Partner Communications Reports Second Quarter 2013 Results1

  Partner Communications Reports Second Quarter 2013 Results1

  OPERATIONAL EFFICIENCY LED TO A REDUCTION OF NIS 153 MILLION IN OPERATING
              EXPENSES COMPARED TO THE SECOND QUARTER LAST YEAR

 FREE CASH FLOW BEFORE INTEREST PAYMENTS^2 IN THE SECOND QUARTER TOTALED NIS
                                 287 MILLION

      CAPITAL INVESTMENTS IN THE SECOND QUARTER TOTALED NIS 122 MILLION

Business Wire

ROSH HA’AYIN, Israel -- August 28, 2013

Partner Communications Company Ltd.:

Q2 2013 Highlights (compared with Q2 2012)

  *Total Revenues: NIS 1,130 million (US$ 312 million), a decrease of 21%
  *Service Revenues: NIS 950 million (US$ 263 million), a decrease of 22%
  *Operating Expenses (OPEX)^3 including cost of equipment sold: NIS 871
    million (US$241million), a decrease of 16%
  *Operating Expenses (OPEX) ^ 3: NIS 700 million (US $193 million), a
    decrease of 18%
  *Adjusted EBITDA^4: NIS 280 million (US$ 77 million), a decrease of 34%
  *Adjusted EBITDA Margin: 25% of total revenues compared with 30%
  *Net Profit: NIS 20 million (US$ 6 million), a decrease of 83%
  *Net Debt: NIS 3,446 million (US$ 952 million), a decrease of NIS 763
    million
  *Free Cash Flow (before interest): NIS 287 million (US$ 79 million), a
    decrease of 8%
  *Cellular ARPU: NIS 83 (US$ 23), a decrease of 18%
  *Cellular Subscriber Base: approximately 2.92 million at quarter-end, a
    decrease of 6%

^1 The financial results presented in this press release are unaudited
financial results
^2 Cash flows from operating activities before interest payments, net of cash
flows used for investment activities.
^3 Operating expenses include cost of service revenues, and selling, marketing
and administrative expenses, and exclude depreciation and amortization and
impairment charges.
^4 For definition of Adjusted EBITDA measure, see “Use of Non-GAAP Financial
Measures” on page 16 below.

Partner Communications Company Ltd. (“Partner” or the “Company") (NASDAQ and
TASE: PTNR), a leading Israeli communications operator, announced today its
results for the quarter ended June 30, 2013.

Commenting on the second quarter 2013 results, Mr. Haim Romano, Partner's CEO,
said:

“The results of the second quarter of 2013 continue to reflect, on the one
hand, the ongoing impact of the competition in the market and, on the other
hand, our investment in the Company's key assets: high quality customer
service, technological advancement and the most advanced network. At the same
time, we are adjusting our business operations, our marketing approach and the
cost structure of the Company, measures which resulted in a decline of NIS 153
million in the Company's operating expenses compared to the second quarter of
2012.

During the quarter, we continued to invest in enhancing the quality of the
cellular network (Orange ultranet), which includes: sharp and clear voice
quality using HD voice technology, enabling extended battery life by up to
approximately 40 percent, the fastest browsing speed in Israel and advanced 4G
services (LTE ready services). The Company continues to improve and develop
its IT and data systems and provides service solutions which are intuitive and
user friendly in the digital space. The Company's investments totaled this
quarter approximately NIS 122 million.

Furthermore, the Company launched the "Orange One" customer program, which
addresses the need for a unique personal customer service in all the service
channels and provides a variety of benefits.

The Company's subscriber base declined this quarter by 11,000 compared to the
previous quarter, a decline entirely due to a decrease in the Pre-paid
subscriber base, while the Post-paid subscriber base increased this quarter,
for the first time in eight quarters. We also witnessed this quarter a decline
in churn rates compared to the previous quarter, and there was no ARPU erosion
compared to the previous quarter."

Mr. Haim Romano further added: "In June 2013, "Standard & Poor's Maalot"
reaffirmed the Company's 'iIAA-' credit rating and revised the outlook from
"negative" to "stable", mainly due to the expected leverage reduction in
2014."

In conclusion, Mr. Haim Romano emphasized: "We will continue to invest in the
Company's assets - an advanced network, quality customer service and advanced
technology - and to strive to create significant differentiation for the
benefit of our customers and employees."

Mr. Ziv Leitman, Partner's Chief Financial Officer commented on the quarterly
results:

“The financial results of the second quarter of 2013, compared to the previous
quarter, reflect the impact of continued competition in the telecommunications
market, seasonality and the ongoing efficiency measures that the Company
continues to implement also during this quarter.

During the second quarter of 2013, the Company continued to adjust its cost
structure and reported a decrease in operating expenses (excluding cost of
equipment sold and depreciation & amortization expenses) of approximately NIS
20 million compared to the first quarter of 2013. The Company plans to
continue to implement additional operational efficiency measures in the coming
quarters, in order to further reduce operating expenses.

The churn rate in the second quarter of 2013 decreased to 9.4% compared with
10.4% in the first quarter of 2013. The churn rate of Post-paid subscribers
continued to decline for the third consecutive quarter. The Company's cellular
subscriber base at the end of the second quarter of 2013 totaled 2.92 million
subscribers, and the number of our Post-paid subscribers increased compared to
the previous quarter, for the first time in eight quarters, as opposed to the
continued decline in the Pre-Paid subscribers.

ARPU totaled NIS 83 in the second quarter of 2013, compared with NIS 82 in the
first quarter of 2013, primarily due to a decrease in price erosion together
with seasonality effects.

Equipment revenues in the second quarter of 2013 totaled NIS 180 million
compared to NIS183million in the previous quarter. Equipment profitability
improved compared to the previous quarter mainly due to the decrease in
handset subsidies to large corporate customers.

As a result of the above effects, the Adjusted EBITDA for the second quarter
of 2013 increased to NIS 280 million compared to NIS 268 million in the first
quarter of 2013.

