EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2

Exhibit 99.2
 
Financial Information for the Second Quarter Ended June 30, 2017 of Kenon, IC Power and Qoros

Table of Contents
 
 
 
Appendix A

Summary Kenon consolidated financial information

 Kenon Holdings Ltd
Unaudited Condensed Consolidated Statements of Financial Position

 
 
As of
 
 
 
June 30,
 
 
December 31
 
 
 
2017
 
 
2016
 
 
 
$ millions
 
Current assets
 
 
 
 
 
 
Cash and cash equivalents
 
 
366
 
 
 
327
 
Short-term investments and deposits
 
 
54
 
 
 
71
 
Trade receivables, net
 
 
278
 
 
 
284
 
Other current assets, including derivatives instruments
 
 
102
 
 
 
50
 
Income tax receivable
 
 
2
 
 
 
11
 
Inventories
 
 
82
 
 
 
92
 
Total current assets
 
 
884
 
 
 
835
 
Non-current assets
 
 
 
 
 
 
 
 
Investments in associated companies
 
 
188
 
 
 
208
 
Restricted cash
 
 
75
 
 
 
36
 
Income tax receivable and tax claims
 
 
107
 
 
 
100
 
Deposits, loans and other receivables, including derivative instruments
 
 
62
 
 
 
60
 
Deferred taxes, net
 
 
24
 
 
 
25
 
Property, plant and equipment, net
 
 
3,507
 
 
 
3,497
 
Goodwill and intangible assets, net
 
 
364
 
 
 
377
 
Total non-current assets
 
 
4,327
 
 
 
4,303
 
Total assets
 
 
5,211
 
 
 
5,138
 
Current liabilities
 
 
 
 
 
 
 
 
Loans and debentures
 
 
322
 
 
 
483
 
Trade payables
 
 
226
 
 
 
286
 
Other payables, including derivative instruments
 
 
90
 
 
 
91
 
Guarantee deposits from customers
 
 
61
 
 
 
57
 
Provisions
 
 
43
 
 
 
119
 
Income tax payable
 
 
19
 
 
 
9
 
Total current liabilities
 
 
761
 
 
 
1,045
 
Non-current liabilities
 
 
 
 
 
 
 
 
Loans, excluding current portion
 
 
1,912
 
 
 
1,973
 
Debentures, excluding current portion
 
 
1,258
 
 
 
857
 
Derivative instruments
 
 
47
 
 
 
45
 
Deferred taxes, net
 
 
233
 
 
 
225
 
Trade payables
 
 
39
 
 
 
44
 
Other non-current liabilities
 
 
56
 
 
 
55
 
Total non-current liabilities
 
 
3,545
 
 
 
3,199
 
Total liabilities
 
 
4,306
 
 
 
4,244
 
Equity
 
 
 
 
 
 
 
 
Share capital
 
 
1,267
 
 
 
1,267
 
Shareholder transaction reserve
 
 
27
 
 
 
27
 
Translation reserve
 
 
(3)
  
 
 
(22
)
Capital reserve
 
 
12
 
 
 
12
 
Accumulated deficit
 
 
(614)
  
 
 
(603
)
Equity attributable to owners of the Company
 
 
689
 
 
 
681
 
Non-controlling interests
 
 
216
 
 
 
213
 
Total equity
 
 
905
 
 
 
894
 
Total liabilities and equity
 
 
5,211
 
 
 
5,138
 

2
 
Kenon Holdings Ltd
 Unaudited Condensed Consolidated Statements of Profit or Loss
 
   
For the six months ended
    
For the three months ended
  
   
June 30 2017
    
June 30 2016
    
June 30 2017
    
June 30 2016
  
   
$ millions
    
$ millions
  
Revenue
    
1,059
      
853
      
522
      
440
  
Cost of sales and services (excluding depreciation)
    
(734
)
    
(625
)
    
(366
)
    
(330
)
Depreciation
    
(85
)
    
(72
)
    
(41
)
    
(39
)
Gross profit
    
240
      
156
      
115
      
71
  
Selling, general and administrative expenses
    
(76
)
    
(63
)
    
(43
)
    
(34
)
Impairment of assets
    
(20
)
    
(72
)
    
-
      
(72
)
Other income
    
64
      
7
      
51
      
5
  
Other expenses
    
(8
)
    
(2
)
    
(7
)
    
(1
)
Operating profit/(loss)
    
200
      
26
      
116
      
(31
)
Financing expenses
    
(134
)
    
(84
)
    
(72
)
    
(47
)
Financing income
    
18
      
8
      
8
      
4
  
Financing expenses, net
    
(116
)
    
(76
)
    
(64
)
    
(43
)
Provision of financial guarantees
    
-
      
(129
)
    
-
      
(129
)
Share in losses of associated companies, net of tax
    
(22
)
    
(108
)
    
-
      
(67
)
Profit/(loss) before income taxes
    
62
      
(287
)
    
52
      
(270
)
Incomes taxes
    
(51
)
    
(19
)
    
(31
)
    
(8
)
Profit/(loss) for the period
    
11
      
(306
)
    
21
      
(278
)
Attributable to:
                                
Kenon’s shareholders
    
(11
)
    
(315
)
    
9
      
(280
)
Non-controlling interests
    
22
      
9
      
12
      
2
  
Profit/(loss) for the period
    
11
      
(306
)
    
21
      
(278
)
Basic/Diluted (loss)/profit per share attributable to Kenon’s shareholders (in dollars):
                                
Basic/Diluted (loss)/profit per share
    
(0.21
)
    
(5.88
)
    
0.17
      
(5.20
)
 
 
3
 
Kenon Holdings Ltd and subsidiaries
 Unaudited Condensed Consolidated Statements of Cash Flows
 
   
For the six months ended
  
   
June 30 2017
    
June 30 2016
  
   
$ millions
  
Cash flows from operating activities
            
Profit/(loss) for the period
    
11
      
(306
)
Adjustments:
                
Depreciation and amortization
    
92
      
78
  
Financing expenses, net
    
116
      
76
  
Share in losses of associated companies, net of tax
    
22
      
108
  
Provision of financial guarantees
    
-
      
129
  
Impairment of assets
    
20
      
72
  
Bad debt expense
    
2
      
3
  
Other capital (gains)/loss, net
    
(8
)
    
-
  
Share-based payments
    
-
      
1
  
Income taxes
    
51
      
19
  
     
306
      
180
  
Change in inventories
    
9
      
(35
)
Change in trade and other receivables
    
6
      
(46
)
Change in trade and other payables
    
(83
)
    
5
  
Change in provisions and employee benefits
    
(2
)
    
(40
)
     
236
      
64
  
Income taxes paid, net
    
(34
)
    
