Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document And Entity Information | |
Entity Registrant Name | Cellcom Israel Ltd. |
Entity Central Index Key | 1,385,145 |
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? | Yes |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 101,044,557 |
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 (₪) | |
Assets | ||||
Cash and cash equivalents | ₪ | ₪ 527 | ₪ 1,240 | ||
Current investments, including derivatives | ₪ | 364 | 284 | ||
Trade receivables | ₪ | [1] | 1,280 | 1,325 | |
Current tax assets | ₪ | 4 | 25 | ||
Other receivables | ₪ | 89 | 61 | ||
Inventory | ₪ | 70 | 64 | ||
Total current assets | ₪ | 2,334 | 2,999 | ||
Trade and other receivables | ₪ | 895 | 796 | ||
Property, plant and equipment, net | ₪ | 1,598 | 1,659 | ||
Intangible assets and others, net | ₪ | 1,260 | 1,207 | ||
Deferred tax assets | ₪ | 1 | |||
Total non- current assets | ₪ | 3,753 | 3,663 | ||
Total assets | ₪ | 6,087 | 6,662 | ||
Liabilities | ||||
Current maturities of debentures and of loans from financial institutions | ₪ | 618 | 863 | ||
Trade payables and accrued expenses | ₪ | 652 | 675 | ||
Current tax liabilities | ₪ | 4 | |||
Provisions | ₪ | 91 | 108 | ||
Other payables, including derivatives | ₪ | 277 | 279 | ||
Total current liabilities | ₪ | 1,642 | 1,925 | ||
Long-term loans from financial institutions | ₪ | 462 | 340 | ||
Debentures | ₪ | 2,360 | 2,866 | ||
Provisions | ₪ | 21 | 30 | ||
Other long-term liabilities | ₪ | 15 | 31 | ||
Liability for employee rights upon retirement, net | ₪ | 15 | 12 | ||
Deferred tax liabilities | ₪ | 131 | 118 | ||
Total non- current liabilities | ₪ | 3,004 | 3,397 | ||
Total liabilities | ₪ | 4,646 | 5,322 | ||
Equity attributable to owners of the Company | ||||
Share capital | ₪ | 1 | 1 | ||
Cash flow hedge reserve | ₪ | (1) | |||
Retained earnings | ₪ | 1,436 | 1,322 | ||
Non-controlling interests | ₪ | 4 | 18 | ||
Total equity | ₪ | 1,441 | 1,340 | ||
Total liabilities and equity | ₪ | ₪ 6,087 | ₪ 6,662 | ||
Convenience translation into U.S. dollar [Member] | ||||
Assets | ||||
Cash and cash equivalents | $ | $ 152 | |||
Current investments, including derivatives | $ | 105 | |||
Trade receivables | $ | 369 | |||
Current tax assets | $ | 1 | |||
Other receivables | $ | 26 | |||
Inventory | $ | 20 | |||
Total current assets | $ | 673 | |||
Trade and other receivables | $ | 258 | |||
Property, plant and equipment, net | $ | 461 | |||
Intangible assets and others, net | $ | 364 | |||
Deferred tax assets | $ | ||||
Total non- current assets | $ | 1,083 | |||
Total assets | $ | 1,756 | |||
Liabilities | ||||
Current maturities of debentures and of loans from financial institutions | $ | 179 | |||
Trade payables and accrued expenses | $ | 188 | |||
Current tax liabilities | $ | 1 | |||
Provisions | $ | 26 | |||
Other payables, including derivatives | $ | 80 | |||
Total current liabilities | $ | 474 | |||
Long-term loans from financial institutions | $ | 134 | |||
Debentures | $ | 681 | |||
Provisions | $ | 6 | |||
Other long-term liabilities | $ | 4 | |||
Liability for employee rights upon retirement, net | $ | 4 | |||
Deferred tax liabilities | $ | 38 | |||
Total non- current liabilities | $ | 867 | |||
Total liabilities | $ | 1,341 | |||
Equity attributable to owners of the Company | ||||
Share capital | $ | ||||
Cash flow hedge reserve | $ | ||||
Retained earnings | $ | 414 | |||
Non-controlling interests | $ | 1 | |||
Total equity | $ | 415 | |||
Total liabilities and equity | $ | $ 1,756 | |||
[1] | Net of allowance for doubtful debts |
Consolidated Statements of Inco
Consolidated Statements of Income ₪ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017ILS (₪)₪ / sharesshares | Dec. 31, 2016ILS (₪)₪ / sharesshares | Dec. 31, 2015ILS (₪)₪ / sharesshares | |
Statement Line Items [Line Items] | ||||
Revenues | ₪ | ₪ 3,871 | ₪ 4,027 | ₪ 4,180 | |
Cost of revenues | ₪ | (2,680) | (2,702) | (2,763) | |
Gross profit | ₪ | 1,191 | 1,325 | 1,417 | |
Selling and marketing expenses | ₪ | (479) | (574) | (620) | |
General and administrative expenses | ₪ | (426) | (420) | (465) | |
Other income (expenses), net | ₪ | 11 | (21) | (22) | |
Operating profit | ₪ | 297 | 310 | 310 | |
Financing income | ₪ | 52 | 46 | 55 | |
Financing expenses | ₪ | (196) | (196) | (232) | |
Financing expenses, net | ₪ | (144) | (150) | (177) | |
Profit before taxes on income | ₪ | 153 | 160 | 133 | |
Taxes on income | ₪ | (40) | (10) | (36) | |
Profit for the year | ₪ | 113 | 150 | 97 | |
Attributable to: | ||||
Owners of the Company | ₪ | 112 | 148 | 95 | |
Non-controlling interests | ₪ | 1 | 2 | 2 | |
Profit for the year | ₪ | ₪ 113 | ₪ 150 | ₪ 97 | |
Earnings per share | ||||
Basic earnings per share (in NIS) | ₪ / shares | ₪ 1.11 | ₪ 1.47 | ₪ 0.95 | |
Diluted earnings per share (in NIS) | ₪ / shares | ₪ 1.10 | ₪ 1.47 | ₪ 0.95 | |
Weighted-average number of shares used in the calculation of basic earnings per share (in shares) | shares | 100,654,935 | 100,654,935 | 100,604,578 | 100,589,458 |
Weighted-average number of shares used in the calculation of diluted earnings per share (in shares) | shares | 100,889,661 | 100,889,661 | 100,698,306 | 100,589,530 |
Convenience translation into U.S. dollar [Member] | ||||
Statement Line Items [Line Items] | ||||
Revenues | $ | $ 1,117 | |||
Cost of revenues | $ | (773) | |||
Gross profit | $ | 344 | |||
Selling and marketing expenses | $ | (138) | |||
General and administrative expenses | $ | (123) | |||
Other income (expenses), net | $ | 3 | |||
Operating profit | $ | 86 | |||
Financing income | $ | 15 | |||
Financing expenses | $ | (57) | |||
Financing expenses, net | $ | (42) | |||
Profit before taxes on income | $ | 44 | |||
Taxes on income | $ | (11) | |||
Profit for the year | $ | 33 | |||
Attributable to: | ||||
Owners of the Company | $ | 33 | |||
Non-controlling interests | $ | ||||
Profit for the year | $ | $ 33 | |||
Earnings per share | ||||
Basic earnings per share (in NIS) | $ / shares | $ 0.32 | |||
Diluted earnings per share (in NIS) | $ / shares | $ 0.32 | |||
Weighted-average number of shares used in the calculation of basic earnings per share (in shares) | shares | 100,654,935 | 100,654,935 | ||
Weighted-average number of shares used in the calculation of diluted earnings per share (in shares) | shares | 100,889,661 | 100,889,661 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income ₪ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | |
Statement Line Items [Line Items] | ||||
Profit for the year | ₪ | ₪ 113 | ₪ 150 | ₪ 97 | |
Other comprehensive income items that after initial recognition in comprehensive income were or will be transferred to profit or loss | ||||
Changes in fair value of cash flow hedges transferred to profit or loss, net of tax | ₪ | 1 | 1 | 1 | |
Total other comprehensive income for the year that after initial recognition in comprehensive income was or will be transferred to profit or loss, net of tax | ₪ | 1 | 1 | 1 | |
Other comprehensive income items that will not be transferred to profit or loss | ||||
Re-measurement of defined benefit plan, net of tax | ₪ | (1) | (2) | ||
Total other comprehensive loss for the year that will not be transferred to profit or loss, net of tax | ₪ | (1) | (2) | ||
Total other comprehensive income (loss) for the year, net of tax | ₪ | 1 | (1) | ||
Total comprehensive income for the year | ₪ | 114 | 150 | 96 | |
Total comprehensive income attributable to: | ||||
Owners of the Company | ₪ | 113 | 148 | 94 | |
Non-controlling interests | ₪ | 1 | 2 | 2 | |
Total comprehensive income for the year | ₪ | ₪ 114 | ₪ 150 | ₪ 96 | |
Convenience translation into U.S. dollar [Member] | ||||
Statement Line Items [Line Items] | ||||
Profit for the year | $ | $ 33 | |||
Other comprehensive income items that after initial recognition in comprehensive income were or will be transferred to profit or loss | ||||
Changes in fair value of cash flow hedges transferred to profit or loss, net of tax | $ | ||||
Total other comprehensive income for the year that after initial recognition in comprehensive income was or will be transferred to profit or loss, net of tax | $ | ||||
Other comprehensive income items that will not be transferred to profit or loss | ||||
Re-measurement of defined benefit plan, net of tax | $ | ||||
Total other comprehensive loss for the year that will not be transferred to profit or loss, net of tax | $ | ||||
Total other comprehensive income (loss) for the year, net of tax | $ | ||||
Total comprehensive income for the year | $ | 33 | |||
Total comprehensive income attributable to: | ||||
Owners of the Company | $ | 33 | |||
Non-controlling interests | $ | ||||
Total comprehensive income for the year | $ | $ 33 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity ₪ in Millions, $ in Millions | Attributable to owners of the Company Share Capital [Member]ILS (₪) | Attributable to owners of the Company Capital reserve [Member]ILS (₪) | Attributable to owners of the Company Retained earnings [Member]ILS (₪) | Attributable to owners of the Company Total [Member]ILS (₪) | Non-controlling interests [Member]ILS (₪) | ILS (₪) | Convenience translation into U.S. dollar [Member]USD ($) |
Balance at Dec. 31, 2014 | ₪ 1 | ₪ (3) | ₪ 1,078 | ₪ 1,076 | ₪ 16 | ₪ 1,092 | |
Comprehensive income for the year | |||||||
Profit for the year | 95 | 95 | 2 | 97 | |||
Other comprehensive income (loss) for the year, net of tax | 1 | (2) | (1) | (1) | |||
Transactions with owners, recognized directly in equity | |||||||
Share based payments | 3 | 3 | 3 | ||||
Dividend to non-controlling interests in a subsidiary | (1) | (1) | |||||
Options written over non-controlling interests in a consolidated company | (4) | (4) | (1) | (5) | |||
Balance at Dec. 31, 2015 | 1 | (2) | 1,170 | 1,169 | 16 | 1,185 | |
Comprehensive income for the year | |||||||
Profit for the year | 148 | 148 | 2 | 150 | |||
Other comprehensive income (loss) for the year, net of tax | 1 | (1) | |||||
Transactions with owners, recognized directly in equity | |||||||
Share based payments | 5 | 5 | 1 | 6 | |||
Dividend to non-controlling interests in a subsidiary | (1) | (1) | |||||
Balance at Dec. 31, 2016 | 1 | (1) | 1,322 | 1,322 | 18 | 1,340 | $ 386 |
Comprehensive income for the year | |||||||
Profit for the year | 112 | 112 | 1 | 113 | 33 | ||
Other comprehensive income (loss) for the year, net of tax | 1 | 1 | 1 | ||||
Transactions with owners, recognized directly in equity | |||||||
Share based payments | 2 | 2 | 2 | ||||
Derecognition of non-controlling interests due to loss of control in a consolidated company (see Note 7(b)) | (15) | (15) | (4) | ||||
Balance at Dec. 31, 2017 | ₪ 1 | ₪ 1,436 | ₪ 1,437 | ₪ 4 | ₪ 1,441 | $ 415 |
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 | ||||
Profit for the year | ₪ | ₪ 113 | ₪ 150 | ₪ 97 | |
Adjustments for: | ||||
Depreciation and amortization | ₪ | 555 | 534 | 562 | |
Share based payments | ₪ | 2 | 6 | 3 | |
Loss (gain) on sale of property, plant and equipment | ₪ | (1) | 10 | (1) | |
Gain on sale of shares in a consolidated company (see Note 7B) | ₪ | (10) | |||
Income tax expense | ₪ | 40 | 10 | 36 | |
Financing expenses, net | ₪ | 144 | 150 | 177 | |
Changes in operating assets and liabilities: | ||||
Change in inventory | ₪ | (6) | 21 | 4 | |
Change in trade receivables (including long-term amounts) | ₪ | 132 | (28) | 209 | |
Change in other receivables (including long-term amounts) | ₪ | (191) | (5) | (34) | |
Change in trade payables, accrued expenses and provisions | ₪ | (27) | (54) | ||
Change in other liabilities (including long-term amounts) | ₪ | 28 | 20 | (95) | |
Payments for derivative hedging contracts, net | ₪ | (3) | |||
Income tax paid | ₪ | (44) | (88) | (68) | |
Income tax received | ₪ | 42 | 1 | ||
Net cash from operating activities | ₪ | 774 | 781 | 836 | |
Cash flows used in investing activities | ||||
Acquisition of property, plant, and equipment | ₪ | (346) | (295) | (305) | |
Additions to intangible assets and others | ₪ | (237) | (73) | (91) | |
Dividend received | ₪ | 2 | |||
Change in current investments, net | ₪ | (77) | (9) | 231 | |
Proceeds from sale of property, plant and equipment | ₪ | 1 | 2 | 4 | |
Interest received | ₪ | 12 | 11 | 15 | |
Repayment of a long-term deposit | ₪ | 48 | |||
Proceeds from sale of shares in a consolidated company, net of cash disposed (see Note 7B) | ₪ | 3 | |||
Net cash used in investing activities | ₪ | (644) | (364) | (96) | |
Cash flows used in financing activities | ||||
Payments for derivative contracts, net | ₪ | (3) | (13) | (32) | |
Receipt of long-term loans from financial institutions | ₪ | 200 | 340 | ||
Repayment of debentures | ₪ | (864) | (732) | (873) | |
Proceeds from issuance of debentures, net of issuance costs | ₪ | 653 | (3) | ||
Dividend paid | ₪ | (1) | (1) | (1) | |
Interest paid | ₪ | (175) | (185) | (227) | |
Net cash from (used in) financing activities | ₪ | (843) | 62 | (1,136) | |
Changes in cash and cash equivalents | ₪ | (713) | 479 | (396) | |
Cash and cash equivalents as at the beginning of the year | ₪ | 1,240 | 761 | 1,158 | |
Effect of exchange rate fluctuations on cash and cash equivalents | ₪ | (1) | |||
Cash and cash equivalents as at the end of the year | ₪ | ₪ 527 | ₪ 1,240 | ₪ 761 | |
Convenience translation into U.S. dollar [Member] | ||||
Cash flows from operating activities | ||||
Profit for the year | $ | $ 33 | |||
Adjustments for: | ||||
Depreciation and amortization | $ | 160 | |||
Share based payments | $ | ||||
Loss (gain) on sale of property, plant and equipment | $ | ||||
Gain on sale of shares in a consolidated company (see Note 7B) | $ | (3) | |||
Income tax expense | $ | 11 | |||
Financing expenses, net | $ | 42 | |||
Changes in operating assets and liabilities: | ||||
Change in inventory | $ | (2) | |||
Change in trade receivables (including long-term amounts) | $ | 38 | |||
Change in other receivables (including long-term amounts) | $ | (55) | |||
Change in trade payables, accrued expenses and provisions | $ | (8) | |||
Change in other liabilities (including long-term amounts) | $ | 8 | |||
Payments for derivative hedging contracts, net | $ | (1) | |||
Income tax paid | $ | (12) | |||
Income tax received | $ | 12 | |||
Net cash from operating activities | $ | 223 | |||
Cash flows used in investing activities | ||||
Acquisition of property, plant, and equipment | $ | (100) | |||
Additions to intangible assets and others | $ | (68) | |||
Dividend received | $ | ||||
Change in current investments, net | $ | (22) | |||
Proceeds from sale of property, plant and equipment | $ | ||||
Interest received | $ | 3 | |||
Repayment of a long-term deposit | $ | ||||
Proceeds from sale of shares in a consolidated company, net of cash disposed (see Note 7B) | $ | 1 | |||
Net cash used in investing activities | $ | (186) | |||
Cash flows used in financing activities | ||||
Payments for derivative contracts, net | $ | (1) | |||
Receipt of long-term loans from financial institutions | $ | 58 | |||
Repayment of debentures | $ | (249) | |||
Proceeds from issuance of debentures, net of issuance costs | $ | ||||
Dividend paid | $ | ||||
Interest paid | $ | (51) | |||
Net cash from (used in) financing activities | $ | (243) | |||
Changes in cash and cash equivalents | $ | (206) | |||
Cash and cash equivalents as at the beginning of the year | $ | 358 | |||
Effect of exchange rate fluctuations on cash and cash equivalents | $ | ||||
Cash and cash equivalents as at the end of the year | $ | $ 152 |
Reporting Entity
Reporting Entity | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of reporting entity [Abstract] | |
Reporting Entity | Note 1 - Reporting Entity A. Cellcom Israel Ltd. ("the Company") is a company incorporated and domiciled in Israel and its official address is 10 Hagavish Street, Netanya 4250708, Israel. The consolidated financial statements of the Group as at December 31, 2017 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group operates and maintains a cellular mobile telephone system in Israel and provides cellular and fixed line telecommunications services, internet services, international calls services, television over the internet services (known as Over the Top TV services, or OTT TV services) and transmission services. The Company is controlled by Koor Industries Ltd., a wholly owned subsidiary of Discount Investment Corporation Ltd. ("DIC"), which is controlled by companies controlled by Mr. Eduardo Elsztain. B. Material event in the reporting period - Change in estimate |
Basis of Preparation of the Fin
Basis of Preparation of the Financial Statements | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of basis of preparation [Abstract] | |
Basis of Preparation of the Financial Statements | Note 2 - Basis of Preparation of the Financial Statements A. Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), as issued by the International Accounting Standards Board (IASB). These consolidated financial statements were approved by the Company's Board of Directors on March 25, 2018. B. Functional and presentation currency These consolidated financial statements are presented in New Israeli Shekels ("NIS"), which is the Group's functional currency, and are rounded to the nearest million unless otherwise indicated. NIS is the currency that represents the primary economic environment in which the Group operates. C. Basis of measurement These consolidated financial statements have been prepared on the basis of historical cost except for the following assets and liabilities: current investments and derivative financial instruments that are measured at fair value through profit or loss, deferred tax assets and liabilities, assets and liabilities in respect of employee benefits and provisions. For further information regarding the measurement of these assets and liabilities see Note 3, regarding Significant Accounting Policies. D. Convenience translation into U.S. dollars ("dollars" or "$") For the convenience of the reader, the reported NIS figures as of December 31, 2017 and for the year then ended, have been presented in dollars, translated at the representative rate of exchange as of December 31, 2017 (NIS 3.467 = US$ 1.00). The dollar amounts presented in these financial statements should not be construed as representing amounts that are receivable or payable in dollars or convertible into dollars, unless otherwise indicated. E. Use of estimates and judgments Use of estimates Information about estimates, uncertainty and critical judgments about provisions and contingent liabilities, is described in Notes 14 and 31. In addition, information about critical estimates, made while applying accounting policies and that have the most significant effect on the consolidated financial statements are described below: Impairment testing of trade and other receivables The financial statements include an impairment loss in trade and other receivables which properly reflect, according to management's estimation, the potential loss from non-recoverable amounts. The Group provides for impairment loss based on its experience in collecting past debts, as well as on information on specific debtors. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. See also Note 21. Impairment testing and useful life of assets The Group regularly reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. See also Note 3H. The useful economic life of the Group's assets is determined by management at the time the asset is acquired and regularly reviewed for appropriateness. The Group defines useful life of its assets in terms of the assets' expected utility to the Group. This judgment is based on the experience of the Group with similar assets. The useful economic life of licenses is based on the duration of the license agreement. The useful economic life of capitalized customer acquisition costs is based on the expected service period from these contracts. See also Notes 3D and 3F. Impairment testing of goodwill The Group reviews a cash generating unit containing goodwill for the purpose of testing it for impairment at least once a year. Determining the recoverable amount requires management to make an estimate of the projected future cash flows from the continuing use of the cash-generating unit and also to choose a suitable discount rate for those cash flows which represents market estimates as for the time value of the money and the specific risks that are related to the cash-generating unit. Determining the estimates of the future cash flows is based on management past experience and management best estimates as for the economic conditions that will exist over the rest of the remaining useful life of the cash generating unit. Further details are given in Note 3H. Legal claims In estimating the likelihood of outcome of legal claims filed against the Company and its investees, the Group takes into consideration the opinion of its legal counsels and their best professional judgment, the stage of proceedings and historical legal precedents in respect of the different issues. Since the outcome of the claims will be determined in courts, the results could differ from these estimates. See also Note 31. Uncertain tax positions When assessing amounts of current and deferred taxes, the Group takes into consideration the effect of the uncertainty that its tax positions will be accepted and of the Group incurring any additional tax and interest expenses. The Group is of the opinion that the cumulative tax liability is fair for all the years in respect of which final tax assessments have not yet been received, based on an analysis of a number of matters including interpretations of tax laws and the Group’s past experience. This assessment is based on estimates and assumptions that may also include assessments and exercising judgment regarding future events. It is possible that new information will become known in future periods that will require the Group to change its estimate regarding the tax liability that was recognized, and any such changes will be expensed immediately in that period. See also Note 28. Change in estimates During the year ended December 31, 2017 management has updated estimates as follows: 1. Towards the end of the Company's 2G and 3G frequencies (the "Frequencies") original amortization period, the Company's annual depreciation committee examined the estimated useful life of the Frequencies. Based on Company's estimate, the Company will continue to use the Frequencies at least for the next 10 years. The estimated useful life of the Frequencies was determined in the past according to the period of the Company's cellular license (until 2022). According to applicable law, the Company's cellular license may be extended for additional 6-year periods, subject to the requirements set in the license. The Company estimates that based on its experience and acquaintance with the communications market in Israel, if current conditions continue, there is high probability that the license will be extended for an additional term of 6 years. In light of the aforesaid, the estimated useful life of the Frequencies has been re-evaluated for the first time, for an additional period of ten years, starting from the beginning of the second quarter of 2017 and ending in 2028 (instead of 18-20 years ending in 2022, as originally estimated). 2. In light of the accumulated experience in the Group's operation in connection with internet services and television over the internet services, the Company's annual depreciation committee examined the estimated useful life of certain fixed asset items that are used for these services. Following this examination, the estimated useful life of these items has been re-evaluated for the first time, starting from the beginning of the fourth quarter of 2017 to 3-6 years from their purchase date (instead of 2-3 years, as originally estimated). 2017 2018 2019 2020 2021 Subsequently NIS millions Decrease (Increase) in depreciation expenses 19 33 17 5 6 (80 ) F. Changes in the accounting policies IFRS15, Revenue from Contracts with Customers Effective January 1, 2017 the Group early adopted International Financial Reporting Standard 15 (“IFRS 15” or “the standard”), which provides guidance on revenue recognition. The standard introduces a new five step model for recognizing revenue from contracts with customers: 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. The standard was applied using the cumulative effect approach as from the initial date of application . In respect of contracts which have not been concluded until the date of transition, such change did not have a material impact on the retained earnings at the initial date of application. In the framework of the initial application of the standard, the Group has chosen to apply the following exemptions: 1. Application of the cumulative effect approach only for contracts not completed at the transition date; and 2. Examining the aggregate effect of contract changes that occurred before the date of initial application, instead of examining each change separately. The main impact of the standard on the Group's financial statements is that customer acquisition costs are capitalized when it is expected that the Group will recover these costs, instead of recognizing these costs in profit or loss as incurred, as was done prior to the adoption of the standard. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and are amortized to profit or loss, in accordance with the expected service period from these contracts (over a period of 2-3 years). Such customer acquisition costs capitalization, had a material positive effect on the Group's results of operations for 2017, which is expected to continue in the coming years, and will be leveled off in later years. In the statements of cash flows, customer acquisition costs paid are presented as part of cash flows used in investing activities and the amortization of capitalized customer acquisition costs, is presented under depreciation and amortization as part of cash flows from operating activities. The Group applies the practical exemption specified in the standard and recognizes customer acquisition costs in profit or loss when the expected amortization period of these costs is one year or less. The tables below present the effects on the Group's consolidated statements of financial position as at December 31, 2017 and on the Group's consolidated statements of income for the year ended at December 31, 2017, assuming that the previous revenue recognition policy would have continued in that period: The effect on the consolidated statements of financial position as at December 31, 2017: According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Intangible assets and others, net 1,167 93 1,260 Current tax assets, net 22 (22 ) - Retained earnings 1,365 71 1,436 The effect on the consolidated statements of income for the year ended December 31, 2017: According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Revenues 3,871 - 3,871 Cost of revenues (2,680 ) - (2,680 ) Gross profit 1,191 - 1,191 Selling and marketing expenses (572 ) 93 (479 ) General and administrative expenses (426 ) - (426 ) Other income, net 11 - 11 Operating profit 204 93 297 Financing income 52 - 52 Financing expenses (196 ) - (196 ) Financing expenses, net (144 ) - (144 ) Profit before taxes on income 60 93 153 Taxes on income (18 ) (22 ) (40 ) Profit for the period 42 71 113 Attributable to: Owners of the Company 41 71 112 Non-controlling interests 1 - 1 Profit for the period 42 71 113 Earnings per share Basic earnings per share (in NIS) 0.40 0.71 1.11 Diluted earnings per share (in NIS) 0.40 0.70 1.10 The effect on the consolidated statements of cash flow for the year ended December 31, 2017: Year ended December 31, 2017 According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Net cash from operating activities 667 107 774 Net cash used in investing activities (537 ) (107 ) (644 ) * According to the standard, incremental costs of obtaining a contract with a customer are recognized as an asset when it is probable that the Group will recover those costs. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and amortized to profit or loss in accordance with the expected service period from these contracts. Amendment to IAS 7, Statement of Cash Flows According to the Amendment, it is required to provide disclosures that will enable the users of the financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flow and non-cash changes. These disclosures are to be provided with respect to the following changes in liabilities arising from financing activities: · changes from financing cash flows; · changes arising from obtaining or losing control of subsidiaries or other businesses; · the effect of changes in foreign exchange rates; · changes in fair values; and other changes. The Amendment is applicable prospectively. 17 . H. Exchange rates and known Consumer Price Indexes are as follows: Exchange rates of US$ Consumer Price Index (points)* As of December 31, 2017 3.467 221.35 As of December 31, 2016 3.845 220.68 As of December 31, 2015 3.902 221.35 Change during the year: Year ended December 31, 2017 (9.83 )% 0.30 % Year ended December 31, 2016 (1.46 )% (0.30 )% Year ended December 31, 2015 0.33 % (0.90 )% *According to 1993 base index. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
Significant Accounting Policies | Note 3 - Significant Accounting Policies The accounting policies set out below have been applied consistently by the Group for all periods presented in these consolidated financial statements, except as described in changes in the accounting policies section in Note 2, regarding Basis of Preparation of the Financial Statements . A. Basis of consolidation 1. Subsidiaries Subsidiaries are entities controlled directly or indirectly by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control is lost. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. 2. Non-controlling interests Non-controlling interests comprise the equity of a subsidiary that cannot be attributed, directly or indirectly, to the parent company. Profit or loss and each component of other comprehensive income are attributable to the owners of the parent company and to non-controlling interests. Issuance of put option to non-controlling interests A put option issued by the Group to non-controlling interests that is settled in cash or another financial instrument is recognized as a liability at the present value of the exercise price. In subsequent periods, changes in the value of the liability in respect of put options are recognized in profit or loss according to the effective interest method. The Group’s share of a subsidiary’s profits includes the share of the non-controlling interests to which the Group issued a put option. 3. Loss of control Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. 4. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, were eliminated in preparing the consolidated financial statements. B. Foreign currency transactions Transactions in foreign currencies are translated to NIS at the prevailing foreign exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies as of the reporting date are translated to NIS at the prevailing foreign exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms of historical cost, are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to NIS at the exchange rate at the date that the fair value was determined. Foreign exchange differences arising on translation are recognized in profit and loss. C. Financial instruments The Group early adopted IFRS 9 (2009), Financial Instruments, which included guidelines regarding the classification and measurement of financial assets, without early adopting all the other rules of the final version of IFRS 9 (2014), Financial Instruments, as mentioned in section R below. According to IFRS 9 (2009), an entity shall classify and measure its financial assets at amortized cost or at fair value, considering its business model for managing financial assets and with respect to the contractual cash flows characteristics of these financial assets. (1) Non-derivative financial assets Initial recognition of financial assets The Group initially recognizes receivables and deposits on the date that they are created. All other financial assets acquired in a regular way purchase, including assets designated at fair value through profit or loss, are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument, meaning on the date the Group undertook to purchase or sell the asset. Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes transaction costs that are directly attributable to the asset acquisition or creation. The Group subsequently measures financial assets at either fair value or amortized cost, as described below: Financial assets measured at amortized cost A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment loss, if: ● the asset is held within a business model with an objective to hold assets in order to collect contractual cash flows; ● the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest; and ● the Group has not elected to designate them at fair value through profit or loss in order to reduce or eliminate an accounting mismatch. Financial assets measured at amortized cost include cash and cash equivalents and trade and other receivables. Cash and cash equivalents comprise cash balances available for immediate use and call deposits. Cash equivalents comprise short-term highly liquid investments (with original maturities of three months or less) that are readily convertible into known amounts of cash and are exposed to insignificant risks of change in value. Financial assets measured at fair value Financial assets other than those classified as measured at amortized cost are subsequently measured at fair value with all changes in fair value recognized in profit or loss. Derecognition of financial assets Financial assets are derecognized when the contractual rights of the Group to the cash flows from the asset expire, or the Group transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Regular way sales of financial assets are recognized on the trade date, meaning on the date the Group undertook to sell the asset. As to the Group’s policy on impairment see Paragraph H. Offset of financial instruments - See section 2 below. (2) Non-derivative financial liabilities The Group initially recognizes debt securities issued on the date they originated. All other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. Financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. The Group subsequently measures financial liabilities at amortized cost using the effective interest method. Non-derivative financial liabilities include debentures, loans from financial institutions and trade and other payables. Financial liabilities are derecognized when the obligation of the Group, as specified in the agreement, expires or when it is discharged or cancelled. Offset of financial instruments Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when, the Group currently has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Change in terms of debt instruments An exchange of debt instruments having substantially different terms, between an existing borrower and lender is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability at fair value. In such cases the entire difference between the amortized cost of the original financial liability and the fair value of the new financial liability is recognized in profit or loss as financing income or expense. The terms are substantially different if the discounted present value of the cash flows according to the new terms, including any commissions paid, less any commissions received and discounted using the original effective interest rate, is different by at least ten percent from the discounted present value of the remaining cash flows of the original financial liability. In addition to the aforesaid quantitative criterion, the Group examines, inter alia, whether there have also been changes in various economic parameters inherent in the exchanged debt instruments, therefore as a rule, exchanges of CPI-linked debt instruments with unlinked instruments are considered exchanges with substantially different terms even if they do not meet the aforementioned quantitative criterion. Expansion of debentures for cash When expanding debentures for cash, debentures are initially measured at their fair value, which is the proceeds received from the issuance (since this is the best market which the issuer has an immediate access to), with no effect on profit or loss in respect of the difference between the proceeds from issuance and the market value of the tradable debentures close to their issuance. (3) Derivative financial instruments, including hedge accounting The Group holds derivative financial instruments to hedge its foreign currency and CPI risks exposures. Derivatives are initially recognized at fair value; transaction costs that can be attributed are recognized to profit and loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value. Changes in fair value are accounted for as follows: Cash flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized through other comprehensive income directly in a hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in the fair value are recognized in profit and loss when the hedged item is sold or leaves the Group's possession, and is presented under the same line item in the consolidated statements of income as the hedged item. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in comprehensive income and presented in the hedging reserve in equity remains there until the forecasted transaction occurs or is no longer expected to occur. The amount recognized in comprehensive income is transferred to profit and loss in the same period that the hedged item affects profit and loss. Economic Hedges Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies or linked to the CPI. Changes in the fair value of such derivatives are recognized in profit and loss, as financing income or expenses . (4) Assets and liabilities linked to the Israeli CPI that are not measured at fair value The carrying amount of CPI linked financial assets and liabilities are revalued in each period according to the actual rate of change in the CPI. D. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes 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 an estimate of the costs of dismantling and removing the items and restoring the site on which they are located (when the Group has an obligation to dismantle and remove the asset or to restore the site). Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. Communications networks consist of several significant components with different useful lives. Each component is treated separately and is depreciated over its estimated useful life. Changes in the obligation to dismantle and remove the items and to restore the site on which they are located, other than changes deriving from the passing of time, are added or deducted from the cost of the asset 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 in profit or loss. Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the net disposal net proceeds with the carrying amount of property, plant and equipment and are recognized net within "other expenses, net" in profit or loss. The cost of replacing part of a fixed asset item is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of day-to-day servicing are recognized in profit or loss as incurred. Depreciation is a systematic allocation of the depreciable amount of an asset over its estimated useful life. An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to operate in the manner intended by management. Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The annual depreciation rates for the current and comparative periods are as follows: % Communications network 5-25 Control and testing equipment 15-25 Vehicles 15-33 Computers and hardware 15-33 Furniture and landline communications equipment 6-33 Leasehold improvements are depreciated over the shorter of their estimated useful lives or the expected lease terms. Depreciation methods, useful lives and residual values are reviewed at least at the end of each reporting year and adjusted if appropriate. E. Rights of use of communications lines The Group implements IFRIC 4, "Determining Whether an Arrangement Contains a Lease", which defines criteria for determining at the beginning of the arrangement, whether the right to use asset constitutes a lease arrangement. According to IFRIC 4, as mentioned above, acquisition transactions of irrevocable rights of use of underwater cables capacity are treated as service receipt transactions. The amount which was paid for the rights of use of communications lines is recognized as a prepaid expense and is amortized on a straight-line basis over the period stated in the agreements, including the option period, which constitutes the estimated useful life of those capacities. F. Intangible assets and others Goodwill that arises upon the acquisition of subsidiaries is presented as part of intangible assets. In subsequent periods goodwill is measured at cost less accumulated impairment losses. Direct development costs associated with internally developed information system software, and payroll costs for employees devoting time to the software projects, incurred during the application development stage, are capitalized and recognized as an intangible asset. In subsequent periods, capitalized development expenditures are measured at cost less accumulated amortization, from the date which the asset is ready for use, and accumulated impairment losses. Incremental customer acquisition costs are capitalized, from January 1, 2017, following the adoption IFRS 15, when it is expected that the Group will recover these costs. Costs of obtaining a contract that would have been incurred regardless of the contract being obtained are recognized as an expense when incurred. Costs incurred to fulfill a contract with a customer are recognized as an asset when they: relate directly to a contract the Group can specifically identify; they generate or enhance resources of the Group that will be used in satisfying performance obligations in the future; and they are expected to be recovered. In any other case the costs are recognized as an expense when incurred. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as intangible assets. In subsequent periods, customer acquisition costs are measured at cost less accumulated amortization according to the specific anticipated contract period and accumulated impairment losses. Customer relationships that are formed upon the acquisition of subsidiaries have a finite useful life and are amortized according to the expected benefits rate from these assets in each period. Other intangible assets and others - licenses and frequencies, computer software and information systems costs are measured at cost less accumulated amortization and accumulated impairment losses and including direct costs necessary to prepare the asset for its intended use. In subsequent periods, these intangible assets are measured at cost less accumulated amortization. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred. Amortization is a systematic allocation of the amortizable amount of an intangible asset over its useful life. Amortization is calculated using the straight-line method, except for customer relationships as aforementioned (and up to 2019). The annual amortization rates for the current and comparative periods are as follows: % Licenses and Frequencies 4-7 (mainly 4) Information systems 25 Software 15-25 Customer acquisition costs 33-50 Goodwill has an indefinite useful life and is not systematically amortized but tested for impairment at least once a year. Amortization methods, useful lives and residual values are reviewed at least each year-end and adjusted if appropriate. The Group examines the useful life of an intangible asset that is not periodically amortized at least once a year in order to determine whether events and circumstances continue to support the decision that the intangible asset has an indefinite useful life. G. Inventory Inventory of cellular phone equipment, accessories and spare-parts are measured at the lower of cost and net realizable value. Cost is determined by the moving average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The Group periodically evaluates the condition and age of inventories and makes provisions for impairment of inventories accordingly. H. Impairment a. Non-derivative financial assets A financial asset not carried at fair value through profit or loss is tested for impairment when objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. An impairment loss in respect of a financial asset measured at amortized cost, is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate of that asset. All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, the reversal is recognized in profit or loss. b. Property, plant and equipment and intangible assets and others The carrying amounts of the Group’s property, plant and equipment and finite lived intangible assets are reviewed at each reporting date, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, then the asset’s recoverable amount is estimated. In each reporting period the Group examines whether the carrying amount of the capitalized customer acquisition costs exceeds the balance of the consideration which the entity expects to receive in exchange for the services to which the asset relates, less the costs directly attributable to the provision of these services that were not recognized as expenses, and if necessary an impairment loss is recognized in profit or loss. Once a year and on the same date, or more frequently if there are indications of impairment, the Group estimates the recoverable amount of each cash generating unit that contains goodwill, or intangible assets that have indefinite useful lives. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit, for which the estimated future cash flows from the asset or cash-generating unit were not adjusted. Cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The Group monitors goodwill at operating segments level. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis. I. Employee benefits a. Post-employment benefits Part of the Group's liability for post-employment benefits is covered by a defined contribution plan financed by deposits with insurance companies or with funds managed by a trustee. A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. The Group's obligation of contribution to defined contribution pension plan is recognized as an expense in profit and loss in the periods during which services are rendered by employees. In addition, the Group has a net obligation in respect of defined benefit plan. A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. This benefit is presented at present value deducting the fair value of any plan assets and is determined using actuarial assessment techniques which involves, among others, determining estimates regarding the capitalization rates, anticipated return on the assets, the rate of the increase in salary and the rates of employee turnover. There is significant uncertainty in respect to these estimates because of the long-term programs. For further information, see Note 18. The Group recognizes immediately, directly in retained earnings through other comprehensive income, all re-measurements gains and losses arising from defined benefit plans. Interest costs and interest income on plan assets that were recognized in profit or loss are presented under financing income and expenses, respectively. b. Termination benefits Termination benefits are recognized as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary retirement. Termination benefits for voluntary retirements are recognized as an expense if the Group has made an offer of voluntary retirement, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. c. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The employee benefits are classified, for measurement purposes, as short-term benefits or as other long-term benefits depending on when the Group expects the benefits to be wholly settled. I. Employee benefits a. Share based payments The grant date fair value of options granted to employees is recognized as salaries and related expenses, with a corresponding increase in retained earnings, over the period that the employees become unconditionally entitled to the options. Fair value is measured using the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, to consider exercise restrictions and behavioral considerations. J. Provisions A provision is recognized if the Group has a present legal or constructive obligation, as a result of a past event, that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at management's best estimate of the expenditure required to settle the obligation at the reporting date. A provision for claims is recognized if the Group has a present legal or constructive obligation, as a result of a past event and it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of obligation can be estimated reliably. K. Revenue The accounting policy that was applied in periods prior to January 1, 2017 Revenues derived from services, including cellular services, internet services, international calls services, fixed local calls, interconnect, roaming revenues, content and value added services, transmission services and television over the internet services, are recognized when the services are provided, in proportion to the stage of completion of the transaction and all other revenue recognition criteria are met. The sale of end-user equipment is generally adjacent to the sale of services. Usually, the sale of equipment to the customer is executed with no contractual obligation of the client to consume services in a minimal amount for a predefined period. As a result, the Group refers to the sale transaction as a separate transaction and recognizes revenue from sale of equipment upon delivery of the equipment to the customer. Revenue from services is recognized and recorded when the services are provided. In case the customer is obligated towards the Group to consume services in a minimal amount for a predefined period, the contract is characterized as a multiple element arrangement and thus, revenue from sale of equipment is recorded in an amount not higher than the fair value of the said equipment, which is not contingent upon delivery of additional components (such as services) and is recognized upon delivery to the customer and when the criteria for revenue recognition are met. The Group determines the fair value of the individual elements based on prices at which the deliverable is regularly sold on a standalone basis, after considering discounts where appropriate. The Group also offers other services, such as extended equipment warranty plans, which are provided for a monthly fee and are either sold separately or bundled and included in packaged rate plans. Revenues from those services are recognized over the service period. Revenue from the sale of goods in the ordinary course of business is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenues from long-term credit arrangements are recognized on the basis of the present value of future cash flows, discounted according to market interest rates at the time of the transaction. The difference between the original credit and its present value is recorded as interest income over the credit period. Prepaid wireless airtime sold to customers is recorded as deferred revenue prior to the commencement of services and is recognized when the airtime is used or expires. When the Group acts as an agent or an intermediary without bearing the risks and rewards resulting from the transaction, revenues are presented on a net basis (as a profit or a commission). However, when the Group acts as a principal supplier and bears the risks and rewards resulting from the transaction, revenues are presented on a gross basis, distinguishing the revenue from the related expenses. The accounting policy applied as from January 1, 2017 following the adoption of IFRS 15 The Group recognizes revenue when the control over the promised goods or services is transferred to the customer. The revenue is measured according to the amount of the consideration to which the Group expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for the benefit of third parties. Identifying the contract The Group accounts for a contract with a customer only when the following conditions are met: (a) The parties to the contract have approved the contract (in writing, orally or according to other customary business practices) and they are committed to satisfying the obligations attributable to them; (b) The Group can identify the rights of each party in relation to the goods or services that will be transferred; (c) The Group can identify the payment terms for the goods or services that will be transferred; (d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to change as a result of the contract); and (e) It is probable that the consideration, to which the Group is entitled to in exchange for the goods or services transferred to the customer, will be collected. For the purpose of paragraph (e) the Group examines, inter alia, the percentage of the advance payments received and the spread of the contractual payments, past experience with the customer and the status and existence of sufficient collateral. If a contract with a customer does not meet all of the above criteria, consideration received from the customer is recognized as a liability until the criteria are met or when one of the following events occurs: the Group has no remaining obligations to transfer goods or services to the customer and any consideration promised by the customer has been received and cannot be returned; or the contract has been terminated and the consideration received from the customer cannot be refunded. Identifying performance obligations On the contract’s inception date the Group assesses the goods or services promised in the contract with the customer and identifies as a performance obligation any promise to transfer to the customer one of the following: (a) Goods or services (or a bundle of goods or services) that are distinct; or (b) A series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. The Group identifies goods or services promised to the customer as being distinct when the customer can benefit from the goods or services on their own or in conjunction with other readily available resources and the Group’s promise to transfer the goods or services to the customer is separately identifiable from other promises in the contract. In order to examine whether a promise to transfer goods or services is separately identifiable, the Group examines whether it is providing a significant service of integrating the goods or services with other goods or services promised in the contract into one integrated outcome that is the purpose of the contract. Option to purchase additional goods or services An option that grants the customer the right to purchase additional goods or services constitutes a separate performance obligation in the contract only if the option grants the customer a material right it would not have received without the original contract. Determining the transaction price The transaction price is the amount of the consideration to which th |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of fair value [Abstract] | |
Fair Value | Note 4 - Fair Value A. Determination of Fair Value A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. 1. Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the appropriate interest rate at the reporting date. 2. Current investments and derivatives The fair value of forward exchange contracts is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using market interest rates appropriate for similar instruments, including the adjustment required for the parties' credit risks. The fair value of investments in debt securities and investments in equity instruments are based on quoted market prices. 3. Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. 4. Share-based payment transactions Fair value of employee stock options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on B. Fair Value Hierarchy When determining the fair value of an asset or liability, the Group uses observable market data as much as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on the data used in the measurement, as follows: Level 1: quoted prices (unadjusted) in active markets for identical instruments. Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3: inputs that are not based on observable market data (unobservable inputs). |
Financial Risk Management
Financial Risk Management | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments [abstract] | |
Financial Risk Management | Note 5 - Financial Risk Management The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial risk management framework. The Board has established a sub-committee for financial exposures management, which is responsible for developing and monitoring the Group’s financial exposures management policies. The sub-committee recommends to the Board of Directors changes in the Group's financial exposures management policy. The Group’s risk management policies are established to identify and analyze the financial risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities through training and procedures. The Group aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Group Audit Committee oversees how management monitors compliance with the Group’s financial risk management policies and procedures, and reviews the adequacy of the financial risk management framework in relation to the risks faced by the Group. See also Note 21. Credit risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Trade and other receivables The Group conducts credit evaluations on receivables over a certain amount, and requires financial guarantees against them. Management monitors outstanding receivable balances and the financial statements include appropriate allowances for estimated irrecoverable amounts. The Group is exposed to credit risk arising mainly from its operation in Israel. Cash and cash equivalents Most of the Group’s cash and cash equivalents are maintained with major banking institutions in Israel. Investments in debt instruments The Group limits its exposure to credit risk by investing only in liquid debt instruments and only with counterparties that have a credit rating of at least "AA-" from S&P Maalot. Management actively monitors credit ratings and given these high credit ratings, management does not expect any counterparty to fail to meet its obligations. Derivatives The counterparties of the derivatives held by the Group are major banks in Israel. At the reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivatives, in the consolidated statement of financial position. Financial instruments that could potentially subject the Group to credit risks consist primarily of trade receivables. Credit risk with respect to these receivables is limited due to the composition of the subscriber base, which includes a large number of individuals and businesses. 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, under both normal and extreme conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The cash surpluses held by Group companies that are not required for financing their current activity, are invested in interest-bearing investment channels such as: short-term deposits and debentures. These investment channels are chosen based on future forecasts of the cash Group will require in order to meet its liabilities. The Group examines current forecasts of its liquidity requirements so as to make certain that there is sufficient cash for its operating needs, and it is careful at all times to have enough unused credit facilities so that the Group does not exceed its credit limits and is in compliance with its financial covenants. These forecasts take into consideration matters such as the Group’s plan to use debt for financing its activity, compliance with required financial covenants, and compliance with external requirements such as laws or regulation. The Group has contractual commitments to purchase inventories, fixed assets and other current services. For further information about material commitments see Note 30, regarding Commitments. Market risk In the ordinary course of business, the Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out according to the policy established by the Board of Directors. Interest rate and CPI risk The Group is exposed to fluctuations in the interest rate, including changes in the CPI, as part of its borrowings are linked to the CPI. As part of its risk management policy the Group has entered into forward contracts that partially hedge the exposure to changes in the CPI. All such transactions are carried out within the policy established by the Board of Directors. Currency risk The Group's operating income and cash flows are exposed to currency risk, mainly due to handset and network related acquisitions, purchase of TV content, purchase of telecommunications capacity and its international roaming services activity. The Group also manages bank accounts that are denominated in a currency other than its respective functional currency, primarily USD and Euro. As part of its financial exposures hedging policy, the Group uses forward and option contracts to partially hedge the exposure to fluctuations in foreign exchange rates. Other market price risk Equity price risk arises from equity securities that are measured through profit and loss. Management monitors the mix of debt and equity securities in its investment portfolio based on market indices. Capital management The Group's capital management aim is to ensure a sound and efficient capital structure which takes into consideration, among others, the following factors: A gearing ratio that supports the Group's cash flow needs with respect to its potential cash flow generation and also supporting its dividend policy, considering the limitation imposed on dividend distribution as established in the indenture of the Group's Series F through L debentures and in the Company's long term loans and deferred loan agreements, while maintaining a Net Debt to EBITDA ratio (see definition in Note 17, regarding Debentures) as established in such documents, and that meets the industry standards. The Group considers Net Debt to EBITDA ratio to be an important measure for investors, debentures holders, analysts, and rating agencies. This ratio is a non-GAAP figure not governed by International Financial Reporting Standards and its definition and calculation may vary from one company to another. The Group's debt mainly consists of short and long-term debentures traded publicly in the Tel Aviv Stock Exchange and loans from financial institutions. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of operating segments [abstract] | |
Operating Segments | Note 6 - Operating Segments The Group operates in two reportable segments, as described below, which are the Group's strategic business units. The strategic business unit's allocation of resources and evaluation of performance are managed separately. The operating segments were determined based on internal management reports reviewed by the Group's chief operating decision maker (CODM). The CODM does not examine the balance of assets or liabilities for those segments and therefore, they are not presented. — Cellular segment - the segment includes the cellular communications services, cellular equipment and supplemental services. — Fixed-line segment - the segment includes landline telephony services, internet services, television services, transmission services, landline equipment and supplemental services. The accounting policies of the reportable segments are the same as described in the annual financial statements in Note 3, regarding Significant Accounting Policies. Year ended December 31, 2017* NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 2,685 1,186 - 3,871 Inter-segment revenues 14 162 (176 ) - Segment EBITDA** 595 258 853 Depreciation and amortization (555 ) Taxes on income (40 ) Financing income 52 Financing expenses (196 ) Other income 1 Share based payments (2 ) Profit for the year 113 Year ended December 31, 2016 NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 2,981 1,046 - 4,027 Inter-segment revenues 17 183 (200 ) - Segment EBITDA** 625 233 858 Depreciation and amortization (534 ) Taxes on income (10 ) Financing income 46 Financing expenses (196 ) Other expenses (8 ) Share based payments (6 ) Profit for the year 150 Year ended December 31, 2015 NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 3,185 995 - 4,180 Inter-segment revenues 18 186 (204 ) - Segment EBITDA** 601 271 872 Depreciation and amortization (562 ) Taxes on income (36 ) Financing income 55 Financing expenses (232 ) Other income 3 Share based payments (3 ) Profit for the year 97 * See Note 2F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers ** Segment EBITDA as reviewed by the Group's CODM, represents earnings before interest (financing expenses, net), taxes, other income (expenses) (except for expenses in respect of voluntary retirement plans for employees, and gain (loss) due to sale of subsidiaries (see Note 26, regarding Other Income (Expenses), net)), depreciation and amortization and share based payments, as a measure of operating profit. Segment EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. |
Subsidiaries
Subsidiaries | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of subsidiaries [abstract] | |
Subsidiaries | Note 7 - Subsidiaries A. Presented hereunder is a list of the Group’s significant subsidiaries: The Group’s ownership interest in the subsidiary for the year ended December 31 Name of subsidiary Principal location of the subsidiary's activity 2016 2017 Netvision Ltd. Israel 100% 100% 013 Netvision Ltd. Israel 100% 100% B. Sale of indirect subsidiary of the Company In May 2017, a wholly owned indirect subsidiary of the Company, 013 Netvision Ltd., or Netvision, has entered an agreement for the sale of its holdings in Internet Rimon Israel 2009 Ltd., or Rimon, a subsidiary of Netvision, to the other shareholders of Rimon. In June 2017, the sale of Netvision's holdings in Rimon was completed, following which the Company recorded under Other Income, net, a capital gain of approximately NIS 10 million. The consideration shall be paid to Netvision in several installments over a period of two years from the closing of the transaction. NIS millions Total consideration transferred 25 Identifiable assets and liabilities transferred: Cash and cash equivalents (12 ) Trade and other receivables (4 ) Property, plant and equipment, net (2 ) Intangible assets and others, net (23 ) Trade payables and accrued expenses 7 Other payables, including derivatives 4 Non-controlling interests 15 Total net identifiable assets 15 Capital gain from sale 10 The aggregate cash flows derived for the Group as a result of the sale: Cash and cash equivalents received 15 Less cash and cash equivalents of the subsidiary (12 ) 3 C. For additional details regarding a reorganization of the Group's subsidiaries following which all the Group's fixed-line operation under the unified license were unified under the Company's wholly owned subsidiary Cellcom Fixed Line Communications, see Note 32E, regarding Regulation and Legislation. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2017 | |
Cash and cash equivalents [abstract] | |
Cash and Cash Equivalents | Note 8 - Cash and Cash Equivalents Composition December 31, 2016 2017 NIS millions NIS millions Bank balances 178 59 Call deposits 1,062 468 1,240 527 The Group's exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed in Note 21. |
Trade and Other Receivables
Trade and Other Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current receivables [abstract] | |
Trade and Other Receivables | Note 9 - Trade and Other Receivables Composition December 31, 201 6 2017 NIS millions NIS millions Current Trade Receivables* Open accounts 512 475 Checks and credit cards receivables 160 173 Accrued income 87 109 Current maturity of long-term receivables 566 523 1,325 1,280 Other Receivables Prepaid expenses 54 76 Others 7 13 61 89 1,386 1,369 Non-current Trade receivables* 461 412 Rights of use of communications lines 327 337 Deposits and other receivables 1 30 Loan to a customer - 107 Other 7 9 796 895 2,182 2,264 * Net of allowance for doubtful debts. The Group is exposed to credit risks and impairment losses related to trade and other receivables as disclosed in Note 21. Non-current trade receivables balances are in respect of equipment sold in installments (mainly 36 monthly payments) which current amount as of December 31, 2017, is calculated at a 3.3% annual discount rate (December 31, 2016 - 3.3%). |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Classes of current inventories [abstract] | |
Inventory | Note 10 - Inventory A. Composition December 31, 2016 2017 NIS millions NIS millions Handsets 42 53 Accessories 10 9 Spare parts 12 8 64 70 B. In slow moving o inventory NIS 3 million |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Property, Plant and Equipment, net | Note 11 - Property, Plant and Equipment, net Computers, furniture and Control and landline Communications testing communications Leasehold network equipment Vehicles equipment improvements Total NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions Cost Balance at January 1, 2016 5,671 124 7 347 156 6,305 Additions 189 1 - 105 6 301 Disposals (796 ) (46 ) (2 ) (82 ) (38 ) (964 ) Balance at December 31, 2016 5,064 79 5 370 124 5,642 Additions 189 - 2 151 6 348 Disposals (262 ) (20 ) - (25 ) (17 ) (324 ) Discontinuance of consolidation (see Note 7B) (2 ) (1 ) (1 ) - - (4 ) Balance at December 31, 2017 4,989 58 6 496 113 5,662 Accumulated Depreciation Balance at January 1, 2016 4,185 96 7 168 104 4,560 Depreciation for the year 284 12 - 67 12 375 Disposals (796 ) (46 ) (2 ) (75 ) (33 ) (952 ) Balance at December 31, 2016 3,673 62 5 160 83 3,983 Depreciation for the year 273 7 1 105 11 397 Disposals (252 ) (20 ) (1 ) (24 ) (17 ) (314 ) Discontinuance of consolidation (see Note 7B) (2 ) - - - - (2 ) Balance at December 31, 2017 3,692 49 5 241 77 4,064 Carrying amounts At January 1, 2016 1,486 28 - 179 52 1,745 At December 31, 2016 1,391 17 - 210 41 1,659 At December 31, 2017 1,297 9 1 255 36 1,598 In the ordinary course of business, the Group acquires property, plant and equipment on credit. The cost of acquisitions, which has not yet been paid at the reporting date, amounted to NIS 143 million (December 31, 2016 and 2015, NIS 120 million and NIS 169 million, respectively). |
Intangible Assets and Others, n
Intangible Assets and Others, net | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about intangible assets [abstract] | |
Intangible Assets and Others, net | Note 12 - Intangible Assets and Others, net Licenses and Frequencies Information systems Software Customer acquisition costs Goodwill Customer relationships and other Total NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions Cost Balance at January 1, 2016 552 296 62 - 830 324 2,064 Additions - 73 8 - - - 81 Disposals - (65 ) (17 ) - - (16 ) (98 ) Balance at December 31, 2016 552 304 53 - 830 308 2,047 Additions - 72 4 120 - 6 202 Disposals - (48 ) (12 ) - - - (60 ) Discontinuance of consolidation (see Note 7B) - (3 ) - - (21 ) - (24 ) Balance at December 31, 2017 552 325 45 120 809 314 2,165 Accumulated Amortization Balance at January 1, 2016 351 116 34 - - 309 810 Amortization for the year 31 71 13 - - 13 128 Disposals - (65 ) (17 ) - - (16 ) (98 ) Balance at December 31, 2016 382 122 30 - - 306 840 Amortization for the year 19 68 9 27 - 3 126 Disposals - (48 ) (12 ) - - - (60 ) Discontinuance of consolidation (see Note 7B) - (1 ) - - - - (1 ) Balance at December 31, 2017 401 141 27 27 - 309 905 Carrying amounts At January 1, 2016 201 180 28 - 830 15 1,254 At December 31, 2016 170 182 23 - 830 2 1,207 At December 31, 2017 151 184 18 93 809 5 1,260 In the ordinary course of business, the Group acquires Intangible assets on credit. The cost of acquisitions, which has not yet been paid at the reporting date, amounted to NIS 28 million (December 31, 2016 and 2015, NIS 32 million and NIS 33 million, respectively). A. Impairment testing for cash-generating unit containing goodwill For the purpose of impairment testing, goodwill is allocated mainly to the Fixed-line segment, which represents the lowest level within the Group, at which goodwill is monitored for internal management purposes, which is not higher than the reported operating segments. See Note 6, regarding Operating Segments. The aggregate carrying amount of goodwill allocated to the Fixed-line segment as of December 31, 2017, is NIS 732 million (December 31, 2016 - NIS 753 million). For additional details, see Note 7B, regarding Sale of Indirect Subsidiary. The recoverable amount of the Fixed-line segment was based on its value in use and was determined by discounting the expected future cash flows to be generated from the continuing use. The recoverable amount of the Fixed-line segment as of December 31, 2017, was determined to be higher than its carrying amount and thus, no impairment loss has been recognized. B. Key assumptions used in calculation of recoverable amount Key assumptions used in the calculation of recoverable amounts are discount rate and terminal value growth rate. These assumptions are as follows: (1) Pre-tax discount rate and terminal value growth rate Pre-tax discount rate Terminal value growth rate 2016 2017 2016 2017 Fixed-line segment 10.4% 10.3% 1.5% 1.5% · The discount rate and the terminal value growth rate are denominated in real terms. · The Fixed-line segment has cash flows for 5 years, as included in its discounted cashflow model. · The long-term growth rate has been determined as 1.5% which represents, among others, the natural population growth rate. · The pre-tax discount rate is estimated and calculated using several assumptions, among others, Fixed-line segment's Cost of Equity, risk premium for normative debt leveraging of the Group and estimates of the normative leverage ratio for the industry. (2) Sensitivity to changes in assumptions The estimated recoverable amount of the Fixed-line segment exceeds its carrying amount by approximately NIS 105 million (2016: approximately NIS 74 million). Management has identified two key assumptions for which there reasonably could be a possible change that could cause the carrying amount to exceed the recoverable amount. The table below shows the amount that these two assumptions are required to change individually in order for the estimated recoverable amount to be equal to the carrying amount: 2016 2017 Pre-tax discount rate 10.8% 10.8% Terminal value growth rate 1.0% 0.9% |
Trade Payables and Accrued Expe
Trade Payables and Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current payables [abstract] | |
Trade Payables and Accrued Expenses | Note 13 - Trade Payables and Accrued Expenses Composition December 31, 2016 2017 NIS millions NIS millions Trade payables 203 256 Accrued expenses 472 396 675 652 |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2017 | |
Provisions [abstract] | |
Provisions | Note 14 - Provisions Composition Dismantling and restoring Other contractual sites Litigations obligations Total NIS millions NIS millions NIS millions NIS millions Balance as at January 1, 2016 20 54 56 130 Provisions made during the year 14 27 1 42 Provisions reversed during the year (4 ) (21 ) (9 ) (34 ) Balance as at January 1, 2017 30 60 48 138 Provisions made during the year 2 14 11 27 Provisions reversed during the year (11 ) (25 ) (17 ) (53 ) Balance as at December 31, 2017 21 49 42 112 Non-current 21 - - 21 Current - 49 42 91 21 49 42 112 Dismantling and restoring sites The Group 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. These dismantling costs are calculated on the basis of the identified costs for the current financial year, extrapolated for future years using the best estimate of future trends in prices, inflation, etc., and are discounted at a risk-free rate. Forecast of estimated site departures or asset returns is revised in light of future changes in regulations or technological requirements. Litigations The Group is involved in a number of legal and other disputes with third parties. The Group's management, after taking legal advice, has established provisions which take into account the facts of each case. The timing of cash outflows associated with legal claims cannot be reasonably determined. For detailed information regarding legal proceedings against the Group, refer to Note 31. Other contractual obligations Provisions for other contractual obligations and exposures include various obligations that are derived either from a constructive obligation or legislation for which there is a high uncertainty regarding the timing and amount of future expenditure required for settlement. |
Other Payables, Including Deriv
Other Payables, Including Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other payables, including derivatives [Abstract] | |
Other Payables, Including Derivatives | Note 15 - Other Payables, Including Derivatives Composition December 31, 2016 2017 NIS millions NIS millions Employees and related liabilities 126 133 Government institutions 43 29 Interest payable 86 54 Accrued expenses 3 1 Deferred revenue 19 42 Derivative financial instruments 2 18 279 277 |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other long-term liabilities [Abstract] | |