Financial expenses in the second quarter of 2013 increased by approximately
NIS 22 million compared to the previous quarter, due to increased linkage
charges in the amount of approximately NIS 15 million as well as due to a
one-time expense of approximately NIS 9 million that was imposed on the
Company due to the early prepayment of bank loans.

Despite the improvement in Adjusted EBITDA, net profit totaled NIS 20 million
in the second quarter of 2013 compared with NIS 31 million in the previous
quarter, due to the said increase in financial expenses.

The Company continued to report robust free cash flow (after interest
payments), which totaled NIS 193 million this quarter, an amount similar to
that of the previous quarter. Cash flow was positively impacted by the
improvement in operating cash flow, which was partially offset by semi-annual
interest payments. During the second quarter, the Company made an early
prepayment of bank loans amounting to approximately NIS 419 million
(approximately NIS 282 million originally maturing in 2014 and approximately
NIS 137 million in 2015). Net debt at the end of the second quarter of 2013 
amounted to approximately NIS 3.4billion compared to NIS 4.2 billion at the
end of the second quarter of 2012, a decrease of NIS 0.8 billion."

Key Financial Results^5 (unaudited)

NIS MILLION                      Q2'13  Q2'12  % Change
Revenues                         1,130  1,428  -21%
Cost of revenues                  878     1,000   -12%
Gross profit                      252     428     -41%
Operating profit                  102     245     -58%
Net profit                        20      120     -83%
Earnings per share (basic, NIS)   0.13    0.77    -83%
Free cash flow                   287    313    -8%
                                                  

Key Operating Indicators:                                           
                                                      Q2'13  Q2'12  Change
Adjusted EBITDA (NIS millions)                          280     423     -34%
Adjusted EBITDA as a percentage of total revenues       25%     30%     -5
Cellular Subscribers (end of period, thousands)         2,921   3,098   -177
Quarterly Cellular Churn Rate (%)                       9.4%    8.9%    0.5
Average Monthly Revenue per Cellular Subscriber         83      101     -18%
(ARPU) (NIS)
Average Monthly Usage per Cellular Subscriber (MOU)     532     437     +22%
(minutes)
No. of Fixed Lines (end of period, thousands)           294     281     +5%
ISP Subscribers (end of period, thousands)             572    609    -6%
                                                                        

^5 See also definitions on first page.

Partner Consolidated Results (unaudited)

           Cellular Segment        Fixed Line Segment      Elimination    Consolidated
NIS        Q2’13  Q2’12  Change  Q2’13  Q2’12  Change  Q2’13  Q2’12  Q2’13  Q2’12  Change
Millions                    %                        %                                        %
Total       897    1,156  -22%     286    308    -7%      (53)   (36)    1,130  1,428  -21%
Revenues
Service     726     949     -23%     277     300     -8%      (53)    (36)    950     1,213   -22%
Revenues
Equipment   171     207     -17%     9       8       13%      -       -       180     215     -16%
Revenues
Operating   59      231     -74%     43      14      +207%    -       -       102     245     -58%
Profit
Adjusted   198    367    -46%    82     56     +46%    -      -      280    423    -34%
EBITDA
                                                                                              

Financial Review

In Q2 2013, total revenues were NIS 1,130 million (US$ 312 million), a
decrease of 21% from NIS 1,428 million in Q2 2012.

Service revenues in Q2 2013 totaled NIS 950 million (US$ 263 million),
decreasing by 22% from NIS 1,213 million in Q2 2012.

Service revenues for the cellular segment in Q2 2013 were NIS 726 million (US$
201 million), decreasing by 23% from NIS 949 million in Q2 2012. The decrease
was mainly a result of the price erosion of cellular services including voice
and data services, following the increased competition due to the entry of new
competitors (new operators and MVNOs). The decrease also reflected the lower
Post-Paid cellular subscriber base which decreased by approximately 6% on an
average basis compared to the second quarter of 2012, as well as lower roaming
revenues, as a result of price erosion in these services.

Service revenues for the fixed line segment reached NIS 277 million (US$ 77
million) in Q2 2013, a decrease of 8% compared with NIS 300 million in Q2
2012. The decrease mainly reflected price erosion in fixed line services
including voice and internet services, as well as a decrease of approximately
6% in the average number of Internet service subscribers over the period.

Equipment revenues in Q2 2013 totaled NIS 180 million (US$ 50 million), a
decrease of 16% compared with NIS 215 million in Q2 2012. The decrease was due
to a reduction in the number of cellular devices sold and a reduction in the
profit margin for cellular devices.

Operating expenses (including cost of service revenues, selling, marketing and
administrative expenses and excluding depreciation and amortization) totaled
NIS 700 million (US$ 193 million) in Q2 2013, a decrease of 18% or NIS 153
million from Q2 2012, largely reflecting the efficiency measures undertaken,
and in particular the reduction in the workforce by over one third during the
last twelve months.

Operating profit for Q2 2013 was NIS 102 million (US$ 28 million), a decrease
of 58% compared with operating profit in Q2 2012 of NIS 245 million.

Adjusted EBITDA in Q2 2013 totaled NIS 280 million (US$ 77 million), a
decrease of 34% from NIS423 million in Q2 2012. Adjusted EBITDA for the
cellular segment was NIS 198 million (US$ 55 million) in Q2 2013, decreasing
by 46% from NIS 367 million in Q2 2012, reflecting the impact of the decrease
in service revenues and in gross profit from equipment sales, partially offset
by the reduction of operating expenses, as described above. Adjusted EBITDA
for the fixed line segment in Q2 2013 was NIS 82 million (US$ 23 million), an
increase of 46% from NIS 56 million in Q2 2012, reflecting the reduction of
operating expenses partially offset by the decrease in service revenues.

Financial expenses, net in Q2 2013 were NIS 71 million (US$ 20 million), a
decrease of 3%, compared with NIS 73 million in Q2 2012. The decrease was
mainly due to the lower level of average debt in Q2 2013 compared with Q2 2012
(see Funding and Investing Review below).