(21
)
Net cash provided by operating activities
    
202
      
43
  


4
 
 
Kenon Holdings Ltd and subsidiaries
 Unaudited Condensed Consolidated Statements of Cash Flows, continued
 
   
For the six months ended
  
   
June 30 2017
    
June 30 2016
  
   
$ millions
  
Cash flows for investing activities
            
Proceeds from sale of property, plant and equipment
    
2
      
-
  
Short-term deposits and loans, net
    
(22
)
    
230
  
Business combinations, less cash acquired
    
-
      
(206
)
Investment in associated company
    
-
      
(89
)
Acquisition of property plant and equipment
    
(96
)
    
(199
)
Acquisition of intangible assets
    
(2
)
    
(4
)
Interest received
    
3
      
3
  
Sale of securities held for trade and available for sale, net
    
-
      
6
  
Payment to release financial guarantee
    
(72
)
    
-
  
Energuate purchase adjustment
    
10
      
-
  
Sale of subsidiary, net
    
1
      
-
  
Payment of deferred acquisition consideration
    
-
      
(1
)
Net cash used in investing activities
    
(176
)
    
(260
)
                 
Cash flows from financing activities
                
Dividend paid to non-controlling interests in a subsidiary
    
(15
)
    
(18
)
Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries
    
-
      
2
  
Receipt of long-term loans and issuance of debentures
    
661
      
603
  
Repayment of long-term loans and debentures
    
(397
)
    
(374
)
Short-term credit from banks and others, net
    
(142
)
    
13
  
Payment of consent fee and early prepayment fee
    
(6
)
    
(26
)
Bond issuance expenses
    
(11
)
    
(10
)
Interest paid
    
(91
)
    
(59
)
Net cash (used in)/provided by financing activities
    
(1
)
    
131
  
                 
Increase/(decrease) in cash and cash equivalents
    
25
      
(86
)
Cash and cash equivalents at the beginning of the period
    
327
      
384
  
Effect of exchange rate fluctuations on balances of cash and cash equivalents
    
14
      
3
  
Cash and cash equivalents at end of the period
    
366
      
301
  
 
5
 
Information regarding reportable segments
 
Information regarding activities of the reportable segments are set forth in the following table.
 
 
  
IC Power1
                          
 
  
Generation2
    
Distribution
    
Qoros3
    
Other
    
Adjustments
    
Total
  
 
  
$ Millions
  
For the six months ended June 30, 2017
                                    
Total sales
    
779
      
280
      
—-
      
—
      
—
      
1,059
  
Adjusted EBITDA4
    
229
      
48
      
—
      
(9
)
    
—
      
268
  
Depreciation and amortization
    
81
      
11
      
—
      
1
      
—
      
93
  
Financing income
    
(5
)
    
(9
)
    
—
      
(9
)
    
5
      
(18
)
Financing expenses
    
108
      
16
      
—
      
15
      
(5
)
    
134
  
Other items:
                                                
Impairment of assets
    
20
      
—
      
—
      
—
      
—
      
20
  
Other income
    
(45
)
    
—
      
—
      
—
      
—
      
(45
)
Share in (profits)/losses of associated companies
    
—
      
—
      
23
      
(1
)
    
—
      
22
  
     
159
      
18
      
23
      
6
      
—
      
206
  
Profit/(loss) before taxes
    
70
      
30
      
(23
)
    
(15
)
    
—
      
62
  
Income taxes
    
36
      
14
      
—
      
1
      
—
      
51
  
Profit/(loss) for the period
    
34
      
16
      
(23
)
    
(16
)
    
—
      
11
  

1.
The total assets and liabilities of IC Power are $5.0 billion and $4.1 billion at June 30, 2017, respectively.
2.
Includes holding company.
3.
Associated company.
4
Adjusted EBITDA is a non-IFRS measure.
 
 
  
IC Power1
                          
 
  
Generation2
    
Distribution2
    
Qoros3
    
Other
    
Adjustments
    
Total
  
 
  
$ Millions
  
For the six months ended June 30, 2016
                                    
Total sales
    
621
      
232
      
—
      
—
      
—
      
853
  
Adjusted EBITDA4
    
149
      
39
      
—
      
(12
)
    
—
      
176
  
 
                                                
Depreciation and amortization
    
71
      
7
      
—
      
—
      
—
      
78
  
Financing income
    
(3
)
    
(2
)
    
—
      
(8
)
    
5
      
(8
)
Financing expenses
    
65
      
13
      
—
      
11
      
(5
)
    
84
  
Other items:
                                                
Impairment of investment in associated company
    
—
      
—
      
—
      
72
      
—
      
72
  
Provision of financial guarantees
    
—
      
—
      
—
      
129
      
—
      
129
  
Share in losses of associated companies
    
—
      
—
      
71
      
37
      
—
      
108
  
 
    
133
      
18
      
71
      
241
      
—
      
463
  
Profit/(loss) before taxes
    
16
      
21
      
(71
)
    
(253
)
    
—
      
(287
)
Income taxes
    
13
      
6
      
—
      
—
      
—
      
19
  
Profit/(loss) for the period
    
3
      
15
      
(71
)
    
(253
)
    
—
      
(306
)
 
1.
The total assets and liabilities of IC Power are $4.9 billion and $4.1 billion at June 30, 2016, respectively.
2.
Includes holding company.
3.
Associated company.
4.
Adjusted EBITDA is a non-IFRS measure.

6

 
  
IC Power1
                          
 
  
Generation2
    
Distribution
    
Qoros3
    
Other
    
Adjustments
    
Total
  
 
  
$ Millions
  
For the three months ended June 30, 2017
                                    
Total sales
    
382
      
140
      
—
      
—
      
—
      
522
  
Adjusted EBITDA4
    
106
      
24
      
—
      
(6
)
    
—
      
124
  
Depreciation and amortization
    
37
      
7
      
—
      
—
      
—
      
44
  
Financing income
    
(3
)
    
(2
)
    
—
      
(6
)
    
3
      
(8
)
Financing expenses
    
61
      
7
      
—
      
7
      
(3
)
    
72
  
Other items:
                                                
Impairment of assets
    
—
      
—
      
—
      
—
      
—
      
—
  
Other income
    
(36
)
    
—
      
—
      
—
      
—
      
(36
)
Share in (profits)/losses of associated companies
    
—
      
—
      
3
      
(3
)
    
—
      
—
  
 
    
59
      
12
      
3
      
(2
)
    
—
      
72
  
Profit/(loss) before taxes
    
47
      
12
      
(3
)
    
(4
)
    
—
      
52
  
Income taxes
    
24
      
7
      
—
      
—
      
—
      
31
  
Profit/(loss) for the period
    
23
      
5
      
(3
)
    
(4
)
    
—
      
21
  

1.
The total assets and liabilities of IC Power are $5.0 billion and $4.1 billion at June 30, 2017, respectively.
2.
Includes holding company.
3.
Associated company.
4.
Adjusted EBITDA is a non-IFRS measure.
 
