Company received a long-term loan from a group of institutional corporations in a principal amount of NIS 100 million. The loan was received according to a loan agreement that was signed in November 2014. The loan will bear unlinked interest at the rate of 4.34% per annum. The Company early repaid the loan in March 2018 (see note 15(5)). Borrowing P: In December 2017, the Company received a long-term loan from a commercial bank in the principal amount of NIS 125 million. The loan will bear unlinked interest at the rate of 2.38% per annum and will be paid in quarterly payments over 5 years. The principal will be paid in quarterly equal payments commencing in December 2018. Borrowing Q: In December 2017, the Company received a long-term loan from a commercial bank in the principal amount of NIS 125 million. The loan will bear unlinked interest at the rate of 2.5% per annum and will be paid in quarterly payments over 6.5 years. The principal will be paid in quarterly equal payments commencing in March 2019. (4) Notes payable buy back The Company's series B, C and E notes, which are traded on the Tel Aviv Stock Exchange, were partially repurchased in 2016 (these notes are considered legally extinguished ) In March 2016, the Company repurchased approximately NIS 43 million par value of notes payable series B, at an average transaction price of approximately 1.104 NIS par value. The total amount paid was approximately NIS 48 million. In March 2016, the Company repurchased approximately NIS 131 million par value of notes payable series E, at an average transaction price of approximately 1.073 NIS par value. The total amount paid was approximately NIS 141 million. In April 2016, the Company repurchased approximately NIS 54 million par value of notes payable series C, at an average transaction price of approximately 1.136 NIS par value. The total amount paid was approximately NIS 61.5 million. The buy-back costs of the aforementioned repurchases were recorded in finance expenses in an amount of NIS 12 million in 2016. (5) Borrowings early repayments In June 2017, the Company made early repayment of principal outstanding of borrowings C, D, E, F, G and H in a total amount of NIS 700 million, thus completing full and final repayment of these borrowings. In July 2017, the Company made early repayment of principal outstanding of borrowings I and J in a total amount of NIS 175 million, thus completing full and final repayment of these borrowings. In December 2017, the Company made early repayment of principal outstanding of borrowings M and N in a total amount of NIS 408 million, thus completing full and final repayment of these borrowings. In December 2017 the Company did not take a borrowing that was contracted in November 2014 (a deferred loan) with a group of institutional corporations in a principal amount of NIS 100 million. The early repayment fees of the aforementioned repayments totaled to an amount of NIS 76 million and were recorded in finance expenses in 2017. In March 2018 the Company early repaid borrowings O and L in a total principal amount of NIS 300 million. In addition, the Company intends to early repay borrowing K during 2018, in a principal amount of NIS 75 million. The early repayments resulted in a change in expected cash flows and the Company recorded in December 2017 additional finance costs of NIS 18 million, mainly due to early repayment fees (see also note 2(j)(3) and note 15(1) above). (6) Notes payable issuance commitments In September 2017, the Company entered into an agreement with certain Israeli institutional investors, according to which the Company undertook to issue to the institutional investors, and the institutional investors undertook to purchase from the Company, in the framework of a private placement, in an aggregate principal amount of NIS 150 million of additional Series F debentures in December 2018. In December 2017, the Company entered into an agreement with certain Israeli institutional investors, according to which the Company undertook to issue to the institutional investors, and the institutional investors undertook to purchase from the Company, in the framework of a private placement, in an aggregate principal amount of NIS 126.75 million of additional Series F debentures in December 2019. In January 2018, the Company entered into an agreement with certain Israeli institutional investors, according to which the Company undertook to issue to the institutional investors, and the institutional investors undertook to purchase from the Company, in the framework of a private placement, in an aggregate principal amount of NIS 100 million of additional Series F debentures in December 2019. (7) Financial covenants (a) Regarding Series F Notes and borrowings P and Q, the Company is required to comply with a financial covenant that the ratio of Net Debt to Adjusted EBITDA shall not exceed 5. Compliance will be examined and reported on a quarterly basis. For the purpose of the covenant, Adjusted EBITDA is calculated as the sum total for the last 12 month period, excluding adjustable one-time items. As of December 31, 2017, the ratio of Net Debt to Adjusted EBITDA was 1.0. Additional stipulations regarding Series F Notes and borrowings P and Q mainly include: shareholders' equity shall not decrease below NIS 400 million; the Company shall not create floating liens subject to certain terms; the Company has the right for early redemption under certain conditions; the Company shall pay additional annual interest of 0.5% in the case of a two-notch downgrade in the Series F Notes rating and an additional annual interest of 0.25% for each further single-notch downgrade, up to a maximum additional interest of 1%; the Company shall pay additional annual interest of 0.25% during a period in which there is a breach of the financial covenant. The Group was in compliance with the financial covenant and the additional stipulations for the year 2017. (b) Regarding borrowings K, L and O, as of December 31, 2017 (see information about early repayments in note 15(5) above), the Company is required to comply with financial covenants on a consolidated basis. Their main provisions are two ratios: (1) The ratio of (a) the amount of all financial obligations of the Company including bank guarantees that the Company has undertaken ("Total Debt") to (b) EBITDA less Capital Expenditures shall not exceed 6.5 (the ratio as of December 31, 2016 and 2017 was 4.5 and 4.1, respectively); and (2) The ratio of (a) Total Debt to (b) the EBITDA of the Company shall not exceed 4 (the ratio as of December 31, 2016 and 2017 was 3.4 and 2.2, respectively). EBITDA is defined as the sum of (a) the net income before extraordinary items, (b) the amount of tax expenses set against the net profits including, without double counting, any provisions for tax expenses, (c) and depreciation and amortization expenses, and (d) any finance costs, net. Capital Expenditures are defined as any expenditure classified as fixed and intangible asset in the financial statements. The Group was in compliance with all covenants stipulated for the years 2016 and 2017. The covenants are measured every six months (on June 30, and December 31) on an annualized basis of twelve months and are based on the financial results for the preceding period of twelve months. The existing loans agreements allow the lenders to demand an immediate repayment of the loans in certain events (events of default), including, among others, a material adverse change in the Company's business and non-compliance with the financial covenants set in those agreements. The Company provided the lenders with a negative pledge undertaking (i.e., not to pledge any of its assets to a third party), except for a number of exceptions that were agreed upon, including pledge (other than by way of floating charge) in favor of a third party over specific assets or rights of the Company, securing obligations no greater than NIS 100 million in aggregate. See note 6 regarding the Company's exposure to market risks and liquidity risk. |
LIABILITY FOR EMPLOYEE RIGHTS U
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of defined benefit plans [abstract] | |
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | NOTE 16 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT Israeli labor laws and agreements require payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. See also note 2(k). (1) Defined contribution plan The Group had contributed NIS 15 million, NIS 14 million, NIS 17 million for the years 2015, 2016 and 2017 respectively, in accordance with Section 14 of the Israeli Severance Pay Law. See also note 2(k)(i)(1). (2) Defined benefit plan Liability for employee rights upon retirement, net is presented as non-current liability. The amounts recognized in the statement of financial position, in respect of a defined benefit plan (see note 2(k)(i)(2)) and changes during the year in the obligation recognized for post-employment defined benefit plans were as follows: New Israeli Shekels in millions Present value of obligation Fair value of plan assets Total At January 1, 2016 133 (99 ) 34 Current service cost 17 17 Interest expense (income) 5 (3 ) 2 Employer contributions (12 ) (12 ) Benefits paid (19 ) 9 (10 ) Remeasurements: Experience loss 9 9 Loss (gain) from change in demographic assumptions (4 ) (4 ) Loss from change in financial assumptions 1 1 Return on plan assets 2 2 At December 31, 2016 142 (103 ) 39 Current service cost 11 11 Past service cost 4 4 Interest expense (income) 4 (3 ) 1 Employer contributions (9 ) (9 ) Benefits paid (25 ) 17 (8 ) Remeasurements: Experience loss 2 2 Loss (gain) from change in financial assumptions 1 1 Return on plan assets (1 ) (1 ) At December 31, 2017 139 (99 ) 40 Remeasurements are recognized in the statement of comprehensive income. The expected contribution to the defined benefit plan during the year ending December 31, 2018 is approximately NIS 10 million. The principal actuarial assumptions used were as follows: December 31 2016 2017 Interest rate weighted average 2.95 % 2.73 % Inflation rate weighted average 1.04 % 1.11 % Expected turnover rate 9%-56 % 9%-56 % Future salary increases 1%-6 % 1%-6 % The sensitivity of the defined benefit obligation to changes in the principal assumptions is: December 31, 2017 NIS in millions Increase of 10% of the assumption Decrease of 10% of the assumption Interest rate (0.6 ) 0.8 Expected turnover rate 0.2 (0.3 ) Future salary increases 0.4 (0.4 ) The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method has been applied as when calculating the pension liability recognized within the statement of financial position. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. The defined benefit plan exposes the Group to a number of risks, the most significant are asset volatility, and a risk that salary increases will be higher than expected in the actuarial calculations. The assets are invested in provident funds, managed by managing companies and are subject to laws and regulations, and supervision (including investment portfolio) of the Capital Markets, Insurance and Saving Division of the Israeli Ministry of Finance. Expected maturity analysis of undiscounted defined benefits as at December 31, 2017: NIS in millions 2018 24 2019 20 2020 11 2021 and 2022 20 2023 and thereafter 83 158 |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of commitments [Abstract] | |
COMMITMENTS | NOTE 17 – COMMITMENTS (1) Under the Telegraph Regulations the Company is committed to pay an annual fixed fee for each frequency used. For the years 2015, 2016 and 2017 the Company recorded expenses in a total amount of approximately NIS 65 million, NIS 64 million and NIS 63 million, respectively. Under the above Regulations should the Company choose to return a frequency, such payment is no longer due. Commencing August 2016, the total amount of frequency fees of both the Company and Hot Mobile under the regulations are divided between the Company and Hot Mobile, through PHI ,according to the OPEX-CAPEX mechanism (see also note 9). (2) At December 31, 2017, the Group is committed to acquire property and equipment and software elements for approximately NIS 5 million. (3) At December 31, 2017, the Group is committed to acquire inventory in an amount of approximately NIS 818 million. (4) Right of Use (ROU) The Group signed long-term agreements with service providers to receive indefeasible Rights of Use (ROU) of international capacities through submarine infrastructures (see note 12), most extendable until 2030. As of December 31, 2017, the Group is committed to pay for capacities over the following years an amount of NIS 207 million (excluding maintenance fees) as follows: New Israeli Shekels in millions 2018 43 2019 41 2020 41 2021 41 2022 41 207 In addition, under the terms of the ROU agreements, as of December 31, 2017 the Group is committed to pay annual maintenance fees during the usage period. The total aggregated expected maintenance fee for the years 2018-2023 is approximately NIS 52 million. Some payments under the ROU agreements are linked to the USD. (5) Liens and guarantees As of December 31, 2017, the Group has provided bank guarantees in respect of licenses (see note 1(d)) in an amount of NIS 100 million, in addition to bank guarantees in favor of other parties in an aggregate amount of approximately NIS 26 million. Therefore, the total bank guarantees provided by the Group as of December 31, 2017 is NIS 126 million. In addition, the Company provided a guarantee to PHI's debt in an amount of NIS 50 million. (6) Covenants and negative pledge – see note 15(7). (7) See note 15(6) with respect of notes payable issuance commitments. (8) Operating leases – see note 19. (9) See note 9 with respect to network sharing and PHI's commitments. |
DEFERRED INCOME WITH RESPECT TO
DEFERRED INCOME WITH RESPECT TO SETTLEMENT AGREEMENT WITH ORANGE | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of deferred income with respect to settlement agreement with orange [Abstract] | |
DEFERRED INCOME WITH RESPECT TO SETTLEMENT AGREEMENT WITH ORANGE | NOTE 18 – DEFERRED INCOME WITH RESPECT TO SETTLEMENT AGREEMENT WITH ORANGE In June 2015, the Company announced that it had entered into a settlement agreement with Orange Brand Services Ltd ("Orange") which created a new framework for their relationship and provided both Partner and Orange the right to terminate the brand license agreement which had been in force since 1998. In accordance with the terms of the settlement agreement, the Company received advance payments in a total of €90 million during 2015; €40 million of which was received between the signing of the agreement and the completion of a market study to assess the Company’s position within the dynamics of the Israeli telecommunications services market; and €50 million of which was received in the fourth quarter of 2015, following the Company’s notice to Orange of its decision to terminate the brand license agreement. As set forth in the settlement agreement, the advance payments were recognized and reconciled evenly on a quarterly basis over a period until the second quarter of 2017, against contingent marketing, sales, customer services and other expenses that were incurred over this period. The income was recorded in the Company’s income statement under “Income with respect to settlement agreement with Orange". For 2015, 2016 and 2017, the Company recognized income with respect to the settlement agreement in an amount of NIS 61 million, NIS 217 million and NIS 108 million, respectively. Based on a legal opinion obtained by the Company, the advance payments are considered compensation payments and are therefore not subject to VAT charges. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance lease and operating lease by lessee [abstract] | |
OPERATING LEASES | NOTE 19 – OPERATING LEASES The Group has entered into operating lease agreements as follows: (1) The Group leases it's headquarter facilities in Rosh Ha-ayin, Israel, with a total of approximately 51,177 gross square meters (including parking lots). The lease term is until the end of 2024. The rental payments are linked to the Israeli CPI. (2) The Group also leases call centers, retail stores and service centers. The leases for each site have different lengths and specific terms. The lease agreements are for periods of two to ten years. The Group has options to extend some lease contract periods for up to twenty years (including the original lease periods). Some of the rental payments are linked to the dollar or to the Israeli CPI. Some of the extension options include an increase of the lease payment in a range of 2%-15%. (3) Lease agreements in respect of cell sites and switching stations throughout Israel are for periods of two to ten years. The Company has an option to extend some of the lease contract periods for up to ten years (including the original lease periods). Some of the rental payments fees are linked to the dollar or linked to the Israeli CPI. Some of the extension options include an increase of the lease payment mostly in a range of 2%-10%. (4) As of December 31, 2017 operating lease agreements in respect of vehicles are for periods of up to three years. The rental payments are linked to the Israeli CPI. (5) Non-cancelable minimum operating lease rentals (undiscounted) in respect of all the above leases are payable including option periods which are reasonably certain are as follows: New Israeli Shekels December 31, 2017 In millions 2018 158 2019 100 2020 77 2021 59 2022-2023 100 2024-2025 52 2026-2027 13 2028 and thereafter 19 578 (6) The rental expenses for the years ended December 31, 2015, 2016 and 2017 were approximately NIS 260 million, NIS 213 million, and NIS 178 million, respectively. Commencing April 2016, rent expenses of cell sites of the Company, Hot Mobile and PHI are divided between the Company and Hot Mobile, through PHI, according to the OPEX-CAPEX mechanism (see also note 9). |
LAWSUITS AND LITIGATIONS
LAWSUITS AND LITIGATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of lawsuits and litigations [Abstract] | |
LAWSUITS AND LITIGATIONS | NOTE 20 – LAWSUITS AND LITIGATIONS A. Claims Total provision recorded in the financial statements in respect of all lawsuits against the Group amounted to NIS 72 million at December 31, 2017. Described below are the main litigation and claims against the Group: 1. Consumer claims This category includes class actions , among others, claims regarding and claims regarding , the Privacy Protection Law, the Communications Law (Telecommunications and Broadcasting), license provisions, other legal provisions and engagement agreements with customers Described hereunder are the outstanding consumer class actions and motions for the recognition of these lawsuits as class actions, detailed according Claim amount Number of claims Total claims amount (NIS million) Up to NIS 100 million 26 640 NIS 100 - 6 1,330 NIS 400 million - NIS 1 billion 2 1, Unquantified claims 13 - Total 47 3,375 With respect to 3 1. On April 13, 2011, a claim and a motion to certify the claim as a class action were filed against Partner. The claim alleges that Partner sent a message to its customers that their internet package was fully utilized before it was fully utilized. The amount claimed in the lawsuit was estimated by the plaintiffs to be approximately NIS 4.6 million. In June 2013, the Court approved the motion and recognized the lawsuit as a class action. In August 2013, Partner filed a request to appeal to the Supreme Court. In February 2014, the Supreme Court dismissed Partner's request, and a hearing has been set. In January 2015, the parties filed a request to approve a settlement agreement. In July 2015, the parties filed an amended request to approve the settlement agreement. In June 2016 the Court approved the request and in February 2018 the parties filed a request to the regarding 2. On September 7, 2010, a claim and a motion to certify the claim as a class action were filed against Partner. The claim alleges that Partner unlawfully charged its customers for services of various content providers which are sent through text messages (SMS). The total amount claimed from Partner is estimated by the plaintiffs to be approximately NIS 405 million. The claim was certified as a class action in December 2016. In February 2017, the plaintiffs filed an appeal to the Supreme Court, regarding the definition of the group of customers. Partner estimates that even if the claim will be decided in favor of the approved group of (as defined by the District Court), 3. On April 3, 2012, a claim and a motion to certify the claim as a class action were filed against Partner. The claim alleges that Partner breached its license conditions in connection with benefits provided to customers that purchased handsets from third parties. The amount claimed in the lawsuit was estimated by the plaintiffs to be approximately NIS 22 million. In September 2014, The Court approved the motion and recognized the lawsuit as a class action. In July 2017, the parties filed a request to the Court to approve a settlement agreement. Partner estimates that the damages that Partner will be required to pay for will be immaterial. With respect to 3 claims 392 3 claims requests agreements 4 352 3 claims 2. Employees and other This category includes 2 claims: a claim and a motion for the recognition of this claim as a class action in the amount of NIS 100 million (in September 2016, the parties filed a request to approve a settlement agreement regarding this claim and in November 2017 the parties filed an amended request to approve a settlement agreement regarding this claim In addition B. Contingencies in respect of building and planning procedures (1) Under the Telegraph Regulations the Company is committed to pay an annual fixed fee for each frequency used. Under the above Regulations should the Company choose to return a frequency, such payment is no longer due. (2) Section 197 of the Building and Planning Law states that a property owner has the right to be compensated by a local planning committee for reductions in property value as a result of a new building plan. In January 2006, the Non-ionizing Radiation Law was published, amending the Planning and Building Law so that local Planning and Building committees must require indemnification letters against reduction in property value from the cellular operators requesting building permits. Accordingly, on January 3, 2006, the National Council for Planning and Building published an interim decision conditioning the issuance of building permits for cell site permits by local planning and building councils upon provision of a 100% indemnification undertaking by the cellular operators. This decision shall remain in effect until it is replaced with an amendment to the National Zoning Plan 36. Between January 3, 2006 and December 31, 2017 the Company provided the local authorities with 488 indemnification letters as a pre-condition for obtaining building permits. In case the Company shall be required to make substantial payments under the indemnity letters, it could have an adverse effect on the Company's financial results. According to the company’s management estimation and based on its legal counsel, a provision The Company assumes that the requirement to provide indemnification letters might require it to change locations of sites to different, less suitable locations and to dismantle some of its sites. These changes in the deployment of the sites might have an adverse effect on the extent, quality and capacity of the network coverage. |
EQUITY AND SHARE BASED PAYMENTS
EQUITY AND SHARE BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |
EQUITY AND SHARE BASED PAYMENTS | NOTE 21 – EQUITY AND SHARE BASED PAYMENTS a. Share capital: The Company's share capital consists of ordinary shares, which are traded on the Tel Aviv Stock Exchange Ltd. under the symbol "PTNR", and are quoted on the NASDAQ Global Select Market™, in the form of American Depositary Shares ("ADSs"), each representing one of the Company’s ordinary shares, under the symbol "PTNR", according to the dual listing regulations. The ADSs are evidenced by American Depositary Receipts ("ADRs"). Since November 2011, Citibank, N.A. serves as the Company's depository for ADSs. The holders of ordinary shares are entitled vote in the general meetings of shareholders and to receive dividends as declared. Under the provisions of the Company's licenses (note 1(d)), restrictions are placed on transfer of the Company's shares and placing liens thereon. The restrictions include the requirement of advance written consent of the Minister of Communications be received prior to transfer of 10% or more of the Company's shares to a third party. The restrictions require that the "founding shareholders or their approved substitutes", as defined in the cellular license, hold at least 26% of the means of control in the Company, including 5% which must be held by Israeli shareholders (Israeli citizens and residents), who were approved as such by the Minister of Communications. Through December 31, 2008 the Company purchased its own 4,467,990 shares at the cost of NIS 351 million ("treasury shares"). In accordance with the Israeli Companies Law, the treasury shares are considered dormant shares as long as they are held by the Company, and as such they do not bear any rights (including the right to vote in general meetings of shareholders and to receive dividends) until they are transferred to a third party. Of which 2,850,472 remained as of December 31, 2017. Of which 1,376,381were allocated as of December 31, 2017 to a trustee on behalf of the Company's employees under the Company's Equity Incentive Plan (see (b) below). These shares are under the control of the Company until vested under the plan and therefore are not presented in the financial statements as outstanding shares until vested (restricted shares ("RSAs")). In June 2017, the Company issued 10,178,211 shares of the Company to the public and to classified investors, following a tender under a shelf offering, and by way of a private placement. The total net consideration received was approximately NIS 190 million. The offering expenses totaled NIS 7 million. b. Share based compensation to employees (1) Description of the Equity Incentive Plan Share options and restricted shares were granted to employees in accordance with Company's Equity Incentive Plan (the "Plan"). It includes allocation of restricted shares ("RSAs") to the Company's employees and officers and determines the right to vote at the general meetings of shareholders The total number of Company's shares reserved for issuance upon exercise of all options or upon the earning of the restricted shares granted under the Plan is 25,917,000, of which 7,816,113 remained ungranted as of The vesting of the options and the earning of the restricted shares are subject to vesting/restriction periods. The vesting of the options and the earning of the restricted shares granted after June 2014 are also subject to performance conditions set by the Company's organs. The Company expects that the performance conditions will be met. The Plan's principal terms of the options include: - Exercise price adjustment: The exercise price of options shall be reduced in the following events: (1) dividend distribution other than in the ordinary course: by the gross dividend amount so distributed per share, and (2) dividend distribution in the ordinary course: the exercise price shall be reduced by the amount of a dividend in excess of 40% of the Company’s net income for the relevant period per share, or by the gross dividend amount so distributed per share - Cashless exercise: (2) Information in respect of options and restricted shares granted under the Plan: Through December 31, 2017 Number of options Number of RSAs Granted 31,304,207 4,298,768 Shares issued upon exercises and vesting (6,430,589 ) (1,617,518 ) Cancelled upon net exercises, expiration and forfeitures (16,165,135 ) (1,336,953 ) Outstanding 8,708,483 1,344,297 Of which: Exercisable 5,190,586 26,556 Vest in 2018 2,502,089 891,309 Vest in 2019 667,254 280,115 Vest in 2020 348,554 146,317 As of December 31, 2017 the Company expects to record a total amount of compensation expenses of approximately (3) Options and RSAs status summary as of December 31, 2015, 2016 and 2017 and the changes therein during the years ended on those dates: Year ended December 31 2015 2016 2017 Weighted average Weighted average Weighted average Share Options: NIS NIS NIS Outstanding at the beginning of the year 8,962,116 32.08 12,686,317 29.52 11,285,901 29.14 Granted during the year 5,519,031 17.41 998,433 18.14 1,201,358 19.45 Exercised during the year (32,880 ) 13.12 (284,251 ) 15.74 (1,906,991 ) 17.38 Forfeited during the year (1,459,215 ) 28.7 (1,219,648 ) 20.58 (988,566 ) 22.91 Expired during the year (302,735 ) 58.61 (894,950 ) 38.16 (883,219 ) 43.10 Outstanding at the end of the year 12,686,317 29.52 11,285,901 29.14 8,708,483 29.67 Exercisable at the end of the year 4,615,076 45.97 5,912,904 37.77 5,190,586 36.66 Shares issued during the year due exercises 8,496 47,484 319,259 RSAs: Outstanding at the beginning of the year 1,589,990 2,900,626 1,955,414 Granted during the year 1,779,596 417,176 507,146 Vested during the year (6,015 ) (858,397 ) (753,106 ) Forfeited during the year (462,945 ) (503,991 ) (365,157 ) Outstanding at the end of the year 2,900,626 1,955,414 1,344,297 Options granted in 2015 Options granted in 2016 Options granted in 2017 Weighted average fair value of options granted using the Black & Scholes option-pricing model – per option (NIS) 5.37 5.02 5.43 The above fair value is estimated on the grant date based on the following weighted average assumptions: Expected volatility 39.28 % 39.5 % 37.6 % Risk-free interest rate 0.54 % 0.54 % 0.53 % Expected life (years) 3 3 3 Dividend yield * * * * Due to the Full Dividend Mechanism the expected dividend yield used in the fair value determination of such options was 0% for the purpose of using the Black & Scholes option-pricing model. The expected volatility is based on a historical volatility, by statistical analysis of the daily share price for periods corresponding the option's expected life. The expected life is expected length of time until expected date of exercising the options, based on historical data on employees' exercise behavior and anticipated future condition. The fair value of RSAs was evaluated based on the stock price on grant date. (4) Information about outstanding options by expiry dates Share Number of share options Weighted average exercise price in NIS 2018 371,687 25.55 2019 1,191,771 49.77 2020 2,324,841 37.66 2021 2,947,959 21.69 2022 826,533 21.66 2023 1,045,692 19.26 8,708,483 29.67 |
INCOME STATEMENT DETAILS
INCOME STATEMENT DETAILS | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of income and expense [abstract] | |
INCOME STATEMENT DETAILS | NOTE 22 – INCOME STATEMENT DETAILS (a) Revenues The aggregate amount of transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2017, in addition to deferred revenues (see table below), is approximately NIS 92 million (mainly services). Of which the Group expects that approximately 60% will be recognized as revenue during 2018, approximately 25% will be recognized as revenue during 2019, and the rest in later years. The above excludes contracts that are for periods of one year or less or are billed based on time incurred, as permitted under IFRS 15 the transaction price allocated to these unsatisfied contracts is not disclosed. The table below describes significant changes in contract liabilities: New Israeli Shekels in millions Deferred revenues from Hot mobile * Other deferred revenues* Balance as at December 31, 2016 226 45 Revenue recognized that was included in the contract liability balance at the beginning of the year (31 ) (29 ) Increases due to cash received, excluding amounts recognized as revenues during the year - 30 Balance as at December 31, 2017 195 46 * Current and non-current deferred revenues. Disaggregation of revenues: Year ended December 31, 2017 New Israeli Shekels in millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services to private customers 1,173 254 (32 ) 1,395 Segment revenue - Services to business customers 805 523 (141 ) 1,187 Segment revenue - Services revenue total 1,978 777 (173 ) 2,582 Segment revenue - Equipment 610 76 686 Total Revenues 2,588 853 (173 ) 3,268 Revenues from services are recognized over time. For the year 2017 revenues from equipment are recognized at a point of time, except for NIS 11 million, which were recognized in 2017 over time. Revenues from equipment for the year 2017 include revenues from operating leases according to IAS 17, in an amount of NIS 11 million. Revenues from services for the year 2017 include revenues from operating leases according to IAS17 in an amount of NIS 10 million. See also note 7 with respect to payment terms of sales of equipment, trade receivables and allowance for doubtful accounts. See also note 2(n). (b) Cost of revenues New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Transmission, communication and content providers 888 814 738 Cost of equipment and accessories 852 625 519 Depreciation and amortization (including impairment) 577 501 477 Wages, employee benefits expenses and car maintenance 320 270 293 Costs of handling, replacing or repairing equipment 88 93 75 Operating lease, rent and overhead expenses 315 258 184 Network and cable maintenance 145 150 97 Internet infrastructure and service providers 49 68 95 Car kit installation, IT support, and other operating expenses 72 62 61 Amortization of rights of use (including impairment) 112 30 40 Other 54 53 48 Total cost of revenues 3,472 2,924 2,627 (c) Selling and marketing expenses New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages, employee benefits expenses and car maintenance 206 177 (*)106 Advertising and marketing 30 68 44 Selling commissions, net 77 82 (*)29 Depreciation and amortization (including impairment) 55 55 (*)54 Operating lease, rent and overhead expenses 27 29 23 Other 22 15 13 Total selling and marketing expenses 417 426 269 (*) See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. (d) General and administrative expenses New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages, employee benefits expenses and car maintenance 84 101 79 Bad debts and allowance for doubtful accounts 63 82 52 Professional fees 31 32 22 Credit card and other commissions 16 14 14 Depreciation 9 9 9 Other 20 25 20 Total general and administrative expenses 223 263 196 (e) Employee benefit expense New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages and salaries including social benefits, social security costs, pension costs and car maintenance before capitalization 622 537 503 Less: expenses capitalized (notes 10, 11) (65 ) (65 ) (77 ) Service costs: defined benefit plan (note 16(2)) 21 17 15 Service costs: defined contribution plan (note 16(1)) 15 14 17 Employee share based compensation expenses (note 21(b)) 17 45 20 610 548 478 See also note 28 with respect of collective employment agreement. |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2017 | |
Other income, net [Abstract] | |
OTHER INCOME, NET | NOTE 23 – OTHER INCOME, NET New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Unwinding of trade receivables 46 41 27 Other income, net 1 4 4 47 45 31 |
FINANCE COSTS, NET
FINANCE COSTS, NET | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance costs, net [Abstract] | |
FINANCE COSTS, NET | NOTE 24 – FINANCE COSTS, NET New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Net foreign exchange rate gains 7 2 Fair value gain from derivative financial instruments, net 2 * * CPI linkage income 9 2 Interest income from cash equivalents 1 1 2 Other 1 3 * Finance income 13 13 4 Interest expenses 136 105 171 CPI linkage expenses 4 Net foreign exchange rate losses 9 Other finance costs 11 13 9 Finance expenses 156 118 184 143 105 180 * Representing an amount of less than 1 million |
INCOME TAX EXPENSES
INCOME TAX EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of income tax expenses [Abstract] | |
INCOME TAX EXPENSES | NOTE 25 – INCOME TAX EXPENSES a. Measurement of results for tax purposes under the Income Tax (Inflationary Adjustments) Law, 1985 Under this law, results for tax purposes through tax-year 2007 were measured in real terms, having regard to the changes in the Israeli CPI. Commencing the tax-year 2008 and thereafter the Company and its subsidiaries are measured for tax purposes in nominal values, except for certain transition provisions: certain losses carryforward for tax purposes, and certain tax deductible depreciation expenses are adjusted to the changes in the CPI until the end of 2007. b. Corporate income tax rates applicable to the Group The Group is taxed according to the regular corporate income tax in Israel. On August 5, 2013, the Law for Change of National Priorities (Legislative Amendments for Achieving the Budgetary Goals for 2013-2014), 2013 was published, enacts, among other things, the raising of the corporate tax rate beginning in 2014 and thereafter to 26.5% (instead of 25%). In January 2016, the Law for the Amendment of the Income Tax Ordinance (No. 216) was published, enacting a reduction of corporate tax rate in 2016 and thereafter, from 26.5% to 25%. In December 2016, the Economic Efficiency Law (Legislative Amendments for Implementing the Economic Policy for the 2017 and 2018 Budget Year), 2016 was published, enacting that the corporate tax rate will be 24% in 2017 and 23% in 2018 and thereafter. c. Deferred income taxes Balances of deferred tax asset (liability) in NIS millions are attributable to the following items: Balance of deferred tax asset (liability) in respect of As at January 1, 2015 Charged to the income statement Charged to other comprehen-sive income As at December 31, 2015 Charged to the income statement Charged to other comprehensive income Effect of change in corporate tax rate As at December 31, 2016 Charged to the income statement Charged to other comprehensive income As at December 31, 2017 Allowance for doubtful accounts 44 1 45 6 (6 ) 45 * 45 Provisions for employee rights 19 (4 ) (1 ) 14 * 2 (2 ) 14 * 1 15 Depreciable fixed assets and software (70 ) 17 (53 ) 13 5 (35 ) 8 (27 ) Intangibles, deferred expenses and carry forward losses 7 15 22 (8 ) (5 ) 9 7 16 Options granted to employees 1 2 3 4 (1 ) 6 * 6 Other 9 9 18 (18 ) 2 2 (2 ) * Total 10 40 (1 ) 49 (3 ) 2 (7 ) 41 13 1 55 * Representing New Israeli Shekels December 31, 2016 2017 In millions Deferred tax assets Deferred tax assets to be recovered after more than 12 months 87 80 Deferred tax assets to be recovered within 12 months 37 50 124 130 Deferred tax liabilities Deferred tax liabilities to be recovered after more than 12 months 72 63 Deferred tax liabilities to be recovered within 12 months 11 12 83 75 Deferred tax assets, net 41 55 d. Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in Israel (see (b) above), and the actual tax expense: New Israeli Shekels Year ended December 31 2015 2016 2017 In millions Profit (loss) before taxes on income, as reported in the income statements (36 ) 88 135 Theoretical tax expense (9 ) 22 32 Increase in tax resulting from disallowable deductions 7 11 8 Taxes on income in respect of previous years 7 (4 ) (10 ) Change in corporate tax rate, see (b) above 7 Temporary differences and tax losses for which no deferred income tax asset was recognized (9 ) Other (1 ) * * Income tax expenses 4 36 21 e. Taxes on income included in the income statements: New Israeli Shekels Year ended December 31 2015 2016 2017 In millions For the reported year: Current 37 31 44 Deferred, see (c) above (40 ) 2 (4 ) Effect of change in corporate tax rate on deferred taxes 7 In respect of previous year: Current 7 (4 ) (10 ) Deferred, see (c) above (9 ) 4 36 21 f. Tax assessments: 1) The Company has received final corporate tax assessments through the year ended December 31, 2015. During 2017, the Company received final tax assessments for the years 2014 and 2015. 2) A subsidiary has received final corporate tax assessments through the year ended December 31, 2013. 3) As general rule, tax self-assessments filed by another two subsidiaries through the year ended December 31, 2012 are, by law, now regarded as final. |
TRANSACTIONS AND BALANCES WITH
TRANSACTIONS AND BALANCES WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of transactions between related parties [abstract] | |
TRANSACTIONS AND BALANCES WITH RELATED PARTIES | NOTE 26 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES a. Key management compensation Key management personnel are the senior management of the Company and the members of the Company's Board of Directors. New Israeli Shekels Year ended December 31 2015 2016 2017 Key management compensation expenses comprised In millions Salaries and short-term employee benefits 23 22 21 Long term employment benefits 4 3 3 Employee share-based compensation expenses 4 17 11 31 42 35 New Israeli Shekels December 31, 2016 2017 Statement of financial position items - key management In millions Current liabilities: 10 11 Non-current liabilities: 12 11 b. In the ordinary course of business, key management or their relatives may have engaged with the Company with immaterial transactions that are under normal market conditions. c. Principal shareholder: On January 29, 2013, S.B. Israel Telecom Ltd. completed the acquisition of 48,050,000 ordinary shares of the Company and became the Company's principal shareholder. See also note 1(a). As of December 31, 2017 the principal shareholder held 49,862,800 ordinary shares including the shares issued in June 2017. See also note 21(a). d. Associates – investment in PHI Balances and transactions with PHI (see also note 9): New Israeli Shekels Year ended December 31 2016 2017 In millions Cost of revenues (2 ) 45 New Israeli Shekels December 31, 2016 2017 In millions Deferred expenses - Right of use 41 95 Current assets (liabilities) (5 ) (43 ) Non-current assets (liabilities) (7 ) The Company provided a guarantee to PHI's debt in an amount of NIS 50 million. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings (loss) per share | |
EARNINGS (LOSS) PER SHARE | NOTE 27 –EARNINGS (LOSS) PER SHARE Following are data relating to the net income (loss) and the weighted average number of shares that were taken into account in computing the basic and diluted EPS: Year ended December 31 2015 2016 2017 Profit (loss) used for the computation of basic and diluted EPS (NIS in millions) (40 ) 52 114 Weighted average number of shares used in computation of basic EPS (in thousands) 156,081 156,268 162,733 Add - net additional shares from assumed exercise of employee stock options and restricted shared (in thousands) 0 1,828 1,804 Weighted average number of shares used in computation of diluted EPS (in thousands) 156,081 158,096 164,537 Number of options and restricted shares not taken into account in computation of because of their anti-dilutive effect (in thousands) 15,587 8,906 5,650 |
COLLECTIVE EMPLOYMENT AGREEMENT
COLLECTIVE EMPLOYMENT AGREEMENT | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of collective employment agreement [Abstract] | |
COLLECTIVE EMPLOYMENT AGREEMENT | NOTE 28 – COLLECTIVE EMPLOYMENT AGREEMENT The Company, the employees' representatives and the Histadrut New General Labor Organization, have reached understandings regarding a retirement plan that includes, among others, an increased retirement payment and range of benefits. As a result, the Company recorded a onetime expense of approximately NIS 35 million in the third quarter of 2015. The Company signed in 2016 a collective employment agreement with the employees' representatives and the Histadrut New General Labor Organization. The agreement includes an organizational chapter that is for a period of three years (2016-2018) and an economic chapter that is valid for the years 2017 and 2018. The collective employment agreement also refers to the participation of employees in the Company's profits and regulates the eligibility conditions for receipt of these awards for the years 2017 and 2018. |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
Basis of preparation of the financial statements | a. Basis of preparation of the financial statements (1) Basis of preparation The consolidated The principal (2) Use of estimates and judgments The preparation of financial statements in conformity with IFRS requires the use of certain critical |
Foreign currency translations | b. Foreign currency translations (1) Functional and presentation currency The consolidated financial statements are measured and presented in New Israeli Shekels ("NIS"), which is the Group's functional and presentation currency as it is the currency of the primary (2) Transactions and balances Foreign currency transactions are translated into NIS using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement in finance costs, net. (3) Convenience translation into U.S. Dollars (USD or $ or dollar) The NIS figures at December 31, 2017 and for the period then ended have been translated into dollars using the representative exchange rate of the dollar at December 31, 2017 (USD 1 = NIS |
Interests in other entities | c. Interests in other entities (1) Subsidiaries The consolidated financial statements include the accounts of the Company and entities controlled by the Company. Control exists when the Company has the power over the investee; has exposure, or rights, to variable returns from involvement in the investee; and has the ability to use its power over the investee to affect its returns. Subsidiaries and partnerships are fully consolidated from the date on which control is transferred to the Company. Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated in preparing the consolidated financial statements. List of wholly owned Subsidiaries and partnerships: 012 Smile Telecom Ltd. 012 Telecom Ltd. Partner Land-Line Communication Solutions - Limited Partnership Partner Future Communications 2000 Ltd. ("PFC") Partner Communication Products 2016 - Limited Partnership Partner Business Communications Solution - Limited Partnership – not active (2) Investment in PHI In November 2013, the Company and Hot Mobile Ltd entered into a network sharing agreement ("NSA") and a right of use agreement. Pursuant to the NSA, the parties created a 50-50 limited partnership - P.H.I. Networks (2015) Limited Partnership ("PHI"), which operates and develops a radio access network shared by both parties, starting with a pooling of both parties' radio access network infrastructures creating a single shared pooled radio access network. PHI began its operations in July 2015, managing the networks. See also note 9. As described in note 4(b)(3) the Company does not control PHI nor does it have joint control over it, and the Company accounts for its investment in PHI according to the equity method as PHI is considered an associate. An associate is an entity over which the group has significant influence but not control. Investment in associate is accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and adjusted thereafter to recognize the investor’s share of the post-establishment profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee in other comprehensive income. Unrealized gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. See also note 26(d) for information about transactions and balances with respect to the investment in PHI – as a related party. |
Inventories | d. Inventories Inventories of equipment: cellular handsets and fixed telephones, tablets, laptops, datacards, servers, spare parts, ISP modems, related equipment, accessories and other inventories are stated at the lower of cost or net realizable value. Cost is determined on the "first-in, first-out" basis. The Group determines its allowance for inventory obsolescence and slow moving inventory based upon past experience, expected inventory turnover, inventory ageing and current and future expectations with respect to product offerings. |
Property and equipment | e. Property and equipment Property and equipment are initially stated at cost. Costs are included in the assets' carrying amounts or recognized as separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance that do not meet the above criteria are charged to the statement of income during the financial period in which they are incurred. Costs include expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Changes in the obligation to dismantle and remove assets on sites and to restore the sites, on which they are located, other than changes deriving from the passing of time, are added or deducted from the cost of the assets in the period in which they occur. The amount deducted from the cost of the asset shall not exceed the balance of the carrying amount on the date of change, and any balance is recognized immediately in profit or loss, See (m)(2). Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. Property and equipment is presented less accumulated depreciation, and accumulated impairment losses. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (see (i)). Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows: years Communications network: Physical layer and infrastructure 10 - 25 (mainly 15, 10) Other Communication network 3 - 15 (mainly 5, 10, 15) Computers, software and hardware for information systems 3-10 (mainly 3-5) Office furniture and equipment 7-15 Optic fibers and related assets 7-25 (mainly 20) Subscribers equipment and installations 2 - 4 Property 25 Leasehold improvements are depreciated by the straight-line method over the term of the lease (including reasonably assured option periods), or the estimated useful life (5‑10 years) of the improvements, whichever is shorter. See note 13(2) with respect of impairment charges in 2015. |
Licenses and other intangible assets | f. Licenses and other intangible assets (1) Licenses costs and amortization (see also note 1 (d)): (a) The licenses to operate cellular communication services were recognized at cost. Borrowing costs which served to finance the license fee - incurred until the commencement of utilization of the license - were capitalized to cost of the license. (b) Partner Land-line Communication solutions – limited partnership's license for providing fixed-line communication services is stated at cost. (c) 012 Smile and its subsidiaries' licenses were recognized at fair value in a business combination as of the acquisition date of 012 Smile March 3, 2011. The other licenses of the Group were received with no significant costs. The licenses (2) Computer software: Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and to bring to use the specified software. Development costs, including employee costs, that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the capitalization criteria under IAS 38 are met. Other development expenditures that do not meet the capitalization criteria, such as software maintenance, are recognized as an expenses as incurred. Computer software costs are amortized over their estimated useful lives (3 to 10 years) using the straight-line method, see also note 11. (3) Customer relationships: The Company has recognized as intangible assets customer relationships that were acquired in a business combination and recognized at fair value as of the acquisition date. Customer relationships are amortized to selling and marketing expenses over their estimated useful economic lives (5 to 10 years) based on the straight line method. See note 13(2) with respect of impairment charges in 2015. (4) 012 Smile trade name: Trade name was acquired in a business combination. In 2015, the Group decided to cease the usage of the "012 Smile" trade name in 2017.As a result the Group revised its expected useful life to end in 2017 as a change in accounting estimate. As a result the amortization expenses of the 012 Smile trade name increased by NIS 1 million, NIS 16 million, and NIS 6 million in 2015, 2016, 2017 respectively, see also notes 4(a)(2), and 13(2). As of December 31, 2017 the trade name was fully amortized. (5) Capitalization of contract costs according to IFRS15 (see note 2(n)): According to IFRS 15 (see note 2(n)) incremental costs of obtaining contracts with customers are recognized as assets when the costs are incremental to obtaining the contracts, and it is probable that the Group will recover these costs, instead of recognizing these costs in the statement of income as incurred (mainly direct commissions paid to resellers and sales employees for sales and upgrades). The assets are amortized in accordance with the expected service period (mainly over 2-3 years), using the portfolio approach, see also note 4(a)(1). IFRS 15 also determines that direct costs of fulfilling a contract which the Group can specifically identify and which produce or improve the Group’s resources that are used for its future performance obligation (and it is probable that the Group will recover these costs) are recognized as assets (together: "contract costs"), see note 11. Contract costs that were recognized as assets are presented in the statements of cash flows as part of cash flows used in investing activities. Other costs incurred that would arise regardless of whether a contract with a customer was obtained are recognized as an expense when incurred. |
