Edgar Filing: Cellcom Israel Ltd.

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For March 13, 2012

Commission File Number: 001-33271

CELLCOM ISRAEL LTD.

10 Hagavish Street

Netanya, Israel 42140

________________________________________________

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F _____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _____ No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not Applicable

cellcom israel announces ilaa/negative rating reaffirmed for possible additional debentures to be traded in israel and additional financial information regarding subsidiary

Netanya, Israel – March 13, 2012 – Cellcom Israel Ltd. (NYSE: CEL) (TASE: CEL) (hereinafter: the "Company") announced today that, following its previous announcements regarding its preparation for a potential offering of new series of debentures to the public in Israel only, under the Company's amended shelf prospectus, Standard & Poor’s Maalot, or Maalot, reaffirmed an “ilAA/negative” rating for the Company and an “ilAA rating” for additional debentures of existing series or new series of up to NIS 1 billion that the Company may issue, which, if issued, would be traded on the Tel Aviv Stock Exchange.

The contemplated offering will require filing of a supplemental shelf offering report with the ISA and TASE. In connection with the contemplated debt offering, the Company will be providing to investors in Israel Netvision’s historic financial statements for the three years ended December 31, 2010 and the six months ended June 30, 2011 and 2010, as well as pro forma financial statements for the Company for the year ended December 31, 2011, prepared on a basis assuming that the acquisition of Netvision, and related financing, occurred on January 1, 2011. The financial information provided in Israel is in the Hebrew language. A convenience translation of these financial statements (excluding the footnotes, which the Company believes do not contain any material information that is not included in the Company's annual report on Form 20-F for the year ended December 31, 2011 filed on March 7, 2012) is filed herewith.

The execution, timing, terms and amount of such contemplated offering have not yet been determined and are subject to a further approval of the Company's Board of Directors. There is no assurance that such offering will be executed, nor as to its timing, terms and amount.

For additional details regarding the Company's public debentures and additional undertakings of the Company included in the amended prospectus see the Company's annual report on Form 20-F for the year ended December 31, 2011 filed on March 7, 2012, under "Item 5. Liquidity and Capital Resources – Debt Service – Shelf prospectus" and " – Public Debentures" and the Company's current report on Form 6-K filed on March 8, 2012

The contemplated offering described in this press release, will be made, if made, in Israel to residents of Israel only. The said debentures will not be registered under the U.S. Securities Act of 1933 and will not be offered or sold in the United States. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any debentures.

A security rating is not a recommendation to buy, sell or hold securities, it may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Forward looking statement

The information included in this press release contains, or may be deemed to contain, forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). Said forward-looking statements, relating to the execution of the offering, the amount to be raised and the use of its proceeds are subject to uncertainties and assumptions about the shelf offering and market conditions and sufficient offers received for an

adequate price. The actual conditions could lead to materially different outcome than that set forth above.

About Cellcom Israel

Cellcom Israel Ltd., established in 1994, is the leading Israeli cellular provider; Cellcom Israel provides its approximately 3.349 million subscribers (as at December 31, 2011) with a broad range of value added services including cellular and landline telephony, roaming services for tourists in Israel and for its subscribers abroad and additional services in the areas of music, video, mobile office etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates an HSPA 3.5 Generation network enabling advanced high speed broadband multimedia services, in addition to GSM/GPRS/EDGE networks. Cellcom Israel offers Israel's broadest and largest customer service infrastructure including telephone customer service centers, retail stores, and service and sale centers, distributed nationwide. Through its broad customer service network Cellcom Israel offers its customers technical support, account information, direct to the door parcel delivery services, internet and fax services, dedicated centers for the hearing impaired, etc. In August 2011, Cellcom Israel completed the acquisition of Netvision Ltd. 013 Netvision Ltd., its wholly owned subsidiary, is a leading Israeli provider of internet connectivity services and international calling services. Cellcom Israel, ,, through its wholly owned subsidiaries also provides landline telephone communication services in Israel, in addition to data communication services. Cellcom Israel's shares are traded both on the New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For additional information please visit the Company's website www.cellcom.co.il

Company Contact

Yaacov Heen

Chief Financial Officer

investors@cellcom.co.il

Tel: +972 52 998 9755

Investor Relations Contact

Porat Saar

CCG Investor Relations Israel & US

cellcom@ccgisrael.com

Tel: +1 646 233 2161

NETVISION LTD. AND ITS SUBSIDIARIES

Financial Information

NETVISION LTD. AND ITS SUBSIDIARIES ("the Company")

Table of Contents

Financial Information as at December 31, 2010:

	Page

Consolidated Statements of Financial Position	2

Consolidated Statements of Comprehensive Income	3

Consolidated Statement of Changes in Equity	4-6

Consolidated Statements of Cash Flows	7-9

Financial Information as at June 30, 2011:

	Page

Condensed Consolidated Interim Statements of Financial position	10

Condensed Consolidated Interim Statements of Comprehensive Income	11

Condensed Consolidated Interim Statements of Changes in Equity	12-14

Condensed Consolidated Interim Statements of Cash Flows	15-17

NETVISION LTD.

