B Communications Ltd. (NASDAQ:BCOM)(TASE:BCOM) today reported its financial results for the third quarter ended September 30, 2010.
Consolidation of Bezeq Results
- Bezeq results consolidated for entire third quarter of 2010: B Communications’ third quarter results reflect the full consolidation of the operations of Bezeq - The Israel Telecommunication Corp., Ltd. (“Bezeq”) for the period. This reflects the fact that B Communications’ acquisition of the controlling interest of Bezeq (approximately 30.4%) was completed during the second quarter of 2010 (on April 14, 2010).
- Supplemental unconsolidated results table: To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. B Communications’ interest in Bezeq’s net income is presented as a single line item in the unconsolidated table, (see below, “B Communications’ Unconsolidated Q3 Financial Results”).
- Adoption of IFRS: In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010 B Communications adopted the financial reporting standards utilized by Bezeq, the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP) (see note C below).
B Communications’ Third Quarter Financial Results
B Communications’ revenues for the third quarter were NIS 3.03 billion (US$ 828 million), an over ten-fold increase compared with NIS 294 million reported in the third quarter of 2009. The Company’s revenues for Q3 2010 consisted entirely of Bezeq's revenues, while its Q3 2009 revenues consisted of sales generated by the Company’s legacy 012 Smile telecom business. Revenues for the first nine months of 2010, which consolidate Bezeq's results from April 14, 2010, were NIS 5.6 billion (US$ 1.5 billion) compared with NIS 869 million reported in the first nine months of 2009.