Right Of Use (ROU) | g. Right Of Use (ROU) Right of use (ROU) of international fiber optic cables was acquired in a business combination, subsequent additions and right of use in PHI's assets are recognized at cost. The ROU with respect of fiber optic cables is presented as deferred expenses (current and non-current) and is amortized on a straight line basis over a period beginning each acquisition of additional ROU in this framework and until 2030 (including expected contractual extension periods). See also notes 12 and 17(4). See note 13(2) with respect to impairment charges to ROU in 2015 in an amount of NIS 76 million. Other costs of right to use PHI's assets are presented as deferred expenses and amortized on a straight line basis over the assets useful lives. |
Goodwill | h. Goodwill Goodwill acquired in a business combination represents the excess of the consideration transferred over the net fair value of the identifiable assets acquired, and identifiable liabilities and contingent liabilities assumed. The goodwill has an indefinite useful economic life and is not subject to amortization; rather is measured at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to a group of CGUs under the fixed line segment that is expected to benefit from the synergies of the combination. The group of CGUs represents the lowest level within the entity which the goodwill is monitored for internal management purposes. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment loss would be recognized for the amount by which the carrying amount of goodwill exceeded its recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs to sell. Value-in-use is determined by discounting expected future cash flows using a pre-tax discount rate. Any impairment is recognized immediately as an expense and is not subsequently reversed. See also note 13(1) with respect to impairment tests. |
Impairment of non-financial assets with finite useful economic lives | i. Impairment of non-financial assets with finite useful economic lives Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indications exist an impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs. The recoverable amount is the higher of an asset's fair value less costs to sell and value-in-use. Value-in-use is determined by discounting expected future cash flows using a pre-tax discount rate. An impairment loss recognized in prior periods for an asset (or CGU) other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset's (or CGU's) recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset (or CGU) shall be increased to its recoverable amount. The increased carrying amount of an asset (or CGU) other than goodwill attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in the statement of income. The Group recorded in 2015 impairment charges of intangible assets, deferred expenses – right of use, and fixed assets, see note 13(2) and note 4(a)(2). |
Financial instruments | j. Financial instruments The Group classifies its financial instruments in the following categories: (1) at fair value through profit or loss, (2) loans and receivables, and (3) liabilities at amortized cost. See note 6(c) as to classification of financial instruments to the categories. Financial assets are classified as current if they are expected to mature within 12 months after the end of the reporting period; otherwise they are classified as non-current. Financial liabilities are included in current liabilities, except for maturities greater than 12 months after the end of the reporting period, which are classified as non-current liabilities. Financial assets and liabilities are offset and the net amount reported in the statement of financial position when the Group has currently a legal enforceable right to offset the recognized amounts and has an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legal enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty. (1) Financial instruments at fair value through profit or loss category Gains or losses arising from changes in the fair value of derivative financial instruments are presented in the income statement within "finance costs, net" in the period in which they arise. These financial instruments are classified into 2 levels based on their valuation method (see also note 6(c)): Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within level 1 that are observable for the assets or liabilities, either directly (as prices) or indirectly (derived from prices). (2) Loans and receivables category Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are recognized initially at fair value and subsequently measured at amortized costs The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated income statement. Trade receivables are presented net of allowance for doubtful accounts. Individual receivables which are known to be uncollectable are written off by reducing the carrying amount directly. The other receivables are assessed collectively. For these receivables the allowance is determined based on percentage of doubtful debts in collection, considering the likelihood of recoverability based on the age of the balances, the historical write-off experience net of recoveries, changes in the credit worthiness, and collection trends. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership of the assets. The Group factored trade receivables resulting from sales of equipment by credit cards. The factoring was on a non-recourse basis. The factoring of accounts receivable was recorded by the Company as a sales transaction . (3) Financial liabilities and borrowings at amortized cost category: Financial liabilities at amortized cost are non-derivative financial instruments with fixed or determinable payment, including trade payables. Financial liabilities at amortized cost are recognized initially at fair value, net of transaction costs, and subsequently measured at amortized costs The Group revised its estimates of payments with respect to long term borrowings L and K due to early repayments (see note 15 (5)), therefore the Group adjusted the carrying amount of the financial liabilities to reflect the actual and revised estimated cash flows. The Group recalculated the carrying amount by computing the present value of estimated future cash flows at the financial instrument's original effective interest rate. The adjustment was recognized in profit or loss as interest expense of NIS 18 million for 2017. |
Employee benefits | k. Employee benefits (i) Post-employment benefits 1. Defined contribution plan According to Section 14 of the Israeli Severance Pay Law the Group's liability for some of the employee rights upon retirement is covered by regular contributions to various pension schemes. The schemes are generally funded through payments to insurance companies or trustee-administered funds. These plans are defined contribution plans, since the Group pays fixed contributions into a separate and independent entity. The Group has no legal or constructive obligations to pay further contribution if the fund does not hold sufficient assets to pay all employees the benefit relating to employee service in the current or prior periods. The amounts funded as above are not reflected in the statement of financial position. Obligations for contributions to defined contribution pension plans are recognized as an expense in the statement of income when they are due. 2. Defined benefit plan Labor laws, agreements and the practice of the Group, require paying retirement benefits to employees dismissed or retiring in certain other circumstances (except for those described in 1 above), measured by multiplying the years of employment by the last monthly salary of the employee (i.e. one monthly salary for each year of tenure), the obligation of the Group to pay retirement benefits is treated as a defined benefit plan. The liability recognized in the statement of financial position in respect of the defined benefit plan is the present value of the defined benefit obligation at end of the reporting period less the fair values of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. According to IAS 19 employee benefits Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity (ii) Termination benefits Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably legally or constructively committed either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. (iii) Short term employee benefits 1. Vacation and recreation benefits The employees are legally entitled to vacation and recreation benefits, both computed on an annual basis. This entitlement is based on the term of employment. This obligation is treated as a short term benefit under IAS 19. The Group charges a liability and expense due to vacation and recreation pay, based on the benefits that have been accumulated for each employee, on an undiscounted basis. 2. Profit-sharing and bonus plans The Group recognizes a liability and an expense for bonuses based on consideration of individual performance and the Group's overall performance. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. 3. Other short term benefits The Group recognized expenses for other short term benefits provided by the collective employment agreement (see note 28). |
Share based payments | l. Share based payments The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Group. The fair value of the employee services received in exchange for the grant of the equity instruments is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the equity instruments granted, at the grant date. Non-market vesting conditions are included The proceeds received net of any directly attributable transactions costs are credited to share capital and capital surplus when the equity instruments are exercised. |
Provisions | m. Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will require settling the obligation, and the amount has been reliably estimated, See note 14. (1) In the ordinary course of business, the Group is involved in a number of lawsuits and litigations. The costs that may result from these lawsuits are only accrued for when it is probable 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, and events arising during the course of legal proceedings that may require a reassessment of this risk, and where applicable discounted at a pre-tax discount rate that (2) The Company is required to incur certain costs in respect of a liability to dismantle and remove assets and to restore sites on which the assets were located. The dismantling costs are calculated according to best estimate of future expected payments discounted at a pre-tax discount rate that (3) Provisions for equipment warranties include obligations to customers in respect of equipment sold. Where there are a number of similar obligations, the likelihood that an outflow will be required in a settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any item included in the same class of obligations may be small. (4) Group's share in provisions recognized by PHI is recognized to the extent probable that the Group will be required to cover, see also note 9. |
Revenues | n. Revenues Early adoption of IFRS 15 Revenue from Contracts with Customers – change in accounting policy: In the third quarter of 2017 the Group has early adopted (the standard is effective from January 1, 2018, earlier application is permitted) with a date of initial application of January 1, 2017 (the transition date) IFRS 15, Revenue from Contracts with Customers Revenue Construction contracts 1) Identifying the contract with the customer. 2) Identifying separate performance obligations in the contract. 3) Determining the transaction price. 4) Allocating the transaction price to separate performance obligations. 5) Recognizing revenue when the performance obligations are satisfied. In accordance with the model, the Group recognizes revenue when it satisfies performance obligations by transferring control over the goods or services to the customers. Revenue is measured based on the consideration that the Group expects to receive for the transfer of the goods or services specified in a contract with the customer, taking into account rebates and discounts, excluding amounts collected on behalf of third parties, such as value added taxes. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component (such as sales of equipment with non-current credit arrangements, mainly in 36 monthly installments) and for any consideration payable to the customer. With respect to sales that constitute a revenue arrangement with multiple performance obligations, the transaction price is allocated to separate performance obligations based of their relative stand-alone selling prices, see also note 4(b)(2). The performance obligations are separately identifiable where the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and the Group’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The performance obligations are mainly services, equipment and options to purchase additional goods or services that provide a material right to the customer. Revenues from services and from providing rights to use the Group's assets, (see note 1(b)) (either month-by-month or long term arrangements) are recognized over time, as the services are rendered to the customers, and all other revenue recognition criteria are met. Revenue from sale of equipment (see note 1(b)) is recognized at a point of time when the control over the equipment is transferred to the customer (mainly upon delivery) and all other revenue recognition criteria are met. The Group determines whether it is acting as a principal or as an agent. The Group is acting as a principal if it controls a promised good or service before they are transferred to a customer. Indicators for acting as a principal include: (1) the Group is primarily responsible for fulfilling the promise to provide the specified good or service, (2) the Group has inventory risk in the specified good or service and (3) the Group has discretion in establishing the price for the specified good or service. On the other hand, the Group is acting as an agent or an intermediary, if these criteria are not met. When the Group is acting as an agent, revenue is recognized in the amount of any fee or commission to which the Group expects to be entitled in exchange for arranging for the other party to provide its goods or services. A Group’s fee or commission might be the net amount of consideration that the Group retains after paying the other party the consideration received in exchange for the goods or services to be provided by that party. The Group determined that it is acting as an agent in respect of certain content services provided by third parties to customers; therefore the revenues recognized from these services are presented on a net basis in the statement of income. The application of IFRS 15 did not have a material effect on the measurement and timing of the Group’s revenue in the reporting period, compared to the provisions of the previous standards. Capitalization of contract costs resulted in a significant impact from the adoption, see below. Transition to the new revenue recognition model: The Group applied IFRS 15 using the cumulative effect approach as from the transition date, without a restatement of comparative figures. As part of the initial implementation of IFRS 15, the Group has chosen to apply the expedients in the transitional provisions, according to which the cumulative effect approach is applied only for contracts not yet complete at the transition date, and therefore there is no change in the accounting treatment for contracts completed at the transition date. The Group also applied the practical expedient of examining the aggregate effect of contracts changes that occurred before the transition date, instead of examining each change separately. Contracts that are renewed on a monthly basis and may be cancelled by the customer at any time, without penalty, were considered completed contracts at the transition date. The transition resulted in an immaterial amount on the statement of financial position as of the transition date, as the cumulative effect as of the transition date was immaterial. Other practical expedients implemented: The Group applies IFRS 15 practical expedient to the revenue model to a portfolio of contracts with similar characteristics if the Group reasonably expects that the financial statement effects of applying the model to the individual contracts within the portfolio would not differ materially. The Group applies a practical expedient in the standard and measures progress toward completing satisfaction of a performance obligation and recognizes revenue based on billed amounts if the Group has a right to invoice a customer at an amount that corresponds directly with its performance to date; for which, or where the original expected duration of the contract is one year or less, the group also applies the practical expedient in the standard and does not disclose the transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations, such as constrained variable consideration. The Group applies a practical expedient in the standard and does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the Group expects the period between customer payment and the transfer of goods or services to be one year or less (see note 23 – unwinding of trade receivables and note 7(a)). The Group applies in certain circumstances where the customer has a material right to acquire future goods or services and those goods or services are similar to the original goods or services in the contract and are provided in accordance with the same terms of the original contract, a practical alternative to estimating the stand-alone selling price of the customer option, and instead allocates the transaction price to the optional goods or services by reference to the goods or services expected to be provided and the corresponding expected consideration. Recognition of receivables: A receivable is recognized when the control over the goods or services is transferred to the customer, and the consideration is unconditional because only the passage of time is required before the payment is due. See note 7 and also note 6(a)(3) regarding trade receivables credit risk. Recognition of contract assets and contract liabilities: A contract asset is a Group’s right to consideration in exchange for goods or services that the entity has transferred to a customer A contract liability is a Group’s obligation to transfer goods or services to a customer Capitalization of contract costs: The main effect of the Group’s application of IFRS 15 is the accounting treatment for the incremental costs of obtaining contracts with customers, which in accordance with IFRS 15, are recognized as assets under certain conditions, see notes 2(f)(5), 11. Under the previous accounting policy these costs were not capitalized, and instead, subsidies, in some cases, of sales of handsets to end subscribers at a price below its cost, securing a fixed-term service contract were capitalized as subscriber acquisition and retention costs (SARC costs). SARC costs were eliminated upon the transition to IFRS 15, see note 11. Use of judgments and estimates: Implementation of the accounting policy described above requires management to exercise discretion in estimates and judgments, see notes 4(a)(1) and 4(b)(2). See additional information with respect to revenues in note 22(a). The tables below summarize the effects of IFRS 15 on the consolidated statement of financial position as at December 31, 2017 and on the consolidated statements of income and cash flows for the year then ended. See disaggregation of revenues and additional information in note 22(a). Effect of change on consolidated statement of financial position: New Israeli Shekels in millions As of December 31, 2017 note Previous accounting policy Effect of change According to IFRS15 as reported Current assets - other receivables and prepaid expenses - Contract assets - 2 2 Non-current assets - Costs to obtain contracts recognized in intangible assets, net – non-current assets 11, 2(f)(5) - 71 71 Deferred income tax asset 25 71 (16 ) 55 Current liabilities - other deferred revenues – Contract liabilities 22 36 4 40 Non-current liabilities – other non-current liabilities – Contract liabilities 22 6 - 6 Deferred revenues from Hot Mobile – Contract liabilities (current and non-current) 22 195 - 195 Equity 1,381 53 1,434 Effect of change on consolidated statement of income: New Israeli Shekels Year ended December 31, 2017 Previous accounting policy Effect of change According to IFRS15 as reported Revenues 3,270 (2 ) 3,268 Selling and marketing expenses 340 (71 ) 269 Operating profit 246 69 315 Profit before income tax 66 69 135 Income tax expenses 5 16 21 Profit for the year 61 53 114 Depreciation and amortization expense 567 13 580 Basic earnings per share 0.38 0.32 0.70 Diluted earnings per share 0.37 0.32 0.69 Effect of change on consolidated statement cash flows: New Israeli Shekels in millions Year ended December 31, 2017 Previous accounting policy Effect of change According to IFRS15 as reported Net cash provided by operating activities 897 76 973 Net cash provided by (used in) investing activities 4 (76 ) (72 ) |
Leases | o. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from lessor) are charged to income statements on a straight-line basis over the lease term, including extending options which are reasonably certain. |
Tax expenses | p. Tax expenses The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted as of the end of the reporting period. Management periodically evaluates positions taken with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognized on temporary differences arising between that tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from initial recognition of goodwill. Deferred income tax is determined using the tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax assets are presented as non-current, see also note 25. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity where there is an intention to settle the balances on a net basis. |
Share capital | q. Share capital Ordinary shares are classified as equity. Company's shares acquired by the Company (treasury shares) are presented as a reduction of equity, at the consideration paid, including any incremental attributable costs, net of tax. Treasury shares do not have a right to receive dividends or to vote. See also note 21(a) |
Earnings Per Share (EPS) | r. Earnings Per Share (EPS) Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume exercise of all dilutive potential ordinary shares. The instruments that are potential dilutive ordinary shares are equity instruments granted to employees, see note 21(b). A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options (see note 27). |
GENERAL (Tables)
GENERAL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of general [Abstract] | |
Schedule of Group Licenses | The Group operates under the following licenses that were received from the Israeli Ministry of Communications ("MOC") and from the Israeli Civil Administration ("CA"): Type of services Area of service License owner Granted by Valid through Guarantees made (1) Cellular Israel Partner Communications Company Ltd. MOC Feb, 2022 80 (2) Cellular West Bank Partner Communications Company Ltd. CA Feb, 2022 4 (3) ISP Israel Partner Communications Company Ltd. MOC Mar, 2023 (4) ISP West Bank Partner Communications Company Ltd. CA Mar, 2023 (5) ISP Israel 012 Smile Telecom Ltd. MOC Jun, 2020 (6) ISP West Bank 012 Smile Telecom Ltd. CA Jun, 2020 (7) ILD (*) Israel 012 Smile Telecom Ltd. MOC Dec, 2029 5 (8) ILD (**) West Bank 012 Smile Telecom Ltd. CA Dec, 2029 0.25 (9) Fixed (*) Israel 012 Telecom Ltd. MOC Dec, 2025 5 (10) Fixed (**) West Bank 012 Telecom Ltd. CA Dec, 2025 0.25 (11) Fixed (*) (incl. ISP, ILD, NTP) Israel Partner Land-line Communication Solutions - Limited Partnership MOC Jan, 2027 5 (12) Fixed (**) (incl. ISP, ILD, NTP) West Bank Partner Land-line Communication Solutions - Limited Partnership CA Jan, 2027 0.25 (13) NTP Israel 012 Smile Telecom Ltd. MOC Dec, 2020 |
SIGNIFICANT ACCOUNTING POLICI38
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
