‫IGLD‬

‫Internet Gold Reports First Quarter 2012 Financial Results‬

‫Idit‬ — Wed, 09 May 2012 10:44:07 +0000

Internet Gold Reports First Quarter 2012 Financial Results

- Company Enters 2012 With Continued Steady Progress Driven By
On-Track Bezeq Performance -

Ramat Gan, Israel – May 9, 2012 – Internet Gold Ltd. (NASDAQ Global Select Market and TASE: IGLD) (” Internet Gold” or “The Company”) today reported its financial results for the quarter ended March 31, 2012.

Bezeq – On-Track Performance: The Bezeq Group reported another stable quarter, delivering revenues of NIS 2.7 billion ($ 738 million) and operating profit of NIS 850 million ($ 229 million) for the period. Bezeq’s EBITDA for the first quarter of 2012 totaled NIS 1.2 billion ($ 323 million), representing an EBITDA margin of 44.1%. Net profit attributable to Bezeq shareholders for the period totaled NIS 582 million ($ 157 million).

Dividend from Bezeq: On April 24, 2012, the general meeting of Bezeq’s shareholders, approved a dividend distribution of NIS 1,074 million ($ 289 million) to Bezeq’s shareholders of record on May 4, 2012. The dividend, which is in line with Bezeq’s stated dividend distribution policy, is expected to be paid on May 21, 2012. Internet Gold’s subsidiary, B Communications Ltd., is expected to receive approximately NIS 334 million ($ 90 million) representing its share of the dividend.

On May 21, 2012, Bezeq is also expected to distribute the third NIS 500 million installment of the NIS 3.0 billion special dividend that was approved by its shareholders on January 24, 2011. Accordingly, B Communications expects to receive an additional NIS 155 million ($ 42 million) on the payment date, representing its share of the special dividend. On March 29, 2012 and on April 4, 2012, objections were filed with the Economic Division of the Tel Aviv District Court, opposing the continued payments of such distribution. Both objections were filed by holders of B Communications Debentures (Series 5), who filed similar objections in the second half of 2011. Bezeq denied the arguments set forth in the objections and asserted that there is no basis for the relief sought. The Court heard the closing arguments on the objections on May 2, 2012.

Cash Position: As of March 31, 2012, Internet Gold’s unconsolidated cash and cash equivalents totaled NIS 325 million ($ 87 million), its unconsolidated total debt was NIS 1.1 billion ($ 304 million), and its net debt totaled NIS 806 million ($ 217 million).

Internet Gold Unconsolidated Balance Sheet Data*

	As of March 31, 2012
	(NIS millions)	(US dollars in millions)
Short term liabilities	133	36
Long term liabilities	998	268
Total liabilities	1,131	304
Cash and cash equivalents	325	87
Total net debt	806	217

* Does not include the balance sheet of B Communications

Internet Gold’s First Quarter Consolidated Financial Results

Internet Gold’s revenues for the first quarter were NIS 2,740 million ($ 738 million), a 5.9% decrease compared with NIS 2,913 million ($ 784 million) reported in the first quarter of 2011. For both the current and the prior-year periods, Internet Gold’s revenues consisted almost entirely of Bezeq’s revenues.

Internet Gold’s net income attributable to shareholders for the first quarter totaled NIS 3 million ($ 1 million), compared to a net loss attributable to shareholders of NIS 64 million ($ 17 million) in the first quarter of 2011. Internet Gold’s net income reflects the impact of two significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of the Bezeq interest was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. We and B Communications are amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization.

During the first quarter of 2012, we recorded NIS 302 million (US$ 81 million) net, in amortization expenses related to the Bezeq purchase price allocation (“Bezeq PPA”). From the date of acquisition of the controlling interest in Bezeq (April 14, 2010) until the end of the first quarter of 2012, we amortized approximately 44% of the total Bezeq PPA. We expect to amortize an additional 13% over the next three quarters of 2012.

The Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements.

Financial expenses: Internet Gold’s unconsolidated financial expenses in the first quarter of 2012 totaled NIS 9 million ($ 2 million). These expenses consisted of NIS 15 million ($ 4 million) of interest on its outstanding debentures, which were partially offset by NIS 6 million ($ 2 million) in income from marketable securities. In addition Internet Gold recorded its share of B Communications financial expenses that totaled NIS 58 million ($ 16 million) for the period (including NIS 53 million ($ 14 million) of interest on the long-term loans incurred to finance the Bezeq acquisition and NIS 12 million ($ 3 million) in expenses related to B Communications’ debentures).

Internet Gold’s Unconsolidated Financial Results

	Q1 2012
	(NIS millions)	(US dollars in millions)
Revenues	-	-
Financial expenses	(9)	(2)
Other expenses	(1)	-
Interest in BCOM’s net loss	13	3
Net loss	3	1

Comments of Management

Commenting on the results, Mr. Doron Turgeman, the CEO of Internet Gold, said, “As we move into 2012, we continue to be very pleased with all aspects of the Bezeq acquisition, which generates a steady return that continues to enhance our overall financial position and capabilities. We remain exceedingly confident regarding Bezeq’s positioning in Israel’s communications market and continue to seek out appropriate high-potential opportunities further afield.”

Bezeq Group’s Q1 Consolidated Results

Revenues of the Bezeq Group in the first quarter of 2012 amounted to NIS 2.74 billion compared with NIS 2.91 billion in the corresponding quarter of 2011, a decrease of 5.9%. Most of the decrease in the Bezeq Group’s revenues is due to the erosion of revenues from cellular services and from the sale of cellular handsets.

Operating profit of the Bezeq Group amounted to NIS 850 million in the first quarter of 2012, compared with NIS 665 million in the corresponding quarter of 2011, an increase of 27.8%. EBITDA in the first quarter of 2012 was NIS 1.21 billion (EBITDA margin of 44.1%), compared with NIS 1 billion (EBITDA margin of 34.3%) in the corresponding quarter of 2011, an increase of 20.8%.

The increase in operating profit and EBITDA is primarily attributable to a provision of NIS 281.5 million for employee retirement expenses recorded in the first quarter of 2011 and the absence of a similar provision in the current quarter.

Net profit attributable to Bezeq shareholders increased by 43.0% and amounted to NIS 582 million in the first quarter of 2012, compared with NIS 407 million in the corresponding quarter of 2011. The increase in net profit is primarily attributable to the provision for employee retirement expenses recorded in the first quarter of 2011, as noted above. In addition, Bezeq recorded a gain of NIS 44 million in the first quarter of 2012 from the sale of assets by the Stage One Venture Capital Fund, in which it holds a 71.8% interest.

Cash flow from operating activities of the Bezeq Group in the first quarter of 2012 increased by 28.8% and amounted to NIS 998 million compared with NIS 775 million in the corresponding quarter of 2011.

Gross capital expenditures (CAPEX) amounted to NIS 462 million in the first quarter of 2012 compared with NIS 513 million the corresponding quarter in 2011, a decrease of 9.9%. The decrease is due to lower investments in fixed-line operations as the NGN project progresses. The Bezeq Group’s CAPEX to consolidated revenues ratio in the first quarter of 2012 was 16.9%, compared with 17.6% in the corresponding quarter of 2011.

As a result of the improved cash flow from operating activities and the decrease in CAPEX payments, free cash flow increased by 26.6% and amounted to NIS 585 million in the first quarter of 2012, compared with NIS 462 million in the corresponding quarter of 2011.

As of March 31, 2012, the gross financial debt of the Bezeq Group was NIS 9.42 billion, compared with NIS 5.64 billion as of March 31, 2011. The net financial debt of the Bezeq Group was NIS 6.65 billion compared with NIS 4.94 billion as of March 31, 2011. At the end of March 2012, the Bezeq Group’s net debt to EBITDA ratio was 1.37, compared with 1.00 at the end of March 2011.

To provide further insight into its results, the Company has provided the following summary of the consolidated financial report of the Bezeq Group’s quarter ended March 31, 2012. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, certain of the reported NIS figures of March 31, 2012 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of March 31, 2012 (NIS 3.715 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B.     Use of non-IFRS Measurements: We and the Bezeq Group’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand the Bezeq Group’s current and future operating cash flow performance.

These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. The Bezeq Group defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2, income tax expenses and depreciation and amortization. We present the Bezeq Group’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

Reconciliation between the Bezeq Group’s results on an IFRS and non-IFRS basis is provided in a table immediately following the Bezeq Group’s consolidated results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of the Bezeq Group’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. The Bezeq Group’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

About Internet Gold

Internet Gold is a telecommunications-oriented holding company which is a controlled subsidiary of Eurocom Communications Ltd. Internet Gold’s primary holding is its controlling interest in B Communications Ltd. (TASE and Nasdaq: BCOM), which in turn holds the controlling interest in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ). Internet Gold’s shares are traded on NASDAQ and the TASE under the symbol IGLD. For more information, please visit the following Internet sites:

www.eurocom.co.il

www.igld.com

www.bcommunications.co.il

www.ir.bezeq.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in Internet Gold’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-000Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position as at

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.715
March 31		March 31
2011	2012	2012
NIS millions		$ millions

Assets
Cash and cash equivalents	706	1,509	406
Investments including derivatives	782	1,978	532
Trade receivables	2,787	3,130	843
Other receivables	276	357	96
Inventory	246	225	61
Assets classified as held-for-sale	38	168	45

Total current assets	4,835	7,367	1,983


Investments including derivatives	129	101	27
Long-term trade and other receivables	1,299	1,442	388
Property, plant and equipment	7,402	7,076	1,905
Intangible assets	9,581	7,824	2,106
Deferred and other expenses	637	410	110
Investment in equity – accounted investees (mainly loans)	1,068	1,041	280
Deferred tax assets	299	188	51

Total non-current assets	20,415	18,082	4,867

Total assets	25,250	25,449	6,850

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position as at

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.715
March 31		March 31
2011	2012	2012
NIS millions		$ millions

Liabilities
Short term bank credit, current maturities of long-term
liabilities and debentures	1,474	1,216	327
Trade payables	1,035	895	241
Other payables including derivatives	1,131	987	266
Dividend payable	675	677	182
Current tax liabilities	396	570	154
Deferred income	34	56	15
Provisions	260	181	49
Employee benefits	538	358	96
Liabilities classified as held-for-sale	9	-	-

Total current liabilities	5,552	4,940	1,330

Debentures	3,455	6,375	1,716
Bank loans	6,070	6,835	1,840
Loans from institutions and others	542	541	146
Dividend payable	1,254	645	173
Employee benefits	267	229	62
Other liabilities	153	77	21
Provisions	69	69	18
Deferred tax liabilities	1,561	1,319	355

Total non-current liabilities	13,371	16,090	4,331

Total liabilities	18,923	21,030	5,661

Equity
Total equity attributable to Company’s shareholders	77	(32)	(9)
Non controlling interest	6,250	4,451	1,198
Total equity	6,327	4,419	1,189

Total liabilities and equity	25,250	25,449	6,850

Internet Gold – Golden Lines Ltd.