Net profit in Q2 2013 was NIS 20 million (US$ 6 million), a decrease of 83%
compared with net profit in Q2 2012 of NIS 120 million.

Based on the weighted average number of shares outstanding during Q2 2013,
basic earnings per share or ADS, was NIS 0.13 (US$ 0.04), a decrease of 83%
compared to NIS 0.77 in Q2 2012.

The effective tax rate for Q2 2013 was 35%, compared with 30% in Q2 2012. The
increase in the effective tax rate was mainly due to the higher percentage of
unrecognized expenses than in the same quarter last year due to the decline in
profit before tax.

Funding and Investing Review

In Q2 2013, cash flow generated from operating activities before interest
payments, net of cash flow used for investing activities ("Free Cash Flow"),
totaled NIS 287 million (US$ 79 million), a decrease of 8% from NIS313
million for Q2 2012.

Cash generated from operations decreased by 0.5% to NIS 415 million (US$ 115
million) in Q2 2013 from NIS 417 million in Q2 2012. This was mainly explained
by the decrease in net profit, partially offset by changes in operating
working capital. In Q2 2013, operating working capital decreased by NIS 95
million as a result of lower equipment sales and a higher proportion of
equipment sales by credit card, while, operating working capital in Q2 2012
decreased by NIS79  million.

The level of cash capital expenditures in fixed assets (Capex) including
intangible assets but excluding capitalized subscriber acquisition and
retention costs, net, was NIS 122 million (US$ 34 million) in Q2 2013, an
increase of 8% from NIS 113 million in Q2 2012.

The level of net debt^6 at the end of Q2 2013 was NIS 3,446 million (US$ 952
million), compared with NIS 4,209 million at the end of Q2 2012, a decrease of
NIS 763 million.

^6 Total long term indebtedness including current maturities less cash and
cash equivalents.

Cellular Segment Financial Review^7

NIS Millions        Q2’13  Q2’12  Change %
Total Revenues      897    1,156  -22%
Service Revenues     726     949     -23%
Equipment Revenues   171     207     -17%
Operating Profit     59      231     -74%
Adjusted EBITDA     198    367    -46%
                                     

Total revenues for the cellular segment  in Q2 2013 were NIS 897 million (US$
248 million), a decrease of 22% from NIS 1,156 million in Q2 2012.

Service revenues for the cellular segment were NIS 726 million (US$ 201
million) in Q2 2013, decreasing by 23% from NIS 949 million in Q2 2012. The
decrease was mainly a result of the price erosion of cellular services
including voice and data services, following the increased competition due to
the entry of new competitors (MVNOs and new operators) and the shifting to
"unlimited plans" since May 2012. The decrease also reflected the lower
Post-Paid cellular subscriber base which decreased by approximately 6% on an
average basis compared to Q2 2012, as well as lower roaming revenues, as a
result of price erosion in roaming services.

Revenues from cellular equipment sales in Q2 2013 totaled NIS171 million (US$
47 million), decreasing by 17% from NIS 207 million in Q2 2012. The decrease
was due to both a decline in the quantity of cellular equipment sold and lower
equipment profit margins, in light of the increased competition from
independent handset importers.

The gross profit from cellular equipment sales in Q2 2013 was NIS 9 million
(US$ 2 million), compared with NIS 31 million in Q2 2012, a decrease of 71%.
This was mainly due to lower profit margins, reflecting the increased
competition in the handset market.

Operating expenses^8  for the cellular segment (excluding inter-segment costs)
totaled NIS514 million (US$ 142 million) in Q2 2013, a decrease of 16% or NIS
100 million from Q2 2012. The decrease mainly reflected lower payroll and
related expenses as a result of the reduction in the level of workforce, a
decrease in royalty expenses following the abolishment of royalty payments to
the State of Israel from the beginning of 2013, and decreases in content
provider expenses and logistics expenses.

Including depreciation and amortization expenses, operating expenses in Q2
2013 decreased by 13% compared with Q2 2012.

Overall, operating profit for the cellular segment in Q2 2013 was NIS 59
million (US$ 16 million), decreasing by 74% compared with NIS 231 million in
Q2 2012. The decrease reflected the impact of the decrease in service revenues
and in gross profit from equipment revenues, partially offset by the reduction
in operating expenses, as described above.

Adjusted EBITDA for the cellular segment totaled NIS 198 million (US$ 55
million) in Q2 2013, a decrease of 46% from NIS 367 million in Q2 2012,
reflecting the impact of the decrease in service revenues and in gross profit
from equipment revenues, partially offset by the reduction in operating
expenses, as described above. As a percentage of total cellular revenues,
Adjusted EBITDA in Q2 2013 was 22%, compared with 32% in Q2 2012.

^7 Includes intersegment revenues and costs of revenues.
^8 Operating expenses include cost of service revenues, and selling, marketing
and administrative expenses, and exclude depreciation and amortization and
impairment charges.

Cellular Segment Operational Review

At the end of the second quarter 2013, the Company's cellular subscriber base
(including mobile data and 012Mobile subscribers) was approximately 2.92
million including approximately 2.1million Post-Paid subscribers or 72% of
the base, and approximately 818 thousand Pre-Paid subscribers, or 28% of the
subscriber base.

During the second quarter of 2013, the Company's subscriber base declined by
approximately 11 thousand and the Post-paid subscriber base increased by 1
thousand, compared with a decrease in the subscriber base of 55 thousand in
Q22012. The decrease in the subscriber base this quarter is due to the
decrease in Pre-paid subscriber base of 12 thousand.

The quarterly churn rate for cellular subscribers in Q2 2013 was 9.4%,
compared with 8.9% in Q2 2012 and 10.4% in Q1 2013. The high rate of churn
reflected mainly the impact of the high level of competition in the market.

Total cellular market share (based on the number of subscribers) at the end of
Q2 2013 was estimated to be approximately 29%, similar to the end of the first
quarter of 2013.

