EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2

Exhibit 99.2
 
Financial Information for the Year Ended December 31, 2017 of Kenon and OPC and

Reconciliation of Certain non-IFRS Financial Information

Table of Contents

 
Appendix A

Summary Kenon consolidated financial information
 
Kenon Holdings Ltd and subsidiaries
 Consolidated Statements of Financial Position as at December 31, 2017 and 2016
 
   
As at December 31
  
   
2017
    
2016
  
   
$ millions
  
Current assets
            
Cash and cash equivalents
    
1,417
      
327
  
Short-term investments and deposits
    
7
      
90
  
Trade receivables, net
    
44
      
284
  
Other current assets, including derivatives
    
36
      
50
  
Income tax receivable
    
-
      
11
  
Inventory
    
-
      
92
  
Total current assets
    
1,504
      
854
  
Non-current assets
                
Investments in associated companies
    
122
      
208
  
Deposits, loans and other receivables, including derivative instruments
    
107
      
177
  
Deferred payment receivable
    
175
      
-
  
Deferred taxes, net
    
–
      
25
  
Property, plant and equipment, net
    
616
      
3,497
  
Intangible assets, net
    
2
      
377
  
Total non-current assets
    
1,022
      
4,284
  
Total assets
    
2,526
      
5,138
  
Current liabilities
                
Loans and debentures
    
448
      
483
  
Trade payables
    
59
      
286
  
Other payables, including derivative instruments
    
83
      
91
  
Guarantee deposits from customers
    
–
      
57
  
Provisions
    
44
      
120
  
Income tax payable
    
172
      
8
  
Total current liabilities
    
806
      
1,045
  
Non-current liabilities
                
Loans, excluding current portion
    
504
      
1,973
  
Debentures, excluding current portion
    
85
      
857
  
Derivative instruments
    
–
      
45
  
Deferred taxes, net
    
53
      
225
  
Trade payables
    
–
      
44
  
Income tax payable
    
27
      
-
  
Other non-current liabilities
    
–
      
55
  
Total non-current liabilities
    
669
      
3,199
  
Total liabilities
    
1,475
      
4,244
  
Equity
                
Share capital
    
1,267
      
1,267
  
Shareholder transaction reserve
    
4
      
27
  
Translation reserve
    
(2
)
    
(22
)
Capital reserve
    
19
      
12
  
Accumulated deficit
    
(305
)
    
(603
)
Equity attributable to owners of the Company
    
983
      
681
  
Non-controlling interests
    
68
      
213
  
Total equity
    
1,051
      
894
  
Total liabilities and equity
    
2,526
      
5,138
  

2
 
Kenon Holdings Ltd and subsidiaries
 Consolidated Statements of Profit & Loss for the years ended December 31, 2017 and 2016
 
   
For the year ended December 31,
  
   
2017
    
2016
  
   
$ millions
  
Revenue
    
366
      
324
  
Cost of sales and services (excluding depreciation)
    
(267
)
    
(251
)
Depreciation
    
(31
)
    
(27
)
Gross profit
    
68
      
46
  
Selling, general and administrative expenses
    
(56
)
    
(47
)
Impairment of assets and investments
    
29
      
(72
)
Other income
    
1
      
1
  
Operating profit/(loss)
    
42
      
(72
)
Financing expenses
    
(70
)
    
(47
)
Financing income
    
3
      
7
  
Financing expenses, net
    
(67
)
    
(40
)
Provision of financial guarantee
    
–
      
(130
)
Share in losses of associated companies, net of tax
    
(111
)
    
(186
)
Loss before income taxes
    
(136
)
    
(428
)
Income taxes
    
(73
)
    
(2
)
Loss for the year from continuing operations
    
(209
)
    
(430
)
Profit for the year from discontinued operations (after tax)
    
478
      
36
  
Profit/(loss) for the year
    
269
 
    
(394
)
Attributable to:
                