Consolidated Statements of income for the three months period ended March 31

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.715
2011	2012	2012
NIS millions		$ millions

Revenues	2,914	2,740	738

Cost and expenses
Depreciation and amortization	700	755	203
Salaries	535	512	138
General and operating expenses	1,133	1,083	292
Other operating expenses, net	247	-	-

	2,615	2,350	633

Operating income	299	390	105

Finance expenses, net	134	19	5

Income after financing expenses, net	165	371	100

Share in losses of equity – accounted investees	65	58	16

Income before income tax	100	313	84

Income tax	88	131	35

Net income for the year	12	182	49

Income (loss) attributable to:
Owners of the Company	(64)	3	1
Non-controlling interest	76	179	48

Net income for the year	12	182	49

Profit (loss) per share, basic	(3.45)	0.16	0.04

Profit (loss) per share, diluted	(3.47)	0. 15	0.04

‫Internet Gold Reports Fourth Quarter 2011 Financial Results‬

‫Idit‬ — Thu, 15 Mar 2012 11:40:42 +0000

Internet Gold Reports Fourth Quarter 2011 Financial Results

- Progress Continues In Line with Business Plan -

- Bezeq Delivers Another Strong Quarter -

Ramat Gan, Israel – March 15, 2012 – Internet Gold Ltd. (NASDAQ Global Select Market and TASE: IGLD) today reported its financial results for the fourth quarter ended December 31, 2011.

The financial results presented in this press release are preliminary un-audited financial results. The final and complete results for the fourth quarter and for the year ended December 31, 2011 will be published when the Company publishes its audited financial reports for 2011 and its annual report on Form 20-F for 2011.

Bezeq – On-Track Performance: The Bezeq Group reported another stable quarter, delivering revenues of NIS 2.7 billion (US$ 694 million) and operating profit of NIS 698 million (US$ 183 million) for the period. Bezeq’s EBITDA for the fourth quarter totaled NIS 1.1 billion (US$ 276 million), representing an EBITDA margin of 39.7%. Net income for the period totaled NIS 521 million (US$ 136 million).

Dividend from Bezeq: On October 5, 2011, IGLD’s subsidiary B Communications Ltd. (“BCOM”) received a dividend from Bezeq totaling NIS 464 million (US$ 121 million). BCOM used this dividend for two purposes: (1) payment of NIS 238 million (US$ 62 million) of its current loan repayment commitment; and (2) pre-payment of an additional NIS 226 million (US$ 59 million) of debt to banks, thereby reducing the size of the final “bullet” repayment due in November 2016 and saving related future interest expenses.

BCOM’s successful Placement of NIS 126 Million in Debentures: During January 2012, BCOM completed a private placement of additional Series B debentures with a total par value of NIS 126 million (US $33 million) to a number of Israeli institutional investors. The placement increased the total outstanding balance of the Series B debentures, which were first issued in September 2010, to par value of NIS 526 million (US $138 million).

Successful Placement of NIS 79 Million in Debentures: During December 2011 and January 2012, Internet Gold completed the private placement of additional Series C debentures with a total par value of NIS 79 million (US $21 million) to a number of Israeli institutional investors. The placement increased the total outstanding balance of the Series C debentures, which were first issued in October 2010, to par value of NIS 649 million (US $170 million).

Cash Position: As of December 31, 2011, the Internet Gold’s unconsolidated cash and cash equivalents totaled NIS 343 million (US$ 90 million) and its unconsolidated gross debt was NIS 1.1 billion (US$ 294 million).

Internet Gold’s Unconsolidated Balance Sheet Data*

	As of December 31, 2011
	(NIS millions)	(US$ millions)
Short term liabilities	135	36
Long term liabilities	985	258
Total liabilities	1,120	294
Cash and cash equivalents	343	90
Total net debt	777	204

* Does not include the balance sheet of BCOM.

Internet Gold Fourth Quarter Consolidated Financial Results

Internet Gold’s revenues for the fourth quarter totaled NIS 2,650 million (US$ 694 million), a decrease of 13.8% compared with NIS 3,074 million (US$ 805 million) reported in the fourth quarter of 2010. For both the current and the prior-year periods, Internet Gold’s revenues consisted almost entirely of Bezeq’s revenues.

Internet Gold’s net loss attributable to the shareholders of the company for the fourth quarter totaled NIS 98 million (US$ 26 million) a decrease of 30% compared with NIS 140 million (US$ 37 million) reported in the fourth quarter of 2010. This net loss reflects the impact of three significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. BCOM is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization.

During the fourth quarter of 2011, BCOM, recorded NIS 86 million (US$ 23 million) net, in amortization expenses related to the Bezeq purchase price allocation (“Bezeq PPA”). Internet Gold has recorded its share of these amortization expenses. During 2010 and 2011 BCOM amortized approximately 38% of the total Bezeq PPA, and expects to amortize an additional 15% in 2012.

BCOM Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements.

Financial expenses: Internet Gold’s unconsolidated financial expenses for the fourth quarter of 2011 totaled NIS 10 million (US$ 3 million) primarily attributable to interest paid on its outstanding series of debentures. In addition Internet Gold recorded its share of BCOM’s financial expenses that totaled NIS 84 million (US$ 22 million) for the period (including NIS 70 million interest paid on the long-term loans incurred to finance the Bezeq acquisition and NIS 10 million in expenses related to BCOM’s debentures).

One-time tax adjustment related to the Bezeq PPA: During the fourth quarter of 2011, Internet Gold recognized its share of BCOM’s one-time adjustment that totaled NIS 92 million (US$ 24) relating to the deferred taxes that it allocated with respect to the Bezeq PPA. This adjustment was required because of changes in the Israeli tax rate enacted on December 5, 2011, including the cancellation of tax reductions that had been provided in the Economic Efficiency Law, resulting in the increase in the company tax rate in Israel to 25% beginning in 2012. Current taxes for the periods reported in these financial statements are calculated according to the tax rates specified in the Economic Efficiency Law, but deferred taxes were recalculated based on the higher future tax rate.

Internet Gold Unconsolidated Financial Results

To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. Internet Gold’s interest in BCOM’s net income is presented as a single line item in the unconsolidated table below:

Internet Gold’s Unconsolidated Financial Results

	Q4 2011
	(NIS millions)	(US$ millions)
Revenues	-	-
Financial expenses	(10)	(3)
Other expenses	(7)	(2)
Interest in BCOM’s net loss	(81)	(21)
Net loss	(98)	(26)

Comments of Management

Commenting on the results, Mr. Doron Turgeman, the CEO of Internet Gold, said, “2011 was another year of good performance marked by accelerated loan repayments and improved financial strength and liquidity. During December 2011 and January 2012, we took advantage of favorable market conditions to further strengthen our balance sheet, raising NIS 79 million in debt from institutional investors at a low interest rate for IGLD and BCOM raised an additional NIS 126 million in debt. As we move into 2012, we remain pleased with our investment in Bezeq and we are continuing to seek out ways to further increase value for our shareholders.”

Bezeq Group’s Q4 and Full Year Financial Results

Revenues of the Bezeq Group in 2011 amounted to NIS 11.37 billion compared with NIS 12.0 billion in 2010, a decrease of 5.1%. Most of the erosion in the Bezeq Group’s revenues is explained by a sharp reduction in cellular interconnect tariffs, which was partially offset by increased sales of cellular terminal equipment and by continuing growth in Internet and data.

The Bezeq Group’s revenues in the fourth quarter of 2011 amounted to NIS 2.65 billion, a decrease of 13.3% compared with NIS 3.06 billion in the fourth quarter of 2010. The decrease stems from the lower interconnect fees mentioned above and from intensifying competition in the markets in which the Bezeq Group operates.

The Bezeq Group’s operating profit, net profit and EBITDA for 2011 were adversely affected by a provision of NIS 361.5 million made for employee retirement expenses (of which NIS 80 million was recorded in the fourth quarter of 2011) and by a net expense of NIS 116 million in respect of employee stock option.

Operating profit in the Bezeq Group amounted to NIS 3.24 billion in 2011 compared with NIS 3.74 billion in 2010, a decrease of 13.4%.

EBITDA in 2011 was NIS 4.64 billion (EBITDA margin of 40.8%), compared with NIS 5.15 billion in 2010 (EBITDA margin of 43.0%), a decline of 10.0%.

Net profit attributable to Bezeq shareholders fell by 15.4% and amounted to NIS 2.07 billion in 2011 compared with NIS 2.44 billion in 2010.

Cash flow from operating activities in 2011 decreased by 13.8% and amounted to NIS 3.19 billion compared with NIS 3.70 billion in 2010. The decrease stems mainly from increased payments to suppliers and an increase in customer balances as a result of the sharp growth in the sale of higher priced smartphones.

Gross capital expenditures (CAPEX) amounted to NIS 1.94 billion in 2011 compared with NIS 1.65 billion in 2010, an increase of 17.9%. The increase is attributable to the Bezeq Group’s ongoing investment in the deployment of the NGN in fixed-line operations and the laying of a submarine cable by Bezeq International. The capex to sales ratio in 2011 was 17.0%, compared with 13.7% in 2010.

As a result of the erosion of cash flow from operating activities and the increase in capex, free cash flow decreased by 29.8% and amounted to NIS 1.55 billion in 2011, compared with NIS 2.20 billion in 2010.

On December 31, 2011, the gross financial debt of the Bezeq Group was NIS 9.58 billion, compared with NIS 5.72 billion on December 31, 2010. The increase compared with the prior year is attributable to the incurrence of NIS 4.64 billion of new debt while repaying NIS 835 million of debt.

To provide further insight into its results, the Company has provided the following summary of the consolidated financial report of the Bezeq Group’s quarter ended December 31, 2011. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, certain of the reported NIS figures of December 31, 2011 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of December 31, 2011 (NIS 3.821 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B.     Use of non-IFRS Measurements: We and the Bezeq Group’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand the Bezeq Group’s current and future operating cash flow performance.

These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. The Bezeq Group defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2, income tax expenses and depreciation and amortization. We present the Bezeq Group’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

Reconciliation between the Bezeq Group’s results on an IFRS and non-IFRS basis is provided in a table immediately following the Bezeq Group's consolidated results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of the Bezeq Group’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. The Bezeq Group’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

About Internet Gold – Golden Lines Ltd.

