Edgar Filing: PARTNER COMMUNICATIONS CO LTD

e6vk

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15a-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated January 29, 2003

Partner Communications Company Ltd.

(Translation of Registrant’s Name Into English)

8 Amal Street
Afeq Industrial Park
Rosh Ha’ayin 48103
Israel

(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 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): 82-_______)

This Form 6-K is incorporated by reference into the Company’s Registration Statement on Form F-3 filed with the Securities and Exchange Commission on December 26, 2001 (Registration No. 333-14222).


Enclosure:		Press Release dated January 29, 2003 re: Partner Communications Reports Fourth Quarter And Full Year 2002 Results.

PARTNER COMMUNICATIONS REPORTS
FOURTH QUARTER AND FULL YEAR 2002
RESULTS

COMPANY POSTS FIRST ANNUAL NET PROFIT

Rosh Ha’ayin, Israel, January 29th, 2003 — Partner Communications Company Ltd. (NASDAQ and TASE: PTNR; LSE: PCCD) today announced its results for the year and quarter ended December 31st 2002.

Highlights:

	•		Revenues in 2002 were NIS 4,054.6 million (US$855.9 million), up 25% from NIS 3,249.3 million in 2001. Revenues in Q4 2002 rose to NIS 1,062.1 million (US$224.2 million), up 21% from NIS 881.0 million in Q4 2001.

	•		EBITDA for 2002 was NIS 1,052.2 million (US$222.1 million), up 60% from NIS 656.4 million in 2001. EBITDA for Q4 2002 rose to NIS 267.8 million (US$56.5 million), up 31% from NIS 204.1 million in Q4 2001.

	•		Operating profit for 2002 was NIS 533.4 million (US$112.6 million), up 418% from NIS 102.9 million in 2001. Operating profit for Q4 2002 rose to NIS 129.3 million (US$27.3 million) up 138%, from NIS 54.4 million for Q4 2001.

	•		Net income for 2002 was NIS 84.2 million (US$17.8 million), compared to a net loss of NIS 303.4 million in 2001. Net income for Q4 2002 rose to NIS 30.6 million (US$6.5 million), compared to a net loss of NIS 34.2 million for Q4 2001.

	•		Active subscribers rose 26% to 1,837,000, compared to 1,458,000 at the end of 2001.

	•		Market share increased to an estimated 29%, up from 27% at the end of 2001.

	•		Annual churn rate in 2002 was 10.9%, compared to 5.8% in 2001.

	•		Average monthly minutes of use per subscriber for 2002 was 280, down 12%, compared to 318 minutes per month in 2001.

	•		ARPU for 2002 was NIS 183 (US$39), down 15%, compared to NIS 214 in 2001.

	•		Average cost of acquiring a new subscriber (SAC) in 2002 was NIS 470 (US$99) compared to NIS 458 in 2001.

Commenting on the 2002 results, Amikam Cohen, Partner’s CEO said: “We are delighted to report our first annual net profit after only four years of conducting operations. Despite the persistence of a challenging macro-economic environment, we have successfully driven our top line revenue growth and significantly enhanced our profitability by taking the lion’s share of subscriber growth in the market while maintaining tight controls over our costs. It is our core strengths in marketing, customer service, and network strategies as well as our dedication to offering our customers attractive rate plans, a wide range of handsets and worldwide services that have enabled us to achieve our performance goals. In addition, we plan on leveraging these very same strengths to make available to subscribers the most advanced services and applications through the introduction of 3G technology.”

Financial Review

Revenues in 2002, driven primarily by subscriber growth of 26%, increased to NIS 4,054.6 million (US$855.9 million), up 25% from NIS 3,249.3 million in 2001. Revenues in Q4 2002 grew to NIS 1,062.1 million (US$224.2 million) from NIS 881.0 million in Q4 2001, an increase of 21%. Data and content revenues accounted for 6% of total revenues in 2002, compared to 3% in 2001. Data and content revenues rose to NIS 238 million (US$50 million) in 2002 from NIS 106 million in 2001, an increase of 125%.

Cost of revenues in 2002, driven primarily by interconnect charges and other network expenses related to higher subscriber numbers and usage, increased by 13%, to NIS 3,069.5 million (US$648.0 million), from NIS 2,719.2 million in 2001. Cost of revenues for Q4 2002 increased by 11%, to NIS 808.6 million (US$170.7 million), from NIS 729.3 million, in Q4 2001.

