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Partner Communications Reports Third Quarter 2017 Results¹

ADJUSTED EBITDA2 TOTALED NIS 239 MILLION

ADJUSTED FREE CASH FLOW2 TOTALED NIS 202 MILLION

NET DEBT2 DECLINED BELOW NIS 1 BILLION TO NIS 887 MILLION

30 THOUSAND HOUSEHOLDS ARE CONNECTED TO PARTNER TV AS OF TODAY

CELLULAR SUBSCRIBERS INCREASE FOR THE SECOND CONSECUTIVE QUARTER

Third quarter 2017 highlights (compared with third quarter 2016)

  • Total Revenues: NIS 826 million (US$ 234 million), a decrease of 3%
  • Service Revenues: NIS 666 million (US$ 189 million), a decrease of 5%
  • Equipment Revenues: NIS 160 million (US$ 45 million), an increase of 6%
  • Total Operating Expenses (OPEX2): NIS 477 million (US$ 135 million), a decrease of 16%
  • Adjusted EBITDA: NIS 239 million (US$ 68 million), an increase of 9%
  • Adjusted EBITDA Margin2: 29% of total revenues compared with 26%
  • Profit for the Period: NIS 54 million (US$ 15 million), an increase of 184%
  • Net Debt: NIS 887 million (US$ 251 million), a decrease of NIS 881 million
  • Adjusted Free Cash Flow (before interest): NIS 202 million (US$ 57 million), a decrease of NIS 13 million
  • Cellular ARPU: NIS 64 (US$ 18), a decrease of 3%
  • Cellular Subscriber Base: approximately 2.68 million at quarter-end, a decrease of 1%

1 The quarterly financial results are unaudited.
2 For the definition of this and other Non-GAAP financial measures, see “Use of Non-GAAP Financial Measures” in this press release.

ROSH HA’AYIN, Israel--(BUSINESS WIRE)-- Partner Communications Company Ltd. (“Partner” or the “Company”) (NASDAQ and TASE: PTNR), a leading Israeli communications provider, announced today its results for the quarter ended September 30, 2017.

Commenting on the third quarter 2017 results, Mr. Isaac Benbenisti, CEO of Partner noted:

"Our strong entrance to the TV market, together with our significant presence in the internet and cellular markets, establishes Partner as a comprehensive communications group. The customer recruitment figures for Partner TV are high compared to our preliminary forecasts. In the last month, the sales rate has increased even more and the number of daily installations has accelerated compared to the period from August through October. In less than a month, we have completed installations in 10,000 additional households and currently the number of households that are already connected to the Partner TV service is approximately 30,000. In addition, thousands of additional households have scheduled installations by the end of the month after they have already completed joining the service. Most of the customers that have joined the TV service have chosen the service as part of our bundle and triple offerings which also includes ISP and internet infrastructure.

As part of our strategic plan as a comprehensive communications group, in August we also announced the commencement of the commercial phase of our independent fiber optic infrastructure project - Partner Fiber - which provides, for the first time, a more advanced and cost-effective alternative to the existing fixed infrastructure in Israel.

Partner's optic fibers have already reached tens of thousands of households throughout the country, and we are working to deploy further at an accelerated rate in several cities simultaneously. In complete alignment with the Ministry of Communications and other regulatory bodies, we will continue to offer the most advanced technology with an attractive value offering to more and more customers.

In the cellular segment we added approximately 33 thousand net Post-Paid subscribers in the last quarter and recorded a net increase in our cellular subscriber base for the second consecutive quarter, despite a decline of approximately 18 thousand Pre-Paid subscribers.”

Mr. Dudu Mizrahi, Partner's Chief Financial Officer, commented on the third quarter 2017 results:

“In the third quarter, many of the activities that the Company has been engaged in during the last year were reflected, among others, in the growth of 33 thousand Post-Paid cellular subscribers, a continued single digit cellular churn rate, a significant improvement in the equipment sales gross profit margin which stood at 27%, an improvement in the EBITDA margin compared with Q3 2016, and an additional quarter with a strong free cash flow before interest which totaled NIS 202 million.

The increase in CAPEX in the quarter mainly reflected the acceleration of the Company's fiber project, which enables the Company to offer advanced services based on an independent fixed-line infrastructure both to the residential market and the business market, as well as the entrance to the TV market.

In the third quarter the Company early adopted the new International Financial Reporting Standard 15 ("IFRS 15"), retroactively as from January 1, 2017 (the standard is effective from January 1, 2018, earlier application is permitted). The total increase in operating profit and profit for the first three quarters of 2017 amounted to NIS 51 million and NIS 39 million, respectively. The increase in the operating profit and profit for the third quarter 2017 alone amounted to NIS 19 million and NIS 15 million, respectively. The increase is mainly a result of costs capitalization of obtaining contracts with customers (part of payroll expenses and selling commissions).

The financial steps which we executed in the past months, including among others, the early repayments of loans in an amount of approximately NIS 0.9 billion and the raising of a new traded bond series, are reflected in the significant decline in finance expenses compared to Q3 2016. The financial steps, together with the strong free cash flow presented by the Company in the current quarter, resulted in a decline in net debt to below NIS 1 billion – to NIS 887 million.”

NIS Million Q3’17 Q2’17 Comments
Service Revenues 666 646

The increase results mainly from higher cellular seasonal
roaming revenues

Equipment Revenues 160 159
Total Revenues 826 805
Gross profit from equipment sales 43 33
OPEX 477 *472

Q3 2017 include expenses related to the launch of the
Company's TV services

Adjusted EBITDA 239 *269


Q2 2017 was the last quarter for which the Company
recorded NIS 54 million income with respect to the
settlement agreement with Orange. This was partially offset
by an increase in service revenues and an increase in gross
profit from equipment

Profit for the Period 54 *46
Capital Expenditures (additions) 107 *78

Adjusted free cash flow (before
interest payments)

202 208
Net Debt 887 1,081

* Figures include the impact of IFRS15 retroactive implementation as from beginning of 2017.