Other Long-term Liabilities | Note 16 - Other Long-term Liabilities Composition December 31, 2016 2017 NIS millions NIS millions Long-term trade payables 3 1 Deferred revenue 2 3 Derivative financial instruments 15 - Other 11 11 31 15 |
Debentures and Long-term Loans
Debentures and Long-term Loans from Financial Institutions | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings [abstract] | |
Debentures and Long-term Loans from Financial Institutions | Note 17 - Debentures and Long-term Loans from Financial Institutions This note provides information about the contractual terms of the Group's debentures and long-term loans from financial institutions, which are measured at amortized cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risk, see Note 21. December 31, 201 6 201 7 NIS millions NIS millions Non- current liabilities Debentures 2,866 2,360 Long-term loans from financial institutions 340 462 3,206 2,822 Current liabilities Current maturities of debentures 863 540 Current maturities of loans from financial institutions - 78 863 618 Debentures The terms and debt repayment schedule The terms and repayment schedule of the Company's debentures are as follows*: December 31, 2016 December 31, 2017 NIS millions NIS millions Currency Nominal interest rate Year of maturity Face value Carrying amount Face value Carrying amount Debentures (Series B) - linked to the Israeli CPI NIS 5.30 % until 2017 185 220 - - Debentures (Series D) - linked to the Israeli CPI NIS 5.19 % until 2017 299 349 - - Debentures (Series E) - unlinked NIS 6.25 % until 2017 164 164 - - Debentures (Series F)** - linked to the Israeli CPI NIS 4.60 % 2017-2020 715 731 643 659 Debentures (Series G)** - unlinked NIS 6.99 % 2017-2019 285 285 228 228 Debentures (Series H) - linked to the Israeli CPI NIS 1.98 % 2018-2024 950 824 950 849 Debentures (Series I) - unlinked NIS 4.14 % 2018-2025 804 753 804 761 Debentures (Series J) - linked to the Israeli CPI NIS 2.45 % 2021-2026 103 102 103 102 Debentures (Series K) - unlinked NIS 3.55 % 2021-2026 304 301 304 301 Total Debentures 3,809 3,729 3,032 2,900 * In January 2018, after the end of the reporting period, the Company repaid interest and principal of debentures in a total sum of approximately NIS 418 million. ** The Company's outstanding debentures were issued based on the then current Israeli shelf prospectus and are listed on the Tel Aviv Stock Exchange, or TASE. The Company's debentures are unsecured and contain standard terms and conditions in addition to certain additional undertakings by the Company, as follows: In connection with the issuance of Series F and G debentures, the Company has undertaken to comply with certain financial and other covenants. Inter alia: · a Net Leverage* exceeding 5, or exceeding 4.5 during four consecutive quarters, shall constitute an event of default; · not to distribute more than 95% of the profits available for distribution according to the Israeli Companies law (“Profits”); provided that if the Net Leverage* exceeds 3.5:1, the Company will not distribute more than 85% of its Profits and if the Net Leverage* exceeds 4:1, the Company will not distribute more than 70% of its Profits. Failure to comply with this covenant shall constitute an event of default; · cross default, excluding following an immediate repayment initiated in relation to a liability of NIS 150 million or less, shall constitute an event of default; · a negative pledge, subject to certain exceptions. Failure to comply with this covenant shall constitute an event of default; · an obligation to pay additional interest of 0.25% for two-notch downgrade in the debentures' rating and additional interest of 0.25% for each additional one-notch downgrade and up to a maximum addition of 1%, in comparison to the rating given to the debentures prior to their issuance; · failure to have the debentures rated over a period of 60 days, shall constitute an event of default. * Net Leverage - the ratio of Net Debt to EBITDA, excluding one-time influences. Net Debt defined as credit and loans from banks and others and debentures, net of cash and cash equivalents and current investments in tradable securities. EBITDA defined as in relation to the twelve month period preceding the Group's most updated consolidated financial statements and calculated as profit before depreciation and amortization, other expenses/ income, net, financing expenses/ income, net and taxes on income. In connection with the issuance of Series H and Series I debentures in July 2014, the Company undertook additional undertakings, in addition to those previously undertaken by the Company in its Series F and G indenture (as detailed above), including: (1) in addition to being an event of default, meeting the financial covenants previously undertaken by the Company (a maximum net leverage ratio (Net Debt to EBITDA ratio) in excess of 5.0:1, or in excess of 4.5:1 for four consecutive quarters) would be a condition for dividend distribution; and (2) meeting such financial covenants would also be a condition for the issuance of additional debentures of each of the two series. In addition, the Series H and Series I Indenture contains substantially similar events of default to those found in the Series F and Series G Indenture, with the exception of certain new events of default that do not appear in the Series F and Series G Indenture as well as certain modifications to the events of default that are found in the Series F and Series G Indenture, including: (1) breach of the above limitation on dividend distributions; (2) the minimum amount required for triggering a cross default shall not apply to a cross default triggered by another series of debentures; (3) the existence of a real concern that the Company shall not meet its material undertakings towards the debenture holders; (4) the inclusion in the Company's financial statements during a period of two consecutive quarters of a note regarding the existence of significant doubt as to the Company's ability to continue as a going concern; and (5) breach of the Company's undertakings regarding the issuance of additional debentures. The Series J and Series K debentures contain standard terms and conditions in addition to certain additional undertakings by the Company, generally similar to the terms of the Company's existing Series H and I debentures. In June 2017, the Company entered into an agreement with certain Israeli institutional investors, according to which the Company irrevocably undertook to issue to the institutional investors, and the institutional investors irrevocably undertook to purchase from the Company, NIS 220 million aggregate principal amount of additional debentures of the existing series K debentures (which are listed on the Tel Aviv Stock Exchange, or TASE), on July 1, 2018, or the Agreed Date. The price was set at NIS 1.011 for each Series K debenture (which bears a stated interest rate of 3.55% per annum) of NIS 1 principal amount, or a total consideration of approximately NIS 222 million, reflecting an effective interest yield of 3.6% per annum. The Company is required to pay a certain commitment fee to the institutional investors. In case the debentures' rating on the Agreed Date shall be il(A-) or below, the price shall be reduced to NIS 1.001 for each Series K debenture of NIS 1 principal amount. The closing of the issuance will be subject to certain customary conditions, including: the absence of any event of default under the series K debentures indenture, the Company having an Israeli shelf prospectus in force, and satisfaction of the conditions set out in the series K debentures indenture for the issuance of additional K debentures (meaning, aside from the no events of default condition detailed above, that the issuance of additional debentures itself will not cause a rating downgrade compared to the rating prior to such issuance, and that the Company meets the financial covenants applicable to the series K debentures on the date of such issuance and thereafter). In January 2018, after the end of the reporting period, the Company issued a new series of debentures, Series L debentures, in a principal amount of approximately NIS 401 million, at an interest rate of 2.5% per annum (annual effective interest rate of 2.66%). Series L debentures principal will be payable in six installments, of which the first four installments of 15% of the principal each will be paid on January 5 of the years 2023 through 2026, and the remaining two installments of 20% of the principal each will be paid on January 5 of the years 2027 and 2028. The interest on the outstanding principal of the Series L debentures is payable on January 5 and on July 5 of each of the years 2019 through 2028. The The Series L debentures are unsecured and contain standard terms and conditions in addition to certain additional undertakings by the Company, generally similar to the terms of the Company's existing Series J and K debentures, with a change to the additional interest to be paid in case of a two-notch downgrade in the debentures' credit rating to 0.5% (with no change to the maximum additional interest). As of December 31, 2017, Long-term loans from financial institutions The terms and repayment schedule of the Company's long-term loans are as follows: December 31, 2016 December 31, 2017 NIS millions NIS millions Currency Nominal interest rate Year of maturity Face value Carrying amount Face value Carrying amount Loan from financial institution NIS 4.60 % 2018-2021 200 200 200 200 Loan from financial institution* NIS 5.10 % 2019-2022 - - 200 200 Loan from bank NIS 4.90 % 2018-2022 140 140 140 140 Total loans 340 340 540 540 * According to a loan agreement entered by the Company and two Israeli financial institutions in May 2015, in June 30, 2017, the second loan under the agreement in a principal amount of NIS 200 million was provided to the Company. The loan is without linkage and the principal amount bears an annual fixed interest of 5.1%. The loan's principal amount will be payable in four equal annual payments on June 30 of each of the years 2019 through 2022 (inclusive). The interest will be paid in ten semi-annual installments on June 30 and December 31, of each calendar year commencing December 31, 2017 through and including June 30, 2022. The Company's outstanding long-term loans contain standard terms and conditions in addition to certain additional undertakings by the Company, including: that the loans' interest rates may be subject to certain adjustments; the Company may prepay the loans, subject to a prepayment fee; generally include the negative pledge, limitations on distributions, events of default and financial covenants applicable to the Company's series F through I debentures. In addition, the loan from a bank includes: certain modifications to such events of default, including foreclosure, materialization of a pledge, execution actions, receivership and (subject to certain exclusions) sale of assets, in a specified certain lower amount, a failure to operate in a field which is material to the Company's operations and mergers and changes of formation (with more limited exclusions) will trigger an event of default; certain events which if not approved by the bank allow the bank to notify the Company of an acceleration of the repayment of the loan; and in case the Company provides stricter financial covenants to another financial institution or debenture holder, those will apply to this agreement as well. Deferred loan from bank In June 2017, the Company entered into a loan agreement with the Israeli bank that provided the Company a similar loan in August 2015 (the "2015 Loan Agreement"), according to which the bank has agreed, subject to certain customary conditions, to provide the Company a deferred loan in a principal amount of NIS 150 million, unlinked, which will be provided to the Company in March 2019, and will bear an annual fixed interest of 4%. The loan's principal amount will be payable in four equal annual payments on March 31 of each of the years 2021 through and including 2024 and the interest will be payable in ten semi-annual installments on March 31 and September 30 of each calendar year commencing September 30, 2019 through and including March 31, 2024. Until the provision of the loan, the Company is required to pay the bank a commitment fee. The agreement includes similar terms and obligations to those included in the Company's August 2015 loan agreement and applies the right to demand immediate repayment of either or both agreements due to certain events of default under either agreement. As of December 31, 2017, the Group is in compliance with the above covenants. Movement in liabilities deriving from financing activities Loans Debentures Derivatives Interest payable Put options to non-controlling interests Total NIS millions Balance as at January 1, 2017 (340 ) (3,729 ) (17 ) (86 ) (11 ) (4,183 ) Changes from financing cash flows Cash received (200 ) - - - - (200 ) Cash paid - 864 3 175 1 1,043 Total net financing cash flows (540 ) (2,865 ) (14 ) 89 (10 ) (3,340 ) Linkage expenses to CPI - (3 ) - - - (3 ) Changes in fair value - - (3 ) - - (3 ) Discount amortization - (32 ) - - - (32 ) Interest expenses - - - (143 ) (1 ) (144 ) Balance as at December 31, 2017 (540 ) (2,900 ) (17 ) (54 ) (11 ) (3,522 ) |
Liability for Employee Rights u
Liability for Employee Rights upon Retirement, Net | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of defined benefit plans [abstract] | |
Liability for Employee Rights upon Retirement, Net | Note 18 - Liability for Employee Rights upon Retirement, Net The obligation of the Group, under law and labor agreements, to pay severance pay to employees who are not covered by the pension or insurance plans as mentioned in section A below, as of December 31, 2017 and 2016 is NIS 15 million and NIS 12 million respectively, as included in the consolidated statements of financial position, under Liability for employee rights upon retirement, net. A. Post-employment benefit plans - defined contribution plan The Group’s liability for severance pay for its Israeli employees is calculated pursuant to Israeli Severance Pay Law. The Group’s liability is mostly covered by monthly deposits with severance pay funds, insurance policies and by an accrual on the consolidated statements of financial position. For most of the Group's employees, the payments to pension funds and to insurance companies exempt the Group from any obligation towards its employees, in accordance with Section 14 of the Severance Pay Law-1963. Accumulated amounts in pension funds and in insurance companies are not under the Group's control or management and accordingly, neither those amounts nor the corresponding accrual for severance pay are presented in the consolidated statements of financial position. B. Post-employment benefit plans - defined benefit plan The portion of the severance payments which is not covered by deposits in defined contribution plans, as aforementioned, is accounted for by the Group as a defined benefit plan, according to which a liability for employee benefits is recognized and in respect of which, the Group deposits amounts in central severance pay funds and in appropriate insurance policies. The total liability as at December 31, 2017 is NIS 27 million (2016 - NIS 25 million). The fair value of the plan assets, the severance pay fund, is NIS 20 million (2016 - NIS 20 million). The expense recognized in the consolidated statement of income for the year ended December 31, 2017 in respect of defined benefit plans, is NIS 3 million (2016 - NIS 3 million). C. As of December 31, 2017 the Group's liability for adaptation grants to employees is NIS 8 million (2016 - NIS 7 million). |
Capital and Reserves
Capital and Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of classes of share capital [abstract] | |
Capital and Reserves | Note 19 - Capital and Reserves Share capital 2015 2016 2017 NIS Issued and paid at January 1 1,005,845 1,006,046 1,006,046 Exercise of share options 201 - 4,400 Issued and paid at December 31 1,006,046 1,006,046 1,010,446 The share capital is comprised of ordinary shares of NIS 0.01 par value each. At December 31, 2017, the authorized share capital was comprised of 300 million ordinary shares (December 31, 2016, 2015 - 300 million each). The holders of ordinary shares are entitled to receive dividends as declared. Basic and diluted earnings per share The calculation of basic earnings per share was based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding (100,589,458, 100,604,578 and 100,654,935 during the years 2015, 2016 and 2017, respectively). The calculations of diluted earnings per share was based on the profit attributable to ordinary shares and the weighted average number of ordinary shares in the basic earnings per share in addition of 72, 93,728 and 234,726 incremental shares (NIS 0.01 par value each) that would be issued resulting from exercise of all options for the years ended December 31, 2015, 2016 and 2017, respectively. At December 31, 2017, 78 thousand options (2016 and 2015 - 1,060 thousand and 616 thousand options, respectively) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive. The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period that the options were outstanding. Dividends In 2015-2017 the Company did not pay dividend to the shareholders of the Company. Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred or exercised. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |
Share-Based Payments | Note 20 - Share-Based Payments In September 2006, the Company's Board of Directors approved a share based incentive plan for employees, directors, consultants, sub-contractors of the Company and the Company’s affiliates. The terms of share-based payments include a dividend adjustment mechanism. The options will be exercised at net, with no cash transfer. In March 2015, the Company's board of directors approved a new shared based incentive plan - "2015 Share Incentive Plan" for employees, directors, consultants and sub-contractors of the Company and the Company's affiliates. Under the plan, the Company's board of directors is authorized to determine the terms of the grants, including the identity of grantees, the number of options or restricted stock units (“RSUs”) to be granted, the vesting schedule and the exercise price. The terms of the share based payments include a dividend adjustment mechanism. The options will be exercised at net exercise mechanism, with no cash transfer. Number of Contractual Adjusted exercise price per share as instruments life of of December 31, Grant date/employees entitled In thousands Vesting conditions options 2017 Share options granted in December 2013 to senior employees 234 Three equal installments over three years of employment 4.5 years $ 14.65 Share options granted in August 2015 and October 2015 to senior employees 2,660 Three equal installments over three years of employment 4.5 years NIS 25.65 Share options granted in November 2016 to senior employees 63 Three equal installments over three years of employment 4.5 years NIS 29.97 The total compensation expense during the year ended December 31, 2017, related to the options granted is NIS 2 million (2016 - NIS 6 million, 2015 - NIS 3 million). The changes in the balances of the options were as follows: Weighted average Weighted average Weighted average Number of options of exercise price Number of options of exercise price Number of options of exercise price (US Dollars) (US Dollars) (US Dollars) 2015 2016 2017 Balance as at January 1 638,865 15.86 2,873,190 7.40 2,764,334 7.15 Granted during the year 2,660,000 6.69 63,000 7.79 - - Forfeited during the year (292,798 ) 19.52 (171,856 ) 11.43 (146,334 ) 11.26 Exercised during the year (132,877 ) 5.67 - - (1,654,335 ) 7.40 Total options outstanding as at December 31 2,873,190 7.40 2,764,334 7.15 963,665 8.07 Total of exercisable options as at December 31* 170,190 15.13 1,020,000 7.89 106,000 12. 98 * The weighted average of the remaining contractual life of options outstanding as at December 31, 2017 is 1.9 years. 2015 2016 2017 Fair value of share options and assumptions: Fair value at grant date NIS NIS 6.3 - Fair value assumptions: Share price at grant date NIS 23.75 NIS 27.75 - Exercise price NIS 25.65 NIS 29.97 - Expected volatility (weighted average) 35.9 % 42.8 % - Option life (expected weighted average life) 2.3 years 2.3 years - Risk free interest rate 0.4 % 0.4 % - |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments [abstract] | |
Financial Instruments | Note 21 - Financial Instruments Credit risk Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: December 31, December 31, 2016 2017 NIS millions NIS millions Trade receivables including long-term amounts 1,786 1,692 Loans and other receivables including long-term amounts 5 146 Investment in debt securities 282 325 Cash and cash equivalents in banks 1,240 527 Derivative financial instrument 2 3 3,315 2,693 The maximum exposure to credit risk of financial assets at the reporting date by type of counterparty is: December 31, December 31, 2016 2017 NIS millions NIS millions Receivables from subscribers 1,590 1,511 Receivables from distributors and other operators 196 158 Investment in government of Israel debt securities 131 90 Investment in institutional debt securities 151 235 Cash and cash equivalents in banks 1,240 527 Other 7 172 3,315 2,693 Impairment losses The aging of financial assets at the reporting date was as follows: Gross Impairment Gross Impairment 2016 2017 NIS millions NIS millions NIS millions NIS millions Not past due 3,200 22 2,580 12 Past due less than one year 154 62 143 53 Past due more than one year 146 101 157 122 3,500 185 2,880 187 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: 2016 2017 NIS millions NIS millions Balance at January 1 202 185 Impairment loss recognized (50 ) (44 ) Doubtful debt expenses 33 46 Balance at December 31 185 187 The allowance accounts in respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the amount considered irrecoverable is written off against the trade receivable directly. Liquidity risk The following are the maturities of contractual financial liabilities and other non-contractual liabilities, including estimated interest payments and excluding the impact of netting agreements: December 31, 2017 Carrying Contractual More than amount Cash flows 1 st 2 nd 3 rd 4-5 years 5 years NIS millions Debentures * (2,954 ) (3,435 ) (658 ) (577 ) (473 ) (739 ) (988 ) Long-term loans from financial institutions (540 ) (605 ) (102 ) (147 ) (141 ) (215 ) - Trade and other payables (784 ) (784 ) (784 ) - - - - Forward exchange contracts on foreign currencies (1 ) (1 ) (1 ) - - - - Forward exchange contracts on CPI (17 ) (17 ) (17 ) - - - - Other long-term liabilities (12 ) (12 ) - (12 ) - - - (4,308 ) (4,854 ) (1,562 ) (736 ) (614 ) (954 ) (988 ) * Including accrued interest on debentures. December 31, 20 16 Carrying Contractual More than amount Cash flows 1 st 2 nd 3 rd 4-5 years 5 years NIS millions Debentures * (3,815 ) (4,448 ) (1,014 ) (657 ) (577 ) (847 ) (1,353 ) Long-term loans from financial institutions (340 ) (392 ) (16 ) (92 ) (89 ) (166 ) (29 ) Trade and other payables (803 ) (803 ) (803 ) - - - - Forward exchange contracts on CPI (17 ) (17 ) (2 ) (15 ) - - - Other long-term liabilities (13 ) (13 ) (2 ) - (11 ) - - (4,988 ) (5,673 ) (1,837 ) (764 ) (677 ) (1,013 ) (1,382 ) * Including accrued interest on debentures. Currency risk and CPI The Group's exposure to foreign currency risk and CPI is as follows: December 31, 2016 December 31, 2017 In or linked In or linked to foreign to foreign currencies Linked currencies Linked (mainly USD) to CPI Unlinked (mainly USD) to CPI Unlinked NIS millions NIS millions Current assets Cash and cash equivalents 12 - 1,228 29 - 498 Current investments, including derivatives 2 141 141 13 135 181 Trade receivables 89 - 1,236 61 - 1,219 Other receivables - - 4 - - 8 Non- current assets Long-term receivables - 1 461 - 54 495 Current liabilities Current maturities of debentures - (642 ) (221 ) - (322 ) (297 ) Trade payables and accrued expenses (182 ) - (493 ) (115 ) - (537 ) Other current liabilities, including derivatives - (49 ) (167 ) (1 ) (42 ) (161 ) Non- current liabilities Long-term loans from financial institutions - - (340 ) - - (462 ) Debentures - (1,584 ) (1,282 ) - (1,288 ) (1,071 ) Other non-current liabilities, including derivatives (3 ) (15 ) (10 ) (1 ) - (11 ) (82 ) (2,148 ) 557 (14 ) (1,463 ) (138 ) The Group's exposure to linkage and foreign currency risk in respect of derivatives is as follows: December 31, 2017 Currency/ linkage receivable Currency/ linkage payable Notional Value Fair value NIS millions Instruments not used for hedging Forward exchange contracts on foreign currencies USD NIS 105 (1 ) Forward exchange contracts on CPI CPI NIS 500 (17 ) Foreign currency put options NIS USD (105 ) 1 Embedded derivative in lease contracts USD NIS 16 2 December 31, 2016 Currency/ linkage receivable Currency/ linkage payable Notional Value Fair value NIS millions Instruments not used for hedging Forward exchange contracts on foreign currencies USD NIS 95 1 Forward exchange contracts on CPI CPI NIS 800 (17 ) Foreign currency put options NIS USD (95 ) 1 Sensitivity analysis A change of the CPI as at December 31, 2017 and 2016 would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2016. Equity Net income Change NIS millions NIS millions December 31, 2017 Increase in the CPI of 2.0 % (9 ) (9 ) Increase in the CPI of 1.0 % (2 ) (2 ) Decrease in the CPI of (1.0 )% - - Decrease in the CPI of (2.0 )% - - December 31, 2016 Increase in the CPI of 2.0 % (13 ) (13 ) Increase in the CPI of 1.0 % (4 ) (4 ) Decrease in the CPI of (1.0 )% 3 3 Decrease in the CPI of (2.0 )% 6 6 Sensitivity of change in foreign exchange rate is immaterial as at December 31, 2017 and 2016. Interest rate risk Profile At the reporting date the interest rate profile of the Group's interest-bearing financial instruments, not including derivatives, was: Carrying amount 2016 2017 NIS millions NIS millions Fixed rate instruments Financial assets 845 679 Financial liabilities (4,069 ) (3,440 ) (3,224 ) (2,761 ) Variable rate instruments Financial assets 500 221 Fair value sensitivity analysis for fixed rate instruments A change of interest rates at the end of the reporting period would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. Equity Profit or loss 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease NIS millions NIS millions December 31, 2017 Fair value sensitivity (net) (9 ) 9 (5 ) 5 (9 ) 9 (5 ) 5 Equity Profit or loss 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease NIS millions NIS millions December 31, 2016 Fair value sensitivity (net) (7 ) 7 (4 ) 4 (7 ) 7 (4 ) 4 Cash flow sensitivity analysis for variable rate instruments A change of 1% in interest rates at the end of the reporting period would have increased (decreased) equity and profit or loss by immaterial amounts. Fair Values (1) Financial instruments measured at fair value for disclosure purposes only The book value of certain financial assets and liabilities, including cash and cash equivalents, trade and other receivables, current investments, including derivatives, trade and other payables, including derivatives and other long-term liabilities, are equal or approximate to their fair value. The fair values of the remaining financial liabilities and their book values as presented in the consolidated statements of financial position are as follows: December 31, 2016 December 31, 2017 Book value Fair value* Book value Fair value* NIS millions NIS millions Debentures including current maturities and accrued interest (3,815 ) (4,112 ) (2,954 ) (3,288 ) Long-term loans from financial institutions including current maturities and accrued interest (340 ) (350 ) (540 ) (574 ) * The fair value as of December 31, 2017 includes principal and interest in a total sum of approximately NIS 418 million, paid in January 2018, after the end of the reporting period. The fair value as of December 31, 2016 includes principal and interest in a total sum of approximately NIS 592 million, paid in January 2017. The fair value of marketable debentures is determined by reference to the quoted closing asking price at the reporting date (level 1), with the addition of principal and interest amounts, which were paid during the following month after the end of the reporting period. (2) Fair value hierarchy of financial instruments measured at fair value The table below analyses financial instruments carried at fair value, by valuation method. December 31, 2017 Level 1 Level 2 Level 3 Total NIS millions NIS millions NIS millions NIS millions Financial assets at fair value through profit or loss Current investments in debt securities 361 - - 361 Derivatives - 3 - 3 Total assets 361 3 - 364 Financial liabilities at fair value through profit or loss Derivatives - (18 ) - (18 ) Total liabilities - (18 ) - (18 ) There have been no transfers during the year between Levels 1 and 2. December 31, 201 Level 1 Level 2 Level 3 Total NIS millions NIS millions NIS millions NIS millions Financial assets at fair value through profit or loss Current investments in debt securities 282 - - 282 Derivatives - 2 - 2 Total assets 282 2 - 284 Financial liabilities at fair value through profit or loss Derivatives - (17 ) - (17 ) Total liabilities - (17 ) - (17 ) (3) Details regarding fair value measurement at Level 2 Financial instrument Valuation method for determining fair value Forward contracts Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. Foreign currency options Fair value is measured based on the Black-Scholes formula. (4) Offset of financial assets and financial liabilities The following table sets out the carrying amounts of recognized financial instruments that were offset in the consolidated statements of financial position: December 31, 2017 Note Gross amounts of recognized financial assets (liabilities) Gross amounts of financial assets (liabilities) recognized and offset in the consolidated statements of financial position Net amounts of financial assets (liabilities) presented in the consolidated statements of financial position NIS millions NIS millions NIS millions Financial assets Trade receivables 9 170 (123 ) 47 Financial liabilities Trade payables and accrued expenses 13 (149 ) 123 (26 ) December 31, 2016 Note Gross amounts of recognized financial assets (liabilities) Gross amounts of financial assets (liabilities) recognized and offset in the consolidated statements of financial position Net amounts of financial assets (liabilities) presented in the consolidated statements of financial position NIS millions NIS millions NIS millions Financial assets Trade receivables 9 224 (159 ) 65 Financial liabilities Trade payables and accrued expenses 13 (183 ) 159 (24 ) Share price risk - sensitivity analysis The Group’s investments in securities include investments in equity instruments. The sensitivity analysis below presents the effect of a change in share prices on the fair value of securities held by the Group, assuming that all other variables remain constant. A change in share prices would have increased (decreased) profit or loss and equity by the amounts shown below (after tax): December 31, 2017 NIS millions Profit or loss Equity Increase of 5% 1 1 Increase of 10% 3 3 Decrease of 5% (1 ) (1 ) Decrease of 10% (3 ) (3 ) |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2017 | |
Revenue [abstract] | |
Revenues | Note 22 - Revenues By type of revenue: Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Revenues from equipment 1,048 994 952 Revenues from services: Cellular services 2,121 2,025 1,777 Land-line communications services 866 871 1,004 Other services 145 137 138 Total revenues from services 3,132 3,033 2,919 Total revenues 4,180 4,027 3,871 |
Cost of Revenues
Cost of Revenues | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of cost of revenues [Abstract] | |
Cost of Revenues | Note 23 - Cost of Revenues Composition Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions According to source of income: Cost of revenues from equipment 763 674 645 Cost of revenues from services 2, 000 2,0 28 2,035 2,763 2, 7 02 2,680 According to its components: Cost of revenues from equipment 763 674 645 Rent and related expenses 3 32 3 21 281 Salaries and related expenses 2 65 2 41 224 Fees to communications operators 732 732 767 Cost of content and value added services 143 168 212 Depreciation and amortization 381 3 96 412 Royalties and fees 9 6 93 86 Other 51 77 53 Total cost of revenues from services 2, 000 2,0 28 2,035 2,763 2,7 02 2,680 |
Selling and Marketing Expenses
Selling and Marketing Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of selling and marketing expenses [Abstract] | |
Selling and Marketing Expenses | Note 24 - Selling and Marketing Expenses Composition Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Salaries and related expenses 27 8 257 241 Commissions 19 6 1 79 88 Advertising and public relations 26 44 36 Depreciation and amortization 38 20 33 Other 82 74 81 620 574 479 |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of general and administrative expenses [Abstract] | |
General and Administrative Expenses | Note 25 - General and Administrative Expenses Composition Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Salaries and related expenses 114 123 124 Depreciation and amortization 143 118 110 Rent and maintenance 59 5 5 51 Data processing and professional services 51 39 36 Allowance for doubtful accounts 32 3 3 46 Other 66 52 59 465 4 20 426 |
Other Income (Expenses), net
Other Income (Expenses), net | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Other (Income) expenses net [Abstract] | |
Other Income (Expenses), net | Note 26 - Other Income (Expenses), net Other Income, net, for 2017 mainly includes a NIS 10 million capital gain from the sale of an indirect subsidiary of the Company. For additional details, see note 7B, regarding Sale of indirect subsidiary of the Company. Other expenses, net, for 2016 and 2015 include mainly expenses in respect of voluntary retirement plans for employees in an amount of approximately NIS 13 million and NIS 25 million, respectively. |
Financing Income and Expenses
Financing Income and Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of financing income and expenses [Abstract] | |
Financing Income and Expenses | Note 27 - Financing Income and Expenses Composition Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Interest income from installment sale transactions 47 38 31 Net change in fair value of financial assets measured at fair value through profit or loss 5 6 14 Other 3 2 7 Financing income 55 46 52 Linkage expenses to CPI and interest expenses on long-term liabilities (169 ) (157 ) (147 ) Net change in fair value of derivatives (32 ) - (8 ) Discount amortization (22 ) (26 ) (32 ) Other (9 ) (13 ) (9 ) Financing expenses (232 ) (196 ) (196 ) Net financing expenses recognized in profit or loss (177 ) (150 ) (144 ) |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of income tax [Abstract] | |
Income Tax | Note 28 - Income Tax A. Details regarding the tax environment of the Group Corporate tax rate Presented hereunder are the tax rates relevant to the Group in the years 2015-2017: 2015 - 2016 - 2017 - On January 4, 2016 the Israeli Parliament passed the Law for the Amendment of the Income Tax Ordinance (Amendment 216) - 2016, by which, inter alia, the corporate tax rate was reduced by 1.5% to a rate of 25% as from January 1, 2016. Furthermore, on December 22, 2016 the Israeli Parliament passed the Economic Efficiency Law (Legislative Amendments for Achieving Budget Objectives in the Years 2017 and 2018) - 2016, by which, inter alia, the corporate tax rate was reduced from 25% to 23% in two steps. The first step to a rate of 24% as from January 2017 and the second step to a rate of 23% as from January 2018. As a result of the aforesaid, the deferred tax balances as at December 31, 2017 were calculated according to the new tax rate of 23% - the tax rate expected to apply on the date of reversal. Current taxes for the reported periods are calculated according to the tax rates presented above. B. Composition of income tax expense (income) Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Current tax expense (income) Current year 45 35 27 Adjustments for prior years, net - (27 ) (1 ) 45 8 26 Deferred tax expense (income) Creation and reversal of temporary differences (9 ) 21 14 Change in tax rate - (19 ) - (9 ) 2 14 Income tax expense 36 10 40 C. Income tax in respect of other comprehensive income (loss) Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Before tax (2 ) 1 1 Tax (benefit) expenses 1 (1 ) - Net of tax (1 ) - 1 D. Reconciliation between the theoretical tax on the pre-tax profit and the tax expense Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Profit before taxes on income 133 160 153 Primary tax rate of the Group 26.5 % 25.0 % 24.0 % Tax calculated according to the Group’s primary tax rate 35 40 37 Additional tax (tax saving) in respect of: Non-deductible expenses 5 4 5 Taxes in respect of previous years - (27 ) (1 ) Effect of change in tax rate - (19 ) - Tax exempt income (1 ) - - Other differences (3 ) 12 (1 ) Income tax expenses 36 10 40 E. Deferred tax assets and liabilities (1) Recognized deferred tax assets and liabilities Deferred taxes are calculated according to the tax rate anticipated to be in effect on the date of reversal as stated above. The movement in deferred tax assets and liabilities is attributable to the following items: Allowance for doubtful debts Property, plant and equipment and intangible assets Other Total NIS NIS NIS millions NIS millions Balance of deferred tax asset (liability) as at January 1, 2017 43 (184 ) 24 (117 ) Changes recognized in profit or loss - (13 ) (1 ) (14 ) Balance of deferred tax asset (liability) as at December 31, 2017 43 (197 ) 23 (131 ) Deferred tax asset 43 5 26 74 Offset of balances (74 ) Deferred tax asset in the consolidated statements of financial position as at December 31, 2017 - Deferred tax liability - (202 ) (3 ) (205 ) Offset of balances 74 Deferred tax liability in the consolidated statements of financial position as at December 31, 2017 (131 ) Allowance for doubtful debts Property, plant and equipment and intangible assets Hedging transactions Carry forward tax deductions and losses Other Total NIS NIS NIS NIS NIS millions NIS millions Balance of deferred tax asset (liability) as at January 1, 2016 53 (201 ) 1 8 25 (114 ) Changes recognized in profit or loss (10 ) 17 (1 ) (8 ) - (2 ) Changes recognized in other comprehensive income - - - - (1 ) (1 ) Balance of deferred tax asset (liability) as at December 31, 2016 43 (184 ) - - 24 (117 ) Deferred tax asset 43 23 - - 27 93 Offset of balances (92 ) Deferred tax asset in the consolidated statements of financial position as at December 31, 2016 1 Deferred tax liability - (207 ) - - (3 ) (210 ) Offset of balances 92 Deferred tax liability in the consolidated statements of financial position as at December 31, 2016 (118 ) (2) Unrecognized deferred tax liability As at December 31, 2017 and 2016, a deferred tax liability for temporary differences related to an investment in a subsidiary was not recognized as the decision whether to sell the investment is within the Group and it is satisfied that it will not be sold in the foreseeable future. F. Tax assessments The Company has received final tax assessments up to and including the year ended December 31, 2013 (2013 fiscal year). 013 Netvision Ltd has received final tax assessments up to and including the year ended December 31, 2015 (2015 fiscal year). |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance lease and operating lease by lessee [abstract] | |