Even with subscriber growth of 26%, selling and marketing expenses remained relatively stable in 2002 and were NIS 308.1 million (US$65.0 million), up 5% from NIS 293.0 million in 2001. Selling and marketing expenses in Q4 2002 were NIS 85.3 million (US$18.0 million), up from NIS 77.5 million in Q4 2001, an increase of 10%.

General and administrative expenses for 2002 were NIS 143.6 million (US$30.3 million), compared to NIS 134.3 million in 2001, an increase of 7%. The increase was driven primarily by insurance costs. In Q4 2002, general and administrative expenses were NIS 38.9 million (US$8.2 million), up from NIS 19.8 million in Q4 2001. Q4 2001 included a refund of approximately NIS 18 million received from Bezeq in partial resolution of a collection dispute.

Operating income for 2002 as a percentage of revenues increased to 13% from 3% in 2001 and 12% in Q4 2002 as compared to 6% in Q4 2001. EBITDA for 2002 as a percentage of revenues increased to 26% from 20% in 2001 and 25% in Q4 2002 as compared to 23% in Q4 2001.

Financial expenses in 2002 were NIS 445.2 million (US$94.0 million), up 11% from NIS 400.9 million in 2001. Financial expenses for Q4 2002 were NIS 98.7 million (US$20.8 million), compared to NIS 88.6 million in Q4 2001, an increase of 11%. Financial expenses were higher in 2002 primarily due to higher levels of average debt, higher interest rates set by the Central Bank of Israel and the effect of the NIS devaluation on our US$175 million denominated senior subordinated notes.

In 2002, the Company had net income of NIS 84.2 million (US$17.8 million), or NIS 0.46 (US$0.1) per ADS or per share, compared to a net loss of NIS 303.4 million or NIS 1.7 per ADS or per share for 2001. Net income per ADS or per share for Q4 2002 was NIS 0.17 (US$0.04) compared to a net loss of NIS 0.19 per ADS or per share for Q4 2001.

“We are very pleased with the financial results for 2002”, said Mr. Alan Gelman, Partner’s Chief Financial Officer. “We materially grew our revenues and controlled expenses, enabling us to become a profitable company. Looking forward, we expect the rate of revenue growth in 2003 to be slowed by lower subscriber growth as a result of a more penetrated market, the reduction in incoming rates mandated by the regulator, increasing competition and the economic slowdown. These will also cause revenues and profitability margins to contract at the outset of 2003. We continue to expect the bulk of our revenue growth to be generated by our voice related business, which will likely be derived from subscriber growth. Nevertheless, we expect data and content revenues to continue to increase in

2003, although at rates slower than experienced in 2002. On the expense side, we will continue our diligent efforts to control costs.

Funding Review

In 2002, cash flow from operating activities net of investing activities was negative NIS 133.8 million (US$28.2) [after approximately NIS 207.6 million (US$43.8 million) in license payments for additional spectrum], compared to negative cash flow of NIS 206.5 million in 2001. In Q4 2002, cash flow from operating activities net of investing activities was NIS 74.1 million (US$15.6 million), compared to cash flow of NIS 90.6 million in Q4 2001.

Capital expenditures, excluding license payments for additional spectrum, were NIS 557.0 million (US$117.6 million) in 2002, 14% of revenues, down from NIS 599.0 million in 2001, 18.5% of revenues. In 2002, the company purchased third generation (“3G”) spectrum and additional second-generation 1800 spectrum. The additional license fees were NIS 220 million (US$46.7 million) and NIS 180 million (US$38.0 million), respectively.

In December 2002, the Company amended its senior credit facility agreement, including changes in the structure, availability period, cost and a re-payment schedule better fitting its business plan, including its expected entry into 3G services.

As of the end of 2002, the US dollar equivalent of $519 million had been drawn from our $710 million bank facility, leaving the Company with additional availability of $191 million.

Commenting on the Company’s funding situation, Mr. Gelman said; “In 2002, we continued to improve across a broad range of financial and operating parameters. We became a profitable company and generated free cash flow for three consecutive quarters. The amended facility provides for additional availability from 2004 onwards, as compared to the original facility. This will allow us more flexibility and headroom to execute our business strategy.”

Operational Review

During Q4 2002, net active subscribers increased by 79,000, or 4.5%.