The monthly Average Revenue Per User (“ARPU”) for cellular subscribers for Q2
2013 was NIS 83 (US$ 23), a decrease of approximately 18% from NIS 101 in Q2
2012 and an increase of 1% from NIS 82 in Q1 2013. The decrease compared to
the second quarter of last year mainly reflected the continued price erosion
in the key cellular services including voice, content and roaming services due
to the competition in the market. The increase compared to the first quarter
2013 was primarily due to a decrease in price erosion together with
seasonality effects.

The monthly average Minutes of Use per subscriber (“MOU”) for cellular
subscribers in Q2 2013 was 532 minutes, an increase of 22% from 437 minutes in
Q2 2012^9. This increase largely reflected the continued increase in the
proportion of cellular subscribers with bundled packages that include large or
unlimited quantities of minutes. In view of this trend, the Company believes
that reporting MOU is no longer beneficial to understanding the results of
operation, and therefore the Company is considering ending reporting MOU as of
the end of 2013.

^9 MOU data includes total incoming minutes to subscribers of those MVNO
operators which Partner hosts on its network.

Fixed Line Segment Review^10

NIS Millions       Q2’13 Q2’12 Change %
Total Revenues     286   308   -7%
Service Revenues   277   300   -8%
Equipment Revenues 9     8     +13%
Operating Profit   43    14    +207%
Adjusted EBITDA    82    56    +46%

Total Revenues in Q2 2013 for the fixed line segment were NIS 286 million (US$
79 million), a decrease of 7% compared with NIS 308 million in Q2 2012.

Service revenues for the fixed line segment reached NIS 277 million (US$ 77
million) in Q2 2013, a decrease of 8% compared with NIS 300 million in Q2
2012. The decrease mainly reflected price erosion in fixed line services
including domestic fixed line, international calls and internet services, as
well as a decrease of 6% in the average number of internet service subscribers
over the period.

Revenues from equipment sales in the fixed line segment in Q2 2013 totaled NIS
9 million (US$ 2 million), compared with NIS 8 million in Q2 2012.

The total number of active fixed lines was approximately 294 thousand at the
end of Q2 2013, an increase of 5% compared with approximately 281 thousand at
the end of Q2 2012, and compared to 293 thousand at the end of Q1 2013.

The ISP subscriber base was approximately 572 thousand as of the end of Q2
2013, compared with approximately 609 thousand at quarter-end of Q2 2012, and
approximately 581 thousand at the end of Q1 2013. The decrease in the number
of ISP subscribers was mainly due to the increased competition in the market.

Operating expenses^11  for the fixed line segment (excluding inter-segment
costs) totaled NIS186 million (US$ 51 million) in Q2 2013, a decrease of
approximately 22% or NIS 53 million from Q2 2012. The decrease mainly
reflected lower payroll and related expenses as a result of the reduction in
the level of workforce. Including depreciation and amortization expenses,
operating expenses for the fixed line segment in Q2 2013 decreased by 20%
compared with Q2 2012.

Operating profit for the fixed line segment was NIS 43 million (US$ 12
million) in Q2 2013, an increase of 207% compared to NIS 14 million in Q2
2012.

Adjusted EBITDA for the fixed line segment in Q2 2013 was NIS 82 million (US$
23 million), an increase of 46% from NIS 56 million in Q2 2012, reflecting the
impact of the reduction in operating expenses, partially offset by the lower
service revenues.

^10 The analysis includes intersegment revenues and costs of revenues.
^11 Operating expenses include cost of service revenues, and selling,
marketing and administrative expenses, and exclude depreciation and
amortization and impairment charges.

Business and Regulatory Developments

Regulatory Developments

1. Wholesale market in the Fixed-line market

On August 5, 2013, the Communications Law (Telecommunications and
Broadcasting), 1982 (the “Telecommunications Law”) was amended to grant the
Minister of Communications the power to set interconnect tariffs and usage
tariffs of another operator's network and supervised services prices, based
not only on cost plus reasonable profit (according to a calculation method
determined by the Minister), but also based on a benchmark which refers to one
of the following: (a) tariffs of services provided by the licensee; (b)
tariffs for other services which are comparable; or (c) tariffs for comparable
services in other countries.
In addition, this amendment to the Telecommunications Law granted the Minister
of Communications with the power to mandate a separation between services
provided to a licensee and services provided to a subscriber and to set
provisions for the manner in which such separation is to be implemented.

For further information, see the Company's 2012 Annual Report (20-F) filed
with the SEC on March 19, 2013 ("2012 Annual Report") "Item 3D. Key
Information - Risk Factors - 3D.1.a RISKS RELATING TO THE REGULATION OF OUR
INDUSTRY - we operate in a highly regulated telecommunications market in which
the regulators limit our flexibility in managing our business, seeks to
increase competition, and adversely affects our business and results of
operations" and "Item 4 - Information on the Company - Business Overview -
Regulation - Regulatory Developments - Public Committee recommendations
regarding the fixed-line telecommunications sector."

2. Ministry of Communications Hearings

a. In July 2013, the Ministry of Communications published a hearing that is
intended to regulate the manner of provision of premium services so that all
of the services will be provided through only three prefixes, two of which
shall be blocked as a default. An international operator will be able to
provide premium services without having to route the call abroad as long as
the services will be provided through the prefixes designated for the
provision of premium services. The revenues of the Company may be adversely
affected by the results of this hearing.

b. In August 2013, the Ministry of Communications published a secondary
hearing with respect to "charging for roaming services abroad" according to
which, subscribers that purchase voice and/or SMS and/or cellular internet
packages for use abroad shall receive an update SMS message at 75%, 95% and
100% utilization of each component of the package as well as an additional SMS
message (if relevant) once the package expires. For packages that include
voice and/or SMS, the cellular operators will not be required to block these
services once the packages are fully utilized or expire. However, for packages
that include cellular data, the cellular operators will be required to block
the data services once the packages expire or the package is fully utilized.
The cellular operators will be required to block as a default cellular
internet abroad and the service will be provided only to subscribers that
requested the service in writing or by phone. In addition, the Ministry is
considering implementing a number of additional steps with respect to
providing the possibility to block cellular internet abroad, transparency and
notification to subscribers. These regulatory limitations may adversely affect
the Company's revenues from roaming services.

c. Further to the Company's 2012 Annual Report with respect to a hearing
published regarding a change in interconnect tariffs for the completion of a
call on a fixed-line network, the Ministry of Communications published in
August 2013 a secondary hearing in this matter in which it was proposed to
reduce the interconnect tariff for the completion of a call on a fixed-line
network to NIS 0.0099 (excluding VAT) per minute.