 
  
IC Power1
                          
 
  
Generation2
    
Distribution2
    
Qoros3
    
Other
    
Adjustments
    
Total
  
 
  
$ Millions
  
For the three months ended June 30, 2016
                                    
Total sales
    
307
      
133
      
—
      
—
      
—
      
440
  
Adjusted EBITDA4
    
63
      
25
      
—
      
(6
)
    
—
      
82
  
 
                                                
Depreciation and amortization
    
36
      
5
      
—
      
—
      
—
      
41
  
Financing income
    
(3
)
    
—
      
—
      
(5
)
    
4
      
(4
)
Financing expenses
    
42
      
4
      
—
      
5
      
(4
)
    
47
  
Other items:
                                                
Impairment of investment in associated company
    
—
      
—
      
—
      
72
      
—
      
72
  
Provision of financial guarantees
    
—
      
—
      
—
      
129
      
—
      
129
  
Share in losses of associated companies
    
—
      
—
      
46
      
21
      
—
      
67
  
 
    
75
      
9
      
46
      
222
      
—
      
352
  
Profit/(loss) before taxes
    
(12
)
    
16
      
(46
)
    
(228
)
    
—
      
(270
)
Income taxes
    
3
      
4
      
—
      
1
      
—
      
8
  
Profit/(loss) for the period
    
(15
)
    
12
      
(46
)
    
(229
)
    
—
      
(278
)
 
1.
The total assets and liabilities of IC Power are $4.9 billion and $4.1 billion at June 30, 2016, respectively.
2.
Includes holding company.
3.
Associated company.
4.
Adjusted EBITDA is a non-IFRS measure.
 
7

 
Information regarding associated companies

   
Carrying amounts of investment in
 associated companies
    
Equity in the net (losses)/ earnings of
associated companies
    
Equity in the net (losses)/ earnings of
associated companies
  
   
as of
    
for the six months ended
    
for the three months ended
  
   
June 30
    
December 31
    
June 30
    
June 30
    
June 30
    
June 30
  
   
2017
    
2016
    
2017
    
2016
    
2017
    
2016
  
   
$ millions
    
$ millions
    
$ millions
  
ZIM
    
84
      
82
      
1
      
(37
)
    
3
      
(21
)
Qoros
    
95
      
117
      
(23
)
    
(71
)
    
(3
)
    
(46
)
Others
    
9
      
9
      
—
      
—
      
—
      
—
  
     
188
      
208
      
(22
)
    
(108
)
    
—
      
(67
)

Contributions of Principal Operations to Loss attributable to Kenon’s Shareholders
 
 
  
Six Months ended June 30,
    
Three Months ended June 30,
  
   
2017
    
2016
    
2017
    
2016
  
 
  
$ millions
    
$ millions
  
IC Power
    
28
      
9
      
16
      
(4
)
Qoros
    
(23
)
    
(71
)
    
(3
)
    
(46
)
ZIM
    
1
      
(37
)
    
3
      
(21
)
Impairment of ZIM
    
-
      
(72
)
    
-
      
(72
)
Provision of Financial Guarantees
    
-
      
(129
)
    
-
      
(129
)
Other
    
(17
)
    
(15
)
    
(7
)
    
(8
)
Loss attributable to Kenon’s shareholders
    
(11
)
    
(315
)
    
9
      
(280
)
 
8
 
Appendix B
 
Summary IC Power unaudited consolidated financial information
 
IC Power’s Consolidated Statement of Income
 
 
  
Six Months ended June 30,
    
Three Months ended June 30,
  
   
2017
    
2016
    
2017
    
2016
  
 
  
$ millions
    
$ millions
    
$ millions
    
$ millions
  
Sales
    
1,059
      
853
      
522
      
440
  
Cost of sales (excluding depreciation and amortization)
    
(734
)
    
(625
)
    
(367
)
    
(330
)
Depreciation and amortization
    
(85
)
    
(72
)
    
(40
)
    
(39
)
                                 
Gross profit
    
240
      
156
      
115
      
71
  
General, selling and administrative expenses
    
(66
)
    
(51
)
    
(37
)
    
(27
)
Asset write-off
    
(20
)
    
—
      
—
      
—
  
Other income
    
56
      
5
      
44
      
3
  
                                 
Operating income
    
210
      
110
      
122
      
47
  
                                 
Financing expenses
    
(124
)
    
(78
)
    
(68
)
    
(46
)
Financing income
    
14
      
5
      
5
      
3
  
                                 
Financing expenses, net
    
(110
)
    
(73
)
    
(63
)
    
(43
)
                                 
Income before taxes
    
100
      
37
      
59
      
4
  
                                 
Taxes on income
    
(50
)
    
(19
)
    
(31
)
    
(7
)
                                 
Net income for the period
    
50
      
18
      
28
      
(3
)
                                 
Attributable to:
                                
Equity holders of the company
    
28
      
9
      
16
      
(4
)
Non-controlling interest
    
22
      
9
      
12
      
1
  
                                 
Net income for the period
    
50
      
18
      
28
      
(3
)
                                 
Operating Income
    
210
      
110
      
122
      
47
  
Depreciation and amortization
    
91
      
77
      
43
      
41
  
Asset write-off
    
20
      
—
      
—
      
—
  
Settlement over liquidated damages
    
(32
)
    
—
      
(32
)
    
—
  
Net gain on Kanan write-off
    
(8
)
    
—
      
(8
)
    
—
  
Working capital adjustment
    
(10
)
    
—
      
—
      
—
  
Realization of translation effect
    
5
      
—
      
5
      
—
  
                                 
Adjusted EBITDA1
    
276
      
187
      
130
      
88
  
 
1.
Adjusted EBITDA is a non-IFRS measure.
 
9
 
Summary Data from IC Power’s Unaudited Consolidated Statement of Cash Flows

   
Six Months Ended June 30,
    
Three Months Ended June 30,
  
   
2017
    
2016
    
2017
    
2016
  
   
($ millions)
  
Cash flows provided by operating activities 
  
$
214
    
$
55
    
$
108
    
$
58
  
Cash flows used in investing activities 
    
(103
)
    
(177
)
    
(47
)
    
(121
)
Cash flows used in financing activities 
    
(52
)
    
(6
)
    
(54
)
    
(71
)
Increase (decrease) in cash and cash equivalents 
    
59
      
(128
)
    
7
      
(134
)
Cash and cash equivalents at the end of the period 
    
292
      
234
      
292
      
234
  
Investments in property, plant and equipment 
    
(96
)
    
(199
)
    
(56
)
    
(100
)
Total depreciation and amortization 
    
92
      
77
      
44
      
41
  
 
Summary Data from IC Power’s Consolidated Statement of Financial Position
 
   
As of
  
   
June 30,
2017
    
June 30,
2016
    
December 31,
2016
  
   
($ millions)
  
Total financial liabilities1 
  
$
3,239
    
$
2,946
    
$
3,072
  
Total monetary assets2 
    
(346
)
    
(319
)
    
(308
)
Total equity attributable to the owners 
    
667
      
610
      
622
  
Total equity 
    
880
      
817
      
833
  
Total assets 
    
4,967
      
4,711
      
4,840
  
 
1.
Including loans from banks and others and debentures.
2.
Including cash and cash equivalents, short-term deposits and restricted cash.
 