Consolidated Statements of Financial Position

	December 31,			December 31,
	2009			2010
	NIS thousands

Current assets
Cash and cash equivalents		325,948			79,329
Sort-term investments		-			187,264
Trade receivables, net		261,857			262,375
Other receivables		46,435			49,120
Inventory of purchased products		6,609			5,176

		640,849			583,264

Non-current assets
Other receivables		13,230			13,189
Rights of use of communication lines		242,390			261,732
Property, plant and equipment, net		208,692			199,868
Goodwill		530,737			531,098
Intangible assets, net		54,612			39,548
Deferred tax assets		50,510			46,652

		1,100,171			1,092,087

		1,741,020			1,675,351

Current liabilities
Short term bank credit and current maturities of loans from banks		36,335			41,843
Trade payables		202,583			204,155
Other payables		122,094			129,845
Current maturities of long-term liabilities to trade payables		4,293			4,018
Current maturities of convertible debentures		15,293			177

		380,598			380,038

Non-current liabilities
Loans from banks		146,805			112,650
Convertible debentures		15,246			-
Deferred revenues in respect of rights of use of communication lines		62,123			56,995
Long-term liabilities to trade payables		14,236			9,885
Employee benefit liabilities		14,388			17,506

		252,798			197,036

Equity attributable to owners of the Company
Share capital		31,205			32,422
Share premium		1,047,393			1,091,830
Proceeds from conversion option on debentures		5,337			31
Adjustments arising from translating financial statements		(600	)		(956	)
Reserve for transaction with non-controlling interests		-			(182	)
Retained earnings (accumulated losses)		15,878			(28,981	)

Non-controlling interest		8,411			4,113

Total equity		1,107,624			1,098,277

		1,741,020			1,675,351

March 9, 2011	(Signed)	(Signed)	(Signed)
Date of approval of	Ami Erel	Nir Sztern	Ofir Sarid
financial statements	Chairman of the Board of	Chief Executive Officer	Chief Financial Officer
	Directors

NETVISION LTD.

Consolidated Statements of Comprehensive Income

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2008			2009			2010
	NIS thousands (except earnings per share data)

Revenues		1,234,584			1,250,159			1,302,908
Cost of revenues		981,822			977,063			1,060,463

Gross profit		252,762			273,096			242,445

Selling and marketing expenses		52,108			49,663			53,662
General and administrative expenses		75,118			67,833			65,672
Impairment of subsidiary activity		-			-			8,036
Impairment of intangible assets		14,143			-			-

Operating profit		111,393			155,600			115,075

Financing income		10,733			3,844			5,347
Financing expenses		(19,395	)		(22,604	)		(19,524	)
Other income, net		382			1,826			344

Income before taxes on income		103,113			138,666			101,242

Taxes on income		16,359			33,018			19,696
Net income		86,754			105,648			81,546

Other comprehensive loss (net of tax effect):

Adjustments arising from translating financial statements of foreign operations		-			(1,144	)		(517	)
Actuarial loss from defined benefit plans, net		(8,746	)		(1,242	)		(2,192	)
Total other comprehensive loss, net		(8,746	)		(2,386	)		(2,709	)

Total comprehensive income		78,008			103,262			78,837

Net income attributable to:
Equity holders of the Company		86,754			105,607			84,871
Non-controlling interests		-			41			(3,325	)
		86,754			105,648			81,546

Total comprehensive income attributable to:
Equity holders of the Company		78,008			103,740			82,467
Non-controlling interests		-			(478	)		(3,630	)
		78,008			103,262			78,837

Net earnings per share attributable to equity holders of the Company (in NIS)
Basic net earnings		2.99			3.54			2.74

Diluted net earnings		2.70			3.45			2.66

NETVISION LTD.