The Company’s active subscriber base as of December 31, 2002 was 1,837,000, accounting for an approximate market share of 29%, up from 27% at the end of 2001. It is comprised of 293,000 business subscribers (16% of the base), 1,004,000 post-paid private subscribers (55% of the base) and 540,000 prepaid subscribers (29% of the base). The annual churn rate for 2002 was 10.9%, compared to 5.8% in 2001. This increase was driven primarily by increased churn in the prepaid sector and churn from those customers who joined the network in 1999 with a three year commitment period. The quarterly churn rate in Q4 of 2002 was 2.9%. The Company anticipates churn rate for 2003 to increase to a level of approximately 15%, driven primarily by increasing churn in the pre-paid sector caused primarily by higher turnover in the base of foreign workers in Israel, and increasing competition affecting all sectors.

In 2002, the declines in average monthly usage per subscriber (“MOU”) and average monthly revenue per subscriber (“ARPU”), were driven primarily by the increased percentage of prepaid subscribers in our customer base (29% at the end of 2002 up from 27% at the end of 2001). MOU in 2002 was 280 minutes, compared to 318 MOU in 2001, a decrease of 12%. MOU for the quarter was 272 minutes, compared to 301 minutes per month for Q4 2001, a decrease of 10%, and 279 minutes per month for Q3 2002, a decrease of 3%. In 2002, ARPU was NIS 183 (US$39), compared to NIS 214 in 2001, a decrease of 15%. ARPU for the fourth quarter of 2002 was NIS 178 (US$38), compared to NIS 195 per month for Q4 2001, a decrease of 9%, and NIS 187 for the Q3 2002, a decrease of 5%.

In 2002, the average cost of acquiring a new subscriber (SAC) was NIS 470 (US$99), compared to NIS 458 for 2001. The average cost of acquiring new subscribers (SAC) in Q4 2002 was NIS 482 (US$102), compared to NIS 426 in Q4 2001 and NIS 495 for Q3 2002. The Company expenses in full all subscriber acquisition and customer retention costs.

Mr. Gelman added, “Looking forward to 2003, we anticipate moderately declining MOU and ARPU, and stable SAC.”

Conference Call Details

Partner Communications will hold a conference call to discuss the company’s full year 2002 and fourth quarter on Wednesday, January 29th, 2003, at 17:00 Israel local time (10:00 a.m. Eastern Daylight time). This conference call will be broadcasted live over the Internet and can be accessed by all interested parties through our investors’ web site at http://investors.partner.co.il. To listen to the broadcast, please go to the web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to listen to the live broadcast, an archive of the call will be available shortly after the call ends via the Internet (at the same location as the live broadcast) until midnight on February 5th 2003.

About Partner Communications

Partner Communications Company Ltd. is the first Global System for Mobile Communications, or GSM, mobile telephone network operator in Israel. The Company commenced full commercial operations in January 1999 under the international orange™ brand name and, through its network, provides quality of service and a range of features to more than 1.8 million subscribers in Israel. Partner subscribers can use roaming services in 104 destinations using 250 GSM networks. The Company has been awarded a 3G license in 2002. Partner’s ADSs are quoted on NASDAQ under the symbol PTNR and on the London Stock Exchange (LSE) under the symbol PCCD. Its shares are quoted on the Tel Aviv Stock Exchange (TASE) under the symbol PTNR. (For further information: http://investors.partner.co.il).

Notes: Some of the information in this release contains forward-looking statements that involve risks and uncertainties within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us.

Words such as “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. Because such statements involve risks and uncertainties, actual results may differ materially from the results currently expected. Factors that could cause such differences include, but are not limited to:

	•		Uncertainties about the degree of growth in the number of consumers using wireless personal communications services and in the number of residents;

	•		The risks associated with the implementation of a third-generation network and business strategy, including risks relating to the operations of new systems and technologies, substantial expenditures required and potential unanticipated costs, uncertainties regarding the adequacy of suppliers on whom we must rely to provide both network and consumer equipment and consumer acceptance of the products and services to be offered;

	•		The impact of existing and new competitors in the market in which we compete, including competitors that may offer less expensive products and services, desirable or innovative products, technological substitutes, or have extensive resources or better financing;

	•		The introduction or popularity of new products and services, including pre-paid phone products, which could increase churn;

	•		The effects of vigorous competition in the market in which we operate and for more valuable customers, which may decrease prices charged, increase churn and change the customer mix, profitability and average revenue per user;

	•		The availability and cost of capital and the consequences of increased leverage;

	•		The risks and costs associated with the need to acquire additional spectrum for current and future services;

	•		The risks associated with technological requirements, technology substitution and changes and other technological developments;

	•		Fluctuations in exchange rates;

	•		The results of litigation filed or to be filed against us; and

	•		The possibility of the market in which we compete being impacted by changes in political, economic or other factors, such as monetary policy, legal and regulatory changes or other external factors over which we have no control;

	•		As well as the risk factors specified under the heading “Risk Factors” in our 2001 annual report on Form *20F* filed with the SEC on April 30, 2002.

