Partner Communications Company Ltd.

Partner Communications Company Ltd. is a leading Israeli telecommunications company, providing a range of cellular and fixed-line telecommunication services. We offer our subscribers competitive tariffs, technologies and services that we believe are advanced, including our 3G services and cellular data services through external or internal (in laptops) cellular modems, tablets and smartphones.
  As part of our strategy to evolve into a diversified multi-service communications group, we supply our services through two business segments:-
    - the cellular business segment , our main business, which represents the substantial portion of our total revenues. The cellular business segment includes all services provided over our cellular networks including airtime, interconnect, roaming and content services. In addition, the cellular business segment’s activities include sales of relevant equipment including cellular handsets, tablets, datacards, modems including built-in modems in laptops and related equipment and accessories.

  On December 31, 2011, we had approximately 3,176 million cellular subscribers, representing an estimated 32% of total Israeli cellular telephone subscribers at that date. At December 31, 2011, approximately 72% of our customer base (approximately 2,282,000 subscribers) was represented by subscribers who subscribe to post-paid tariff plans and 28% (approximately 894,000 subscribers) by subscribers who subscribe to pre-paid tariff plans; and
   - the fixed line business segment , which includes a number of services provided over fixed line networks including (1) transmission services; (2) Primary Rate Interface ("PRI") lines for business sector customers; (3) Voice over Broadband ("VoB") telephony services; (4) outgoing and Incoming international telephony, hubbing, roaming and signaling and calling card services (ILD); and (5) Internet service provider ("ISP") services, including value added services, specialized data services and server hosting, and WiFi network of hotspots across Israel. In addition, this segment includes sales of related equipment such as routers and phones.

    As of December 31, 2011, our fixed-line telephony subscriber base for both residential as well as business subscribers reached approximately 292,000 lines and our ISP subscriber base reached approximately 632,000 customers.

  We market our services under the Orange brand which is licensed to us and has been used successfully in other markets around the world to promote telecommunications services.  Throughout the years Orange has been the leading telecommunications brand in Israel. We also market some of our Fixed-Line Services under the 012 Smile brand.
  Our GSM/UMTS network covered 99% of the Israeli population at year-end 2011. We currently operate our GSM network in the 900 MHz and 1800 MHz bands and the UMTS network in the 2100 MHz band and experimentally in the 900 MHz band. Our GSM services include standard and enhanced GSM services, as well as value-added services and products such as roaming, voice mail, voice messaging, color picture messaging, ringtone and game downloads, information services, and General Packet Radio Services (“GPRS”), which enables the packet transfer of data.
  Our 3G network offers a wide range of services, such as video calls, a portal of content services including a rich selection of video-based services, and the transmission of data.
   In 2011, we were named as the number one communications brand in Israel by Superbrands Organization Israel for the third consecutive year. In 2011, we won the “best workplace” award in the telecommunication industry for the sixth time, an award granted to us by Business Data Information.
 

	Three Months Ended December 31
Income Statement Data ( NIS m)	2011	2010
Total Revenues	1,589	1,761
Gross Profit	310	641
Gross Margins  %	20%	36%
Operating Income	-55	459
Net Interest Expense	-55	-45
Pretax Income	-110	414
Net Income	-188	304
Diluted Earnings Per Share (NIS)	-1.21	1.96

	Year Ended December 31
Income Statement Data (NIS m)	2011	2010	2009
Total Revenues	6,998	6,674	6,079
Gross Profit	2,020	2,581	2,309
Gross Margins  %	29%	39%	38%
Operating Income	1,036	1,860	1,701
Net Interest Expense	-294	-181	-176
Pretax Income	742	1,679	1,525
Net Income	443	1,243	1,141
Diluted Earnings Per Share (NIS)	2.84	7.95	7.37

Balance Sheet Data (NIS m)	12/31/11	12/31/10
Total Cash & ST Investments	532	321
Current Assets	2,308	1,830
Total Assets	7,087	5,627
Current Liabilities	2,889	1,826
Total Equity	425	626

Key Financial Ratios	12/31/11	12/31/10
Current Ratio	1.2x	1.0x
L-T Debt/Equity	1099.5%	493.3%

Dividend Policy

In November 2011, the company's Board of Director’s approved the distribution of a cash dividend for the third quarter of 2011 of  NIS 0.9 (24 US cents) per share or ADS (for a total of approximately NIS 140 million or US $38 million) to shareholders. The dividend was paid on December 20, 2011. The company's dividend policy for 2012 is to distribute at least 80% of annual net income as dividends.