Operating Leases | Note 29 - Operating Leases Non-cancelable operating lease rentals are payable as follows: December 31, December 31, 2016 2017 NIS millions NIS millions Less than one year 274 275 Between one and five years 570 573 More than five years 103 70 947 918 During the year ended December 31, 2017, NIS 280 million was recognized as expenses in respect of operating leases in the consolidated statements of income (2016 and 2015, NIS 286 million and NIS 285 million, respectively). Major operating lease and service agreements: a. Office buildings and warehouses - there are lease agreements for periods of up to 14 years. b. Switching stations- there are lease agreements for switching station locations for periods of up to 18 years. c. Cell sites- there are lease agreements for cell sites for periods of up to 21 years. d. Service centers, retail stores and stands - there are lease agreements for service and installation centers and stands for periods of up to 13 years. e. Motor vehicles - lease for a period of 3 years. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of commitments [Abstract] | |
Commitments | Note 30 - Commitments A. The Group has commitments regarding the license it was granted in 1994, including: 1. Not to pledge any of the assets used to execute the license without the advance consent of the Ministry of Communications. 2. The Company's shareholders' joint equity, combined with the Company's equity, shall not amount to less than US$ 200 million. Regarding this stipulation, a shareholder holding less than 10% of the rights to the Company's equity is not taken into account. The Group is in compliance with the above conditions. B. As at December 31, 2017, the Group has commitments to purchase equipment for the communications networks, end user equipment, systems and software maintenance, and content and related services, in a total amount of approximately NIS 859 million. C. Between 2003 and 2016, Netvision entered into a number of agreements with TI Sparkle Ireland Telecommunications Ltd. (formerly Mediterranean Nautilus Ltd.) and TI Sparkle (Israel) Ltd. (formerly Mediterranean Nautilus (Israel) Ltd.), or collectively TI Sparkle, for the purchase of rights of use of certain telecommunications capacities on TI Sparkle's communications cables, as well as maintenance and operation services relating to these cables. Over the last few years Netvision has increased the capacity purchased for significantly lower prices, as well as reduced maintenance costs. The term of the agreement with respect to capacity purchased from TI Sparkle is in effect until May 2032. Netvision has the option to terminate agreements with respect to parts of the capacity in 2022 and 2027. The remainder of the obligation under all existing agreements as of December 31, 2017 is NIS 92 million. D. In March and April 2017, the Company's Sharing Agreements - the 4G network sharing and 2G and 3G hosting services agreement with Marathon 018 Xfone Ltd., or Xfone, (which has not entered the cellular market yet) and the 3G and 4G network sharing and 2G hosting services agreement with Golan Telecom Ltd., or Golan, (originally entered with Electra and adopted by Golan, after being acquired by Electra), and an agreement combining the 4G network sharing arrangements of the Xfone agreement and the Golan agreement into one three-way agreement - came into effect. The main provisions of the Sharing Agreements are: · Network sharing - the parties will cooperate in the development of the shared 3G and 4G networks (as applicable), which will use the parties' relevant frequencies, to be operated by separate, newly created entities, or the Joint Corporations, which are equally owned by the parties. Each of the Company and the sharing party/parties shall hold the active elements of the shared network in equal parts and will grant each other and the Joint Corporations an Indefeasible Right of Use, or IRU, in their active elements of the shared Network. To that end, the sharing parties will purchase and hold equal shares of the active elements of the shared networks owned by the Company prior to the Effective Date. Future ongoing investments in such active elements shall be equally borne by the parties. Each party will purchase and operate its own core network. The Company will further provide the sharing parties and the Joint Corporations an IRU to the Company's passive elements of the shared network. The Company shall provide services to the Joint Corporations as a subcontractor. · Hosting services - the Company shall provide Xfone hosting services in relation to the Company's 2G and 3G networks and to Golan hosting services in relation to the Company's 2G network. · Term - the Agreements are for a term of ten years (the Xfone Agreement - commencing from the earlier of the commercial launch of cellular services by Xfone or 12 months following the receipt of regulatory approvals for the agreement ("the Xfone Agreement Effective Date")), and will be extended for additional periods, unless either party notifies otherwise. The termination of the Golan Agreement prior to the lapse of the first 10 years due to its breach by Golan, shall entitle the Company to an agreed compensation of NIS 600 million plus VAT. · Consideration - the average annual consideration for the Company under the Golan agreement during the Term (starting with lower annual payment and increasing over the Term), is expected to range between approximately NIS 210-220 million plus VAT, depending on Golan's amount of subscribers and their usage of the shared network and our 2G network. Such consideration includes the following components: o Its share of the active elements of the existing 3G and 4G network owned by the Company and minimum future investment by Golan in active elements of the shared network; o IRU to the Passive elements; o Operation costs of the shared network and the 2G network (both active and passive), to include a fixed component to be borne equally by the parties, subject to certain discount arrangements dependent on Golan's subscribers amount, and a variable component to be borne by the parties according to the parties' relative usage of data by their subscribers. The consideration for the Company under the Xfone agreement includes substantially similar arrangements (mutatis mutandis to its sharing and hosting agreement) but Xfone shall be entitled to a discount according to which, the said payments for the IRU to the passive elements and its share of the operation costs, will be replaced during a period of up to 5 years from the Xfone Agreement Effective Date, with a monthly payment per subscriber to the Company of NIS 25 in the first year, NIS 27.5 in the second year and NIS 30 thereafter, plus VAT, but in any case not less than certain minimum annual amounts (ranging between approximately NIS 20 million in the first year and approximately NIS 110 million in the fifth year). The Agreements include standard stipulations as well as certain arrangements for separation of the parities and adding another sharing party. In addition to standard termination causes, Xfone may terminate its agreement by a prior written notice if it decides to cease operating in the cellular market in Israel. The Golan agreement (which replaces the former national roaming services agreement) includes the following arrangements as well: · Loan - upon closing of the purchase of Golan by Electra, a loan by the Company to Golan in the sum of NIS 130 million for a period of 10 years to be repaid in 6 semi-annual equal installments beginning the 8th year of the Term (interest and CPI differentials to be accrued, will be paid as of the 6th year). The loan is guaranteed by a second degree floating charge on Golan's assets and rights (excluding certain exceptions) or an equivalent guaranty. In April 2017, the said loan in an amount of NIS 130 million was provided to Golan according to the terms of such agreement. · Resolve of the previously reported past national roaming payments differences. According to the terms of the Golan agreement, part of the consideration is recognized as revenues and part is recognized as a reduction of operation costs. As mentioned above, the Golan agreement includes a number of performance obligations for revenue recognition purposes: · IRU to Golan to the passive elements; · IRU to Golan in its part of the existing active elements of the shared 3G and 4G network and 2G hosting services; · Transmission services to Golan. In addition, Golan shall pay the Company for participation in the operating costs of the 3G and 4G shared network and 2G network and future ongoing investments in the shared networks, according to a mechanism set in the agreement. E. In October 2016, the Company entered into an agreement with Apple Sales International for the purchase and distribution of iPhone handsets in Israel. Under the terms of the agreement, the Company has committed to purchase a minimum quantity of iPhone products over a period of three years, which are expected to represent a significant portion of the Company total cellular handsets purchase amounts, over that period. F. In May 2016, the Company entered into several agreements aiming to provide the Company with a comprehensive CRM SAAS solution, on a cloud 'software as a service', or SAAS, basis, which, when completed, will gradually replace all the Company current CRM systems with one CRM solution that will serve both the Company cellular and fixed-line segments. These agreements include the following main agreements: An agreement with salesforce.com EMEA Limited, or Salesforce, for the provision of Salesforce's CRM SAAS platform, including various products and services and support for the agreement term. The agreement is valid until August 2019, and may be terminated by the Company in April 2018. The Company also has an option to renew the agreement for two additional periods of 5 years each under certain terms. Two agreements with Vlocity UK Ltd., or Vlocity, as follows: (i) an agreement for the provision of Vlocity's telecom-CRM SAAS solution, based on Salesforce platform, including support for such services for the agreement term. This agreement is valid until November 2019, and may be terminated by the Company in April 2018; and (ii) an agreement for the development and customization for Salesforce's and Vlocity's CRM solution. This agreement will be valid until the project is completed, and may be terminated by the Company subject to prior written notice. |
Contingent Liabilities
Contingent Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of contingent liabilities [abstract] | |
Contingent Liabilities | Note 31 - Contingent Liabilities In the ordinary course of business, the Group is involved in various lawsuits against it. The costs that may result from these lawsuits are only accrued for when it is more likely than not that a liability, resulting from past events, will be incurred and the amount of that liability can be quantified or estimated within a reasonable range. The amount of the provisions recorded is based on a case-by-case assessment of the risk level, while events that occur in the course of the litigation may require a reassessment of this risk. The Group’s assessment of risk is based both on the advice of its legal counsels and on the Group's estimate of the probable settlements amounts that are expected to be incurred, if such settlements will be agreed by both parties. The provision recorded in the consolidated financial statements in respect of all lawsuits against the Group amounted to NIS 49 million (see also Note 14, regarding Provisions). Described hereunder are the outstanding lawsuits against the Group, classified into groups with similar characteristics. The amounts presented below are calculated based on the claims amounts as of the date of their submission to the Group. A. Consumer claims In the ordinary course of business, lawsuits have been filed against the Group by its customers. These are mostly purported class actions, particularly concerning allegations of illegal collection of funds, unlawful conduct or breach of license, or a breach of agreements with customers, causing monetary and non-monetary damage to them. As of December 31, 2017, the amounts claimed from the Group by its customers sum up to NIS 16.634 billion (including class actions as detailed below). In addition, there are other purported class actions against the Group, in which the amount claimed has not been quantified if the lawsuits are certified as class actions, and in respect of which the Group has exposure in addition to the above mentioned. In addition, there is another purported class action for approximately NIS 300 million, that has been filed against the Group and other defendants together without specifying the amount claimed from the Group, another purported class action against the Group and other defendants together, in which the amount claimed from the Group was estimated by the plaintiffs to be approximately NIS 3 million, and other purported class actions, that have been filed against the Group and other defendants together in which the amount claimed has not been quantified if the lawsuits are certified as class actions and in respect of which the Group has exposure in addition to the above mentioned. In December 2016, the District court partially approved a request to certify a lawsuit filed against the Company in July 2014 as a class action, relating to an allegation that the commercial messages the Company sent to its subscribers failed to meet the requirements of applicable law. In January 2017, the plaintiffs appealed the dismissal of the allegations which were not approved, to the Supreme Court. The total amount claimed was estimated by the plaintiffs to be approximately NIS 21 million. In January 2017, the District court partially approved a request to certify a lawsuit filed against the Group in February 2013 as a class action, relating to an allegation that the Group failed to disconnect customers within the time frame set in its license and applicable law. In March 2017, the plaintiffs appealed the dismissal of the allegations which were not approved, to the Supreme Court. The total amount claimed was estimated by the plaintiffs to be approximately NIS 72 million. In December 2017, the District Court approved a request to certify a lawsuit filed against the Company in May 2015 as a class action, relating to an allegation that the Company unlawfully charged some of its subscribers for call details reports. In February 2018, after the end of the reporting period, the Company appealed the approval of this allegation to the Supreme Court and the plaintiff appealed the dismissal of other allegations. The total amount claimed was not estimated by the plaintiffs. Of all the consumer purported class actions, in two purported class actions with aggregate amounts claimed estimated by the plaintiffs of approximately NIS 15.076 billion, settlement agreements were filed with the court and the proceedings are still pending. Of all the consumer purported class actions, there is a purported class action for approximately NIS 6 million, of which at this early stage it is not possible to assess the chances of success. After the end of the reporting period, two purported class actions against the Group, with aggregate amounts claimed estimated by the plaintiffs of approximately NIS 160 million and another purported class action against the Group for which the amount claimed from the Group was not specified, were concluded. After the end of the reporting period, five purported class actions have been filed against the Group: three purported class actions with aggregate amounts claimed estimated by the plaintiffs of approximately NIS 88 million, a purported class action for a sum estimated by the plaintiffs of tens of millions of NIS, and a purported class action against the Group and other defendants together, in which the amount claimed from the Group was estimated by the plaintiffs to be approximately NIS 4 million. At this early stage it is not possible to assess their chances of success. Described hereunder are the outstanding consumer class actions and purported class actions against the Group broken down by amount claimed if the lawsuit is certified as a class action, as of December 31, 2017: Claim amount Number of claims Total claims amount (NIS millions) Up to NIS 100 million 15 468 NIS 100-500 million 5 1,166 Above NIS 1 billion 1 15,000 Unquantified claims 12 - Against the Group and other defendants together without specifying the amount claimed from the Group 1 300 Against the Group and other defendants together, in which the amount claimed from the Group has been quantified 1 3 Unquantified claims against the Group and other defendants 5 - Described hereunder are purported class actions against the Group, in which the amount claimed was NIS 1 billion or more: 1. In March 2015, a purported class action in a total amount estimated by the plaintiffs to be approximately NIS 15 billion, if the lawsuit is certified as a class action, was filed against the Company, by plaintiffs alleging to be subscribers of the Company, in connection with allegations that the Company unlawfully violated the privacy of its subscribers. In February 2017, a settlement agreement was filed with the court and proceedings are still pending. 2. In December 2015, a purported class action was filed against the Company and two other defendants, alleging that the defendants unlawfully offer cellular pre-paid calling cards for very high prices by allegedly coordinating such prices among them. The total amount claimed from all defendants, including the Company, had the lawsuit been certified as a class action, was estimated by the plaintiffs to be approximately NIS 13 billion, out of which, based on the data specified in the lawsuit by the plaintiffs, an estimated amount of approximately NIS 6.7 billion was claimed from the Company. In September 2016, the purported class action was dismissed by the District Court. In November 2016, the plaintiffs filed an appeal regarding the District Court's decision and in January 2017, the Supreme Court dismissed their appeal. B. Employees, subcontractors, suppliers, authorities and others claims In the ordinary course of business, lawsuits have been filed against the Group by employees, subcontractors, suppliers, authorities and others which deal mostly with claims for breach of provisions of the law governing termination of employment and obligatory payments to employees, claims for breach of agreements, copyright and patent infringement and compulsory payments to authorities. As of December 31, 2017, the amounts that are claimed from the Group under these claims total approximately NIS 27 million. C. Liens and guarantees As part of issuance of the Series F through L debentures and the loan agreements which the Company entered into, the Company committed not to create liens on its assets, subject to certain exceptions. The Group has given bank guarantees as follows: a. To the Government of Israel (to guarantee performance of the Cellular License) - NIS 80 million. b. To the Government of Israel (to guarantee performance of the Licenses of the Group) - NIS 18 million. c. To suppliers, government institutions and others - NIS 159 million. |
Regulation and Legislation
Regulation and Legislation | 12 Months Ended |
Dec. 31, 2017 | |
Items for presentation of regulatory deferral accounts [abstract] | |
Regulation and Legislation | Note 32 - Regulation and Legislation A. Under an interim order issued by the Supreme Court in September 2010, the Company is unable to rely on the exemption from obtaining a building permit for the construction of radio access devices under cellular networks, other than to replace or relocate existing radio access devices in certain conditions, until regulations limiting such reliance are enacted or a different decision by the court is made. In 2017, a draft regulations setting procedures for making changes in existing radio access devices including replacement thereof and for the construction of a limited number of new radio access devices exempt from building permits, but requiring certain municipal procedures, was deliberated in the Israeli Parliament's Economic Committee. B. In 2012, the Israeli Minister of Communications published a policy document regarding landline wholesale services, which mainly provided for: (1) the creation of an effective wholesale telecommunications access market in Israel, as Bezeq and Hot will allow other operators that do not own an infrastructure, to use their infrastructure in order to provide services to end users; (2) the gradual annulment of the structural separation in the Bezeq and Hot groups and its replacement with an accounting separation and change of the supervision on Bezeq retail tariffs to maximum tariffs rather than the current setting of fixed tariffs, generally depending on the development of a wholesale market and the state of competition in the market, and with relation to television broadcasting services, if there is a reasonable possibility of providing a basic package of television services through the internet by providers without a national landline infrastructure. In 2015, the wholesale landline market was formally launched in Israel in regards to internet infrastructure services and use of certain physical infrastructure by operators who do not own such infrastructure. Although the wholesale market was formally applicable to Hot's infrastructure as well, Hot's infrastructure has been effectively excluded from the wholesale market up until recently, initially as the maximum tariffs for Hot's wholesale infrastructure service were not published by the MOC until June 2017 (and are higher than those set for Bezeq's service) and thereafter, due to disagreements with Hot as to the implementation of the service, which were recently resolved by the MOC. To the best of the Company's knowledge, there are no wholesale services supplied yet over Hot's infrastructure. The Ministry of Communications previously announced it will not interfere with the tariffs Hot has set for its wholesale telephony service. In June 2017, the Ministry of Communications published regulations setting Bezeq's resale telephony service to be provided by Bezeq as of July 2017, as a temporary 14 month alternative for wholesale landline telephony service. In addition, the Ministry of Communications resolved that Bezeq's obligation to offer wholesale telephony service, will be postponed until the lapse of said resale telephony service period. The resolution further notes that the Ministry of Communications will consider the resale telephony service as a permanent replacement of the telephony wholesale service. The tariffs set for the resale telephony service are substantially higher than those set for Bezeq's telephony wholesale service. The Ministry of Communications is holding a public hearing in relation to the aforementioned tariffs, to be applied retroactively after its conclusion. Further, in January 2016, the Ministry of Communications announced its intention to annul Bezeq and Hot's structural separation as part of its plan to ensure massive investment in fiber optics infrastructure in Israel. In December 2016 the Ministry of Communications informed Bezeq that it intends to hold a public hearing regarding a possible annulment of the corporate separation and thereafter the structural separation in the Bezeq group. An amendment to the Communications Law applies certain wholesale obligations on all landline operators, including the Company and requiring all landline operators to grant all other landline operators access to their passive infrastructure (except IBC's passive infrastructure), the terms of which (with the exclusion of Bezeq and Hot whose terms are set by the regulator) will be negotiated by the parties. C. The Ministry of Communications set certain requirements for the approval of network sharing, including the following principles: (1) sharing of passive elements of cell sites and active sharing of antennas among all cellular operators are encouraged; (2) active sharing of radio networks using shared equipment and frequencies will be allowed only between an operator with a partial 3G network deployment and an operator with a full 3G network deployment, whereas such sharing will not be allowed for two operators with full 3G network deployment; (3) sharing of transmission from cell sites among operators sharing frequencies is generally allowed; (4) approval of active sharing of radio networks using shared equipment and frequencies shall be for a limited period, only if there are at least three independent cellular networks in Israel, and is conditioned upon certain conditions, including: (i) the obligation to allow other operators to join on terms similar to the terms granted to the sharing operator with the smallest market share; (ii) the obligation to host a Mobile Virtual Network Operator without the other sharing operators' consent; (iii) the shared radio network must be operated through a joint entity held equally by the sharing operators, which entity will be required to obtain a license from the Ministry of Communications and will use the frequencies allocated to sharing operators; and (iv) the radio elements of the shared network will be held in equal parts by the sharing operators, and each of the sharing operators will have the right to use other sharing operators' passive infrastructure including following termination of the agreement. For details regarding the Company's network sharing and hosting agreements with Xfone and Golan, see Note 30, regarding Commitments. D. In June 2016, a committee for the regulation of broadcasting nominated by the Ministry of Communications published its final recommendations, including classification of the audio visual providers in the market into categories and determination of the regulation applied to each class as follows: under 10% revenues market share - self regulation; more than 10% revenues market share - narrow regulation involving a mandatory license; and more than 10% revenues market share for 3 consecutive years - full regulation, including mandatory investments and original Israeli content financing. The implementation of such recommendations is subject to the adoption thereof by legislation. E. In 2017, following the Ministry of Communication's requirement to unify the unified licenses held by each communications group into one unified license, the Company completed a reorganization of its subsidiaries, including Netvision, following which all the Company's fixed-line operation under the unified license are unified under the Company's wholly owned subsidiary Cellcom Fixed Line Communications, Limited Partnership. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of transactions between related parties [abstract] | |
Related Parties | Note 33 - Related Parties A. Balance sheet December 31, December 31, 2016 2017 NIS millions NIS millions Current assets 1 2 Current liabilities 1 2 Long-term liability - debentures (including current maturity)* 3 - * Debentures balance held by related parties, which includes debentures held for the benefit of the public, through, among others, provident funds, mutual funds and pension funds, as of December 31, 2017 and 2016, is NIS 19 million par value linked to the CPI and NIS 25 million par value linked to the CPI, respectively. B. Transactions with related and interested parties executed in the ordinary course of business at regular commercial terms: Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Income: Revenues 16 17 13 Expenses: Cost of revenues and other 25 16 16 In the ordinary course of business, from time to time, the Group purchases, leases, sells and cooperates in the sale of goods and services or otherwise engages in transactions with entities that are members of the DIC/IDB group or other interested or related parties. The Group has examined said transactions and believes them to be on commercial terms comparable to those that the Group could obtain from/ provide to unaffiliated parties. C. Key management personnel compensation In addition to their salaries, the Group also provides non-cash benefits to executive officers (such as a car, medical insurance, etc.), and contributes to a post-employment defined benefit plan on their behalf. The Group has undertaken to indemnify the Group's directors and officers, as well as certain other employees for certain events listed in the indemnifications letters given to them. The aggregate amount payable to all directors and officers and other employees who may have been or will be given such indemnification letters is limited to the amounts the Group receives from the Group’s insurance policy plus 30% of the Group’s shareholders’ equity as of December 31, 2001 or NIS 486 million, adjusted for changes in the Israeli CPI. Executive officers also participate in the Group’s share option program (see Note 20, regarding Share-Based Payments). Key management personnel compensation is comprised of: Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Short-term employee benefits 4 4 6 Share-based payments 1 1 1 5 5 7 D. Agreements with DIC In October 2006, the Company entered into an agreement with DIC pursuant to which DIC provides the Company with advisory services in the areas of management, finance, business and accountancy. In 2015, the agreement was amended so that the annual consideration for DIC management services would be equal to the director's fees (both the annual fee and the meeting attendance fee) paid to the Company's external and independent director (which is in the amount of NIS 134,180 per year and NIS 4,035 per meeting, adjusted for changes in the Israeli CPI for October 2015), for each director that DIC nominates or proposes to the Company's Board of Directors, but no more than five directors (replacing the fixed consideration of NIS 2 million (linked to the Israeli Consumer Price Index for June 2006) plus VAT per year, paid to DIC until December 31, 2014). This agreement is for a term of one year and is automatically renewed for one-year terms (however the extension thereof after October 2018 requires the approvals of the parties organs according to the Israeli Companies Law), unless either party provides 60 days prior notice to the contrary. As of the balance sheet date, no directors' services are included in the agreement and no management fees are paid thereunder. |
Significant Accounting Polici40
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
Basis of consolidation | A. Basis of consolidation 1. Subsidiaries Subsidiaries are entities controlled directly or indirectly by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control is lost. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. 2. Non-controlling interests Non-controlling interests comprise the equity of a subsidiary that cannot be attributed, directly or indirectly, to the parent company. Profit or loss and each component of other comprehensive income are attributable to the owners of the parent company and to non-controlling interests. Issuance of put option to non-controlling interests A put option issued by the Group to non-controlling interests that is settled in cash or another financial instrument is recognized as a liability at the present value of the exercise price. In subsequent periods, changes in the value of the liability in respect of put options are recognized in profit or loss according to the effective interest method. The Group’s share of a subsidiary’s profits includes the share of the non-controlling interests to which the Group issued a put option. 3. Loss of control Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. 4. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, were eliminated in preparing the consolidated financial statements. |
Foreign currency transactions | B. Foreign currency transactions Transactions in foreign currencies are translated to NIS at the prevailing foreign exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies as of the reporting date are translated to NIS at the prevailing foreign exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms of historical cost, are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to NIS at the exchange rate at the date that the fair value was determined. Foreign exchange differences arising on translation are recognized in profit and loss. |
Financial instruments | C. Financial instruments The Group early adopted IFRS 9 (2009), Financial Instruments, which included guidelines regarding the classification and measurement of financial assets, without early adopting all the other rules of the final version of IFRS 9 (2014), Financial Instruments, as mentioned in section R below. According to IFRS 9 (2009), an entity shall classify and measure its financial assets at amortized cost or at fair value, considering its business model for managing financial assets and with respect to the contractual cash flows characteristics of these financial assets. (1) Non-derivative financial assets Initial recognition of financial assets The Group initially recognizes receivables and deposits on the date that they are created. All other financial assets acquired in a regular way purchase, including assets designated at fair value through profit or loss, are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument, meaning on the date the Group undertook to purchase or sell the asset. Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes transaction costs that are directly attributable to the asset acquisition or creation. The Group subsequently measures financial assets at either fair value or amortized cost, as described below: Financial assets measured at amortized cost A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment loss, if: ● the asset is held within a business model with an objective to hold assets in order to collect contractual cash flows; ● the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest; and ● the Group has not elected to designate them at fair value through profit or loss in order to reduce or eliminate an accounting mismatch. Financial assets measured at amortized cost include cash and cash equivalents and trade and other receivables. Cash and cash equivalents comprise cash balances available for immediate use and call deposits. Cash equivalents comprise short-term highly liquid investments (with original maturities of three months or less) that are readily convertible into known amounts of cash and are exposed to insignificant risks of change in value. Financial assets measured at fair value Financial assets other than those classified as measured at amortized cost are subsequently measured at fair value with all changes in fair value recognized in profit or loss. Derecognition of financial assets Financial assets are derecognized when the contractual rights of the Group to the cash flows from the asset expire, or the Group transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Regular way sales of financial assets are recognized on the trade date, meaning on the date the Group undertook to sell the asset. As to the Group’s policy on impairment see Paragraph H. Offset of financial instruments - See section 2 below. (2) Non-derivative financial liabilities The Group initially recognizes debt securities issued on the date they originated. All other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. Financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. The Group subsequently measures financial liabilities at amortized cost using the effective interest method. Non-derivative financial liabilities include debentures, loans from financial institutions and trade and other payables. Financial liabilities are derecognized when the obligation of the Group, as specified in the agreement, expires or when it is discharged or cancelled. Offset of financial instruments Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when, the Group currently has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Change in terms of debt instruments An exchange of debt instruments having substantially different terms, between an existing borrower and lender is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability at fair value. In such cases the entire difference between the amortized cost of the original financial liability and the fair value of the new financial liability is recognized in profit or loss as financing income or expense. The terms are substantially different if the discounted present value of the cash flows according to the new terms, including any commissions paid, less any commissions received and discounted using the original effective interest rate, is different by at least ten percent from the discounted present value of the remaining cash flows of the original financial liability. In addition to the aforesaid quantitative criterion, the Group examines, inter alia, whether there have also been changes in various economic parameters inherent in the exchanged debt instruments, therefore as a rule, exchanges of CPI-linked debt instruments with unlinked instruments are considered exchanges with substantially different terms even if they do not meet the aforementioned quantitative criterion. Expansion of debentures for cash When expanding debentures for cash, debentures are initially measured at their fair value, which is the proceeds received from the issuance (since this is the best market which the issuer has an immediate access to), with no effect on profit or loss in respect of the difference between the proceeds from issuance and the market value of the tradable debentures close to their issuance. (3) Derivative financial instruments, including hedge accounting The Group holds derivative financial instruments to hedge its foreign currency and CPI risks exposures. Derivatives are initially recognized at fair value; transaction costs that can be attributed are recognized to profit and loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value. Changes in fair value are accounted for as follows: Cash flow hedges Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized through other comprehensive income directly in a hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in the fair value are recognized in profit and loss when the hedged item is sold or leaves the Group's possession, and is presented under the same line item in the consolidated statements of income as the hedged item. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in comprehensive income and presented in the hedging reserve in equity remains there until the forecasted transaction occurs or is no longer expected to occur. The amount recognized in comprehensive income is transferred to profit and loss in the same period that the hedged item affects profit and loss. Economic Hedges Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies or linked to the CPI. Changes in the fair value of such derivatives are recognized in profit and loss, as financing income or expenses . (4) Assets and liabilities linked to the Israeli CPI that are not measured at fair value The carrying amount of CPI linked financial assets and liabilities are revalued in each period according to the actual rate of change in the CPI. |