Q3’17 Q2’17 Comments

Cellular Post-Paid Subscribers
(end of period, thousands)

2,306 2,273 Increase of 33 thousand subscribers

Cellular Pre-Paid Subscribers

(end of period, thousands)

371 389 Decrease of 18 thousand subscribers

Monthly Average Revenue per
Cellular User (ARPU) (NIS)

64 62 Mainly the result of higher seasonal roaming revenues
Quarterly Cellular Churn Rate (%) 9.3% 9.0%

Key Financial Results

NIS MILLION (except EPS) Q3'17 Q3'16 % Change
Revenues 826 849 -3%
Cost of revenues 625 691 -10%
Gross profit 201 158 +27%
Operating profit 92 64 +44%
Profit for the period 54 19 +184%
Earnings per share (basic, NIS) 0.32 0.12 +167%
Adjusted free cash flow (before interest) 202 215 -6%

Key Operating Indicators

Q3'17 Q3'16 Change
Adjusted EBITDA (NIS million) 239 220 +9%
Adjusted EBITDA (as a % of total revenues) 29% 26% +3
Cellular Subscribers (end of period, thousands) 2,677 2,693 -16
Quarterly Cellular Churn Rate (%) 9.3% 9.7% -0.4
Monthly Average Revenue per Cellular User (ARPU) (NIS) 64 66 -2

Partner Consolidated Results

Cellular Segment Fixed-Line Segment Elimination Consolidated
NIS Million Q3'17 Q3'16 Change % Q3'17 Q3'16 Change % Q3'17 Q3'16 Q3'17 Q3'16 Change %
Total Revenues

652

670

-3%

216

232

-7%

(42)

(53)

826

849

-3%

Service Revenues

514

531

-3%

194

220

-12%

(42)

(53)

666

698

-5%

Equipment Revenues

138

139

-1%

22

12

+83%

160

151

+6%

Operating Profit

74

36

+106%

18

28

-36%

92

64

+44%

Adjusted EBITDA

189

156

+21%

50

64

-22%

239

220

+9%

Financial Review

In Q3 2017, total revenues were NIS 826 million (US$ 234 million), a decrease of 3% from NIS 849 million in Q3 2016.

Service revenues in Q3 2017 totaled NIS 666 million (US$ 189 million), a decrease of 5% from NIS 698 million in Q3 2016.

Service revenues for the cellular segment in Q3 2017 totaled NIS 514 million (US$ 146 million), a decrease of 3% from NIS 531 million in Q3 2016. The decrease was mainly the result of the continued price erosion of cellular services (both Post-Paid and Pre-Paid) due to the continued competitive market conditions.

Service revenues for the fixed-line segment in Q3 2017 totaled NIS 194 million (US$ 55 million), a decrease of 12% from NIS 220 million in Q3 2016. The decrease reflected the continuing decrease in revenues from international calls as well as other fixed line services.

Equipment revenues in Q3 2017 totaled NIS 160 million (US$ 45 million), an increase of 6% from NIS 151 million in Q3 2016, largely reflecting a change in product mix.

Gross profit from equipment sales in Q3 2017 was NIS 43 million (US$ 12 million), compared with NIS 28 million in Q3 2016, an increase of 54%, mainly reflecting higher profit margins from sales due to a change in the product mix.

Total operating expenses (‘OPEX’) totaled NIS 477 million (US$ 135 million) in Q3 2017, a decrease of 16% or NIS 93 million from Q3 2016. The decrease mainly reflected a decline in expenses related to the cellular network, the implementation of the International Financial Reporting Standard 15 ("IFRS 15"), a nonrecurring decrease in site-rental expenses as well as a decrease in other expenses reflecting the impact of various efficiency measures undertaken as part of a long-term plan to reduce the Company’s cost base, partially offset by additional expenses relating to the Company's TV services which were launched in June 2017. Including depreciation and amortization expenses and other expenses (mainly amortization of employee share based compensation), OPEX in Q3 2017 decreased by 14% compared with Q3 2016.

Operating profit for Q3 2017 was NIS 92 million (US$ 26 million), an increase of 44% compared with NIS 64 million in Q3 2016.

Adjusted EBITDA in Q3 2017 totaled NIS 239 million (US$ 68 million), an increase of 9% from NIS 220 million in Q3 2016. As a percentage of total revenues, Adjusted EBITDA in Q3 2017 was 29% compared with 26% in Q3 2016.

Adjusted EBITDA for the cellular segment was NIS 189 million (US$ 54 million), in Q3 2017, an increase of 21% from NIS 156 million in Q3 2016, reflecting the decrease in OPEX (as explained above) and the increase in gross profit from equipment sales partially offset by the decrease in service revenues and despite the fact that Q3 2017 was the first quarter (since Q2 2015) in which the Company did not record any income with respect to the settlement agreement regarding the Orange brand. As a percentage of total cellular segment revenues, Adjusted EBITDA for the cellular segment in Q3 2017 was 29% compared with 23% in Q3 2016.

Adjusted EBITDA for the fixed-line segment was NIS 50 million (US$ 14 million) in Q3 2017, a decrease of 22% from NIS 64 million in Q3 2016, reflecting the decrease in service revenues, partially offset by the decrease in OPEX and the increase in gross profit from equipment sales. As a percentage of total fixed-line segment revenues, Adjusted EBITDA for the fixed-line segment in Q3 2017 was 23%, compared with 28% in Q3 2016.

Finance costs, net in Q3 2017 were NIS 15 million (US$ 4 million), a decrease of 50% compared with NIS 30 million in Q3 2016. The decrease largely reflects lower interest expenses due to the lower level of debt as a result of early repayments made in June and July 2017 as well as regular maturities, in addition to lower linkage expenses due to a lower CPI level.

Income taxes for Q3 2017 were NIS 23 million (US$ 7 million), compared with NIS 15 million in Q3 2016.

Profit in Q3 2017 was NIS 54 million (US$ 15 million), compared with a profit of NIS 19 million in Q3 2016, an increase of 184%.

Based on the weighted average number of shares outstanding during Q3 2017, basic earnings per share or ADS, was NIS 0.32 (US$ 0.09), compared to basic earnings per share of NIS 0.12 in Q3 2016.