Internet Gold is a telecommunications-oriented holding company which is a controlled subsidiary of Eurocom Communications Ltd. Internet Gold’s primary holding is its controlling interest in B Communications Ltd. (TASE and NASDAQ: BCOM), which in turn holds the controlling interest in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ). Internet Gold’s shares are traded on NASDAQ and the TASE under the symbol IGLD. For more information, please visit the following Internet sites:

www.eurocom.co.il

www.igld.com

www.bcommunications.co.il

www.ir.bezeq.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position as at

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.821
December 31		December 31
2010	2011	2011
NIS millions		$ millions

Assets
Cash and cash equivalents	404	1,447	379
Investments including derivatives	1,029	1,548	405
Trade receivables	2,701	3,059	801
Other receivables	231	294	77
Inventory	177	204	53
Assets classified as held-for-sale	219	133	35

Total current assets	4,761	6,685	1,750


Investments including derivatives	129	119	31
Long-term trade and other receivables	1,114	1,499	392
Property, plant and equipment	7,392	7,308	1,913
Intangible assets	9,163	8,099	2,120
Deferred and other expenses	423	394	103
Investment in equity – accounted investees (mainly loans)	1,084	1,059	277
Deferred tax assets	254	223	58

Total non-current assets	19,559	18,701	4,894

Total assets	24,320	25,386	6,644

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position as at

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.821
December 31		December 31
2010	2011	2011
NIS millions		$ millions

Liabilities
Short term bank credit, current maturities of long-term
liabilities and debentures	1,501	1,306	342
Trade payables	1,066	892	233
Other payables including derivatives	817	840	220
Dividend payable	-	669	175
Current tax liabilities	346	486	127
Deferred income	34	56	15
Provisions	251	186	49
Employee benefits	269	389	102
Liabilities classified as held-for-sale	21	-	-

Total current liabilities	4,305	4,824	1,263

Debentures	3,546	6,388	1,672
Bank loans	6,138	6,753	1,767
Loans from institutions and others	541	544	142
Dividend payable	-	636	166
Employee benefits	305	229	60
Other liabilities	150	186	49
Provisions	69	69	18
Deferred tax liabilities	1,555	1,459	382

Total non-current liabilities	12,304	16,264	4,256

Total liabilities	16,609	21,088	5,519

Equity (Deficit)
Total equity (deficit) attributable to Company’s
shareholders	295	(111)	(29)
Non controlling interest	7,416	4,409	1,154
Total equity	7,711	4,298	1,125

Total liabilities and equity	24,320	25,386	6,644

Internet Gold – Golden Lines Ltd.

Consolidated Statements of income for the year ended December 31

		Convenience
		translation into
		U.S. dollars
		$1 = NIS 3.821
2010	2011	2011
NIS millions		$ millions

Revenues	8,732	11,376	2,978

Cost and expenses
Depreciation and amortization	2,295	2,794	731
Salaries	1,500	2,122	555
General and operating expenses	3,711	4,505	1,180
Other operating expenses (income), net	(3)	382	100

	7,503	9,803	2,566

Operating income	1,229	1,573	412

Finance expenses, net	389	593	155

Income after financing expenses, net	840	980	257

Share in losses of equity – accounted investees	235	216	57

Income before income tax	605	764	200

Income tax	385	673	176

Net income for the year	220	91	24

Income (loss) attributable to:
Owners of the Company	(209)	(247)	(64)
Non-controlling interest	429	338	88

Net income for the year	220	91	24

Loss per share, basic	(11.11)	(12.85)	(3.36)

Loss per share, diluted	(11.23)	(12.91)	(3.38)

‫Internet Gold Reports Third Quarter 2011 Financial Results‬

‫Idit‬ — Thu, 10 Nov 2011 11:28:56 +0000

Internet Gold Reports Third Quarter 2011 Financial Results

- Business Plan Continues to Progress Ahead of Schedule –

- Another Stable Quarter For Bezeq -

Ramat Gan, Israel – November 10, 2011 – Internet Gold Ltd. (NASDAQ Global Select Market and TASE: IGLD) today reported its financial results for the quarter ended September 30, 2011 and its cash position and loan repayment status as of September 30, 2011.

Bezeq: Another Strong Quarter

The Bezeq Group reported another strong, stable quarter, delivering revenues of NIS 2.9 billion (US$ 781 million) and operating profit of NIS 944 million (US$ 254 million) for the period. Bezeq’s EBITDA for the third quarter of 2011 totaled NIS 1.3 billion (US$ 350 million), representing an EBITDA margin of 44.6%.

Continued Ahead-Of-Schedule Progress for the Company’s Subsidiary Financing Plan

On October 5, 2011, Internet Gold’s subsidiary, B Communications Ltd., received a dividend from Bezeq totaling NIS 464 million (US$ 125 million). The dividend consisted of:

A current dividend of NIS 308 million (US$ 83 million), representing the Company’s share of Bezeq’s net profit for the first half of 2011; and

A special dividend of NIS 156 million (US$ 42 million), the second of six equal special dividends. As declared by Bezeq’s Board of Directors and approved by the Israeli Court, special dividends totaling approximately NIS 3 billion are to be paid with no interest or index adjustments on a semi-annual basis through 2013.

B Communications used this dividend for two purposes: (1) payment of NIS 238 million (US$ 64 million) of its current loan repayment commitment; and (2) pre-payment of an additional NIS 226 million (US$ 61 million) to banks, thereby reducing the size of the final “bullet” repayment that is due at November 2016, and saving related future interest expenses.

Cash Position

As of September 30, 2011, the Company’s cash and cash equivalents totaled NIS 437 million (US$ 117 million), and its unconsolidated gross debt was NIS 1.2 billion (US$ 323 million).

Internet Gold’s Unconsolidated Balance Sheet Data*

	As of September 30, 2011
	(NIS millions)	(US$ millions)
Short term liabilities	153	41
Long term liabilities	1,047	282
Total liabilities	1,200	323
Cash and cash equivalents	437	117
Total net debt	763	206

* Does not include the balance sheet of B Communications.

Internet Gold Third Quarter Consolidated Financial Results

Internet Gold’s revenues for the third quarter were NIS 2,917 million (US$ 786 million), a decrease of 4% compared with NIS 3,053 (US$ 822 million) million reported in the third quarter of 2010. For both the current and the prior-year periods, Internet Gold’s revenues consisted almost entirely of Bezeq’s revenues.

Internet Gold’s net loss attributable to the Company’s owners for the third quarter totaled NIS 52 million (US$ 14 million) compared with net profit of NIS 8 million (US$ 2 million) in the third quarter of 2010. This net loss reflected the impact of two significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the third quarter of 2011, the Company’s subsidiary, B Communications, recorded NIS 348 million (US$ 94 million) in amortization expenses related to the Bezeq purchase price allocation (“Bezeq PPA”). B Communications is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization.

Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements.

Financial expenses: B Communications’ financial expenses for the third quarter totaled NIS 93 million (US$ 25 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 72 million (US$ 20 million), and expenses related to B Communications’ debentures, which totaled NIS 12 million (US$ 3 million). In addition, Internet Gold incurred financial expenses totaling NIS 24 million (US$ 6 million), primarily attributable to the interest payments made during the period to holders of its two series of debentures.

Internet Gold Unconsolidated Financial Results

To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. Internet Gold’s interest in B Communications’ net income is presented as a single line item in the unconsolidated table below:

Internet Gold’s Unconsolidated Financial Results

	Q3 2011
	(NIS millions)	(US$ millions)
Revenues	-	-
Financial expenses	(24)	(6)
Other expenses	(2)	(1)
Interest in Bcom’s net loss	(26)	(7)
Net loss	(52)	(14)

Comments of Management

Commenting on the results, Mr. Doron Turgeman, the recently-appointed CEO of Internet Gold, said, “During the third quarter, we continued to focus on the smooth execution of B Communications’ accelerated loan repayment plan. To date, it has repaid approximately NIS 2 billion (US$ 539 million) of its total bank debt, including NIS 1,683 million (US$ 453 million) of principal and NIS 313 million (US$ 84 million) of interest and CPI-linkage expenses. In parallel, we continue to be very pleased with developments at Bezeq, and therefore feel favorably positioned to carry out our plans.”

Bezeq Group’s Q3 Financial Results

To provide further insight into its results, the Company has provided the following summary of the consolidated financial report of the Bezeq Group’s quarter ended September 30, 2011. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Revenues of the Bezeq Group in the third quarter of 2011 amounted to NIS 2.9 billion, a decrease of 3.8% compared with the third quarter of 2010. Revenues from Bezeq Fixed-line operations and from Pelephone were adversely affected by the reduction of mobile termination rates to the cellular networks commencing January 1, 2011. The decrease in revenues was partially offset by growth in Pelephone’s equipment sales revenues.

Operating profit of the Bezeq Group amounted to NIS 944 million in the third quarter of 2011, a decrease of 3.6% compared with the third quarter of 2010. EBITDA for the third quarter was NIS 1.30 billion (EBITDA margin of 44.6%), a decrease of 2.1% compared with the third quarter of 2010 (EBITDA margin of 43.8%). The decrease in these profitability indices is primarily due to intensifying competition in the cellular market.

Net profit attributed to the shareholders of Bezeq in the third quarter of 2011 amounted to NIS 550 million, a decrease of 6.5% compared with the third quarter of 2010. The decrease is primarily attributable to a rise in finance expenses due to the increase in debt.

Since the beginning of the year, cash flows from operating activities has decreased by 21.1% compared with the corresponding period and amounted to NIS 2.3 billion, mainly due to the sharp rise in sales of smartphones resulting in a significant increase in payment to suppliers while customer payments for these phones is made in 36 installments.

Gross investments (CAPEX) in the third quarter of 2011 amounted to NIS 437 million, an increase of 14.7% compared with the third quarter of 2010. The increase is primarily attributable to the investment by Bezeq International in a submarine cable. The CAPEX to sales ratio was 15% in the third quarter of 2011, compared with 12.6% in the corresponding quarter of 2010.

On September 30, 2011, the gross financial debt of the Bezeq Group was NIS 9.6 billion, compared with NIS 5.7 billion on September 30, 2010. The increase is due to the incurrence of NIS 4.7 billion of debt, of which NIS 2.7 billion was recorded in the third quarter of 2011. Conversely, NIS 0.8 million debt was repaid.

On September 30, 2011, the net financial debt of the Bezeq Group was NIS 6.0 billion, compared with NIS 4.3 billion on September 30, 2010. At the end of September 2011, the ratio of net debt to EBITDA of the Bezeq Group was 1.24, compared with 0.91 at the end of September 2010.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of September 30, 2011 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of September 30, 2011 (NIS 3.712 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B.     Use of non-IFRS Measurements: We and the Bezeq Group’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand the Bezeq Group’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. The Bezeq Group defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2, income tax expenses and depreciation and amortization. We present the Bezeq Group’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About Internet Gold – Golden Lines Ltd.

www.eurocom.co.il

www.igld.com

www.bcommunications.co.il

www.ir.bezeq.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position

	Convenience
	translation into
	U.S. dollars
September 30	September 30	September 30	December 31
2011	2011	2010	2010
(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
NIS millions	US$ millions	NIS millions	NIS millions

Assets
Cash and cash equivalents	1,722	464	1,796	404
Investments including derivatives	2,721	733	643	1,029
Receivables in respect of series C debentures	-	-	169	-
Trade receivables	3,007	810	2,747	2,701
Other receivables	234	63	203	228
Inventory	199	54	178	177
Current tax assets	2	1	-	3
Assets classified as held-for-sale	113	30	30	219

Total current assets	7,998	2,155	5,766	4,761

Investments including derivatives	115	31	134	129
Long-term trade receivables and other receivables	1,594	429	1,073	1,114
Property, plant and equipment	7,392	1,991	5,534	7,392
Intangible assets	8,342	2,247	14,897	9,163
Deferred and other expenses	385	104	670	423
Investments in equity-accounted investee
(mainly loans)	1,031	278	1,111	1,084
Deferred tax assets	218	59	334	254