Property, plant and equipment | D. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes 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 an estimate of the costs of dismantling and removing the items and restoring the site on which they are located (when the Group has an obligation to dismantle and remove the asset or to restore the site). Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. Communications networks consist of several significant components with different useful lives. Each component is treated separately and is depreciated over its estimated useful life. Changes in the obligation to dismantle and remove the items and to restore the site on which they are located, other than changes deriving from the passing of time, are added or deducted from the cost of the asset 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 in profit or loss. Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the net disposal net proceeds with the carrying amount of property, plant and equipment and are recognized net within "other expenses, net" in profit or loss. The cost of replacing part of a fixed asset item is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of day-to-day servicing are recognized in profit or loss as incurred. Depreciation is a systematic allocation of the depreciable amount of an asset over its estimated useful life. An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to operate in the manner intended by management. Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The annual depreciation rates for the current and comparative periods are as follows: % Communications network 5-25 Control and testing equipment 15-25 Vehicles 15-33 Computers and hardware 15-33 Furniture and landline communications equipment 6-33 Leasehold improvements are depreciated over the shorter of their estimated useful lives or the expected lease terms. Depreciation methods, useful lives and residual values are reviewed at least at the end of each reporting year and adjusted if appropriate. |
Rights of use of communications lines | E. Rights of use of communications lines The Group implements IFRIC 4, "Determining Whether an Arrangement Contains a Lease", which defines criteria for determining at the beginning of the arrangement, whether the right to use asset constitutes a lease arrangement. According to IFRIC 4, as mentioned above, acquisition transactions of irrevocable rights of use of underwater cables capacity are treated as service receipt transactions. The amount which was paid for the rights of use of communications lines is recognized as a prepaid expense and is amortized on a straight-line basis over the period stated in the agreements, including the option period, which constitutes the estimated useful life of those capacities. |
Intangible assets and others | F. Intangible assets and others Goodwill that arises upon the acquisition of subsidiaries is presented as part of intangible assets. In subsequent periods goodwill is measured at cost less accumulated impairment losses. Direct development costs associated with internally developed information system software, and payroll costs for employees devoting time to the software projects, incurred during the application development stage, are capitalized and recognized as an intangible asset. In subsequent periods, capitalized development expenditures are measured at cost less accumulated amortization, from the date which the asset is ready for use, and accumulated impairment losses. Incremental customer acquisition costs are capitalized, from January 1, 2017, following the adoption IFRS 15, when it is expected that the Group will recover these costs. Costs of obtaining a contract that would have been incurred regardless of the contract being obtained are recognized as an expense when incurred. Costs incurred to fulfill a contract with a customer are recognized as an asset when they: relate directly to a contract the Group can specifically identify; they generate or enhance resources of the Group that will be used in satisfying performance obligations in the future; and they are expected to be recovered. In any other case the costs are recognized as an expense when incurred. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as intangible assets. In subsequent periods, customer acquisition costs are measured at cost less accumulated amortization according to the specific anticipated contract period and accumulated impairment losses. Customer relationships that are formed upon the acquisition of subsidiaries have a finite useful life and are amortized according to the expected benefits rate from these assets in each period. Other intangible assets and others - licenses and frequencies, computer software and information systems costs are measured at cost less accumulated amortization and accumulated impairment losses and including direct costs necessary to prepare the asset for its intended use. In subsequent periods, these intangible assets are measured at cost less accumulated amortization. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred. Amortization is a systematic allocation of the amortizable amount of an intangible asset over its useful life. Amortization is calculated using the straight-line method, except for customer relationships as aforementioned (and up to 2019). The annual amortization rates for the current and comparative periods are as follows: % Licenses and Frequencies 4-7 (mainly 4) Information systems 25 Software 15-25 Customer acquisition costs 33-50 Goodwill has an indefinite useful life and is not systematically amortized but tested for impairment at least once a year. Amortization methods, useful lives and residual values are reviewed at least each year-end and adjusted if appropriate. The Group examines the useful life of an intangible asset that is not periodically amortized at least once a year in order to determine whether events and circumstances continue to support the decision that the intangible asset has an indefinite useful life. |
Inventory | G. Inventory Inventory of cellular phone equipment, accessories and spare-parts are measured at the lower of cost and net realizable value. Cost is determined by the moving average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The Group periodically evaluates the condition and age of inventories and makes provisions for impairment of inventories accordingly. |
Impairment | H. Impairment a. Non-derivative financial assets A financial asset not carried at fair value through profit or loss is tested for impairment when objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. An impairment loss in respect of a financial asset measured at amortized cost, is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate of that asset. All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, the reversal is recognized in profit or loss. b. Property, plant and equipment and intangible assets and others The carrying amounts of the Group’s property, plant and equipment and finite lived intangible assets are reviewed at each reporting date, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, then the asset’s recoverable amount is estimated. In each reporting period the Group examines whether the carrying amount of the capitalized customer acquisition costs exceeds the balance of the consideration which the entity expects to receive in exchange for the services to which the asset relates, less the costs directly attributable to the provision of these services that were not recognized as expenses, and if necessary an impairment loss is recognized in profit or loss. Once a year and on the same date, or more frequently if there are indications of impairment, the Group estimates the recoverable amount of each cash generating unit that contains goodwill, or intangible assets that have indefinite useful lives. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit, for which the estimated future cash flows from the asset or cash-generating unit were not adjusted. Cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The Group monitors goodwill at operating segments level. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis. |
Employee benefits | I. Employee benefits a. Post-employment benefits Part of the Group's liability for post-employment benefits is covered by a defined contribution plan financed by deposits with insurance companies or with funds managed by a trustee. A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. The Group's obligation of contribution to defined contribution pension plan is recognized as an expense in profit and loss in the periods during which services are rendered by employees. In addition, the Group has a net obligation in respect of defined benefit plan. A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. This benefit is presented at present value deducting the fair value of any plan assets and is determined using actuarial assessment techniques which involves, among others, determining estimates regarding the capitalization rates, anticipated return on the assets, the rate of the increase in salary and the rates of employee turnover. There is significant uncertainty in respect to these estimates because of the long-term programs. For further information, see Note 18. The Group recognizes immediately, directly in retained earnings through other comprehensive income, all re-measurements gains and losses arising from defined benefit plans. Interest costs and interest income on plan assets that were recognized in profit or loss are presented under financing income and expenses, respectively. b. Termination benefits Termination benefits are recognized as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary retirement. Termination benefits for voluntary retirements are recognized as an expense if the Group has made an offer of voluntary retirement, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. c. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The employee benefits are classified, for measurement purposes, as short-term benefits or as other long-term benefits depending on when the Group expects the benefits to be wholly settled. a. Share based payments The grant date fair value of options granted to employees is recognized as salaries and related expenses, with a corresponding increase in retained earnings, over the period that the employees become unconditionally entitled to the options. Fair value is measured using the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, to consider exercise restrictions and behavioral considerations. |
Provisions | J. Provisions A provision is recognized if the Group has a present legal or constructive obligation, as a result of a past event, that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at management's best estimate of the expenditure required to settle the obligation at the reporting date. A provision for claims is recognized if the Group has a present legal or constructive obligation, as a result of a past event and it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of obligation can be estimated reliably. |
Revenue | K. Revenue The accounting policy that was applied in periods prior to January 1, 2017 Revenues derived from services, including cellular services, internet services, international calls services, fixed local calls, interconnect, roaming revenues, content and value added services, transmission services and television over the internet services, are recognized when the services are provided, in proportion to the stage of completion of the transaction and all other revenue recognition criteria are met. The sale of end-user equipment is generally adjacent to the sale of services. Usually, the sale of equipment to the customer is executed with no contractual obligation of the client to consume services in a minimal amount for a predefined period. As a result, the Group refers to the sale transaction as a separate transaction and recognizes revenue from sale of equipment upon delivery of the equipment to the customer. Revenue from services is recognized and recorded when the services are provided. In case the customer is obligated towards the Group to consume services in a minimal amount for a predefined period, the contract is characterized as a multiple element arrangement and thus, revenue from sale of equipment is recorded in an amount not higher than the fair value of the said equipment, which is not contingent upon delivery of additional components (such as services) and is recognized upon delivery to the customer and when the criteria for revenue recognition are met. The Group determines the fair value of the individual elements based on prices at which the deliverable is regularly sold on a standalone basis, after considering discounts where appropriate. The Group also offers other services, such as extended equipment warranty plans, which are provided for a monthly fee and are either sold separately or bundled and included in packaged rate plans. Revenues from those services are recognized over the service period. Revenue from the sale of goods in the ordinary course of business is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenues from long-term credit arrangements are recognized on the basis of the present value of future cash flows, discounted according to market interest rates at the time of the transaction. The difference between the original credit and its present value is recorded as interest income over the credit period. Prepaid wireless airtime sold to customers is recorded as deferred revenue prior to the commencement of services and is recognized when the airtime is used or expires. When the Group acts as an agent or an intermediary without bearing the risks and rewards resulting from the transaction, revenues are presented on a net basis (as a profit or a commission). However, when the Group acts as a principal supplier and bears the risks and rewards resulting from the transaction, revenues are presented on a gross basis, distinguishing the revenue from the related expenses. The accounting policy applied as from January 1, 2017 following the adoption of IFRS 15 The Group recognizes revenue when the control over the promised goods or services is transferred to the customer. The revenue is measured according to the amount of the consideration to which the Group expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for the benefit of third parties. Identifying the contract The Group accounts for a contract with a customer only when the following conditions are met: (a) The parties to the contract have approved the contract (in writing, orally or according to other customary business practices) and they are committed to satisfying the obligations attributable to them; (b) The Group can identify the rights of each party in relation to the goods or services that will be transferred; (c) The Group can identify the payment terms for the goods or services that will be transferred; (d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to change as a result of the contract); and (e) It is probable that the consideration, to which the Group is entitled to in exchange for the goods or services transferred to the customer, will be collected. For the purpose of paragraph (e) the Group examines, inter alia, the percentage of the advance payments received and the spread of the contractual payments, past experience with the customer and the status and existence of sufficient collateral. If a contract with a customer does not meet all of the above criteria, consideration received from the customer is recognized as a liability until the criteria are met or when one of the following events occurs: the Group has no remaining obligations to transfer goods or services to the customer and any consideration promised by the customer has been received and cannot be returned; or the contract has been terminated and the consideration received from the customer cannot be refunded. Identifying performance obligations On the contract’s inception date the Group assesses the goods or services promised in the contract with the customer and identifies as a performance obligation any promise to transfer to the customer one of the following: (a) Goods or services (or a bundle of goods or services) that are distinct; or (b) A series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. The Group identifies goods or services promised to the customer as being distinct when the customer can benefit from the goods or services on their own or in conjunction with other readily available resources and the Group’s promise to transfer the goods or services to the customer is separately identifiable from other promises in the contract. In order to examine whether a promise to transfer goods or services is separately identifiable, the Group examines whether it is providing a significant service of integrating the goods or services with other goods or services promised in the contract into one integrated outcome that is the purpose of the contract. Option to purchase additional goods or services An option that grants the customer the right to purchase additional goods or services constitutes a separate performance obligation in the contract only if the option grants the customer a material right it would not have received without the original contract. Determining the transaction price The transaction price is the amount of the consideration to which the Group expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for third parties. The Group takes into account the effects of determining the transaction price and the existence of a significant financing component. Variable consideration The transaction price includes fixed amounts and amounts that may change as a result of discounts, refunds, credits, price concessions, incentives, performance bonuses, penalties, claims and disputes and contract modifications that the consideration in their respect has not yet been agreed by the parties. The Group includes variable consideration, or part of it, in the transaction price only when it is highly probable that its inclusion will not result in a significant revenue reversal in the future when the uncertainty has been subsequently resolved. At the end of each reporting period and if necessary, the Group revises the amount of the variable consideration included in the transaction price. Allocating the transaction price to performance obligations In a multiple performance obligations transaction, the transaction price is allocated between the components of the transaction according to the ratio of their stand-alone selling prices. Existence of a significant financing component In order to measure the transaction price, the Group adjusts the amount of the promised consideration in respect of the effects of the time on the value of money if the timing of the payments agreed between the parties provides to the customer or the Group a significant financing benefit. In these cases, the contract contains a significant financing component. When assessing whether a contract contains a significant financing component, the Group examines, inter alia, the expected length of time between the date the Group transfers the promised goods or services to the customer and the date the customer pays for these goods or services, as well as the difference, if any, between the amount of the consideration promised and the cash selling price of the promised goods or services. When the contract contains a significant financing component, the Group recognizes the amount of the consideration using the discount rate that would be reflected in a separate financing transaction between it and the customer on the contract’s inception date. The financing component is recognized as interest income or expenses over the period, which are calculated according to the effective interest method. In cases where the difference between the time of receiving payment and the time of transferring the goods or services to the customer is one year or less, the Group applies the practical exemption included in the standard and does not separate a significant financing component. Satisfaction of performance obligations Revenue is recognized when the Group satisfies a performance obligation by transferring to the customer control over promised goods or services. Warranty In order to assess whether a warranty provides a distinct service to the customer and is therefore a distinct performance obligation, the Group examines, inter alia, the following characteristics: does the customer have the option to purchase the warranty separately; is the warranty required by law; the period of the warranty and the nature of the actions the Group promises to execute. Principal or agent When another party is involved in providing goods or services to the customer, the Group examines whether the nature of its promise is a performance obligation to provide the defined goods or services themselves, which means the Group is a principal provider and therefore recognizes revenue in the gross amount of the consideration, or obligation to arrange that another party provides the goods or services which means the Group is an agent and therefore recognizes revenue in the amount of the net commission. The Group is a principal provider when it controls the promised goods or services before their transfer to the customer. Indicators that the Group controls the goods or services before their transfer to the customer include, inter alia, as follows: the Group is the primary obligor for fulfilling the promises in the contract; the Group has inventory risk before the goods or services are transferred to the customer; and the Group has discretion in setting the prices of the goods or services. |
Cost of revenues | L. Cost of revenues Cost of revenues mainly include equipment purchase costs, salaries and related expenses, value added services costs, royalties expenses, ongoing license fees, interconnection and roaming expenses, cell site leasing costs, depreciation and amortization expenses and maintenance expenses, directly related to services rendered. The Group recognizes discounts from suppliers as a decrease in Cost of Sales. Therefore, discounts in respect of purchases that are added to the closing inventory balance are treated as inventory and the remainder as a decrease in Cost of Sales. |
Advertising expenses | M. Advertising expenses Advertising costs are expensed as incurred. |
Lease payments | N. Lease payments Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. |
Financing income and expenses | O. Financing income and expenses Financing income is comprised of interest income on installment sale transactions and funds invested, changes in the fair value of financial instruments measured at fair value through profit or loss and income from exchange rate differences. Interest income is recognized in the consolidated statements of income as it accrues using the effective interest method. Financing expenses are comprised of interest expenses, linkage expenses, discount amortization expenses, changes in fair value of financial instruments measured at fair value through profit or loss, losses from exchange rate differences and unwinding of the discount on provisions. All borrowing costs are recognized in profit and loss using the effective interest method. Changes in the fair value of financial assets at fair value through profit or loss also include income from dividends and interest. Gains and losses from exchange rate differences and changes in the fair value of financial instruments measured at fair value through profit or loss, are presented on a net basis, as financing income or financing expenses. In the statements of cash flows, payments for derivative contracts which are used for economic hedges of financial liabilities arising from financing activities, are presented as part of cash flows from financing activities. Payments for derivative contracts which are used for economic hedges of handset and network related acquisitions and international roaming services activity, and changes in the fair value of those derivatives, are presented as part of cash flows from operating activities. Interest received and dividends received are presented as part of cash flows from investing activities. Interest paid and dividends paid are presented as part of cash flows from financing activities. |
Taxes on income | P. Taxes on income Taxes on income comprise current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or are recognized directly in equity or in other comprehensive income to the extent they relate to items recognized directly in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and there is intent to settle current tax liabilities and assets on a net basis or the tax assets and liabilities will be realized simultaneously. Deferred tax is recognized for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or their current tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. A provision for uncertain tax positions, including additional tax and interest expenses, is recognized when it is more probable than not that the Group will have to use its economic resources to pay the obligation. |
Earnings per share | Q. Earnings per share The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees. |
New standards not yet adopted | R. New standards not yet adopted IFRS 9 (2014), Financial Instruments ("final version of IFRS 9") IFRS 9 (2014) is a final version of the standard, which includes revised guidance on the classification and measurement of financial instruments, and a new model for measuring impairment of financial assets. This guidance has been added to the chapter dealing with general hedge accounting requirements issued in 2013. Classification and measurement of financial assets In accordance with the final version of IFRS 9, there are three principal categories for measuring financial assets: amortized cost, fair value through profit and loss and fair value through other comprehensive income. The basis of classification for debt instruments is the entity’s business model for managing financial assets and the contractual cash flow characteristics of the financial asset. Investments in equity instruments will be measured at fair value through profit and loss (unless the entity elected at initial recognition to present fair value changes in other comprehensive income). As described in paragraph C(1) in this note, the Group has adopted in an early adoption from 2012 the classification and measurement rules of IFRS 9 (2009), with respect of financial assets, without adopting in an early adoption all of the other rules of the final version of IFRS 9, described below: Classification and measurement of financial liabilities There is no change in the classification and measurement principles of financial liabilities compared to those prescribed in IAS 39. Nevertheless, IFRS 9 (2014) requires that changes in fair value of financial liabilities designated at fair value through profit or loss that are attributable to changes in its credit risk, should usually be recognized in other comprehensive income. Hedge accounting - general In accordance with the final version of IFRS 9, additional hedging strategies that are used for risk management will qualify for hedge accounting. The final version of IFRS 9 replaces the present 80%-125% test for determining hedge effectiveness, with the requirement that there be an economic relationship between the hedged item and the hedging instrument, with no quantitative threshold. In addition, the final version of IFRS 9 introduces new models that are alternatives to hedge accounting as regarding credit exposures and certain contracts outside the scope of the final version of IFRS 9 and sets new principles for accounting for hedging instruments. In addition, the final version of IFRS 9 provides new disclosure requirements. Impairment of financial assets The final version of IFRS 9 presents a new ‘expected credit loss’ model for calculating impairment. For most financial assets, the new model presents a dual measurement approach for impairment: if the credit risk of a financial asset has not increased significantly since its initial recognition, an impairment provision will be recorded in the amount of the expected credit losses that result from default events that are possible within the twelve months after the reporting date. If the credit risk has increased significantly, in most cases the impairment provision will increase and be recorded at the level of the lifetime expected credit losses of the financial asset. The final version of IFRS 9 is effective for annual periods beginning on or after January 1, 2018 with early adoption being permitted. It will be applied retrospectively with some exemptions. The Group is planning to adopt the standard from January 1, 2018 without amending the comparative data but while adjusting balances of retained earnings and other components of equity as at January 1, 2018 (the initial date of application). Material changes and expected effects of adopting the standard: 1. The new standard includes a new ‘expected credit loss’ model for financial debt assets not measured at fair value through profit or loss. The new model presents a dual measurement approach for impairment: if the credit risk of a financial asset has not increased significantly since its initial recognition, an impairment provision will be recorded in the amount of the expected credit losses that result from default events that are possible within the twelve months after the reporting date. If the credit risk has increased significantly, in most cases the impairment provision will increase and be recorded at the level of lifetime expected credit losses of the financial asset. 2. According to the new standard, in cases that a change in terms or exchange of financial liabilities is immaterial and does not lead to derecognition, the new cash flows should be discounted at the original effective interest rate, with the difference between the present value of the financial liability having the new terms and the present value of the original financial liability being recognized in profit or loss. As a result of applying the new standard, the carrying amount of debentures the terms of which were changed and for which a new effective interest rate was calculated at the time of the change in terms according to IAS 39, will be recalculated from the date of the change in terms using the original effective interest rate. As a result, retained earnings balance is expected to decrease by NIS 35-40 million. IFRS 16, Leases The standard replaces International Accounting Standard 17 - Leases (IAS 17) and its related interpretations. The standard's instructions annul the existing requirement from lessees to classify leases as operating or finance leases. Instead of this, for lessees, the new standard presents a unified model for the accounting treatment of all leases according to which the lessee has to recognize an asset and liability in respect of the lease in its financial statements. Nonetheless, IFRS 16 includes two exceptions to the general model whereby a lessee may elect not to apply the requirements for recognizing a right-of-use asset and a liability with respect to short-term leases of up to one year and/or leases where the underlying asset has a low value. In addition, IFRS 16 permits the lessee to apply the definition of the term lease according to one of the following two alternatives consistently for all leases: retrospective application for all the lease agreements, which means reassessing the existence of a lease for each separate contract, or alternatively to apply a practical expedient that permits continuing with the assessment made regarding existence of a lease based on the guidance in IAS 17, Leases, and IFRIC 4, Determining whether an Arrangement contains a Lease, with respect to leases entered into before the date of initial application. Furthermore, the standard determines new and expanded disclosure requirements from those required at present. The standard will become effective for annual periods as of January 1, 2019, with the possibility of early adoption, so long as the company has also early adopted IFRS 15 - Revenue from contracts with customers. The standard includes a number of alternatives for the implementation of transitional provisions, so that companies can choose one of the following alternatives at the implementation date: full retrospective implementation or implementation from the effective date (with the possibility of certain practical expedients) while adjusting the balance of retained earnings at that date. The Group is examining the effects of adopting the standard on the financial statements but at this time is unable to reliably estimate the quantitative effect on its financial statements. The Group has a significant scope of operating leases agreements (for additional details see Note 29, regarding Operating Leases) and therefore, the effect on the Group’s financial statements is expected to be material. IFRIC 22, Foreign Currency Transactions and Advance Consideration The interpretation provides that the transaction date for the purpose of determining the exchange rate for recording a foreign currency transaction that includes advance consideration is the date of initial recognition of the non-monetary asset/liability from the prepayment. If there are multiple payments or receipts in advance, a transaction date is established for each payment or receipt. IFRIC 22 is applicable for annual periods beginning on or after January 1, 2018 with the possibility of early adoption. IFRIC 22 includes various alternative transitional provisions, so that companies can choose between one of the following alternatives at initial application: retrospective application; prospective application from the first reporting period the entity initially applied IFRIC 22; or prospective application from the first reporting period presented in the comparative data in the financial statements for the period the entity initially applied IFRIC 22. The Group has examined the effect of applying IFRIC 22 on the financial statements and intends to choose the transitional provision alternative of prospective application as from January 1, 2018. In the past, the Group had decided that the “date of transaction” used to determine the exchange rate for recording a foreign currency transaction would be the date on which the Group initially recognizes a non-monetary asset/liability in respect of the advance consideration. As a result, the effect on the Group’s financial statements is not expected to be material. IFRIC 23, Uncertainty Over Income Tax Treatments IFRIC 23 clarifies how to apply the recognition and measurement requirements of IAS 12 for uncertainties in income taxes. According to IFRIC 23, when determining the taxable profit (loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments, the entity should assess whether it is probable that the tax authority will accept its tax position. Insofar as it is probable that the tax authority will accept the entity’s tax position, the entity will recognize the tax effects on the financial statements according to that tax position. On the other hand, if it is not probable that the tax authority will accept the entity’s tax position, the entity is required to reflect the uncertainty in its accounts by using one of the following methods: the most likely outcome or the expected value. IFRIC 23 clarifies that when the entity examines whether or not it is probable that the tax authority will accept the entity’s position, it is assumed that the tax authority with the right to examine any amounts reported to it will examine those amounts and that it has full knowledge of all relevant information when doing so. Furthermore, according to IFRIC 23 an entity has to consider changes in circumstances and new information that may change its assessment. IFRIC 23 also emphasizes the need to provide disclosures of the judgments and assumptions made by the entity regarding uncertain tax positions. IFRIC 23 is effective for annual reporting periods beginning on or after January 1, 2019, with the possibility of early adoption. The interpretation includes two alternatives for applying the transitional provisions, so that companies can choose between retrospective application or prospective application as from the first reporting period in which the entity initially applied the interpretation. According to the Group's estimation, the effect of adopting IFRIC 23 on the financial statements will be immaterial. |
Basis of Preparation of the F41
Basis of Preparation of the Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of basis of preparation [Abstract] | |
Schedule of Changes in Consolidated Financial Statements in Current and Future years | 2017 2018 2019 2020 2021 Subsequently NIS millions Decrease (Increase) in depreciation expenses 19 33 17 5 6 (80 ) |
Schedule of Effect on Consolidated Statements of Financial Position | The effect on the consolidated statements of financial position as at December 31, 2017: According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Intangible assets and others, net 1,167 93 1,260 Current tax assets, net 22 (22 ) - Retained earnings 1,365 71 1,436 |