Business Developments

Tender for the election of an investor for the Israel Electric Corporation's
telecommunication project

Further to the Company's 2012 Annual Report with respect to a tender to elect
an investor for the Israel Electric Corporation's telecommunication project,
on July 11, 2013 an agreement was signed between the Israel Electric
Corporation and a group of investors headed by ViaEuropa for the set-up of a
telecommunications (FTTH) infrastructure company.

Changes In the organizational structure of Partner's group and new
appointments

On August 27, 2013, the Company's Board of Directors approved a change in the
organizational structure of Partner's group, in which a Retail Division will
be established and Mr. Zvika Shenfeld will be appointed as Vice President of
the Retail Division, as of October 1, 2013. Mr. Zvika Shenfeld will be
responsible for the development and establishment of the Partner Group's new
retail activity.

In addition, the Board of Directors approved the appointment of Ms. Na'ama Gat
as Vice President of the unified Marketing and Growth Engines Division of
Partner's group. Her appointment will take effect on October 1, 2013. Ms. Gat
served in a variety of senior managerial positions in the marketing arena in
leading companies in Israel. In her last position, Ms. Gat served as Vice
President and Manager of the Marketing and Business Development Division at
Mizrahi Tefahot Bank. Ms. Gat holds a B.A. degree in Psychology and English
literature from Haifa University and an M.A. degree in Marketing and
advertising from Marquette University, USA.

Conference Call Details

Partner will hold a conference call on Wednesday, August 28, 2013 at 10.00
a.m. Eastern Time / 5.00 p.m. Israel Time.

Please call the following numbers (at least 10 minutes before the scheduled
time) in order to participate: International: +972.3. 918.0610, North America
toll-free: + 1.888.407.2553

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

If you are unavailable to join live, the replay numbers are:

International: +972.3.925.5921, North America: +1.888.782.4291

Both the replay of the call and the webcast will be available from August 28,
2013 until September 4, 2013.

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
"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. All statements other than statements of historical fact included
in this press release regarding our future performance, plans to increase
revenues or margins or preserve or expand market share in existing or new
markets, plans to reduce expenses, and any statements regarding other future
events or our future prospects, 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
about Partner, consumer habits and preferences in cellular telephone usage,
trends in the Israeli telecommunications industry in general, the impact of
current global economic conditions and possible regulatory and legal
developments. For further information regarding of some of the 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 2012 Annual Report (20-F) filed with the SEC on March 19, 2013.  In 
light  of  these  risks, uncertainties and assumptions, the forward-looking
events discussed in this press release might not occur, and actual results may
differ materially from the results anticipated. 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 financial results presented in this press release are unaudited financial
results.

The results were prepared in accordance with IFRS, other than Adjusted EBITDA
and free cash flow before interest payments, which are non-GAAP financial
measures.

The financial information is presented in NIS millions (unless otherwise
stated) and thefigures presented are roundedaccordingly.

The convenience translations of the Nominal New Israeli Shekel (NIS) figures
into US Dollars were made at the rate of exchange prevailing at June 30, 2013:
US $1.00 equals NIS 3.618. The translations were made purely for the
convenience of the reader.

Use of Non-GAAP Financial Measures:

‘Adjusted EBITDA’ represents earnings before interest (finance costs, net),
taxes, depreciation, amortization (including amortization of intangible
assets, deferred expenses-right of use, and share based compensation expenses)
and impairment charges, as a measure of operating profit. Adjusted EBITDA is
not a financial measure under IFRS and may not be comparable to other
similarly titled measures in other companies. Adjusted EBITDA may not be
indicative of the Company’s historic operating results nor is it meant to be
predictive of potential future results. Adjusted EBITDA is presented solely to
enhance the understanding of our operating results. We use the term “Adjusted
EBITDA” to highlight the fact that amortization includes amortization of
deferred expenses – right of use and employee share- based compensation
expenses, but Adjusted EBITDA is fully comparable to EBITDA information which
has been previously provided for prior periods. Reconciliation between our net
cash flow from operating activities and Adjusted EBITDA on a consolidated
basis is presented in the attached summary financial results.

About Partner Communications

Partner Communications Company Ltd. ("Partner") is a leading Israeli provider
of telecommunications services (cellular, fixed-line telephony and internet
services) under the orange™ brand and the 012 Smile brand. 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.orange.co.il/en/Investors-Relations/lobby/

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                           
                                                              Convenience

                                 New Israeli shekels          translation into

                                                              U.S. dollars
                                 June 30,     December 31,   June 30,
                                 2013          2012           2013
                                 (Unaudited)   (Audited)      (Unaudited)
                                 In millions
CURRENT ASSETS
Cash and cash equivalents        513           548            142
Trade receivables                1,249         1,397          345
Other receivables and prepaid    55            47             15
expenses
Deferred expenses- right of      26            22             7
use
Inventories                      106           98             30
Income tax receivable            3             7              1
Derivative financial             1             1              *
instruments
                                 1,953         2,120          540
                                                              
NON CURRENT ASSETS
Trade Receivables                357           509            99
Deferred expenses- right of      128           138            35
use
Property and equipment           1,846         1,990          510
Licenses and other intangible    1,180         1,217          326
assets
Goodwill                         407           407            112
Deferred income tax asset        24            36             7
                                 3,942         4,297          1,089
                                                              