Total non-current assets	19,077	5,139	23,753	19,559


Total assets	27,075	7,294	29,519	24,320

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position

	Convenience
	translation into
	U.S. dollars
September 30	September 30	September 30	December 31
2011	2011	2010	2010
(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
NIS millions	US$ millions	NIS millions	NIS millions

Liabilities
Short-term bank credit, current maturities of
long-term liabilities and debentures	1,567	422	1,661	1,501
Trade payables	919	248	1,103	1,066
Other payables including derivatives	1,108	299	953	817
Dividend payable	1,542	415	891	-
Current tax liabilities	432	116	437	346
Deferred income	52	14	32	34
Provisions	220	59	295	251
Employee benefits	467	126	351	269
Liabilities classified as held-for-sale	-	-	-	21
Total current liabilities	6,307	1,699	5,723	4,305

Debentures	6,445	1,736	3,528	3,546
Bank loans	6,876	1,852	6,284	6,138
Loans from institutions and others	548	148	540	541
Dividend payable	771	208	-	-
Employee benefits	271	73	298	305
Deferred income and other liabilities	156	43	44	150
Provisions	70	19	68	69
Deferred tax liabilities	1,249	336	2,444	1,555
Total non-current liabilities	16,386	4,415	13,206	12,304

Total liabilities	22,693	6,114	18,929	16,609

Equity

Total equity attributable to Company’s
shareholders	(14)	(4)	455	295
Non-controlling interest	4,396	1,184	10,135	7,416
Total equity	4,382	1,180	10,590	7,711

Total liabilities and equity	27,075	7,294	29,519	24,320

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Operations

Nine months period ended			Three months period ended			Year ended
September 30,			September 30,			December 31,
	Convenience			Convenience
	translation			translation
	into			into
	U.S. dollars			U.S. dollars
2011	2011	2010	2011	2011	2010	2010
NIS millions	US$ millions	NIS millions	NIS millions	US$ millions	NIS millions	NIS millions
(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)

Revenues	8,726	2,351	5,658	2,917	786	3,053	8,732

Cost and expenses
Depreciation and amortization	2,113	569	1,062	714	192	577	2,295
Salaries	1,626	438	934	551	149	495	1,500
General and operating
expenses	3,452	930	2,380	1,184	319	1,291	3,711
Other operating expenses
(income), net	277	75	(113)	1	-	(59)	(3)

	7,468	2,012	4,263	2,450	660	2,304	7,503

Operating income	1,258	339	1,395	467	126	749	1,229

Financing expenses, net	473	127	369	186	50	180	389

Income after financing
expense, net	785	212	1,026	281	76	569	840

Share in losses of
equity-accounted investee	203	55	154	66	18	71	235

Income before income tax	582	157	872	215	58	498	605
Income tax	340	92	357	136	37	189	385

Net income	242	65	515	79	21	309	220

Attributable to:
Owners of the Company	(149)	(40)	(69)	(52)	(14)	8	(209)
Non-controlling interest	391	105	584	131	35	301	429
Net income	242	65	515	79	21	309	220

Income (loss) per share,
basic
Net income (loss) per share	(7.94)	(2.14)	(3.63)	(2.82)	(0.76)	0.42	(11.11)

Income (loss) per share,
diluted
Net income (loss) per share	(8.00)	(2.16)	(3.63)	(2.84)	(0.77)	0.42	(11.23)

‫Internet Gold – Golden Lines Ltd. Announces the Retirement of its Chief Executive Officer, Eli Holtzman, and the Election of Doron Turgeman as its New Chief Executive Officer‬

‫Idit‬ — Mon, 03 Oct 2011 07:21:46 +0000

Ramat-Gan, Israel, October 3 , 2011, Internet Gold- Golden Lines Ltd. (NASDAQ: IGLD) announced today that Eli Holtzman, a co-founder of the company and its chief executive officer since 1992 and a director since July 1999, has retired, effective October 2, 2011.

Mr. Doron Turgeman, the company’s chief financial officer, was elected to succeed Mr. Holtzman as chief executive officer effective October 2, 2011. Mr. Holtzman has also retired from his director position in the Company, as well as other Companies within our Group.

Doron Turgeman joined the company in 2000 and has served as its chief financial officer since May 2001 and as deputy chief executive officer since October 2004. Mr. Turgeman holds a B.A. degree in Economics and Accounting from the Hebrew University of Jerusalem and is a certified public accountant (Israel).

Mr. Shaul Elovitch, Internet Gold’s Chairman of The Board of Directors, speaking on behalf of the Board of Directors, thanked Mr. Holtzman for his significant contribution to the company and his unrivalled contribution to Internet Gold’s foundation and major success.

Mr. Elovitch noted, “During Mr. Holtzman tenure, Internet Gold achieved remarkable results and became a leading communication group in Israel. We wish Mr. Holtzman well and much success in his future endeavors” He also said, “On behalf of our Board of Directors, I congratulate Mr. Turgeman on his appointment as chief executive officer. We believe that his managerial experience and deep knowledge of the company’s business and operations will allow him to assume his new responsibilities swiftly and cope successfully with the challenges the company is facing.”

Mr. Ehud Yahalom was elected as the company’s principal financial officer effective October 2, 2011. Mr. Yahalom joined the company during May 2011. Mr. Yahalom holds a B.A. degree in economics and accounting from the Haifa University, a M.B.A in business management and finance from the College of Management Academic Studies in Rishon LeZion and is a certified public accountant (Israel).

About Internet Gold

Internet Gold is a telecommunications-oriented holding company which is a subsidiary of Eurocom Communications Ltd. Internet Gold’s primary holding is its controlling interest in B Communications Ltd. (TASE and Nasdaq: BCOM), which in turn holds the controlling interest in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ). Internet Gold’s shares are traded on NASDAQ and the TASE under the symbol IGLD. For more information, please visit the following Internet sites:

www.eurocom.co.il;

www.igld.com;

www.bcommunications.co.il;

www.ir.bezeq.co.il

Forward-Looking Statements

This communication contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in Internet Gold – Golden Lines filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

‫Internet Gold Reports Second Quarter 2011 Financial Results‬

‫Idit‬ — Tue, 02 Aug 2011 10:29:29 +0000

Internet Gold Reports Second Quarter 2011 Financial Results

- Bezeq Delivers Another Strong Quarter -

- Bezeq’s Significant Regular and Special Dividends Continue to Boost the Cash Position of the Company’s Subsidiary BCOM –

Ramat Gan, Israel – August 2, 2011 – Internet Gold Ltd. (NASDAQ Global Select Market and TASE: IGLD) today reported its financial results for the quarter ended June 30, 2011 and its cash position and loan repayment status as of June 30, 2011.

Bezeq delivers another strong quarter

The Bezeq Group reported another strong, stable quarter, delivering revenues of NIS 2.9 billion (US$ 849 million) and operating profit of NIS 935 million (US$ 274 million) in the second quarter. Bezeq’s EBITDA for the second quarter of 2011 totaled NIS 1.3 billion (US$ 381 million), representing an EBITDA margin of 44.35%, and cash flow from operating activities reached NIS 670 million (US$ 196 million).

Dividends Received from Bezeq

On May 19, 2011, Internet Gold’s subsidiary, B Communications, received two dividends from Bezeq totaling NIS 520 million (US$ 152 million). The dividends consisted of:

Current dividend totaling NIS 363 million (US$ 106 million), representing B Communication’s share of Bezeq’s net profit for the second half of 2010; and
Special dividend totaling NIS 157 million (US$ 46 million), the first of six equal special dividends to be paid with no interest or index adjustments on a semi-annual basis through 2013, totaling approximately NIS 3 billion (US$ 878 million) over a three year period, as declared by Bezeq’s Board of Directors and approved by the Israeli Court.

Cash Position

As of June 30, 2011, Internet Gold’s unconsolidated cash and cash equivalents totaled NIS 343 million (US$ 100 million), and its unconsolidated gross debt was NIS 1.06 billion (US$ 309 million). Having increased its ownership interest in B Communications during the second quarter, Internet Gold currently holds (indirectly) 24.39% of the outstanding shares of Bezeq.

Internet Gold’s Unconsolidated Balance Sheet Data*

	As of June 30, 2011
	(NIS millions)	(US$ millions)
Short term liabilities	134	39
Long term liabilities	922	270
Total liabilities	1,056	309
Cash and cash equivalents	343	100
Total net debt	713	209

* Does not include the balance sheet of B Communications.

Internet Gold Second Quarter Financial Results

Internet Gold’s revenues for the second quarter were NIS 2,895 million (US$ 848 million), an increase of 12% compared with NIS 2,586 million (US$ 751 million) reported in the second quarter of 2010. For both the current and the prior-year periods, Internet Gold’s revenues consisted mostly of Bezeq’s revenues. However, for the second quarter of 2011, Internet Gold’s revenues reflected Bezeq’s revenues for the entire quarter, while during the second quarter of 2010, Internet Gold began to consolidate its share of Bezeq’s revenues commencing April 14, 2010, the date of B Communications’ acquisition of the controlling interest in Bezeq.

Internet Gold’s net loss for the second quarter totaled NIS 33 million (US$ 10 million) compared with a net loss of NIS 43 million (US$ 13 million) in the second quarter of 2010. This net loss reflected the impact of two significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the standards of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values. During the second quarter of 2011, Internet Gold’s subsidiary, B Communications, recorded amortization expenses of NIS 310 million (US$ 91 million) related to the Bezeq purchase price allocation (“Bezeq PPA”). B Communications is amortizing certain of the acquired identifiable intangible assets in accordance with the economic future benefits expected from such assets using an accelerated method of amortization under which approximately 16% of the acquired identifiable intangible assets were amortized during 2010 and an additional 15% will be amortized during 2011.

Financial expenses: B Communications’ financial expenses, net for the second quarter totaled NIS 98 million (US$ 29 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 86 million (US$ 25 million), and expenses related to its debentures, which totaled NIS 14 million (US$ 4 million). In addition, Internet Gold incurred financial expenses, net totaling NIS 27 million (US$ 8 million), reflecting the interest payments it made during the period to holders of its two series of outstanding debentures.

Internet Gold Unconsolidated Financial Results

	Q2 2011
	(NIS millions)	(US$ millions)
Revenues	-	-
Financial expenses	(27)	(8)
Tax and other expenses	2	-
Interest in BCOM’s net loss	(8)	(2)
Net loss	(33)	(10)

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of Internet Gold said, “The second quarter was another period of progress during which we continued to accelerate the debt repayment plan of our subsidiary, B Communications, due primarily to the significant current and special dividends that it received on May 19 from Bezeq. From April 14, 2010 through June 30, 2011, B Communications repaid approximately NIS 1.5 billion (US$ 439 million) of its bank debt, comprised in part of NIS 1,307 million (US$ 383 million) of principal, and its finance plan continues to progress ahead-of-schedule. We are also very pleased with developments at Bezeq, and continue to focus on the smooth execution of our loan repayment plan. In parallel, we continue looking for opportunities to create additional value for our shareholders.”