Schedule of Effect on Consolidated Statements of Income | The effect on the consolidated statements of income for the year ended December 31, 2017: According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Revenues 3,871 - 3,871 Cost of revenues (2,680 ) - (2,680 ) Gross profit 1,191 - 1,191 Selling and marketing expenses (572 ) 93 (479 ) General and administrative expenses (426 ) - (426 ) Other income, net 11 - 11 Operating profit 204 93 297 Financing income 52 - 52 Financing expenses (196 ) - (196 ) Financing expenses, net (144 ) - (144 ) Profit before taxes on income 60 93 153 Taxes on income (18 ) (22 ) (40 ) Profit for the period 42 71 113 Attributable to: Owners of the Company 41 71 112 Non-controlling interests 1 - 1 Profit for the period 42 71 113 Earnings per share Basic earnings per share (in NIS) 0.40 0.71 1.11 Diluted earnings per share (in NIS) 0.40 0.70 1.10 |
Schedule of Effect on Consolidated Statements of Cash Flow | The effect on the consolidated statements of cash flow for the year ended December 31, 2017: Year ended December 31, 2017 According to the previous policy Effect of the standard* According to IFRS 15 NIS millions Net cash from operating activities 667 107 774 Net cash used in investing activities (537 ) (107 ) (644 ) * According to the standard, incremental costs of obtaining a contract with a customer are recognized as an asset when it is probable that the Group will recover those costs. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and amortized to profit or loss in accordance with the expected service period from these contracts. |
Schedule of Exchange Rates and Known Consumer Price Indexes | Exchange rates and known Consumer Price Indexes are as follows: Exchange rates of US$ Consumer Price Index (points)* As of December 31, 2017 3.467 221.35 As of December 31, 2016 3.845 220.68 As of December 31, 2015 3.902 221.35 Change during the year: Year ended December 31, 2017 (9.83 )% 0.30 % Year ended December 31, 2016 (1.46 )% (0.30 )% Year ended December 31, 2015 0.33 % (0.90 )% *According to 1993 base index. |
Significant Accounting Polici42
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of significant accounting policies [Abstract] | |
Schedule of Estimated Useful Lives of Fixed Assets | Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The annual depreciation rates for the current and comparative periods are as follows: % Communications network 5-25 Control and testing equipment 15-25 Vehicles 15-33 Computers and hardware 15-33 Furniture and landline communications equipment 6-33 |
Schedule of Amortizable Useful Lives for Intangible Assets | The annual amortization rates for the current and comparative periods are as follows: % Licenses and Frequencies 4-7 (mainly 4) Information systems 25 Software 15-25 Customer acquisition costs 33-50 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of operating segments [abstract] | |
Schedule of Operating Segments | The accounting policies of the reportable segments are the same as described in the annual financial statements in Note 3, regarding Significant Accounting Policies. Year ended December 31, 2017* NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 2,685 1,186 - 3,871 Inter-segment revenues 14 162 (176 ) - Segment EBITDA** 595 258 853 Depreciation and amortization (555 ) Taxes on income (40 ) Financing income 52 Financing expenses (196 ) Other income 1 Share based payments (2 ) Profit for the year 113 Year ended December 31, 2016 NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 2,981 1,046 - 4,027 Inter-segment revenues 17 183 (200 ) - Segment EBITDA** 625 233 858 Depreciation and amortization (534 ) Taxes on income (10 ) Financing income 46 Financing expenses (196 ) Other expenses (8 ) Share based payments (6 ) Profit for the year 150 Year ended December 31, 2015 NIS millions Cellular Fixed-line Reconciliation for consolidation Consolidated Reconciliation of subtotal Segment EBITDA to profit for the year External revenues 3,185 995 - 4,180 Inter-segment revenues 18 186 (204 ) - Segment EBITDA** 601 271 872 Depreciation and amortization (562 ) Taxes on income (36 ) Financing income 55 Financing expenses (232 ) Other income 3 Share based payments (3 ) Profit for the year 97 * See Note 2F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers ** Segment EBITDA as reviewed by the Group's CODM, represents earnings before interest (financing expenses, net), taxes, other income (expenses) (except for expenses in respect of voluntary retirement plans for employees, and gain (loss) due to sale of subsidiaries (see Note 26, regarding Other Income (Expenses), net)), depreciation and amortization and share based payments, as a measure of operating profit. Segment EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. |
Subsidiaries (Tables)
Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of subsidiaries [abstract] | |
Schedule of Group's Significant Subsidiaries | Presented hereunder is a list of the Group’s significant subsidiaries: The Group’s ownership interest in the subsidiary for the year ended December 31 Name of subsidiary Principal location of the subsidiary's activity 2016 2017 Netvision Ltd. Israel 100% 100% 013 Netvision Ltd. Israel 100% 100% |
Schedule of Consideration Transaction | Sale of indirect subsidiary of the Company In May 2017, a wholly owned indirect subsidiary of the Company, 013 Netvision Ltd., or Netvision, has entered an agreement for the sale of its holdings in Internet Rimon Israel 2009 Ltd., or Rimon, a subsidiary of Netvision, to the other shareholders of Rimon. In June 2017, the sale of Netvision's holdings in Rimon was completed, following which the Company recorded under Other Income, net, a capital gain of approximately NIS 10 million. The consideration shall be paid to Netvision in several installments over a period of two years from the closing of the transaction. NIS millions Total consideration transferred 25 Identifiable assets and liabilities transferred: Cash and cash equivalents (12 ) Trade and other receivables (4 ) Property, plant and equipment, net (2 ) Intangible assets and others, net (23 ) Trade payables and accrued expenses 7 Other payables, including derivatives 4 Non-controlling interests 15 Total net identifiable assets 15 Capital gain from sale 10 |
Schedule of Aggregate Cash Flows Derived for Group Result of Sale | The aggregate cash flows derived for the Group as a result of the sale: Cash and cash equivalents received 15 Less cash and cash equivalents of the subsidiary (12 ) 3 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and cash equivalents [abstract] | |
Schedule of Cash And Cash Equivalents | December 31, 2016 2017 NIS millions NIS millions Bank balances 178 59 Call deposits 1,062 468 1,240 527 |
Trade and Other Receivables (Ta
Trade and Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current receivables [abstract] | |
Schedule of Trade and Other Receivables | December 31, 201 6 2017 NIS millions NIS millions Current Trade Receivables* Open accounts 512 475 Checks and credit cards receivables 160 173 Accrued income 87 109 Current maturity of long-term receivables 566 523 1,325 1,280 Other Receivables Prepaid expenses 54 76 Others 7 13 61 89 1,386 1,369 Non-current Trade receivables* 461 412 Rights of use of communications lines 327 337 Deposits and other receivables 1 30 Loan to a customer - 107 Other 7 9 796 895 2,182 2,264 * Net of allowance for doubtful debts. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Classes of current inventories [abstract] | |
Schedule of Inventories | December 31, 2016 2017 NIS millions NIS millions Handsets 42 53 Accessories 10 9 Spare parts 12 8 64 70 |
Property, Plant and Equipment48
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [abstract] | |
Schedule of Property, Plant and Equipment, Net | Computers, furniture and Control and landline Communications testing communications Leasehold network equipment Vehicles equipment improvements Total NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions Cost Balance at January 1, 2016 5,671 124 7 347 156 6,305 Additions 189 1 - 105 6 301 Disposals (796 ) (46 ) (2 ) (82 ) (38 ) (964 ) Balance at December 31, 2016 5,064 79 5 370 124 5,642 Additions 189 - 2 151 6 348 Disposals (262 ) (20 ) - (25 ) (17 ) (324 ) Discontinuance of consolidation (see Note 7B) (2 ) (1 ) (1 ) - - (4 ) Balance at December 31, 2017 4,989 58 6 496 113 5,662 Accumulated Depreciation Balance at January 1, 2016 4,185 96 7 168 104 4,560 Depreciation for the year 284 12 - 67 12 375 Disposals (796 ) (46 ) (2 ) (75 ) (33 ) (952 ) Balance at December 31, 2016 3,673 62 5 160 83 3,983 Depreciation for the year 273 7 1 105 11 397 Disposals (252 ) (20 ) (1 ) (24 ) (17 ) (314 ) Discontinuance of consolidation (see Note 7B) (2 ) - - - - (2 ) Balance at December 31, 2017 3,692 49 5 241 77 4,064 Carrying amounts At January 1, 2016 1,486 28 - 179 52 1,745 At December 31, 2016 1,391 17 - 210 41 1,659 At December 31, 2017 1,297 9 1 255 36 1,598 |
Intangible Assets and Others,49
Intangible Assets and Others, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about intangible assets [abstract] | |
Schedule of Intangible Assets, Net | Licenses and Frequencies Information systems Software Customer acquisition costs Goodwill Customer relationships and other Total NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions NIS millions Cost Balance at January 1, 2016 552 296 62 - 830 324 2,064 Additions - 73 8 - - - 81 Disposals - (65 ) (17 ) - - (16 ) (98 ) Balance at December 31, 2016 552 304 53 - 830 308 2,047 Additions - 72 4 120 - 6 202 Disposals - (48 ) (12 ) - - - (60 ) Discontinuance of consolidation (see Note 7B) - (3 ) - - (21 ) - (24 ) Balance at December 31, 2017 552 325 45 120 809 314 2,165 Accumulated Amortization Balance at January 1, 2016 351 116 34 - - 309 810 Amortization for the year 31 71 13 - - 13 128 Disposals - (65 ) (17 ) - - (16 ) (98 ) Balance at December 31, 2016 382 122 30 - - 306 840 Amortization for the year 19 68 9 27 - 3 126 Disposals - (48 ) (12 ) - - - (60 ) Discontinuance of consolidation (see Note 7B) - (1 ) - - - - (1 ) Balance at December 31, 2017 401 141 27 27 - 309 905 Carrying amounts At January 1, 2016 201 180 28 - 830 15 1,254 At December 31, 2016 170 182 23 - 830 2 1,207 At December 31, 2017 151 184 18 93 809 5 1,260 |
Schedule of Pre-tax Discount Rate and Terminal Value Growth Rate | Key assumptions used in the calculation of recoverable amounts are discount rate and terminal value growth rate. These assumptions are as follows: (1) Pre-tax discount rate and terminal value growth rate Pre-tax discount rate Terminal value growth rate 2016 2017 2016 2017 Fixed-line segment 10.4% 10.3% 1.5% 1.5% |
Schedule of Sensitivity to Changes in Assumptions | The table below shows the amount that these two assumptions are required to change individually in order for the estimated recoverable amount to be equal to the carrying amount: 2016 2017 Pre-tax discount rate 10.8% 10.8% Terminal value growth rate 1.0% 0.9% |
Trade Payables and Accrued Ex50
Trade Payables and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Trade and other current payables [abstract] | |
Schedule of Composition of Trade Payables and Accrued Expenses | December 31, 2016 2017 NIS millions NIS millions Trade payables 203 256 Accrued expenses 472 396 675 652 |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Provisions [abstract] | |
Schedule of Composition of Provisions | Dismantling and restoring Other contractual sites Litigations obligations Total NIS millions NIS millions NIS millions NIS millions Balance as at January 1, 2016 20 54 56 130 Provisions made during the year 14 27 1 42 Provisions reversed during the year (4 ) (21 ) (9 ) (34 ) Balance as at January 1, 2017 30 60 48 138 Provisions made during the year 2 14 11 27 Provisions reversed during the year (11 ) (25 ) (17 ) (53 ) Balance as at December 31, 2017 21 49 42 112 Non-current 21 - - 21 Current - 49 42 91 21 49 42 112 |
Other Payables, Including Der52
Other Payables, Including Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other payables, including derivatives [Abstract] | |
Schedule of Composition of Other Payables, Including Derivatives | December 31, 2016 2017 NIS millions NIS millions Employees and related liabilities 126 133 Government institutions 43 29 Interest payable 86 54 Accrued expenses 3 1 Deferred revenue 19 42 Derivative financial instruments 2 18 279 277 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of other long-term liabilities [Abstract] | |
Schedule of Composition of Other Long-term Liabilities | December 31, 2016 2017 NIS millions NIS millions Long-term trade payables 3 1 Deferred revenue 2 3 Derivative financial instruments 15 - Other 11 11 31 15 |
Debentures and Long-term Loan54
Debentures and Long-term Loans from Financial Institutions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings [abstract] | |
Schedule of Debentures | December 31, 201 6 201 7 NIS millions NIS millions Non- current liabilities Debentures 2,866 2,360 Long-term loans from financial institutions 340 462 3,206 2,822 Current liabilities Current maturities of debentures 863 540 Current maturities of loans from financial institutions - 78 863 618 |
Schedule of Terms and Debt Repayment of Debentures | The terms and repayment schedule of the Company's debentures are as follows*: December 31, 2016 December 31, 2017 NIS millions NIS millions Currency Nominal interest rate Year of maturity Face value Carrying amount Face value Carrying amount Debentures (Series B) - linked to the Israeli CPI NIS 5.30 % until 2017 185 220 - - Debentures (Series D) - linked to the Israeli CPI NIS 5.19 % until 2017 299 349 - - Debentures (Series E) - unlinked NIS 6.25 % until 2017 164 164 - - Debentures (Series F)** - linked to the Israeli CPI NIS 4.60 % 2017-2020 715 731 643 659 Debentures (Series G)** - unlinked NIS 6.99 % 2017-2019 285 285 228 228 Debentures (Series H) - linked to the Israeli CPI NIS 1.98 % 2018-2024 950 824 950 849 Debentures (Series I) - unlinked NIS 4.14 % 2018-2025 804 753 804 761 Debentures (Series J) - linked to the Israeli CPI NIS 2.45 % 2021-2026 103 102 103 102 Debentures (Series K) - unlinked NIS 3.55 % 2021-2026 304 301 304 301 Total Debentures 3,809 3,729 3,032 2,900 * In January 2018, after the end of the reporting period, the Company repaid interest and principal of debentures in a total sum of approximately NIS 418 million. ** |
Schedule of Terms and Conditions of Long-term Loans From Financial Institutions | The terms and repayment schedule of the Company's long-term loans are as follows: December 31, 2016 December 31, 2017 NIS millions NIS millions Currency Nominal interest rate Year of maturity Face value Carrying amount Face value Carrying amount Loan from financial institution NIS 4.60 % 2018-2021 200 200 200 200 Loan from financial institution* NIS 5.10 % 2019-2022 - - 200 200 Loan from bank NIS 4.90 % 2018-2022 140 140 140 140 Total loans 340 340 540 540 * According to a loan agreement entered by the Company and two Israeli financial institutions in May 2015, in June 30, 2017, the second loan under the agreement in a principal amount of NIS 200 million was provided to the Company. The loan is without linkage and the principal amount bears an annual fixed interest of 5.1%. The loan's principal amount will be payable in four equal annual payments on June 30 of each of the years 2019 through 2022 (inclusive). The interest will be paid in ten semi-annual installments on June 30 and December 31, of each calendar year commencing December 31, 2017 through and including June 30, 2022. |
Schedule of Movement in Liabilities Deriving From Financing Activities | Movement in liabilities deriving from financing activities Loans Debentures Derivatives Interest payable Put options to non-controlling interests Total NIS millions Balance as at January 1, 2017 (340 ) (3,729 ) (17 ) (86 ) (11 ) (4,183 ) Changes from financing cash flows Cash received (200 ) - - - - (200 ) Cash paid - 864 3 175 1 1,043 Total net financing cash flows (540 ) (2,865 ) (14 ) 89 (10 ) (3,340 ) Linkage expenses to CPI - (3 ) - - - (3 ) Changes in fair value - - (3 ) - - (3 ) Discount amortization - (32 ) - - - (32 ) Interest expenses - - - (143 ) (1 ) (144 ) Balance as at December 31, 2017 (540 ) (2,900 ) (17 ) (54 ) (11 ) (3,522 ) |
Capital and Reserves (Tables)
Capital and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of classes of share capital [abstract] | |
Schedule of Share Capital | 2015 2016 2017 NIS Issued and paid at January 1 1,005,845 1,006,046 1,006,046 Exercise of share options 201 - 4,400 Issued and paid at December 31 1,006,046 1,006,046 1,010,446 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |
Schedule of Share Incentive Plan | Number of Contractual Adjusted exercise price per share as instruments life of of December 31, Grant date/employees entitled In thousands Vesting conditions options 2017 Share options granted in December 2013 to senior employees 234 Three equal installments over three years of employment 4.5 years $ 14.65 Share options granted in August 2015 and October 2015 to senior employees 2,660 Three equal installments over three years of employment 4.5 years NIS 25.65 Share options granted in November 2016 to senior employees 63 Three equal installments over three years of employment 4.5 years NIS 29.97 |
Schedule of Balances of Options | The changes in the balances of the options were as follows: Weighted average Weighted average Weighted average Number of options of exercise price Number of options of exercise price Number of options of exercise price (US Dollars) (US Dollars) (US Dollars) 2015 2016 2017 Balance as at January 1 638,865 15.86 2,873,190 7.40 2,764,334 7.15 Granted during the year 2,660,000 6.69 63,000 7.79 - - Forfeited during the year (292,798 ) 19.52 (171,856 ) 11.43 (146,334 ) 11.26 Exercised during the year (132,877 ) 5.67 - - (1,654,335 ) 7.40 Total options outstanding as at December 31 2,873,190 7.40 2,764,334 7.15 963,665 8.07 Total of exercisable options as at December 31* 170,190 15.13 1,020,000 7.89 106,000 12. 98 * The weighted average of the remaining contractual life of options outstanding as at December 31, 2017 is 1.9 years. |
Schedule of Fair Value of Share Options and Assumptions | 2015 2016 2017 Fair value of share options and assumptions: Fair value at grant date NIS NIS 6.3 - Fair value assumptions: Share price at grant date NIS 23.75 NIS 27.75 - Exercise price NIS 25.65 NIS 29.97 - Expected volatility (weighted average) 35.9 % 42.8 % - Option life (expected weighted average life) 2.3 years 2.3 years - Risk free interest rate 0.4 % 0.4 % - |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of Maximum Exposure to Credit Risk | The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: December 31, December 31, 2016 2017 NIS millions NIS millions Trade receivables including long-term amounts 1,786 1,692 Loans and other receivables including long-term amounts 5 146 Investment in debt securities 282 325 Cash and cash equivalents in banks 1,240 527 Derivative financial instrument 2 3 3,315 2,693 |
Schedule of Maximum Exposure to Credit Risk of Financial Assets | The maximum exposure to credit risk of financial assets at the reporting date by type of counterparty is: December 31, December 31, 2016 2017 NIS millions NIS millions Receivables from subscribers 1,590 1,511 Receivables from distributors and other operators 196 158 Investment in government of Israel debt securities 131 90 Investment in institutional debt securities 151 235 Cash and cash equivalents in banks 1,240 527 Other 7 172 3,315 2,693 |
Schedule of Aging of Financial Assets | The aging of financial assets at the reporting date was as follows: Gross Impairment Gross Impairment 2016 2017 NIS millions NIS millions NIS millions NIS millions Not past due 3,200 22 2,580 12 Past due less than one year 154 62 143 53 Past due more than one year 146 101 157 122 3,500 185 2,880 187 |
Schedule of Allowance for Impairment in Respect of Trade Receivables | The movement in the allowance for impairment in respect of trade receivables during the year was as follows: 2016 2017 NIS millions NIS millions Balance at January 1 202 185 Impairment loss recognized (50 ) (44 ) Doubtful debt expenses 33 46 Balance at December 31 185 187 |
Schedule of Maturities of Contractual of Financial Liabilities and Other Non-Contractual Liabilities | The following are the maturities of contractual financial liabilities and other non-contractual liabilities, including estimated interest payments and excluding the impact of netting agreements: December 31, 2017 Carrying Contractual More than amount Cash flows 1 st 2 nd 3 rd 4-5 years 5 years NIS millions Debentures * (2,954 ) (3,435 ) (658 ) (577 ) (473 ) (739 ) (988 ) Long-term loans from financial institutions (540 ) (605 ) (102 ) (147 ) (141 ) (215 ) - Trade and other payables (784 ) (784 ) (784 ) - - - - Forward exchange contracts on foreign currencies (1 ) (1 ) (1 ) - - - - Forward exchange contracts on CPI (17 ) (17 ) (17 ) - - - - Other long-term liabilities (12 ) (12 ) - (12 ) - - - (4,308 ) (4,854 ) (1,562 ) (736 ) (614 ) (954 ) (988 ) * Including accrued interest on debentures. December 31, 20 16 Carrying Contractual More than amount Cash flows 1 st 2 nd 3 rd 4-5 years 5 years NIS millions Debentures * (3,815 ) (4,448 ) (1,014 ) (657 ) (577 ) (847 ) (1,353 ) Long-term loans from financial institutions (340 ) (392 ) (16 ) (92 ) (89 ) (166 ) (29 ) Trade and other payables (803 ) (803 ) (803 ) - - - - Forward exchange contracts on CPI (17 ) (17 ) (2 ) (15 ) - - - Other long-term liabilities (13 ) (13 ) (2 ) - (11 ) - - (4,988 ) (5,673 ) (1,837 ) (764 ) (677 ) (1,013 ) (1,382 ) * Including accrued interest on debentures. |
Schedule of Group's Exposure to Foreign Currency Risk and CPI | The Group's exposure to foreign currency risk and CPI is as follows: December 31, 2016 December 31, 2017 In or linked In or linked to foreign to foreign currencies Linked currencies Linked (mainly USD) to CPI Unlinked (mainly USD) to CPI Unlinked NIS millions NIS millions Current assets Cash and cash equivalents 12 - 1,228 29 - 498 Current investments, including derivatives 2 141 141 13 135 181 Trade receivables 89 - 1,236 61 - 1,219 Other receivables - - 4 - - 8 Non- current assets Long-term receivables - 1 461 - 54 495 Current liabilities Current maturities of debentures - (642 ) (221 ) - (322 ) (297 ) Trade payables and accrued expenses (182 ) - (493 ) (115 ) - (537 ) Other current liabilities, including derivatives - (49 ) (167 ) (1 ) (42 ) (161 ) Non- current liabilities Long-term loans from financial institutions - - (340 ) - - (462 ) Debentures - (1,584 ) (1,282 ) - (1,288 ) (1,071 ) Other non-current liabilities, including derivatives (3 ) (15 ) (10 ) (1 ) - (11 ) (82 ) (2,148 ) 557 (14 ) (1,463 ) (138 ) |
Schedule of Exposure to Linkage and Foreign Currency Risk | The Group's exposure to linkage and foreign currency risk in respect of derivatives is as follows: December 31, 2017 Currency/ linkage receivable Currency/ linkage payable Notional Value Fair value NIS millions Instruments not used for hedging Forward exchange contracts on foreign currencies USD NIS 105 (1 ) Forward exchange contracts on CPI CPI NIS 500 (17 ) Foreign currency put options NIS USD (105 ) 1 Embedded derivative in lease contracts USD NIS 16 2 December 31, 2016 Currency/ linkage receivable Currency/ linkage payable Notional Value Fair value NIS millions Instruments not used for hedging Forward exchange contracts on foreign currencies USD NIS 95 1 Forward exchange contracts on CPI CPI NIS 800 (17 ) Foreign currency put options NIS USD (95 ) 1 |
Schedule of Sensitivity Analysis | A change of the CPI as at December 31, 2017 and 2016 would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2016. Equity Net income Change NIS millions NIS millions December 31, 2017 Increase in the CPI of 2.0 % (9 ) (9 ) Increase in the CPI of 1.0 % (2 ) (2 ) Decrease in the CPI of (1.0 )% - - Decrease in the CPI of (2.0 )% - - December 31, 2016 Increase in the CPI of 2.0 % (13 ) (13 ) Increase in the CPI of 1.0 % (4 ) (4 ) Decrease in the CPI of (1.0 )% 3 3 Decrease in the CPI of (2.0 )% 6 6 |
Schedule of Group's Interest-Bearing Financial Instruments | At the reporting date the interest rate profile of the Group's interest-bearing financial instruments, not including derivatives, was: Carrying amount 2016 2017 NIS millions NIS millions Fixed rate instruments Financial assets 845 679 Financial liabilities (4,069 ) (3,440 ) (3,224 ) (2,761 ) Variable rate instruments Financial assets 500 221 |
Schedule of Fair Value Sensitivity Analysis for Fixed Rate Instruments | A change of interest rates at the end of the reporting period would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. Equity Profit or loss 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease NIS millions NIS millions December 31, 2017 Fair value sensitivity (net) (9 ) 9 (5 ) 5 (9 ) 9 (5 ) 5 Equity Profit or loss 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease 1.0% increase 1.0% decrease 0.5% increase 0.5% decrease NIS millions NIS millions December 31, 2016 Fair value sensitivity (net) (7 ) 7 (4 ) 4 (7 ) 7 (4 ) 4 |
Schedule of Fair Values of Remaining Financial Liabilities | The fair values of the remaining financial liabilities and their book values as presented in the consolidated statements of financial position are as follows: December 31, 2016 December 31, 2017 Book value Fair value* Book value Fair value* NIS millions NIS millions Debentures including current maturities and accrued interest (3,815 ) (4,112 ) (2,954 ) (3,288 ) Long-term loans from financial institutions including current maturities and accrued interest (340 ) (350 ) (540 ) (574 ) |
Schedule of Analyses Financial Instruments Carried at Fair Value | The table below analyses financial instruments carried at fair value, by valuation method. December 31, 2017 Level 1 Level 2 Level 3 Total NIS millions NIS millions NIS millions NIS millions Financial assets at fair value through profit or loss Current investments in debt securities 361 - - 361 Derivatives - 3 - 3 Total assets 361 3 - 364 Financial liabilities at fair value through profit or loss Derivatives - (18 ) - (18 ) Total liabilities - (18 ) - (18 ) |
Schedule of Details Regarding Fair Value Measurement at Level 2 | There have been no transfers during the year between Levels 1 and 2. December 31, 201 Level 1 Level 2 Level 3 Total NIS millions NIS millions NIS millions NIS millions Financial assets at fair value through profit or loss Current investments in debt securities 282 - - 282 Derivatives - 2 - 2 Total assets 282 2 - 284 Financial liabilities at fair value through profit or loss Derivatives - (17 ) - (17 ) Total liabilities - (17 ) - (17 ) |
Schedule of Carrying Amounts of Recognized Financial Instruments | The following table sets out the carrying amounts of recognized financial instruments that were offset in the consolidated statements of financial position: December 31, 2017 Note Gross amounts of recognized financial assets (liabilities) Gross amounts of financial assets (liabilities) recognized and offset in the consolidated statements of financial position Net amounts of financial assets (liabilities) presented in the consolidated statements of financial position NIS millions NIS millions NIS millions Financial assets Trade receivables 9 170 (123 ) 47 Financial liabilities Trade payables and accrued expenses 13 (149 ) 123 (26 ) December 31, 2016 Note Gross amounts of recognized financial assets (liabilities) Gross amounts of financial assets (liabilities) recognized and offset in the consolidated statements of financial position Net amounts of financial assets (liabilities) presented in the consolidated statements of financial position NIS millions NIS millions NIS millions Financial assets Trade receivables 9 224 (159 ) 65 Financial liabilities Trade payables and accrued expenses 13 (183 ) 159 (24 ) |
Share price risk [Member] | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of Fair Value Sensitivity Analysis for Fixed Rate Instruments | A change in share prices would have increased (decreased) profit or loss and equity by the amounts shown below (after tax): December 31, 2017 NIS millions Profit or loss Equity Increase of 5% 1 1 Increase of 10% 3 3 Decrease of 5% (1 ) (1 ) Decrease of 10% (3 ) (3 ) |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Revenue [abstract] | |
Schedule of Composition of Revenues By Type | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Revenues from equipment 1,048 994 952 Revenues from services: Cellular services 2,121 2,025 1,777 Land-line communications services 866 871 1,004 Other services 145 137 138 Total revenues from services 3,132 3,033 2,919 Total revenues 4,180 4,027 3,871 |
Cost of Revenues (Tables)
Cost of Revenues (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of cost of revenues [Abstract] | |
Schedule of Composition of Cost of Revenues | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions According to source of income: Cost of revenues from equipment 763 674 645 Cost of revenues from services 2, 000 2,0 28 2,035 2,763 2, 7 02 2,680 According to its components: Cost of revenues from equipment 763 674 645 Rent and related expenses 3 32 3 21 281 Salaries and related expenses 2 65 2 41 224 Fees to communications operators 732 732 767 Cost of content and value added services 143 168 212 Depreciation and amortization 381 3 96 412 Royalties and fees 9 6 93 86 Other 51 77 53 Total cost of revenues from services 2, 000 2,0 28 2,035 2,763 2,7 02 2,680 |
Selling and Marketing Expenses
Selling and Marketing Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of selling and marketing expenses [Abstract] | |
Schedule of Composition of Selling and Marketing Expenses | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Salaries and related expenses 27 8 257 241 Commissions 19 6 1 79 88 Advertising and public relations 26 44 36 Depreciation and amortization 38 20 33 Other 82 74 81 620 574 479 |
General and Administrative Ex61
General and Administrative Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of general and administrative expenses [Abstract] | |
Schedule of Composition of General and Administrative Expenses | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Salaries and related expenses 114 123 124 Depreciation and amortization 143 118 110 Rent and maintenance 59 5 5 51 Data processing and professional services 51 39 36 Allowance for doubtful accounts 32 3 3 46 Other 66 52 59 465 4 20 426 |
Financing Income and Expenses (
Financing Income and Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of financing income and expenses [Abstract] | |
Schedule of Composition of Financing Income and Expenses | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Interest income from installment sale transactions 47 38 31 Net change in fair value of financial assets measured at fair value through profit or loss 5 6 14 Other 3 2 7 Financing income 55 46 52 Linkage expenses to CPI and interest expenses on long-term liabilities (169 ) (157 ) (147 ) Net change in fair value of derivatives (32 ) - (8 ) Discount amortization (22 ) (26 ) (32 ) Other (9 ) (13 ) (9 ) Financing expenses (232 ) (196 ) (196 ) Net financing expenses recognized in profit or loss (177 ) (150 ) (144 ) |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of income tax [Abstract] | |
Schedule of Components of Income Taxes | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Current tax expense (income) Current year 45 35 27 Adjustments for prior years, net - (27 ) (1 ) 45 8 26 Deferred tax expense (income) Creation and reversal of temporary differences (9 ) 21 14 Change in tax rate - (19 ) - (9 ) 2 14 Income tax expense 36 10 40 |
Schedule of Other Comprehensive Income | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Before tax (2 ) 1 1 Tax (benefit) expenses 1 (1 ) - Net of tax (1 ) - 1 |
Schedule of Reconciliation Between Theoretical Tax on Pre-tax Profit and Tax Expense | Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Profit before taxes on income 133 160 153 Primary tax rate of the Group 26.5 % 25.0 % 24.0 % Tax calculated according to the Group’s primary tax rate 35 40 37 Additional tax (tax saving) in respect of: Non-deductible expenses 5 4 5 Taxes in respect of previous years - (27 ) (1 ) Effect of change in tax rate - (19 ) - Tax exempt income (1 ) - - Other differences (3 ) 12 (1 ) Income tax expenses 36 10 40 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of finance lease and operating lease by lessee [abstract] | |
Schedule of Operating Leases | Non-cancelable operating lease rentals are payable as follows: December 31, December 31, 2016 2017 NIS millions NIS millions Less than one year 274 275 Between one and five years 570 573 More than five years 103 70 947 918 |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of contingent liabilities [abstract] | |
Schedule of Contingent Liabilities | Described hereunder are the outstanding consumer class actions and purported class actions against the Group broken down by amount claimed if the lawsuit is certified as a class action, as of December 31, 2017: Claim amount Number of claims Total claims amount (NIS millions) Up to NIS 100 million 15 468 NIS 100-500 million 5 1,166 Above NIS 1 billion 1 15,000 Unquantified claims 12 - Against the Group and other defendants together without specifying the amount claimed from the Group 1 300 Against the Group and other defendants together, in which the amount claimed from the Group has been quantified 1 3 Unquantified claims against the Group and other defendants 5 - |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of transactions between related parties [abstract] | |
Schedule of Balance Sheet | December 31, December 31, 2016 2017 NIS millions NIS millions Current assets 1 2 Current liabilities 1 2 Long-term liability - debentures (including current maturity)* 3 - * Debentures balance held by related parties, which includes debentures held for the benefit of the public, through, among others, provident funds, mutual funds and pension funds, as of December 31, 2017 and 2016, is NIS 19 million par value linked to the CPI and NIS 25 million par value linked to the CPI, respectively. |
Schedule of Transactions with Related Parties | Transactions with related and interested parties executed in the ordinary course of business at regular commercial terms: Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Income: Revenues 16 17 13 Expenses: Cost of revenues and other 25 16 16 |
Schedule of Key Management Personnel Compensation | Key management personnel compensation is comprised of: Year ended December 31, 2015 2016 2017 NIS millions NIS millions NIS millions Short-term employee benefits 4 4 6 Share-based payments 1 1 1 5 5 7 |
Basis of Preparation of the F67
Basis of Preparation of the Financial Statements (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of basis of preparation [Abstract] | |
Useful life of frequencies | next 10 years |
Useful life of frequencies period of license | until 2,022 |
Additional term of license | 6 Years |
Estimated useful frequencies re-evaluated period | beginning of the second quarter of 2017 and ending in 2028 (instead of 18-20 years ending in 2022, as originally estimated). |
Estimated useful life of items re-evaluated period | beginning of the fourth quarter of 2017 to 3-6 years from their purchase date (instead of 2-3 years, as originally estimated). |
Expected service period for contracts | over a period of 2-3 years |
Basis of Preparation of the F68
Basis of Preparation of the Financial Statements (Schedule of Changes in Consolidated Financial Statements) (Details) ₪ in Millions | 12 Months Ended |
Dec. 31, 2017ILS (₪) | |
2017 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | ₪ 19 |
2018 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | 33 |
2019 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | 17 |
2020 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | 5 |
2021 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | 6 |
Subsequently [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Decrease (Increase) in depreciation expenses | ₪ (80) |
Basis of Preparation of the F69
Basis of Preparation of the Financial Statements (Schedule of Consolidated Statements of Financial Position) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of expected impact of initial application of new standards or interpretations [line items] | |||
Current tax assets, net | ₪ 4 | ₪ 25 | |
Retained earnings | 1,436 | ₪ 1,322 | |
According to the previous policy [Member] | |||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | |||
Intangible assets and others, net | 1,167 | ||
Current tax assets, net | 22 | ||
Retained earnings | 1,365 | ||
Effect of the standard [Member] | |||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | |||
Intangible assets and others, net | [1] | 93 | |
Current tax assets, net | [1] | (22) | |
Retained earnings | [1] | 71 | |
According to IFRS 15 [Member] | |||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | |||
Intangible assets and others, net | 1,260 | ||
Current tax assets, net | |||
Retained earnings | ₪ 1,436 | ||
[1] | According to the standard, incremental costs of obtaining a contract with a customer are recognized as an asset when it is probable that the Group will recover those costs. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and amortized to profit or loss in accordance with the expected service period from these contracts. |
Basis of Preparation of the F70
Basis of Preparation of the Financial Statements (Schedule of Consolidated Statements of Income) (Details) - ILS (₪) ₪ / shares in Units, ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Revenues | ₪ 3,871 | ₪ 4,027 | ₪ 4,180 | |
Cost of revenues | 2,680 | 2,702 | 2,763 | |
Gross profit | 1,191 | 1,325 | 1,417 | |
Selling and marketing expenses | 479 | 574 | 620 | |
General and administrative expenses | 426 | 420 | 465 | |
Other income, net | (11) | 21 | 22 | |
Operating profit | 297 | 310 | 310 | |
Financing income | 52 | 46 | 55 | |
Financing expenses | 196 | 196 | 232 | |
Financing expenses, net | (144) | (150) | (177) | |
Profit before taxes on income | 153 | 160 | 133 | |
Taxes on income | 40 | 10 | 36 | |
Profit for the period | 113 | 150 | 97 | |
Attributable to: | ||||
Owners of the Company | 112 | 148 | 95 | |
Non-controlling interests | 1 | 2 | 2 | |
Profit for the period | ₪ 113 | ₪ 150 | ₪ 97 | |
Earnings per share | ||||
Basic earnings per share (in NIS) | ₪ 1.11 | ₪ 1.47 | ₪ 0.95 | |
Diluted earnings per share (in NIS) | ₪ 1.10 | ₪ 1.47 | ₪ 0.95 | |
According to the previous policy [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Revenues | ₪ 3,871 | |||
Cost of revenues | (2,680) | |||
Gross profit | 1,191 | |||
Selling and marketing expenses | (572) | |||
General and administrative expenses | (426) | |||
Other income, net | 11 | |||
Operating profit | 204 | |||
Financing income | 52 | |||
Financing expenses | (196) | |||
Financing expenses, net | (144) | |||
Profit before taxes on income | 60 | |||
Taxes on income | (18) | |||
Profit for the period | 42 | |||
Attributable to: | ||||
Owners of the Company | 41 | |||
Non-controlling interests | 1 | |||