The attached summary financial statements were prepared in accordance with U.S. GAAP. The attached summary financial statements for 2002 are unaudited.

The convenience translations of the Nominal New Israeli Shekel (NIS) figures into US Dollars were made at the rate of exchange prevailing at December 31st, 2002: US $1.00 equals NIS 4.737. The translations were made purely for the convenience of the reader.

Earnings before interest, taxes, depreciation, amortization, exceptional items and capitalization of intangible assets (“EBITDA”) is presented because it is a measure commonly used in the telecommunications industry and is presented solely in order to improve the understanding of the Company’s operating results and to provide further perspective on these results. EBITDA, however, should not be considered as an alternative to operating income or income for the year as an indicator of the operating performance of the Company. Similarly, EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results.

Contacts:


Mr. Alan Gelman Chief Financial Officer Tel: +972-67-814951 Fax:+972-67-815961 E-mail:alan.gelman@orange.co.il		Dr. Dan Eldar V.P. Carrier, Investor and International Relations Tel:+972-67-814151 Fax:+972-67-814161 E-mail:dan.eldar@orange.co.il

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)

CONSOLIDATED BALANCE SHEETS


					December 31

					2001		2002		2002

									Convenience
									translation
									into
									U.S. dollars
					New Israeli Shekels

					(Audited)		(Unaudited)
							(In thousands)
				Assets
CURRENT ASSETS:
	Cash and cash equivalents					5,272		1,360		287
	Security deposit							107,794		22,756
	Accounts receivable:
		Trade				458,434		518,768		109,514
		Other				42,930		50,986		10,763
	Inventories					124,512		137,508		29,028

			Total current assets			631,148		816,416		172,348

INVESTMENTS AND LONG-TERM RECEIVABLES:
	Non-marketable securities					8,244		3,530		745
	Security deposit					100,869
	Accounts receivable — trade					3,696
	Funds in respect of employee rights upon retirement					28,160		42,461		8,964

						140,969		45,991		9,709

FIXED ASSETS, net of accumulated depreciation and amortization						1,749,052		1,864,511		393,606

LICENSE AND DEFERRED CHARGES,
	Net of accumulated amortization					1,112,959		1,269,348		267,965

			Total assets			3,634,128		3,996,266		843,628


				December 31

				2001			2002			2002

										Convenience
										translation
										into
										U.S. dollars
				New Israeli Shekels

				(Audited)			(Unaudited)
							(In thousands)
Liabilities, net of capital deficiency
CURRENT LIABILITIES:
	Current maturities of long-term bank loans				483,897
	Accounts payable and accruals:
		Trade			524,642			532,987			112,516
		Other			186,165			202,166			42,678

			Total current liabilities		1,194,704			735,153			155,194

LONG-TERM LIABILITIES:
	Bank loans, net of current maturities				1,818,066			2,467,556			520,911
	Notes payable				772,800			828,975			175,000
	Liability for employee rights upon retirement				42,334			60,966			12,870

			Total long-term liabilities		2,633,200			3,357,497			708,781

COMMITMENTS AND CONTINGENT LIABILITIES
			Total liabilities		3,827,904			4,092,650			863,975

CAPITAL DEFICIENCY:
	Share capital — ordinary shares of NIS 0.01 par value: authorized — December 31, 2001 — 200,000,000 shares and December 31, 2002 — 235,000,000 shares; issued and outstanding — December 31, 2001 — 178,924,585 shares and December 31, 2002 — 181,595,222 shares				1,789			1,816			383
	Capital surplus				2,298,080			2,293,270			484,119
	Deferred compensation				(24,362	)		(6,385	)		(1,348	)
	Accumulated deficit				(2,469,283	)		(2,385,085	)		(503,501	)

			Total capital deficiency		(193,776	)		(96,384	)		(20,347	)

					3,634,128			3,996,266			843,628

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS


				Year ended December 31

				2000			2001			2002		2002

												Convenience
												translation
												into
												U.S. dollars
				New Israeli Shekels

