B Communications Reports Financial Results for the Fourth Quarter and Full Year of 2016

RAMAT GAN, Israel, March 30, 2017

"2016 was a great year for B Communications as we improved our financial position significantly. During the year, we upgraded our Israeli credit rating to AA3, provided our equity investors with an amazing 12% dividend yield, and continued to deleverage our long term debt structure. We feel very comfortable with Bezeq's 2017 guidance which was released this morning and believe that during 2017 we will be able to continue to meet our main goals, by continuing to both deleverage our debt and create value for our shareholders," said Doron Turgeman, CEO of B Communications.

Private Placement of Series C Debentures: On January 11, 2017, the Company completed a private placement of NIS 118 million par value of its Series C Debentures to Israeli institutional investors for an aggregate consideration of approximately NIS 118 million ($31 million). The private placement was carried out as an increase to the outstanding Series C Debentures, which were first issued in September 2016 and have identical terms.

Dividend from Bezeq: On October 6, 2016, Bezeq distributed NIS 665 million ($173 million) to shareholders of record as of September 20, 2016. B Communications' share of the dividend distribution was NIS 175 million ($46 million).

In accordance with Bezeq's dividend policy, its Board of Directors recommended the distribution of 100% of its profits for the second half of 2016 as a cash dividend of NIS 578 million ($150 million) to its shareholders. The dividend, which is subject to shareholder approval, is expected to be paid on May 29, 2017 to shareholders of record as of May 16, 2017. B Communications is expected to receive approximately NIS 152 million ($40 million) if the dividend distribution is approved.

Financial Liabilities and Liquidity: As of December 31, 2016, B Communications' unconsolidated liquidity balances (comprised of cash and cash equivalents, short term investments and funds deposited in a pledged account) totaled NIS 435 million ($113 million) and its financial liabilities totaled NIS 2.6 billion ($677 million), including NIS 1.9 billion ($489 million) of the Series C Debentures, NIS 693 million ($180 million) of Series B Debentures (the totals for both series include accrued interest and unamortized premiums, discounts and debt issuance costs) and a NIS 30 million ($8 million) tax liability.