PARTNER COMMUNICATIONS CO LTD (ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory)

NOTE 5 – SEGMENT INFORMATION

	New Israeli Shekels
	Year ended December 31, 2017*
	In millions
	Cellular segment		Fixed-line segment		Elimination			Consolidated
Segment revenue - Services		1,960		622					2,582
Inter-segment revenue - Services		18		155		(173	)
Segment revenue - Equipment		610		76					686
Total revenues		2,588		853		(173	)		3,268

Segment cost of revenues - Services		1,470		613					2,083
Inter-segment cost of revenues- Services		154		19		(173	)
Segment cost of revenues - Equipment		490		54					544
Cost of revenues		2,114		686		(173	)		2,627
Gross profit		474		167					641

Operating expenses ⁽³⁾		367		98					465
Income with respect to settlement agreement with Orange		108							108
Other income, net		29		2					31
Operating profit		244		71					315
Adjustments to presentation of segment
Adjusted EBITDA
–Depreciation and amortization		445		135
–Other ⁽¹⁾		21		1
Segment Adjusted EBITDA ⁽²⁾		710		207

	New Israeli Shekels
	Year ended December 31, 2017*
	In millions
Reconciliation of segments subtotal Adjusted EBITDA to profit for the year
Segments subtotal Adjusted EBITDA ⁽²⁾		917
Depreciation and amortization		(580	)
Finance costs, net		(180	)
Income tax expenses		(21	)
Other ⁽¹⁾		(22	)
Profit for the year		114

* See Notes 2(n), 2(f)(5) regarding the early adoption of IFRS15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts of NIS 64 million and NIS 20 million for the cellular segment and the fixed-line segment, respectively. The adoption of IFRS15 resulted in an increase in amortization expenses in 2017 for the cellular segment and the fixed-line segment in amounts of NIS 11 million and NIS 2 million, respectively.

	New Israeli Shekels
	Year ended December 31, 2016
	In millions
	Cellular segment		Fixed-line segment			Elimination			Consolidated
Segment revenue - Services		2,080		672						2,752
Inter-segment revenue - Services		19		194			(213	)
Segment revenue - Equipment		729		63						792
Total revenues		2,828		929			(213	)		3,544

Segment cost of revenues - Services		1,659		617						2,276
Inter-segment cost of revenues- Services		192		21			(213	)
Segment cost of revenues - Equipment		596		52						648
Cost of revenues		2,447		690			(213	)		2,924
Gross profit		381		239						620

Operating expenses ⁽³⁾		571		118						689
Income with respect to settlement agreement with Orange		217								217
Other income, net		41		4						45
Operating profit		68		125						193
Adjustments to presentation of segment
Adjusted EBITDA
–Depreciation and amortization		447		148
–Other ⁽¹⁾		47		(1	)
Segment Adjusted EBITDA ⁽²⁾		562		272

	New Israeli Shekels
	Year ended December 31, 2016
	In millions
Reconciliation of segments subtotal Adjusted EBITDA to profit for the year
Segments subtotal Adjusted EBITDA ⁽²⁾		834
Depreciation and amortization		(595	)
Other ⁽¹⁾		(46	)
Finance costs, net		(105	)
Income tax expenses		(36	)
Profit for the year		52

	New Israeli Shekels
	Year ended December 31, 2015
	In millions
	Cellular segment		Fixed-line segment			Elimination			Consolidated
Segment revenue - Services		2,275		717						2,992
Inter-segment revenue - Services		22		189			(211	)
Segment revenue - Equipment		1,051		68						1,119
Total revenues		3,348		974			(211	)		4,111

Segment cost of revenues - Services		1,856		736	^(*)					2,592
Inter-segment cost of revenues- Services		187		24			(211	)
Segment cost of revenues - Equipment		832		48						880
Cost of revenues		2,875		808			(211	)		3,472
Gross profit		473		166						639

Operating expenses ⁽³⁾		506		134	^(*)					640
Income with respect to settlement agreement with Orange		61								61
Other income, net		44		3						47
Operating profit		72		35						107
Adjustments to presentation of segment
Adjusted EBITDA
–Depreciation and amortization
(including impairment charges, see note 13)		510		243
–Other (1)		15		1
Segment Adjusted EBITDA ⁽²⁾		597		279

	New Israeli Shekels
	Year ended December 31, 2015
	In millions
Reconciliation of segments subtotal Adjusted EBITDA to loss for the year
Segments subtotal Adjusted EBITDA ⁽²⁾		876
Depreciation and amortization (including impairment charges, see note 13)		(753	)
Other ⁽¹⁾		(16	)
Finance costs, net		(143	)
Income tax expenses		(4	)
Loss for the year		(40	)

(*) Includes impairment charges in the fixed line segment, see note 13.

(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 CO LTD | CIK:0001096691 |

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