Schedule of Depreciation Calculated Using Straight-Line Method | Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows: years Communications network: Physical layer and infrastructure 10 - 25 (mainly 15, 10) Other Communication network 3 - 15 (mainly 5, 10, 15) Computers, software and hardware for information systems 3-10 (mainly 3-5) Office furniture and equipment 7-15 Optic fibers and related assets 7-25 (mainly 20) Subscribers equipment and installations 2 - 4 Property 25 |
Schedule of Effect of Change on Consolidated Statement of Financial Position | Effect of change on consolidated statement of financial position: New Israeli Shekels in millions As of December 31, 2017 note Previous accounting policy Effect of change According to IFRS15 as reported Current assets - other receivables and prepaid expenses - Contract assets - 2 2 Non-current assets - Costs to obtain contracts recognized in intangible assets, net – non-current assets 11, 2(f)(5) - 71 71 Deferred income tax asset 25 71 (16 ) 55 Current liabilities - other deferred revenues – Contract liabilities 22 36 4 40 Non-current liabilities – other non-current liabilities – Contract liabilities 22 6 - 6 Deferred revenues from Hot Mobile – Contract liabilities (current and non-current) 22 195 - 195 Equity 1,381 53 1,434 |
Schedule of Effect of Change on Consolidated Statement of Income | Effect of change on consolidated statement of income: New Israeli Shekels Year ended December 31, 2017 Previous accounting policy Effect of change According to IFRS15 as reported Revenues 3,270 (2 ) 3,268 Selling and marketing expenses 340 (71 ) 269 Operating profit 246 69 315 Profit before income tax 66 69 135 Income tax expenses 5 16 21 Profit for the year 61 53 114 Depreciation and amortization expense 567 13 580 Basic earnings per share 0.38 0.32 0.70 Diluted earnings per share 0.37 0.32 0.69 |
Schedule of Effect of Change on Consolidated Statement Cash flows | Effect of change on consolidated statement cash flows: New Israeli Shekels in millions Year ended December 31, 2017 Previous accounting policy Effect of change According to IFRS15 as reported Net cash provided by operating activities 897 76 973 Net cash provided by (used in) investing activities 4 (76 ) (72 ) |
CRITICAL ACCOUNTING ESTIMATES39
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of critical accounting estimates and judgements [Abstract] | |
Schedule of Recoverable Amount of Goodwill for Impairment Tests | The key assumptions used in the December 31, 2017 test were as follows: Terminal growth rate 0.9 % After-tax discount rate 9.3 % Pre-tax discount rate 11.2 % |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of operating segments [abstract] | |
Schedule of Segment Information | Year ended December 31, 2017* In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 1,960 622 2,582 Inter-segment revenue - Services 18 155 (173 ) Segment revenue - Equipment 610 76 686 Total revenues 2,588 853 (173 ) 3,268 Segment cost of revenues - Services 1,470 613 2,083 Inter-segment cost of revenues- Services 154 19 (173 ) Segment cost of revenues - Equipment 490 54 544 Cost of revenues 2,114 686 (173 ) 2,627 Gross profit 474 167 641 Operating expenses (3) 367 98 465 Income with respect to settlement agreement with Orange 108 108 Other income, net 29 2 31 Operating profit 244 71 315 Adjustments to presentation of segment Adjusted EBITDA 445 135 –Other (1) 21 1 Segment Adjusted EBITDA (2) 710 207 New Israeli Shekels Year ended December 31, 2017* In millions Reconciliation of segments subtotal Adjusted EBITDA to profit for the year Segments subtotal Adjusted EBITDA (2) 917 Depreciation and amortization (580 ) Finance costs, net (180 ) Income tax expenses (21 ) Other (1) (22 ) Profit for the year 114 * See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts New Israeli Shekels Year ended December 31, 2016 In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 2,080 672 2,752 Inter-segment revenue - Services 19 194 (213 ) Segment revenue - Equipment 729 63 792 Total revenues 2,828 929 (213 ) 3,544 Segment cost of revenues - Services 1,659 617 2,276 Inter-segment cost of revenues- Services 192 21 (213 ) Segment cost of revenues - Equipment 596 52 648 Cost of revenues 2,447 690 (213 ) 2,924 Gross profit 381 239 620 Operating expenses (3) 571 118 689 Income with respect to settlement agreement with Orange 217 217 Other income, net 41 4 45 Operating profit 68 125 193 Adjustments to presentation of segment Adjusted EBITDA –Depreciation and amortization 447 148 –Other (1) 47 (1 ) Segment Adjusted EBITDA (2) 562 272 New Israeli Shekels Year ended December 31, 2016 In millions Reconciliation of segments subtotal Adjusted EBITDA to profit for the year Segments subtotal Adjusted EBITDA (2) 834 Depreciation and amortization (595 ) Other (1) (46 ) Finance costs, net (105 ) Income tax expenses (36 ) Profit for the year 52 New Israeli Shekels Year ended December 31, 2015 In millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services 2,275 717 2,992 Inter-segment revenue - Services 22 189 (211 ) Segment revenue - Equipment 1,051 68 1,119 Total revenues 3,348 974 (211 ) 4,111 Segment cost of revenues - Services 1,856 736 (*) 2,592 Inter-segment cost of revenues- Services 187 24 (211 ) Segment cost of revenues - Equipment 832 48 880 Cost of revenues 2,875 808 (211 ) 3,472 Gross profit 473 166 639 Operating expenses (3) 506 134 (*) 640 Income with respect to settlement agreement with Orange 61 61 Other income, net 44 3 47 Operating profit 72 35 107 Adjustments to presentation of segment Adjusted EBITDA –Depreciation and amortization 510 243 –Other (1) 15 1 Segment Adjusted EBITDA (2) 597 279 New Israeli Shekels Year ended December 31, 2015 In millions Reconciliation of segments subtotal Adjusted EBITDA to loss for the year Segments subtotal Adjusted EBITDA (2) 876 Depreciation and amortization (including impairment charges, see note 13) (753 ) Other (1) (16 ) Finance costs, net (143 ) Income tax expenses (4 ) Loss for the year (40 ) (*) Includes impairment charges in the fixed line segment, see note 13. (1) Mainly amortization of employee share based compensation. (2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses – right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods. (3) Operating expenses include selling and marketing expenses and general and administrative expenses. |
FINANCIAL INSTRUMENTS AND FIN41
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments [abstract] | |
Schedule of Data Regarding US Dollar and Euro Exchange Rate and Israeli CPI | Data regarding the US Dollar and Euro exchange rate and the Israeli CPI: Exchange Exchange rate of one rate of one Israeli Dollar Euro CPI* At December 31: 2017 NIS 3.467 NIS 4.153 221.57 points 2016 NIS 3.845 NIS 4.044 220.68 points 2015 NIS 3.902 NIS 4.247 221.13 points Increase (decrease) during the year: 2017 (9.8 )% 2.7 % 0.4 % 2016 (1.5 )% (4.8 )% (0.2 )% 2015 0.3 % (10.1 )% (1.0 )% * Index for each reporting period's last month, on the basis of 1993 average = 100 points. |
Schedule of Analysis of Linkage Terms of Financial Instruments Balances | (b) Analysis of linkage terms of financial instruments balances December 31, 2017 In or linked to USD In or linked to other foreign currencies NIS linked to CPI NIS unlinked Total New Israeli Shekels in millions Current assets Cash and cash equivalents 2 4 861 867 Short term deposits 150 150 Trade receivables * 62 34 712 808 Other receivables 9 9 Non- current assets Trade receivables 232 232 Total assets 64 38 1,964 2,066 Current liabilities Current maturities of notes payable and borrowings 213 491 704 Trade payables * 143 32 612 787 Payables in respect of employees 78 78 Other payables 21 21 Non- current liabilities Notes payable 972 972 Borrowings from banks and others 243 243 Total liabilities 143 32 213 2,417 2,805 In or linked to foreign currencies New Israeli Shekels in millions *Accounts that were set-off under enforceable netting arrangements Trade receivables gross amounts 281 Set-off (185 ) Trade receivables, net 96 Trade payables gross amounts 360 Set-off (185 ) Trade payables, net 175 December 31, 2016 In or linked to USD In or linked to other foreign currencies NIS linked to CPI NIS unlinked Total New Israeli Shekels in millions Current assets Cash and cash equivalents 2 1 713 716 Short term deposits 452 452 Trade receivables * 58 35 897 990 Other receivables 39 39 Non- current assets Trade receivables 333 333 Total assets 60 36 2,434 2,530 Current liabilities Current maturities of notes payable and borrowings 212 287 499 Trade payables * 132 19 530 681 Payables in respect of employees 90 90 Other payables 10 10 Non- current liabilities Notes payable 212 437 649 Borrowings from banks and others 197 1,353 1,550 Total liabilities 132 19 621 2,707 3,479 In or linked to foreign currencies New Israeli Shekels in millions *Accounts that were set-off under enforceable netting arrangements Trade receivables gross amounts 267 Set-off (174 ) Trade receivables, net 93 Trade payables gross amounts 325 Set-off (174 ) Trade payables, net 151 |
Schedule of Details Regarding Derivative Financial Instruments | The notional amounts of derivatives as of December 31, 2016 and 2017 are as follows, based on the amounts of currencies to be received, translated into NIS at the exchange rates prevailing at each of the reporting dates, respectively: New Israeli Shekels December 31 2016 2017 In millions Embedded derivatives pay USD, receive NIS 11 3 |
Schedule of Maturities of Financial Liabilities | Maturities of financial liabilities as of December 31, 2017: 2018 2019 2020 2021 to 2022 2023 to 2024 Total New Israeli Shekels in millions Principal payments of long term indebtedness: Notes payable series C (1) 213 213 Notes payable series D 109 109 109 110 437 Notes payable series F 129 258 257 644 Borrowing K (2) 75 75 Borrowing L (3) 200 200 Borrowing O (3) 100 100 Borrowing P 7 29 29 60 125 Borrowing Q 23 23 45 34 125 Expected interest payments of long term borrowings and notes payables (1) (2) 68 23 19 23 7 140 Trade and other payables 865 865 Total 1,637 184 309 496 298 2,924 Add offering expenses and discounts and premiums 4 2,928 (1) Linked to the CPI as of December 31, 2017. (2) The Company intends to early repay the borrowings in 2018.(see note 15 (5)). (3) The Company early repaid the borrowings in March 2018 (see note 15(5)). See note 15 in respect of borrowings and notes payable. |
Schedule of Fair Values of Financial Instruments | There were no transfers between fair value levels during the year. Carrying amounts and fair values of financial assets and liabilities, and their categories: December 31, 2016 December 31, 2017 Category Carrying amount Fair value Interest rate used (**) Carrying amount Fair value Interest rate used (**) New Israeli Shekels in millions Assets Cash and cash equivalents L&R 716 716 867 867 Short term deposits L&R 452 452 150 150 Trade receivables L&R 1,323 1,318 4.72 % 1,040 1,040 4.47 % Other receivables (*) L&R 9 9 9 9 Liabilities Notes payable series C AC 423 440 Market quote 213 219 Market quote Notes payable series D AC 543 548 Market quote 435 443 Market quote Notes payable series E AC 121 127 Market quote Notes payable series F AC 650 659 Market quote Trade and other payables (*) AC 771 771 865 865 Borrowing C AC 75 81 3.43 % Borrowing D AC 75 81 3.43 % Borrowing E (*) AC 152 152 Borrowing F AC 197 199 3.17 % Borrowing G AC 100 98 3.85 % Borrowing H AC 100 97 3.85 % Borrowing I AC 120 120 3.43 % Borrowing J AC 62 62 3.23 % Borrowing K AC 76 76 3.43 % 75 75 3.71 % Borrowing L AC 200 204 3.98 % 200 200 4.25 % Borrowing M AC 200 201 3.85 % Borrowing N AC 250 260 3.67 % Borrowing O AC 100 110 4.34 % Borrowing P AC 125 125 2.38 % Borrowing Q AC 125 125 2.5 % Interest payable (*) AC 9 9 21 21 Derivative financial instruments FVTPL Level 2 * * * * (*) The fair value of these financial instruments equals their carrying amounts, as the impact of discounting is not significant. (**) The fair values of the notes payable quoted market prices at the end of the reporting period are within level 1 of the fair value hierarchy. The fair values of other instruments under AC categories were calculated based on observable weighted average of interest rates derived from quoted market prices of the Group's notes payable and bank quotes of rates of similar terms and nature, are within level 2 of the fair value hierarchy. |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current receivables [abstract] | |
Schedule of Composition of Trade Receivables | (a) Composition: New Israeli Shekels December 31 2016 2017 In millions Trade (current and non-current) 1,545 1,260 Deferred interest income (note 2(n)) (32 ) (27 ) Allowance for doubtful accounts (190 ) (193 ) 1,323 1,040 Current 990 808 Non – current 333 232 |
Schedule of Allowance for Doubtful Accounts | The changes in the allowance for the years ended December 31, 2015, 2016 and 2017 are as follows: New Israeli Shekels Year ended 2015 2016 2017 In millions Balance at beginning of year 166 169 190 Receivables written-off during the year as uncollectible (61 ) (61 ) (49 ) Charge or expense during the year 64 82 52 Balance at end of year 169 190 193 |
Schedule of Aging of Gross Trade Receivables | The aging of gross trade receivables and their respective allowance for doubtful accounts as of December 31, 2016 and 2017 is as follows: New Israeli Shekels December 31 2016 2017 In millions Gross Allowance Gross Allowance Less than one year 1,420 101 1,089 69 More than one year 125 89 171 124 1,545 190 1,260 193 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Classes of current inventories [abstract] | |
Schedule of Inventory | New Israeli Shekels December 31 2016 2017 In millions Handsets and devices 60 60 Accessories and other 9 8 Spare parts 22 19 ISP modems, routers, servers and related equipment 5 6 96 93 Write-offs recorded 6 5 Cost of inventory recognized as expenses and included in cost of revenues for the year ended 673 558 |
INVESTMENT IN PHI (Tables)
INVESTMENT IN PHI (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of associates [abstract] | |
Schedule of Summarized Financial Information for Associates | Both are incorporated and operate in Israel. Set out below is summarized financial information for the associates which are accounted for by the Group using the equity method. As at December 31 2016 2017 NIS in millions NIS in millions Current assets 122 119 Non-current assets 115 218 Current liabilities 110 117 Non-current liabilities 125 218 Net assets 2 2 Supplemental information relating to associates: Commitments for operating leases and operating expenses 364 443 Commitments to purchase fixed assets 3 2 Guarantees made to third parties 1 Year ended December 31 2016 2017 NIS in millions NIS in millions Summarized statement of income Revenue 432 477 Pre-tax Profit * - After-tax profit * - Total comprehensive income * - Reconciliation to carrying amount: Opening net assets of PHI 2 2 Profit for the period * - Closing net assets of PHI 2 2 Carrying amount: Group's share (50%) 1 1 * Representing an amount of less than NIS 1 million. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Schedule of Property and Equipment | Communication network Computers and information systems Optic fibers and related assets Subscribers equipment and installations Property, leasehold improvements, furniture and equipment Total New Israeli Shekels in millions Cost Balance at January 1, 2015 2,504 303 469 - 229 3,505 Additions in 2015 106 (1) * 19 12 4 141 Disposals in 2015 423 39 2 * 30 494 Balance at December 31, 2015 2,187 (1) 264 486 12 203 3,152 Additions in 2016 51 (1) 17 22 17 9 (1) 116 Disposals in 2016 235 74 78 387 Balance at December 31, 2016 2,003 (1) 207 508 29 134 (1) 2,881 Additions in 2017 55 7 97 109 6 274 Disposals in 2017 165 60 1 3 229 Balance at December 31, 2017 1,893 154 604 138 137 2,926 Accumulated depreciation Balance at January 1, 2015 1,379 178 151 - 136 1,844 Depreciation in 2015 270 (1) 45 34 1 26 376 Impairment charges (2) 5 7 12 Disposals in 2015 423 39 2 30 494 Balance at December 31, 2015 1,231 (1) 191 183 1 132 1,738 Depreciation in 2016 223 (1) 29 35 6 23 316 Disposals in 2016 230 74 76 380 Balance at December 31, 2016 1,224 (1) 146 218 7 79 1,674 Depreciation in 2017 204 22 36 24 15 301 Disposals in 2017 165 60 1 3 229 Balance at December 31, 2017 1,263 108 253 31 91 1,746 Carrying amounts, net At December 31, 2015 956 (1) 73 303 11 71 1,414 At December 31, 2016 779 (1) 61 290 22 55 (1) 1,207 At December 31, 2017 630 46 351 107 46 1,180 (1) Reclassified (2) See note 13(2) (*) Representing an amount of less than 1 million. |
Schedule of Depreciation Expense | New Israeli Shekels Year ended December 31 2015 2016 2017 In millions Cost additions include capitalization of salary and employee related expenses 30 29 33 |
INTANGIBLE AND OTHER ASSETS (Ta
INTANGIBLE AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about intangible assets [abstract] | |
Schedule of Intangible Assets with Finite Economic Useful Lives | Intangible assets with finite economic useful lives: Licenses Costs of obtaining contracts with customers (4) Customer relationships Subscriber acquisition and retention costs Computer software (1) Total New Israeli Shekels in millions Cost At January 1, 2015 2,088 73 276 13 646 3,096 Additions in 2015 35 6 89 130 Disposals in 2015 6 73 79 At December 31, 2015 2,123 73 276 13 662 3,147 Additions in 2016 4 82 86 Disposals in 2016 4 110 114 At December 31, 2016 2,123 73 276 13 634 3,119 Transition to IFRS 15 (4) 2 (13 ) (11 ) Additions in 2017 84 59 143 Disposals in 2017 73 128 201 At December 31, 2017 2,123 86 - 276 - 565 3,050 Accumulated amortization At January 1, 2015 1,502 33 188 9 285 2,017 Amortization in 2015 (2) 86 6 23 7 121 243 Impairment charges (3) 2 8 10 Disposals in 2015 6 73 79 At December 31, 2015 1,588 41 219 10 333 2,191 Amortization in 2016 88 21 18 5 117 249 Disposals in 2016 4 110 114 At December 31, 2016 1,676 62 237 11 340 2,326 Transition to IFRS 15 (4) (11 ) (11 ) Amortization in 2017 88 15 11 18 107 239 Disposals in 2017 73 128 201 At December 31, 2017 1,764 15 - 255 - 319 2,353 Carrying amounts, net At December 31, 2015 535 32 57 3 329 956 At December 31, 2016 447 11 39 2 294 793 At December 31, 2017 359 71 - 21 - 246 697 |
Schedule of Amortization Expenses and Impairments | New Israeli Shekels Year ended December 31 2015 2016 2017 In millions (1) Cost additions include capitalization of salary and employee related expenses 35 36 44 (2) See information with respect to change in estimate of economic life of the trade name in 2015 in note 2(f)(4) (3) See note 13(2). (4) See adoption of IFRS 15 Revenues from Contracts with Customers in note 2 (n) and note 2(f)(5) |
DEFERRED EXPENSES - RIGHT OF 47
DEFERRED EXPENSES - RIGHT OF USE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of deferred expenses - right of use [Abstract] | |
Schedule of Deferred Expenses - Right of Use | New Israeli Shekels in millions Cost Balance at January 1, 2015 402 Additional payments in 2015 34 Balance at December 31, 2015 436 Additional payments in 2016 80 Balance at December 31, 2016 516 Additional payments in 2017 113 Balance at December 31, 2017 629 Accumulated amortization and impairment Balance at January 1, 2015 271 Amortization in 2015 36 Impairment recorded in 2015 76 Balance at December 31, 2015 383 Amortization in 2016 30 Balance at December 31, 2016 413 Amortization in 2017 40 Balance at December 31, 2017 453 Carrying amount, net at December 31, 2015 53 Carrying amount, net at December 31, 2016 103 Current 28 Non-current 75 Carrying amount, net at December 31, 2017 176 Current 43 Non-current 133 See also notes 17(4) and note 2(g). |
IMPAIRMENT TESTS (Tables)
IMPAIRMENT TESTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of impairment loss and reversal of impairment loss [abstract] | |
Schedule of Goodwill Impairment Assumptions | The key assumptions used are as follows: As of December 31, 2015 2016 2017 Terminal growth rate ( negative ) 0.5 % 0.9 % After-tax discount rate 10.3 % 9.8 % 9.3 % Pre-tax discount rate 13.4 % 11.9 % 11.2 % |
PROVISIONS (Tables)
PROVISIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other provisions [abstract] | |
Schedule of Provisions | Group's share in PHI's provisions Dismantling and restoring sites obligation Legal claims Equipment warranty New Israeli Shekels in millions Balance as at January 1, 2017 - 35 76 1 Additions during the year 7 5 8 7 Reductions during the year (14 ) (12 ) (5 ) Finance costs 1 Balance as at December 31, 2017 7 27 72 3 Non-current 7 27 Current 72 3 Balance as at December 31, 2016 35 76 1 Non-current 35 Current 76 1 |
BORROWINGS AND NOTES PAYABLE (T
BORROWINGS AND NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about borrowings [abstract] | |
Schedule of Composition of Borrowings and Notes Payable | Composition as of December 31, 2017: Linkage terms (principal and interest) Annual interest rate Notes payable series C Note 15 (4) CPI 3.35% CPI adj. Notes payable series D 'Makam' (*) plus Notes payable series F Note 15 (2), (6) 2.16% fixed Borrowing K (received in 2015) Note 15 (5) 3.71% fixed Borrowing L (received in 2015) Note 15 (5) 4.25% fixed Borrowing O (received in 2017) Note 15 (3), (5) 4.34% fixed Borrowing P (received in 2017) Note 15 (3) 2.38% fixed Borrowing Q (received in 2017) Note 15 (3) 2.5% fixed (*) |
Schedule of Changes in Debentures, Including Cash Flows From Financing Activities | The following table details the changes in debentures, including cash flows from financing activities: Movement in 2017 As at December 31, 2016 Cash flows from (used in) financing activities, net Non cash movements CPI adjustments and other finance costs Change in estimated cash flows (*) New Israeli Shekels in millions Non-current borrowings, including current maturities 1,607 (982 ) 625 Notes payable, including current maturities 1,087 207 4 1,298 Interest payable 9 (165 ) 159 18 21 2,703 (940 ) 163 18 1,944 (*) See note 15(5) below and note 2(j)(3). |
LIABILITY FOR EMPLOYEE RIGHTS51
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of defined benefit plans [abstract] | |
Schedule of Obligation Recognized for Post-Employment Defined Benefit Plans | The amounts recognized in the statement of financial position, in respect of a defined benefit plan (see note 2(k)(i)(2)) and changes during the year in the obligation recognized for post-employment defined benefit plans were as follows: New Israeli Shekels in millions Present value of obligation Fair value of plan assets Total At January 1, 2016 133 (99 ) 34 Current service cost 17 17 Interest expense (income) 5 (3 ) 2 Employer contributions (12 ) (12 ) Benefits paid (19 ) 9 (10 ) Remeasurements: Experience loss 9 9 Loss (gain) from change in demographic assumptions (4 ) (4 ) Loss from change in financial assumptions 1 1 Return on plan assets 2 2 At December 31, 2016 142 (103 ) 39 Current service cost 11 11 Past service cost 4 4 Interest expense (income) 4 (3 ) 1 Employer contributions (9 ) (9 ) Benefits paid (25 ) 17 (8 ) Remeasurements: Experience loss 2 2 Loss (gain) from change in financial assumptions 1 1 Return on plan assets (1 ) (1 ) At December 31, 2017 139 (99 ) 40 |
Schedule of Principal Actuarial Assumptions | The principal actuarial assumptions used were as follows: December 31 2016 2017 Interest rate weighted average 2.95 % 2.73 % Inflation rate weighted average 1.04 % 1.11 % Expected turnover rate 9%-56 % 9%-56 % Future salary increases 1%-6 % 1%-6 % |
Schedule of Sensitivity of Defined Benefit Obligation to Changes | The sensitivity of the defined benefit obligation to changes in the principal assumptions is: December 31, 2017 NIS in millions Increase of 10% of the assumption Decrease of 10% of the assumption Interest rate (0.6 ) 0.8 Expected turnover rate 0.2 (0.3 ) Future salary increases 0.4 (0.4 ) |
Schedule of Expected Maturity Analysis of Undiscounted Defined Benefits | Expected maturity analysis of undiscounted defined benefits as at December 31, 2017: NIS in millions 2018 24 2019 20 2020 11 2021 and 2022 20 2023 and thereafter 83 158 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of commitments [Abstract] | |
Schedule of Future Capacities Owed for Right of Use Agreements | The Group signed long-term agreements with service providers to receive indefeasible Rights of Use (ROU) of international capacities through submarine infrastructures (see note 12), most extendable until 2030. As of December 31, 2017, the Group is committed to pay for capacities over the following years an amount of NIS 207 million (excluding maintenance fees) as follows: New Israeli Shekels in millions 2018 43 2019 41 2020 41 2021 41 2022 41 207 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance lease and operating lease by lessee [abstract] | |
Schedule of Non-Cancelable Future Minimum Payments Under Operating Leases | Non-cancelable minimum operating lease rentals (undiscounted) in respect of all the above leases are payable including option periods which are reasonably certain are as follows: New Israeli Shekels December 31, 2017 In millions 2018 158 2019 100 2020 77 2021 59 2022-2023 100 2024-2025 52 2026-2027 13 2028 and thereafter 19 578 |
LAWSUITS AND LITIGATIONS (Table
LAWSUITS AND LITIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of lawsuits and litigations [Abstract] | |
Schedule of Claims or Breach of Consumer Protection Law and Customer Agreement Claims | Described hereunder are the outstanding consumer class actions and motions for the recognition of these lawsuits as class actions, detailed according Claim amount Number of claims Total claims amount (NIS million) Up to NIS 100 million 26 640 NIS 100 - 6 1,330 NIS 400 million - NIS 1 billion 2 1, Unquantified claims 13 - Total 47 3,375 |
EQUITY AND SHARE BASED PAYMEN55
EQUITY AND SHARE BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |
Schedule of Information in Respect of Options and Restricted Shares Granted | Information in respect of options and restricted shares granted under the Plan: Through December 31, 2017 Number of options Number of RSAs Granted 31,304,207 4,298,768 Shares issued upon exercises and vesting (6,430,589 ) (1,617,518 ) Cancelled upon net exercises, expiration and forfeitures (16,165,135 ) (1,336,953 ) Outstanding 8,708,483 1,344,297 Of which: Exercisable 5,190,586 26,556 Vest in 2018 2,502,089 891,309 Vest in 2019 667,254 280,115 Vest in 2020 348,554 146,317 |
