NOTE 23 - ADDITIONAL INFORMATION- RECONCILIATION OF US GAAP TO IFRS

Since the initial listing of the Company on NASDAQ in the United States of America in 1993, the Company utilized US GAAP reports (prior to 2007 Israeli GAAP reconciled to US GAAP) in the preparation of its financial statements.

As many of the Company's investors and analysts are located in Israel and in Europe and are familiar with and use the International Financial Reporting Standards rules (”IFRS”) the Company is providing on a voluntary basis a reconciliation from U.S. GAAP to IFRS as detailed below (condensed balance sheet, condensed statement of operations and additional information). IFRS differs in certain significant aspects from US GAAP. The primary differences between US GAAP and IFRS relating to the Company are the accounting for goodwill, financial instruments, pension plans and termination benefits.

A. Goodwill

Adjustment arising from goodwill of a subsidiary acquired in 2008.

The purchase consideration was paid in Tower's stocks. Under US GAAP the consideration was measured according to Tower's share price at the transaction announcement date. Under IFRS the consideration was measured according to Tower's share price at closing date. Accordingly, a lower purchase consideration was measured under IFRS than the purchase consideration measured under US GAAP. Consequently no purchase price was allocated to goodwill under IFRS.

B. Financial Instruments

Adjustments arising from allocation of proceeds from issuance of convertible debentures and warrants to liabilities and equity and the subsequent measurement of such liabilities.

The adjustment stems primarily from a convertible debt security sold by Tower in 2010, with a conversion ratio that have been determined in the third quarter of 2012 based on Tower's share price as of such date. Under ASC 815 and ASC 470-20, the related conversion feature was measured in the third quarter of 2012 based on its intrinsic value and recorded to equity, with a corresponding discount on the debt instrument. Under IAS 39 such conversion feature was bifurcated from its host contract at the date of issuance and measured as a liability at fair value at each cut-off date until the date of determination of the related conversion ratio, at which date such conversion feature was classified to equity.

C. Pension Plans

Adjustments arising from defined benefit pension arrangements.

Under ASC 715 prior years' service cost, as well as actuarial gains and losses, are recorded in accumulated other comprehensive income, and amortized to the profit and loss statement over time. Under IAS 19, prior years' service cost is recorded to the profit and lost statement in the period in which the underlying change was executed, while actuarial gains and losses, at the Company's election, are recorded directly to retained earnings with no impact on the profit and loss statement.

D. Termination Benefits

Adjustment arising from benefit to be granted to certain of the Company's employees upon termination.

Under IAS 19, such benefits are not reflected in the Company's financial statements until termination occurs. Under ASC 712 such benefits are recorded in earlier periods based on probability of occurrence.

E. Condensed Balance Sheet in Accordance with IFRS

		As of December 31, 2015
	US GAAP		Adjustments			IFRS
ASSETS
Current assets	$	446,727	$	--		$	446,727
Property and equipment, net		459,533		--			459,533
Long term assets		59,964		(7,450	)		52,514
Total assets		966,224		(7,450	)		958,774
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities	$	211,119	$	(70	)	$	211,049
Long-term liabilities		369,519		(1,502	)		368,017
Total liabilities		580,638		(1,572	)		579,066
TOTAL SHAREHOLDERS' EQUITY		385,586		(5,878	)		379,708
Total liabilities and shareholders' equity	$	966,224	$	(7,450	)	$	958,774

F. Condensed Statement of Operations in Accordance with IFRS

	Year ended December 31, 2015
	US GAAP		Adjustments		IFRS
Profit before income tax and excluding other financing expense, net	$	68,525	$	(750)	$	67,775
Other non cash financing expense, net		(109,930)		73,770		(36,160)
Profit (loss) before income tax benefit		(41,405)		73,020		31,615
Income tax benefit		12,278		--		12,278
Profit (loss) for the period		(29,127)		73,020		43,893
Net income attributable to the non-controlling interest		(520)		--		(520)
Net profit (loss) attributable to the company	$	(29,647)	$	73,020	$	43,373

G. Reconciliation of Net Profit (Loss) from US GAAP to IFRS:

	Year ended December 31,
	2015		2014			2013
Net profit (loss) in accordance with US GAAP	$	(29,647)	$	4,263		$	(107,660	)
Financial instruments		73,770		21,556			(1,619
Pension plans		(705)		(1,314	)		(1,166	)
Termination benefits		(45)		409			106
Net profit (loss) in accordance with IFRS	$	43,373	$	24,914		$	(110,339	)

H. Reconciliation of Shareholders' Equity from US GAAP to IFRS:

	As of December 31,
	2015		2014
Shareholders' equity in accordance with US GAAP	$	385,586	$	195,561
Financial instruments		(380)		(54,656	)
Termination benefits		1,502		1,547
Goodwill		(7,000)		(7,000	)
Shareholders' equity in accordance with IFRS	$	379,708	$	135,452

I. Reconciliation of Goodwill from US GAAP to IFRS:

	As of December 31,
	2015		2014
Goodwill in accordance with US GAAP	$	7,000	$	7,000
Goodwill		(7,000)		(7,000	)
Goodwill in accordance with IFRS	$	--	$	--

J. Reconciliation of Other Long-term Assets from US GAAP to IFRS:

	As of December 31,
	2015		2014
Other long term assets in accordance with US GAAP	$	6,759	$	10,018
Financial instruments		(450)		(3,412	)
Other long term assets in accordance with IFRS	$	6,309	$	6,606

K. Reconciliation of Current Maturities of Loans and Debentures from US GAAP to IFRS:

		As of December 31,
	2015			2014
Current maturities of loans and debentures in accordance with US GAAP	$	33,259		$	119,999
Financial instruments		(70	)		25,622
Current maturities of loans and debentures in accordance with IFRS	$	33,189		$	145,621

L. Reconciliation of Long Term Debentures from US GAAP to IFRS:

	As of December 31,
	2015		2014
Long term debentures in accordance with US GAAP	$	45,826	$	107,311
Financial instruments		-		25,622
Long term debentures in accordance with IFRS	$	45,826	$	132,933

M. Reconciliation of Other Long Term Liabilities from US GAAP to IFRS:

	As of December 31,
	2015		2014
Other long term liabilities in accordance with US GAAP	$	7,609	$	22,924
Termination benefits		(1,502)		(1,547	)
Other long-term liabilities in accordance with IFRS	$	6,107	$	21,377