Consolidated Statements of Changes in Equity

	Attributable to equity holders of the Company
	Share capital		Share premium		Options (Series 1)		Conversion option on debentures (Series B)			Adjustments arising from translating financial statements			Reserve for transactions with non-controlling interests			Retained earnings (accumulated losses)			Total			Non-controlling interests			Total equity
	NIS thousands



Balance as of January 1, 2010		31,205		1,047,393		-		5,337			(600	)		-			15,878			1,099,213			8,411			1,107,624

Net income (loss)		-		-		-		-			-			-			84,871			84,871			(3,325	)		81,546
Other comprehensive loss, net of tax		-		-		-		-			(356	)		-			(2,048	)		(2,404	)		(305	)		(2,709	)
Total comprehensive income (loss)		-		-		-		-			(356	)		-			82,823			82,467			(3,630	)		78,837
Amortization of Share-based compensation		-		-		-		-			-			-			4,802			4,802			-			4,802
Conversion of debentures (Series B) into shares		1,040		34,076		-		(5,223	)		-			-			-			29,893			-			29,893
Exercise of employee share options		177		10,278		-		-			-			-			(7,484	)		2,971			-			2,971
Repayment of debentures (Series B)		-		83		-		(83	)		-			-			-			-			-			-
Subsidiary shares buyback from non-controlling interests		-		-		-		-			-			(182	)		-			(182	)		(668	)		(850	)
Dividend		-		-		-		-			-			-			(125,000	)		(125,000	)		-			(125,000	)

Balance as of December 31, 2010		32,422		1,091,830		-		31			(956	)		(182	)		(28,981	)		1,094,164			4,113			1,098,277

NETVISION LTD.

Consolidated Statements of Changes in Equity (cont’d)

	Attributable to equity holders of the Company
	Share capital		Share premium		Options (Series 1)			Conversion option on debentures (Series B)			Adjustments arising from translating financial statements			Reserve for transactions with non-controlling interests		Retained earnings (accumulated losses)			Total			Non-controlling interests			Total equity
	NIS thousands

Balance as of January 1, 2009		30,086		998,556		9,727			8,206			-			-		29,087			1,075,662			-			1,075,662

Net income		-		-		-			-			-			-		105,607			105,607			41			105,648
Other comprehensive loss, net of tax		-		-		-			-			(600	)		-		(1,267	)		(1,867	)		(519	)		(2,386	)
Total comprehensive income (loss)		-		-		-			-			(600	)		-		104,340			103,740			(478	)		103,262
Amortization of Share-based compensation		-		-		-			-			-			-		3,650			3,650			-			3,650
Conversion of debentures into shares		25		870		-			(134	)		-			-		-			761			-			761
Exercise of share options (Series 1)		867		35,233		(9,708	)		-			-			-		-			26,392			-			26,392
Vesting of share options (Series 1)		-		19		(19	)		-			-			-		-			-			-			-
Exercise of employee share options		227		9,980		-			-			-			-		(5,199	)		5,008			-			5,008
Repayment of debentures (Series B)		-		2,735		-			(2,735	)		-			-		-			-			-			-
Acquisition of initially consolidated subsidiary		-		-		-			-			-			-		-			-			6,215			6,215
Vesting of put option to non-controlling interests in a subsidiary		-		-		-			-			-			-		-			-			3,140			3,140
Dividend		-		-		-			-			-			-		(116,000	)		(116,000	)		(466	)		(116,466	)

Balance as of December 31, 2009		31,205		1,047,393		-			5,337			(600	)		-		15,878			1,099,213			8,411			1,107,624

NETVISION LTD.

Consolidated Statements of Changes in Equity (cont’d)

	Attributable to equity holders of the Company
	Share capital		Share premium		Options (Series 1)			Conversion option on debentures (Series B)			Adjustments arising from translating financial statements		Retained earnings (accumulated losses)			Total			Non-controlling interests			Total equity
	NIS thousands
Balance as of January 1, 2008		29,641		981,775		-			-			-		(53,787	)		957,629			284			957,913

Net income		-		-		-			-			-		86,754			86,754			-			86,754
Other comprehensive loss, net of tax		-		-		-			-			-		(8,746	)		(8,746	)		-			(8,746	)
Total comprehensive income		-		-		-			-			-		78,008			78,008			-			78,008
Amortization of Share-based compensation		-		-		-			-			-		7,066			7,066			-			7,066
Equity component of convertible debentures		-		-		-			9,574			-		-			9,574			-			9,574
Conversion of debentures into shares		293		11,559		-			(1,368	)		-		-			10,484			-			10,484
Classification of liability in respect of options (Series 1)		-		-		9,971			-			-		-			9,971			-			9,971
Exercise of share options (Series 1)		22		949		(244	)										727			-			727
Exercise of employee share options		130		4,273		-			-			-		(2,200	)		2,203			-			2,203
Classification of non-controlling interests to goodwill in respect of put option to non-controlling interests in subsidiary		-		-		-			-			-		-			-			(284	)		(284	)

Balance as of December 31, 2008		30,086		998,556		9,727			8,206			-		29,087			1,075,662			-			1,075,662

NETVISION LTD.