10
 
Appendix C
 
Definition of IC Power’s Adjusted EBITDA and non-IFRS reconciliation
 
This press release, including the financial tables, presents Adjusted EBITDA, net debt and net financial liabilities, which are financial metrics considered to be “non-IFRS financial measures.” Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with IFRS.
 
IC Power defines “Adjusted EBITDA” as for each period for each entity as net income (loss) before depreciation and amortization, financing expenses, net, income tax expense (benefit), asset write-off, settlement over liquidated damages, net gain on Kanan write-off, working capital adjustment, and release of accumulated translation adjustment. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of our profitability since it does not take into consideration certain costs and expenses that result from our business that could have a significant effect on our net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
 
Set forth below is a reconciliation of IC Power’s, and each of its segments’, net income to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

   
Six Months Ended June 30, 2017
  
   
($ millions)
  
   
Generation
    
Distribution
    
Total
  
   
Peru
    
Israel
    
Central America
    
Other1
    
Guatemala
  
Net income for the period
    
72
      
9
      
7
      
(54
)
    
16
      
50
  
Depreciation and amortization2
    
35
      
15
      
14
      
17
      
11
      
92
  
Financing expenses, net
    
39
      
15
      
6
      
43
      
7
      
110
  
Income tax expense
    
26
      
3
      
5
      
2
      
14
      
50
  
Asset Write-off
    
-
      
-
      
-
      
20
      
-
      
20
  
Settlement over liquidated damages
    
(32
)
    
-
      
-
      
-
      
-
      
(32
)
Net gain on Kanan write-off
    
-
      
-
      
1
      
(9
)
    
-
      
(8
)
Working capital adjustment
    
-
      
-
      
-
      
(10
)
    
-
      
(10
)
Release of accumulated translation adjustment
    
-
      
-
      
-
      
5
      
-
      
5
  
Adjusted EBITDA
    
140
      
42
      
33
      
14
      
48
      
277
  

 
1.
In addition to the results of certain of IC Power’s generation assets, IC Power’s Other segment also includes expenses and other adjustments relating to its headquarters and intermediate holding companies, including purchase price allocations recorded in connection with IC Power’s acquisition of Energuate, which allocations were recorded by Inkia, one of IC Power’s intermediate holding companies.
2.
Includes depreciation and amortization expenses from general, selling and administrative expenses.

11

   
Three Months Ended June 30, 2017
  
   
($ millions)
  
   
Generation
    
Distribution
    
Total
  
   
Peru
    
Israel
    
Central America
    
Other
    
Guatemala
  
Net income for the period
    
50
      
(2
)
    
-
      
(24
)
    
4
      
28
  
Depreciation and amortization2
    
17
      
7
      
6
      
7
      
6
      
43
  
Financing expenses, net
    
21
      
9
      
4
      
22
      
7
      
63
  
Income tax expense
    
20
      
-
      
2
      
2
      
7
      
31
  
Settlement over liquidated damages
    
(32
)
    
-
      
-
      
-
      
-
      
(32
)
Net gain on Kanan write-off
    
-
      
-
      
1
      
(9
)
    
-
      
(8
)
Release of accumulated translation adjustment
    
-
      
-
      
-
      
5
      
-
      
5
  
Adjusted EBITDA
    
76
      
14
      
13
      
3
      
24
      
130
  

1.
In addition to the results of certain of IC Power’s generation assets, IC Power’s Other segment also includes expenses and other adjustments relating to its headquarters and intermediate holding companies, including purchase price allocations recorded in connection with IC Power’s acquisition of Energuate, which allocations were recorded by Inkia, one of IC Power’s intermediate holding companies.
  
2.
Includes depreciation and amortization expenses from general, selling and administrative expenses.
 
   
Six Months Ended June 30, 2016
  
   
($ millions)
  
   
Generation
    
Distribution
    
Total
  
   
Peru
    
Israel
    
Central America
    
Other1
    
Guatemala
  
Net income for the period
    
20
      
8
      
3
      
(28
)
    
15
      
18
  
Depreciation and amortization2
    
25
      
13
      
16
      
17
      
7
      
78
  
Financing expenses, net
    
23
      
7
      
7
      
26
      
10
      
73
  
Income tax expense
    
8
      
-
      
3
      
2
      
6
      
19
  
Adjusted EBITDA
    
76
      
28
      
29
      
17
      
38
      
188
  
 
1.
In addition to the results of certain of IC Power’s generation assets, IC Power’s Other segment also includes expenses and other adjustments relating to its headquarters and intermediate holding companies, including purchase price allocations recorded in connection with IC Power’s acquisition of Energuate, which allocations were recorded by Inkia, one of IC Power’s intermediate holding companies.
2.
Includes depreciation and amortization expenses from general, selling and administrative expenses.
 
   
Three Months Ended June 30, 2016
  
   
($ millions)
  
   
Generation
    
Distribution
    
Total
  
   
Peru
    
Israel
    
Central America
    
Other1
    
Guatemala
  
Net income for the period
    
4
      
(5
)
    
-
      
(14
)
    
12
      
(3
)
Depreciation and amortization2
    
13
      
7
      
10
      
7
      
4
      
41
  
Financing expenses, net
    
18
      
5
      
3
      
13
      
4
      
43
  
Income tax expense
    
2
      
(2
)
    
1
      
1
      
5
      
7
  
Adjusted EBITDA
    
37
      
5
      
14
      
7
      
25
      
88
  
 
1.
In addition to the results of certain of IC Power’s generation assets, IC Power’s Other segment also includes expenses and other adjustments relating to its headquarters and intermediate holding companies, including purchase price allocations recorded in connection with IC Power’s acquisition of Energuate, which allocations were recorded by Inkia, one of IC Power’s intermediate holding companies.
2.
Includes depreciation and amortization expenses from general, selling and administrative expenses.
 