Kenon's shareholders
    
237
      
(412
)
Non-controlling interests
    
32
      
18
  
(Loss)/ Profit for the year
    
269
      
(394
)
Basic/diluted (loss)/profit per share attributable to Kenon's shareholders (in dollars):
                
Basic/diluted profit/(loss) per share
    
4.40
      
(7.67
)
Basic/diluted (loss) per share from continuing operations
    
(4.00
)
    
(8.08
)
Basic/diluted profit per share from discontinued operations
    
8.40
      
0.41
  
 
 
3
 
Kenon Holdings Ltd and subsidiaries
Consolidated Statements of Cash Flows
 For the years ended December 31, 2017 and 2016
 
   
For the year ended December 31
  
   
2017
    
2016
  
   
$ millions
  
Cash flows from operating activities
            
(Loss)/Profit for the year
    
269
      
(394
)
Adjustments:
                
Depreciation and amortization
    
178
      
172
  
Impairment of assets and investments
    
(8
)
    
72
  
Financing expenses, net
    
276
      
171
  
Share in losses of associated companies, net
    
111
      
186
  
Capital gains/(losses), net
    
(26
)
    
3
  
Provision for financial guarantee
    
–
      
130
  
Bad debt expense
    
7
      
5
  
Share-based payments
    
1
      
1
  
Income taxes
    
278
      
59
  
     
1,086
      
405
  
Change in inventories
    
1
      
(40
)
Change in trade and other receivables
    
(63
)
    
(69
)
Change in trade and other payables
    
(568
)
    
23
  
Change in provisions and employee benefits
    
2
      
(41
)
Cash generated from operating activities
    
458
      
278
  
Income taxes paid, net
    
(66
)
    
(117
)
Dividends received from investments in associates
    
–
      
1
  
Net cash provided by operating activities
    
392
      
162
  
 
4
 
 
Kenon Holdings Ltd and subsidiaries
Consolidated Statement of Cash Flows, continued
 For the years ended December 31, 2017 and 2016
 
   
For the year ended December 31
  
   
2017
    
2016
  
   
$ millions
  
Cash flows from investing activities
            
Proceeds from sale of property, plant and equipment and intangible assets
    
5
      
–
  
Short-term deposits and loans, net
    
(5
)
    
222
  
Cash paid for businesses purchased, less cash acquired
    
–
      
(206
)
Disposal of subsidiary, net of cash disposed of and exit from combination
    
793
      
–
  
Investment in associates
    
–
      
(111
)
Sale of securities held for trade and available for sale, net
    
–
      
17
  
Acquisition of property, plant and equipment
    
(228
)
    
(281
)
Acquisition of intangible assets
    
(10
)
    
(9
)
Proceeds from realization of long-term deposits
    
5
      
–
  
Interest received
    
7
      
6
  
Payment of consideration retained
    
–
      
(2
)
Payment to release financial guarantee
    
(72
)
    
(36
)
Exercisable purchase assignment
    
10
      
–
  
Insurance claim received
    
80
      
–
  
Net cash provided by (used in) investing activities
    
585
      
(400
)
                 
Cash flows from financing activities
                
Dividend paid to non-controlling interests
    
(29
)
    
(33
)
Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries
    
100
      
10
  
Payment of issuance expenses related to long-term debt
    
(35
)
    
–
  
Payment of consent fee
    
(5
)
    
–
  
Receipt of long-term loans and issuance of debentures
    
1,939
      
799
  
Repayment of long-term loans and debentures
    
(1,506
)
    
(445
)
Short-term credit from banks and others, net
    
(126
)
    
(5
)
Payment of swap unwinding and early repayment fee
    
(47
)
    
–
  
Purchase of non-controlling interest
    
(14
)
    
–
  
Interest paid
    
(180
)
    