TOTAL ASSETS                     5,895         6,417          1,629
                                                              

* Representing an amount less than 1 million

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                            
                                                              Convenience

                                 New Israeli shekels          translation into

                                                              U.S. dollars
                                 June 30,     December 31,   June 30,
                                 2013          2012           2013
                                 (Unaudited)   (Audited)      (Unaudited)
                                 In millions
CURRENT LIABILITIES
Current maturities of notes      332           306            92
payable and bank borrowings
Trade payables                   765           866            211
Parent group - trade                           70
Payables in respect of           96            110            27
employees
Other payables (mainly           49            59             13
institutions)
Deferred revenue                 40            40             11
Provisions                       65            60             18
Income tax payable               22                           6
Derivative financial             16            14             5
instruments
                                 1,385         1,525          383
                                                              
NON CURRENT LIABILITIES
Notes payable                    2,331         2,321          644
Bank borrowings                  1,296         1,733          358
Liability for employee rights    47            50             13
upon retirement, net
Dismantling and restoring        29            28             8
sites obligation
Other non-current liabilities    9             10             2
Deferred tax liability           2             9              1
                                 3,714         4,151          1,026
                                                              
TOTAL LIABILITIES                5,099         5,676          1,409
                                                              
EQUITY
Share capital - ordinary shares
of NIS 0.01

par value: authorized - December
31, 2012,                        2             2              1

and June 30, 2013 - 235,000,000
shares;

issued and outstanding -
December 31, 2012 –
*155,645,708 shares
June 30, 2013 – *155,652,529
shares
Capital surplus                  1,100         1,100          304
Accumulated earnings (deficit)   45            (10)           12
Treasury shares, at cost -
December
                                (351)         (351)          (97)
31, 2012 and June 30, 2013 -
4,467,990 shares
TOTAL EQUITY                     796           741            220
TOTAL LIABILITIES AND EQUITY     5,895         6,417          1,629
                                                              

* Net of treasury shares

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                                      
                                                                         Convenience translation
                 New Israeli shekels                                     into U.S.

                                                                         dollars
                 6 month                     3 month                     6 month       3 month
                 period ended               period ended                period       period
                 June 30                     June 30                     ended         ended
                                                                         June 30,      June 30,
                 2013         2012          2013         2012          2013          2013
                 (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                 In millions (except per share data)
Revenues, net    2,274         2,999         1,130         1,428         629           312
Cost of          1,779         2,128         878           1,000         492           243
revenues
Gross profit     495           871           252           428           137           69
                                                                                       
Selling and
marketing        235           302           117           148           65            32
expenses
General and
administrative   107           133           54            65            30            15

expenses
Other income,    44            57            21            30            12            6
net
Operating        197           493           102           245           54            28
profit
Finance income   11            19            13            26            3             4
Finance          131           147           84            99            36            23
expenses
Finance costs,   120           128           71            73            33            19
net
Profit before    77            365           31            172           21            9
income tax
Income tax       26            99            11            52            7             3
expenses
Profit for the   51            266           20            120           14            6
period
                                                                                       
Earnings per
share
Basic            0.33          1.71          0.13          0.77          0.09          0.04
Diluted          0.33          1.71          0.13          0.77          0.09          0.04
Weighted
average number
of shares
outstanding
(in thousands)
Basic            155,647       155,646       155,647       155,646       155,647       155,647
Diluted          156,051       155,668       156,098       155,647       156,051       156,098
                                                                                       

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                     
                                                                        Convenience translation
                New Israeli shekels                                     into U.S.

                                                                        dollars
                6 month                     3 month                     6 month       3 month
                period ended               period ended                period       period
                June 30,                    June 30,                    ended         ended
                                                                        June 30,      June 30,
                2013         2012          2013         2012          2013          2013
                (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                In millions
Profit for      51            266           20            120           14            6
the period
Other
comprehensive
income for      -             (12)          -             (12)          -             -
the period,
net of income
tax
TOTAL
COMPREHENSIVE   51            254           20            108           14            6
INCOME FOR
THE PERIOD
                                                                                      

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

SEGMENT INFORMATION
                                                                   
                New Israeli Shekels                                   New Israeli Shekels
                Six months ended June 30, 2013                        Six months ended June 30, 2012
                In millions (Unaudited)                               In millions (Unaudited)
                                      Reconciliation                                        Reconciliation
                 Cellular   Fixed                                      Cellular   Fixed
                 segment   line     for             Consolidated   segment   line     for             Consolidated
                            segment                                               segment
                                      consolidation                                         consolidation
Segment
revenue -        1,435      476                        1,911           1,898      556                        2,454
Services
Inter-segment
revenue -        15         84        (99)                             14         64        (78)
Services
Segment
revenue -        347        16                        363             530        15                        545
Equipment
Total revenues   1,797      576       (99)             2,274           2,442      635       (78)             2,999
Segment cost
of revenues –    1,042      387                        1,429           1,216      442                        1,658
Services
Inter-segment
cost of          82         17        (99)                             64         14        (78)
revenues-
Services
Segment cost
of revenues -    334        16                        350             456        14                        470
Equipment
Cost of          1,458      420       (99)             1,779           1,736      470       (78)             2,128
revenues
Gross profit     339        156                        495             706        165                        871
Operating        271        71                         342             317        118                        435
expenses
Other income,    43         1                          44              57                                   57
net
Operating        111        86                         197             446        47                         493
profit
Adjustments to
presentation
of Adjusted
EBITDA
–Depreciation
and              269        78                         347             279        83                         362
amortization
–Other (1)       4                                    4               5          1                          6
Adjusted         384        164                        548             730        131                        861
EBITDA
Reconciliation
of Adjusted
EBITDA to

profit before
tax
- Depreciation
and                                                    347                                                   362
amortization
- Finance                                              120                                                   128
costs, net
- Other (1)                                            4                                                     6
Profit before                                          77                                                    365
income tax
                                                                                                             

(1) Mainly employee share based compensation expenses.