Consolidation of Bezeq Results

Bezeq results consolidated for entire second quarter of 2011: Internet Gold’s results for the second quarter of 2011 reflect the consolidation of the operations of Bezeq for the entire three-month period. However, Internet Gold’s results for the comparative period of 2010 included Bezeq’s results commencing April 14, 2010, the date of the acquisition.

Supplemental unconsolidated results table: To provide investors with transparent insight into its business, Internet Gold has also provided its results on an unconsolidated basis. Internet Gold’s interest in B Communications’ net income is presented as a single line item in the unconsolidated table, (see above, “Internet Gold’s Unconsolidated Q2 Financial Results”).

Bezeq Group’s Q2 Financial Results

To provide further insight into its results, we have provided the following summary of the consolidated financial report of the Bezeq Group’s quarter ended June 30, 2011. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Bezeq Group’s revenues for the second quarter of 2011 amounted to NIS 2.9 billion (US$ 849 million), a decrease of 3.0% compared to the second quarter of 2010. Bezeq Fixed-Line revenues and Pelephone revenues were negatively affected by the reduction in mobile termination rates that came into effect on January 1, 2011. The decrease in revenues was moderated by growth in Pelephone’s revenues from equipment sales and by the consolidation of Walla! (commencing April 25, 2010).

Bezeq Group’s operating profit in the second quarter of 2011 amounted to NIS 935 million (US$ 274 million), a decrease of 5.6% compared with the second quarter of 2010. Net profit attributable to the owners of Bezeq in the second quarter amounted to NIS 585 million (US$ 171 million), a decrease of 8.3% compared with the corresponding quarter. EBITDA for the second quarter amounted to NIS 1.28 billion (US$ 375 million) (EBITDA margin of 44.3%), a decrease of 4.1% compared with the corresponding quarter, (EBITDA margin of 44.9%). In the second quarter of 2010, a one-time gain of NIS 57 million (US$ 17 million) was recorded as a result of the consolidation of Walla’s operations by Bezeq International. After adjustment for the one-time gain growth was recorded in each of the above parameters.

Cash flow from operating activities in the second quarter of 2011 was down 31.4% compared with the corresponding quarter in 2010, and amounted to NIS 670 million (US$ 196 million), mainly due to the sharp rise in sales of smartphones and the significant increase in supplier payments whereas subscriber payments for those handsets are made in 36 installments.

Gross investments (CAPEX) in the second quarter of 2011 amounted to NIS 495 million (US$ 145 million), an increase of 15.9% compared with the corresponding quarter in 2010. The increase stemmed, among other things, from the investment in a submarine cable by Bezeq International. The CAPEX to sales ratio was 17.1% in the second quarter of 2011, compared with 14.3% in the second quarter of 2010.

As a result of the decrease in cash flow from operating activities and the increase in CAPEX, free cash flow in the second quarter of 2011 amounted to NIS 264 million (US$ 77 million), compared with NIS 606 million (US$ 177 million) in the corresponding quarter in 2010, a decrease of 56.4%.

As of June 30, 2011, the net financial debt of the Bezeq Group was NIS 6.5 billion (US$ 1.9 million), compared with NIS 5.0 billion (US$ 1.5 billion) on June 30, 2010. The increase was attributable to the issuance of NIS 2.8 billion (US$ 820 million) of debt, of which NIS 2 billion (US$ 586 million) was issued in the second quarter of 2011. In contrast, NIS 1.4 billion (US$ 410 million) of debt was repaid. At the end of June 2011, the ratio of the Bezeq Group’s net debt to EBITDA was 1.33, compared with 1.07 at the end of June 2010. We note that an issue of NIS 2.7 billion (US$ 791 million) of debentures at the end of June 2011 is not included in the Bezeq Group’s balance sheet since the consideration was received after the balance sheet date.

Bezeq Group (Consolidated)¹	Q2 2011	Q2 2010	Change
	(NIS millions)
Revenues	2,893	2,981	-3.0%
Operating profit	935	990	-5.6%
EBITDA	1,283	1,338	-4.1%
EBITDA margin	44.3%	44.9%
Net profit attributable to Company shareholders	585	638	-8.3%
Diluted EPS (NIS)	0.21	0.24	-12.5%
Cash flow from operating activities	670	976	-31.4%
Capex payments, net ²	406	370	9.7%
Free cash flow ³	264	606	-56.4%
Net debt/EBITDA (end of period) ⁴	1.33	1.07
Net debt/shareholders’ equity (end of period)	2.66	0.92

¹ Bezeq Group results reflect the consolidation of Walla! as of April 25, 2010.

² Capex data reflects payments related to capex and are based on the cash flow statements.

³ Free cash flow is defined as cash flow from operating activities less net capex payments.

⁴ EBITDA in this calculation refers to the trailing twelve months.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, certain of the reported NIS figures of June 30, 2011 and for the periods than ended, and for the comparative periods have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of June 30, 2011 (NIS 3.415 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B. Use of non-IFRS Measurements: We and Bezeq’s management regularly internally use supplemental non-IFRS financial measures to understand, manage and evaluate our business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2,  income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which is based on its approximately 78.11% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (31.23%) and board control of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the NASDAQ Global Select Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASEב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
http://ir.bezeq.co.il
http://www.eurocom.co.il http://www.bcommunications.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position

	Convenience
	translation into
	U.S. dollars
June 30	June 30	June 30	December 31
2011	2011	2010	2010
(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
NIS millions	US$ millions	NIS millions	NIS millions

Assets
Cash and cash equivalents	548	160	365	404
Investments including derivatives	675	198	547	1,029
Trade receivables	2,855	836	2,689	2,701
Other receivables	237	69	284	228
Inventory	277	81	169	177
Current tax assets	2	1	-	3
Assets classified as held-for-sale	151	44	38	219

Total current assets	4,745	1,389	4,092	4,761

Investments including derivatives	112	33	138	129
Long-term trade receivables	1,474	432	940	1,114
Property, plant and equipment	7,487	2,192	5,514	7,392
Intangible assets	8,643	2,531	14,932	9,163
Deferred and other expenses	396	116	687	423
Investments in equity-accounted investee
(mainly loans)	1,050	307	1,136	1,084
Deferred tax assets	259	76	337	254

Total non-current assets	19,421	5,687	23,684	19,559


Total assets	24,166	7,076	27,776	24,320

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Financial Position

	Convenience
	translation into
	U.S. dollars
June 30	June 30	June 30	December 31
2011	2011	2010	2010
(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
NIS millions	US$ millions	NIS millions	NIS millions

Liabilities
Short-term bank credit, current maturities of
long-term liabilities and debentures	1,789	524	2,155	1,501
Trade payables	1,005	294	1,033	1,066
Other payables including derivatives	996	292	774	817
Dividend payable	668	196	-	-
Current tax liabilities	309	90	254	346
Deferred income	39	11	33	34
Provisions	253	74	371	251
Employee benefits	488	143	454	269
Liabilities classified as held-for-sale	4	1	-	21
Total current liabilities	5,551	1,625	5,074	4,305

Debentures	3,692	1,081	2,817	3,546
Bank loans	6,651	1,948	5,869	6,138
Loans from institutions and others	546	160	-	541
Dividend payable	941	276	-	-
Employee benefits	267	78	295	305
Deferred income and other liabilities	155	45	5	150
Provisions	70	20	73	69
Deferred tax liabilities	1,361	399	2,474	1,555
Total non-current liabilities	13,683	4,007	11,533	12,304

Total liabilities	19,234	5,632	16,607	16,609

Equity

Total equity attributable to Company’s
shareholders	38	11	432	295
Non-controlling interest	4,894	1,433	10,737	7,416
Total equity	4,932	1,444	11,169	7,711

Total liabilities and equity	24,166	7,076	27,776	24,320

Internet Gold – Golden Lines Ltd.

Consolidated Statements of Operations

Six months period ended			Three months period ended			Year ended
June 30,			June 30,			December 31,
	Convenience			Convenience
	translation			translation
	into			into
	U.S. dollars			U.S. dollars
2011	2011	2010	2011	2011	2010	2010
NIS millions	US$ millions	NIS millions	NIS millions	US$ millions	NIS millions	NIS millions
(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)

Revenues	5,809	1,701	2,605	2,895	848	2,586	8,732

Cost and expenses
Depreciation and amortization	1,399	409	485	699	205	484	2,295
Salaries	1,075	315	439	540	158	437	1,500
General and operating
expenses	2,268	664	1,089	1,135	332	1,076	3,711
Other operating expenses
(income), net	276	81	(54)	29	9	(11)	(3)

	5,018	1,469	1,959	2,403	704	1,986	7,503

Operating income	791	232	646	492	144	600	1,229

Financing expenses, net	287	84	189	153	45	136	389

Income after financing
expense, net	504	148	457	339	99	464	840

Share in losses of
equity-accounted investee	137	40	83	72	21	83	235

Income before income tax	367	108	374	267	78	381	605
Income tax	204	60	168	116	34	147	385

Net income	163	48	206	151	44	234	220

Attributable to:
Owners of the Company	(97)	(28)	(77)	(33)	(10)	(43)	(209)
Non-controlling interest	260	76	283	184	54	277	429
Net income	163	48	206	151	44	234	220

Income (loss) per share,
basic
Net income (loss) per share	(5.10)	(1.49)	(4.07)	(1.68)	(0.49)	(2.22)	(11.11)

Income (loss) per share,
diluted
Net income (loss) per share	(5.15)	(1.51)	(4.07)	(1.72)	(0.50)	(2.32)	(11.23)

‫Internet Gold Reports First Quarter 2011 Financial Results‬

‫Lena‬ — Thu, 12 May 2011 14:18:26 +0000

- Holding in Bezeq through B Communications Increased –

- Continued Ahead-of-Schedule Progress in B Communications’ Repayment of its Debt –

Ramat Gan, Israel – May 12, 2011 – Internet Gold Ltd. (NASDAQ Global Select Market and TASE: IGLD) today reported its financial results for the first quarter of 2011 and its cash position and loan repayment status as of March 31, 2011.

Progress in Loan Repayment Plan of Internet Gold’s Subsidiary, B Communications

As of March 31, 2011, Internet Gold’s subsidiary, B Communications, had exceeded its original plan for repaying the debt it incurred to fund its April 2010 acquisition of the controlling interest (approximately 30%) in Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”). From April 14, 2010 through March 31, 2011, B Communications repaid NIS 892 million (US$ 256 million) of principal and NIS 143 million (US$ 41 million) of interest and CPI-linked expenses. During the second quarter of 2011, B Communications intends to repay an additional NIS 520 million (US$ 149 million) of its debt.

Dividends to be Received from Bezeq

On May 19, 2011, our subsidiary, B Communications expects to receive NIS 520 million (US$ 149 million) in dividend payments from Bezeq. This amount consists of:

A current dividend totaling NIS 363 million (US$ 104 million), representing B Communications’ share of Bezeq’s dividend distribution for the second half of 2010. Bezeq has adopted a dividend distribution policy according to which Bezeq will distribute to its shareholders, semiannually, a dividend equal to 100% of its semiannual net income attributable to the shareholders. Since the dividend was announced after the report date, it does not appear on B Communications’ financial reports as of March 31, 2011.

