Note 28 – Segment, Customer and Geographic Information

General

The following summary describes the Group’s reportable segments in 2018:

OPC – OPC Energy Ltd operates in the Israeli electricity generation sector, including the initiation, development, construction and operation of power plants and the sale and supply of electricity.

Quantum – Quantum (2007) LLC is a wholly owned subsidiary of Kenon and holds Kenon’s share in Qoros. Qoros is a China-based automotive company that is jointly-owned with Baoneng Group and a subsidiary of Wuhu.

In addition to the segments detailed above, the Group has other activities, such as the discontinued power businesses in Latin America and Caribbean, container shipping services and renewable energy businesses categorized as Others.

Evaluation of the operating segments performance is based on Adjusted EBITDA. Adjusted EBITDA is defined as the net income (loss) excluding depreciation and amortization, financing income, income taxes and other items as presented in the tables below.

There were no intersegment sales in 2018, 2017 and 2016.

B.	Information regarding reportable segments

Financial information of the reportable segments is set forth in the following table.

	OPC			Quantum			Other			Adjustments			Total
	$ thousands
2018
Total sales		363,262			-			750			-			364,012

Income/(loss) before taxes		36,499			456,854			(31,385	)					461,968
Income Taxes		(10,233	)		-			(1,266	)		-			(11,499	)
Income/(loss) from continuing operations		26,266			456,854			(32,651	)		-			450,469

Depreciation and amortization		29,809			-			607						30,416
Financing income		(2,031	)		(10,371	)		(48,430	)		32,240			(28,592	)
Financing expenses		27,219			2,003			33,400			(32,240	)		30,382
Other items:
Write back of financial guarantee		-			(62,563	)		-			-			(62,563	)
Gain on third party investment in Qoros		-			(504,049	)		-			-			(504,049	)
Fair value loss on option		-			39,788			-			-			39,788
Share in losses of associated companies		-			78,338			26,919			-			105,257
		54,997			(456,854	)		12,496			-			(389,361	)

Adjusted EBITDA		91,496			-			(18,889	)		-			72,607

Segment assets		893,162			91,626			239,550			-			1,224,338
Investments in associated companies		-			139,184			91,596			-			230,780
														1,455,118
Segment liabilities		700,452			-			38,948			-			739,400
Capital expenditure		100,389			-			19			-			100,408

	OPC			Quantum			Other			Adjustments			Total
	$ thousands
2017
Total sales		365,395			-			309			-			365,704

Income/(loss) before taxes		22,708			(127,526	)		(30,818	)		-			(135,636	)
Income Taxes		(8,945	)		-			(63,864	)		-			(72,809	)
Income/(loss) from continuing operations		13,763			(127,526	)		(94,682	)		-			(208,445	)

Depreciation and amortization		30,102			-			692			-			30,794
Financing income		(1,088	)		-			(13,230	)		11,414			(2,904	)
Financing expenses		33,753			6,328			41,499			(11,414	)		70,166
Other items:
Share in losses/(income) of associated companies		-			121,198			(10,533	)		-			110,665
Write back of impairment of investments		-			-			(28,758	)		-			(28,758	)
		62,767			127,526			(10,330	)		-			179,963

Adjusted EBITDA		85,475			-			(41,148	)		-			44,327

Segment assets		939,809			15,654			1,448,700			-			2,404,163
Investments in associated companies		-			1,694			120,000			-			121,694
														2,525,857
Segment liabilities		742,692			75,081			656,737			-			1,474,510
Capital expenditure		109,226			-			121,245			-			230,471

	OPC			Quantum			Other			Adjustments			Total
	$ thousands
2016
Total sales		324,188			-			65			-			324,253

Income/(loss) before taxes		20,450			(142,534	)		(304,816	)		-			(426,900	)
Income Taxes		(67	)		-			(2,185	)		-			(2,252	)
Income/(loss) from continuing operations		20,383			(142,534	)		(307,001	)		-			(429,152	)

Depreciation and amortization		26,697			-			589			-			27,286
Financing income		(2,988	)		-			(17,081	)		12,345			(7,724	)
Financing expenses		22,838			-			36,783			(12,345	)		47,276
Other items:
Share in losses/(income) of associated companies		-			142,534			43,681			-			186,215
Provision of financial guarantee		-			-			130,193			-			130,193
Impairment of investments		-			-			72,263			-			72,263
		46,547			142,534			266,428			-			455,509

Adjusted EBITDA		66,997			-			(38,388	)		-			28,609

Segment assets		667,631			2,016			4,261,929			-			4,931,576
Investments in associated companies		-			117,593			90,640			-			208,233
														5,139,809
Segment liabilities		533,684			-			3,709,905			-			4,243,589
Capital expenditure		72,540			-			245,313			-			317,853

C.	Customer and Geographic Information

Major customers

Following is information on the total sales of the Group to material customers and the percentage of the Group’s total revenues (in $ Thousand):

	2018					2017					2016
Customer	Total revenues		Percentage of revenues of the Group			Total revenues		Percentage of revenues of the Group			Total revenues		Percentage of revenues of the Group

Customer 1		74,019		20.33	%		75,757		20.72	%		59,886		18.47	%
Customer 2		61,482		16.89	%		50,461		13.80	%		32,449		10.01	%
Customer 3		54,639		15.01	%		53,617		14.66	%		39,359		12.14	%
Customer 4		42,487		11.67	%		*		*			*		*
Customer 5		39,276		10.79	%		38,223		10.45	%		36,394		11.22	%

(*) Represents an amount less than 10% of revenues.

Information based on geographic areas

The Group’s geographic revenues are as follows:

	For the year ended December 31,
	2018		2017		2016
	$ Thousands
Israel		363,262		365,395		324,188
Others		750		309		65
Total revenues		364,012		365,704		324,253

The Group’s non-current assets* on the basis of geographic location:

	As at December 31,
	2018		2017
	$ Thousands
Israel		636,256		617,358
Others		138		447
Total non-current assets		636,394		617,805

* Composed of property, plant and equipment and intangible assets.