Profit for the period | ₪ 42 | |||
Earnings per share | ||||
Basic earnings per share (in NIS) | ₪ 0.40 | |||
Diluted earnings per share (in NIS) | ₪ 0.40 | |||
Effect of the standard [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Revenues | [1] | |||
Cost of revenues | [1] | |||
Gross profit | [1] | |||
Selling and marketing expenses | [1] | 93 | ||
General and administrative expenses | [1] | |||
Other income, net | [1] | |||
Operating profit | [1] | 93 | ||
Financing income | [1] | |||
Financing expenses | [1] | |||
Financing expenses, net | [1] | |||
Profit before taxes on income | [1] | 93 | ||
Taxes on income | [1] | (22) | ||
Profit for the period | 71 | |||
Attributable to: | ||||
Owners of the Company | [1] | 71 | ||
Non-controlling interests | [1] | |||
Profit for the period | ₪ 71 | |||
Earnings per share | ||||
Basic earnings per share (in NIS) | [1] | ₪ 0.71 | ||
Diluted earnings per share (in NIS) | [1] | ₪ 0.70 | ||
According to IFRS 15 [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Revenues | ₪ 3,871 | |||
Cost of revenues | (2,680) | |||
Gross profit | 1,191 | |||
Selling and marketing expenses | (479) | |||
General and administrative expenses | (426) | |||
Other income, net | 11 | |||
Operating profit | 297 | |||
Financing income | 52 | |||
Financing expenses | (196) | |||
Financing expenses, net | (144) | |||
Profit before taxes on income | 153 | |||
Taxes on income | (40) | |||
Profit for the period | 113 | |||
Attributable to: | ||||
Owners of the Company | 112 | |||
Non-controlling interests | 1 | |||
Profit for the period | ₪ 113 | |||
Earnings per share | ||||
Basic earnings per share (in NIS) | ₪ 1.11 | |||
Diluted earnings per share (in NIS) | ₪ 1.10 | |||
[1] | According to the standard, incremental costs of obtaining a contract with a customer are recognized as an asset when it is probable that the Group will recover those costs. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and amortized to profit or loss in accordance with the expected service period from these contracts. |
Basis of Preparation of the F71
Basis of Preparation of the Financial Statements (Schedule of Consolidated Statements of Cash Flow) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Net cash from operating activities | ₪ 774 | ₪ 781 | ₪ 836 | |
Net cash used in investing activities | (644) | ₪ (364) | ₪ (96) | |
According to the previous policy [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Net cash from operating activities | 667 | |||
Net cash used in investing activities | (537) | |||
Effect of the standard [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Net cash from operating activities | [1] | 107 | ||
Net cash used in investing activities | [1] | (107) | ||
According to IFRS 15 [Member] | ||||
Disclosure of expected impact of initial application of new standards or interpretations [line items] | ||||
Net cash from operating activities | 774 | |||
Net cash used in investing activities | ₪ (644) | |||
[1] | According to the standard, incremental costs of obtaining a contract with a customer are recognized as an asset when it is probable that the Group will recover those costs. Accordingly, incremental incentives and commissions paid to Group employees and resellers for securing contracts with customers, are recognized as an asset and amortized to profit or loss in accordance with the expected service period from these contracts. |
Basis of Preparation of the F72
Basis of Preparation of the Financial Statements (Schedule of Exchange Rates and Known Consumer Price Indexes) (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of basis of preparation [Abstract] | ||||
Exchange rates of US$ | 3.467 | 3.845 | 3.902 | |
Change during the year: Exchange rates of US$ in % | (9.83%) | (1.46%) | 0.33% | |
Consumer Price Index (points) | [1] | 221.35 | 220.68 | 221.35 |
Change during the year: Consumer Price Index (points) in % | [1] | 0.30% | (0.30%) | (0.90%) |
[1] | According to 1993 base index. |
Significant Accounting Polici73
Significant Accounting Policies (Narrative) (Details) ₪ in Millions | 12 Months Ended |
Dec. 31, 2017ILS (₪) | |
Statement Line Items [Line Items] | |
Expected increase in debentures balance due to adoption of final version of IFRS 9 | ₪ 35 |
Decrease in retained earnings | 40 |
Bottom of range [member] | |
Statement Line Items [Line Items] | |
Decrease in retained earnings | 35 |
Top of range [member] | |
Statement Line Items [Line Items] | |
Decrease in retained earnings | ₪ 40 |
Significant Accounting Polici74
Significant Accounting Policies (Schedule of Estimated Useful Lives of Fixed Assets) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | next 10 years |
Communications network [Member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 5% |
Communications network [Member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 25% |
Control and testing equipment [Member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 15% |
Control and testing equipment [Member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 25% |
Vehicles [Member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 15% |
Vehicles [Member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 33% |
Computers and hardware [Member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 15% |
Computers and hardware [Member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 33% |
Furniture and landline communications equipment [Member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 6% |
Furniture and landline communications equipment [Member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives (In %) | 33% |
Significant Accounting Polici75
Significant Accounting Policies (Schedule of Amortizable Useful Lives for Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Licenses and Frequencies [Member] | |
Disclosure of detailed information about intangible assets [line items] | |
Amortization rates in % | 4-7% (mainly 4%) |
Information systems [Member] | |
Disclosure of detailed information about intangible assets [line items] | |
Amortization rates in % | 25% |
Software [Member] | |
Disclosure of detailed information about intangible assets [line items] | |
Amortization rates in % | 15-25% |
Customer acquisition costs [Member] | |
Disclosure of detailed information about intangible assets [line items] | |
Amortization rates in % | 33-50% |
Operating Segments (Schedule of
Operating Segments (Schedule of Operating Segments) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Disclosure of operating segments [line items] | ||||
External revenues | ₪ 3,871 | ₪ 4,027 | ₪ 4,180 | |
Segment EBITDA | [1] | 853 | 858 | 872 |
Depreciation and amortization | (555) | (534) | (562) | |
Taxes on income | (40) | (10) | (36) | |
Financing income | 52 | 46 | 55 | |
Financing expenses | (196) | (196) | (232) | |
Other expenses | 1 | (8) | 3 | |
Share based payments | (2) | (6) | (3) | |
Profit for the year | 113 | 150 | 97 | |
Cellular [Member] | ||||
Disclosure of operating segments [line items] | ||||
External revenues | 2,685 | 2,981 | 3,185 | |
Inter-segment revenues | 14 | 17 | 18 | |
Segment EBITDA | [1] | 595 | 625 | 601 |
Fixed-line [Member] | ||||
Disclosure of operating segments [line items] | ||||
External revenues | 1,186 | 1,046 | 995 | |
Inter-segment revenues | 162 | 183 | 186 | |
Segment EBITDA | [1] | 258 | 233 | 271 |
Reconciliation for consolidation [Member] | ||||
Disclosure of operating segments [line items] | ||||
External revenues | ||||
Inter-segment revenues | (176) | (200) | (204) | |
Consolidated [Member] | ||||
Disclosure of operating segments [line items] | ||||
External revenues | 3,871 | 4,027 | 4,180 | |
Inter-segment revenues | ||||
[1] | Segment EBITDA as reviewed by the Group's CODM, represents earnings before interest (financing expenses, net), taxes, other income (expenses) (except for expenses in respect of voluntary retirement plans for employees, and gain (loss) due to sale of subsidiaries (see Note 26, regarding Other Income (Expenses), net)), depreciation and amortization and share based payments, as a measure of operating profit. Segment EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. |
Subsidiaries (Schedule of Group
Subsidiaries (Schedule of Group's Significant Subsidiaries) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Netvision Ltd [Member] | ||
Disclosure of subsidiaries [line items] | ||
Principal location of the subsidiary's activity | Israel | Israel |
The Group's ownership interest in the subsidiary for the year ended December 31 | 100.00% | 100.00% |
013 Netvision Ltd [Member] | ||
Disclosure of subsidiaries [line items] | ||
Principal location of the subsidiary's activity | Israel | Israel |
The Group's ownership interest in the subsidiary for the year ended December 31 | 100.00% | 100.00% |
Subsidiaries (Schedule of Consi
Subsidiaries (Schedule of Consideration Transaction) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Identifiable assets and liabilities transferred: | ||
Trade and other receivables | ₪ 895 | ₪ 796 |
Property, plant and equipment, net | 1,598 | 1,659 |
Intangible assets and others, net | 1,260 | 1,207 |
Other payables, including derivatives | 277 | ₪ 279 |
Capital gain from sale | 10 | |
Netvision Ltd [Member] | ||
Disclosure of subsidiaries [line items] | ||
Total consideration transferred | 25 | |
Identifiable assets and liabilities transferred: | ||
Cash and cash equivalents | (12) | |
Trade and other receivables | (4) | |
Property, plant and equipment, net | (2) | |
Intangible assets and others, net | (23) | |
Trade payables and accrued expenses | 7 | |
Other payables, including derivatives | 4 | |
Non-controlling interests | 15 | |
Total net identifiable assets | 15 | |
Capital gain from sale | ₪ 10 |
Subsidiaries (Schedule of Aggre
Subsidiaries (Schedule of Aggregate Cash Flows Derived for Group Result of Sale) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of subsidiaries [line items] | ||||
Cash and cash equivalents received | ₪ 527 | ₪ 1,240 | ₪ 761 | ₪ 1,158 |
Netvision Ltd [Member] | ||||
Disclosure of subsidiaries [line items] | ||||
Cash and cash equivalents received | 15 | |||
Less cash and cash equivalents of the subsidiary | (12) | |||
Total cash flows derived for the group result of sale | ₪ 3 |
Cash and Cash Equivalents (Sche
Cash and Cash Equivalents (Schedule of Cash and Cash Equivalents) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents [abstract] | ||||
Bank balances | ₪ 59 | ₪ 178 | ||
Call deposits | 468 | 1,062 | ||
Cash and cash equivalents | ₪ 527 | ₪ 1,240 | ₪ 761 | ₪ 1,158 |
Trade and Other Receivables (Na
Trade and Other Receivables (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Trade and other current receivables [abstract] | ||
Number of monthly payments (mainly) | 36 | |
Annual discount rate | 3.30% | 3.30% |
Trade and Other Receivables (Sc
Trade and Other Receivables (Schedule of Trade and Other Receivables) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Current Trade Receivables | |||
Open accounts | [1] | ₪ 475 | ₪ 512 |
Checks and credit cards receivables | [1] | 173 | 160 |
Accrued income | [1] | 109 | 87 |
Current maturity of long-term receivables | [1] | 523 | 566 |
Current Trade Receivables | [1] | 1,280 | 1,325 |
Other Receivables | |||
Prepaid expenses | 76 | 54 | |
Others | 13 | 7 | |
Other receivables | 89 | 61 | |
Trade and other receivables | 1,369 | 1,386 | |
Non-current | |||
Trade receivables | [1] | 412 | 461 |
Rights of use of communications lines | 337 | 327 | |
Deposits and other receivables | 30 | 1 | |
Loan to a customer | 107 | ||
Other | 9 | 7 | |
Trade and other receivables | 895 | 796 | |
Trade receivables | ₪ 2,264 | ₪ 2,182 | |
[1] | Net of allowance for doubtful debts |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Classes of current inventories [abstract] | ||
Inventory write-down | ₪ 3 | ₪ 2 |
Inventory (Schedule of Inventor
Inventory (Schedule of Inventories) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Classes of current inventories [abstract] | ||
Handsets | ₪ 53 | ₪ 42 |
Accessories | 9 | 10 |
Spare parts | 8 | 12 |
Inventory | ₪ 70 | ₪ 64 |
Property, Plant and Equipment85
Property, Plant and Equipment, net (Narrative) (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 of property, plant and equipment which has not yet been paid as of the reporting date | ₪ 143 | ₪ 120 | ₪ 169 |
Property, Plant and Equipment86
Property, Plant and Equipment, net (Schedule of Property, Plant and Equipment, net) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | ₪ 1,659 | |
Balance | 1,598 | ₪ 1,659 |
Cost [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 5,642 | 6,305 |
Additions | 348 | 301 |
Disposals | (324) | (964) |
Discontinuance of consolidation (see Note 7B) | (4) | |
Balance | 5,662 | 5,642 |
Cost [Member] | Communications network [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 5,064 | 5,671 |
Additions | 189 | 189 |
Disposals | (262) | (796) |
Discontinuance of consolidation (see Note 7B) | (2) | |
Balance | 4,989 | 5,064 |
Cost [Member] | Control and testing equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 79 | 124 |
Additions | 1 | |
Disposals | (20) | (46) |
Discontinuance of consolidation (see Note 7B) | (1) | |
Balance | 58 | 79 |
Cost [Member] | Vehicles [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 5 | 7 |
Additions | 2 | |
Disposals | (2) | |
Discontinuance of consolidation (see Note 7B) | (1) | |
Balance | 6 | 5 |
Cost [Member] | Computers, furniture and landline communications equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 370 | 347 |
Additions | 151 | 105 |
Disposals | (25) | (82) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 496 | 370 |
Cost [Member] | Leasehold improvements [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 124 | 156 |
Additions | 6 | 6 |
Disposals | (17) | (38) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 113 | 124 |
Accumulated Depreciation [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 3,983 | 4,560 |
Depreciation | 397 | 375 |
Disposals | (314) | (952) |
Discontinuance of consolidation (see Note 7B) | (2) | |
Balance | 4,064 | 3,983 |
Accumulated Depreciation [Member] | Communications network [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 3,673 | 4,185 |
Depreciation | 273 | 284 |
Disposals | (252) | (796) |
Discontinuance of consolidation (see Note 7B) | (2) | |
Balance | 3,692 | 3,673 |
Accumulated Depreciation [Member] | Control and testing equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 62 | 96 |
Depreciation | 7 | 12 |
Disposals | (20) | (46) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 49 | 62 |
Accumulated Depreciation [Member] | Vehicles [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 5 | 7 |
Depreciation | 1 | |
Disposals | (1) | (2) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 5 | 5 |
Accumulated Depreciation [Member] | Computers, furniture and landline communications equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 160 | 168 |
Depreciation | 105 | 67 |
Disposals | (24) | (75) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 241 | 160 |
Accumulated Depreciation [Member] | Leasehold improvements [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 83 | 104 |
Depreciation | 11 | 12 |
Disposals | (17) | (33) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 77 | 83 |
Carrying amount [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 1,659 | 1,745 |
Balance | 1,598 | 1,659 |
Carrying amount [Member] | Communications network [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 1,391 | 1,486 |
Balance | 1,297 | 1,391 |
Carrying amount [Member] | Control and testing equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 17 | 28 |
Balance | 9 | 17 |
Carrying amount [Member] | Vehicles [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | ||
Balance | 1 | |
Carrying amount [Member] | Computers, furniture and landline communications equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 210 | 179 |
Balance | 255 | 210 |
Carrying amount [Member] | Leasehold improvements [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Balance | 41 | 52 |
Balance | ₪ 36 | ₪ 41 |
Intangible Assets and Others,87
Intangible Assets and Others, net (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] | |||
Cost of intangible assets which have not yet been paid as of the reporting date | ₪ 28 | ₪ 32 | ₪ 33 |
Discounted cash flow model period | 5 years | ||
Long-term growth rate | 1.50% | ||
Fixed-line segment [Member] | |||
Disclosure of detailed information about intangible assets [line items] | |||
Goodwill | ₪ 732 | 753 | |
Estimated recoverable amount | ₪ 105 | ₪ 74 |
Intangible Assets and Others,88
Intangible Assets and Others, net (Schedule of Intangible Assets, net) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about intangible assets [line items] | ||
Balance | ₪ 1,207 | |
Balance | 1,260 | ₪ 1,207 |
Cost [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 2,047 | 2,064 |
Additions | 202 | 81 |
Disposals | (60) | (98) |
Discontinuance of consolidation (see Note 7B) | (24) | |
Balance | 2,165 | 2,047 |
Cost [Member] | Licenses and Frequencies [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 552 | 552 |
Additions | ||
Disposals | ||
Discontinuance of consolidation (see Note 7B) | ||
Balance | 552 | 552 |
Cost [Member] | Information systems [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 304 | 296 |
Additions | 72 | 73 |
Disposals | (48) | (65) |
Discontinuance of consolidation (see Note 7B) | (3) | |
Balance | 325 | 304 |
Cost [Member] | Software [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 53 | 62 |
Additions | 4 | 8 |
Disposals | (12) | (17) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 45 | 53 |
Cost [Member] | Customer acquisition costs [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | ||
Additions | 120 | |
Disposals | ||
Discontinuance of consolidation (see Note 7B) | ||
Balance | 120 | |
Cost [Member] | Goodwill [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 830 | 830 |
Additions | ||
Disposals | ||
Discontinuance of consolidation (see Note 7B) | (21) | |
Balance | 809 | 830 |
Cost [Member] | Customer relationship and other [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 308 | 324 |
Additions | 6 | |
Disposals | (16) | |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 314 | 308 |
Accumulated Depreciation [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 840 | 810 |
Amortization for the year | 126 | 128 |
Disposals | (60) | (98) |
Discontinuance of consolidation (see Note 7B) | (1) | |
Balance | 905 | 840 |
Accumulated Depreciation [Member] | Licenses and Frequencies [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 382 | 351 |
Amortization for the year | 19 | 31 |
Disposals | ||
Discontinuance of consolidation (see Note 7B) | ||
Balance | 401 | 382 |
Accumulated Depreciation [Member] | Information systems [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 122 | 116 |
Amortization for the year | 68 | 71 |
Disposals | (48) | (65) |
Discontinuance of consolidation (see Note 7B) | (1) | |
Balance | 141 | 122 |
Accumulated Depreciation [Member] | Software [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 30 | 34 |
Amortization for the year | 9 | 13 |
Disposals | (12) | (17) |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 27 | 30 |
Accumulated Depreciation [Member] | Customer acquisition costs [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | ||
Amortization for the year | 27 | |
Disposals | ||
Discontinuance of consolidation (see Note 7B) | ||
Balance | 27 | |
Accumulated Depreciation [Member] | Goodwill [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | ||
Amortization for the year | ||
Disposals | ||
Discontinuance of consolidation (see Note 7B) | ||
Balance | ||
Accumulated Depreciation [Member] | Customer relationship and other [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 306 | 309 |
Amortization for the year | 3 | 13 |
Disposals | (16) | |
Discontinuance of consolidation (see Note 7B) | ||
Balance | 309 | 306 |
Carrying amount [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 1,207 | 1,254 |
Balance | 1,260 | 1,207 |
Carrying amount [Member] | Licenses and Frequencies [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 170 | 201 |
Balance | 151 | 170 |
Carrying amount [Member] | Information systems [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 182 | 180 |
Balance | 184 | 182 |
Carrying amount [Member] | Software [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 23 | 28 |
Balance | 18 | 23 |
Carrying amount [Member] | Customer acquisition costs [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | ||
Balance | 93 | |
Carrying amount [Member] | Goodwill [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 830 | 830 |
Balance | 809 | 830 |
Carrying amount [Member] | Customer relationship and other [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Balance | 2 | 15 |
Balance | ₪ 5 | ₪ 2 |
Intangible Assets and Others,89
Intangible Assets and Others, net (Schedule of Pre-tax Discount Rate and Terminal Value Growth Rate) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of detailed information about intangible assets [line items] | ||
Pre-tax discount rate | 10.80% | 10.80% |
Terminal value growth rate | 0.90% | 1.00% |
Fixed-line segment [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Pre-tax discount rate | 10.30% | 10.40% |
Terminal value growth rate | 1.50% | 1.50% |
Intangible Assets and Others,90
Intangible Assets and Others, net (Schedule of Sensitivity to Changes in Assumptions) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of detailed information about intangible assets [abstract] | ||
Pre-tax discount rate | 10.80% | 10.80% |
Terminal value growth rate | 0.90% | 1.00% |
Trade Payables and Accrued Ex91
Trade Payables and Accrued Expenses (Schedule of Composition of Trade Payables and Accrued Expenses) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Trade and other current payables [abstract] | ||
Trade payables | ₪ 256 | ₪ 203 |
Accrued expenses | 396 | 472 |
Trade Payables and Accrued Expenses | ₪ 652 | ₪ 675 |
Provisions (Schedule of Composi
Provisions (Schedule of Composition of Provisions) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of other provisions [line items] | ||
Balance | ₪ 138 | ₪ 130 |
Provisions made during the year | 27 | 42 |
Provisions reversed during the year | (53) | (34) |
Balance | 112 | 138 |
Non-current | 21 | 30 |
Current | 91 | 108 |
Dismantling and restoring sites [Member] | ||
Disclosure of other provisions [line items] | ||
Balance | 30 | 20 |
Provisions made during the year | 2 | 14 |
Provisions reversed during the year | (11) | (4) |
Balance | 21 | 30 |
Non-current | 21 | |
Current | ||
Litigations [Member] | ||
Disclosure of other provisions [line items] | ||
Balance | 60 | 54 |
Provisions made during the year | 14 | 27 |
Provisions reversed during the year | (25) | (21) |
Balance | 49 | 60 |
Non-current | ||
Current | 49 | |
Other contractual obligations [Member] | ||
Disclosure of other provisions [line items] | ||
Balance | 48 | 56 |
Provisions made during the year | 11 | 1 |
Provisions reversed during the year | (17) | (9) |
Balance | 42 | ₪ 48 |
Non-current | ||
Current | ₪ 42 |
Other Payables, Including Der93
Other Payables, Including Derivatives (Schedule of Composition of Other Payables, Including Derivatives) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of other payables, including derivatives [Abstract] | ||
Employees and related liabilities | ₪ 133 | ₪ 126 |
Government institutions | 29 | 43 |
Interest payable | 54 | 86 |
Accrued expenses | 1 | 3 |
Deferred revenue | 42 | 19 |
Derivative financial instruments | 18 | 2 |
Other payables, including derivatives | ₪ 277 | ₪ 279 |
Other Long-term Liabilities (Sc
Other Long-term Liabilities (Schedule of Composition of Other Long-term Liabilities) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of other long-term liabilities [Abstract] | ||
Long-term trade payables | ₪ 1 | ₪ 3 |
Deferred revenue | 3 | 2 |
Derivative financial instruments | 15 | |
Other | 11 | 11 |
Other Long-term Liabilities | ₪ 15 | ₪ 31 |
Debentures and Long-term Loan95
Debentures and Long-term Loans from Financial Institutions (Narrative) (Details) - ILS (₪) ₪ / shares in Units, ₪ in Millions | Jul. 05, 2013 | Jan. 31, 2018 | Jun. 30, 2017 | Jul. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about borrowings [line items] | ||||||||
Net Leverage | 3 | |||||||
Net Leverage in event of default | a Net Leverage exceeding 5, or exceeding 4.5 during four consecutive quarters, shall constitute an event of default; | |||||||
Description of profits available for distribution | not to distribute more than 95% of the profits available for distribution according to the Israeli Companies law (Profits); provided that if the Net Leverage* exceeds 3.5:1, the Company will not distribute more than 85% of its Profits and if the Net Leverage* exceeds 4:1, the Company will not distribute more than 70% of its Profits. Failure to comply with this covenant shall constitute an event of default; | |||||||
Immediate repayment | ₪ 150 | |||||||
Period of event of default | 60 days | |||||||
Net Debt to EBITDA ratio | (a maximum net leverage ratio (Net Debt to EBITDA ratio) in excess of 5.0:1, or in excess of 4.5:1 for four consecutive quarters) | |||||||
Principal amount | ₪ 3,032 | ₪ 3,809 | ||||||
Par value | ₪ 0.01 | |||||||
Repaid interest and principal of debentures | ₪ 864 | 732 | ₪ 873 | |||||
Non-adjusting events after reporting period [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Repaid interest and principal of debentures | ₪ 418 | |||||||
Two-notch downgrade [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 0.25% | |||||||
One-notch downgrade [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 0.25% | |||||||
maximum addition [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 1.00% | |||||||
Debentures (Series F) - linked to the Israeli CPI [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | [1] | 4.60% | ||||||
Interest rate increased | 0.25% to 4.60% | |||||||
Principal amount | [1] | ₪ 643 | 715 | |||||
Debentures (Series G) - unlinked [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | [1] | 6.99% | ||||||
Interest rate increased | 6.99% | |||||||
Principal amount | [1] | ₪ 228 | 285 | |||||
Loan from financial institutions [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 5.10% | |||||||
Principal amount | ₪ 200 | ₪ 540 | 340 | |||||
Repayment terms of debentures | The loan's principal amount will be payable in four equal annual payments on June 30 of each of the years 2019 through 2022 (inclusive). The interest will be paid in ten semi-annual installments on June 30 and December 31, of each calendar year commencing December 31, 2017 through and including June 30, 2022. | |||||||
Debentures (Series K) - unlinked [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 3.55% | |||||||
Principal amount | ₪ 304 | ₪ 304 | ||||||
Total consideration | ₪ 222 | |||||||
Effective interest rate | 3.60% | |||||||
Par value | ₪ 1.011 | |||||||
Debentures (Series L) - unlinked [Member] | Non-adjusting events after reporting period [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 2.50% | |||||||
Principal amount | ₪ 401 | |||||||
Total consideration | ₪ 400 | |||||||
Effective interest rate | 2.66% | |||||||
Repayment terms of debentures | Series L debentures principal will be payable in six installments, of which the first four installments of 15% of the principal each will be paid on July 5 of the years 2023 through 2026, and the remaining two installments of 20% of the principal each will be paid on July 5 of the years 2027 and 2028. The interest on the outstanding principal of the Series L debentures is payable on January 5 and on July 5 of each of the years 2019 through 2028. | |||||||
Par value | ₪ 1,000 | |||||||
Deferred loan from bank [Member] | ||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||
Interest rate | 4.00% | |||||||
Principal amount | ₪ 150 | |||||||
Repayment terms of debentures | The loan's principal amount will be payable in four equal annual payments on March 31 of each of the years 2021 through and including 2024 and the interest will be payable in ten semi-annual installments on March 31 and September 30 of each calendar year commencing September 30,2019  through and including March 31, 2024. | |||||||
[1] | In June 2013, the Company's rating was updated from an "ilAA-/negative" to an "ilA+/stable" rating, in relation to the Company's debentures traded on the Tel Aviv Stock Exchange. Following this update of rating and since this was the second downgrade in the Debentures' rating since their issuance, the annual interest rate that the Company pays for its Series F and G debentures has been increased by 0.25% to 4.60% and 6.99%, respectively, beginning July 5, 2013. |
Debentures and Long-term Loan96
Debentures and Long-term Loans from Financial Institutions (Schedule of Debentures) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Non- current liabilities | ||
Debentures | ₪ 2,360 | ₪ 2,866 |
Long-term loans from financial institutions | 462 | 340 |
Non- current liabilities | 2,822 | 3,206 |
Current liabilities | ||
Current maturities of debentures | 618 | 863 |
Current maturities of loans from financial institutions | 78 | |
Current liabilities | ₪ 618 | ₪ 863 |
Debentures and Long-term Loan97
Debentures and Long-term Loans from Financial Institutions (Schedule of Terms and Debt repayment of Debentures) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | ||
Disclosure of detailed information about borrowings [line items] | ||||
Face value | ₪ 3,032 | ₪ 3,809 | ||
Carrying amount | ₪ 2,900 | 3,729 | ||
Debentures (Series B) - linked to the Israeli CPI [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 5.30% | |||
Year of maturity | until 2,017 | |||
Face value | 185 | |||
Carrying amount | 220 | |||
Debentures (Series D) - linked to the Israeli CPI [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 5.19% | |||
Year of maturity | until 2,017 | |||
Face value | 299 | |||
Carrying amount | 349 | |||
Debentures (Series E) - unlinked [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 6.25% | |||
Year of maturity | until 2,017 | |||
Face value | 164 | |||
Carrying amount | 164 | |||
Debentures (Series F) - linked to the Israeli CPI [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | [1] | NIS | ||
Nominal interest rate | [1] | 4.60% | ||
Year of maturity | [1] | 2017-2020 | ||
Face value | [1] | ₪ 643 | 715 | |
Carrying amount | [1] | ₪ 659 | 731 | |
Debentures (Series G) - unlinked [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | [1] | NIS | ||
Nominal interest rate | [1] | 6.99% | ||
Year of maturity | [1] | 2017-2019 | ||
Face value | [1] | ₪ 228 | 285 | |
Carrying amount | [1] | ₪ 228 | 285 | |
Debentures (Series H) - linked to the Israeli CPI [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 1.98% | |||
Year of maturity | 2018-2024 | |||
Face value | ₪ 950 | 950 | ||
Carrying amount | ₪ 849 | 824 | ||
Debentures (Series I) - unlinked [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 4.14% | |||
Year of maturity | 2018-2025 | |||
Face value | ₪ 804 | 804 | ||
Carrying amount | ₪ 761 | 753 | ||
Debentures (Series J) - linked to the Israeli CPI [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 2.45% | |||
Year of maturity | 2021-2026 | |||
Face value | ₪ 103 | 103 | ||
Carrying amount | ₪ 102 | 102 | ||
Debentures (Series K) - unlinked [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 3.55% | |||
Year of maturity | 2021-2026 | |||
Face value | ₪ 304 | 304 | ||
Carrying amount | ₪ 301 | 301 | ||
Loan from financial institutions [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 4.60% | |||
Year of maturity | 2018-2021 | |||
Face value | ₪ 200 | 200 | ||
Carrying amount | ₪ 200 | 200 | ||
Loan from financial institutions [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | [2] | NIS | ||
Nominal interest rate | [2] | 5.10% | ||
Year of maturity | [2] | 2019-2022 | ||
Face value | [2] | ₪ 200 | ||
Carrying amount | [2] | ₪ 200 | ||
Loan from Bank [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Currency | NIS | |||
Nominal interest rate | 4.90% | |||
Year of maturity | 2018-2022 | |||
Face value | ₪ 140 | 140 | ||
Carrying amount | 140 | 140 | ||
Loan from financial institutions [Member] | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Nominal interest rate | 5.10% | |||
Face value | 540 | ₪ 200 | 340 | |
Carrying amount | ₪ 540 | ₪ 340 | ||
[1] | In June 2013, the Company's rating was updated from an "ilAA-/negative" to an "ilA+/stable" rating, in relation to the Company's debentures traded on the Tel Aviv Stock Exchange. Following this update of rating and since this was the second downgrade in the Debentures' rating since their issuance, the annual interest rate that the Company pays for its Series F and G debentures has been increased by 0.25% to 4.60% and 6.99%, respectively, beginning July 5, 2013. | |||
[2] | According to a loan agreement entered by the Company and two Israeli financial institutions in May 2015, in June 30, 2017, the second loan under the agreement in a principal amount of NIS 200 million was provided to the Company. The loan is without linkage and the principal amount bears an annual fixed interest of 5.1%. The loan's principal amount will be payable in four equal annual payments on June 30 of each of the years 2019 through 2022 (inclusive). The interest will be paid in ten semi-annual installments on June 30 and December 31, of each calendar year commencing December 31, 2017 through and including June 30, 2022. |
Debentures and Long-term Loan98
Debentures and Long-term Loans from Financial Institutions (Schedule of Movement in liabilities) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | ₪ 863 | ||
Changes from financing cash flows | |||
Cash received | (200) | ||
Cash paid | 1,043 | ||
Net cash from (used in) financing activities | (843) | ₪ 62 | ₪ (1,136) |
Linkage expenses to CPI | (1) | ||
Changes in fair value | (3) | ||
Discount amortization | 32 | 26 | ₪ 22 |
Interest expenses | (144) | ||
Balance as at December 31, 2017 | 618 | 863 | |
Loan [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | (340) | ||
Changes from financing cash flows | |||
Cash received | (200) | ||
Cash paid | |||
Net cash from (used in) financing activities | (540) | ||
Linkage expenses to CPI | |||
Changes in fair value | |||
Discount amortization | |||
Interest expenses | |||
Balance as at December 31, 2017 | (540) | (340) | |
Debentures [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | (3,729) | ||
Changes from financing cash flows | |||
Cash received | |||
Cash paid | 864 | ||
Net cash from (used in) financing activities | (2,865) | ||
Linkage expenses to CPI | (3) | ||
Changes in fair value | |||
Discount amortization | (32) | ||
Interest expenses | |||
Balance as at December 31, 2017 | (2,900) | (3,729) | |
Derivates [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | (17) | ||
Changes from financing cash flows | |||
Cash received | |||
Cash paid | 3 | ||
Net cash from (used in) financing activities | (14) | ||
Linkage expenses to CPI | |||
Changes in fair value | (3) | ||
Discount amortization | |||
Interest expenses | |||
Balance as at December 31, 2017 | (17) | (17) | |
Interest payable [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | (86) | ||
Changes from financing cash flows | |||
Cash received | |||
Cash paid | 175 | ||
Net cash from (used in) financing activities | 89 | ||
Linkage expenses to CPI | |||
Changes in fair value | |||
Discount amortization | |||
Interest expenses | (143) | ||
Balance as at December 31, 2017 | (54) | (86) | |
Put options of non-controlling interests [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Balance as at January 1, 2017 | (11) | ||
Changes from financing cash flows | |||
Cash received | |||
Cash paid | 1 | ||
Net cash from (used in) financing activities | (10) | ||
Linkage expenses to CPI | |||
Changes in fair value | |||
Discount amortization | |||
Interest expenses | (1) | ||
Balance as at December 31, 2017 | ₪ (11) | ₪ (11) |
Liability for Employee Rights99
Liability for Employee Rights upon Retirement, Net (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of defined benefit plans [abstract] | ||
Liability for employee rights upon retirement, net | ₪ 15 | ₪ 12 |
Total liability | 27 | 25 |
Fair value of the plan assets | 20 | 20 |
Defined benefit plans expense | 3 | 3 |
Group's liability for adaptation grants to employees | ₪ 8 | ₪ 7 |
Capital and Reserves (Narrative
Capital and Reserves (Narrative) (Details) - ILS (₪) ₪ / shares in Units, ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of classes of share capital [abstract] | |||
Par value per share | ₪ 0.01 | ||
Authorized share capital | ₪ 300 | ₪ 300 | ₪ 300 |
Weighted-average number of shares used in the calculation of basic earnings per share (in shares) | 100,654,935 | 100,604,578 | 100,589,458 |
Incremental shares | 234,726 | 93,728 | 72 |
Options excluded from diluted weighted average number of ordinary shares | 78,000 | 1,060,000 | 616,000 |
Capital and Reserves (Schedule
Capital and Reserves (Schedule of Share Capital) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of classes of share capital [abstract] | |||
Issued and paid at January 1 | 1,006,046 | 1,006,046 | 1,005,845 |
Exercise of share options | 4,400 | 201 | |
Issued and paid at December 31 | 1,010,446 | 1,006,046 | 1,006,046 |
Share-Based Payments (Narrative
Share-Based Payments (Narrative) (Details) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017ILS (₪)Years | Dec. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |||
Total compensation expense | ₪ | ₪ 2 | ₪ 6 | ₪ 3 |
Weighted average of the remaining contractual life of options outstanding | Years | 1.9 |
Share-Based Payments (Schedule
Share-Based Payments (Schedule of Share Incentive Plan) (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($)sharesYears | Dec. 31, 2017ILS (₪)Years | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Contractual life of options | 1.9 | 1.9 |
Share options granted in December 2013 to senior employees [Member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of instruments In thousands | shares | 234 | |
Vesting conditions | Three equal installments over three years of employment | |
Contractual life of options | 4.5 | 4.5 |
Adjusted exercise price per share as of December 31, 2016 | $ | $ 14.65 | |
Share options granted in August 2015 and October 2015 to senior employees [Member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of instruments In thousands | shares | 2,660 | |
Vesting conditions | Three equal installments over three years of employment | |
Contractual life of options | 4.5 | 4.5 |
Adjusted exercise price per share as of December 31, 2016 | ₪ | ₪ 25.65 | |
Share options granted in November 2016 to senior employees [Member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of instruments In thousands | shares | 63 | |
Vesting conditions | Three equal installments over three years of employment | |
Contractual life of options | 4.5 | 4.5 |
Adjusted exercise price per share as of December 31, 2016 | ₪ | ₪ 29.97 |
Share-Based Payments (Schedu104
Share-Based Payments (Schedule of Balances of Options) (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)shares$ / shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | ||
Number of options | ||||
Balance as at January 1 | shares | 2,764,334 | 2,873,190 | 638,865 | |
Granted during the year | shares | 63,000 | 2,660,000 | ||
Forfeited during the year | (146,334) | (171,856) | (292,798) | |
Exercised during the year | (1,654,335) | (132,877) | ||
Total options outstanding as at December 31 | 963,665 | 2,764,334 | 2,873,190 | |
Total of exercisable options as at December 31 | [1] | 106,000 | 1,020,000 | 170,190 |
Weighted average of exercise price | ||||
Balance as at January 1 | $ 7.15 | $ 7.40 | $ 15.86 | |
Granted during the year | 7.79 | 6.69 | ||
Forfeited during the year | 11.26 | 11.43 | 19.52 | |
Exercised during the year | 7.4 | 5.67 | ||
Total options outstanding as at December 31 | 8.07 | 7.15 | 7.40 | |
Total of exercisable options as at December 31 | [1] | $ 12.98 | $ 7.89 | $ 15.13 |
[1] | The weighted average of the remaining contractual life of options outstanding as at December 31, 2017 is 1.9 years. |
Share-Based Payments (Schedu105
Share-Based Payments (Schedule of Fair Value of Share Options and Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2017ILS (₪)Years | Dec. 31, 2016ILS (₪)Years | Dec. 31, 2015ILS (₪)Years | |
Fair value of share options and assumptions: | |||
Fair value at grant date | ₪ 6.3 | ₪ 3.5 | |
Fair value assumptions: | |||
Share price at grant date | 27.75 | 23.75 | |
Exercise price | ₪ 29.97 | ₪ 25.65 | |
Expected volatility (weighted average) | 42.80% | 35.90% | |
Option life (expected weighted average life) | Years | 2.3 | 2.3 | |
Risk free interest rate | 0.40% | 0.40% |
Financial Instruments (Narrativ
Financial Instruments (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] | |||
Change of interest rates | 1.00% | ||
Repaid interest and principal of debentures | ₪ 864 | ₪ 732 | ₪ 873 |
Repayments of debentures [Member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Repaid interest and principal of debentures | ₪ 418 | ₪ 592 |
Financial Instruments (Schedule
Financial Instruments (Schedule of Maximum Exposure to Credit Risk) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of detailed information about financial instruments [abstract] | ||||
Trade receivables including long-term amounts | ₪ 1,692 | ₪ 1,786 | ||
Loans and other receivables including long-term amounts | 146 | 5 | ||
Investment in debt securities | 325 | 282 | ||
Cash and cash equivalents in banks | 527 | 1,240 | ₪ 761 | ₪ 1,158 |
Derivative financial instrument | 3 | 2 | ||
Maximum exposure to credit risk | ₪ 2,693 | ₪ 3,315 |
Financial Instruments (Sched108
Financial Instruments (Schedule of Maximum Exposure to Credit Risk of Financial Assets) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of detailed information about financial instruments [abstract] | ||||
Receivables from subscribers | ₪ 1,511 | ₪ 1,590 | ||
Receivables from distributors and other operators | 158 | 196 | ||
Investment in government of Israel debt securities | 90 | 131 | ||
Investment in institutional debt securities | 235 | 151 | ||
Cash and cash equivalents in banks | 527 | 1,240 | ₪ 761 | ₪ 1,158 |
Other | 172 | 7 | ||
Maximum exposure to credit risk | ₪ 2,693 | ₪ 3,315 |
Financial Instruments (Sched109
Financial Instruments (Schedule of Aging of Financial Assets) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Cost [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | ₪ 2,880 | ₪ 3,500 |
Cost [Member] | Not past due [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 2,580 | 3,200 |
Cost [Member] | Past due less than one year [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 143 | 154 |
Cost [Member] | Past due more than one year [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 157 | 146 |
Impairment [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 187 | 185 |
Impairment [Member] | Not past due [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 12 | 22 |
Impairment [Member] | Past due less than one year [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | 53 | 62 |
Impairment [Member] | Past due more than one year [Member] | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Financial assets | ₪ 122 | ₪ 101 |
Financial Instruments (Sched110
Financial Instruments (Schedule of Allowance for Impairment in Respect of Trade Receivables) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about financial instruments [abstract] | ||
Balance at January 1 | ₪ 185 | ₪ 202 |
Impairment loss recognized | (44) | (50) |
Doubtful debt expenses | 46 | 33 |
Balance at December 31 | ₪ 187 | ₪ 185 |
Financial Instruments (Sched111
Financial Instruments (Schedule of Maturities of Contractual of Financial Liabilities) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
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] | |||
Long-term loans from financial institutions | ₪ 462 | ₪ 340 | |
Trade and other payables | 1 | 3 | |
Carrying amount [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] | |||
Debentures | [1] | (2,954) | (3,815) |
Long-term loans from financial institutions | (540) | (340) | |
Trade and other payables | (784) | (803) | |
Forward exchange contracts on foreign currencies | (1) | ||
Forward exchange contracts on CPI | (17) | (17) | |
Other long-term liabilities | (12) | (13) | |
Financial liabilities and other non-contractual liabilities | (4,308) | (4,988) | |
Contractual Cash flows [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] | |||
Debentures | [1] | (3,435) | (4,448) |
Long-term loans from financial institutions | (605) | (392) | |
Trade and other payables | (784) | (803) | |
Forward exchange contracts on foreign currencies | (1) | ||
Forward exchange contracts on CPI | (17) | (17) | |
Other long-term liabilities | (12) | (13) | |
Financial liabilities and other non-contractual liabilities | (4,854) | (5,673) | |
1st 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] | |||
Debentures | [1] | (658) | (1,014) |
Long-term loans from financial institutions | (102) | (16) | |
Trade and other payables | (784) | (803) | |
Forward exchange contracts on foreign currencies | (1) | ||
Forward exchange contracts on CPI | (17) | (2) | |
Other long-term liabilities | (2) | ||
Financial liabilities and other non-contractual liabilities | (1,562) | (1,837) | |
2nd 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] | |||
Debentures | [1] | (577) | (657) |
Long-term loans from financial institutions | (147) | (92) | |
Trade and other payables | |||
Forward exchange contracts on foreign currencies | |||
Forward exchange contracts on CPI | (15) | ||
Other long-term liabilities | (12) | ||
Financial liabilities and other non-contractual liabilities | (736) | (764) | |
3rd 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] | |||
Debentures | [1] | (473) | (577) |
Long-term loans from financial institutions | (141) | (89) | |
Trade and other payables | |||
Forward exchange contracts on foreign currencies | |||
Forward exchange contracts on CPI | |||
Other long-term liabilities | (11) | ||
Financial liabilities and other non-contractual liabilities | (614) | (677) | |
4-5 years [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] | |||
Debentures | [1] | (739) | (847) |
Long-term loans from financial institutions | (215) | (166) | |
Trade and other payables | |||
Forward exchange contracts on foreign currencies | |||
Forward exchange contracts on CPI | |||
Other long-term liabilities | |||
Financial liabilities and other non-contractual liabilities | (954) | (1,013) | |
More than 5 years [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] | |||
Debentures | [1] | (988) | (1,353) |
Long-term loans from financial institutions | (29) | ||
Trade and other payables | |||
Forward exchange contracts on foreign currencies | |||
Forward exchange contracts on CPI | |||
Other long-term liabilities | |||
Financial liabilities and other non-contractual liabilities | ₪ (988) | ₪ (1,382) | |
[1] | Including accrued interest on debentures. |
Financial Instruments (Sched112
Financial Instruments (Schedule of Group's Exposure to Foreign Currency Risk and CPI) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets | |||||
Cash and cash equivalents | ₪ 527 | ₪ 1,240 | ₪ 761 | ₪ 1,158 | |
Current investments, including derivatives | 364 | 284 | |||
Trade receivables | [1] | 1,280 | 1,325 | ||
Other receivables | 89 | 61 | |||
Non- current assets | |||||
Long-term receivables | 895 | 796 | |||
Current liabilities | |||||
Current maturities of debentures | (618) | (863) | |||
Trade payables and accrued expenses | (652) | (675) | |||
Other current liabilities, including derivatives | (277) | (279) | |||
Non- current liabilities | |||||
Long-term loans from financial institutions | (462) | (340) | |||
Debentures | (2,360) | (2,866) | |||
Other non- current liabilities, including derivatives | (15) | (31) | |||
Currency Risk [Member] | In or linked to foreign currencies (mainly USD) [Member] | |||||
Current assets | |||||
Cash and cash equivalents | 29 | 12 | |||
Current investments, including derivatives | 13 | 2 | |||
Trade receivables | 61 | 89 | |||
Other receivables | |||||
Non- current assets | |||||
Long-term receivables | |||||
Current liabilities | |||||
Current maturities of debentures | |||||
Trade payables and accrued expenses | (115) | (182) | |||
Other current liabilities, including derivatives | (1) | ||||
Non- current liabilities | |||||
Long-term loans from financial institutions | |||||
Debentures | |||||
Other non- current liabilities, including derivatives | (1) | (3) | |||
Assets (liabilities) | (14) | (82) | |||
Currency Risk [Member] | Linked to CPI [Member] | |||||
Current assets | |||||
Cash and cash equivalents | |||||
Current investments, including derivatives | 135 | 141 | |||
Trade receivables | |||||
Other receivables | |||||
Non- current assets | |||||
Long-term receivables | 54 | 1 | |||
Current liabilities | |||||
Current maturities of debentures | (322) | (642) | |||
Trade payables and accrued expenses | |||||
Other current liabilities, including derivatives | (42) | (49) | |||
Non- current liabilities | |||||
Long-term loans from financial institutions | |||||
Debentures | (1,288) | (1,584) | |||
Other non- current liabilities, including derivatives | (15) | ||||
Assets (liabilities) | (1,463) | (2,148) | |||
Currency Risk [Member] | Unlinked [Member] | |||||
Current assets | |||||
Cash and cash equivalents | 498 | 1,228 | |||
Current investments, including derivatives | 181 | 141 | |||
Trade receivables | 1,219 | 1,236 | |||
Other receivables | 8 | 4 | |||
Non- current assets | |||||
Long-term receivables | 495 | 461 | |||
Current liabilities | |||||
Current maturities of debentures | (297) | (221) | |||
Trade payables and accrued expenses | (537) | (493) | |||
Other current liabilities, including derivatives | (161) | (167) | |||
Non- current liabilities | |||||
Long-term loans from financial institutions | (462) | (340) | |||
Debentures | (1,071) | (1,282) | |||
Other non- current liabilities, including derivatives | (11) | (10) | |||
Assets (liabilities) | ₪ (138) | ₪ 557 | |||
[1] | Net of allowance for doubtful debts |
Financial Instruments (Sched113
Financial Instruments (Schedule of Exposure to Linkage and Foreign Currency Risk) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Forward exchange contracts on foreign currencies [Member] | ||
Instruments not used for hedging | ||
Currency/linkage receivable | USD | USD |
Currency/linkage payable | NIS | NIS |
Notional Value | ₪ 105 | ₪ 95 |
Fair value | ₪ (1) | ₪ 1 |
Forward exchange contracts on CPI [Member] | ||
Instruments not used for hedging | ||
Currency/linkage receivable | CPI | CPI |
Currency/linkage payable | NIS | NIS |
Notional Value | ₪ 500 | ₪ 800 |
Fair value | ₪ (17) | ₪ (17) |
Foreign currency put options [Member] | ||
Instruments not used for hedging | ||
Currency/linkage receivable | NIS | NIS |
Currency/linkage payable | USD | USD |
Notional Value | ₪ (105) | ₪ (95) |
Fair value | ₪ 1 | ₪ 1 |
Embedded derivative in lease contracts [Member] | ||
Instruments not used for hedging | ||
Currency/linkage receivable | USD | |
Currency/linkage payable | NIS | |
Notional Value | ₪ 16 | |
Fair value | ₪ 2 |
Financial Instruments (Sched114
Financial Instruments (Schedule of Sensitivity Analysis) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2001 | |
Disclosure of detailed information about financial instruments [line items] | |||||
Equity | ₪ 1,441 | ₪ 1,340 | ₪ 1,185 | ₪ 1,092 | ₪ 486 |
Net income | ₪ 113 | ₪ 150 | ₪ 97 | ||
Increase in the CPI of [Member] | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Change | 2.00% | 2.00% | |||
Equity | ₪ (9) | ₪ (13) | |||
Net income | ₪ (9) | ₪ (13) | |||
Increase in the CPI of [Member] | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Change | 1.00% | 1.00% | |||
Equity | ₪ (2) | ₪ (4) | |||
Net income | ₪ (2) | ₪ (4) | |||
Decrease in the CPI of [Member] | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Change | (1.00%) | (1.00%) | |||
Equity | ₪ 3 | ||||
Net income | ₪ 3 | ||||
Decrease in the CPI of [Member] | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Change | (2.00%) | (2.00%) | |||
Equity | ₪ 6 | ||||
Net income | ₪ 6 |
Financial Instruments (Sched115
Financial Instruments (Schedule of Group's Interest-Bearing Financial Instruments) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fixed rate instruments [Member] | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial assets | ₪ 679 | ₪ 845 |
Financial liabilities | (3,440) | (4,069) |
Financial assets liabilities | (2,761) | (3,224) |
Variable rate instruments [Member] | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Financial assets | ₪ 221 | ₪ 500 |
Financial Instruments (Sched116
Financial Instruments (Schedule of Fair Value Sensitivity Analysis for Fixed Rate Instruments) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Share price risk [Member] | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
Increase of 5% of Profit or loss | ₪ 1 | |
Increase of 10% of Profit or loss | 3 | |
Decrease of 5% of Profit or loss | (1) | |
Decrease of 10% of Profit or loss | (3) | |
Increase of 5% of equity | 1 | |
Increase of 10% of equity | 3 | |
Decrease of 5% of equity | (1) | |
Decrease of 10% of equity | (3) | |
Fixed rate instruments [Member] | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
1.0% increase in fair value sensitivity (net) of equity | (9) | ₪ (7) |
1.0% decrease in fair value sensitivity (net) of equity | 9 | 7 |
0.5% increase in fair value sensitivity (net) of equity | (5) | (4) |
0.5% decrease in fair value sensitivity (net) of equity | 5 | 4 |
1.0% increase in fair value sensitivity (net) of Profit or loss | (9) | (7) |
1.0% decrease in fair value sensitivity (net) of Profit or loss | 9 | 7 |
0.5% increase in fair value sensitivity (net) of Profit or loss | (5) | (4) |
0.5% decrease in fair value sensitivity (net) of Profit or loss | ₪ 5 | ₪ 4 |
Financial Instruments (Sched117
Financial Instruments (Schedule of Fair Values of Remaining Financial Liabilities) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about financial instruments [abstract] | |||
Debentures including current maturities and accrued interest, Book value | ₪ (2,954) | ₪ (3,815) | |
Debentures including current maturities and accrued interest, Fair value | [1] | (3,288) | (4,112) |
Long-term loans from financial institutions including current, Book value | (540) | (340) | |
Long-term loans from financial institutions including current, Fair value | [1] | ₪ (574) | ₪ (350) |
[1] | The fair value as of December 31, 2017 includes principal and interest in a total sum of approximately NIS 418 million, paid in January 2018, after the end of the reporting period. The fair value as of December 31, 2016 includes principal and interest in a total sum of approximately NIS 592 million, paid in January 2017. |
Financial Instruments (Sched118
Financial Instruments (Schedule of Analyses Financial Instruments Carried at Fair Value) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financial liabilities at fair value through profit or loss Derivatives [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | ₪ (18) | ₪ (17) |
Financial liabilities at fair value through profit or loss Derivatives [Member] | Level 1 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | ||
Financial liabilities at fair value through profit or loss Derivatives [Member] | Level 2 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | (18) | (17) |
Financial liabilities at fair value through profit or loss Derivatives [Member] | Level 3 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | ||
Financial liabilities at fair value through profit or loss [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | (18) | (17) |
Financial liabilities at fair value through profit or loss [Member] | Level 1 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | ||
Financial liabilities at fair value through profit or loss [Member] | Level 2 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | (18) | (17) |
Financial liabilities at fair value through profit or loss [Member] | Level 3 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total liabilities | ||
Financial assets at fair value through profit or loss Current investments in debt securities [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 361 | 282 |
Financial assets at fair value through profit or loss Current investments in debt securities [Member] | Level 1 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 361 | 282 |
Financial assets at fair value through profit or loss Current investments in debt securities [Member] | Level 2 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | ||
Financial assets at fair value through profit or loss Current investments in debt securities [Member] | Level 3 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | ||
Financial assets at fair value through profit or loss Derivatives [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 3 | 2 |
Financial assets at fair value through profit or loss Derivatives [Member] | Level 1 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | ||
Financial assets at fair value through profit or loss Derivatives [Member] | Level 2 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 3 | 2 |
Financial assets at fair value through profit or loss Derivatives [Member] | Level 3 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | ||
Financial assets at fair value through profit or loss [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 364 | 284 |
Financial assets at fair value through profit or loss [Member] | Level 1 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 361 | 282 |
Financial assets at fair value through profit or loss [Member] | Level 2 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets | 3 | 2 |
Financial assets at fair value through profit or loss [Member] | Level 3 [Member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Total assets |
Financial Instruments (Sched119
Financial Instruments (Schedule of Details Regarding Fair Value Measurement at Level 2) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Forward contract [Member] | |
Disclosure of financial liabilities [line items] | |
Valuation method for determining fair value | Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties credit risks. |
Foreign currency options [Member] | |
Disclosure of financial liabilities [line items] | |
Valuation method for determining fair value | Fair value is measured based on the Black-Scholes formula. |
Financial Instruments (Sched120
Financial Instruments (Schedule of Carrying Amounts of Recognized Financial Instruments) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets | ||
Trade receivables | ₪ 2,264 | ₪ 2,182 |
Financial liabilities | ||
Trade payables and accrued expenses | 652 | 675 |
Gross amounts of recognized financial assets (liabilities) [Member] | ||
Financial assets | ||
Trade receivables | 170 | 224 |
Financial liabilities | ||
Trade payables and accrued expenses | (149) | (183) |
Gross amounts of financial assets (liabilities) recognized and offset in the consolidated statements of financial position [Member] | ||
Financial assets | ||
Trade receivables | (123) | (159) |
Financial liabilities | ||
Trade payables and accrued expenses | 123 | 159 |
Net amounts of financial assets (liabilities) presented in the consolidated statements of financial position [Member] | ||
Financial assets | ||
Trade receivables | 47 | 65 |
Financial liabilities | ||
Trade payables and accrued expenses | ₪ (26) | ₪ (24) |
Revenues (Schedule of Compositi
Revenues (Schedule of Composition of Revenues By Type) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue [abstract] | |||
Revenues from equipment | ₪ 952 | ₪ 994 | ₪ 1,048 |
Revenues from services: | |||
Cellular services | 1,777 | 2,025 | 2,121 |
Land-line communications services | 1,004 | 871 | 866 |
Other services | 138 | 137 | 145 |
Total revenues from services | 2,919 | 3,033 | 3,132 |
Total revenues | ₪ 3,871 | ₪ 4,027 | ₪ 4,180 |
Cost of Revenues (Schedule of C
Cost of Revenues (Schedule of Composition of Cost of Revenues) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
According to source of income: | |||
Cost of revenues from equipment | ₪ 645 | ₪ 674 | ₪ 763 |
Cost of revenues from services | 2,035 | 2,028 | 2,000 |
Cost of revenues | 2,680 | 2,702 | 2,763 |
According to its components: | |||
Cost of revenues from equipment | 645 | 674 | 763 |
Rent and related expenses | 281 | 321 | 332 |
Salaries and related expenses | 224 | 241 | 265 |
Fees to communications operators | 767 | 732 | 732 |
Cost of content and value added services | 212 | 168 | 143 |
Depreciation and amortization | 412 | 396 | 381 |
Royalties and fees | 86 | 93 | 96 |
Other | 53 | 77 | 51 |
Total cost of revenues from services | 2,035 | 2,028 | 2,000 |
Cost of revenues | ₪ 2,680 | ₪ 2,702 | ₪ 2,763 |
Selling and Marketing Expens123
Selling and Marketing Expenses (Schedule of Composition of Selling and Marketing Expenses) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of selling and marketing expenses [Abstract] | |||
Salaries and related expenses | ₪ 241 | ₪ 257 | ₪ 278 |
Commissions | 88 | 179 | 196 |
Advertising and public relations | 36 | 44 | 26 |
Depreciation and amortization | 33 | 20 | 38 |
Other | 81 | 74 | 82 |
Selling and marketing expenses | ₪ 479 | ₪ 574 | ₪ 620 |
General and Administrative E124
General and Administrative Expenses (Schedule of Composition of General and Administrative Expenses) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of general and administrative expenses [Abstract] | |||
Salaries and related expenses | ₪ 124 | ₪ 123 | ₪ 114 |
Depreciation and amortization | 110 | 118 | 143 |
Rent and maintenance | 51 | 55 | 59 |
Data processing and professional services | 36 | 39 | 51 |
Allowance for doubtful accounts | 46 | 33 | 32 |
Other | 59 | 52 | 66 |
General and administrative expenses | ₪ 426 | ₪ 420 | ₪ 465 |
Other Income (Expenses), net (D
Other Income (Expenses), net (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Other (Income) expenses net [Abstract] | |||
Other employee expenses | ₪ 13 | ₪ 25 | |
Capital gain due to sale of subsidiary | ₪ 10 |
Financing Income and Expense126
Financing Income and Expenses (Schedule of Composition of Financing Income and Expenses) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of financing income and expenses [Abstract] | |||
Interest income from installment sale transactions | ₪ 31 | ₪ 38 | ₪ 47 |
Net change in fair value of financial assets measured at fair value through profit or loss | 14 | 6 | 5 |
Other | 7 | 2 | 3 |
Financing income | 52 | 46 | 55 |
Linkage expenses to CPI and interest expenses on long-term liabilities | (147) | (157) | (169) |
Net change in fair value of derivatives | (8) | (32) | |
Discount amortization | (32) | (26) | (22) |
Foreign exchange differences and other | (9) | (13) | (9) |
Financing expenses | (196) | (196) | (232) |
Net financing expenses recognized in profit or loss | ₪ (144) | ₪ (150) | ₪ (177) |
Income Tax (Narrative) (Details
Income Tax (Narrative) (Details) | Jan. 04, 2016 | Dec. 22, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of income tax [Abstract] | |||||
Corporate tax rate | 24.00% | 25.00% | 26.50% | ||
Change in tax rate | reduced by 1.5% to a rate of 25% as from January 1, 2016. | On December 22, 2016 the Israeli Parliament passed the Economic Efficiency Law (Legislative Amendments for Achieving Budget Objectives in the Years 2017 and 2018) - 2016, by which, inter alia, the corporate tax rate was reduced from 25% to 23% in two steps. The first step to a rate of 24% as from January 2017 and the second step to a rate of 23% as from January 2018. | |||
Deferred tax rate | 23.00% |
Income Tax (Schedule of Compone
Income Tax (Schedule of Components of Income Taxes) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense (income) | |||
Current year | ₪ 27 | ₪ 35 | ₪ 45 |
Adjustments for prior years, net | (1) | (27) | |
Current tax expense (income) | 26 | 8 | 45 |
Deferred tax expense (income) | |||
Creation and reversal of temporary differences | 14 | 21 | (9) |
Change in tax rate | (19) | ||
Deferred tax expense (income) | 14 | 2 | (9) |
Income tax expense | ₪ 40 | ₪ 10 | ₪ 36 |
Income Tax (Schedule of Other C
Income Tax (Schedule of Other Comprehensive Income) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of income tax [Abstract] | |||
Other comprehensive income (loss) items, before tax | ₪ 1 | ₪ 1 | ₪ (2) |
Other comprehensive income (loss) items, tax (benefit) expenses | (1) | 1 | |
Total other comprehensive income (loss) for the year, net of tax | ₪ 1 | ₪ (1) |
Income Tax (Schedule of Reconci
Income Tax (Schedule of Reconciliation Between Theoretical Tax on Pre-tax Profit and Tax Expense) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of income tax [Abstract] | |||
Profit before taxes on income | ₪ 153 | ₪ 160 | ₪ 133 |
Primary tax rate of the Group | 24.00% | 25.00% | 26.50% |
Tax calculated according to the Group's primary tax rate | ₪ 37 | ₪ 40 | ₪ 35 |
Additional tax (tax saving) in respect of: | |||
Non-deductible expenses | 5 | 4 | 5 |
Taxes in respect of previous years | (1) | (27) | |
Effect of change in tax rate | (19) | ||
Tax exempt income | (1) | ||
Other differences | (1) | 12 | (3) |
Income tax expense | ₪ 40 | ₪ 10 | ₪ 36 |
Income Tax (Schedule of Deferre
Income Tax (Schedule of Deferred Tax Assets and Liabilities Recognized) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | ₪ (117) | ₪ (114) |
Changes recognized in profit or loss | (14) | (2) |
Changes recognized in other comprehensive income | (1) | |
Balance of deferred tax asset (liability) | (131) | (117) |
Deferred tax asset | 74 | 93 |
Offset of balances | (74) | (92) |
Deferred tax asset in the consolidated statements of financial position as at December 31, 2017 | 1 | |
Deferred tax liability | (205) | (210) |
Offset of balances | 74 | 92 |
Deferred tax liability in the consolidated statements of financial position as at December 31, 2017 | (131) | (118) |
Allowance for doubtful debts [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | 43 | 53 |
Changes recognized in profit or loss | (10) | |
Changes recognized in other comprehensive income | ||
Balance of deferred tax asset (liability) | 43 | 43 |
Deferred tax asset | 43 | 43 |
Deferred tax liability | ||
Property, plant and equipment and intangible assets [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | (184) | (201) |
Changes recognized in profit or loss | (13) | 17 |
Changes recognized in other comprehensive income | ||
Balance of deferred tax asset (liability) | (197) | (184) |
Deferred tax asset | 5 | 23 |
Deferred tax liability | (202) | (207) |
Hedging transactions [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | 1 | |
Changes recognized in profit or loss | (1) | |
Changes recognized in other comprehensive income | ||
Balance of deferred tax asset (liability) | ||
Deferred tax asset | ||
Deferred tax liability | ||
Carry forward tax deductions and losses [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | 8 | |
Changes recognized in profit or loss | (8) | |
Changes recognized in other comprehensive income | ||
Balance of deferred tax asset (liability) | ||
Deferred tax asset | ||
Deferred tax liability | ||
Other [Member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Balance of deferred tax asset (liability) | 24 | 25 |
Changes recognized in profit or loss | (1) | |
Changes recognized in other comprehensive income | (1) | |
Balance of deferred tax asset (liability) | 23 | 24 |
Deferred tax asset | 26 | 27 |
Deferred tax liability | ₪ (3) | ₪ (3) |
Operating Leases (Narrative) (D
Operating Leases (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating leases expense | ₪ 280 | ₪ 286 | ₪ 285 |
Office buildings and warehouses [Member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating lease period | 14 years | ||
Switching stations [Member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating lease period | 18 years | ||
Cell sites [Member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating lease period | 21 years | ||
Service centers, retail stores and stands [Member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating lease period | 13 years | ||
Motor vehicles [Member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating lease period | 3 years |
Operating Leases (Schedule of O
Operating Leases (Schedule of Operating Leases) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of finance lease and operating lease by lessee [line items] | ||
Non-cancelable operating lease rentals | ₪ 918 | ₪ 947 |
Less than one year [Member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Non-cancelable operating lease rentals | 275 | 274 |
Between one and five years [Member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Non-cancelable operating lease rentals | 573 | 570 |
More than 5 years [Member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Non-cancelable operating lease rentals | ₪ 70 | ₪ 103 |
Commitments (Details)
Commitments (Details) - ILS (₪) ₪ in Millions | 1 Months Ended | 2 Months Ended | 12 Months Ended | |
Oct. 31, 2016 | May 31, 2016 | Apr. 30, 2017 | Dec. 31, 2017 | |
Disclosure of contingent liabilities in business combination [line items] | ||||
Shareholders' joint equity | ₪ 200 | |||
Stipulation shareholder holding percentage | 10.00% | |||
Commitments to purchase equipment | ₪ 859 | |||
Period of renew of agreement | two additional periods of 5 years | |||
Golan Agreement [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Termination period of agreement | The termination of the Golan Agreement prior to the lapse of the first 10 years due to its breach by Golan. | |||
Agreed compensation | ₪ 600 | |||
Loan to Golan | ₪ 130 | |||
Period of loan | 10 years | |||
Loan repayment term | Repaid in 6 semi-annual equal installments beginning the 8th year of the Term (interest and CPI differentials to be accrued, will be paid as of the 6th year). | |||
Golan Agreement [Member] | Bottom of range [member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Annual consideration | ₪ 210 | |||
Golan Agreement [Member] | Top of range [member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Annual consideration | ₪ 220 | |||
Mediterranean Nautilus Ltd. and Mediterranean Nautilus (Israel) Ltd. [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Term of agreement | The term of the agreement with respect to capacity purchased from Med Nautilus is in effect until May 2032. Netvision has the option to terminate agreements with respect to parts of the capacity in 2022 and 2027. | |||
Obligation under agreements | ₪ 92 | |||
Xfone [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Term of agreement | The Agreements are for a term of ten years (the Xfone Agreement - commencing from the earlier of the commercial launch of cellular services by Xfone or 12 months following the receipt of regulatory approvals for the agreement (the Xfone Agreement Effective Date)), and will be extended for additional periods, unless either party notifies otherwise. | |||
Xfone [Member] | 1st year [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Monthly payment per subscriber | ₪ 25 | |||
Xfone [Member] | 2nd year [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Monthly payment per subscriber | 275 | |||
Xfone [Member] | Thereafter [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Monthly payment per subscriber | 30 | |||
Xfone [Member] | Bottom of range [member] | 1st year [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Annual minimum amounts per agreement terms | 20 | |||
Xfone [Member] | Top of range [member] | Fifth year [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Annual minimum amounts per agreement terms | ₪ 110 | |||
Apple Sales International [Member] | ||||
Disclosure of contingent liabilities in business combination [line items] | ||||
Period of minimum quantity of iPhone products | three years |
Contingent Liabilities (Narrati
Contingent Liabilities (Narrative) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Disclosure of contingent liabilities [line items] | |||||
Provision | ₪ 112 | ₪ 138 | ₪ 130 | ||
Government of Israel (to guarantee performance of the Cellular License) [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Bank guarantees | 80 | ||||
Government of Israel (to guarantee performance of the Licenses of the Group) [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Bank guarantees | 18 | ||||
Suppliers, government institutions and others [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Bank guarantees | 159 | ||||
Plaintiffs [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | ₪ 72 | ||||
Two purported class actions by plaintiffs [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | ₪ 15,076 | ||||
Six purported class actions [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 6 | ||||
Three purported class actions by plaintiff [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 160 | ||||
Purported class action [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 88 | ||||
Two purported class actions [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 4 | ||||
Against the Group and other defendants together [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 3 | ||||
Plaintiffs [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 3 | 21 | |||
NIS 1 billion or more claim by plaintiffs [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 13,000 | ₪ 15,000 | |||
NIS 1 billion or more claim by data specified in lawsuit by plaintiffs [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 6,700 | ||||
Said claims [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Claim amount | 27 | ||||
Litigations [Member] | |||||
Disclosure of contingent liabilities [line items] | |||||
Provision | 49 | ₪ 60 | ₪ 54 | ||
Claim amount | ₪ 16,634 |
Contingent Liabilities (Schedul
Contingent Liabilities (Schedule of Contingent Liabilities) (Details) ₪ in Millions | Dec. 31, 2017ILS (₪)Claims |
Up to NIS 100 million [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 15 |
Total claims amount | ₪ | ₪ 468 |
NIS 100-500 million [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 5 |
Total claims amount | ₪ | ₪ 1,166 |
Above NIS 1 billion [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 1 |
Total claims amount | ₪ | ₪ 15,000 |
Unquantified claims [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 12 |
Total claims amount | ₪ | |
Against the Group and other defendants together without [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 1 |
Total claims amount | ₪ | ₪ 300 |
Against the Group and other defendants together [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 1 |
Total claims amount | ₪ | ₪ 3 |
Unquantified claims against the Group and other defendants [Member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims | Claims | 5 |
Total claims amount | ₪ |
Related Parties (Narrative) (De
Related Parties (Narrative) (Details) - ILS (₪) ₪ in Millions | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2006 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2001 | |
Disclosure of transactions between related parties [line items] | ||||||
Percentage of group insurance policy | 30.00% | |||||
Equity | ₪ 1,441 | ₪ 1,340 | ₪ 1,185 | ₪ 1,092 | ₪ 486 | |
Related parties [Member] | ||||||
Disclosure of transactions between related parties [line items] | ||||||
Debentures balance held | ₪ 19 | ₪ 25 | ||||
Agreements with DIC [Member] | ||||||
Disclosure of transactions between related parties [line items] | ||||||
Directors fees | ₪ 134,180 | |||||
Agreements with DIC [Member] | Per meeting [Member] | ||||||
Disclosure of transactions between related parties [line items] | ||||||
Directors fees | 4,035 | |||||
Agreements with DIC [Member] | Fixed consideration [Member] | ||||||
Disclosure of transactions between related parties [line items] | ||||||
Directors fees | ₪ 2 |
Related Parties (Schedule of Ba
Related Parties (Schedule of Balance Sheet) (Details) - ILS (₪) ₪ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of transactions between related parties [line items] | |||
Current assets | ₪ 2,334 | ₪ 2,999 | |
Current liabilities | 1,642 | 1,925 | |
Long-term liability - debentures (including current maturity) | 2,360 | 2,866 | |
Related parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Current assets | 2 | 1 | |
Current liabilities | 2 | 1 | |
Long-term liability - debentures (including current maturity) | [1] | ₪ 3 | |
[1] | Debentures balance held by related parties, which includes debentures held for the benefit of the public, through, among others, provident funds, mutual funds and pension funds, as of December 31, 2017 and 2016, is NIS 19 million par value linked to the CPI and NIS 25 million par value linked to the CPI, respectively. |
Related Parties (Schedule of Tr
Related Parties (Schedule of Transactions with Related Parties) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income: | |||
Revenues | ₪ 13 | ₪ 17 | ₪ 16 |
Expenses: | |||
Cost of revenues and other | ₪ 16 | ₪ 16 | ₪ 25 |
Related Parties (Schedule of Ke
Related Parties (Schedule of Key Management Personnel Compensation) (Details) - ILS (₪) ₪ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of transactions between related parties [abstract] | |||
Short-term employee benefits | ₪ 6 | ₪ 4 | ₪ 4 |
Share-based payments | 1 | 1 | 1 |
Key management personnel compensation | ₪ 7 | ₪ 5 | ₪ 5 |