Schedule of Options and RSAs Status Summary | Options and RSAs status summary as of December 31, 2015, 2016 and 2017 and the changes therein during the years ended on those dates: Year ended December 31 2015 2016 2017 Weighted average Weighted average Weighted average Share Options: NIS NIS NIS Outstanding at the beginning of the year 8,962,116 32.08 12,686,317 29.52 11,285,901 29.14 Granted during the year 5,519,031 17.41 998,433 18.14 1,201,358 19.45 Exercised during the year (32,880 ) 13.12 (284,251 ) 15.74 (1,906,991 ) 17.38 Forfeited during the year (1,459,215 ) 28.7 (1,219,648 ) 20.58 (988,566 ) 22.91 Expired during the year (302,735 ) 58.61 (894,950 ) 38.16 (883,219 ) 43.10 Outstanding at the end of the year 12,686,317 29.52 11,285,901 29.14 8,708,483 29.67 Exercisable at the end of the year 4,615,076 45.97 5,912,904 37.77 5,190,586 36.66 Shares issued during the year due exercises 8,496 47,484 319,259 RSAs: Outstanding at the beginning of the year 1,589,990 2,900,626 1,955,414 Granted during the year 1,779,596 417,176 507,146 Vested during the year (6,015 ) (858,397 ) (753,106 ) Forfeited during the year (462,945 ) (503,991 ) (365,157 ) Outstanding at the end of the year 2,900,626 1,955,414 1,344,297 Options granted in 2015 Options granted in 2016 Options granted in 2017 Weighted average fair value of options granted using the Black & Scholes option-pricing model – per option (NIS) 5.37 5.02 5.43 The above fair value is estimated on the grant date based on the following weighted average assumptions: Expected volatility 39.28 % 39.5 % 37.6 % Risk-free interest rate 0.54 % 0.54 % 0.53 % Expected life (years) 3 3 3 Dividend yield * * * * Due to the Full Dividend Mechanism the expected dividend yield used in the fair value determination of such options was 0% for the purpose of using the Black & Scholes option-pricing model. |
Schedule of Information About Outstanding Options by Expiry Dates | Share Number of share options Weighted average exercise price in NIS 2018 371,687 25.55 2019 1,191,771 49.77 2020 2,324,841 37.66 2021 2,947,959 21.69 2022 826,533 21.66 2023 1,045,692 19.26 8,708,483 29.67 |
INCOME STATEMENT DETAILS (Table
INCOME STATEMENT DETAILS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Analysis of income and expense [abstract] | |
Schedule of Significant Changes in Contract Liabilities | The table below describes significant changes in contract liabilities: New Israeli Shekels in millions Deferred revenues from Hot mobile * Other deferred revenues* Balance as at December 31, 2016 226 45 Revenue recognized that was included in the contract liability balance at the beginning of the year (31 ) (29 ) Increases due to cash received, excluding amounts recognized as revenues during the year - 30 Balance as at December 31, 2017 195 46 * Current and non-current deferred revenues. |
Schedule of Disaggregation of Revenues | Disaggregation of revenues: Year ended December 31, 2017 New Israeli Shekels in millions Cellular segment Fixed-line segment Elimination Consolidated Segment revenue - Services to private customers 1,173 254 (32 ) 1,395 Segment revenue - Services to business customers 805 523 (141 ) 1,187 Segment revenue - Services revenue total 1,978 777 (173 ) 2,582 Segment revenue - Equipment 610 76 686 Total Revenues 2,588 853 (173 ) 3,268 |
Schedule of Cost of Revenues | Cost of revenues New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Transmission, communication and content providers 888 814 738 Cost of equipment and accessories 852 625 519 Depreciation and amortization (including impairment) 577 501 477 Wages, employee benefits expenses and car maintenance 320 270 293 Costs of handling, replacing or repairing equipment 88 93 75 Operating lease, rent and overhead expenses 315 258 184 Network and cable maintenance 145 150 97 Internet infrastructure and service providers 49 68 95 Car kit installation, IT support, and other operating expenses 72 62 61 Amortization of rights of use (including impairment) 112 30 40 Other 54 53 48 Total cost of revenues 3,472 2,924 2,627 |
Schedule of Selling and Marketing Expenses | Selling and marketing expenses New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages, employee benefits expenses and car maintenance 206 177 (*)106 Advertising and marketing 30 68 44 Selling commissions, net 77 82 (*)29 Depreciation and amortization (including impairment) 55 55 (*)54 Operating lease, rent and overhead expenses 27 29 23 Other 22 15 13 Total selling and marketing expenses 417 426 269 (*) See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
Schedule of General and Administrative Expenses | General and administrative expenses New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages, employee benefits expenses and car maintenance 84 101 79 Bad debts and allowance for doubtful accounts 63 82 52 Professional fees 31 32 22 Credit card and other commissions 16 14 14 Depreciation 9 9 9 Other 20 25 20 Total general and administrative expenses 223 263 196 |
Schedule of Employee Benefit Expense | Employee benefit expense New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Wages and salaries including social benefits, social security costs, pension costs and car maintenance before capitalization 622 537 503 Less: expenses capitalized (notes 10, 11) (65 ) (65 ) (77 ) Service costs: defined benefit plan (note 16(2)) 21 17 15 Service costs: defined contribution plan (note 16(1)) 15 14 17 Employee share based compensation expenses (note 21(b)) 17 45 20 610 548 478 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other income, net [Abstract] | |
Schedule of Other Income Net | New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Unwinding of trade receivables 46 41 27 Other income, net 1 4 4 47 45 31 |
FINANCE COSTS, NET (Tables)
FINANCE COSTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance costs, net [Abstract] | |
Schedule of Finance Costs Net | New Israeli Shekels Year ended December 31, 2015 2016 2017 In millions Net foreign exchange rate gains 7 2 Fair value gain from derivative financial instruments, net 2 * * CPI linkage income 9 2 Interest income from cash equivalents 1 1 2 Other 1 3 * Finance income 13 13 4 Interest expenses 136 105 171 CPI linkage expenses 4 Net foreign exchange rate losses 9 Other finance costs 11 13 9 Finance expenses 156 118 184 143 105 180 * Representing an amount of less than 1 million |
INCOME TAX EXPENSES (Tables)
INCOME TAX EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of income tax expenses [Abstract] | |
Schedule of Balances of Deferred Tax Asset (Liability) | Balances of deferred tax asset (liability) in NIS millions are attributable to the following items: Balance of deferred tax asset (liability) in respect of As at January 1, 2015 Charged to the income statement Charged to other comprehen-sive income As at December 31, 2015 Charged to the income statement Charged to other comprehensive income Effect of change in corporate tax rate As at December 31, 2016 Charged to the income statement Charged to other comprehensive income As at December 31, 2017 Allowance for doubtful accounts 44 1 45 6 (6 ) 45 * 45 Provisions for employee rights 19 (4 ) (1 ) 14 * 2 (2 ) 14 * 1 15 Depreciable fixed assets and software (70 ) 17 (53 ) 13 5 (35 ) 8 (27 ) Intangibles, deferred expenses and carry forward losses 7 15 22 (8 ) (5 ) 9 7 16 Options granted to employees 1 2 3 4 (1 ) 6 * 6 Other 9 9 18 (18 ) 2 2 (2 ) * Total 10 40 (1 ) 49 (3 ) 2 (7 ) 41 13 1 55 * Representing New Israeli Shekels December 31, 2016 2017 In millions Deferred tax assets Deferred tax assets to be recovered after more than 12 months 87 80 Deferred tax assets to be recovered within 12 months 37 50 124 130 Deferred tax liabilities Deferred tax liabilities to be recovered after more than 12 months 72 63 Deferred tax liabilities to be recovered within 12 months 11 12 83 75 Deferred tax assets, net 41 55 |
Schedule of Reconciliation of Theoretical Tax Expense | Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in Israel (see (b) above), and the actual tax expense: New Israeli Shekels Year ended December 31 2015 2016 2017 In millions Profit (loss) before taxes on income, as reported in the income statements (36 ) 88 135 Theoretical tax expense (9 ) 22 32 Increase in tax resulting from disallowable deductions 7 11 8 Taxes on income in respect of previous years 7 (4 ) (10 ) Change in corporate tax rate, see (b) above 7 Temporary differences and tax losses for which no deferred income tax asset was recognized (9 ) Other (1 ) * * Income tax expenses 4 36 21 |
Schedule of Taxes on Income Included in Income Statements | Taxes on income included in the income statements: New Israeli Shekels Year ended December 31 2015 2016 2017 In millions For the reported year: Current 37 31 44 Deferred, see (c) above (40 ) 2 (4 ) Effect of change in corporate tax rate on deferred taxes 7 In respect of previous year: Current 7 (4 ) (10 ) Deferred, see (c) above (9 ) 4 36 21 |
TRANSACTIONS AND BALANCES WIT60
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of transactions between related parties [abstract] | |
Schedule of Key Management Compensation | Key management compensation Key management personnel are the senior management of the Company and the members of the Company's Board of Directors. New Israeli Shekels Year ended December 31 2015 2016 2017 Key management compensation expenses comprised In millions Salaries and short-term employee benefits 23 22 21 Long term employment benefits 4 3 3 Employee share-based compensation expenses 4 17 11 31 42 35 New Israeli Shekels December 31, 2016 2017 Statement of financial position items - key management In millions Current liabilities: 10 11 Non-current liabilities: 12 11 |
Schedule of Balances and Transactions with PHI | Balances and transactions with PHI (see also note 9): New Israeli Shekels Year ended December 31 2016 2017 In millions Cost of revenues (2 ) 45 New Israeli Shekels December 31, 2016 2017 In millions Deferred expenses - Right of use 41 95 Current assets (liabilities) (5 ) (43 ) Non-current assets (liabilities) (7 ) |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings (loss) per share | |
Schedule of Data Relating to Net Income (Loss) and Weighted Average Number of Shares | Following are data relating to the net income (loss) and the weighted average number of shares that were taken into account in computing the basic and diluted EPS: Year ended December 31 2015 2016 2017 Profit (loss) used for the computation of basic and diluted EPS (NIS in millions) (40 ) 52 114 Weighted average number of shares used in computation of basic EPS (in thousands) 156,081 156,268 162,733 Add - net additional shares from assumed exercise of employee stock options and restricted shared (in thousands) 0 1,828 1,804 Weighted average number of shares used in computation of diluted EPS (in thousands) 156,081 158,096 164,537 Number of options and restricted shares not taken into account in computation of because of their anti-dilutive effect (in thousands) 15,587 8,906 5,650 |
GENERAL (Schedule of Group Lice
GENERAL (Schedule of Group Licenses) (Details) | 12 Months Ended | |
Dec. 31, 2017 | ||
Group License One [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Cellular | |
Area of service | Israel | |
License owner | Partner Communications Company Ltd. | |
Granted by | MOC | |
Valid through | Feb, 2022 | |
Guarantees made | NIS 80 million | |
Group License Two [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Cellular | |
Area of service | West Bank | |
License owner | Partner Communications Company Ltd. | |
Granted by | CA | |
Valid through | Feb, 2022 | |
Guarantees made | NIS 4 million | |
Group License Three [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ISP | |
Area of service | Israel | |
License owner | Partner Communications Company Ltd. | |
Granted by | MOC | |
Valid through | Mar, 2023 | |
Group License Four [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ISP | |
Area of service | West Bank | |
License owner | Partner Communications Company Ltd. | |
Granted by | CA | |
Valid through | Mar, 2023 | |
Group License Five [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ISP | |
Area of service | Israel | |
License owner | 012 Smile Telecom Ltd. | |
Granted by | MOC | |
Valid through | Jun, 2020 | |
Group License Six [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ISP | |
Area of service | West Bank | |
License owner | 012 Smile Telecom Ltd. | |
Granted by | CA | |
Valid through | Jun, 2020 | |
Group License Seven [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ILD | [1] |
Area of service | Israel | |
License owner | 012 Smile Telecom Ltd. | |
Granted by | MOC | |
Valid through | Dec, 2029 | |
Guarantees made | NIS 5 million | |
Group License Eight [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | ILD | [2] |
Area of service | West Bank | |
License owner | 012 Smile Telecom Ltd. | |
Granted by | CA | |
Valid through | Dec, 2029 | |
Guarantees made | NIS 0.25 million | |
Group License Nine [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Fixed | [1] |
Area of service | Israel | |
License owner | 012 Telecom Ltd. | |
Granted by | MOC | |
Valid through | Dec, 2025 | |
Guarantees made | NIS 5 million | |
Group License Ten [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Fixed | [2] |
Area of service | West Bank | |
License owner | 012 Telecom Ltd. | |
Granted by | CA | |
Valid through | Dec, 2025 | |
Guarantees made | NIS 0.25 million | |
Group License Eleven [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Fixed (incl. ISP, ILD, NTP) | [1] |
Area of service | Israel | |
License owner | Partner Land-line Communication Solutions - Limited Partnership | |
Granted by | MOC | |
Valid through | Jan, 2027 | |
Guarantees made | NIS 5 million | |
Group License Twelve [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | Fixed (incl. ISP, ILD, NTP) | [2] |
Area of service | West Bank | |
License owner | Partner Land-line Communication Solutions - Limited Partnership | |
Granted by | CA | |
Valid through | Jan, 2027 | |
Guarantees made | NIS 0.25 million | |
Group License Thirteen [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Type of services | NTP | |
Area of service | Israel | |
License owner | 012 Smile Telecom Ltd. | |
Granted by | MOC | |
Valid through | Dec, 2020 | |
[1] | In February 2016, these licenses were replaced by the MoC with a general-unified license. The term of the new license is similar to the term of the previous license. | |
[2] | In July 2016, these licenses were replaced with a general-unified license. The general conditions of the general-unified license granted by the MoC, generally apply to these licenses, subject to certain modifications. |
SIGNIFICANT ACCOUNTING POLICI63
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about intangible assets [line items] | |||
Convenience translation into U.S. Dollars | (USD 1 = NIS 3.467) | ||
Increase in amortization expense due to change in accounting estimate | ₪ 253 | ||
Right of use impairment charges | 76 | ||
Adjustment recognized in profit or loss interest expense | ₪ 18 | ||
Computer software [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful life of intangible assets | 3 to 10 years | ||
Customer relationships [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful life of intangible assets | 5 to 10 years | ||
Capitalized Contract Costs [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Useful life of intangible assets | mainly over 2-3 years | ||
Trade name [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Increase in amortization expense due to change in accounting estimate | ₪ 6 | ₪ 16 | ₪ 1 |
SIGNIFICANT ACCOUNTING POLICI64
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Depreciation Calculated Using Straight-Line Method) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Physical layer and infrastructure [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 10 - 25 (mainly 15, 10) |
Other Communication network [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 3 - 15 (mainly 5, 10, 15) |
Computers, software and hardware for information systems [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 3-10 (mainly 3-5) |
Office furniture and equipment [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 7-15 |
Optic fibers and related assets [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 7-25 (mainly 20) |
Subscribers equipment and installations [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 2-4 |
Property [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | 25 |
Property, leasehold improvements, furniture and equipment [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives of assets (in years) | (5-10 years) |
SIGNIFICANT ACCOUNTING POLICI65
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Effect of Change on Consolidated Statement of Financial Position) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets - other receivables and prepaid expenses - Contract assets | ₪ 2,009 | [1] | ₪ 2,339 | ||
Non-current assets - Costs to obtain contracts recognized in intangible assets, net - non-current assets | 2,709 | [1] | 2,858 | ||
Deferred income tax asset | 55 | [1] | 41 | ||
Current liabilities - other deferred revenues - Contract liabilities | 1,811 | [1] | 1,607 | ||
Non-current liabilities - other non-current liabilities - Contract liabilities | 1,473 | [1] | 2,479 | ||
Deferred revenues from Hot Mobile - Contract liabilities (current and non-current) | 164 | [1] | 195 | ||
Equity | 1,434 | [1] | ₪ 1,111 | ₪ 1,020 | ₪ 1,039 |
Previously accounting policy [Member] | |||||
Current assets - other receivables and prepaid expenses - Contract assets | |||||
Non-current assets - Costs to obtain contracts recognized in intangible assets, net - non-current assets | |||||
Deferred income tax asset | 71 | ||||
Current liabilities - other deferred revenues - Contract liabilities | 36 | ||||
Non-current liabilities - other non-current liabilities - Contract liabilities | 6 | ||||
Deferred revenues from Hot Mobile - Contract liabilities (current and non-current) | 195 | ||||
Equity | 1,381 | ||||
Effect of Change [Member] | |||||
Current assets - other receivables and prepaid expenses - Contract assets | 2 | ||||
Non-current assets - Costs to obtain contracts recognized in intangible assets, net - non-current assets | 71 | ||||
Deferred income tax asset | (16) | ||||
Current liabilities - other deferred revenues - Contract liabilities | 4 | ||||
Non-current liabilities - other non-current liabilities - Contract liabilities | |||||
Deferred revenues from Hot Mobile - Contract liabilities (current and non-current) | |||||
Equity | 53 | ||||
According to IFRS15 as reported [Member] | |||||
Current assets - other receivables and prepaid expenses - Contract assets | 2 | ||||
Non-current assets - Costs to obtain contracts recognized in intangible assets, net - non-current assets | 71 | ||||
Deferred income tax asset | 55 | ||||
Current liabilities - other deferred revenues - Contract liabilities | 40 | ||||
Non-current liabilities - other non-current liabilities - Contract liabilities | 6 | ||||
Deferred revenues from Hot Mobile - Contract liabilities (current and non-current) | 195 | ||||
Equity | ₪ 1,434 | ||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
SIGNIFICANT ACCOUNTING POLICI66
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Effect of Change on Consolidated Statement of Income) (Details) - ILS (₪) ₪ / shares in Units, ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenues, net | ₪ 3,268 | [1] | ₪ 3,544 | ₪ 4,111 |
Selling and marketing expenses | 269 | [1] | 426 | 417 |
Operating profit | 315 | [1] | 193 | 107 |
Profit before income tax | 135 | [1] | 88 | (36) |
Income tax expenses | 21 | [1] | 36 | 4 |
Profit (loss) for the year | 114 | [1] | 52 | (40) |
Depreciation and amortization expense | ₪ (580) | [2] | ₪ (595) | ₪ (753) |
Basic earnings per share | ₪ 0.7 | [1] | ₪ 0.33 | ₪ (0.26) |
Diluted earnings per share | ₪ 0.69 | [1] | ₪ 0.33 | ₪ (0.26) |
Previously accounting policy [Member] | ||||
Revenues, net | ₪ 3,270 | |||
Selling and marketing expenses | 340 | |||
Operating profit | 246 | |||
Profit before income tax | 66 | |||
Income tax expenses | 5 | |||
Profit (loss) for the year | 61 | |||
Depreciation and amortization expense | ₪ 567 | |||
Basic earnings per share | ₪ 0.38 | |||
Diluted earnings per share | ₪ 0.37 | |||
Effect of Change [Member] | ||||
Revenues, net | ₪ (2) | |||
Selling and marketing expenses | (71) | |||
Operating profit | 69 | |||
Profit before income tax | 69 | |||
Income tax expenses | 16 | |||
Profit (loss) for the year | 53 | |||
Depreciation and amortization expense | ₪ 13 | |||
Basic earnings per share | ₪ 0.32 | |||
Diluted earnings per share | ₪ 0.32 | |||
According to IFRS15 as reported [Member] | ||||
Revenues, net | ₪ 3,268 | |||
Selling and marketing expenses | 269 | |||
Operating profit | 315 | |||
Profit before income tax | 135 | |||
Income tax expenses | 21 | |||
Profit (loss) for the year | 114 | |||
Depreciation and amortization expense | ₪ 580 | |||
Basic earnings per share | ₪ 0.7 | |||
Diluted earnings per share | ₪ 0.69 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | |||
[2] | See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts of NIS 64 million and NIS 20 million for the cellular segment and the fixed-line segment, respectively. The adoption of IFRS15 resulted in an increase in amortization expenses in 2017 for the cellular segment and the fixed-line segment in amounts of NIS 11 million and NIS 2 million, respectively. |
SIGNIFICANT ACCOUNTING POLICI67
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Effect of Change on Consolidated Statement Cash flows) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Net cash provided by operating activities | ₪ 973 | [1] | ₪ 945 | ₪ 922 |
Net cash provided by (used in) investing activities | (72) | [1] | ₪ (639) | ₪ (356) |
Previously accounting policy [Member] | ||||
Net cash provided by operating activities | 897 | |||
Net cash provided by (used in) investing activities | 4 | |||
Effect of Change [Member] | ||||
Net cash provided by operating activities | 76 | |||
Net cash provided by (used in) investing activities | (76) | |||
According to IFRS15 as reported [Member] | ||||
Net cash provided by operating activities | 973 | |||
Net cash provided by (used in) investing activities | ₪ (72) | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
CRITICAL ACCOUNTING ESTIMATES68
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about intangible assets [line items] | |||
Pre-tax discount rate | 11.20% | 11.90% | 13.40% |
Amortization expenses increase decrease | ₪ 249 | ₪ 253 | |
Percentage of headroom of fixed line segment recoverable amount over carrying amount | 23.00% | 23.00% | 9.00% |
Change of after-tax discount rate within range | ± 10% multiplied by the variable 9.3% (8.4% to 10.2%) | ||
Change of terminal permanent growth rate within range | ± 1% of the variable 0.9% (minus 0.9% to 1.9%) | ||
Giza Singer Even. Ltd [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Pre-tax cash flow projections period | five-year | ||
Fixed-Line Segment [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Impairment charges | ₪ 98 | ||
Recoverable amount | ₪ 250 | ||
Pre-tax cash flow projections period | five-year period and using extrapolation with specific adjustments expected until 2027 | ||
Pre-tax discount rate | 12.90% | ||
Fixed-Line Segment [Member] | Giza Singer Even. Ltd [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Recoverable amount | ₪ 250 | ||
Trade name [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Impairment charges | 2 | ||
Amortization expenses increase decrease | ₪ 6 | ₪ 16 | ₪ 1 |
CRITICAL ACCOUNTING ESTIMATES69
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Schedule of Goodwill for Impairment Tests) (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of critical accounting estimates and judgements [Abstract] | |||
Terminal growth rate | 0.90% | 0.50% | (0.90%) |
After-tax discount rate | 9.30% | 9.80% | 10.30% |
Pre-tax discount rate | 11.20% | 11.90% | 13.40% |
SEGMENT INFORMATION (Narrative)
SEGMENT INFORMATION (Narrative) (Details) ₪ in Millions | 12 Months Ended |
Dec. 31, 2017ILS (₪) | |
Cellular Segment [Member] | |
Disclosure of operating segments [line items] | |
Capitalized amount | ₪ 64 |
Increase in amortization expenses | 11 |
Fixed-Line Segment [Member] | |
Disclosure of operating segments [line items] | |
Capitalized amount | 20 |
Increase in amortization expenses | ₪ 2 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Information) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Disclosure of operating segments [line items] | |||||||
Total revenues | ₪ 3,268 | ₪ 3,544 | ₪ 4,111 | ||||
Total cost of revenues | 2,627 | 2,924 | 3,472 | ||||
Gross profit | 641 | 620 | 639 | ||||
Income with respect to settlement agreement with Orange | 108 | [1] | 217 | 61 | |||
Other income, net | 31 | [1] | 45 | 47 | |||
Operating profit | 315 | [1] | 193 | 107 | |||
Adjusted EBITDA | |||||||
Depreciation and amortization (including impairment charges) | 580 | [1] | 595 | 753 | |||
Reconciliation of segments subtotal Adjusted EBITDA to profit for the year | |||||||
Segments subtotal Adjusted EBITDA | 917 | [2],[3] | 834 | [4] | 876 | [4] | |
Depreciation and amortization (including impairment charges) | (580) | [3] | (595) | (753) | |||
Finance costs, net | (180) | [1] | (105) | (143) | |||
Income tax expenses | (21) | [1] | (36) | (4) | |||
Other | [5] | (22) | (46) | (16) | |||
Profit (loss) for the year | 114 | [1] | 52 | (40) | |||
Cellular Segment [Member] | |||||||
Disclosure of operating segments [line items] | |||||||
Segment revenue - Services | 1,960 | [3] | 2,080 | 2,275 | |||