Cellular Segment Operational Review

At the end of Q3 2017, the Company's cellular subscriber base (including mobile data and 012 Mobile subscribers) was approximately 2.68 million including approximately 2.31 million Post-Paid subscribers or 86% of the base, and approximately 371 thousand Pre-Paid subscribers, or 14% of the subscriber base.

During the third quarter of 2017, the cellular subscriber base increased by approximately 15 thousand subscribers. The Post-Paid subscriber base increased by approximately 33 thousand subscribers, while the Pre-Paid subscriber base declined by approximately 18 thousand subscribers.

The quarterly churn rate for cellular subscribers in Q3 2017 was 9.3%, compared with 9.7% in Q3 2016.

Total cellular market share (based on the number of subscribers) at the end of Q3 2017 was estimated to be approximately 26%, unchanged from Q3 2016.

The monthly Average Revenue per User (“ARPU”) for cellular subscribers in Q3 2017 was NIS 64 (US$ 18), a decrease of 3% from NIS 66 in Q3 2016. The decrease mainly reflected the continued price erosion in key cellular services due to the persistent competition in the cellular market.

Funding and Investing Review

In Q3 2017, Adjusted Free Cash Flow totaled NIS 202 million (US$ 57 million), a decrease of 6% from NIS 215 million in Q3 2016. Excluding the impact of the NIS 35 million payment received from Hot Mobile in Q3 2016, Adjusted Free Cash Flow increased by 12%.

Cash generated from operations increased by 21% to NIS 306 million (US$ 87 million) in Q3 2017 from NIS 253 million in Q3 2016. The increase mainly reflected the increase in Adjusted EBITDA and the smaller decrease in operating assets and liabilities.

Cash capital expenditures (‘CAPEX payments’), as represented by cash flows used for the acquisition of property and equipment and intangible assets, were NIS 105 million (US$ 30 million) in Q3 2017, an increase of 139% from NIS 44 million in Q3 2016. The increase mainly reflected the impact of the implementation of IFRS 15 (capitalization of part of payroll and selling commission expenses) and the increase in investments related to fiber deployment and TV services.

The level of Net Debt at the end of Q3 2017 amounted to NIS 887 million (US$ 251 million), compared with NIS 1,768 million at the end of Q3 2016.

Business Developments

The Company's Board of Directors approved on November 20, 2017 the appointment of Mr. Tomer Bar Zeev as a member to the Company's Board of Directors. Mr. Tomer Bar Zeev was nominated by S.B. Israel Telecom Ltd., the Company's principal shareholder. In accordance with the Company's Articles of Association and applicable law, Mr. Bar Zeev shall serve in office until the coming Annual General Meeting of shareholders.

Mr. Bar Zeev is the founder and CEO of ironSource since 2010, a leading digital content company that offers monetization and distribution solutions for app developers, software developers, mobile carriers, and device manufacturers. Mr. Bar Zeev holds a BA in computer science from IDC Herziliya.

An active investor in other technology startups, Mr. Bar Zeev has a deep understanding of companies in the telecommunication and technology fields..

Regulatory Developments

In August 2015, the Ministry of Communications' regulation regarding access to Bezeq's passive infrastructure came into force. The purpose of this regulation is to allow other licensees to use Bezeq's passive infrastructure (such as ducts, manholes, poles, boxes etc.) in order to deploy their own high speed fiber optical cables. According to the Ministry's temporary instructions at the time (which was in force until November 1, 2015), any work inside Bezeq's passive infrastructure was to be performed by Bezeq's employees. Although the interim period has since passed, the Ministry of Communications did not effectively enforce its abovementioned decision on Bezeq.

Following the enactment of the Economic Program Law for the years 2017-2018 (which set Bezeq's obligation to allow access to its passive infrastructure into law), Bezeq has begun to partially observe its duty to provide access to its passive infrastructures. Bezeq has deployed several fiber optic cables for licensees using its own personnel.

On October 19, 2017, the Ministry of Communications instructed Bezeq to allow other domestic operators (including Partner) to deploy fiber optic cables with their own contractors (without the need for the use of Bezeq personnel). This change has the potential to substantially increase the speed of deployment of Partner's fiber infrastructure.

IFRS 15

In the third quarter of 2017 the Company early adopted (the standard is effective from January 1, 2018, earlier application is permitted), as from January 1, 2017 (the transition date), IFRS 15, Revenue from Contracts with Customers, which outlines a single comprehensive model of accounting for revenue arising from contracts with customers and supersedes IAS 18, Revenue, and IAS 11, Construction contracts (the "previous standards"). The model includes five steps for analyzing transactions so as to determine when to recognize revenue and at what amount:

1) Identifying the contract with the customer.

2) Identifying separate performance obligations in the contract.

3) Determining the transaction price.

4) Allocating the transaction price to separate performance obligations.

5) Recognizing revenue when the performance obligations are satisfied.

In accordance with the model, the Company recognizes revenue when the customer obtains control over the goods or services. Revenue is based on the consideration that the Company expects to receive for the transfer of the goods or services promised to the customer, excluding amounts collected on behalf of third parties, and where collection is probable.

The Company applied IFRS 15 using the cumulative effect approach as from the transition date, without a restatement of comparative figures. As part of the initial implementation of IFRS 15, the Company has chosen to apply the expedients in the transitional provisions, according to which the cumulative effect approach is applied only for contracts not yet complete at the transition date, and therefore there is no change in the accounting treatment for contracts completed at the transition date. The Company also applied the practical expedient of examining the aggregate effect of contracts changes that occurred before the transition date, instead of examining each change separately. Contracts that are renewed on a monthly basis and may be cancelled by the customer at any time, without penalty, were considered completed contracts at the transition date. The cumulative effect as of the transition date was immaterial and did not affect the financial statements.

The application of IFRS 15 did not have a material effect on the measurement and timing of the Company’s revenue in the reporting period, compared to the provisions of the previous standards.

The main effect of the Company’s application of IFRS 15 is the accounting treatment for the incremental costs of obtaining contracts with customers, which in accordance with IFRS 15, are recognized as assets when the costs are incremental to obtaining the contracts, and it is probable that the Company will recover these costs, instead of recognizing these costs in the statement of income as incurred. IFRS 15 also determines that direct costs of fulfilling a contract which the Company can specifically identify and which produce or improve the Company’s resources that are used for its future performance obligation (and it is probable that the Company will recover these costs) are recognized as assets (the incremental and direct costs together: "contract costs"). Contract costs that were recognized as assets are presented in the statements of cash flows as part of cash flows used in investing activities.