(151
)
Net cash provided by financing activities
    
97
      
175
  
                 
Increased / (Decrease) in cash and cash equivalents
    
1,074
      
(63
)
Cash and cash equivalents at beginning of the year
    
327
      
384
  
Effect of exchange rate fluctuations on balances of cash and cash equivalents
    
16
      
6
  
Cash and cash equivalents at end of the year
    
1,417
      
327
  

5
Information regarding reportable segments

The following table sets forth selected financial data for Kenon’s reportable segments for the periods presented:
 
 
  
Year Ended December 31, 20171
  
   
OPC
    
Qoros2
    
Other3
    
Adjustments4
    
Consolidated Results
  
   
(in millions of USD, unless otherwise indicated)
  
Sales          
  
$
365
    
$
-
    
$
1
    
$
-
    
$
366
  
Depreciation and amortization
    
(30
)
    
-
      
(1
 )    
-
      
(31
)
Impairment of assets and investments
    
-
      
-
      
29
      
-
      
29
  
Financing income          
    
1
      
-
      
13
      
(11
)
    
3
  
Financing expenses          
    
(34
)
    
-
      
(47
 )    
11
      
(70
)
Share in (losses) income of associated companies
    
-
      
(121
)
    
10
      
-
      
(111
)
Profit / (Loss) before taxes
  
$
23
    
$
(121
)
  
$
(38
 )  
$
-
    
$
(136
)
Income taxes          
    
(9
)
    
-
      
(64
 )    
-
      
(73
)
Profit / (Loss) from continuing operations
  
$
14
    
$
(121
)
  
$
(102
 )  
$
-
    
$
(209
)
                                         
Segment assets5          
  
$
937
    
$
-
    
$
1,469
  6  
$
-
    
$
2,406
  
Investments in associated companies
    
-
      
2
      
120
      
-
      
122
  
Segment liabilities          
    
741
      
-
      
726
  7
    
-
      
1,467
  
Capital expenditure8          
    
109
      
-
      
121
      
-
      
230
  
 
(1)
In December 2017, Inkia completed the sale of the Inkia Business.
(2)
Associated company.
(3)
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
(4)
“Adjustments” includes inter-segment financing income and expenses.
(5)
Excludes investments in associates.
(6)
Includes Kenon’s, IC Green’s and IC Power holding company assets.
(7)
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
(8)
Includes the additions of Property, Plant and Equipment, or PP&E, and intangibles based on an accrual basis.
 
  
Year Ended December 31, 20161
  
   
OPC
    
Qoros2
    
Other3
    
Adjustments4
    
Consolidated Results
  
   
(in millions of USD, unless otherwise indicated)
  
Sales          
  
$
324
    
$
—
    
$
—
    
$
-
    
$
324
  
Depreciation and amortization
    
(27
)
    
—
      
-
      
-
      
(27
)
Impairment of assets and investments
    
-
      
—
      
(72
)
    
-
      
(72
)
Financing income          
    
3
      
—
      
16
      
(12
)
    
7
  
Financing expenses          
    
(23
)
    
—
      
(36
)
    
12
      
(47
)
Share in losses of associated companies
    
-
      
(143
)
    
(43
)
    
-
      
(186
)
Provision of financial guarantee
    
-
      
—
      
(130
)
    
-
      
(130
)
Profit / (Loss) before taxes          
  
$
20
    
$
(143
)
  
$
(305
)
  
$
-
    
$
(428
)
Income taxes          
    
—
      
—
      
(2
)
    
-
      
(2
)
Profit / (Loss) from continuing operations
  
$
20
    
$
(143
)
  
$
(307
)
  
$
-
    
$
(430
)
Segment assets5          
  
$
668
    
$
—
    
$
4,262
    
$
-
    
$
4,930
  
Investments in associated companies
    
-
      
118
      
90
      
-
      
208
  
Segment liabilities          
    
534
      
—
      
3,710
      
-
      
4,244
  
Capital expenditure8          
    
73
      
—
      
245
      
-
      
318
  
____________________________________
 
(1)
Results during this period have been reclassified to reflect the results of the Inkia Business as discontinued operations.
(2)
Associated company.
(3)
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
(4)
“Adjustments” includes inter-segment financing income and expenses.
(5)
Excludes investments in associates.
(6)
Includes Kenon’s, IC Green’s and IC Power holding company assets.
(7)
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
(8)
Includes the additions of PP&E and intangibles based on an accrual basis.
 