Inter-segment revenue - Services | 18 | [3] | 19 | 22 | |||
Segment revenue - Equipment | 610 | [3] | 729 | 1,051 | |||
Total revenues | 2,588 | 2,828 | 3,348 | ||||
Segment cost of revenues - Services | 1,470 | [3] | 1,659 | 1,856 | |||
Inter-segment cost of revenues- Services | 154 | [3] | 192 | 187 | |||
Segment cost of revenues - Equipment | 490 | [3] | 596 | 832 | |||
Total cost of revenues | 2,114 | 2,447 | 2,875 | ||||
Gross profit | 474 | 381 | 473 | ||||
Operating expenses | [6] | 367 | [3] | 571 | 506 | ||
Income with respect to settlement agreement with Orange | 108 | [3] | 217 | 61 | |||
Other income, net | 29 | [3] | 41 | 44 | |||
Operating profit | 244 | [3] | 68 | 72 | |||
Adjusted EBITDA | |||||||
Depreciation and amortization (including impairment charges) | 445 | 447 | 510 | ||||
Other | [5] | 21 | [3] | 47 | 15 | ||
Segment Adjusted EBITDA | 710 | [2],[3] | 562 | [4] | 597 | [4] | |
Fixed-Line Segment [Member] | |||||||
Disclosure of operating segments [line items] | |||||||
Segment revenue - Services | 622 | [3] | 672 | 717 | |||
Inter-segment revenue - Services | 155 | [3] | 194 | 189 | |||
Segment revenue - Equipment | 76 | [3] | 63 | 68 | |||
Total revenues | 853 | 929 | 974 | ||||
Segment cost of revenues - Services | 613 | [3] | 617 | 736 | [7] | ||
Inter-segment cost of revenues- Services | 19 | [3] | 21 | 24 | |||
Segment cost of revenues - Equipment | 54 | [3] | 52 | 48 | |||
Total cost of revenues | 686 | 690 | 808 | ||||
Gross profit | 167 | 239 | 166 | ||||
Operating expenses | [6] | 98 | [3] | 118 | 134 | [7] | |
Other income, net | 2 | [3] | 4 | 3 | |||
Operating profit | 71 | [3] | 125 | 35 | |||
Adjusted EBITDA | |||||||
Depreciation and amortization (including impairment charges) | 135 | 148 | 243 | ||||
Other | [5] | 1 | [3] | (1) | 1 | ||
Segment Adjusted EBITDA | 207 | [2],[3] | 272 | [4] | 279 | [4] | |
Elimination [Member] | |||||||
Disclosure of operating segments [line items] | |||||||
Inter-segment revenue - Services | (173) | [3] | (213) | (211) | |||
Total revenues | (173) | (213) | (211) | ||||
Inter-segment cost of revenues- Services | (173) | [3] | (213) | (211) | |||
Total cost of revenues | (173) | (213) | (211) | ||||
Consolidated [Member] | |||||||
Disclosure of operating segments [line items] | |||||||
Segment revenue - Services | 2,582 | [3] | 2,752 | 2,992 | |||
Segment revenue - Equipment | 686 | [3] | 792 | 1,119 | |||
Total revenues | 3,268 | 3,544 | 4,111 | ||||
Segment cost of revenues - Services | 2,083 | [3] | 2,276 | 2,592 | |||
Segment cost of revenues - Equipment | 544 | [3] | 648 | 880 | |||
Total cost of revenues | 2,627 | 2,924 | 3,472 | ||||
Gross profit | 641 | 620 | 639 | ||||
Operating expenses | 465 | [3] | 689 | [6] | 640 | [6] | |
Income with respect to settlement agreement with Orange | 108 | [3] | 217 | 61 | |||
Other income, net | 31 | [3] | 45 | 47 | |||
Operating profit | ₪ 315 | [3] | ₪ 193 | ₪ 107 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||
[2] | Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term 'Adjusted EBITDA' is to highlight the fact that the Amortization includes amortization of deferred expenses - right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods. | ||||||
[3] | See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts of NIS 64 million and NIS 20 million for the cellular segment and the fixed-line segment, respectively. The adoption of IFRS15 resulted in an increase in amortization expenses in 2017 for the cellular segment and the fixed-line segment in amounts of NIS 11 million and NIS 2 million, respectively. | ||||||
[4] | Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses - right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods. | ||||||
[5] | Mainly amortization of employee share based compensation. | ||||||
[6] | Operating expenses include selling and marketing expenses and general and administrative expenses. | ||||||
[7] | Includes impairment charges in the fixed line segment, see note 13. |
FINANCIAL INSTRUMENTS AND FIN72
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about financial instruments [line items] | |||
Increase (decrease) of interest rates | 1.00% | ||
Increase (decrease) in interest expenses | ₪ 5 | ||
CPI Exchange Rate [Member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Percentage increase (decrease) in Sensitivity analysis | 2.00% | 2.00% | 2.00% |
Decreased (increased) in equity and profit | ₪ 3 | ₪ 9 | ₪ 20 |
USD exchange rate [Member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Percentage increase (decrease) in Sensitivity analysis | 5.00% | 5.00% | 5.00% |
Decreased (increased) in equity and profit | ₪ 3 | ₪ 3 | ₪ 5 |
FINANCIAL INSTRUMENTS AND FIN73
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Schedule of Data Regarding Exchange Rate) (Details) | Dec. 31, 2017NISPoints | Dec. 31, 2016NISPoints | Dec. 31, 2015NISPoints | |
Exchange rate of one Dollar [Member] | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Exchange rate | 3.467 | 3.845 | 3.902 | |
Increase (decrease) during the year | (9.80%) | (1.50%) | 0.30% | |
Exchange rate of one Euro [Member] | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Exchange rate | 4.153 | 4.044 | 4.247 | |
Increase (decrease) during the year | 2.70% | (4.80%) | (10.10%) | |
Israeli CPI [Member] | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Exchange rate | Points | [1] | 221.57 | 220.68 | 221.13 |
Increase (decrease) during the year | [1] | 0.40% | (0.20%) | (1.00%) |
[1] | Index for each reporting period's last month, on the basis of 1993 average = 100 points. |
FINANCIAL INSTRUMENTS AND FIN74
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Schedule of Analysis of Financial Instruments Balances) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Current assets | |||||||
Cash and cash equivalents | ₪ 867 | [1] | ₪ 716 | [1] | ₪ 926 | ₪ 663 | |
Short term deposits | 150 | [1] | 452 | ||||
Trade receivables | 808 | [1] | 990 | ||||
Non- current assets | |||||||
Trade receivables | 232 | [1] | 333 | ||||
TOTAL ASSETS | 4,718 | [1] | 5,197 | ||||
Current liabilities | |||||||
Current maturities of notes payable and borrowings | 705 | [1] | 498 | ||||
Trade payables | 787 | [1] | 681 | ||||
Other payables | 31 | [1] | 28 | ||||
Non- current liabilities | |||||||
Notes payable | 975 | [1] | 646 | ||||
Borrowings from banks and others | 243 | [1] | 1,550 | ||||
TOTAL LIABILITIES | 3,284 | [1] | 4,086 | ||||
Accounts that were set-off under enforceable netting arrangements | |||||||
Trade receivables, net | 1,040 | 1,323 | |||||
In or linked to USD [Member] | |||||||
Current assets | |||||||
Cash and cash equivalents | 2 | 2 | |||||
Trade receivables | [2] | 62 | 58 | ||||
Non- current assets | |||||||
TOTAL ASSETS | 64 | 60 | |||||
Current liabilities | |||||||
Trade payables | [2] | 143 | 132 | ||||
Non- current liabilities | |||||||
TOTAL LIABILITIES | 143 | 132 | |||||
In or linked to other foreign currencies (mainly EURO) [Member] | |||||||
Current assets | |||||||
Cash and cash equivalents | 4 | 1 | |||||
Trade receivables | [2] | 34 | 35 | ||||
Non- current assets | |||||||
TOTAL ASSETS | 38 | 36 | |||||
Current liabilities | |||||||
Trade payables | [2] | 32 | 19 | ||||
Non- current liabilities | |||||||
TOTAL LIABILITIES | 32 | 19 | |||||
NIS linked to CPI [Member] | |||||||
Current liabilities | |||||||
Current maturities of notes payable and borrowings | 213 | 212 | |||||
Non- current liabilities | |||||||
Notes payable | 212 | ||||||
Borrowings from banks and others | 197 | ||||||
TOTAL LIABILITIES | 213 | 621 | |||||
NIS unlinked [Member] | |||||||
Current assets | |||||||
Cash and cash equivalents | 861 | 713 | |||||
Short term deposits | 150 | 452 | |||||
Trade receivables | [2] | 712 | 897 | ||||
Other receivables | 9 | 39 | |||||
Non- current assets | |||||||
Trade receivables | 232 | 333 | |||||
TOTAL ASSETS | 1,964 | 2,434 | |||||
Current liabilities | |||||||
Current maturities of notes payable and borrowings | 491 | 287 | |||||
Trade payables | [2] | 612 | 530 | ||||
Payables in respect of employees | 78 | 90 | |||||
Other payables | 21 | 10 | |||||
Non- current liabilities | |||||||
Notes payable | 972 | 437 | |||||
Borrowings from banks and others | 243 | 1,353 | |||||
TOTAL LIABILITIES | 2,417 | 2,707 | |||||
Total [Member] | |||||||
Current assets | |||||||
Cash and cash equivalents | 867 | 716 | |||||
Short term deposits | 150 | 452 | |||||
Trade receivables | [2] | 808 | 990 | ||||
Other receivables | 9 | 39 | |||||
Non- current assets | |||||||
Trade receivables | 232 | 333 | |||||
TOTAL ASSETS | 2,066 | 2,530 | |||||
Current liabilities | |||||||
Current maturities of notes payable and borrowings | 704 | 499 | |||||
Trade payables | [2] | 787 | 681 | ||||
Payables in respect of employees | 78 | 90 | |||||
Other payables | 21 | 10 | |||||
Non- current liabilities | |||||||
Notes payable | 972 | 649 | |||||
Borrowings from banks and others | 243 | 1,550 | |||||
TOTAL LIABILITIES | 2,805 | 3,479 | |||||
In or linked to foreign currencies [Member] | |||||||
Accounts that were set-off under enforceable netting arrangements | |||||||
Trade receivables gross amounts | 281 | 267 | |||||
Set-off | (185) | (174) | |||||
Trade receivables, net | 96 | 93 | |||||
Trade payables gross amounts | 360 | 325 | |||||
Set-off | (185) | (174) | |||||
Trade payables, net | ₪ 175 | ₪ 151 | |||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||
[2] | Accounts that were set-off under enforceable netting arrangements |
FINANCIAL INSTRUMENTS AND FIN75
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Schedule of Details Regarding Derivative Financial Instruments) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of detailed information about financial instruments [abstract] | ||
Embedded derivatives pay USD, receive NIS | ₪ 3 | ₪ 11 |
FINANCIAL INSTRUMENTS AND FIN76
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Schedule of Maturities of Financial Liabilities) (Details) ₪ in Millions | Dec. 31, 2017ILS (₪) | |
Principal payments of long term indebtedness: | ||
Total undisco-unted | ₪ 2,924 | |
Add offering expenses and discounts | 4 | |
Total discounted | 2,928 | |
Notes payable series C [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 213 | [1] |
Notes payable series D [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 437 | |
Borrowing O [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 100 | [2] |
Borrowing P [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 125 | |
Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 140 | [1],[3] |
Trade and other payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 865 | |
Borrowing Q [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 125 | |
Notes payable series F [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 644 | |
Borrowing K [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 75 | [3] |
Borrowing L [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 200 | [2] |
Less than one year [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 1,637 | |
Less than one year [Member] | Notes payable series C [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 213 | [1] |
Less than one year [Member] | Notes payable series D [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 109 | |
Less than one year [Member] | Borrowing K [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 75 | [3] |
Less than one year [Member] | Borrowing L [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 200 | [2] |
Less than one year [Member] | Borrowing O [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 100 | [2] |
Less than one year [Member] | Borrowing P [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 7 | |
Less than one year [Member] | Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 68 | [1],[3] |
Less than one year [Member] | Trade and other payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 865 | |
2019 [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 184 | |
2019 [Member] | Notes payable series D [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 109 | |
2019 [Member] | Borrowing P [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 29 | |
2019 [Member] | Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 23 | [1],[3] |
2019 [Member] | Borrowing Q [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 23 | |
2020 [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 309 | |
2020 [Member] | Notes payable series D [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 109 | |
2020 [Member] | Borrowing P [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 29 | |
2020 [Member] | Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 19 | [1],[3] |
2020 [Member] | Borrowing Q [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 23 | |
2020 [Member] | Notes payable series F [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 129 | |
2021 to 2022 [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 496 | |
2021 to 2022 [Member] | Notes payable series D [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 110 | |
2021 to 2022 [Member] | Borrowing P [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 60 | |
2021 to 2022 [Member] | Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 23 | [1],[3] |
2021 to 2022 [Member] | Borrowing Q [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 45 | |
2021 to 2022 [Member] | Notes payable series F [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 258 | |
2023 to 2024 [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 298 | |
2023 to 2024 [Member] | Expected interest payments of long term borrowings and notes payables [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 7 | [1],[3] |
2023 to 2024 [Member] | Borrowing Q [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | 34 | |
2023 to 2024 [Member] | Notes payable series F [Member] | ||
Principal payments of long term indebtedness: | ||
Total undisco-unted | ₪ 257 | |
[1] | Linked to the CPI as of December 31, 2017. | |
[2] | The Company early repaid the borrowings in March 2018 (see note 15(5)). | |
[3] | The Company intends to early repay the borrowings in 2018 (see note 15 (5)). |
FINANCIAL INSTRUMENTS AND FIN77
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Schedule of Fair Values of Financial Instruments) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | ||||
Notes payable series C [Member] | |||||
Assets and Liabilities | |||||
Category | AC | AC | |||
Carrying amount, Liabilities | ₪ 213 | ₪ 423 | |||
Fair value, Liabilities | ₪ 219 | ₪ 440 | |||
Interest rate used | Market quote | Market quote | [1] | ||
Notes payable series D [Member] | |||||
Assets and Liabilities | |||||
Category | AC | AC | |||
Carrying amount, Liabilities | ₪ 435 | ₪ 543 | |||
Fair value, Liabilities | ₪ 443 | ₪ 548 | |||
Interest rate used | Market quote | Market quote | [1] | ||
Trade and other payables [Member] | |||||
Assets and Liabilities | |||||
Category | [2] | AC | AC | ||
Carrying amount, Liabilities | [2] | ₪ 865 | ₪ 771 | ||
Fair value, Liabilities | [2] | ₪ 865 | ₪ 771 | ||
Borrowing C [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 75 | ||||
Fair value, Liabilities | ₪ 81 | ||||
Interest rate used | [1] | 3.43% | |||
Borrowing D [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 75 | ||||
Fair value, Liabilities | ₪ 81 | ||||
Interest rate used | [1] | 3.43% | |||
Borrowing E [Member] | |||||
Assets and Liabilities | |||||
Category | [2] | AC | |||
Carrying amount, Liabilities | [2] | ₪ 152 | |||
Fair value, Liabilities | [2] | ₪ 152 | |||
Borrowing F [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 197 | ||||
Fair value, Liabilities | ₪ 199 | ||||
Interest rate used | [1] | 3.17% | |||
Borrowing G [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 100 | ||||
Fair value, Liabilities | ₪ 98 | ||||
Interest rate used | [1] | 3.85% | |||
Borrowing H [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 100 | ||||
Fair value, Liabilities | ₪ 97 | ||||
Interest rate used | [1] | 3.85% | |||
Borrowing I [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 120 | ||||
Fair value, Liabilities | ₪ 120 | ||||
Interest rate used | [1] | 3.43% | |||
Borrowing J [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 62 | ||||
Fair value, Liabilities | ₪ 62 | ||||
Interest rate used | [1] | 3.23% | |||
Borrowing K [Member] | |||||
Assets and Liabilities | |||||
Category | AC | AC | |||
Carrying amount, Liabilities | ₪ 75 | ₪ 76 | |||
Fair value, Liabilities | ₪ 75 | ₪ 76 | |||
Interest rate used | 3.71% | 3.43% | [1] | ||
Borrowing L [Member] | |||||
Assets and Liabilities | |||||
Category | AC | AC | |||
Carrying amount, Liabilities | ₪ 200 | ₪ 200 | |||
Fair value, Liabilities | ₪ 200 | ₪ 204 | |||
Interest rate used | 4.25% | 3.98% | [1] | ||
Borrowing M [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 200 | ||||
Fair value, Liabilities | ₪ 201 | ||||
Interest rate used | [1] | 3.85% | |||
Borrowing N [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 250 | ||||
Fair value, Liabilities | ₪ 260 | ||||
Interest rate used | [1] | 3.67% | |||
Interest payable [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 21 | [2] | ₪ 9 | ||
Fair value, Liabilities | ₪ 21 | [2] | ₪ 9 | ||
Derivative financial instruments [Member] | |||||
Assets and Liabilities | |||||
Category | FVTPL Level 2 | FVTPL Level 2 | |||
Carrying amount, Liabilities | [2] | ||||
Fair value, Liabilities | [2] | ||||
Notes payable series E [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | 121 | ||||
Fair value, Liabilities | ₪ 127 | ||||
Interest rate used | Market quote | ||||
Borrowing O [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 100 | ||||
Fair value, Liabilities | ₪ 110 | ||||
Interest rate used | 4.34% | ||||
Borrowing P [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 125 | ||||
Fair value, Liabilities | ₪ 125 | ||||
Interest rate used | 2.38% | ||||
Borrowing Q [Member] | |||||
Assets and Liabilities | |||||
Category | AC | ||||
Carrying amount, Liabilities | ₪ 125 | ||||
Fair value, Liabilities | ₪ 125 | ||||
Interest rate used | 2.5% | ||||
Notes payable series F [Member] | |||||
Assets and Liabilities | |||||
Carrying amount, Liabilities | ₪ 650 | ||||
Fair value, Liabilities | ₪ 659 | ||||
Cash and cash equivalents [Member] | |||||
Assets and Liabilities | |||||
Category | L&R | L&R | |||
Carrying amount, Assets | ₪ 867 | ₪ 716 | |||
Fair value, Assets | ₪ 867 | ₪ 716 | |||
Short term deposits [Member] | |||||
Assets and Liabilities | |||||
Category | L&R | L&R | |||
Carrying amount, Assets | ₪ 150 | ₪ 452 | |||
Fair value, Assets | ₪ 150 | ₪ 452 | |||
Trade receivables [Member] | |||||
Assets and Liabilities | |||||
Category | L&R | L&R | |||
Carrying amount, Assets | ₪ 1,040 | ₪ 1,323 | |||
Fair value, Assets | ₪ 1,040 | ₪ 1,318 | |||
Interest rate used | [1] | 4.47% | 4.72% | ||
Other receivables [Member] | |||||
Assets and Liabilities | |||||
Category | [2] | L&R | L&R | ||
Carrying amount, Assets | [2] | ₪ 9 | ₪ 9 | ||
Fair value, Assets | [2] | ₪ 9 | ₪ 9 | ||
[1] | The fair values of the notes payable quoted market prices at the end of the reporting period are within level 1 of the fair value hierarchy. The fair values of other instruments under AC categories were calculated based on observable weighted average of interest rates derived from quoted market prices of the Group's notes payable and bank quotes of rates of similar terms and nature, are within level 2 of the fair value hierarchy. | ||||
[2] | The fair value of these financial instruments equals their carrying amounts, as the impact of discounting is not significant. |
TRADE RECEIVABLES (Narrative) (
TRADE RECEIVABLES (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | ||
Sales of equipment through credit cards | ₪ 72 | |
Bottom of range [Member] | ||
Statement Line Items [Line Items] | ||
Interest rate on trade receivables | 4.47% | 3.72% |
Top of range [Member] | ||
Statement Line Items [Line Items] | ||
Interest rate on trade receivables | 4.72% | 4.72% |
TRADE RECEIVABLES (Schedule of
TRADE RECEIVABLES (Schedule of Composition of Trade Receivables) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Trade and other current receivables [abstract] | |||||
Trade (current and non-current) | ₪ 1,260 | ₪ 1,545 | |||
Deferred interest income (note 2(n)) | (27) | (32) | |||
Allowance for doubtful accounts | (193) | (190) | ₪ (169) | ₪ (166) | |
Trade receivables, net | 1,040 | 1,323 | |||
Current | 808 | [1] | 990 | ||
Non - current | ₪ 232 | [1] | ₪ 333 | ||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
TRADE RECEIVABLES (Schedule o80
TRADE RECEIVABLES (Schedule of Allowance for Doubtful Accounts) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Trade and other current receivables [abstract] | |||
Balance at beginning of year | ₪ 190 | ₪ 169 | ₪ 166 |
Receivables written-off during the year as uncollectible | (49) | (61) | (61) |
Charge or expense during the year | 52 | 82 | 64 |
Balance at end of year | ₪ 193 | ₪ 190 | ₪ 169 |
TRADE RECEIVABLES (Schedule o81
TRADE RECEIVABLES (Schedule of Aging of Gross Trade Receivables) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||||
Gross | ₪ 1,260 | ₪ 1,545 | ||
Allowance | 193 | 190 | ₪ 169 | ₪ 166 |
Less than one year [Member] | ||||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||||
Gross | 1,089 | 1,420 | ||
Allowance | 69 | 101 | ||
More than one year [Member] | ||||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||||
Gross | 171 | 125 | ||
Allowance | ₪ 124 | ₪ 89 |
INVENTORY (Schedule of Inventor
INVENTORY (Schedule of Inventory) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Classes of current inventories [abstract] | |||
Handsets and devices | ₪ 60 | ₪ 60 | |
Accessories and other | 8 | 9 | |
Spare parts | 19 | 22 | |
ISP modems, routers, servers and related equipment | 6 | 5 | |
Inventories | 93 | [1] | 96 |
Write-offs recorded | 5 | 6 | |
Cost of inventory recognized as expenses and included in cost of revenues for the year ended | ₪ 558 | ₪ 673 | |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INVESTMENT IN PHI (Narrative) (
INVESTMENT IN PHI (Narrative) (Details) - ILS (₪) ₪ in Millions | Nov. 08, 2013 | Feb. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of associates [line items] | ||||||
Revenues from ROU | ₪ 3,268 | [1] | ₪ 3,544 | ₪ 4,111 | ||
Hot Mobile [Member] | ||||||
Disclosure of associates [line items] | ||||||
Period of agreement | 15-year | |||||
Options exercised | ₪ 250 | |||||
Period of termination notice | two years | |||||
Revenues from ROU | 51 | ₪ 120 | ||||
P.H.I. Networks [Member] | ||||||
Disclosure of associates [line items] | ||||||
Revenues from ROU | ₪ 477 | ₪ 432 | ||||
Ownership interest | 50.00% | |||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INVESTMENT IN PHI (Schedule of
INVESTMENT IN PHI (Schedule of Summarized Financial Information for Associates) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Disclosure of associates [line items] | |||||
Current assets | ₪ 2,009 | [1] | ₪ 2,339 | ||
Non-current assets | 2,709 | [1] | 2,858 | ||
Current liabilities | 1,811 | [1] | 1,607 | ||
Non-current liabilities | 1,473 | [1] | 2,479 | ||
Summarized statement of income | |||||
Revenues, net | 3,268 | [1] | 3,544 | ₪ 4,111 | |
Pre-tax Profit | 135 | [1] | 88 | (36) | |
After-tax profit | 114 | [1] | 52 | (40) | |
Total comprehensive income | 113 | [1] | 46 | ₪ (36) | |
P.H.I. Networks [Member] | |||||
Disclosure of associates [line items] | |||||
Current assets | 119 | 122 | |||
Non-current assets | 218 | 115 | |||
Current liabilities | 117 | 110 | |||
Non-current liabilities | 218 | 125 | |||
Supplemental information relating to associates: | |||||
Commitments for operating leases and operating expenses | 443 | 364 | |||
Commitments to purchase fixed assets | 2 | 3 | |||
Guarantees made to third parties | 1 | ||||
Summarized statement of income | |||||
Revenues, net | 477 | 432 | |||
Pre-tax Profit | [2] | ||||
After-tax profit | [2] | ||||
Total comprehensive income | [2] | ||||
Reconciliation to carrying amount: | |||||
Opening net assets of PHI | 2 | 2 | |||
Profit for the period | [2] | ||||
Closing net assets of PHI | 2 | 2 | |||
Carrying amount: Group's share | ₪ 1 | ₪ 1 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||
[2] | Representing an amount of less than NIS 1 million. |
PROPERTY AND EQUIPMENT (Schedul
PROPERTY AND EQUIPMENT (Schedule of Property and Equipment) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | ₪ 1,207 | ||||||
Balance | 1,180 | [1] | ₪ 1,207 | ||||
Cost [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 2,881 | 3,152 | ₪ 3,505 | ||||
Additions | 274 | 116 | 141 | ||||
Disposals | 229 | 387 | 494 | ||||
Balance | 2,926 | 2,881 | 3,152 | ||||
Cost [Member] | Other Communication network [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 2,003 | [2] | 2,187 | [2] | 2,504 | ||
Additions | 55 | 51 | [2] | 106 | [2] | ||
Disposals | 165 | 235 | 423 | ||||
Balance | 1,893 | 2,003 | [2] | 2,187 | [2] | ||
Cost [Member] | Computers, software and hardware for information systems [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 207 | 264 | 303 | ||||
Additions | 7 | 17 | [3] | ||||
Disposals | 60 | 74 | 39 | ||||
Balance | 154 | 207 | 264 | ||||
Cost [Member] | Optic fibers and related assets [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 508 | 486 | 469 | ||||
Additions | 97 | 22 | 19 | ||||
Disposals | 1 | 2 | |||||
Balance | 604 | 508 | 486 | ||||
Cost [Member] | Subscribers equipment and installations [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 29 | 12 | |||||
Additions | 109 | 17 | 12 | ||||
Disposals | [3] | ||||||
Balance | 138 | 29 | 12 | ||||
Cost [Member] | Property, leasehold improvements, furniture and equipment [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 134 | [2] | 203 | 229 | |||
Additions | 6 | 9 | [2] | 4 | |||
Disposals | 3 | 78 | 30 | ||||
Balance | 137 | 134 | [2] | 203 | |||
Accumulated depreciation [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 1,674 | 1,738 | 1,844 | ||||