Direct commissions paid to resellers and sales employees for sales and upgrades, are recognized as an asset for obtaining a contract instead of an expense in the statement of income. The assets are amortized in accordance with the expected service period (mainly over 2 to 3 years), using the portfolio approach.

For the effect of IFRS 15 on the financial reports, see also the section, 'Effect of IFRS15 implementation' in this press release.

Conference Call Details

Partner will hold a conference call on Tuesday, November 21, 2017 at 10.00AM Eastern Time / 5.00PM Israel Time.

To join the call, please dial the following numbers (at least 10 minutes before the scheduled time):

International: +972.3.918.0687

North America toll-free: +1.866.860.9642

A live webcast of the call will also be available on Partner's Investors Relations website at: www.partner.co.il/en/Investors-Relations/lobby/

If you are unavailable to join live, the replay of the call will be available from November 21, 2017 until December 12, 2017, at the following numbers:

International: +972.3.925.5940

North America toll-free: +1.877.456.0009

In addition, the archived webcast of the call will be available on Partner's Investor Relations website at the above address for approximately three months.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Words such as "estimate", “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “project”, “goal”, “target” and similar expressions often identify forward-looking statements but are not the only way we identify these statements. Specific statements have been made regarding the Company's anticipated acceleration of the deployment of its fiber optic infrastructure. In addition, all statements other than statements of historical fact included in this press release regarding our future performance are forward-looking statements. We have based these forward-looking statements on our current knowledge and our present beliefs and expectations regarding possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions, including, as regards the anticipated acceleration of fiber cable deployment, whether the Ministry of Communications’ instruction to Bezeq to allow other domestic operators (including Partner) to deploy fiber optic cables with their own contractors (without the need for the use of Bezeq personnel) will be respected or enforced and whether the Company will have the financial resources needed to continue to increase the number of customers served by its fiber optic infrastructure. The future results may differ materially from those anticipated herein. For further information regarding risks, uncertainties and assumptions about Partner, trends in the Israeli telecommunications industry in general, the impact of current global economic conditions and possible regulatory and legal developments, and other risks we face, see “Item 3. Key Information - 3D. Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects”, “Item 8. Financial Information - 8A. Consolidated Financial Statements and Other Financial Information - 8A.1 Legal and Administrative Proceedings” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in the Company’s Annual Reports on Form 20-F filed with the SEC, as well as its immediate reports on Form 6-K furnished to the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The quarterly financial results presented in this press release are unaudited financial results.

The results were prepared in accordance with IFRS, other than the non-GAAP financial measures presented in the section, “Use of Non-GAAP Financial Measures”.

The financial information is presented in NIS millions (unless otherwise stated) and the figures presented are rounded accordingly.

The convenience translations of the New Israeli Shekel (NIS) figures into US Dollars were made at the rate of exchange prevailing at September 30, 2017: US $1.00 equals NIS 3.529. The translations were made purely for the convenience of the reader.

Use of Non-GAAP Financial Measures

The following non-GAAP measures are used in this report. These measures are not financial measures under IFRS and may not be comparable to other similarly titled measures for other companies. Further, the measures may not be indicative of the Company’s historic operating results nor are meant to be predictive of potential future results.

Non-GAAP
Measure

Calculation

Most Comparable IFRS
Financial Measure

Adjusted
EBITDA*

Adjusted
EBITDA margin
(%)

Adjusted EBITDA:

Profit (Loss)

add

Income tax expenses,

Finance costs, net,

Depreciation and amortization expenses (including
amortization of intangible assets, deferred
expenses-right of use and impairment charges),
Other expenses (mainly amortization of share
based compensation)

Adjusted EBITDA margin (%):

Adjusted EBITDA

divided by

Total revenues

Profit (Loss)

Adjusted Free
Cash Flow**

Adjusted Free Cash Flow:

Cash flows from operating activities

deduct

Cash flows from investing activities

add

Short-term investment in (proceeds from) deposits

Cash flows from
operating activities

deduct

Cash flows from
investing activities

Total Operating
Expenses
(OPEX)

Total Operating Expenses:

Cost of service revenues

add

Selling and marketing expenses

add

General and administrative expenses

deduct

Depreciation and amortization expenses,

Other expenses (mainly amortization of employee
share based compensation)

Sum of:

Cost of service
revenues,

Selling and marketing
expenses,

General and
administrative expenses

Net Debt

Net Debt:

Current maturities of notes payable and borrowings

add

Notes payable

add

Borrowings from banks and others

deduct

Cash and cash equivalents

deduct

Short-term deposits

Sum of:

Current maturities of
notes payable and
borrowings,

Notes payable
,

Borrowings from banks
and others

* Adjusted EBITDA is fully comparable with EBITDA measure which was provided in reports for prior periods.
**Adjusted Free Cash Flow measure is fully comparable to Free Cash Flow measure which was provided in reports for prior periods.

About Partner Communications

Partner Communications Company Ltd. is a leading Israeli provider of telecommunications services (cellular, fixed-line telephony, internet services and television services). Partner’s ADSs are quoted on the NASDAQ Global Select Market™ and its shares are traded on the Tel Aviv Stock Exchange (NASDAQ and TASE: PTNR).