Consolidated Statements of Cash Flows

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2008			2009			2010
	NIS thousands
Cash flows from operating activities

Net income		86,754			105,648			81,546
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to the profit or loss items:
Depreciation and amortization		130,694			115,623			121,233
Impairment of intangible assets		14,143			-			-
Impairment of subsdiary activity		-			-			8,036
Amortization of Share-based compensation		7,066			3,650			4,802
Revaluation (erosion) of short-term deposits		423			-			(756	)
Revaluation of convertible debentues (Series A) presented at fair value through profit or loss		(5,151	)		-			-
Increase in value of options (Series 1), net		(1,602	)		-			-
Increase (decrease) in liabilities for employee benefits, net		(7,052	)		(3,242	)		925
Decrease (increase) in deferred taxes		15,079			1,660			(184	)
Taxes on income		1,280			31,358			19,880
Financial expenses, net		2,952			6,023			7,843
Gain from vesting of put option to non-controlling interest in a subsidiaty		-			(1,523	)		-
Capital loss (gain)		(382	)		2			-
		157,450			153,551			161,779

Changes in operating assets and liability items:
Decrease (increase) in trade receivables		(45,159	)		26,656			(716	)
Decrease in other receivables		1,628			1,251			1,045
Decrease (increase) in inventory of purchased products		2,073			(66	)		1,376
Decrease in trade payables		(35,624	)		(8,274	)		(5,345	)
Increase (decrease) in other payables		16,568			(3,420	)		1,652
Decrease (increase) in other long-term receivables		(2,013	)		(3,535	)		42
Increase (decrease) in long-term liabilities for trade payables		(278	)		2,609			(4,626	)
Payment for rights of use of communication lines		(38,001	)		(37,550	)		(46,956	)
Exercise of rights of communication lines		6,561			6,715			6,333
Decrease in deferred revenues in respect of sale of rights of use of communication lines		(3,616	)		(2,935	)		(5,128	)
		(97,861	)		(18,549	)		(52,323	)

Cash paid and received during the year for:
Interest paid		(6,905	)		(9,687	)		(10,944	)
Interest received		4,044			3,739			3,113
Taxes paid		(58	)		(24,395	)		(21,513	)
Taxes received		-			225			5,772
		(2,919	)		(30,118	)		(23,572	)

Net cash provided by operating activities		143,424			210,532			167,430

NETVISION LTD.

Consolidated Statements of Cash Flows (cont’d)

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2008			2009			2010
	NIS thousands

Cash flows from investing activities
Purchase of property, plant and equipment		(72,309	)		(103,181	)		(65,205	)
Purchase of intangible assets		(6,228	)		(7,130	)		(10,334	)
Purchase of marketable securities		-			-			(228,936	)
Cash used in acquisition of initially consolidated subsidiaries and activities (a)		(23,300	)		(7,742	)		-
Proceeds from sale of marketable securities and short-term deposits		37,514			-			42,428
Proceeds from sale of investments in previously consolidated subsidiaries (b)		213			-			-
Indemnification from insurance company for damage to property, plant and equipment		-			6,054			-
Net cash used in investing activities		(64,110	)		(111,999	)		(262,047	)

Cash flows from financing activities
Subsidiary shares buyback from non-controlling interests		-			-			(850	)
Exercise of options and employee options		2,930			31,400			2,971
Short-term bank credit, net		53,107			(85,656	)		5,501
Repayment of debentures (Series B)		-			(15,675	)		(482	)
Repayment of long-term loans		-			(8,750	)		(36,148	)
Receipt of long-term loans		-			191,727			2,000
Dividend paid to equity holders of the Company		-			(116,466	)		(125,000	)

Net cash from (used in) financing activities		56,037			(3,420	)		(152,008	)

Exchange differences on balances of cash and cash equivalents		-			(31	)		6

Increase (decrease) in cash and cash equivalents		135,351			95,082			(246,619	)

Cash and cash equivalents at the beginning of the year		95,515			230,866			325,948

Cash and cash equivalents at the end of the year		230,866			325,948			79,329

NETVISION LTD.