Depreciation | 301 | 316 | 376 | ||||
Impairment charges | [4] | 12 | |||||
Disposals | 229 | 380 | 494 | ||||
Balance | 1,746 | 1,674 | 1,738 | ||||
Accumulated depreciation [Member] | Other Communication network [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 1,224 | [2] | 1,231 | [2] | 1,379 | ||
Depreciation | 204 | 223 | [2] | 270 | [2] | ||
Impairment charges | [4] | 5 | |||||
Disposals | 165 | 230 | 423 | ||||
Balance | 1,263 | 1,224 | [2] | 1,231 | [2] | ||
Accumulated depreciation [Member] | Computers, software and hardware for information systems [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 146 | 191 | 178 | ||||
Depreciation | 22 | 29 | 45 | ||||
Impairment charges | [4] | 7 | |||||
Disposals | 60 | 74 | 39 | ||||
Balance | 108 | 146 | 191 | ||||
Accumulated depreciation [Member] | Optic fibers and related assets [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 218 | 183 | 151 | ||||
Depreciation | 36 | 35 | 34 | ||||
Disposals | 1 | 2 | |||||
Balance | 253 | 218 | 183 | ||||
Accumulated depreciation [Member] | Subscribers equipment and installations [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 7 | 1 | |||||
Depreciation | 24 | 6 | 1 | ||||
Balance | 31 | 7 | 1 | ||||
Accumulated depreciation [Member] | Property, leasehold improvements, furniture and equipment [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 79 | 132 | 136 | ||||
Depreciation | 15 | 23 | 26 | ||||
Disposals | 3 | 76 | 30 | ||||
Balance | 91 | 79 | 132 | ||||
Carrying amounts, net [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 1,207 | 1,414 | |||||
Balance | 1,180 | 1,207 | 1,414 | ||||
Carrying amounts, net [Member] | Other Communication network [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | [2] | 779 | 956 | ||||
Balance | 630 | 779 | [2] | 956 | [2] | ||
Carrying amounts, net [Member] | Computers, software and hardware for information systems [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 61 | 73 | |||||
Balance | 46 | 61 | 73 | ||||
Carrying amounts, net [Member] | Optic fibers and related assets [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 290 | 303 | |||||
Balance | 351 | 290 | 303 | ||||
Carrying amounts, net [Member] | Subscribers equipment and installations [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 22 | 11 | |||||
Balance | 107 | 22 | 11 | ||||
Carrying amounts, net [Member] | Property, leasehold improvements, furniture and equipment [Member] | |||||||
Disclosure of detailed information about property, plant and equipment [line items] | |||||||
Balance | 55 | [2] | 71 | ||||
Balance | ₪ 46 | ₪ 55 | [2] | ₪ 71 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||
[2] | Reclassified | ||||||
[3] | Representing an amount of less than 1 million. | ||||||
[4] | See note 13(2) |
PROPERTY AND EQUIPMENT (Sched86
PROPERTY AND EQUIPMENT (Schedule of Depreciation Expense) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |||
Cost additions include capitalization of salary and employee related expenses | ₪ 33 | ₪ 29 | ₪ 30 |
INTANGIBLE AND OTHER ASSETS (Sc
INTANGIBLE AND OTHER ASSETS (Schedule of Intangible Assets with Finite Economic Useful Lives) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | ₪ 793 | ||||||
Amortization | ₪ 249 | ₪ 253 | |||||
Balance | 697 | [1] | 793 | ||||
Trade name [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Amortization | 6 | 16 | 1 | ||||
Cost [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 3,119 | 3,147 | 3,096 | ||||
Transition to IFRS 15 | [2] | (11) | |||||
Additions | 143 | 86 | 130 | ||||
Disposals | 201 | 114 | 79 | ||||
Balance | 3,050 | 3,119 | 3,147 | ||||
Cost [Member] | Licenses [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 2,123 | 2,123 | 2,088 | ||||
Additions | 35 | ||||||
Balance | 2,123 | 2,123 | 2,123 | ||||
Cost [Member] | Trade name [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 73 | 73 | 73 | ||||
Disposals | 73 | ||||||
Balance | 73 | 73 | |||||
Cost [Member] | Customer relationships [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 276 | 276 | 276 | ||||
Balance | 276 | 276 | 276 | ||||
Cost [Member] | Subscriber acquisition and retention costs [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 13 | 13 | 13 | ||||
Transition to IFRS 15 | [2] | (13) | |||||
Additions | 4 | 6 | |||||
Disposals | 4 | 6 | |||||
Balance | 13 | 13 | |||||
Cost [Member] | Computer software [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | [3] | 634 | 662 | 646 | |||
Additions | 59 | 82 | [3] | 89 | [3] | ||
Disposals | 128 | 110 | [3] | 73 | [3] | ||
Balance | 565 | 634 | [3] | 662 | [3] | ||
Cost [Member] | Costs of obtaining contracts with customers [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Transition to IFRS 15 | [2] | 2 | |||||
Additions | 84 | ||||||
Balance | 86 | ||||||
Accumulated amortization [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 2,326 | 2,191 | 2,017 | ||||
Transition to IFRS 15 | [2] | (11) | |||||
Amortization | 239 | 249 | 243 | [4] | |||
Impairment charges | [5] | 10 | |||||
Disposals | 201 | 114 | 79 | ||||
Balance | 2,353 | 2,326 | 2,191 | ||||
Accumulated amortization [Member] | Licenses [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 1,676 | 1,588 | 1,502 | ||||
Amortization | 88 | 88 | 86 | [4] | |||
Balance | 1,764 | 1,676 | 1,588 | ||||
Accumulated amortization [Member] | Trade name [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 62 | 41 | 33 | ||||
Amortization | 11 | 21 | 6 | [4] | |||
Impairment charges | [5] | 2 | |||||
Disposals | 73 | ||||||
Balance | 62 | 41 | |||||
Accumulated amortization [Member] | Customer relationships [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 237 | 219 | 188 | ||||
Amortization | 18 | 18 | 23 | [4] | |||
Impairment charges | [5] | 8 | |||||
Balance | 255 | 237 | 219 | ||||
Accumulated amortization [Member] | Subscriber acquisition and retention costs [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 11 | 10 | 9 | ||||
Transition to IFRS 15 | [2] | (11) | |||||
Amortization | 5 | 7 | [4] | ||||
Disposals | 4 | 6 | |||||
Balance | 11 | 10 | |||||
Accumulated amortization [Member] | Computer software [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | [3] | 340 | 333 | 285 | |||
Amortization | 107 | 117 | [3] | 121 | [3],[4] | ||
Disposals | 128 | 110 | [3] | 73 | [3] | ||
Balance | 319 | 340 | [3] | 333 | [3] | ||
Accumulated amortization [Member] | Costs of obtaining contracts with customers [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Amortization | 15 | ||||||
Balance | 15 | ||||||
Carrying amounts, net [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 793 | 956 | |||||
Balance | 697 | 793 | 956 | ||||
Carrying amounts, net [Member] | Licenses [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 447 | 535 | |||||
Balance | 339 | 447 | 535 | ||||
Carrying amounts, net [Member] | Trade name [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 11 | 32 | |||||
Balance | 11 | 32 | |||||
Carrying amounts, net [Member] | Customer relationships [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 39 | 57 | |||||
Balance | 21 | 39 | 57 | ||||
Carrying amounts, net [Member] | Subscriber acquisition and retention costs [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | 2 | 3 | |||||
Balance | 2 | 3 | |||||
Carrying amounts, net [Member] | Computer software [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | [3] | 294 | 329 | ||||
Balance | 246 | ₪ 294 | [3] | ₪ 329 | [3] | ||
Carrying amounts, net [Member] | Costs of obtaining contracts with customers [Member] | |||||||
Disclosure of detailed information about intangible assets [line items] | |||||||
Balance | ₪ 71 | ||||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||||
[2] | See adoption of IFRS 15 Revenues from Contracts with Customers in note 2 (n) and note 2(f)(5) | ||||||
[3] | Cost additions include capitalization of salary and employee related expenses | ||||||
[4] | See information with respect to change in estimate of economic life of the trade name in 2015 in note 2(f)(4) | ||||||
[5] | See note 13(2). |
INTANGIBLE AND OTHER ASSETS (88
INTANGIBLE AND OTHER ASSETS (Schedule of Amortization Expenses and Impairments) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about intangible assets [abstract] | |||
Cost additions include capitalization of salary and employee related expenses | ₪ 44 | ₪ 36 | ₪ 35 |
DEFERRED EXPENSES - RIGHT OF 89
DEFERRED EXPENSES - RIGHT OF USE (Schedule of Deferred Expenses - Right of Use) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | ₪ 793 | |||
Amortization | ₪ 249 | ₪ 253 | ||
Balance | 697 | [1] | 793 | |
Right-of-use assets [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Current | 43 | 28 | ||
Non-current | 133 | 75 | ||
Cost [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | 3,119 | 3,147 | 3,096 | |
Additional payments | 143 | 86 | 130 | |
Balance | 3,050 | 3,119 | 3,147 | |
Cost [Member] | Right-of-use assets [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | 516 | 436 | 402 | |
Additional payments | 113 | 80 | 34 | |
Balance | 629 | 516 | 436 | |
Accumulated amortization and impairment [Member] | Right-of-use assets [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | 413 | 383 | 271 | |
Amortization | 40 | 30 | 36 | |
Impairment recorded | 76 | |||
Balance | 453 | 413 | 383 | |
Carrying amounts, net [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | 793 | 956 | ||
Balance | 697 | 793 | 956 | |
Carrying amounts, net [Member] | Right-of-use assets [Member] | ||||
Disclosure of detailed information about intangible assets [line items] | ||||
Balance | 103 | 53 | 131 | |
Balance | ₪ 176 | ₪ 103 | ₪ 53 | |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
IMPAIRMENT TESTS (Narrative) (D
IMPAIRMENT TESTS (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | ||
Disclosure of information for cash-generating units [line items] | ||||
Goodwill | ₪ 407 | [1] | ₪ 407 | |
Pre-tax discount rate | 11.20% | 13.40% | 11.90% | |
Fixed-Line Segment [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Pre-tax cash flow projections period | five-year period and using extrapolation with specific adjustments expected until 2027 | |||
Impairment charges | ₪ 98 | |||
Pre-tax discount rate | 12.90% | |||
Recoverable amount | ₪ 250 | |||
Right of use [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Impairment charges | 76 | |||
Customer relationships [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Impairment charges | 8 | |||
Computer software [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Impairment charges | 7 | |||
Other Communication network [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Impairment charges | 5 | |||
Trade name [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Impairment charges | 2 | |||
Giza Singer Even. Ltd [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Pre-tax cash flow projections period | five-year | |||
Giza Singer Even. Ltd [Member] | Fixed-Line Segment [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Recoverable amount | ₪ 250 | |||
CGU [Member] | ||||
Disclosure of information for cash-generating units [line items] | ||||
Goodwill | ₪ 407 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
IMPAIRMENT TESTS (Schedule of G
IMPAIRMENT TESTS (Schedule of Goodwill Impairment Assumptions) (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of impairment loss and reversal of impairment loss [abstract] | |||
Terminal growth rate | 0.90% | 0.50% | (0.90%) |
After-tax discount rate | 9.30% | 9.80% | 10.30% |
Pre-tax discount rate | 11.20% | 11.90% | 13.40% |
PROVISIONS (Schedule of Provisi
PROVISIONS (Schedule of Provisions) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Disclosure of other provisions [line items] | |||
Current | ₪ 75 | [1] | ₪ 77 |
Group's share in PHI's provisions [Member] | |||
Disclosure of other provisions [line items] | |||
Balance | |||
Additions during the year | 7 | ||
Balance | 7 | ||
Non-current | 7 | ||
Dismantling and restoring sites obligation [Member] | |||
Disclosure of other provisions [line items] | |||
Balance | 35 | ||
Additions during the year | 5 | ||
Reductions during the year | (14) | ||
Finance costs | 1 | ||
Balance | 27 | ||
Non-current | 27 | 35 | |
Legal claims [Member] | |||
Disclosure of other provisions [line items] | |||
Balance | 76 | ||
Additions during the year | 8 | ||
Reductions during the year | (12) | ||
Balance | 72 | ||
Current | 72 | 76 | |
Equipment warranty [Member] | |||
Disclosure of other provisions [line items] | |||
Balance | 1 | ||
Additions during the year | 7 | ||
Reductions during the year | (5) | ||
Balance | 3 | ||
Current | ₪ 3 | ₪ 1 | |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
BORROWINGS AND NOTES PAYABLE (N
BORROWINGS AND NOTES PAYABLE (Narrative) (Details) - ILS (₪) ₪ / shares in Units, ₪ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Apr. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2018 | Sep. 30, 2017 | ||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Additional interest rate | 1.20% | 1.20% | ||||||||||
Interest rate | 1.294% | 1.294% | ||||||||||
Repayments of notes payable | ₪ 443 | [1] | ₪ 643 | ₪ 308 | ||||||||
Finance expense | 184 | [1] | 118 | ₪ 156 | ||||||||
Borrowings | ₪ 1,944 | ₪ 1,944 | ₪ 2,703 | |||||||||
Financial obligation ratio | The ratio of (a) the amount of all financial obligations of the Company including bank guarantees that the Company has undertaken ("Total Debt") to (b) EBITDA less Capital Expenditures shall not exceed 6.5 (the ratio as of December 31, 2016 and 2017 was 4.5 and 4.1, respectively); and | |||||||||||
Ratio of total debt | The ratio of (a) Total Debt to (b) the EBITDA of the Company shall not exceed 4 (the ratio as of December 31, 2016 and 2017 was 3.4 and 2.2, respectively). | |||||||||||
Additional finance expense | ₪ 18 | |||||||||||
Security obligations | 100 | |||||||||||
Notes payable series O and L [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repayments of notes payable | ₪ 300 | |||||||||||
Notes payable series K [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repayments of notes payable | ₪ 75 | |||||||||||
Additional Series F debentures [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Borrowings | ₪ 100 | |||||||||||
Notes payable series F [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Interest rate | 2.16% | |||||||||||
Borrowings | ₪ 389 | ₪ 255 | ₪ 389 | |||||||||
Borrowings term | five years | |||||||||||
Borrowing start date | June 2,020 | |||||||||||
Borrowing P [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Interest rate | 2.38% | 2.38% | ||||||||||
Borrowings | ₪ 125 | ₪ 125 | ||||||||||
Borrowing start date | December 2,018 | |||||||||||
Borrowing Q [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Interest rate | 2.50% | 2.50% | ||||||||||
Borrowings | ₪ 125 | ₪ 125 | ||||||||||
Borrowing start date | March 2,019 | |||||||||||
Borrowing O [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Interest rate | 4.34% | 4.34% | ||||||||||
Borrowings | ₪ 100 | ₪ 100 | ||||||||||
Borrowing start date | March 2,018 | |||||||||||
Notes payable series B [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repurchased of notes payable | ₪ 43 | |||||||||||
Transaction price par value | ₪ 1.104 | |||||||||||
Repayments of notes payable | ₪ 48 | |||||||||||
Notes payable series E [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repurchased of notes payable | ₪ 131 | |||||||||||
Transaction price par value | ₪ 1.073 | |||||||||||
Repayments of notes payable | ₪ 141 | |||||||||||
Notes payable series C [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repurchased of notes payable | ₪ 54 | |||||||||||
Transaction price par value | ₪ 1.136 | |||||||||||
Repayments of notes payable | ₪ 62 | |||||||||||
Finance expense | ₪ 12 | |||||||||||
Notes payable series D [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repayments of notes payable | ₪ 700 | |||||||||||
Notes payable series I and J [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repayments of notes payable | ₪ 175 | |||||||||||
Notes payable series M and N [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Repayments of notes payable | ₪ 408 | |||||||||||
Institutional Corporations [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Borrowings | 100 | 100 | ||||||||||
Additional Series F debentures [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Borrowings | ₪ 127 | ₪ 127 | ₪ 150 | |||||||||
Series F Notes and borrowings P and Q [Member] | ||||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||||
Financial obligation ratio | The ratio of Net Debt to Adjusted EBITDA was 1.0. Additional stipulations regarding Series F Notes and borrowings P and Q mainly include: shareholders' equity shall not decrease below NIS 400 million; the Company shall not create floating liens subject to certain terms; the Company has the right for early redemption under certain conditions; the Company shall pay additional annual interest of 0.5% in the case of a two-notch downgrade in the Series F Notes rating and an additional annual interest of 0.25% for each further single-notch downgrade, up to a maximum additional interest of 1%; the Company shall pay additional annual interest of 0.25% during a period in which there is a breach of the financial covenant. | |||||||||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
BORROWINGS AND NOTES PAYABLE (S
BORROWINGS AND NOTES PAYABLE (Schedule of Composition of Borrowings and Notes Payable) (Details) | 12 Months Ended | |
Dec. 31, 2017 | ||
Notes payable series C [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Linkage terms (principal and interest) | CPI | |
Annual interest rate | 3.35% CPI adj. | |
Notes payable series D [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 'Makam' plus 1.2% | [1] |
Notes payable series F [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 2.16% fixed | |
Borrowing K [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 3.71% fixed | |
Borrowing L [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 4.25% fixed | |
Borrowing O [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 4.34% fixed | |
Borrowing P [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 2.38% fixed | |
Borrowing Q [Member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Annual interest rate | 2.5% fixed | |
[1] | 'Makam' is a variable interest that is based on the yield of 12 month government bonds issued by the government of Israel. The interest is updated on a quarterly basis. The interest rates paid (in annual terms, and including the additional interest of 1.2%) for the period from October 1, 2017 to December 30, 2017 was 1.294%. |
BORROWINGS AND NOTES PAYABLE 95
BORROWINGS AND NOTES PAYABLE (Schedule of Changes in Debentures, Including Cash Flows From Financing Activities) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about borrowings [line items] | |||
Non-current borrowings, including current maturities | ₪ 625 | ₪ 1,607 | |
Notes payable, including current maturities | 1,298 | 1,087 | |
Interest payable | 21 | 9 | |
Borrowings | 1,944 | ₪ 2,703 | |
Cash flows from (used in) financing activities, net [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current borrowings, including current maturities | (982) | ||
Notes payable, including current maturities | 207 | ||
Interest payable | (165) | ||
Borrowings | (940) | ||
Non cash movements CPI adjustments and other finance costs [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Notes payable, including current maturities | 4 | ||
Interest payable | 159 | ||
Borrowings | 163 | ||
Change in estimated cash flows [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Interest payable | [1] | 18 | |
Borrowings | [1] | ₪ 18 | |
[1] | See note 15(5) below and note 2(j)(3). |
LIABILITY FOR EMPLOYEE RIGHTS96
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of defined benefit plans [line items] | |||
Defined benefit plan amount | ₪ 17 | ₪ 14 | ₪ 15 |
Expected contribution to defined benefit plan [Member] | |||
Disclosure of defined benefit plans [line items] | |||
Defined benefit plan amount | ₪ 10 |
LIABILITY FOR EMPLOYEE RIGHTS97
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Schedule of Obligation Recognized for Defined Benefit Plans) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of net defined benefit liability (asset) [line items] | ||
At January 1 | ₪ 39 | ₪ 34 |
Current service cost | 11 | 17 |
Past service cost | 4 | |
Interest expense (income) | 1 | 2 |
Employer contributions | (9) | (12) |
Benefits paid | (8) | (10) |
Remeasurements: | ||
Experience loss | 2 | 9 |
Loss (gain) from change in demographic assumptions | (4) | |
Loss (gain) from change in financial assumptions | 1 | 1 |
Return on plan assets | (1) | 2 |
At December 31 | 40 | 39 |
Present value of obligation [Member] | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
At January 1 | 142 | 133 |
Current service cost | 11 | 17 |
Past service cost | 4 | |
Interest expense (income) | 4 | 5 |
Benefits paid | (25) | (19) |
Remeasurements: | ||
Experience loss | 2 | 9 |
Loss (gain) from change in demographic assumptions | (4) | |
Loss (gain) from change in financial assumptions | 1 | 1 |
At December 31 | 139 | 142 |
Fair value of plan assets [Member] | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
At January 1 | (103) | (99) |
Interest expense (income) | (3) | (3) |
Employer contributions | (9) | (12) |
Benefits paid | 17 | 9 |
Remeasurements: | ||
Return on plan assets | (1) | 2 |
At December 31 | ₪ (99) | ₪ (103) |
LIABILITY FOR EMPLOYEE RIGHTS98
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Schedule of Principal Actuarial Assumptions) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of defined benefit plans [line items] | ||
Interest rate weighted average | 2.73% | 2.95% |
Inflation rate weighted average | 1.11% | 1.04% |
Bottom of range [Member] | ||
Disclosure of defined benefit plans [line items] | ||
Expected turnover rate | 9.00% | 9.00% |
Future salary increases | 1.00% | 1.00% |
Top of range [Member] | ||
Disclosure of defined benefit plans [line items] | ||
Expected turnover rate | 56.00% | 56.00% |
Future salary increases | 6.00% | 6.00% |
LIABILITY FOR EMPLOYEE RIGHTS99
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Schedule of Sensitivity of Defined Benefit Obligation to Changes) (Details) | Dec. 31, 2017 |
Interest rate [Member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Increase of 10% of the assumption | (0.60%) |
Decrease of 10% of the assumption | 0.80% |
Expected turnover rate [Member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Increase of 10% of the assumption | 0.20% |
Decrease of 10% of the assumption | (0.30%) |
Future salary increases [Member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Increase of 10% of the assumption | 0.40% |
Decrease of 10% of the assumption | (0.40%) |
LIABILITY FOR EMPLOYEE RIGHT100
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Schedule of Maturity Analysis of Undiscounted Defined Benefits) (Details) ₪ in Millions | Dec. 31, 2017ILS (₪) |
Disclosure of defined benefit plans [line items] | |
Expected maturity | ₪ 158 |
2018 [Member] | |
Disclosure of defined benefit plans [line items] | |
Expected maturity | 24 |
2019 [Member] | |
Disclosure of defined benefit plans [line items] | |
Expected maturity | 20 |
2020 [Member] | |
Disclosure of defined benefit plans [line items] | |
Expected maturity | 11 |
2021 and 2022 [Member] | |
Disclosure of defined benefit plans [line items] | |
Expected maturity | 20 |
2023 and thereafter [Member] | |
Disclosure of defined benefit plans [line items] | |
Expected maturity | ₪ 83 |
COMMITMENTS (Narrative) (Detail
COMMITMENTS (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of transactions between related parties [line items] | |||
Frequency fee expense | ₪ 63 | ₪ 64 | ₪ 65 |
Commited to acquire property and equipment and software | 5 | ||
Commited to acquire inventory | 818 | ||
Maintenance fee for years 2018-2023 | ₪ 52 | ||
Bank guarantees | 126 | ||
In respect of licenses [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Bank guarantees | 100 | ||
Other parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Bank guarantees | 26 | ||
PHI's debt [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Bank guarantees | ₪ 50 |
COMMITMENTS (Schedule of Future
COMMITMENTS (Schedule of Future Capacities Owed for Right of Use Agreements) (Details) ₪ in Millions | Dec. 31, 2017ILS (₪) |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | ₪ 207 |
2018 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | 43 |
2019 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | 41 |
2020 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | 41 |
2021 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | 41 |
2022 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Commitments to pay for rights of use | ₪ 41 |
DEFERRED INCOME WITH RESPECT103
DEFERRED INCOME WITH RESPECT TO SETTLEMENT AGREEMENT WITH ORANGE (Details) € in Millions, ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017ILS (₪) | [1] | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | Dec. 31, 2015EUR (€) | |
Disclosure of transactions between related parties [line items] | |||||
Income with respect to settlement agreement with Orange | ₪ | ₪ 108 | ₪ 217 | ₪ 61 | ||
Orange [Member] | |||||
Disclosure of transactions between related parties [line items] | |||||
Received advance payments | € 90 | ||||
Orange [Member] | Israeli telecommunications services market [Member] | |||||
Disclosure of transactions between related parties [line items] | |||||
Received advance payments | 40 | ||||
Orange [Member] | Decision to terminate the brand license agreement [Member] | |||||
Disclosure of transactions between related parties [line items] | |||||
Received advance payments | € 50 | ||||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
OPERATING LEASES (Narrative) (D