A special dividend totaling NIS 157 million (US$ 45 million) that was declared by Bezeq’s Board of Directors and approved by the Israeli Court. This amount is the first of six equal semi-annual payments to be paid without interest or index adjustments on a basis during the years 2011-2013. To the extent possible, each payment will be scheduled to coincide with the payment of the expected regular dividend. B Communications is capitalizing these payments on its balance sheet at their present value. In B Communications’ unconsolidated balance sheet as of March 31, 2011, the first two special dividend payments totaling NIS 308 million (US$ 89 million) are recorded as accounts receivable – short term, and the remaining four payments totaling NIS 573 million (US$ 164 million) are recorded as accounts receivable – long term.

B Communications intends to use these dividend payments for two purposes:

1) A payment of NIS 235 million (US$ 68 million) towards B Communications’ current loan repayment commitment.

2) Pre-payment of an additional NIS 283 million (US$ 81 million) to creditors, thereby reducing the amount of the remaining bank indebtedness, which will reduce future interest expenses.

Increase of Internet Gold’s subsidiary, B Communications, Stake in Bezeq

During the first quarter of 2011, B Communications purchased 29,662,168 of Bezeq’s outstanding ordinary shares on the Tel Aviv Stock Exchange. The purchases increased B Communications’ ownership interest in Bezeq to approximately 31.37% of Bezeq’s outstanding shares as of March 12, 2011, at a cost of approximately NIS 300 million (US$ 86 million).

Internet Gold’s Unconsolidated Cash Position

At March 31, 2011, Internet Gold’s cash and cash equivalents totaled NIS 382 million (US$ 110 million) and its total unconsolidated debt was NIS 1,044 million (US$ 300 million). This reflected the successful placement of NIS 134 million of Series C debentures on February 28, 2011.

Internet Gold’s Unconsolidated Balance Sheet Data*

	As of March 31, 2011
	*(NIS millions)*	(*US$ millions)*
Short term liabilities	137	39
Long term liabilities	907	260
Total liabilities	1,044	300
Cash and cash equivalents	382	110
Other assets	5	1
Total net debt	657	189

* Does not include the balance sheets of B Communications or Bezeq.

Internet Gold’s First Quarter Financial Results

Internet Gold’s revenues for the first quarter were NIS 2.9 billion (US$ 837 million), which consisted entirely of Bezeq’s revenues. During the first quarter of 2010, a transitional period before B Communications’ acquisition of its ownership interest Bezeq, Internet Gold’s revenues totaled NIS 19 million, which included the sales of its legacy media business but no revenues of either Bezeq or of the legacy communications business.

Internet Gold’s net loss for the first quarter of 2011 totaled NIS 64 million (US$ 18 million) compared with net loss attributable to the shareholders of NIS 34 million recorded in the first quarter of 2010. This net loss reflected the impact of three significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the first quarter of 2011, Internet Gold’s subsidiary, B Communications recorded NIS 88 million, net (US$ 25 million) of amortization expenses, representing its net share of the amortization expenses related to the aforementioned Bezeq purchase price allocation (“Bezeq PPA”). B Communications is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization under which approximately 21% of the acquired identifiable intangible assets were amortized during 2010 and an additional 20% will be amortized during 2011.

Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, B Communications finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements. (see Note B below).

Financial expenses: Internet Gold’s consolidated financial expenses for the first quarter totaled NIS 134 million (US$ 38 million). These expenses consisted primarily of interest and linkage costs on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 75 million (US$ 22 million), and expenses related to debentures issued by the Company and by B Communications, which totaled NIS 34 million (US$ 10 million).

One-time expenses recorded by Bezeq: On January 24, 2011, Bezeq’s Board of Directors approved an Employee Early Retirement Plan under which a total of up to 260 employees will leave Bezeq at a total cost of up to NIS 285 million (US$ 82 million). The expenses associated with this program have been recorded in Bezeq’s, B Communications’ and Internet Gold’s financial statements as “Other Expenses.”

Internet Gold’s Unconsolidated Financial Results

	Three Months Ended March 3, 2011
	*(NIS millions)*	*(US$ millions)*
Operating expenses	(1)	(1)
Financial expenses	(21)	(6)
Internet Gold’s interest in subsidiaries net loss	(42)	(12)
Internet Gold’s net loss	(64)	(19)

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of Internet Gold, said, “The first quarter was another excellent period for Bezeq, demonstrating the profit-generating power of its formidable position in Israel’s telecommunications market, strong management and growth strategy. Due to the special dividend, which B Communications will receive by the end of next week, we intend to accelerate our repayment plan. At the same time, during the quarter B Communications took advantage of its cash position and our firm belief in Bezeq’s potential to increase its stake, investing an additional NIS 300 million in Bezeq’s shares. This demonstrates our strong confidence in the long-term prospects of our primary investment. In addition, we are pleased to have reached the final stage of divesting our Media business, having sold all but one of our Media holdings as of March 31, 2011.”

Consolidation of Bezeq Results

Bezeq results consolidated for the entire first quarter of 2011: B Communications’ first quarter results reflect the full consolidation of the operations of Bezeq for the period. The comparison quarter of 2010 was a transitional period before the Bezeq acquisition (which was completed on April 14, 2010), and does not include results from either Bezeq or the Company’s legacy communications business.

Supplemental unconsolidated results table: To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. Internet Gold’s interest in B Communications’ net income is presented as a single line item in the unconsolidated table (see above, “Internet Gold’s Unconsolidated Financial Results for the Three Months Ended March 31, 2011”).

Bezeq Group’s First Quarter 2011 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s consolidated financial report for the quarter ended March 31, 2011. When we refer to the “Bezeq Group” or the “Group” below we are referring to Bezeq- – The Israel Telecommunication Corp., Ltd. and its subsidiaries: “Bezeq Fixed-Line refers to Bezeq’s operation as a domestic operator, including fixed-line telephony services, Internet services, transmission services and data, “Pelephone” refers to Pelephone Communications Ltd., “Bezeq International” refers to Bezeq International Ltd., “DBS” or “YES” (the trade name for DBS) refers to DBS Satellite Service (1998) Ltd. and “Walla” refers to Walla!, a provider of internet services and portal services. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Bezeq Group (consolidated) Results

Bezeq Group revenues for the first quarter of 2011 amounted to NIS 2.9 billion (US$ 837 million), similar to the prior year’s quarter. Bezeq Fixed-Line revenues and Pelephone revenues from cellular services were negatively affected by the MTR cut that came into effect on January 1, 2011. Conversely, the Bezeq Group recorded an increase in revenues due to growth in revenues from Pelephone’s terminal equipment and consolidation of the results of Walla (as from May 21, 2010).

First quarter 2011 operating profit, net profit, and EBITDA for the Group, as well as fixed line activity, was impacted by a NIS 285 million (US$ 82 million) provision for employee retirement.

Operating profit for the Group was NIS 665 million (US$ 191 million) in the first quarter of 2011, down 23.9% compared with the first quarter of 2010.

Net profit attributable to Bezeq shareholders in first quarter of 2011 was NIS 407 million (US$ 117 million), down 36.6% compared to the first quarter of 2010. EBITDA for first quarter of 2011 was NIS 1 billion (US$ 287 million) (EBITDA margin of 34.3%), down NIS 217 million (US$ 62 million) compared to the first quarter of 2010 (EBITDA margin of 41.7%). Without retirement expenses, growth would have been recorded in all operational results.

Cash flow from operating activities in the first quarter of 2011 declined 3.8% compared to the first quarter of 2010, amounting to NIS 775 million (US$ 223 million), mainly due to changes in Pelephone’s working capital.

Gross capital expenditures in first quarter of 2011 amounted to NIS 503 million (US$ 144 million), an increase of 39.7% compared to the first quarter of 2010. This increase was mainly due to the ongoing rollout of NGN infrastructure in Bezeq’s fixed line segment. Bezeq’s first quarter 2011 consolidated capex-to-sales ratio was 17.3%, compared to 12.3% in the first quarter of 2010.

At March 31, 2011, the Bezeq Group’s consolidated net financial debt was NIS 4.9 billion (US$ 1.4 billion), compared to NIS 2.9 billion at March 31, 2010. The increase in the financial debt compared to March 31, 2010 was mainly due to new debt of NIS 2.6 billion (US$ 746 million) issued by Bezeq in the second and third quarters of 2010, partially offset by the repayment of loans and debentures by Bezeq and Pelephone. At the end March 2011, the Bezeq Group’s net debt-to-EBITDA ratio was 1.00, compared to 0.65 at the end of March 2010.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures as of March 31, 2011 and for the period then ended, have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of March 31, 2011 (NIS 3.4810 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B. Purchase Price Allocation (PPA): In connection with B Communications’ acquisition of the controlling interest in Bezeq, it has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the B Communications finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements of the Company.

C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of B Communications’ acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard of generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

D. NON-IFRS MEASUREMENTS: Reconciliation between Bezeq’s results on an IFRS and non-IFRS basis is provided in a table immediately following Bezeq Group’s Consolidated Results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

We and Bezeq’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies. Reconciliation between results on an IFRS and non-IFRS basis is provided in a table immediately following the Consolidated Statement of Operations.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with ASC 718-10 (formerly known as SFAS 123 (R)),  income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which is based on its approximately 76.78% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (31.24%) and Board control of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the NASDAQ Global Select Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASE: אנזהב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
www.eurocom.co.il

http://igld.com

www.bcommunications.co.il/

http://ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in the filings of Internet Gold – Golden Lines Ltd. with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet

‫Internet Gold Reports Fourth Quarter 2010 Financial Results‬

‫Lena‬ — Tue, 08 Mar 2011 16:16:01 +0000

- IGLD Group’s Primary Asset, Bezeq, Delivers Another Strong Quarter & Announces Ambitious Dividend Plan -

- - Debt Repayment Process Progressing Well Ahead of Schedule–

Petah Tikva, Israel – March 8, 2010 – Internet Gold (NASDAQ Global Select Market and TASE: IGLD) today reported its financial results for the fourth quarter and full year ended December 31, 2010 together with its cash position and loan repayment status as of December 31, 2010.

Progress in Loan Repayment Plan

As of December 31, 2010, Internet Gold’s 76.78% owned subsidiary B Communications Ltd. exceeded its original plan for the repayment of the debt it incurred to fund its April 2010 acquisition of the controlling interest (approximately 30%) in Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”). From April 14, 2010 through December 31, 2010, B Communications repaid NIS 892 million (US$ 251 million) principal amount of debt.

Internet Gold’s Unconsolidated Cash Position

At December 31, 2010, Internet Gold’s cash and cash equivalents totaled NIS 256 million (US$ 72 million) and its total unconsolidated debt was NIS 901 million (US$ 254 million). This reflected the following events:

Successful placement of NIS 170 million in debentures: On September 28, 2010, Internet Gold issued NIS 170 million (US $48 million) of Series C debentures. These debentures carry a 4.45% fixed annual interest rate, are linked to the Israeli CPI, and are listed for trade on the Tel Aviv Stock Exchange.