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

SEGMENT INFORMATION
                                                                   
                New Israeli Shekels                                   New Israeli Shekels
                Three months ended June 30, 2013                      Three months ended June 30, 2012
                In millions (Unaudited)                               In millions (Unaudited)
                                      Reconciliation                                        Reconciliation
                 Cellular   Fixed                                      Cellular   Fixed
                 segment   line     for             Consolidated   segment   line     for             Consolidated
                            segment                                               segment
                                      consolidation                                         consolidation
Segment
revenue -        718        232                        950             942        271                        1,213
Services
Inter-segment
revenue -        8          45        (53)                             7          29        (36)
Services
Segment
revenue -        171        9                         180             207        8                         215
Equipment
Total revenues   897        286       (53)             1,130           1,156      308       (36)             1,428
Segment cost
of revenues –    514        193                        707             595        223                        818
Services
Inter-segment
cost of          43         10        (53)                             29         7         (36)
revenues-
Services
Segment cost
of revenues -    162        9                         171             176        6                         182
Equipment
Cost of          719        212       (53)             878             800        236       (36)             1,000
revenues
Gross profit     178        74                         252             356        72                         428
Operating        139        32                         171             155        58                         213
expenses
Other income,    20         1                          21              30                                   30
net
Operating        59         43                         102             231        14                         245
profit
Adjustments to
presentation
of Adjusted
EBITDA
–Depreciation
and              137        39                         176             134        42                         176
amortization
–Other (1)       2                                    2               2                                    2
Adjusted         198        82                         280             367        56                         423
EBITDA
Reconciliation
of Adjusted
EBITDA to

profit before
tax
- Depreciation
and                                                    176                                                   176
amortization
- Finance                                              71                                                    73
costs, net
- Other (1)                                            2                                                     2
Profit before                                          31                                                    172
income tax
                                                                                                             

(1) Mainly employee share based compensation expenses.

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                    
                                                                       Convenience translation
               New Israeli shekels                                     into U.S.

                                                                       dollars
               6 month                     3 month                     6 month       3 month
               period ended               period ended                period       period
               June 30                     June 30                     ended         ended
                                                                       June 30,      June 30,
               2013         2012          2013         2012          2013          2013
               (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
               In millions
CASH FLOWS
FROM
OPERATING
ACTIVITIES:
Cash
generated
from           745           870           423           469           207           117
operations
(Appendix A)
Income tax
received       6             (103)         (8)           (52)          2             (2)
(paid)
Net cash
provided by    751           767           415           417           209           115
operating
activities
CASH FLOWS
FROM
INVESTING
ACTIVITIES:
Acquisition
of property    (180)         (188)         (82)          (84)          (50)          (23)
and
equipment
Acquisition
of             (76)          (62)          (41)          (30)          (21)          (11)
intangible
assets
Interest       5             4             3             2             1             1
received
Proceeds
from
(payments
for)           (10)          15            (8)           8             (3)           (2)
derivative
financial
instruments,
net
Net cash
used in        (261)         (231)         (128)         (104)         (73)          (35)
investing
activities


CASH FLOWS
FROM
FINANCING
ACTIVITIES:
Dividend                     (6)
paid
Repayment of
finance        (1)           (2)                                       *
lease
Interest       (105)         (67)          (94)          (43)          (29)          (26)
paid
Repayment of
non-current    (419)         (74)          (419)         (25)          (116)         (116)
bank
borrowings
Repayment of
notes                       (393)                      (196)                      
payables
Net cash
used in        (525)         (542)         (513)         (264)         (145)         (142)
financing
activities


INCREASE
(DECREASE)     (35)          (6)           (226)         49            (9)           (62)
IN CASH AND
CASH
EQUIVALENTS
CASH AND
CASH
EQUIVALENTS    548           532           739           477           151           204
AT BEGINNING
OF PERIOD
CASH AND
CASH
EQUIVALENTS    513           526           513           526           142           142
AT END OF
PERIOD
                                                                                     

* Representing an amount of less than 1 million

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Appendix A - Cash generated from operations and supplemental information
                                                                    
                                                                       Convenience translation
               New Israeli shekels                                     into U.S.

                                                                       dollars
               6 month                     3 month                     6 month       3 month
               period ended               period ended                period       period
               June 30                     June 30                     ended         ended
                                                                       June 30,      June 30,
               2013         2012          2013         2012          2013          2013
               (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
               In millions
Cash
generated
from
operations:
Profit for     51            266           20            120           14            6
the period
Adjustments
for:
Depreciation
and            333           349           169           169           92            47
amortization
Amortization
of deferred    15            12            8             6             4             2
expenses -
Right of use
Employee
share based    4             7             2             3             1             1
compensation
expenses
Liability
for employee
rights upon    (3)           (3)           (1)           1             (1)           (*)
retirement,
net
Finance        18            30            15            29            5             4
costs, net
Gain (loss)
from change
in fair
value of       13            (13)          14            (22)          4             4
derivative
financial
instruments
Interest       105           67            94            43            29            26
paid
Interest       (5)           (4)           (3)           (2)           (1)           (1)
received
Deferred       5             (13)          2             (9)           1             *
income taxes
Income tax
paid           (6)           103           8             52            (2)           2
(received)
Changes in
operating
assets and
liabilities:
Decrease
(increase)
in accounts
receivable:
Trade          300           165           153           121           83            43
Other          (8)           (13)          2             (2)           (2)           *
Increase
(decrease)
in accounts
payable and
accruals:
Parent                       (25)                        (5)
group- trade
Trade          (69)          (61)          (59)          (32)          (19)          (16)
Other          (23)          22            (49)          8             (6)           (14)
payables
Provisions     5             (3)           2             (2)           2             *
Deferred                     (8)           2             (7)                         *
revenue
Increase in
deferred       (9)           (16)          (5)           (8)           (2)           (1)
expenses -
Right of use
Current
income tax     27            (3)           2             (1)           7             1
liability
Decrease
(increase)     (8)           11            47            7             (2)           13
in
inventories
Cash
generated      745           870           423           469           207           117
from
operations
                                                                                     

At June 30, 2013 and 2012, trade and other payables include NIS 173 million
($48 million) and NIS 184 million, respectively, in respect of acquisition of
intangible assets and property and equipment.