OPERATING LEASES (Narrative) (Details) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017ILS (₪)m² | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | |
Disclosure of finance lease and operating lease by lessee [abstract] | |||
Area of lease | m² | 51,177 | ||
Lease term | 2,024 | ||
Period of lease agreements for service centers and retail stores | two to ten years | ||
Extend period of lease | twenty years | ||
Percentage of increase of lease payment | 2%-15% | ||
Period of lease agreements in respect of cell sites and switching stations | two to ten years | ||
Lease contract period | ten years | ||
Percentage of increase of lease payment mostly | 2%-10% | ||
Rental expenses | ₪ | ₪ 178 | ₪ 213 | ₪ 260 |
OPERATING LEASES (Schedule of N
OPERATING LEASES (Schedule of Non-Cancelable Future Minimum Payments Under Operating Leases) (Details) ₪ in Millions | Dec. 31, 2017ILS (₪) |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | ₪ 578 |
2018 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 158 |
2019 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 100 |
2020 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 77 |
2021 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 59 |
2022-2023 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 100 |
2024-2025 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 52 |
2026-2027 [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | 13 |
2028 and thereafter [Member] | |
Disclosure of finance lease and operating lease by lessee [line items] | |
Non-cancelable minimum operating lease rentals | ₪ 19 |
LAWSUITS AND LITIGATIONS (Narra
LAWSUITS AND LITIGATIONS (Narrative) (Details) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017ILS (₪)Claims | Dec. 31, 2016ILS (₪) | Apr. 03, 2012ILS (₪) | Apr. 13, 2011ILS (₪) | Sep. 09, 2010ILS (₪) | |
Disclosure of contingent liabilities [line items] | |||||
Percentage of provision indemnification by cellular operators | 100.00% | ||||
Lawsuit provisions [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Total provision recorded | ₪ 72 | ||||
Agreement claims [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Litigation claim amount | 392 | ₪ 4.6 | ₪ 405 | ||
Additional litigation claim amount | ₪ 352 | ||||
Number of claims | Claims | 47 | ||||
Alleged breach of license, Telecom law [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Litigation claim amount | ₪ 22 | ||||
Employees and suppliers claims [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Additional litigation claim amount | ₪ 40 | ||||
Number of claims | Claims | 2 | ||||
Civil lawsuit amount | ₪ 100 |
LAWSUITS AND LITIGATIONS (Sched
LAWSUITS AND LITIGATIONS (Schedule of Claims or Breach of Consumer Protection Law and Customer Agreement Claims) (Details) - Agreement claims [Member] ₪ in Millions | Dec. 31, 2017ILS (₪)Claims |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 47 |
Total claims amount (NIS million) | ₪ | ₪ 3,375 |
Up to NIS 100 million [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 26 |
Total claims amount (NIS million) | ₪ | ₪ 640 |
NIS 100-400 million [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 6 |
Total claims amount (NIS million) | ₪ | ₪ 1,330 |
NIS 400 million - NIS 1 billion [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 2 |
Total claims amount (NIS million) | ₪ | ₪ 1,405 |
Unquantified claims [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 13 |
Total claims amount (NIS million) | ₪ |
EQUITY AND SHARE BASED PAYME108
EQUITY AND SHARE BASED PAYMENTS (Narrative) (Details) ₪ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2017ILS (₪)shares | Dec. 31, 2008ILS (₪)shares | Dec. 31, 2017ILS (₪)shares | Dec. 31, 2016ILS (₪)shares | Dec. 31, 2015ILS (₪) | ||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Percentage transfer of shares to third party | 10.00% | |||||||
Percentage of israeli shareholders | 5.00% | |||||||
Treasury shares repurchased | 4,467,990 | |||||||
Treasury shares repurchased, value | ₪ | ₪ 351 | |||||||
Shares issued | 10,178,211 | 168,243,913 | [1] | 156,993,337 | [1] | |||
Total net consideration | ₪ | ₪ 190 | ₪ 190 | [2] | |||||
Offering expenses | ₪ | ₪ 7 | |||||||
Remaining treasury shares | 2,850,472 | |||||||
Percentage of dividend in excess of net income for the relevant period per share | [3] | |||||||
Compensation expenses during next three years with respect to options and restricted shares | ₪ | ₪ 16 | |||||||
Equity Incentive Plan [Member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of shares reserved for issuance upon exercise of all options or upon the earning of the restricted shares granted | 25,917,000 | |||||||
Shares remained ungranted | 7,816,113 | |||||||
Percentage of dividend in excess of net income for the relevant period per share | 40.00% | |||||||
Equity Incentive Plan [Member] | Trustee [Member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Shares granted | 1,376,381 | |||||||
[1] | Net of treasury shares. | |||||||
[2] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | |||||||
[3] | Due to the Full Dividend Mechanism the expected dividend yield used in the fair value determination of such options was 0% for the purpose of using the Black & Scholes option-pricing model. |
EQUITY AND SHARE BASED PAYME109
EQUITY AND SHARE BASED PAYMENTS (Schedule of Information in Respect of Options and Restricted Shares Granted) (Details) | 12 Months Ended |
Dec. 31, 2017shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Outstanding | 8,708,483 |
Number of options [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Granted | 31,304,207 |
Shares issued upon exercises and vesting | (6,430,589) |
Cancelled upon net exercises, expiration and forfeitures | (16,165,135) |
Outstanding | 8,708,483 |
Exercisable | 5,190,586 |
Number of options [Member] | Vest in 2018 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 2,502,089 |
Number of options [Member] | Vest in 2019 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 667,254 |
Number of options [Member] | Vest in 2020 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 348,554 |
Number of RSAs [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Granted | 4,298,768 |
Shares issued upon exercises and vesting | (1,617,518) |
Cancelled upon net exercises, expiration and forfeitures | (1,336,953) |
Outstanding | 1,344,297 |
Exercisable | 26,556 |
Number of RSAs [Member] | Vest in 2018 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 891,309 |
Number of RSAs [Member] | Vest in 2019 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 280,115 |
Number of RSAs [Member] | Vest in 2020 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Vest | 146,317 |
EQUITY AND SHARE BASED PAYME110
EQUITY AND SHARE BASED PAYMENTS (Schedule of Options and RSAs Status Summary) (Details) | 12 Months Ended | |||
Dec. 31, 2017ILS (₪)sharesYears | Dec. 31, 2016ILS (₪)sharesYears | Dec. 31, 2015ILS (₪)sharesYears | ||
Number Share Options and RSA's: | ||||
Outstanding at the end of the year | 8,708,483 | |||
Number Share Options and RSA's: | ||||
Weighted average fair value of options granted using the Black & Scholes option-pricing model - per option (NIS) | ₪ | ₪ 5.43 | ₪ 5.02 | ₪ 5.37 | |
The above fair value is estimated on the grant date based on the following weighted average assumptions: | ||||
Expected volatility | 37.60% | 39.50% | 39.28% | |
Risk-free interest rate | 0.53% | 0.54% | 0.54% | |
Expected life (years) | Years | 3 | 3 | 3 | |
Dividend yield | [1] | |||
RSAs [Member] | ||||
Number Share Options and RSA's: | ||||
Outstanding at the beginning of the year | 1,955,414 | 2,900,626 | 1,589,990 | |
Granted during the year | 507,146 | 417,176 | 1,779,596 | |
Vested during the year | (753,106) | (858,397) | (6,015) | |
Forfeited during the year | (365,157) | (503,991) | (462,945) | |
Outstanding at the end of the year | 1,344,297 | 1,955,414 | 2,900,626 | |
Share Options [Member] | ||||
Number Share Options and RSA's: | ||||
Outstanding at the beginning of the year | 11,285,901 | 12,686,317 | 8,962,116 | |
Granted during the year | 1,201,358 | 998,433 | 5,519,031 | |
Exercised during the year | (1,906,991) | (284,251) | (32,880) | |
Forfeited during the year | (988,566) | (1,219,648) | (1,459,215) | |
Expired during the year | (883,219) | (894,950) | (302,735) | |
Outstanding at the end of the year | 8,708,483 | 11,285,901 | 12,686,317 | |
Exercisable at the end of the year | 5,190,586 | 5,912,904 | 4,615,076 | |
Shares issued during the year due exercises | 319,259 | 47,484 | 8,496 | |
Number Share Options and RSA's: | ||||
Outstanding at the beginning of the year | ₪ | ₪ 29.14 | ₪ 29.52 | ₪ 32.08 | |
Granted during the year | ₪ | 19.45 | 18.14 | 17.41 | |
Exercised during the year | ₪ | 17.38 | 15.74 | 13.12 | |
Forfeited during the year | ₪ | 22.91 | 20.58 | 28.7 | |
Expired during the year | ₪ | 43.1 | 38.16 | 58.61 | |
Outstanding at the end of the year | ₪ | 29.67 | 29.14 | 29.52 | |
Exercisable at the end of the year | ₪ | ₪ 36.66 | ₪ 37.77 | ₪ 45.97 | |
[1] | Due to the Full Dividend Mechanism the expected dividend yield used in the fair value determination of such options was 0% for the purpose of using the Black & Scholes option-pricing model. |
EQUITY AND SHARE BASED PAYME111
EQUITY AND SHARE BASED PAYMENTS (Schedule of Information About Outstanding Options by Expiry Dates) (Details) | 12 Months Ended |
Dec. 31, 2017ILS (₪)shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 8,708,483 |
Weighted average exercise price in NIS | ₪ | ₪ 29.67 |
2018 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 371,687 |
Weighted average exercise price in NIS | ₪ | ₪ 25.55 |
2019 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 1,191,771 |
Weighted average exercise price in NIS | ₪ | ₪ 49.77 |
2020 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 2,324,841 |
Weighted average exercise price in NIS | ₪ | ₪ 37.66 |
2021 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 2,947,959 |
Weighted average exercise price in NIS | ₪ | ₪ 21.69 |
2022 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 826,533 |
Weighted average exercise price in NIS | ₪ | ₪ 21.66 |
2023 [Member] | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Number of share options | shares | 1,045,692 |
Weighted average exercise price in NIS | ₪ | ₪ 19.26 |
INCOME STATEMENT DETAILS (Narra
INCOME STATEMENT DETAILS (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Line Items [Line Items] | |||
Addition to deferred revenues | ₪ 92 | ||
Revenues from equipment | 11 | ||
Revenues from equipment from operating leases | 11 | ||
Revenues from services for operating leases | ₪ 10 | ||
Percentage Increase in Revenues [Member] | |||
Statement Line Items [Line Items] | |||
Percentage of performance obligations that were unsatisfied or partially unsatisfied as year end that will be recognized as revenue during subsequent years | 25.00% | 60.00% |
INCOME STATEMENT DETAILS (Sched
INCOME STATEMENT DETAILS (Schedule of Significant Changes in Contract Liabilities) (Details) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017ILS (₪) | ||
Statement Line Items [Line Items] | ||
Balance as at December 31, 2016 | ₪ 108 | |
Deferred revenues from Hot mobile [Member] | ||
Statement Line Items [Line Items] | ||
Balance as at December 31, 2016 | 226 | [1] |
Revenue recognized that was included in the contract liability balance at the beginning of the year | (31) | [1] |
Increases due to cash received, excluding amounts recognized as revenues during the year | [1] | |
Balance as at December 31, 2017 | 195 | [1] |
Other deferred revenues [Member] | ||
Statement Line Items [Line Items] | ||
Balance as at December 31, 2016 | 45 | [1] |
Revenue recognized that was included in the contract liability balance at the beginning of the year | (29) | [1] |
Increases due to cash received, excluding amounts recognized as revenues during the year | 30 | [1] |
Balance as at December 31, 2017 | ₪ 46 | [1] |
[1] | Current and non-current deferred revenues |
INCOME STATEMENT DETAILS (Sc114
INCOME STATEMENT DETAILS (Schedule of Disaggregation of Revenues) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Disclosure of operating segments [line items] | |||||
Total revenues | ₪ 3,268 | [1] | ₪ 3,544 | ₪ 4,111 | |
Cellular Segment [Member] | |||||
Disclosure of operating segments [line items] | |||||
Segment revenue - Services to private customers | 1,173 | ||||
Segment revenue - Services to business customers | 805 | ||||
Segment revenue - Services revenue total | 1,978 | ||||
Segment revenue - Equipment | 610 | [2] | 729 | 1,051 | |
Total revenues | [2] | 2,588 | |||
Fixed-Line Segment [Member] | |||||
Disclosure of operating segments [line items] | |||||
Segment revenue - Services to private customers | 254 | ||||
Segment revenue - Services to business customers | 523 | ||||
Segment revenue - Services revenue total | 777 | ||||
Segment revenue - Equipment | 76 | [2] | 63 | 68 | |
Total revenues | [2] | 853 | |||
Elimination [Member] | |||||
Disclosure of operating segments [line items] | |||||
Segment revenue - Services to private customers | (32) | ||||
Segment revenue - Services to business customers | (141) | ||||
Segment revenue - Services revenue total | (173) | ||||
Total revenues | [2] | (173) | |||
Consolidated [Member] | |||||
Disclosure of operating segments [line items] | |||||
Segment revenue - Services to private customers | 1,395 | ||||
Segment revenue - Services to business customers | 1,187 | ||||
Segment revenue - Services revenue total | 2,582 | ||||
Segment revenue - Equipment | 686 | [2] | ₪ 792 | ₪ 1,119 | |
Total revenues | [2] | ₪ 3,268 | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | ||||
[2] | See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts of NIS 64 million and NIS 20 million for the cellular segment and the fixed-line segment, respectively. The adoption of IFRS15 resulted in an increase in amortization expenses in 2017 for the cellular segment and the fixed-line segment in amounts of NIS 11 million and NIS 2 million, respectively. |
INCOME STATEMENT DETAILS (Sc115
INCOME STATEMENT DETAILS (Schedule of Cost of Revenues) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Analysis of income and expense [abstract] | ||||
Transmission, communication and content providers | ₪ 738 | ₪ 814 | ₪ 888 | |
Cost of equipment and accessories | 519 | 625 | 852 | |
Depreciation and amortization (including impairment) | 477 | 501 | 577 | |
Wages, employee benefits expenses and car maintenance | 293 | 270 | 320 | |
Costs of handling, replacing or repairing equipment | 75 | 93 | 88 | |
Operating lease, rent and overhead expenses | 184 | 258 | 315 | |
Network and cable maintenance | 97 | 150 | 145 | |
Internet infrastructure and service providers | 95 | 68 | 49 | |
Car kit installation, IT support, and other operating expenses | 61 | 62 | 72 | |
Amortization of rights of use (including impairment) | 40 | 30 | 112 | |
Other | 48 | 53 | 54 | |
Total cost of revenues | ₪ 2,627 | [1] | ₪ 2,924 | ₪ 3,472 |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INCOME STATEMENT DETAILS (Sc116
INCOME STATEMENT DETAILS (Schedule of Selling and Marketing Expenses) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Analysis of income and expense [abstract] | ||||
Wages, employee benefits expenses and car maintenance | ₪ 106 | [1] | ₪ 177 | ₪ 206 |
Advertising and marketing | 44 | 68 | 30 | |
Selling commissions, net | 29 | [1] | 82 | 77 |
Depreciation and amortization (including impairment) | 54 | [1] | 55 | 55 |
Operating lease, rent and overhead expenses | 23 | 29 | 27 | |
Other | 13 | 15 | 22 | |
Total selling and marketing expenses | ₪ 269 | [2] | ₪ 426 | ₪ 417 |
[1] | See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. | |||
[2] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INCOME STATEMENT DETAILS (Sc117
INCOME STATEMENT DETAILS (Schedule of General and Administrative Expenses) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Analysis of income and expense [abstract] | ||||
Wages, employee benefits expenses and car maintenance | ₪ 79 | ₪ 101 | ₪ 84 | |
Bad debts and allowance for doubtful accounts | 52 | 82 | 63 | |
Professional fees | 22 | 32 | 31 | |
Credit card and other commissions | 14 | 14 | 16 | |
Depreciation | 9 | 9 | 9 | |
Other | 20 | 25 | 20 | |
Total general and administrative expenses | ₪ 196 | [1] | ₪ 263 | ₪ 223 |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INCOME STATEMENT DETAILS (Sc118
INCOME STATEMENT DETAILS (Schedule of Employee Benefit Expense) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Analysis of income and expense [abstract] | |||
Wages and salaries including social benefits, social security costs, pension costs and car maintenance before capitalization | ₪ 503 | ₪ 537 | ₪ 622 |
Less: expenses capitalized (notes 10, 11) | (77) | (65) | (65) |
Service costs: defined benefit plan (note 16(2)) | 15 | 17 | 21 |
Service costs: defined contribution plan (note 16(1)) | 17 | 14 | 15 |
Employee share based compensation expenses (note 21(b)) | 20 | 45 | 17 |
Employee benefits expense | ₪ 478 | ₪ 548 | ₪ 610 |
OTHER INCOME, NET (Schedule of
OTHER INCOME, NET (Schedule of Other Income Net) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Other income, net [Abstract] | ||||
Unwinding of trade receivables | ₪ 27 | ₪ 41 | ₪ 46 | |
Other income, net | 4 | 4 | 1 | |
Other income, net | ₪ 31 | [1] | ₪ 45 | ₪ 47 |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
FINANCE COSTS, NET (Schedule of
FINANCE COSTS, NET (Schedule of Finance Costs Net) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Disclosure of finance costs, net [Abstract] | |||||
Net foreign exchange rate gains | ₪ 2 | ₪ 7 | |||
Fair value gain from derivative financial instruments, net | [1] | [1] | ₪ 2 | ||
CPI linkage income | 2 | 9 | |||
Interest income from cash equivalents | 2 | 1 | 1 | ||
Other | [1] | 3 | 1 | ||
Finance income | 4 | [2] | 13 | 13 | |
Interest expenses | 171 | 105 | 136 | ||
CPI linkage expenses | 4 | ||||
Net foreign exchange rate losses | 9 | ||||
Other finance costs | 9 | 13 | 11 | ||
Finance expenses | 184 | [2] | 118 | 156 | |
Finance costs, net | ₪ 180 | [2] | ₪ 105 | ₪ 143 | |
[1] | Representing an amount of less than 1 million | ||||
[2] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INCOME TAX EXPENSES (Narrative)
INCOME TAX EXPENSES (Narrative) (Details) | Aug. 05, 2013 | Jan. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||||
Change in tax rate | corporate tax rate beginning in 2014 and thereafter to 26.5% (instead of 25%) | corporate tax rate in 2016 and thereafter, from 26.5% to 25% | ||
Changes in tax rates or tax laws enacted or announced [Member] | ||||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||||
Corporate tax rate | 23.00% | 24.00% |
INCOME TAX EXPENSES (Schedule o
INCOME TAX EXPENSES (Schedule of Balances of Deferred Tax Asset (Liability)) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | ₪ 41 | ₪ 49 | ₪ 10 | ||
Charged to the income statement | 13 | (3) | 40 | ||
Charged to other comprehensive income | 1 | 2 | (1) | ||
Effect of change in corporate tax rate | (7) | ||||
As at December 31 | 55 | 41 | 49 | ||
Allowance for doubtful accounts [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | 45 | 45 | 44 | ||
Charged to the income statement | [1] | 6 | 1 | ||
Effect of change in corporate tax rate | (6) | ||||
As at December 31 | 45 | 45 | 45 | ||
Provisions for employee rights [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | 14 | 14 | 19 | ||
Charged to the income statement | [1] | [1] | (4) | ||
Charged to other comprehensive income | 1 | 2 | (1) | ||
Effect of change in corporate tax rate | (2) | ||||
As at December 31 | 15 | 14 | 14 | ||
Depreciable fixed assets and software [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | (35) | (53) | (70) | ||
Charged to the income statement | 8 | 13 | 17 | ||
Effect of change in corporate tax rate | 5 | ||||
As at December 31 | (27) | (35) | (53) | ||
Intangibles, deferred expenses and carry forward losses [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | 9 | 22 | 7 | ||
Charged to the income statement | 7 | (8) | 15 | ||
Effect of change in corporate tax rate | (5) | ||||
As at December 31 | 16 | 9 | 22 | ||
Options granted to employees [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | 6 | 3 | 1 | ||
Charged to the income statement | [1] | 4 | 2 | ||
Effect of change in corporate tax rate | (1) | ||||
As at December 31 | 6 | 6 | 3 | ||
Other [Member] | |||||
Balance of deferred tax asset (liability) in respect of | |||||
As at January 1 | 2 | 18 | 9 | ||
Charged to the income statement | (2) | (18) | 9 | ||
Effect of change in corporate tax rate | 2 | ||||
As at December 31 | [1] | ₪ 2 | ₪ 18 | ||
[1] | Representing an amount of less than NIS 1 million. |
INCOME TAX EXPENSES (Schedul123
INCOME TAX EXPENSES (Schedule of Deferred Income Taxes) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
Deferred tax assets | ₪ 130 | ₪ 124 |
Deferred tax liabilities | ||
Deferred tax liabilities | 75 | 83 |
Deferred tax assets, net | 55 | 41 |
Deferred tax assets to be recovered after more than 12 months [Member] | ||
Deferred tax assets | ||
Deferred tax assets | 80 | 87 |
Deferred tax assets to be recovered within 12 months [Member] | ||
Deferred tax assets | ||
Deferred tax assets | 50 | 37 |
Deferred tax liabilities to be recovered after more than 12 months [Member] | ||
Deferred tax liabilities | ||
Deferred tax liabilities | 63 | 72 |
Deferred tax liabilities to be recovered within 12 months [Member] | ||
Deferred tax liabilities | ||
Deferred tax liabilities | ₪ 12 | ₪ 11 |
INCOME TAX EXPENSES (Schedul124
INCOME TAX EXPENSES (Schedule of Reconciliation of Theoretical Tax Expense) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of income tax expenses [Abstract] | ||||
Profit (loss) before taxes on income, as reported in the income statements | ₪ 135 | [1] | ₪ 88 | ₪ (36) |
Theoretical tax expense | 32 | 22 | (9) | |
Increase in tax resulting from disallowable deductions | 8 | 11 | 7 | |
Taxes on income in respect of previous years | (10) | (4) | 7 | |
Change in corporate tax rate, see (b) above | 7 | |||
Temporary differences and tax losses for which no deferred income tax asset was recognized | (9) | |||
Other | (1) | |||
Income tax expenses | ₪ 21 | [1] | ₪ 36 | ₪ 4 |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
INCOME TAX EXPENSES (Schedul125
INCOME TAX EXPENSES (Schedule of Taxes on Income Included in Income Statements) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
For the reported year: | ||||
Current | ₪ 44 | ₪ 31 | ₪ 37 | |
Deferred, see (c) above | (4) | 2 | (40) | |
Effect of change in corporate tax rate on deferred taxes | 7 | |||
In respect of previous year: | ||||
Current | (10) | (4) | 7 | |
Deferred, see (c) above | (9) | |||
Income tax expenses | ₪ 21 | [1] | ₪ 36 | ₪ 4 |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
TRANSACTIONS AND BALANCES WI126
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Narrative) (Details) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017ILS (₪)shares | Jan. 29, 2013shares | |
PHI [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Guarantee for debt amount | ₪ | ₪ 50 | |
S.B. Israel Telecom Ltd. [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Number of shares issued in acquisition | 48,050,000 | |
Shareholder [Member] | ||
Disclosure of transactions between related parties [line items] | ||
Number of shares issued in acquisition | 49,862,800 |
TRANSACTIONS AND BALANCES WI127
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Schedule of Key Management Compensation) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Key management compensation expenses comprised | |||
Salaries and short-term employee benefits | ₪ 21 | ₪ 22 | ₪ 23 |
Long term employment benefits | 3 | 3 | 4 |
Employee share-based compensation expenses | 11 | 17 | 4 |
Key management compensation expenses | 35 | 42 | ₪ 31 |
Statement of financial position items - key management | |||
Current liabilities: | 11 | 10 | |
Non-current liabilities: | ₪ 11 | ₪ 12 |
TRANSACTIONS AND BALANCES WI128
TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Schedule of Balances and Transactions with PHI) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of transactions between related parties [line items] | ||||
Cost of revenues | ₪ 2,627 | [1] | ₪ 2,924 | ₪ 3,472 |
PHI [Member] | ||||
Disclosure of transactions between related parties [line items] | ||||
Cost of revenues | 45 | (2) | ||
Deferred expenses - Right of use | 95 | 41 | ||
Current assets (liabilities) | (43) | ₪ (5) | ||
Non-current assets (liabilities) | ₪ (7) | |||
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
EARNINGS (LOSS) PER SHARE (Sche
EARNINGS (LOSS) PER SHARE (Schedule of Data Relating to Net Income (Loss) and Weighted Average Number of Shares) (Details) - ILS (₪) shares in Thousands, ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Earnings (loss) per share | ||||
Profit (loss) for the year | ₪ 114 | [1] | ₪ 52 | ₪ (40) |
Weighted average number of shares used in computation of basic EPS (in thousands) | 162,733 | 156,268 | 156,081 | |
Add - net additional shares from assumed exercise of employee stock options and restricted shared (in thousands) | 1,804 | 1,828 | 0 | |
Weighted average number of shares used in computation of diluted EPS (in thousands) | 164,537 | 158,096 | 156,081 | |
Number of options and restricted shares not taken into account in computation of diluted earnings per share, because of their anti-dilutive effect (in thousands) | 5,650 | 8,906 | 15,587 | |
[1] | See Note 2(n) regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. |
COLLECTIVE EMPLOYMENT AGREEM130
COLLECTIVE EMPLOYMENT AGREEMENT (Details) - ILS (₪) ₪ in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2016 | |
Disclosure of collective employment agreement [Abstract] | ||
Onetime expense in employment agreement | ₪ 35 | |
Period of collective employment agreement | Period of three years (2016-2018) and an economic chapter that is valid for the years 2017 and 2018. |