Consolidated Statements of Cash Flows (cont’d)

		Year ended			Year ended			Year ended
		December 31,			December 31,			December 31,
		2008			2009			2010
		NIS thousands

(a)	Cash used in acquisition of initially consolidated subsidiaries and activities
	The subsidiaries' assets and liabilities at the date of acquisition:
	Working capital (excluding cash and cash equivalents)		198			8,541			-
	Property, plant and equipment, net		(1,059	)		(1,320	)		-
	Intangible assets, net		(22,439	)		(21,412	)		-
	Liabilities for employee benefits		-			234			-
	Non-controlling interests		-			6,215			-
			(23,300	)		(7,742	)		-

(b)	Proceeds from sale of investments in previously consolidated subsidiaries:
	The subsidiary's assets and liabilities at the date of sale:
	Working capital (excluding cash and cash equivalents)		(169	)		-			-
	Capital gain		382			-			-
			213			-			-

(c)	Significant non-cash transactions:
	Conversion of debentures into shares		10,484			761			29,893
	Purchase of property, plant and equipment on credit		(23,984	)		(21,421	)		(26,004	)
	Classification of equity component of convertible debentures from liability to equity		9,574			-			-
	Classification of receipts on account of options (Series 1) from liabilities to equity		9,971			-			-
	Deferred taxes recorded against reduction of goodwill		17,845			19,456			-

NETVISION LTD.

Condensed Consolidated Interim Statements of Financial position

	December 31,			June 30,			June 30,
	2010			2010			2011
	Audited			Unaudited
	NIS thousands


Current assets
Cash and cash equivalents		79,329			183,628			102,730
Sort-term investments		187,264			96,060			60,170
Trade receivables, net		262,375			258,048			247,996
Other receivables		49,120			51,746			63,102
Inventory of purchased products		5,176			6,218			4,393

		583,264			595,700			478,391
Non-current assets
Long-term receivables		13,189			13,219			16,632
Rights of use of communication lines		261,732			252,965			267,495
Property, plant and equipment, net		199,868			195,823			185,356
Goodwill		531,098			530,516			531,112
Intangible assets, net		39,548			49,092			36,647
Deferred tax assets		46,652			50,250			38,787
		1,092,087			1,091,865			1,076,029

		1,675,351			1,687,565			1,554,420
Current liabilities
Short-term bank credit and current maturities of loans from banks		41,843			36,353			16,485
Trade payables		204,155			195,746			186,355
Other payables		129,845			118,471			128,898
Current maturities of long-term liabilities to trade payables		4,018			4,995			5,308
Current maturities of convertible debentures		177			440			-

		380,038			356,005			337,046

Non-current liabilities
Loans from banks		112,650			124,709			28,340
Deferred revenues in respect of rights of use of communication lines		56,995			59,715			55,181
Long-term liabilities to trade payables		9,885			11,653			12,172
Employee benefit liabilities		17,506			15,442			10,010
		197,036			211,519			105,703

Equity attributable to owners of the Company
Share capital		32,422			32,282			32,489
Share premium		1,091,830			1,084,266			1,094,613
Proceeds from conversion option on debentures		31			77			-
Adjustments arising from translating financial statements		(956	)		(550	)		-
Reserve for transaction with non-controlling interests		(182	)		-			(182	)
Accumulated losses		(28,981	)		(4,360	)		(19,168	)
Non-controlling interest		4,113			8,326			3,919
Total equity		1,098,277			1,120,041			1,111,671
		1,675,351			1,687,565			1,554,420

August 8, 2011	(Signed)	(Signed)	(Signed)
Date of approval of	Ami Erel	Nir Sztern	Ofir Sarid
financial statements	Chairman of the Board of	Chief Executive Officer	Chief Financial Officer
	Directors

NETVISION LTD.

Condensed Consolidated Interim Statements of Comprehensive Income

	Year ended December 31,			Three-month period ended June 30,						Six-month period ended June 30,
	2010			2010			2011			2010			2011
	Audited			Unaudited
	NIS thousands

Revenues		1,302,908			314,024			315,063			628,035			638,741
Cost of revenues		1,060,463			250,658			240,653			504,294			496,593

Gross profit		242,445			63,366			74,410			123,741			142,148

Selling and marketing expenses		53,662			12,846			11,245			28,241			25,429
General and administrative expenses		65,672			16,723			16,570			32,603			31,920
Other operating expenses (income):
Lawsuit settlement		-			-			8,964			-			8,964
Other income, net, from sale of subsidiary and other activities		8,036			-			(376	)		-			(376	)

Operating profit		115,075			33,797			38,007			62,897			76,211

Financing income		5,347			938			1,048			1,877			1,308
Financing expenses		(19,524	)		(4,359	)		(3,097	)		(8,911	)		(7,234	)
Other income		344			344			312			344			312

Income before taxes on income		101,242			30,720			36,270			56,207			70,597

Taxes on income		19,696			6,719			9,104			12,172			18,071
Net income		81,546			24,001			27,166			44,035			52,526

Other comprehensive income (loss), net of tax effect:

Adjustments arising from translating financial statements of foreign operations		(517	)		307			-			155			-
Realization of capital reserve in respect of a foreign operation which has been sold		-			-			956			-			956
Actuarial loss from defined benefit plans, net		(2,192	)		-			-			-			-
Total other comprehensive income (loss), net		(2,709	)		307			956			155			956

Total comprehensive income		78,837			24,308			28,122			44,190			53,482

Net income attributable to:
Equity holders of the Company		84,871			24,051			27,117			44,225			51,846
Non-controlling interests		(3,325	)		(50	)		49			(190	)		680
		81,546			24,001			27,166			44,035			52,526

Total comprehensive income attributable to:
Equity holders of the Company		82,467			24,205			28,073			44,275			52,802
Non-controlling interests		(3,630	)		103			49			(85	)		680
		78,837			24,308			28,122			44,190			53,482

Net earnings per share attributable to equity holders of the Company (in NIS)
Basic net earnings		2.74			0.78			0.86			1.45			1.64

Diluted net earnings		2.66			0.73			0.86			1.38			1.64

NETVISION LTD.

Condensed Consolidated Interim Statements of Changes in Equity

	Attributable to equity holders of the Company
	Share capital		Share premium		Conversion option (Series B)			Adjustments arising from translating financial statements			Reserve for transactions with non-controlling interests			Retained earnings (accumulated losses)			Total			Non-controlling interests			Total equity
	Unaudited
	NIS thousands



Balance as of January 1, 2011 (audited)		32,422		1,091,830		31			(956	)		(182	)		(28,981	)		1,094,164			4,113			1,098,277
Amortization of Share-based compensation		-		-		-			-			-			1,079			1,079			-			1,079
Exercise of employee share options		63		2,650		-			-			-			(2,112	)		601			-			601
Conversion of debentures (Series B) into shares		4		133		(31	)		-			-			-			106			-			106
Dividend		-		-		-			-			-			(41,000	)		(41,000	)		(874	)		(41,874	)
Total comprehensive income		-		-		-			956			-			51,846			52,802			680			53,482

Balance as of June 30, 2011		32,489		1,094,613		-			-			(182	)		(19,168	)		1,107,752			3,919			1,111,671

Balance as of January 1, 2010 (audited)		31,205		1,047,393		5,337			(600	)		-			15,878			1,099,213			8,411			1,107,624
Amortization of Share-based compensation		-		-		-			-			-			2,576			2,576			-			2,576
Exercise of employee share options		46		3,009		-			-			-			(2,039	)		1,016			-			1,016
Conversion of debentures (Series B) into shares		1,031		33,864		(5,260	)		-			-			-			29,635			-			29,635
Dividend		-		-		-			-			-			(65,000	)		(65,000	)		-			(65,000	)
Total comprehensive income		-		-		-			50			-			44,225			44,275			(85	)		44,190
Balance as of June 30, 2010		32,282		1,084,266		77			(550	)		-			(4,360	)		1,111,715			8,326			1,120,041

NETVISION LTD.

Condensed Consolidated Interim Statements of Changes in Equity (cont’d)

	Attributable to equity holders of the Company
	Share capital		Share premium		Conversion option (Series B)			Adjustments arising from translating financial statements			Reserve for transactions with non-controlling interests			Retained earnings (accumulated losses)			Total		Non-controlling interests		Total equity
	Unaudited
	NIS thousands

Balance as of April 1, 2011		32,481		1,094,322		31			(956	)		(182	)		(46,748	)		1,078,948		3,870		1,082,818
Amortization of Share-based compensation		-		-		-			-			-			625			625		-		625
Exercise of employee share options		4		158		-			-			-			(162	)		-		-		-
Conversion of debentures (Series B) into shares		4		133		(31	)		-			-			-			106		-		106
Total comprehensive income		-		-		-			956			-			27,117			28,073		49		28,122
Balance as of June 30, 2011		32,489		1,094,613		-			-			(182	)		(19,168	)		1,107,752		3,919		1,111,671

Balance as of April 1, 2010		31,334		1,053,488		4,845			(704	)		-			(29,252	)		1,059,711		8,223		1,067,934
Amortization of Share-based compensation		-		-		-			-			-			981			981		-		981
Exercise of employee share options		11		129		-			-			-			(140	)		-		-		-
Conversion of debentures (Series B) into shares		937		30,649		(4,768	)		-			-			-			26,818		-		26,818
Total comprehensive income		-		-		-			154			-			24,051			24,205		103		24,308
Balance as of June 30, 2010		32,282		1,084,266		77			(550	)		-			(4,360	)		1,111,715		8,326		1,120,041

NETVISION LTD.

Condensed Consolidated Interim Statements of Changes in Equity (cont’d)

	Attributable to equity holders of the Company
	Share capital		Share premium		Conversion option (Series B)			Adjustments arising from translating financial statements			Reserve for transactions with non-controlling interests			Retained earnings (accumulated losses)			Total			Non-controlling interests			Total equity

	NIS thousands

Balance as of January 1, 2010 (audited)		31,205		1,047,393		5,337			(600	)		-			15,878			1,099,213			8,411			1,107,624

Net income (loss)		-		-		-			-			-			84,871			84,871			(3,325	)		81,546
Other comprehensive loss, net of tax		-		-		-			(356	)		-			(2,048	)		(2,404	)		(305	)		(2,709	)
Total comprehensive income (loss)		-		-		-			(356	)		-			82,823			82,467			(3,630	)		78,837
Amortization of Share-based compensation		-		-		-			-			-			4,802			4,802			-			4,802
Conversion of convertible debentures (Series B)		1,040		34,159		(5,306	)		-			-			-			29,893			-			29,893
Exercise of employee share options		177		10,278		-			-			-			(7,484	)		2,971			-			2,971
Subsidiary shares buyback from non-controlling interests		-		-		-			-			(182	)		-			(182	)		(668	)		(850	)
Dividend declared		-		-		-			-			-			(125,000	)		(125,000	)		-			(125,000	)
Balance as of December 31, 2010 (audited)		32,422		1,091,830		31			(956	)		(182	)		(28,981	)		1,094,164			4,113			1,098,277

NETVISION LTD.

Condensed Consolidated Interim Statements of Cash Flows

	Year ended December 31,			Three-month period ended June 30,					Six-month period ended June 30,
	2010			2010		2011			2010		2011
	Audited			Unaudited
	NIS thousands

Cash flows from operating activities
Net income		81,546			24,001		27,166			44,035		52,526
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to the profit or loss items:
Depreciation and amortization		121,233			29,763		29,155			58,203		57,024
Impairment of subsdiary activity		8,036			-		956			-		956
Amortization of Share-based compensation		4,802			981		625			2,576		1,079
Erosion of short-term deposits		(756	)		-		(580	)		-		(481	)
Increase (decrease) in liabilities for employee benefits, net		925			703		(499	)		1,054		(599	)
Decrease (increase) in deferred taxes		(184	)		2,451		3,977			260		7,866
Taxes on income		19,880			4,268		5,127			11,912		10,205
Financial expenses, net		7,843			1,817		1,204			3,522		2,976
Capital gain from sale of of property, plant and equipment		-			-		-			-		(71	)

		161,779			39,983		39,965			77,527		78,955

NETVISION LTD.

Condensed Consolidated Interim Statements of Cash Flows (cont’d)

	Year ended December 31,			Three-month period ended June 30,						Six-month period ended June 30,
	2010			2010			2011			2010			2011
	Audited			Unaudited
	NIS thousands

Changes in operating assets and liability items:
Decrease (increase) in trade receivables		(716	)		(3,372	)		(437	)		4,178			14,379
Decrease (increase) in other receivables		1,045			55			198			(5,119	)		(10,783	)
Decrease in inventory of purchased products		1,376			733			828			391			783
Increase (decrease) in trade payables		(5,345	)		(7,890	)		(15,763	)		1,856			(9,324	)
Increase (decrease) in other payables		1,652			293			(73	)		(3,454	)		(3,488	)
Decrease (increase) in long-term receivables		42			(1,138	)		262			11			(3,444	)
Increase (decrease) in long-term liabilities for trade payables		(4,626	)		(1,120	)		(1,806	)		(1,881	)		3,576
Payment for rights of use of communication lines		(46,956	)		(10,882	)		(11,967	)		(22,167	)		(24,706	)
Exercise of rights of communication lines		6,333			1,579			1,581			3,138			3,139
Decrease in deferred revenues in respect of sale of rights of use of communication lines		(5,128	)		(1,291	)		(800	)		(2,409	)		(1,794	)
		(52,323	)		(23,033	)		(27,977	)		(25,456	)		(31,662	)

Cash paid and received during the year for:
Interest paid		(10,944	)		(2,615	)		(1,588	)		(5,479	)		(4,931	)
Interest received		3,113			746			384			1,915			1,955
Taxes paid		(21,513	)		(4,937	)		(9,358	)		(11,925	)		(14,594	)
Taxes received		5,772			-			-			-			-

		(23,572	)		(6,806	)		(10,562	)		(15,489	)		(17,570	)

Net cash provided by operating activities		167,430			34,145			28,592			80,617			82,249

NETVISION LTD.