For more information about Partner, see: http://www.partner.co.il/en/Investors-Relations/lobby

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION




New Israeli Shekels

Convenience
translation
into U.S.
Dollars

September 30, December 31, September 30,
2017

2016 2017
(Unaudited) (Audited) (Unaudited)
In millions
CURRENT ASSETS
Cash and cash equivalents 1,010 716 286
Short-term deposits 150 452 43
Trade receivables 819 990 232
Other receivables and prepaid expenses 62 57 18
Deferred expenses – right of use 40 28 11
Inventories 90 96 25
2,171 2,339 615
NON CURRENT ASSETS
Trade receivables 228 333 65
Prepaid expenses and other 2 2 1
Deferred expenses – right of use 121 75 34
Property and equipment 1,128 1,207 320
Intangible and other assets 716 793 203
Goodwill 407 407 115
Deferred income tax asset 27 41 8
2,629 2,858 746
TOTAL ASSETS 4,800 5,197 1,361

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION




New Israeli Shekels

Convenience
translation into
U.S. Dollars

September 30, December 31, September 30,
2017 2016 2017
(Unaudited)

(Audited)

(Unaudited)
In millions
CURRENT LIABILITIES
Current maturities of notes payable and borrowings 557 498 158
Trade payables 702 681 199
Payables in respect of employees 51 101 14
Other payables (mainly institutions) 28 28 8
Income tax payable 83 45 23
Deferred income with respect to settlement
agreement with Orange 108
Deferred revenues from HOT mobile 31 31 9
Other deferred revenues 42 38 12
Provisions 78 77 22
1,572 1,607 445
NON CURRENT LIABILITIES
Notes payable 899 646 255
Borrowings from banks and others 591 1,550 167
Liability for employee rights upon retirement, net 36 39 11
Dismantling and restoring sites obligation 28 35 8
Deferred revenues from HOT mobile 172 195 49
Other non-current liabilities 21 14 6
1,747 2,479 496
TOTAL LIABILITIES 3,319 4,086 941
EQUITY

Share capital - ordinary shares of NIS 0.01

2 2 1

par value: authorized - December 31, 2016

and September 30, 2017 - 235,000,000 shares;

issued and outstanding -

December 31, 2016 – *156,993,337 shares
September 30, 2017 – *167,527,166 shares
Capital surplus 1,199 1,034 340
Accumulated retained earnings 538 358 152

Treasury shares, at cost

(258) (283) (73)

December 31, 2016 – **3,603,578 shares

September 30, 2017 – **3,296,619 shares

TOTAL EQUITY 1,481 1,111 420
TOTAL LIABILITIES AND EQUITY 4,800 5,197 1,361

* Net of treasury shares.
** Including, restricted shares in amount of 2,008,584 and 2,061,201 as of September 30, 2017 and December 31, 2016 respectively held by trustee under the Company's Equity Incentive Plan, such shares will become outstanding upon completion of vesting conditions.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

New Israeli shekels

Convenience translation into U.S.
dollars

9 month
period ended
September 30

3 month
period ended
September 30

9 month
period ended
September 30,

3 month
period ended
September 30,

2017 2016 2017 2016 2017 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
In millions (except per share data)
Revenues, net 2,434 2,723 826 849 690 234
Cost of revenues 1,916 2,218 625 691 543 177
Gross profit 518 505 201 158 147 57
Selling and marketing expenses 189 330 70 98 54 20
General and administrative

expenses

146 188 46 60 41 13

Income with respect to
settlement agreement
with Orange

108 163 55 30
Other income, net 24 35 7 9 7 2
Operating profit 315 185 92 64 89 26
Finance income 4 10 5 * 1 1
Finance expenses 96 92 20 30 27 5
Finance costs, net 92 82 15 30 26 4
Profit before income tax 223 103 77 34 63 22
Income tax expenses 59 44 23 15 17 7
Profit for the period 164 59 54 19 46 15
Earnings per share
Basic 1.02 0.38 0.32 0.12 0.29 0.09
Diluted 1.01 0.37 0.32 0.12 0.28 0.09
Weighted average number of shares outstanding

(in thousands)

Basic 161,002 156,120 167,371 156,178 161,002 167,371
Diluted 162,745 157,925 168,815 157,953 162,745 168,815

* Representing an amount of less than 1 million.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME

New Israeli shekels

Convenience translation into U.S.
dollars

9 month
period ended
September 30,

3 month
period ended
September 30,

9 month
period ended
September 30,

3 month
period ended
September 30,

2017 2016 2017 2016 2017 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
In millions

Profit for the period

164 59 54 19 46 15

Other comprehensive income

for the period, net of income tax

- - - - - -

TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD

164 59 54 19 46 15

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION

New Israeli Shekels New Israeli Shekels
Nine months ended September 30, 2017 Nine months ended September 30, 2016
In millions (Unaudited) In millions (Unaudited)
Cellular segment Fixed line segment Reconciliation

for

consolidation

Consolidated Cellular

segment

Fixed line

segment

Reconciliation

for

consolidation

Consolidated
Segment revenue - Services

1,487

465

1,952 1,586 514 2,100
Inter-segment revenue - Services

13

115

(128)

15 147

(162)

Segment revenue - Equipment

428

54

482 571 52 623
Total revenues

1,928

634

(128)

2,434 2,172 713

(162)

2,723
Segment cost of revenues – Services

1,093

443

1,536

1,261 460

1,721

Inter-segment cost of revenues- Services

114

14

(128)

146 16

(162)

Segment cost of revenues - Equipment

342

38

380

454 43 497
Cost of revenues

1,549

495

(128)

1,916 1,861 519

(162)

2,218
Gross profit

379

139

518

311 194 505
Operating expenses (3)

268

67

335

428 90 518

Income with respect to settlement

agreement with Orange

108

108

163

163
Other income, net

23

1

24

32 3 35
Operating profit

242

73

315

78 107 185
Adjustments to presentation of segment

Adjusted EBITDA

–Depreciation and amortization

327

100

338 110
–Other (1)

17

37
Segment Adjusted EBITDA (2)

586

173

453 217

Reconciliation of segment subtotal Adjusted

EBITDA to profit for the period

Segments subtotal Adjusted EBITDA (2)

759

670
- Depreciation and amortization

(427)

(448)

- Finance costs, net

(92)

(82)

- Income tax expenses

(59)

(44)

- Other (1)

(17)

(37)

Profit for the period

164

59

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION

New Israeli Shekels New Israeli Shekels
Three months ended September 30, 2017 Three months ended September 30, 2016
In millions (Unaudited) In millions (Unaudited)
Cellular segment Fixed line segment Reconciliation

for

consolidation

Consolidated Cellular

segment

Fixed line

segment

Reconciliation

for

consolidation

Consolidated
Segment revenue - Services

510

156

666

526 172 698
Inter-segment revenue - Services

4

38

(42)