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

RECONCILIATION BETWEEN OPERATING CASH FLOWS AND ADJUSTED EBITDA
                                                                   
                                                                      Convenience translation
              New Israeli shekels                                     into U.S.

                                                                      dollars**
              6 month                     3 month                     6 month       3 month
              period ended               period ended                period       period
              June 30                     June 30                     ended         ended
                                                                      June 30,      June 30,
              2013         2012          2013         2012          2013          2013
              (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
              In millions
                                                                                    
Net cash
provided by   751           767           415           417           209           115
operating
activities
                                                                                    
Liability
for
employee      3             3             1             (1)           1             *
rights upon
retirement
Accrued
interest
and
exchange
and linkage   (115)         (91)          (105)         (71)          (32)          (29)
differences
on

long-term
liabilities
Increase
(decrease)
in accounts
receivable:
Trade         (300)         (165)         (153)         (121)         (83)          (43)
Other,
including
derivative    3             43            (13)          33            1             (3)
financial
instruments
Decrease
(increase)
in accounts
payable and
accruals:
Trade         69            61            59            32            19            16
Shareholder
– current                   25                          5
account
Other         19            1             48            12            5             13
Income tax
paid          (6)           103           8             52            (2)           2
(received)
Increase
(decrease)    8             (11)          (47)          (7)           2             (13)
in
inventories
Increase
(decrease)
in assets     (1)                         (1)                         (*)           (*)
retirement
obligation
Financial     117          125          68           72           31           19
expenses***
Adjusted      548          861          280          423          151          77
EBITDA
                                                                                    

* Representing an amount of less than 1 million
** The convenience translation of the New Israeli Shekel (NIS) figures into US
dollars was made at the exchange prevailing at June 30, 2013: US $1.00 equals
3.618 NIS.
*** Financial expenses excluding any charge for the amortization of pre-launch
financial costs

Key Financial and Operating Indicators (unaudited)^12

NIS M unless          Q2'         Q3'         Q4'         Q1'         Q2'         Q3'         Q4'         Q1'         Q2'
otherwise          11       11       11       12       12       12       12       13       13       2011     2012
stated
Cellular
Segment Service    1,074    1,070    1,005    963      949      892      788      724      726      4,248    3,592
Revenues
Cellular
Segment               520         379         294         323         207         157         209         176         171         1,748       896
Equipment
Revenues
Fixed Line
Segment Service       325         341         324         320         300         296         294         283         277         1,127       1,210
Revenues
Fixed Line
Segment               7           6           9           7           8           8           13          7           9           26          36
Equipment
Revenues
Reconciliation
for                   -39      -45      -43      -42      -36      -38      -46      -46      -53      -151     -162
consolidation
Total Revenues        1,887       1,751       1,589       1,571       1,428       1,315       1,258       1,144       1,130       6,998       5,572
                                                                                                                                              
Operating             377         314         -55         248         245         217         155         95          102         1,036       865
Profit
                                                                                                                                              
Cellular
Segment               502         447         407         363         367         328         256         186         198         1,896       1,314
Adjusted EBITDA
Fixed Line
Segment               84       82       71       75       56       73       84       82       82       282      288
Adjusted EBITDA
Total Adjusted        586         529         478         438         423         401         340         268         280         2,178       1,602
EBITDA
Adjusted EBITDA       31%         30%         30%         28%         30%         30%         27%         23%         25%         31%         29%
Margin (%)
                                                                                                                                              
OPEX                  913         952         889         872         853         793         744         720         700         3,517       3,262
                                                                                                                                              
Financial             99          81          55          55          73          68          38          49          71          294         234
Expenses, net
Net Profit            205         172         -188        146         120         110         102         31          20          443         478
Total Dividend        -           140         -           -           160                     -           -           -           350         160
Declared
                                                                                                                                              
Capital               75          132         131         133         113         125         121         130         122         471         492
Expenditures^13
Free Cash Flow        158         376         292         223         313         375         323         203         287         1,082       1,234
Free Cash Flow        37          363         209         199         270         310         255         192         193         847         1,034
After Interest
                                                                                                                                              
Net Debt              4,856       4,718       4,639       4,450       4,209       4,072       3,812       3,622       3,446       4,639       3,812
                                                                                                                                              
Cellular
Subscriber Base       3,175       3,201       3,176       3,147       3,098       3,042       2,976       2,932       2,921       3,176       2,976
(Thousands)
Number of Fixed
Lines                 292         295         292         285         281         282         288         293         294         292         288
(Thousands)
ISP Subscriber
Base                  632         632         632         618         609         594         587         581         572         632         587
(Thousands)
Cellular ARPU         112         111         106         101         101         97          87          82          83          111         97
(NIS)
Cellular MOU          396         410         407         424         437         457         483         496         532         397         450
(Minutes)
Cellular Churn        6.5%        7.2%        8.2%        8.0%        8.9%        10.4%       10.9%       10.4%       9.4%        29%         38%
Rate (%)
Number of                  8,588    7,891    7,230    6,961    6,102    5,396    4,772    4,377    7,891    5,396
Employees (FTE)
                                                                                                                                              

^12 See first page for definitions. Including the results of 012 Smile from
March 2011, 2011 and 2012 annual numbers are audited
^13 Cash capital expenditures in fixed assets including intangible assets but
excluding capitalized subscriber acquisition and retention costs, net,

Contact:

Mr. Ziv Leitman, +972-54-7814951
Chief Financial Officer
investors@orange.co.il
or
Ms. Yaffa Cohen-Ifrah, +972-54-9099039
Head of Investor Relations
Yaffa.cohenifrah@orange.co.il
 
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