Condensed Consolidated Interim Statements of Cash Flows (cont’d)

	Year ended December 31,			Three-month period ended June 30,						Six-month period ended June 30,
	2010			2010			2011			2010			2011
	Audited			Unaudited
	NIS thousands

Cash flows from investing activities
Purchase of property, plant and equipment		(65,205	)		(15,969	)		(16,541	)		(35,286	)		(30,325	)
Purchase of intangible assets		(10,334	)		(2,405	)		(2,661	)		(5,014	)		(5,320	)
Purchase of marketable securities		(228,936	)		(96,006	)		-			(96,006	)		-
Proceeds from sale of property, plant and equipment		-			-			-			-			234
Proceeds from sale of marketable securities and short-term deposits		42,428			-			29,923			-			127,575
Net cash provided by (used in) investing activities		(262,047	)		(114,380	)		10,721			(136,306	)		92,164

Cash flows from financing activities
Subsidiary shares buyback from non-controlling interests		(850	)		-			-			-			-
Exercise of employee options		2,971			-			-			1,016			601
Short-term bank credit, net		5,501			-			2,009			-			538
Repayment of debentures (Series B)		(482	)		(477	)		(71	)		(477	)		(71	)
Repayment of long-term loans		(36,148	)		(16,897	)		(3,919	)		(22,078	)		(111,088	)
Receipt of long-term loans		2,000			-			202			-			882
Dividend paid to equity holders of the Company		(125,000	)		(65,000	)		(41,000	)		(65,000	)		(41,874	)

Net cash used in financing activities		(152,008	)		(82,374	)		(42,779	)		(86,539	)		(151,012	)

Exchange differences on balances of cash and cash equivalents		6			(102	)		-			(92	)		-

Increase (decrease) in cash and cash equivalents		(246,619	)		(162,711	)		(3,466	)		(142,320	)		23,401

Cash and cash equivalents at the beginning of the year		325,948			346,339			106,196			325,948			79,329

Cash and cash equivalents at the end of the year		79,329			183,628			102,730			183,628			102,730

(a) Significant non-cash transactions:
Conversion of debentures into shares		29,893			26,818			106			29,635			106
Purchase of property, plant and equipment on credit		(26,004	)		(5,769	)		(1,869	)		(9,738	)		(9,039	)

Cellcom Israel Ltd. and Subsidiaries

Pro forma statements

Business combination

On August 31, 2011 (the "date of acquisition"), the merger transaction of Netvision Ltd. ("Netvision") to be a wholly owned subsidiary of Cellcom Israel Ltd. ("Cellcom", "the Company"), was completed. Netvision is primarily engaged with providing Internet service, international landline telephone service, as well as providing local landline telephony services. As a result of the merger, the Company holds 100% of the merged company, Netvision, and commencing with the date of acquisition, Netvision it is fully consolidated in the Company's financial statements.

Pro forma condensed consolidated income statement

According to management's estimates and assumptions, if Netvision Ltd. acquisition had occurred on January 1, 2011, condensed consolidated income statement would has been as follows:

	Year ended December 31, 2011
	NIS millions
	Cellcom			Netvision			Reconciliation for consolidation			Consolidated			Note

Revenues		6,131			1,200			(74	)		7,257			1
Cost of revenues		(3,144	)		(865	)		74			(3,935	)		1

Gross profit		2,987			335			-			3,322

Selling and marketing expenses		(911	)		(80	)		(115	)		(1,106	)		2
General and administrative expenses		(651	)		(108	)		-			(759	)
Other expenses, net		(1	)		(7	)		-			(8	)

Operating profit		1,424			140			(115	)		1,449

Financing income		114			5			15			134			3
Financing expenses		(405	)		(11	)		(60	)		(476	)		3
Financing expenses, net		(291	)		(6	)		(45	)		(342	)

Profit before taxes on income		1,133			134			(160	)		1,107

Taxes on income		(312	)		(24	)		28			(308	)		4
Profit for the year		821			110			(132	)		799

Cellcom Israel Ltd. and Subsidiaries

Pro forma statements

Explanatory notes

Elimination of intercompany transactions, mainly interconnect and roaming services.

Depreciation and amortization expenses based on the allocated purchase price of net assets acquired.

Theoretical financing income and expenses, assuming Netvision had been acquired on January 1, 2011.

Tax benefit in respect of depreciation and amortization of purchase price allocations, assuming Netvision had been acquired on January 1, 2011.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CELLCOM ISRAEL LTD.
Date:	March 13, 2012	By:	/s/ Liat Menahemi Stadler
			Name:	Liat Menahemi Stadler
			Title:	General Counsel