6
Information regarding reportable segments
 
   
Year Ended December 31, 20151
  
   
OPC
    
Qoros2
    
Other3
    
Adjustments4
    
Consolidated Results
  
   
(in millions of USD, unless otherwise indicated)
  
Sales          
  
$
326
    
$
—
    
$
—
    
$
-
    
$
326
  
Depreciation and amortization
    
(26
)
    
—
      
1
      
—
      
(25
)
Asset impairment          
    
-
      
—
      
(7
)
    
—
      
(7
)
Financing income          
    
3
      
—
      
8
      
—
      
11
  
Financing expenses          
    
(26
)
    
—
      
(10
)
    
—
      
(36
)
Share in (losses) income of associated companies
    
-
      
(196
)
    
9
      
—
      
187
  
Gain from distribution of dividend in kind
    
-
      
—
      
210
      
—
      
210
  
Income (loss) before taxes
  
$
30
    
$
(196
)
  
$
199
    
$
—
    
$
33
  
Income taxes          
    
(8
)
    
—
      
(1
 )    
—
      
(9
)
Income (loss) from continuing operations
  
$
22
    
$
(196
)
  
$
198
    
$
—
    
$
24
  
Segment assets5          
  
$
811
    
$
—
    
$
3,303
6 
  
$
—
    
$
4,114
  
Investments in associated companies
    
-
      
159
      
210
      
—
      
369
  
Segment liabilities          
    
677
      
—
      
2,542
7 
    
—
      
3,219
  
Capital expenditure8          
    
18
      
—
      
556
      
—
      
574
  
 
 
(1)
 Results during this period have been reclassified to reflect the results of the Inkia Business as discontinued operations.
(2)
Associated company.
(3)
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM and Tower (up to June 30, 2015), as associated companies; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
(4)
“Adjustments” includes inter-segment sales.
(5)
Excludes investments in associates.
(6)
Includes Kenon’s, IC Green’s and IC Power holding company assets.
(7)
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
(8)
Includes the additions of PP&E and intangibles based on an accrual basis.

Information regarding associated companies
 
 
  
Carrying amounts of investment in associated companies
    
Equity in the net (losses) / earnings of associated companies
  
 
  
as at
    
for the year ended
  
 
  
December 31
    
December 31
    
December 31
    
December 31
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
$ millions
    
$ millions
  
ZIM
    
120
      
82
      
10
      
(43
)
Qoros
    
2
      
118
      
(121
)
    
(143
)
Others
    
–
      
8
      
–
      
–
  
 
                                
 
    
122
      
208
      
(111
)
    
(186
)
 
7
Appendix B
 
Summary OPC consolidated financial information
 
OPC’s Consolidated Statement of Income
 
 
  
For the year ended
December 31,
  
 
  
2017
    
2016
  
 
  
(in millions of USD)
  
Sales
    
365
      
324
  
Cost of sales (excluding depreciation and amortization)
    
(266
)
    
(251
)
Depreciation and amortization
    
(30
)
    
(27
)
Gross profit
    
69
      
46
  
General, selling and administrative expenses
    
(13
)
    
(6
)
                 
Operating income
    
56
      
40
  
Financing expenses
    
(34
)
    
(23
)
Financing income
    
1
      
3
  
Financing expenses, net
    
(33
)
    
(20
)
Income before taxes
    
23
      
20
  
Taxes on income
    
(9
)
    
−
  
Net income for the period
    
14
      
20
  
Attributable to:
                