					(Audited)						(Unaudited)
				(In thousands except per share data)
REVENUES, net					2,103,859			3,249,349			4,054,563		855,935
COST OF REVENUES					2,161,507			2,719,163			3,069,458		647,975

GROSS PROFIT (LOSS)					(57,648	)		530,186			985,105		207,960
SELLING AND MARKETING EXPENSES					327,881			292,960			308,079		65,037
GENERAL AND ADMINISTRATIVE EXPENSES					154,637			134,282			143,594		30,313

OPERATING PROFIT (LOSS)					(540,166	)		102,944			533,432		112,610
FINANCIAL EXPENSES , net					228,609			400,927			445,180		93,979
LOSS ON IMPAIRMENT OF INVESTMENTS IN NON-MARKETABLE SECURITIES								8,862			4,054		856

NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLES					(768,775	)		(306,845	)		84,198		17,775
CUMULATIVE EFFECT, AT BEGINNING OF YEAR, OF A CHANGE IN ACCOUNTING PRINCIPLES								3,483

NET INCOME (LOSS) FOR THE YEAR					(768,775	)		(303,362	)		84,198		17,775

EARNINGS (LOSS) PER SHARE (“EPS”) :
	Basic:
			Before cumulative effect		(4.30	)		(1.72	)		0.47		0.10
			Cumulative effect					0.02

					(4.30	)		(1.70	)		0.47		0.10

	Diluted:
			Before cumulative effect		(4.30	)		(1.72	)		0.46		0.10
			Cumulative effect					0.02

					(4.30	)		(1.70	)		0.46		0.10

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING :
		Basic			178,888,888			178,909,274			179,984,090		179,984,090

		Diluted			178,888,888			178,909,274			183,069,394		183,069,394

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


				Year ended December 31

				2000			2001			2002			2002

													Convenience
													translation
													into
													U.S. dollars
				New Israeli Shekels

						(Audited)				(Unaudited)
				(In thousands except per share data)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income (loss) for the year				(768,775	)		(303,362	)		84,198			17,775
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation and amortization			431,510			538,267			516,199			108,972
		Loss on impairment of investments in non-marketable securities						8,862			4,054			856
		Amortization of deferred compensation related to employee stock option grants, net			56,618			20,699			8,957			1,891
		Liability for employee rights upon retirement			11,581			18,736			18,632			3,933
		Accrued interest, exchange and linkage differences on (erosion of) long-term liabilities			(13,214	)		54,522			91,027			19,216
		Accrued interest and exchange differences on security deposit			(2,574	)		(6,590	)		(6,925	)		(1,462	)
		Amount carried to deferred charges			(7,489	)		(22	)		(3,805	)		(803	)
		Sundry			(181	)		1,647			839			177
	Changes in operating asset and liability items:
		Decrease (increase) in accounts receivable:
			Trade		(197,308	)		(55,944	)		(56,638	)		(11,957	)
			Other		23,970			(14,235	)		(8,056	)		(1,701	)
		Increase (decrease) in accounts payable and accruals:
			Trade		93,499			57,271			31,909			6,736
			Shareholder’s current account		20			(2,230	)
			Other		84,685			68,068			14,796			3,124
		Decrease (increase) in inventories			(65,614	)		36,859			(12,996	)		(2,744	)

	Net cash provided by (used in) operating activities				(353,272	)		422,548			682,191			144,013

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of fixed assets				(712,377	)		(601,050	)		(599,769	)		(126,613	)
	Proceeds from sale of fixed assets				1,063			1,771			5,737			1,211
	Investment in non-marketable securities							(16,446	)
	Investment in security deposit				(91,705	)
	Purchase of additional spectrum										(207,635	)		(43,833	)
	Funds in respect of employee rights upon retirement				(6,712	)		(13,336	)		(14,301	)		(3,019	)

	Net cash used in investing activities				(809,731	)		(629,061	)		(815,968	)		(172,254	)

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


		Year ended December 31

		2000			2001			2002			2002

											Convenience
											translation
											into
											U.S. dollars
		New Israeli Shekels

			(Audited)						(Unaudited)
		(In thousands)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from exercise of stock options granted to employees		5			47			4,237			894
	Proceeds from issuance of notes payable, net		684,463
	Long-term bank loans received		1,119,032			1,111,869			1,349,326			284,848
	Repayment of long-term bank loans		(1,054,725	)		(901,000	)		(1,223,698	)		(258,327	)