5 48 (53)
Segment revenue - Equipment

138

22

160

139 12 151
Total revenues

652

216

(42)

826

670 232 (53) 849
Segment cost of revenues – Services

358

150

508

410 158 568
Inter-segment cost of revenues- Services

38

4

(42)

48 5 (53)
Segment cost of revenues - Equipment

102

15

117

112 11 123
Cost of revenues

498

169

(42)

625

570 174 (53) 691
Gross profit

154

47

201

100 58 158
Operating expenses (3)

87

29

116

127 31 158

Income with respect to settlement

agreement with Orange

55

55
Other income, net

7

*

7

8 1 9
Operating profit

74

18

92

36 28 64

Adjustments to presentation of segment

Adjusted EBITDA

–Depreciation and amortization

109

32

108 35
–Other (1)

6

12 1
Segment Adjusted EBITDA (2)

189

50

156 64

Reconciliation of segment subtotal Adjusted

EBITDA to profit for the period

Segments subtotal Adjusted EBITDA (2)

239

220

- Depreciation and amortization

(141)

(143)

- Finance costs, net

(15)

30))

- Income tax expenses

(23)

(15)

- Other (1)

(6)

13))

Profit for the period

54

19

* Representing an amount of less than 1 million.

(1) Mainly amortization of employee share based compensation.
(2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses – right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods.
(3) Operating expenses include selling and marketing expenses and general and administrative expenses.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




New Israeli Shekels

Convenience
translation
into
U.S. Dollars

9 months ended
September 30,

2017 2016 2017
(Unaudited) (Unaudited) (Unaudited)
In millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations (Appendix) 804 652 227
Income tax paid (7) (20) (2)
Net cash provided by operating activities 797 632 225

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment (146)

(97)

(41)
Acquisition of intangible and other assets (117) (52) (33)
Proceeds from (investment in) short-term deposits, net 302 85
Interest received 2 2 1
Consideration received from sales of property and equipment * 4 *
Net cash provided by (used in) investing activities 41 (143) 12

CASH FLOWS FROM FINANCING ACTIVITIES:

Share issuance 190 54
Interest paid (85)

(80)

(24)
Current borrowings received 52
Repayment of non-current borrowings (901) (11) (255)
Proceeds from issuance of notes payable, net of issuance costs 252 71
Repayment of notes payable (235)
Net cash used in financing activities (544) (274) (154)

INCREASE IN CASH AND CASH EQUIVALENTS

294 215 83

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

716 926 203

CASH AND CASH EQUIVALENTS AT END OF PERIOD

1,010 1,141 286

* Representing an amount of less than 1 million.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Appendix - Cash generated from operations and supplemental information




New Israeli Shekels

Convenience
translation
into
U.S. Dollars

9 months ended
September 30,
2017 2016 2017
(Unaudited) (Unaudited) (Unaudited)
In millions
Cash generated from operations:
Profit for the period 164 59 46
Adjustments for:
Depreciation and amortization 399 427 113
Amortization of deferred expenses - Right of use 28 21 8
Employee share based compensation expenses 16 36 5
Liability for employee rights upon retirement, net (3) (3) (1)
Finance costs, net (3) 2 (1)
Change in fair value of derivative financial instruments (1) * *
Capital loss from property and equipment * 1 *
Interest paid 85 80 24
Interest received (2) (2) (1)
Deferred income taxes 14 12 4
Income tax paid 7 20 2
Changes in operating assets and liabilities:
Decrease (increase)in accounts receivable:
Trade 276 122 78
Other (5) 8 (1)
Increase (decrease) in accounts payable and accruals:
Trade 45 (3) 13
Other payables (49) (38) (14)
Provisions 1 (6) *

Deferred income with respect to settlement

agreement with Orange

(108) (163) (31)
Deferred revenues from HOT mobile (23) 54 (7)
Other deferred revenues 5 6 1
Increase in deferred expenses - Right of use (86) (52) (24)
Current income tax liability 38 11 11
Decrease in inventories 6 60 2
Cash generated from operations 804 652 227

* Representing an amount of less than 1 million.

At September 30, 2017 and 2016, trade and other payables include NIS 102 million ($29 million) and NIS 96 million, respectively, in respect of acquisition of intangible assets and property and equipment; payments in respect thereof are presented in cash flows from investing activities.

These balances are recognized in the cash flow statements upon payment.

Effect of IFRS15 implementation:

The tables below summarize the effects on the interim condensed consolidated statement of financial position as at September 30, 2017 and on the interim condensed consolidated statements of income and cash flows for the nine and three months periods ended as of the same date.

Effect of change on interim condensed consolidated statement of financial position:

New Israeli Shekels in millions
As of September 30, 2017

Previous
accounting policy

Effect of
change

According to
IFRS15

(Unaudited)

Costs to obtain contracts recognized in intangible
assets, net – non-current assets

- 51 51
Deferred income tax asset 39 (12) 27
Equity 1,442 39 1,481

Effect of change on interim condensed consolidated statement of income:

New Israeli Shekels in millions
Nine months ended September 30, 2017 Three months ended September 30, 2017

Previous
accounting
policy

Effect of
change

According
to IFRS15

Previous
accounting
policy

Effect of
change

According to
IFRS15

(Unaudited)
Selling and marketing expenses 240 (51) 189 89 (19) 70
Operating profit 264 51 315 73 19 92
Profit before income tax 172 51 223 58 19 77
Income tax expenses 47 12 59 19 4 23
Profit for the period 125 39 164 39 15 54
Depreciation and amortization expense 422 5 427 138 3 141

Effect of change on interim condensed consolidated statement cash flows:

New Israeli Shekels in millions
Nine months ended September 30, 2017 Three months ended September 30, 2017

Previous
accounting
policy

Effect of
change

According
to IFRS15

Previous
accounting
policy

Effect of
change

According to
IFRS15

(Unaudited)
Net cash provided by operating activities 746 51 797 286 20 306
Net cash provided by (used in) investing activities 92 (51) 41 (234) (20) (254)

Reconciliation of Non-GAAP Measures:

Adjusted Free Cash Flow

New Israeli Shekels

Convenience
translation into
U.S. Dollars

Convenience
translation into
U.S. Dollars

9 months

period ended
September 30,

9 months

period ended
September 30,

3 months

period ended

September 30,

3 months

period ended
September 30,

9 months

period ended

September 30,

3 months

period ended

September 30,

2017 2016 2017 2016 2017 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
In millions
Net cash provided by operating activities 797 632 306 253 225 87
Net cash used in investing activities 41 (143) (254) (38) 12 (72)
Proceeds from (investment in) short-term deposits (302) 150 (85) 43
Adjusted Free Cash Flow 536 489 202 215 152 58
Interest paid (85) (80) (10) (14) (24) (3)
Adjusted Free Cash Flow After Interest

451

409

192

201

128

55

Total Operating Expenses (OPEX)


New Israeli Shekels

Convenience
translation into
U.S. Dollars

Convenience
translation into
U.S. Dollars

9 months

period ended
September 30,

9 months

period ended
September 30,

3 months

period ended

September 30,

3 months

period ended
September 30,

9 months

period ended

September 30,

3 months

period ended

September 30,

2017 2016 2017 2016 2017 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
In millions
Cost of revenues – Services 1,536 1,721 508 568 435 144
Selling and marketing expenses 189 330 70 98 54 20
General and administrative expenses 146 188 46 60 41 13
Depreciation and amortization (427) (448) (141) (143) (121) (40)
Other (1) (17) (37) (6) (13) (5) (2)
OPEX 1,427

1,754

477 570 404 135

(1) Mainly amortization of employee share based compensation

Key Financial and Operating Indicators (unaudited)*

NIS M unless otherwise stated

Q3' 15

Q4' 15

Q1' 16

Q2' 16

Q3' 16

Q4' 16

Q1' 17

Q2' 17

Q3' 17

2015 2016
Cellular Segment Service Revenues 587 550 543 527 531 498 489 497 514 2,297 2,099
Cellular Segment Equipment Revenues 234 269 244 188 139 158 145 145 138 1,051 729
Fixed-Line Segment Service Revenues 225 223 222 219 220 205 194 192 194 906 866
Fixed-Line Segment Equipment Revenues 12 22 23 17 12 11 18 14 22 68 63
Reconciliation for consolidation (52) (57) (55) (54) (53) (51) (43) (43) (42) (211) (213)
Total Revenues 1,006 1,007 977 897 849 821 803 805 826 4,111 3,544
Gross Profit from Equipment Sales 52 61 56 42 28 18 26 33 43 239 144
Operating Profit (Loss) 32 (48) 54 67 64 8 **105 **118 92 107 193
Cellular Segment Adjusted EBITDA 137 152 142 155 156 109 **187 **210 189 597 562
Fixed-Line Segment Adjusted EBITDA 59 65 80 73 64 55 **64 **59 50 279 272
Total Adjusted EBITDA 196 217 222 228 220 164 **251 **269 239 876 834
Adjusted EBITDA Margin (%) 19% 22% 23% 25% 26% 20% **31% **33% 29% 21% 24%
OPEX 650 608 612 572 570 570 **478 **472 477 2,463 2,324
Impairment charges on operating profit 98 98
Income with respect to settlement agreement
with Orange 23 38 54 54 55 54 54 54 61 217
Finance costs, net 40 39 24 28 30 23 23 54 15 143 105
Profit (loss) (9) (65) 14 26 19 (7) **64 **46 54 (40) 52
Capital Expenditures (cash) 64 56 48 57 44 47 **82 **76 105 359 196
Capital Expenditures (additions) 51 86 34 40 44

84

**58 **78 107 271 202
Adjusted Free Cash Flow 291 230 114 160 215 269 126 208 202 566 758
Adjusted Free Cash Flow (After Interest) 277 172 89 119 201 241 109 150 192 429 650
Net Debt 2,355 2,175 2,079 1,964 1,768 1,526 1,415 1,081 887 2,175 1,526
Cellular Subscriber Base (Thousands) 2,739 2,718 2,692 2,700 2,693 2,686 2,658 2,662 2,677 2,718 2,686
Post-Paid Subscriber Base (Thousands) 2,136 2,156 2,174 2,191 2,215 2,241 2,259 2,273 2,306 2,156 2,241
Pre-Paid Subscriber Base (Thousands) 603 562 518 509 478 445 399 389 371 562 445
Cellular ARPU (NIS) 71 67 67 65 66 62 61 62 64 69 65
Cellular Churn Rate (%) 10.8% 11.1% 11.2% 9.8% 9.7% 9.4% 9.8% 9.0% 9.3% 46% 40%
Number of Employees (FTE) 3,017 2,882 2,827 2,740 2,742 2,686 2,580 2,582 2,696 2,882 2,686

* See footnote 2 regarding use of non-GAAP measures.
** Figures include impact of IFRS15 retroactive implementation as from beginning of 2017.

Disclosure for notes holders as of September 30, 2017

Information regarding the notes series issued by the Company, in million NIS

Series

Original
issuance
date

Principal on
the date of
issuance

As of 30.09.2017 Interest rate

Principal repayment
dates

Interest
repayment
dates

Linkage

Trustee contact details

Principal
book value

Linked principal
book value

Interest
accumulated
in books

Market
value

From To
C 25.04.10

24.02.11*

200

444

393 425 4 435 3.35%

+

CPI

30.12.16 30.12.18 30.6, 30.12 Linked to CPI

Hermetic Trust (1975) Ltd.

Merav Offer. 113 Hayarkon St.,
Tel Aviv. Tel: 03-5544553.

D 25.04.10

04.05.11*

400

146

546 546 2 551 1.328%

(MAKAM+1.2%)

30.12.17 30.12.21 30.3, 30.6, 30.9, 30.12

Variable
interest
MAKAM (2)

Hermetic Trust (1975) Ltd.
Merav Offer. 113 Hayarkon St.,
Tel Aviv. Tel: 03-5544553.

E 25.04.10

04.05.11*

400

535

121 121 2 124 5.5% 30.12.13 30.12.17 30.6, 30.12 Not Linked

Mishmeret Trust Company Ltd.
Rami Sebty. 48 Menachem
Begin Rd. Tel Aviv.Tel:03-
6374355.

F

(1)

20.07.17 255 255 255 1 260 2.16% 25.06.20 25.06.24 25.6, 25.12 Not Linked

Hermetic Trust (1975) Ltd.

Merav Offer. 113 Hayarkon St.,
Tel Aviv. Tel: 03-5544553.

(1) In July 2017, the Company issued Series F Notes in a principal amount of NIS 255 million. Regarding Series F Notes, the Company is required to comply with a financial covenant that the ratio of Net Debt to Adjusted EBITDA shall not exceed 5. Compliance will be examined and reported on a quarterly basis. For the definitions of Net Debt and Adjusted EBITDA see 'Use of non-GAAP measures' section above. For the purpose of the covenant, Adjusted EBITDA is calculated as the sum total for the last 12 month period, excluding adjustable one-time items. As of September 30, 2017, the ratio of Net Debt to Adjusted EBITDA was 1.0. Additional stipulations regarding Series F Notes are as follows: shareholders' equity shall not decrease below NIS 400 million; the Company shall not create floating liens subject to certain terms; the Company has the right for early redemption under certain conditions; the Company shall pay additional annual interest of 0.5% in the case of a two-notch downgrade in the Notes rating and an additional annual interest of 0.25% for each further single-notch downgrade, up to a maximum additional interest of 1%; the Company shall pay additional annual interest of 0.25% during a period in which there is a breach of the financial covenant.
The Company has additional financial covenants regarding its borrowings from financial institutions. See note 15 to the Company's 2016 annual financial statements.
In the reporting period, the Company was in compliance with all financial covenants and obligations and no cause for early repayment occurred.
In September 2017, the Company entered into an agreement with Israeli institutional investors to issue in December 2018, in the framework of a private placement, additional Series F notes, in an aggregate principal amount of NIS 150 million. S&P Maalot has rated the additional deferred issuance with an 'ilA+' rating. For additional details see the Company's press releases dated September 13 and 17, 2017.
(2) 'MAKAM' is a variable interest based on the yield of 12 month government bonds issued by the government of Israel. The interest rate is updated on a quarterly basis.
(*) On these dates additional Notes of the series were issued. The information in the table refers to the full series.

Disclosure for Notes holders as of September 30, 2017 (cont.)

Notes Rating Details*

Series

Rating
Company

Rating as of
30.09.2017 and
22.11.2017 (1)

Rating
assigned upon
issuance of
the Series

Recent date of
rating as of
30.09.2017 and
22.11.2017

Additional ratings between the original issuance date and the recent date of
rating (2)

Date Rating
C S&P Maalot ilA+ ilAA- 07/2017 07/2010, 09/2010,

10/2010, 09/2012,

12/2012, 06/2013,

07/2014, 07/2015,

07/2016, 07/2017

ilAA-/Stable, ilAA-/Stable,

ilAA-/Negative, ilAA-/Watch Neg,

ilAA-/Negative, ilAA-/Stable,

ilAA-/Stable, ilA+/Stable,

ilA+/Stable, ilA+/Stable

D S&P Maalot ilA+ ilAA- 07/2017
E S&P Maalot ilA+ ilAA- 07/2017
F S&P Maalot ilA+ ilA+ 07/2017 07/2017 ilA+/Stable

(1) In July 2017, S&P Maalot affirmed the Company's rating of “ilA+/Stable”.

(2) For details regarding the rating of the notes see the S&P Maalot report dated July 2, 2017 and July 27, 2017.

* A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating

Summary of Financial Undertakings (according to repayment dates) as of September 30, 2017

a. Notes issued to the public by the Company and held by the public, excluding such notes held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).

Principal payments

Gross interest
payments (without
deduction of tax)

ILS linked
to CPI

ILS not linked
to CPI

Euro Dollar Other
First year 212,513 230,506 - - - 26,963
Second year 212,513 109,228 - - - 13,651
Third year - 160,138 - - - 8,678
Fourth year - 160,138 - - - 6,165
Fifth year and on - 261,958 - - - 6,951
Total 425,026 921,968 - - - 62,408

b. Private notes and other non-bank credit, excluding such notes held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).

Principal payments

Gross interest
payments (without
deduction of tax)

ILS linked
to CPI

ILS not linked
to CPI

Euro Dollar Other
First year - 115,000 - - - 35,036
Second year - 152,917 - - - 23,548
Third year - 163,333 - - - 16,592
Fourth year - 133,333 - - - 9,845
Fifth year and on - 141,667 - - - 6,003
Total - 706,250 - - - 91,024

c. Credit from banks in Israel based on the Company's "Solo" financial data – None.

d. Credit from banks abroad based on the Company's "Solo" financial data – None.

Summary of Financial Undertakings (according to repayment dates) as of September 30, 2017 (cont.)

e. Total of sections a - d above, total credit from banks, non-bank credit and notes based on the Company's "Solo" financial data (in thousand NIS).

Principal payments

Gross interest
payments (without
deduction of tax)

ILS linked
to CPI

ILS not linked to
CPI

Euro Dollar Other
First year 212,513 345,506 - - - 61,999
Second year 212,513 262,145 - - - 37,199
Third year - 323,471 - - - 25,270
Fourth year - 293,471 - - - 16,010
Fifth year and on - 403,625 - - - 12,954
Total 425,026 1,628,218 - - - 153,432

f. Off-balance sheet Credit exposure based on the Company's "Solo" financial data (in thousand NIS) – 50,000 (Guarantees on behalf of an associate, without expiration date).
g. Off-balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above – None.
h. Total balances of the credit from banks, non-bank credit and notes of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above - None.
i. Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of notes offered by the Company held by the parent company or the controlling shareholder - None.
j. Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of notes offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company – None.
k. Total balances of credit granted to the Company by consolidated companies and balances of notes offered by the Company held by the consolidated companies - None.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171120006233/en/

Partner Communications Company Ltd.
Dudu Mizrahi, +972-54-781-4951
Chief Financial Officer
or
Liat Glazer Shaft, +972-54-781-5051
Head of Investor Relations and Corporate Projects
investors@partner.co.il

Source: Partner Communications Company Ltd.