Equity holders of the company
    
9
      
16
  
Non-controlling interest
    
5
      
4
  
Net income for the period
    
14
      
20
  
 
8
Summary Data from OPC’s Consolidated Statement of Cash Flows

 
  
For the year ended
December 31,
  
 
  
2017
    
2016
  
 
  
(in millions of USD)
  
Cash flows provided by operating activities
    
114
      
25
  
Cash flows used in investing activities
    
(158
)
    
(19
)
Cash flows provided by (used in) financing activities
    
163
      
(104
)
                 
Increase (decrease) in cash and cash equivalents
    
119
      
(98
)
                 
Cash and cash equivalents at end of the period
    
147
      
23
  
Investments in property, plant and equipment
    
630
    
509
  
Total depreciation and amortization
    
31
      
27
  
 
Summary Data from OPC’s Consolidated Statement of Financial Position

             
 
  
As at
  
 
  
December 31, 2017
    
December 31, 2016
  
 
  
(in millions of USD)
  
Total financial liabilities1
    
596
      
454
  
Total monetary assets2
    
147
      
28
  
Total equity attributable to the owners
  
173
    
116
  
Total assets
    
941
    
672
  
 
1.
Including loans from banks and others and debentures
2.
Including cash and cash equivalents, short-term deposits and restricted cash.
 
9
Appendix C
 
Definition of OPC’s EBITDA and non-IFRS reconciliation
 
This press release, including the financial tables, presents EBITDA and net debt, 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.
 
OPC defines “EBITDA” as for each period for each entity as net income before depreciation and amortization, financing expenses, net, and income tax expense. EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures 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. 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. 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.
 
OPC believes that the disclosure of EBITDA and net debt provides transparent and useful information to investors and financial analysts in their review of the company’s, or its subsidiaries’ and associate’s, 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 OPC’s net income to EBITDA for the periods presented. Other companies may calculate EBITDA differently, and therefore this presentation of EBITDA may not be comparable to other similarly titled measures used by other companies.

   
For the year ended
December 31, 2017
  
   
(in USD millions)
  
Net income for the period
    
14
  
Depreciation and amortization
    
30
  
Financing expenses, net
    
33
  
Income tax expense
    
9
  
EBITDA
    
86
  

   
For the year ended
December 31, 2016
  
   
(in USD millions)
  
Net income for the period
    
20
  
Depreciation and amortization
    
27
  
Financing expenses, net
    
20
  
EBITDA
    
67
  
 
10
 
Appendix D
 
Summary Financial Information of OPC’s Subsidiaries
 
The tables below set forth a reconciliation of net debt to total debt for OPC’s subsidiaries as of December 31, 2017:
 
  
 
  
OPC-Rotem
    
OPC-Hadera
    
OPC Energy & Others
    
Total OPC
  
Total debt(i)
    
383
      
144
      
91
      
618
  
Cash(ii)
    
86
      
31
      
106
      
223
  
Net Debt          
    
297
      
113
      
(15
)
    
395
  
 
(i)
Total debt comprises loans from banks and third parties and debentures, and includes long term and short term debt.
(ii)
Includes cash and cash equivalents, short-term deposits and restricted cash, and long-term deposits and restricted cash.
 
The tables below set forth a reconciliation of net debt to total debt for OPC’s subsidiaries as of December 31, 2016:
 
  
 
  
OPC-Rotem
    
OPC-Hadera
    
OPC Energy & Others
    
Total OPC
  
Total debt(i)
    
365
      
-
      
52
      
417
  
Cash(ii)
    
22
      
1
      
23
      
46
  
Net Debt          
    
343
      
(1
)
    
29
      
371
  
 
(i)
Total debt comprises loans from banks and third parties and debentures, and includes long term and short term debt.
(ii)
Includes cash and cash equivalents, short-term deposits and restricted cash, and long-term deposits and restricted cash.
 
 
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