	Net cash provided by financing activities		748,775			210,916			129,865			27,415

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(414,228	)		4,403			(3,912	)		(826	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR			415,097			869			5,272			1,113

CASH AND CASH EQUIVALENTS AT END OF YEAR			869			5,272			1,360			287

SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION — cash paid during the year:
	Interest		164,198			285,465			323,841			68,364

	Advances to income tax authorities		1,440			5,617			5,207			1,099

Supplementary information on investing activities not involving cash flows

At December 31, 2000, 2001 and 2002, trade payables include NIS 144,482,000, NIS 148,276,000 and NIS 117,406,000 ($24,785,000), respectively, in respect of acquisition of fixed assets. In addition, at December 31, 2002, trade payables include NIS 7.2 million ($1.5 million) in respect of acquisition of additional spectrum. These balances will be given recognition in these cash flow statements upon payment.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
RECONCILIATION OF EBITDA


												Convenience		Convenience
												translation		translation
												into		into
	New Israeli shekels*					New Israeli shekels*						U.S. dollars**		U.S. dollars**

												12 month		3 month
												period		period
	12 month period ended					3 month period ended						ended		ended
	December 31					December 31						December 31		December 31

						(Unaudited)
	2002		2001			2002			2001			2002		2002

Net loss		84,198		(303,362	)		30,574			(34,201	)		17,775		6,454
Adjustments required to reconcile EBITDA:
Financial expenses***		437,993		393,739			96,933			86,747			92,461		20,463
Depreciation and amortization		516,199		538,267			138,230			145,587			108,972		29,181
Amortization of stock option granted to employees		8,957		20,699			2,474			4,309			1,891		522
Capital loss (gain)		839		1,647			(409	)		1,647			177		(86	)
Other expenses		4,054		8,862									856
Implementation of FAS 133****				(3,483	)

EBITDA		1,052,240		656,369			267,802			204,089			222,132		56,534


*	The financial statements have been prepared on the basis of historical cost.

**	The convenience translation of the New Israeli Shekel (NIS) figures into US dollars was made at the exchange prevailing at December 31, 2002: US $1.00 equals 4.737 NIS.

***	Financial expenses excluding any charge for the amortization of pre-launch financial costs, which are included in other depreciation and amortization charges stated above.

****	Cumulative effect, at beginning of year, of a change in accounting principles.

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS


			New Israeli shekels
			3 month period ended

		December 31			March 31			June 30		September 30		December 31
		2001			2002			2002		2002		2002

							(Unaudited)
							(In thousands)
REVENUES — net			881,031			929,490			991,566		1,071,385		1,062,122
COST OF REVENUES			729,344			713,699			742,642		804,526		808,591

GROSS INCOME			151,687			215791			248,924		266,859		253,531
	SELLING AND MARKETING EXPENSES		77,507			78,633			76,092		68,085		85,269
	GENERAL AND ADMINISTRATIVE EXPENSES		19,809			33,399			34,861		36,392		38,942

OPERATING INCOME			54,371			103,759			137,971		162,382		129,320
FINANCIAL EXPENSES — net			88,572			122,559			112,738		111,137		98,746
LOSS ON IMPAIRMENT OF INVESTMENT IN MARKETABLE SECURITIES						4,054

NET INCOME (LOSS) FOR THE PERIOD			(34,201	)		(22,854	)		25,233		51,245		30,574

PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
Summary Operating Data


		December 31,			December 31,
		2001			2002

Subscribers (in thousands)			1,458			1,837
Estimated share of total Israeli mobile telephone subscribers			27	%		29	%
Churn rate in quarter			1.4	%		2.9	%
Average monthly usage in quarter per subscriber (minutes)			301			272
	Usage for Business subscribers		528			541
	Usage for private subscribers		272			249
	Usage for pre-paid subscribers		184			150
Average monthly revenue in quarter per subscriber, including in-roaming revenue (NIS)			195			178
	ARPU for Business subscribers		347			343
	ARPU for private subscribers		177			161
	ARPU for pre-paid subscribers		135			120
Number of operational base stations (in parenthesis number of micro sites out of total number of base stations)			1882	(703)		2,035	(726)
Subscriber acquisition costs in quarter per subscriber (NIS)			426			482
Number of employees (full-time equivalent)			2,523			2,685

SIGNATURES

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

	Partner Communications Company Ltd. By /s/ Alan Gelman

	Name: Alan Gelman Title: Chief Financial Officer

Dated: January 29, 2003