Successful Exchange of Series B Debentures for Series C Debentures: On December 19, 2010, the Company issued an additional NIS 148 million (US $42 million) of Series C debentures, and exchanged them for approximately 19% of its outstanding Series B Debentures. The goal of this transaction was to improve the Company’s liquidity, the average duration of its debentures and its cash position after the Bezeq transaction.

Successful placement of NIS 134 million in Debentures in February 2011: On February 28, 2011, the Company raised an additional NIS 134 million (US $38 million) through the issuance of additional Series C debentures.

Internet Gold’s Unconsolidated Balance Sheet Data*

	As of December 31, 2010 *(NIS millions)*	As of December 31, 2010 (*US$ millions)*
Short term liabilities	131	37
Long term liabilities	770	217
Total liabilities	901	254
Cash and cash equivalents	256	72
Other assets	5	2
Total net debt	640	180

* Does not include the balance sheet of B Communications.

Internet Gold’s Fourth Quarter Financial Results

Internet Gold’s revenues for the fourth quarter of 2010 were NIS 3.1 billion (US$ 866 million) compared with NIS 323 million reported in the fourth quarter of 2009. The Company’s revenues for the fourth quarter of 2010 consisted primarily of Bezeq’s revenues, together with the modest contribution of its media business, which totaled NIS 16 million (US$ 5 million) for the period. Internet Gold’s fourth quarter 2009 revenues consisted of sales generated by its legacy 012 Smile telecom business. Revenues for the full year 2010, which consolidate Bezeq’s results from April 14, 2010, were NIS 8.7 billion (US$ 2.5 million) compared with NIS 1.2 billion for 2009.

Internet Gold’s net loss for the fourth quarter totaled NIS 171 million (US$ 48 million) compared with net income of NIS 31 million recorded in the fourth quarter of 2009. Internet Gold’s net loss for the year ended December 31, 2010 totaled NIS 241 million (US$ 68 million) compared with net income of NIS 62 million recorded in 2009. These net losses reflected the impact of two significant expenses:

Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the fourth quarter of 2010, Internet Gold recorded an additional NIS 267 million (US$ 75 million) in amortization expenses related to the aforementioned Bezeq purchase price allocation (“Bezeq PPA”), bringing the total of its Bezeq PPA amortization expense for 2010 to NIS 359 million (US$ 101 million). Internet Gold is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization under which approximately 40% of the acquired identifiable intangible assets will be amortized during 2010 and 2011.

Financial expenses: Internet Gold’s financial expenses for the fourth quarter totaled NIS 129 million (US$ 36 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 73 million (US$ 20 million), and expenses related to the Company’s CPI-linked debentures, which totaled NIS 31 million (US$ 9 million). This was offset by NIS 8 million (US$ 2 million) of finance income generated by the Company’s conservative portfolio of marketable investments.

Internet Gold’s Unconsolidated Financial Results

	Q4 2010 *(NIS millions)*	Q4 2010 (US$ millions)	2010 *(NIS millions)*	2010 (US$ millions)
Operating expenses	(1)	-	(5)	(2)
Financial expenses	(12)	(4)	(100)	(28)
Internet Gold’s interest in subsidiaries net loss	(158)	(45)	(136)	(38)
Internet Gold’s net loss	(171)	(49)	(241)	(68)

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of Internet Gold, said, “2010 was an outstanding year for the Internet Gold Group. From a strategic point of view, the Bezeq acquisition, which we closed in April, transformed us from a niche ISP/ILD player into a very broad communications group, giving us control over Israel’s largest Telco and clear leadership of the Israeli telecommunications market. From the financial point of view, we have already accelerated our loan repayment plan, and carried out a bond exchange transaction that improved the structure of our outstanding debt.

“With the goal of focusing fully on Bezeq and our communications business, we have recently sold three of our Goldmind.Media assets and intend to divest our remaining media holdings during the next several months. Taken as a whole, we are very pleased with the development of our business, and continue to seek out additional ways to create value for our shareholders.”

Bezeq Group’s Q4 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s quarter and year ended December 31, 2010 consolidated financial reports. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Bezeq Group’s Consolidated Results

Bezeq Group revenues for 2010 totaled a record NIS 12.0 billion, up 4.1% from NIS 11.5 billion in 2009. Revenue growth was driven by higher revenues at Pelephone, Bezeq International and the initial consolidation of the Walla! results, and was partially offset by a 0.8% decline in Bezeq Fixed-Line’s revenues. Fourth quarter 2010 Bezeq group revenues totaled NIS 3.1 billion, an increase of 4.3% versus the year ago quarter.

In the second quarter, Bezeq began consolidating the results of Walla!, the leading Israeli Internet portal serving a community of more than 5 million monthly users in Israel and abroad.

Bezeq’s operating profit increased 26.0% to NIS 3.7 billion in 2010 as compared to the full year 2009. The improvement in operating profit delivered a 31.2% operating margin and was driven primarily by higher total revenues and the positive impact of ongoing cost reduction initiatives, as well as by the incremental capital gains from the ongoing disposal of real estate and copper during the year.

Net profit attributable to Bezeq shareholders from continuing operations in 2010 amounted to NIS 2.4 billion, up 13.3% as compared to the full year 2009, when excluding a one-time gain of NIS 1.5 billion related to the deconsolidation of yes in the third quarter of 2009.

Bezeq’s EBITDA for 2010 increased 15.6% to NIS 5.2 billion (EBITDA margin 43.0%) compared to 2009 (EBITDA margin 38.7%). EBITDA in the fourth quarter of 2010 increased 48.2% to NIS 1.3 billion (41.5% EBITDA margin) versus the year ago quarter (29.2% EBITDA margin).

Fourth quarter and full year 2009 operating profit, net profit, and EBITDA for the Fixed-Line segment were impacted by a NIS 267 million provision for employee retirement recorded in Q4 2009 versus an NIS 36 million provision recorded in 2010, of which only NIS 5 million was recorded in the fourth quarter. Subsequent to year end, Bezeq announced a plan to early retire up to 260 employees at an estimated cost of NIS 281.5 million. The provision for these expenses will be recorded in the first quarter of 2011.

Cash flow from operating activities in 2010 rose 1.1% year-over-year to NIS 3.7 billion versus the full year 2009.

Gross capital expenditures in 2010 amounted to NIS 1.6 billion, an increase of 9.3% as compared to the full year 2009. This rise was primarily related to the ongoing rollout of the Bezeq’s Fixed-Line segment’s NGN (next generation network) infrastructure. The 2010 consolidated capex-to-sales ratio was 13.7%, as compared with 13.1% for the full year 2009.

As of December 31, 2010, Bezeq’s consolidated financial debt was NIS 5.7 billion, compared with NIS 4.1 billion as of December 31, 2009. The year-over-year increase in the financial debt was primarily related to Bezeq raising new debt totaling NIS 2.6 billion during the second and third quarters of 2010 through new loans from Israeli banks with an average duration of 4.7 years. These increases were partially offset by the repayment of debentures and loans by Bezeq and Pelephone. As of year-end 2010, the Bezeq’s net debt-to-EBITDA ratio was 1.04, as compared to 0.76 at year-end 2009.

Conference Call Information

Internet Gold’s management invites its investors and other interested parties to participate in a conference call to be held today, Tuesday, March 8, at 11:00 am EST (18:00 in Israel). During the call, Messrs. Eli Holtzman and Doron Turgeman, who serve as the CEO and CFO of both Internet Gold and B Communications, will be available to answer questions regarding both companies.

To participate, please call one of the following access numbers several minutes before the call begins:

1-888-668-9141 from within the U.S.

1-866-485-2399 from within Canada

0-800-917-5108 from within the U.K.

+972-3-918-0610 from other international locations

The call will also be broadcast live through the Company’s website, www.bcommunications.co.il, and will be available for replay during the next 30 days.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of December 31, 2010 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of December 31, 2010 (NIS 3.5490 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B. Purchase Price Allocation (PPA): As part of B Communications’ acquisition of the controlling interest in Bezeq, the Company has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements.

C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard of generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

D. NON-IFRS MEASUREMENTS: Reconciliation between Bezeq’s results on a IFRS and non-IFRS basis is provided in a table immediately following Bezeq Group’s Consolidated Results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

We and Bezeq’s management regularly uses supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies. Reconciliation between results on a IFRS and non-IFRS basis is provided in a table immediately following the Consolidated Statement of Operations.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS2, income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which is based on its approximately 76.78% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (30.29%) and Board control of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the Nasdaq Global Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASE: אנזהב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
http://ir.bezeq.co.il
http://www.eurocom.co.il http://www.bcommunications.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet

‫Internet Gold’s Fourth Quarter Earnings Release Scheduled For March 8, 2011‬

‫Idit‬ — Tue, 01 Mar 2011 09:45:28 +0000

Petah Tikva, Israel March 1, 2011, Internet Gold – Golden Lines Ltd. (NASDAQ/TASE: IGLD), today announced that it will release its fourth quarter results on Tuesday, March 8, 2011, before the market opens. On the same day, at 11:00 a.m. EDT, management will host a teleconference to discuss the results.

To participate, please call one of the following access numbers several minutes before the call begins: 1-888-668-9141 from within the U.S. or 1866-485-2399 from within Canada, 0-800-917-5108 from within the U.K., or +972-3-918-0610 from other international locations.

The call will also be broadcast live through the company’s Website, www.igld.co.il , and will be available for replay during the next 30 days.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which it based on its approximately 76.78% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (30.29%) and board control of of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the Nasdaq Global Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASE: אנזהב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
http://ir.bezeq.co.il
http://www.eurocom.co.il http://www.bcommunications.co.il

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

‫Internet Gold – Golden Lines Will Issue NIS 148 Million Of its Series C Debentures in Exchange for NIS 124 Million Of Outstanding Series B Debentures in a Private Placement with Institutional Investors in Israel‬

‫Lena‬ — Thu, 16 Dec 2010 08:28:08 +0000

PETACH TIKVA, Israel, December 16, 2010 – Internet Gold – Golden Lines (NASDAQ and TASE: IGLD), today announced that on December 16, 2010 the Company effected a private placement of NIS 148,328,588 million (US $ 41,386,325 million) principal amount of Series C Debentures to certain institutional investors in Israel in exchange for approximately NIS 124,855,714 million (US $ 34,836,974 million) principal amount of the Company’s outstanding Series B Debentures held by such institutional investors (or approximately 19% of the outstanding Series B Debentures), reflecting an exchange ratio of 1:1.188 (NIS 1.188 principal amount of Series C Debentures for NIS 1 principal amount of Series B Debentures).

The private placement was structured as an increase to the outstanding Series C Debentures of the Company which were first issued in September 2010.

The completion of the private placement is subject to the Tel Aviv Stock Exchange approval for the listing of the newly issued Series C Debentures on the Tel Aviv Stock Exchange.

The Israeli Tax Authority approved a formula for calculating the adjusted discount rate for all Series C Debentures, for taxation purposes. According to the principles set out in the Approval, as a result of the private placement, The Company expects such adjusted discount rate to be 0%.