12
 
Appendix D
 
Summary operational information of IC Power’s generation assets
 
The following table sets forth summary operational information regarding each of IC Power’s operating companies and associate in its power generation business as of August 30, 2017, according to segment:
 
Segment
  
 
Country
  
 
Entity
  
 
Ownership
Percentage
 (Rounded)
  
 
Fuel
  
 
Installed
Capacity
(MW)1
  
 
Proportionate
Capacity2
  
 
Type of Asset
  
Peru
  
 
Peru
  
 
Kallpa3
  
 
75%
  
 
Natural Gas, hydroelectric
  
 
1,608
  
 
1,206
  
 
Greenfield
  
 
  
 
Peru
  
 
Samay I
  
 
75%
  
 
Diesel and Natural Gas
  
 
632
  
 
474
  
 
Greenfield
  
Israel
  
 
Israel
  
 
OPC-Rotem
  
 
61%
  
 
Natural Gas and Diesel
  
 
4664
  
 
284
  
 
Greenfield
  
 
  
 
Israel
  
 
OPC-Hadera5
  
 
76%
  
 
Natural Gas
  
 
18
  
 
14
  
 
Acquired
  
Central
America
  
 
Nicaragua
  
 
Corinto
  
 
65%
  
 
HFO
  
 
71
  
 
46
  
 
Acquired
  
Nicaragua
  
 
Tipitapa Power
  
 
65%
  
 
HFO
  
 
51
  
 
33
  
 
Acquired
  
Nicaragua
  
 
Amayo I
  
 
61%
  
 
Wind
  
 
40
  
 
24
  
 
Acquired
  
Nicaragua
  
 
Amayo II
  
 
61%
  
 
Wind
  
 
23
  
 
14
  
 
Acquired
  
Guatemala
  
 
Puerto Quetzal
  
 
100%
  
 
HFO
  
 
179
  
 
179
  
 
Acquired
  
El Salvador
  
 
Nejapa
  
 
100%
  
 
HFO
  
 
140
  
 
140
  
 
Original Inkia Asset
  
Panama 
  
 
Kanan6
  
 
100%
  
 
—
  
 
—
  
 
—
  
 
—
  
Other
  
 
Bolivia
  
 
COBEE
  
 
100%
  
 
Hydroelectric, Natural Gas
  
 
228
  
 
228
  
 
Original Inkia Asset
  
Chile
  
 
Central Cardones
  
 
87%
  
 
Diesel 
  
 
153
  
 
133
  
 
Acquired
  
Chile
  
 
Colmito
  
 
100%
  
 
Natural Gas and Diesel
  
 
58
  
 
58
  
 
Acquired
  
Dominican Republic
  
 
CEPP
  
 
97%
  
 
HFO
  
 
67
  
 
65
  
 
Original Inkia Asset
  
Jamaica
  
 
JPPC
  
 
100%
  
 
HFO
  
 
60
  
 
60
  
 
Original Inkia Asset
  
Panama
  
 
Pedregal7
  
 
21%
  
 
HFO
  
 
54
  
 
11
  
 
Original Inkia Asset
  
 
 
  
 
Total Operating Capacity
  
 
3,848
  
 
2,969
  
 
 
  
 
                                    
1.
Reflects 100% of the capacity of each of IC Power’s assets, regardless of ownership interest in the entity that owns each such asset.
2.
Reflects the proportionate capacity of each of IC Power’s assets, as determined by IC Power’s ownership interest in the entity that owns each such asset.
3.
Kallpa merged with CDA in August 2017, with the surviving entity renamed Kallpa Generación SA.
4.
Based on OPC-Rotem’s generation license.
5.
OPC-Hadera also holds a conditional license for the construction of a cogeneration power station in Israel. This station is being developed as a greenfield project (at an expected cost of $250 million, including the acquisition price of OPC-Hadera), based upon a plant with 148 MW of capacity (based on the plant’s generation license). Construction commenced in June 2016 and commercial operations are expected to commence by early 2019.
6.
Kanan’s barges (representing 92 MW) have been placed offline and the assets have been written off as a result of a fire that occurred in April 2017.
7.
Although Pedregal is located in Central America, it is a minority investment. Therefore, from an income statement perspective, it is not part of the Central America segment and Pedregal is only reflected in IC Power’s share in income of associate.
 
13

Appendix E
 
Summary Unaudited Financial Information of IC Power’s Subsidiaries and Associated Company
 
 
  
Three Months Ended June 30, 2017
  
Entity
  
Ownership
Interest
 (%)
    
Sales
    
Cost of
 Sales
    
Adjusted
EBITDA1
    
Outstanding
Debt2
    
Net
Debt3
  
 
        
($ millions)
  
GENERATION
                                    
Peru segment
                                    
Kallpa          
    
75
    
$
117
    
$
65
    
$
41
    
$
412
    
$
372
  
CDA          
    
75
      
29
      
8
      
27
      
585
      
568
  
Samay I          
    
75
      
25
      
21
      
8
      
349
      
314
  
Israel segment
                              
OPC-Rotem          
    
61
      
79
      
62
      
14
      
392
      
367
  
OPC-Hadera          
    
76
      
5
      
6
      
—
      
119
      
58
  
Central America segment
                              
ICPNH4          
    
61-65
      
24
      
18
      
4
      
79
      
68
  
Puerto Quetzal          
    
100
      
14
      
12
      
2
      
19
      
14
  
Nejapa          
    
100
      
23
      
17
      
4
      
3
      
(7
)
Cenérgica          
    
100
      
7
      
6
      
1
      
—
      
(1
)
Kanan          
    
100
      
19
      
18
      
2
      
41
      
33
  
Guatemel          
    
100
      
3
      
1
      
—
      
—
      
(2
)
Other segment
                              
COBEE          
    
100
      
11
      
5
      
6
      
83
      
66
  
Central Cardones          
    
87
      
3
      
—
      
2
      
33
      
29
  
Colmito          
    
100
      
6
      
5
      
1
      
16
      
15
  
CEPP          
    
97
      
7
      
5
      
1
      
11
      
10
  
JPPC          
    
100
      
13
      
11
      
2
      
2
      
(3
)
Surpetroil5
    
60
      
—
      
—
      
—
      
—
      
(1
)
RECSA          
    
100
      
1
      
—
      
—
      
5
      
4
  
Holdings6
                                                
IC Power Distribution Holdings          
    
100
      
—
      
—
      
—
      
—
      
—
  
Inkia & Other7         
    
100
      
—
      
—
      
(4
)
    
448
      
422
  
IC Power & Other8  
    
100
      
—
      
—
      
(5
)
    
201
      
140
  
DISTRIBUTION
                                                
DEORSA    
    
93
      
63
      
50
      
13
      
183
      
176
  
DEOCSA
    
91
      
77
      
61
      
11
      
258
      
251
  
Eliminations
            
(4
)
    
(4
)
    
-
      
-
      
-
  
TOTAL  
          
$
522
    
$
367
    
$
130
    
$
3,239
    
$
2,893
  
 
                                        
1.
Adjusted EBITDA for each entity for the period is defined as net income (loss) before depreciation and amortization, financing expenses, net, income tax expense (benefit), asset write-off, settlement over liquidated damages, net gain on Kanan write-off, working capital adjustment and release of accumulated translation adjustment.
2.
Includes short-term and long-term debt and excludes loans and notes owed to Kenon.
3.
Net debt is defined as total debt attributable to each of IC Power’s subsidiaries, excluding debt owed to Kenon, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power’s subsidiaries.
4.
Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.
5.
In April 2017, IC Power sold its 60% interest in Surpetroil.
6.
In addition to the results of certain of IC Power’s generation assets, IC Power’s Other segment also includes expenses and other adjustments relating to its headquarters and intermediate holding companies, including purchase price allocations recorded in connection with IC Power’s acquisition of Energuate, which allocations were recorded by Inkia, one of IC Power’s intermediate holding companies.
7.
Outstanding debt includes $448 million of debt of Inkia.
8.
Includes $12 million of IC Power’s outstanding debt, $90 million of OPC’s bonds and $99 million of debt of IC Power’s subsidiary Overseas Investment Peru. OPC’s net debt as of June 30, 2017 is $61 million.
 
14
 
The following tables set forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power’s subsidiaries for the three months ended June 30, 2017:
 
  
Kallpa
    
CDA
    
Samay I
    
OPC-Rotem
    
OPC-Hadera
    
ICPN
    
Puerto
Quetzal
  
 
  
($ millions)
  
Net income (loss) 
  
$
18
    
$
31
    
$
1
    
$
(2
)
  
$
—
    
$
—
    
$
—
  
Depreciation and amortization 
    
9
      
5
      
3
      
8
      
(1
)
    
2
      
2
  
Finance expenses, net 
    
7
      
10
      
4
      
9
      
—
      
2
      
—
  
Income tax expense (benefit) 
    
7
      
13
      
—
      
(1
)
    
1
      
—
      
—
  
Settlement over liquidated damages
    
—
      
(32
)
    
—
      
—
      
—
      
—
      
—
  
Adjusted EBITDA 
  
$
41
    
$
27
    
$
8
    
$
14
    
$
—
    
$
4
    
$
2
  
 
 
  
Nejapa
    
Cenérgica
    
Kanan
    
Guatemel
    
COBEE
    
Central
Cardones
    
Colmito
  
 
  
($ millions)
  
Net income (loss) 
  
$
2
    
$
—
    
$
(2
)
  
$
—
    
$
2
    
$
—
    
$
—
  
Depreciation and amortization 
    
1
      
—
      
1
      
—
      
2
      
1
      
1
  
Finance expenses, net 
    
—
      
—
      
2
      
—
      
1
      
1
      
—
  
Income tax expense 
    
1
      
1
      
—
      
—
      
1
      
—
      
—
  
Net gain on Kanan write-off
    
—
      
—
      
1
      
—
      
—
      
—
      
—
  
Adjusted EBITDA 
  
$
4
    
$
1
    
$
2
    
$
—
    
$
6
    
$
2
    
$
1
  

 
  
CEPP
    
JPPC
    
Surpetroil1
    
RECSA
    
IC Power
Distribution
Holdings
    
Inkia &
Other
    
IC Power
& Other
  
 
        
($ millions)
  
Net income (loss) 
  
$
1
    
$
1
    
$
—
    
$
—
    
$
(1
)
  
$
(12
)
  
$
(15
)
Depreciation and amortization 
    
—
      
1
      
—
      
—
      
—
      
2
      
—
  
Finance expenses, net 
    
—
      
—
      
—
      
—
      
1
      
9
      
10
  
Income tax expense (benefit) 
    
—
      
—
      
—
      
—
      
—
      
1
      
—
  
Net gain on Kanan write-off
    
—
      
—
      
—
      
—
      
—
      
(9
)
    
—
  
Working capital adjustment
    
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Release of accumulated translation adjustment 
    
—
      
—
      
—
      
—
      
—
      
5
      
—
  
Adjusted EBITDA
  
$
1
    
$
2
    
$
—
    
$
—
    
$
—
    
$
(4
)
  
$
(5
)
 
                                        
1. In April 2017, IC Power sold its 60% interest in Surpetroil.
 
15

 
  
DEOCSA
    
DEORSA
    
IC Power
Total
  
 
  
($ millions)
  
Net income (loss) 
  
$
2
    
$
2
    
$
28
  
Depreciation and amortization 
    
3
      
3
      
43
  
Finance expenses, net 
    
3
      
4
      
63
  
Income tax expense 
    
3
      
4
      
31
  
Settlement over liquidated damages
    
—
      
—
      
(32
)
Net gain on Kanan write-off
    
—
      
—
      
(8
)
Release of accumulated translation adjustment 
    
—
      
—
      
5
  
Adjusted EBITDA 
  
$
11
    
$
13
    
$
130
  
 
The tables below set forth a reconciliation of net debt to total debt for IC Power’s subsidiaries as of June 30, 2017.
 
 
  
Kallpa
    
CDA
    
Samay I
    
OPC-Rotem
    
OPC-Hadera
    
ICPNH
    
Puerto
Quetzal
    
Nejapa
    
Cenérgica
    
Kanan
  
 
  
($ millions)
  
Total debt 
  
$
412
    
$
585
    
$
349
    
$
392
    
$
119
    
$
79
    
$
19
    
$
3
    
$
—
    
$
41
  
Cash 
    
40
      
17
      
35
      
25
      
61
      
11
      
5
      
10
      
1
      
8
  
 
                                                                                
Net Debt 
  
$
372
    
$
568
    
$
314
    
$
367
    
$
58
    
$
68
    
$
14
    
$
(7
)
  
$
(1
)
  
$
33
  

 
  
Guatemel
    
COBEE
    
Central
Cardones
    
Colmito
    
CEPP
    
JPPC
    
Surpetroil1
    
RECSA
    
IC Power
Distribution
Holdings
    
Inkia &
Other
  
 
  
($ millions)
  
Total debt
  
$
—
    
$
83
    
$
33
    
$
16
    
$
11
    
$
2
    
$
-
    
$
5
    
$
—
    
$
448
  
Cash
    
2
      
17
      
4
      
1
      
1
      
5
      
1
      
1
      
—
      
26
  
 
                                                                                
Net Debt
  
$
(2
)
  
$
66
    
$
29
    
$
15
    
$
10
    
$
(3
)
  
$
(1
)
  
$
4
    
$
—
    
$
422
  
 
                                 
1. In April 2017, IC Power sold its 60% interest in Surpetroil.

 
  
IC Power
& Other
    
DEOCSA
    
DEORSA
    
Total IC
Power
  
 
  
($ millions)
  
Total debt 
  
$
201
    
$
258
    
$
183
    
$
3,239
  
Cash 
    
61
      
7
      
7
      
346
  
 
                                
Net debt 
  
$
140
    
$
251
    
$
176
    
$
2,893
  


16

The following table sets forth summary financial information for IC Power’s generation subsidiaries and associates for the three months ended June 30, 2016:
 
 
  
Three Months Ended June 30, 2016
  
Entity
  
Ownership
Interest
(%)
    
Sales
    
Cost of
Sales
    
Adjusted EBITDA1
    
Outstanding
Debt2
    
Net
Debt3
  
 
        
($ millions)
  
GENERATION
                                    
Peru segment
                                    
Kallpa 
    
75
    
$
107
    
$
69
    
$
33
    
$
417
    
$
402
  
CDA 
    
75
      
—
      
—
      
—
      
597
      
583
  
Samay I 
    
75
      
8
      
4
      
4
      
339
      
324
  
Israel segment
                              
OPC-Rotem 
    
80
      
69
      
62
      
4
      
373
      
326
  
OPC-Hadera 
    
100
      
4
      
5
      
1
      
—
      
(16
)
Central America segment
                              
ICPNH4 
    
61-65
      
21
      
12
      
6
      
92
      
78
  
Puerto Quetzal 
    
100
      
16
      
14
      
1
      
19
      
11
  
Nejapa 
    
100
      
21
      
18
      
3
      
—
      
(11
)
Cenérgica 
    
100
      
5
      
5
      
1
      
—
      
(2
)
Kanan 
    
100
      
17
      
14
      
3
      
60
      
55
  
Guatemel 
    
100
      
2
      
1
      
—
      
—
      
(1
)
Other segment
                              
COBEE 
    
100
      
10
      
4
      
6
      
69
      
44
  
Central Cardones 
    
87
      
4
      
—
      
2
      
40
      
35
  
Colmito 
    
100
      
6
      
5
      
1
      
17
      
16
  
CEPP 
    
97
      
7
      
5
      
2
      
12
      
9
  
JPPC 
    
100
      
8
      
8
      
(1
)
    
7
      
4
  
Surpetroil 
    
—
      
2
      
2
      
—
      
3
      
3
  
RECSA 
    
100
      
—
      
—
      
1
      
3
      
2
  
Holdings5
                                                
IC Power Distribution Holdings 
    
100
      
—
      
—
      
—
      
119
      
119
  
Inkia & Other6 
    
100
      
—
      
—
      
(1
)
    
448
      
374
  
IC Power, OPC & Other7 
    
100
      
—
      
—
      
(3
)
    
66
      
21
  
DISTRIBUTION
                                                
DEORSA 
    
93
      
61
      
45
      
14
      
103
      
96
  
DEOCSA 
    
91
      
72
      
57
      
11
      
159
      
152
  
TOTAL
          
$
440
    
$
330
    
$
88
    
$
2,943
    
$
2,624
  
 
1.
“Adjusted EBITDA” for each entity for the period is defined as net income (loss) before depreciation and amortization, financing expenses, net, and income tax expense (benefit).
2.
Includes short-term and long-term debt and excludes loans and notes owed to our parent company.
3.
Net debt is defined as total debt attributable to each of IC Power’s subsidiaries, excluding debt owed to our parent company, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power’s subsidiaries.
4.
Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.
5.
Outstanding debt includes $448 million of debt of Inkia.
6.
Includes $12 million of IC Power’s outstanding debt and $54 million of OPC’s debt.
 
The following tables set forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power’s subsidiaries for the three months ended June 30, 2016:
 
 
  
Kallpa
    
CDA
    
Samay I
    
OPC
    
AIE
    
ICPNH
    
Puerto
Quetzal
  
 
  
($ millions)
  
Net income (loss) 
  
$
2
    
$
1
    
$
1
    
$
(5
)
  
$
—
    
$
2
    
$
—
  
Depreciation and amortization 
    
12
      
—
      
1
      
6
      
1
      
2
      
1
  
Finance expenses, net 
    
17
      
—
      
1
      
5
      
—
      
2
      
—
  
Income tax expense (benefit) 
    
2
      
(1
)
    
1
      
(2
)
    
—
      
—
      
—
  
Adjusted EBITDA
  
$
33
    
$
—
    
$
4
    
$
4
    
$
1
    
$
6
    
$
1
  
 

 
17
 
 
  
Nejapa
    
Cenérgica
    
Kanan
    
Guatamel
    
COBEE
    
Central
 Cardones
    
Colmito
  
 
  
($ millions)
  
Net income (loss)
  
$
1
    
$
1
    
$
(4
)
  
$
—
    
$
3
    
$
1
    
$
(1
)
Depreciation and amortization
    
1
      
—
      
6
      
—
      
1
      
1
      
1
  
Finance expenses, net
    
—
      
—
      
1
      
—
      
1
      
—
      
1
  
Income tax expense
    
1
      
—
      
—
      
—
      
1
      
—
      
—
  
Adjusted EBITDA
  
$
3
    
$
1
    
$
3
    
$
—
    
$
6
    
$
2
    
$
1
  
 
                                     
 
  
CEPP
    
JPPC
    
Surpetroil
    
RECSA
    
IC Power Distribution Holdings
    
Inkia &
Other
    
IC Power & Other
  
 
    ($ millions)  
Net income (loss) 
  
$
1
    
$
(1
)
  
$
(1
)
  
$
—
    
$
(2
)
  
$
(7
)
  
$
(7
)
Depreciation and amortization 
    
1
      
1
      
1
      
1
      
—
      
—
      
—
  
Finance expenses, net 
    
—
      
—
      
—
      
—
      
2
      
5
      
4
  
Income tax expense (benefit) 
    
—
      
(1
)
    
—
      
—
      
—
      
1
      
—
  
Adjusted EBITDA 
  
$
2
    
$
(1
)
  
$
—
    
$
1
    
$
—
    
$
(1
)
  
$
(3
)
 
  
DEOCSA
    
DEORSA
    
IC Power
 Total
  
 
  
($ millions)
  
Net income (loss)
  
$
5
    
$
7
    
$
(3
)
Depreciation and amortization
    
2
      
2
      
41
  
Finance expenses, net
    
2
      
2
      
43
  
Income tax expense
    
2
      
3
      
7
  
Adjusted EBITDA
  
$
11
    
$
14
    
$
88
  
 
The tables below set forth a reconciliation of net debt to total debt for IC Power’s subsidiaries as of June 30, 2016.
 
 
  
Kallpa
    
CDA
    
Samay I
    
OPC
    
AIE
    
ICPNH
    
Puerto
 Quetzal
    
Nejapa
    
Cenérgica
    
Kanan
  
 
  
($ millions)
  
Total debt
  
$
417
    
$
597
    
$
339
    
$
373
    
$
—
    
$
92
    
$
19
    
$
—
    
$
—
    
$
60
  
Cash
    
15
      
14
      
15
      
47
      
16
      
14
      
8
      
11
      
2
      
5
  
Net Debt
  
$
402
    
$
583
    
$
324
    
$
326
    
$
(16
)
  
$
78
    
$
11
    
$
(11
)
  
$
(2
)
  
$
55
  
 
 
  
Guatemel
    
COBEE
    
Central
 Cardones
    
Colmito
    
CEPP
    
JPPC
    
Surpetroil
    
RECSA
    
IC Power
Distribution
 Holdings
    
Inkia &
 Other
  
 
  
($ millions)
  
Total debt
  
$
—
    
$
69
    
$
40
    
$
17
    
$
12
    
$
7
    
$
3
    
$
3
    
$
119
    
$
448
  
Cash
    
1
      
25
      
5
      
1
      
3
      
3
      
—
      
1
      
—
      
74
  
Net Debt
  
$
(1
)
  
$
44
    
$
35
    
$
16
    
$
9
    
$
4
    
$
3
    
$
2
    
$
119
    
$
374
  
 
 
  
IC Power & Other
    
DEOCSA
    
DEORSA
    
Total IC Power
  
 
              
($ millions)
  
Total debt 
  
$
66
    
$
159
    
$
103
      
2,943
  
Cash 
    
45
      
7
      
7
      
319
  
Net debt
    
21
      
152
      
96
      
2,624
  
 
                                
18
Appendix F
 
Summary of Qoros’ Unaudited Condensed Consolidated Financial Information

Qoros’ Condensed Consolidated Statement of Profit or Loss
 
   
For the six months ended
    
For the three months ended
  
In millions of RMB
  
June 30
 2017
    
June 30
 2016
    
June 30
2017
    
June 30
2016
  
                         
Revenue
    
677
      
1,111
      
272
      
599
  
Cost of sales
    
(850
)
    
(1,352
)
    
(374
)
    
(741
)
                                 
Gross profit
    
(173
)
    
(241
)
    
(102
)
    
(142
)
Other income
    
308
      
31
      
298
      
11
  
Research and development expenses
    
(80
)
    
(82
)
    
(42
)
    
(51
)
Selling, general and administrative expenses
    
(200
)
    
(402
)
    
(101
)
    
(256
)
Other expenses
    
(9
)
    
(7
)
    
(1
)
    
(4
)
(Loss)/Profit from operation
    
(154
)
    
(701
)
    
52
      
(442
)
Finance income
    
6
      
50
      
1
      
23
  
Finance costs
    
(177
)
    
(239
)
    
(95
)
    
(163
)
Net finance cost
    
(171
)
    
(189
)
    
(94
)
    
(140
)
Loss for the period
    
(325
)
    
(890
)
    
(42
)
    
(582
)
 
19

Qoros’ Consolidated Statement of Financial Position
 
 
  
At June 30
    
At December 31
  
In millions of RMB
  
2017
    
2016
  
Assets
            
Property, plant and equipment
    
4,102
      
4,219
  
Intangible assets
    
4,310
      
4,323
  
Prepayments for purchase of equipment
    
7
      
1
  
Lease prepayments
    
197
      
199
  
Trade and other receivables
    
92
      
92
  
Pledged deposits
    
—
      
8
  
Equity-accounted investees
    
2
      
2
  
Non-current assets
    
8,710
      
8,844
  
Inventories
    
222
      
322
  
VAT recoverable
    
856
      
808
  
Trade and other receivables
    
37
      
60
  
Prepayments
    
19
      
13
  
Available for sale financial assets
    
—
      
100
  
Pledged deposits
    
35
      
36
  
Cash and cash equivalents
    
258
      
465
  
 
                
Current assets
    
1,427
      
1,804
  
 
    
10,656
      
10,656
  
Total assets
    
10,137
      
10,648
  
 
                
Equity
                
Paid-in capital
    
10,425
      
10,425
  
Reserves
    
53
      
53
  
Accumulated losses
    
(10,358
)
    
(10,032
)
 
                
Total equity
    
120
      
446
  
 
                
Liabilities
                
Loans and borrowings
    
4,337
      
4,249
  
Deferred income
    
167
      
412
  
Trade and other payables
    
111
      
112
  
Provision
    
58
      
56
  
 
                
Non-current liabilities
    
4,673
      
4,829
  
 
                
Loans and borrowings
    
2,724
      
2,641
  
Trade and other payables
    
2,605
      
2,685
  
Deferred income
    
15
      
47
  
 
                
Current liabilities
    
5,344
      
5,373
  
 
                
Total liabilities
    
10,017
      
10,202
  
 
                
Total equity and liabilities
    
10,137
      
10,648
  
 
20
 
Appendix G
 
Definition of Qoros’ Adjusted EBITDA and non-IFRS Reconciliation
 
This press release presents the Adjusted EBITDA of Qoros, which is a financial metric considered to be a “non-IFRS financial measure.” Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with IFRS.
 
Qoros defines “Adjusted EBITDA” for each period as net loss for the period, excluding net finance costs, depreciation and amortization and other income relating to license rights. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of our profitability since it does not take into consideration certain costs and expenses that result from our business that could have a significant effect on our net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
 
Qoros believes that the disclosure of Adjusted EBITDA provides transparent and useful information to investors and financial analysts in their review of Qoros’ operating performance and in the comparison of such operating performance to the operating performance of other companies in the same industry or in other industries that have different capital structures, debt levels and/or income tax rates.
 
Set forth below is a reconciliation of Qoros’ net loss to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

   
For the six months ended
    
For the three months ended
  
In millions of RMB
  
30 June 2017
    
30 June 2016
    
30 June 2017
    
30 June 2016
  
Net loss for the period
    
(325
)
    
(890
)
    
(42
)
    
(582
)
Net finance costs
    
171
      
189
      
94
      
140
  
Depreciation and Amortization
    
203
      
359
      
86
      
231
  
Other income – license rights
    
(270
)
    
-
      
(263
)
    
-
  
Adjusted EBITDA
    
(221
)
    
(342
)
    
(125
)
    
(211
)
 
21