Upon completion of the exchange offer, approximately NIS 528,699,029 million (US $147,516,470 million) in aggregate principal amount of the Series B Debentures will remain outstanding. The Series B Debentures purchased by the Company will be cancelled and the remaining outstanding Series B Debentures will continue to trade on the Tel Aviv Stock Exchange.

The terms of the newly issued Series C Debentures will be identical to the terms of Series C Debentures issued in September 2010. The newly issued Series C Debentures will be listed on the Tel Aviv Stock Exchange, subject to exchange approval and initial re-sales will be restricted by applicable securities laws.

The exchange of the Debentures was conducted as a private placement to Israeli institutional investors pursuant to Regulation S under the U.S. Securities Act of 1933. The newly issued Series C Debentures have not been registered under the Securities Act and may not be offered or sold in the United States or to U.S. persons unless they are registered under the Securities Act or an exemption from registration is available.

Midroog Ltd., an Israeli rating company affiliated with Moody’s, has awarded the newly issued Series C Debentures an A3 stable rating, as was awarded to the Series C Debentures when initially issued in September 2010. In awarding the new debentures an A3 stable rating; Midroog cited the following factors, among others: (1) B Communications’ holding of the controlling interest in Bezeq, the leading player in the Israeli communications market, which has an Aa1 stable rating; and (2) the financing structure for the acquisition of the Bezeq interest.

Eli Holtzman, CEO of Internet Gold commented: “Our main goal in structuring the exchange offer was to improve our liquidity, the average duration of our debentures and our cash position post the Bezeq transaction. We are very pleased with the results”.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments in the industries it is engaged, the failure to manage growth and other risks detailed from time to time in Internet Gold’s filings with the Securities Exchange Commission, including Internet Gold’s Annual Report on Form 20-F. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which is based on its approximately 76% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (30.34%) and Board control of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the Nasdaq Global Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASE: אנזהב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
http://ir.bezeq.co.il
http://www.eurocom.co.il http://www.bcommunications.co.il

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

‫Internet Gold Reports Ahead-of-Plan Execution for Q3 2010‬

‫Lena‬ — Thu, 04 Nov 2010 10:14:17 +0000

- Debt Repayment Process Progressing Well Ahead of Schedule–

- Balance Sheet Strengthened Through Successful Issuance of
NIS 170 Million in Low-Interest Series C Debentures –

Petah Tikva, Israel – November 2, 2010 – Internet Gold (NASDAQ Global Market and TASE: IGLD) today reported its financial results for the third quarter ended September 30, 2010.

Consolidation of Bezeq Results

Bezeq results consolidated for entire Q3 period: All of the Q3 results of Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”) are consolidated into Internet Gold’s Q3 results. This reflects the fact that the acquisition of the controlling interest of Bezeq (approximately 30.4%) by Internet Gold’s 76.62%-owned subsidiary, B Communications (NASDAQ Global Market and TASE: BCOM) was completed before the beginning of the third quarter (on April 14, 2010).

Supplemental unconsolidated results table: To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. In the unconsolidated table, Internet Gold’s interest in B Communication’s net income is presented as a single line item (see below, “Internet Gold’s Unconsolidated Q3 Financial Results”).

Adoption of IFRS: In contemplation of the acquisition of the controlling interest in Bezeq, on January 1, 2010 Internet Gold adopted the financial reporting standards utilized by Bezeq, the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP) (see notes C and D below).

Internet Gold’s Q3 Financial Results

Internet Gold’s revenues for the third quarter totaled NIS 3.1 billion (US$ 833 million) a ten-fold increase compared with NIS 310 million reported in the third quarter of 2009. The Company’s revenues for Q3 2010 consisted primarily of Bezeq’s revenues, together with the modest contribution of its media business, which totaled NIS 21 million (US$ 6 million) for the period. Its Q3 2009 revenues consisted of sales generated by the Company’s legacy 012 Smile telecom business. Revenues for the first nine months of 2010, which consolidate Bezeq’s results from April 14, 2010,were NIS 5.7 billion (US$ 1.5 billion) compared with NIS 921 million reported in the first nine months of 2009.

Internet Gold’s net income attributable to the owners of the company for the third quarter totaled NIS 8 million (US$ 2 million) compared with NIS 3 million recorded in the third quarter of 2009. Internet Gold’s net income for the reporting quarter consisted entirely of the profit generated by Bezeq for the period, mitigated by the impact of two significant expenses:

Financial expenses: Internet Gold’s financial expenses for the third quarter totaled NIS 107 million (US$ 29 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 81 million (US$ 22 million), and expenses related to Company’s CPI-linked debentures, which totaled NIS 34 million (US$ 9.3 million), offset by NIS 8 million (US$ 2 million) of finance income generated by the Company’s conservative portfolio of marketable investments.

Amortization (net): Internet Gold’s amortization related to the Bezeq purchase price allocation totaled NIS 52 million (US$ 14 million) during the third quarter of 2010 (see Note B below).

Net loss attributable to the owners of the company for the first nine months of 2010 was NIS 69 million (US$ 19 million) compared with NIS 59 million net income reported in the first nine months of 2009.

Internet Gold’s Cash Position and Loan Repayment Plan

Successful placement of NIS 170 million in debentures: On September 28, 2010, Internet Gold issued NIS 170 million (US $46 million) of Series C debentures. These debentures carry a 4.45% fixed annual interest rate, linked to the Israeli CPI, and are listed for trade on the Tel Aviv Stock Exchange.

Dividends received from Bezeq: On October 7, 2010,
B Communications received a dividend of NIS 389 million (US$ 106 million) from Bezeq. Bezeq paid this dividend in line with its announced policy of paying out 100% of its net income as dividends on a semi-annual basis. This dividend was larger than the Company had projected in its original budget and loan repayment plan. B Communications used this dividend for three purposes:

1) Payment of a portion of B Communications’ current loan repayment
commitment in the amount of NIS 255 million (US$ 70 million).

2) Pre-payment of an additional NIS 56 million (US$ 15 million) to
creditors, thereby reducing the size of the final “bullet”
repayment that is due at the end of the loan repayment
period and saving related future interest expenses.

3) Addition of NIS 78 million (US$ 21 million) to the Company’s cash
balance.

Outstanding loans & loan repayment plan: At September 30, 2010, the Company’s unconsolidated total gross debt was NIS 1 billion (US$ 282 million) and unconsolidated net debt was NIS 583 million (US$ 159 million). At this point, the Company’s loan repayment process is proceeding well ahead of schedule.

Internet Gold’s Unconsolidated Cash Position

*(in NIS millions)*	As of June 30, 2010 (pre debt offering)	As of Sept. 30, 2010 (post debt offering)
Cash and cash equivalents	280	281
Receivable in respect of series C debentures	-	169
Total gross debt	(851)	(1,033)

Internet Gold’s Unconsolidated Q3 Financial Results

	Q3 2010 *(NIS millions)*	Q3 2010 *(US$ millions)*
Operating expenses	(1)	-*
Financial expenses	(23)	(6)
Internet Gold’s interest in B communication’s net income	32	8
Internet Gold’s net income	8	2

*less than US$ 0.5 million

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of Internet Gold, said, “We are pleased to report a period of rapid progress that has confirmed Bezeq’s cash generation potential and the overall soundness of our loan repayment plan.

“Bezeq has reported another excellent quarter, demonstrating the power of its formidable position in Israel’s telecommunications market, strong management and growth strategy to generate sizeable profits. Having received a larger-than-expected dividend, we have been able to accelerate our repayment plan and to increase our cash balance. At the same time, we took advantage of favorable market conditions to further strengthen our balance sheet, raising NIS 170 million from investors at a low rate of interest for Internet Gold and additional NIS 400 million for B communications. As such, we feel well positioned to carry out all of our plans and to continue seeking out ways to generate value for our shareholders.”

Bezeq Group’s Q3 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s Q3 consolidated financial report. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il

Bezeq Group’s Consolidated Results

Bezeq Group revenues for Q3 2010 totaled a record NIS 3.03 billion, up 3.7% from NIS 2.92 billion in the year ago period. Revenue growth was driven by higher revenues at Pelephone, Bezeq International and the consolidation of Walla!, and was partially offset by a 1.5% decline in Bezeq Fixed-Line.

Operating profit for the Company increased 11.9% to NIS 979 million in Q3 2010, up from NIS 875 million in Q3 2009. The improvement in operating profit delivered a 32.3% operating margin and was driven primarily by higher total revenues and the positive impact of ongoing cost reduction initiatives, and to a lesser extent by the positive impact from the ongoing disposal of real estate and copper during the quarter.

Net profit attributable to Bezeq shareholders for Q3 2010 amounted to NIS 588 million, in line with the year ago period when excluding a one-time gain of NIS 1.5 billion related to the deconsolidation of yes in Q3 2009.

Cash flow from operating activities in Q3 2010 rose 14.2% year-over-year to NIS 1.17 billion, as compared to NIS 1.02 billion in Q3 2009. The year-over-year increase in operating cash flow was primarily related to working capital timing differences within the Fixed-Line segment.

Free cash flow increased 27.5% year-over-year to NIS 838 million in Q3 2010, as compared with NIS 657 million in Q3 2009, due to the aforementioned change in operating cash flow and a 9.9% decline in capital expenditures-related payments made during the quarter.

Conference Call Information

Internet Gold’s management invites its investors and other interested parties to participate in a conference call to be held today, Tuesday, November 2, at 09:00 am EDT (15:00 in Israel). During the call, the CEO and CFO of both Internet Gold and B Communications, Messrs. Eli Holtzman and Doron Turgeman, will be available to answer questions regarding both Internet Gold and B Communications.

To participate, please call one of the following access numbers several minutes before the call begins:

1-888-668-9141 from within the U.S.

1-866-485-2399 from within Canada

0-800-917-5108 from within the U.K.

+972-3-918-0609 from other international locations

The call will also be broadcast live through the Company’s website, www.igld.co.il, and will be available for replay during the next 30 days.

Notes:

A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of September 30, 2010 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of September 30, 2010 (NIS 3.6650 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B. Purchase Price Allocation (PPA): As part of B Communications’ acquisition of the controlling interest in Bezeq, the Company has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements.

C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

D.     NON-GAAP MEASUREMENTS: Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with GAAP.

Bezeq’s management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.

EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with GAAP as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About Internet Gold – Golden Lines Ltd.

Internet Gold is Israel’s leading telecommunications group. Internet Gold’s main asset is its control of Bezeq, the Israel Telecommunication Corp. (http://ir.bezeq.co.il) (TASE:BZEQ), Israel’s largest telecommunications service provider, which is based on its approximately 76% ownership of B Communications Ltd. (Nasdaq and TASE: BCOM), the holder of the controlling interest (30.37%) and Board control of Bezeq.

Internet Gold is controlled by Eurocom Communications, a leading privately-held investment group headquartered in Ramat-Gan, Israel. Internet Gold’s shares are traded on the Nasdaq Global Market (Nasdaq: IGLD) and the Tel Aviv Stock Exchange (TASE: אנזהב) where its share price is tracked as part of the TA-100 Index.

For more information, please visit the following Internet sites:
http://ir.bezeq.co.il
http://www.eurocom.co.il http://www.bcommunications.co.il

Forward-Looking Statements

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet