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Company profile

All Things Mobile Analytic Inc., formerly Toron, Inc., is a technology company. The Company is focused on providing technology for micropayments and mobile device online gaming, telecommunications and fintech services. The Company distributes its owned and partner brands globally.

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5

Cellcom Israel announces Third Quarter 2020 Results

1:49 am ET November 23, 2020 (PR Newswire) Print

Cellcom Israel concludes the third quarter of 2020 with an increase of 3% in revenues compared to the third quarter last year. Revenues totaled NIS 956 million. However, corona virus crisis continues to adversely affect the Company's results and led to a loss of NIS 373 million and Adjusted EBITDA1 of NIS 231 million for the third quarter

THIRD QUARTER 20203 HIGHLIGHTS (compared to third quarter of 2019):

-- Total Revenues totaled NIS 956 million ($278 million) compared to NIS 928 million ($270 million) in the third quarter last year, an increase of 3.0%.

-- Service revenues totaled NIS 695 million ($202 million) compared to NIS 709 million ($206 million) in the third quarter last year, a decrease of 2.0%.

-- Equipment revenues totaled NIS 261 million ($76 million) compared to NIS 219 million ($64 million) in the third quarter last year, an increase of 19.2%.

-- Operating loss totaled NIS 6 million ($1 million) compared to Operating income of NIS 36 million ($10 million) in the third quarter last year.

-- Loss totaled NIS 37 million ($10 million) compared to NIS 2 million ($1 million) in the third quarter last year.

-- Adjusted EBITDA1 totaled NIS 2313 million ($67 million) compared to NIS 271 million ($79 million) in the third quarter last year, a decrease of 14.8%.

-- Net cash from operating activities totaled NIS 202 million ($59 million) compared to NIS 273 million ($79 million) in the third quarter last year, a decrease of 26.0%.

-- Free cash flow1 totaled NIS 44 million ($13 million) compared to NIS 53 million ($15 million) in the third quarter last year (excluding a total of approximately NIS 181 million resulting from the sale of independent fiber optic infrastructure of the company in residential areas to IBC).

1 Please see "Use of Non-IFRS financial measures" section in continued of this press release.
2 As of January 1, 2019 the Company is applying International Financial Reporting Standard IFRS 16, Leases. The effects of applying the standard in the third quarter of 2020 and the third quarter of 2019 amounted to an increase of NIS 64 million and NIS 72 million in Adjusted EBITDA respectively, an increase of NIS 65 million and NIS 71 million in Cash flows from operating activities respectively.
3 The Group's results include Golan's results from the date closing of the transaction, i.e. as of September 2020

Avi Gabbay, the Company's Chief Executive Officer, referred to the results of the third quarter of 2020:

"In the third quarter, we continued to deal with the effects of the Corona virus pandemic which continued to adversely affect the Company's results. Given the many challenges, we are working to adjust our expense structure and remain focused on providing excellent service to our customers.

We continue to grow our TV and Internet subscriber-base and continue to transfer existing customers to fiber optic. Cellcom Israel currently has approximately 80,000 active fiber customers out of approximately 500,000 households in connected buildings to the IBC's fiber infrastructure.

During the quarter, an investment agreement was signed for HOT to enter as a partner in IBC, pending regulatory approvals. The agreement will allow for a significant expansion in the scope of optical fiber deployment and at an accelerated pace. The wide deployment will transform Cellcom Israel from a company that relies on the fixed network of others to a partner in an extensive and independent infrastructure.

This quarter, we completed the acquisition of Golan Telecom Ltd. ("Golan"). The transaction strengthens Cellcom Israel's position as a leading communications company and is expected to significantly contribute to Cellcom Israel's adjusted EBITDA and free cash flow.

We received the license for 5G and we are setting up sites that will support this network alongside the expansion of our 4G network which improves the network's performance and the level of service to our customers."

Shai Amsalem, the Company's Chief Financial Officer, said:

"The current quarter includes for the first time, the consolidation of Golan's results, the acquisition of which was completed in late August and therefore the consolidation includes the results of only one month. The results of the third quarter, reflect the continued impact of the Corona virus pandemic which caused a sharp decline in roaming revenues from our customers travelling abroad and tourists arriving in Israel.

The Company's operating expenses declined by NIS 20 million year over year and reflect the effect of the efficiency measures implemented by the Company. Operating expenses compared with the previous quarter increased due to an increase in activity in the Company's service centers and points of sale.

Revenues from fixed-line services continued to grow, thanks to the recruitment of new Internet and TV customers and the transfer of existing customers to the fiber infrastructure.

Revenues from the sale of equipment in the cellular sector increased compared to the same period last year due to among other aspects an increase in online sales. At the same time, these sales carry low gross profit margin.

The Company's adjusted EBITDA in the third quarter of 2020 amounted to NIS 231 million, reflecting a decrease of 14.8% compared with the corresponding quarter last year, mainly in light of the sharp decline in the Company's revenue from roaming services.

Free cash flow for the third quarter of 2020 amounted to NIS 44 million, compared with NIS 53 million in the corresponding quarter (excluding the proceeds from the sale of our fiber network in residential neighborhoods to IBC). The decrease in free cash flow was mainly due to the continued impact of the decline in roaming revenues."

Cellcom Israel Ltd. (NYSE: CEL; TASE: CEL) ("Cellcom Israel" or the "Company" or the "Group") announced today its financial results for the third quarter of 2020.

Main Consolidated Financial Results:

                                     Q3/20203 Q3/2019 Change% Q3/2020      Q3/2019
                                     NIS million              US$ million
                                                              (convenience translation)
Total revenues                       956      928     3.0%    278          270
Operating (loss) Income              (6)      36      -       (1)          10
Loss                                 (37)     (2)     1,750%  (10)         (1)
Free cash flow                       44       234     (81.2)% 13           68
Adjusted EBITDA                      231      271     (14.8)% 67           79
Adjusted EBITDA, as percent of total 24.2%    29.2%   (17.1)%
revenues

Main Financial Data by Operating Segments:

                                     Cellular (*)                                 Fixed-line (**)                              Inter-segment adjustments     Consolidated results
                                                                                                                               (***)
NIS million                          Q3'20          Q3'19          Change         Q3'20          Q3'19          Change         Q3'20          Q3'19          Q3'20          Q3'19          Change
                                                                   %                                            %                                                                          %
Total revenues                       637            611            4.3%           365            358            2.0%           (46)           (41)           956            928            3.0%
Service revenues                     414            439            (5.7)%         327            311            5.1%           (46)           (41)           695            709            (2.0)%
Equipment revenues                   223            172            29.7%          38             47             (19.1)%        -              -              261            219            19.2%
Adjusted EBITDA                      114            185            (38.4)%        117            86             36.0%          -              -              231            271            (14.8)%
Adjusted EBITDA, as percent of total 17.9%          30.3%          (40.9)%        32.1%          24.0%          33.8%                                        24.2%          29.2%          (17.1)%
revenues
(*)          The segment includes the cellular communications services, end user cellular equipment and supplemental services.
(**)     The segment includes landline telephony services, internet services, television services, transmission services, end user fixed-line equipment and supplemental services.
(***)      Include cancellation of inter-segment revenues between "Cellular" and "Fixed-line" segments.

FINANCIAL REVIEW (THIRD QUARTER OF 2020 COMPARED TO THIRD QUARTER OF 2019):

The Group's results include Golan's results as of September 2020

Revenues for the third quarter of 2020 increased 3.0% totaling NIS 956 million ($278 million), compared to NIS 928 million ($270 million) in the third quarter last year. The increase in revenues is mainly attributed to a 19.2% increase in equipment revenues, which was partially offset by a 2.0% decrease in service revenues.

Service revenues totaled NIS 695 million ($202 million) in the third quarter of 2020, a 2.0% decrease from NIS 709 million ($206 million) in the third quarter last year.

Service revenues in the cellular segment totaled NIS 414 million ($120 million) in the third quarter of 2020, a 5.7% decrease from NIS 439 million ($128 million) in the third quarter last year. This decrease resulted mainly from decrease of the Company's roaming services activities as a result of the Corona virus crisis which was partially offset by revenues from Golan (consolidated as of September).

Service revenues in the fixed-line segment totaled NIS 327 million ($95 million) in the third quarter of 2019, a 5.1% increase from NIS 311 million ($90 million) in the third quarter last year. The increase resulted mainly from an increase in revenues from internet and TV services.

Equipment revenues totaled NIS 261 million ($76 million) in the third quarter of 2020, a 19.2% increase compared to NIS 219 million ($64 million) in the third quarter last year. The increase resulted, among other things, from an increase in the quantity of end user equipment sold online in the cellular segment.

Cost of revenues for the third quarter of 2020 totaled NIS 744 million ($216 million), a 12.9% increase compared to NIS 659 million ($192 million) in the third quarter of 2019. This increase resulted mainly from an increase in the quantity of end user equipment sold in the cellular segment, an increase in the costs of interconnect as a result of an increase in minutes and additional expenses of Golan which was consolidated into the Group's results as of September. This increase was partially offset by decrease of TV services' content costs.

Gross profit for the third quarter of 2020 decreased 21.2% to NIS 212 million ($62 million), compared to NIS 269 million ($78 million) in the third quarter of 2019. Gross profit margin for the third quarter of 2020 amounted to 22.2%, down from 29.0% in the third quarter of 2019. This is, among other things, due to increase in sales of end user equipment at a low gross profit.

Selling, Marketing, General and Administrative Expenses and Credit losses ("SG&A Expenses") for the third quarter of 2020 decreased 6.6% to NIS 227 million ($66 million), compared to NIS 243 million ($71 million) in the third quarter of 2019. This decrease resulted mainly from a decrease in salaries and advertising expenses as a result of streamlining the Company's made.

Operating loss for the third quarter of 2020 totaled NIS 6 million ($1 million), compared to operating income of NIS 36 million ($10 million) in the third quarter of 2019. The operating loss is mainly due to the adverse effect of Corona virus crisis over the Company's revenues from roaming services.

Adjusted EBITDA for the third quarter of 2020 decreased by 14.8% totaling NIS 231 million ($67 million) compared to NIS 271 million ($79 million) in the third quarter of 2019. Adjusted EBITDA as a percent of revenues for the third quarter of 2020 totaled 24.2%, down from 29.2% in the third quarter of 2019.

Cellular segment Adjusted EBITDA for the third quarter of 2020 totaled NIS 114 million ($33 million), compared to NIS 185 million ($54 million) in the third quarter last year, a decrease of 38.4%, which resulted mainly from a decrease in roaming services activities as a result of the Corona virus crisis and a decrease in the contribution of end-user equipment sales.

Fixed-line segment Adjusted EBITDA for the third quarter of 2020 totaled NIS 117 million ($34 million), compared to NIS 86 million ($25 million) in the third quarter last year, a 36.0% increase, which resulted mainly from increase in activity in internet and TV fields, as well as, due to cost savings related to the fixed-line segment as a result of transfer subscribers to fiber infrastructure and decrease of TV's content costs.

Financing expenses, net for the third quarter of 2020 totaled NIS 32 million ($9 million), compared with NIS 31 million ($9 million) in the third quarter of 2019, an increase of 3.2%.

Loss for the third quarter of 2020 totaled NIS 37 million ($10 million), compared with loss of NIS 2 million ($1 million) in the third quarter of 2019. As stated, the loss is mainly due to the adverse effect of the Corona virus crisis on the Company's revenues from roaming services.

Basic loss per share for the third quarter of 2020 totaled NIS 0.22 ($0.07), compared to basic loss per share of NIS 0.01 ($0.003) in the third quarter last year.

OPERATING REVIEW

MAIN PERFORMANCE INDICATORS - CELLULAR SEGMENT:

                                                         Q3/20203 Q3/2019 Change (%)
Cellular subscribers at the end of period (in thousands) 3,641    2,767   31.6%
Churn Rate for cellular subscribers (in %)               8.7%     11.4%   (23.7)%
Monthly cellular ARPU (in NIS)                           45.7     53.2    (14.0)%

(3) Includes Golan's indicators from September, 2020.

Cellular subscriber base of the Company at the end of the third quarter of 2020 was 3.641 million subscribers. The increase in subscriber base is due to the completion of the Golan acquisition.

Cellular Churn Rate for the third quarter of 2020 totaled 8.7%, compared to 11.4% in the third quarter last year.

The monthly cellular Average Revenue per User ("ARPU") for the third quarter of 2020 totaled 45.7 NIS ($13.3), compared to NIS 53.2 ($15.5) in the third quarter last year. The decrease in ARPU resulted mainly from decrease in demand of the Company's roaming services as a result of the Corona virus crisis and the ongoing erosion in the prices of cellular services.

MAIN PERFORMANCE INDICATORS - FIXED-LINE SEGMENT:

                                                           Q3/2020 Q3/2019 Change (%)
Internet infrastructure field subscribers                  289     278     4.0%
- (households) at the end of period (in thousands)
TV field subscribers - at the end of period (in thousands) 251     247     1.6%

In the third quarter of 2020, the Company's subscriber base in the TV field increased by approximately 6,000 net subscribers and the Company's subscriber base in the internet infrastructure field increased by approximately 6,000 net households.

FINANCING AND INVESTMENT REVIEW

Cash Flow

Free cash flow for the third quarter of 2020 totaled NIS 44 million ($13 million), compared to NIS 234 million ($68 million) in the third quarter of 2019. In the corresponding quarter, the Company received an amount of approx. NIS 181 million as a result of the sale of the Company's independent fiber optic infrastructure in residential areas to IBC. The decrease in the free cash flow from NIS 53 million ($15 million) to NIS 44 million ($13 million) is mainly due the decrease in receipts from roaming services which was offset by a decrease in capital expenditures in fixed assets and intangible assets.

Total Equity

Total Equity as of September 30, 2020 amounted to NIS 1,918 million ($558 million). During the quarter, series 4 options in an amount of NIS 75 million were exercised which mainly increased the equity.

Cash Capital Expenditures in Fixed Assets and Intangible Assets and others

During the third quarter of 2020, the Company invested NIS 108 million ($31 million) in fixed assets and intangible assets and others (including, among others, investments in the Company's communications networks, information systems, software and TV set-top boxes and capitalization of part of the customer acquisition costs as a result of the adoption of IFRS 15), compared to NIS 149 million ($43 million) in the third quarter of 2019.

Dividend

On November 22, 2020, the Company's Board of Directors decided not to declare a cash dividend for the third quarter of 2020. In making its decision, the board of directors considered the Company's dividend policy and business status and decided not to distribute a dividend at this time, given the intensified competition and its adverse effect on the Company's results of operations, and in order to strengthen the Company's balance sheet. The board of directors will re-evaluate its decision in future quarters. No future dividend declaration is guaranteed and is subject to the Company's board of directors' sole discretion, as detailed in the Company's annual report for the year ended December 31, 2019 on Form 20-F filed on March 23, 2020, or the 2019 Annual Report, under "Item 8 - Financial Information - A. Consolidated Statements and Other Financial Information - Dividend Policy".

OTHER DEVELOPMENTS DURING THE THIRD QUARTER OF 2020 AND SUBSEQUENT TO THE END OF THE REPORTING PERIOD

Golan Transaction

Following the Company's previous announcements regarding the signing of a binding memorandum of understanding for the purchase of Golan Telecom Ltd., or Golan, and approval of the transaction by the Israeli Competition Authority and the Israeli Ministry of Communications, or MOC, the Company concluded the acquisition of Golan's entire share capital, for a total sum of approximately NIS 613 million (approximately NIS 545 million plus an amount equal to the cash and deposits of Golan as of the closing date and minus transaction expenses as agreed between the parties) on August 26, 2020.

In addition, as previously reported, Golan's MNO license was replaced with an MVNO license for an interim period, following the deposit of a bank guarantee by Golan with the MOC, in the sum of approximately NIS 75 million, in respect of the demand that Golan will return certain monetary benefits previously received from the MOC, which Golan disputes.

IBC Transaction

In September 2020, the Company announced that it, together with the Israel Infrastructure Fund, or IIF, entered into an investment transaction with Hot Telecommunication Systems Ltd., (together with its affiliates "Hot") in IBC Israel Broadband (2013) Ltd., or IBC, composed of several agreements, or the Transaction. In addition to standard and customary conditions, the Transaction includes an undertaking to substantially increase the deployment of IBC's fiber-optic network over the next few years and the following:

Investment Agreements - Entered between the partnership through which the Company and IIF, hold 70% of IBC's share capital, or the IBC Partnership, and Hot. Under the Investment Agreements, Hot shall become an equal partner in the IBC Partnership, and hold indirectly 23.3% of IBC's share capital, by making an investment substantially equal to the investment made by each of the Company and IIF until the closing date of the Transaction. Further, the Investment Agreements include certain additional governance rights and dead lock mechanisms.

IRU Agreement - Entered between IBC and Hot, under which Hot undertakes to purchase an indefeasible right, to use IBC's fiber-optic network.

Services Agreement - Entered between IBC and Hot, under which IBC undertakes to purchase certain services from Hot and may purchase additional services.

IBC also undertakes to continue to purchase from the Company certain services supplied to it by the Company prior to the closing date.

The completion of the Transaction is subject to regulatory change and required approvals, including regulatory and third party approvals. The Company cannot guarantee such change will be made and approvals will be granted.

For additional details see the Company's 2019 Annual Report under "Item 4 - Information on the Company - B. Business Overview - Networks and Infrastructure - Fixed-line Segment - Investment in IBC and sale of fiber-optic infrastructure to IBC".

Update On The Corona Virus And Implications

Following previous announcements, the Company's results for the third quarter of 2020 continues to reflect the negative effects of the Corona virus pandemic on the Company's roaming services.

As previously announced, the Company expects its roaming services to continue to be adversely affected by the Corona virus pandemic, mainly due to implications on the outbound and inbound tourism in Israel, a parameter that directly affects revenues from international roaming services.

For additional details, see the Company's 2019 Annual Report under "Item 3. Risk Factors - The Corona virus may adversely affect our results of operations" and "Item 5. Operating and Financial Review and Prospects - A. Operating Results - Overview - General".

Regulation

Frequencies

Following the Company's previous announcements regarding the frequencies, including 5G frequencies, won by the Company and its partners to the shared cellular network in the 2020 frequencies tender (and the completion of the acquisition of Golan by the Company), the MOC approved the frequencies allocation between the Company and Marathon 018 Xfone, or Xfone, and in October 2020, the MOC allocated such frequencies designated for the Company to the Company and amended its cellular license accordingly.

For additional details see the Company's 2019 Annual Report under "Item 3. Key Information - D. Risk Factors - Risks Related to our Business - We operate in a heavily regulated industry, which can harm our results of operations. Regulation in Israel has materially adversely affected our results", " - We face intense competition in all aspects of our business", "We may not be able to obtain permits to construct and operate cell sites", " - We may be required to indemnify certain local planning and building committees in respect of claims against them", "- We may be adversely affected by significant technological and other changes in the cellular communications industry" and "Item 4. Information on The Company - B. Business Overview - Network and Infrastructure- Spectrum allocation", " - Government Regulations - Permits for cell site construction" and the Company report for the second quarter 2020 under "Other developments during the second quarter of 2020 and subsequent to the end of the reporting period - Regulation - Conclusion of the Frequencies Tender".

Network Deployment

In November 2020, the MOC published a hearing proposing the following: (1) require cellular operators to execute an additional stage in their universal deployment obligation for 4G networks, within 2 years from resolution on the matter (excluding Xfone, whose 2 years period shall commence only on 2022); (2) change the current regulation which allows national roaming and network sharing only between a veteran operator (i.e. the Company, Pelephone and Partner) and a "new" operator (i.e. Xfone and Hot Mobile) and allow all cellular operators to voluntarily cooperate, using national roaming or network sharing configuration (MOCN) in certain periphery areas and a limited number of sites.

The Company is studying the hearing and at this preliminary stage cannot assess the implications on its results of operations, should the proposed be approved.

For additional details see the Company's 2019 Annual Report under Item 3. Key Information - D. Risk Factors - Risks Related to our Business -"We may not be able to obtain permits to construct and operate cell sites" and "Item 4. Information on The Company - B. Business Overview - Cellular Segment - Network and Infrastructure- Permits for Cell Site Construction" and "Network sharing agreements", "Government Regulations - Cellular Segment - Network Sharing" and "Permits for cell site construction".

Cell Sites

Further to previous reports of claims made by several local planning and building authorities that the Israeli cellular operators may not receive building permits in reliance on the Israeli National Zoning Plan 36 for Communications, or the Plan, for cell sites operating in frequencies not detailed in the Plan and conflicting District Court decisions on the matter, on August 2020, the Israeli Supreme Court ruled that the Plan applies to all cell sites set in the Plan, whether or not the frequencies in which they operate are detailed in the Plan, in accordance with the opinion of the Israeli Ministry of Justice and the Israeli cellular operators position.

For additional details see the Company's 2019 Annual Report under Item 3. Key Information - D. Risk Factors - Risks Related to our Business -"We may not be able to obtain permits to construct and operate cell sites", and "Item 4. Information on The Company - B. Business Overview - Network and Infrastructure- Permits For Cell Site Construction - National Zoning Plan 36 - Site Licensing".

Network Sharing Agreement

In November 2020, the Company announced that its cellular sharing network partner, Marathon 018 Xfone Ltd., or Xfone, has not paid the monthly payment due October 31, 2020, under the sharing network agreement, or Debt. The Company issued a demand for the immediate payment of the Debt to Xfone and intends to act diligently to exercise its rights under the agreement. At this preliminary stage, the Company cannot assess the implications on the Company's results.

For additional details regarding the materiality of the network sharing agreement on the Company's results, see the Company's 2019 Annual Report under "Item 3. Risk Factors - Our network sharing agreements consideration constitute a significant portion of our revenues" and Item 4. Information on the Company - B. Business Overview - Networks and Infrastructure - Network sharing agreements".

Changes to the Board of Directors

In September 2020, the Company's board of directors appointed Mr. Eran Shenar and Ms. Diana Ingrid Elsztein-Dan as members of the Company's Board of Directors. Mr. Shenar was nominated to the board by the Company's employees, as per the February 2020 collective employment agreement.

Mr. Shenar is the founder and co-owner of Best-Medical Center as of 2019 and of the Multidisciplinary Center of Gastroenterology since 2015 and has served as a business and financial consultant since 2010. From 2009 to 2011 Mr. Shenar served as a director and chairman of the finance committee of Sinopsis Ltd. and a partner in Altos Private Equity. From 2007 to 2009 he served as CEO of Katzir holding fund and as a director in various private companies. From 2003 to 2007 he served as the manager of the Strauss-Elite merger (2003) and Strategic control manager in Strauss-Elite Group and from 1998 - 2003 he served as a manager in the financial advisory division of Somech-Chaikin, KPMG. Mr. Shenar is a Certified Public Accountant and holds an M.B.A. with major in finance, strategy and entrepreneurship and a B.A. in economics and accounting, both from the Tel-Aviv University.

Ms. Diana Ingrid Elsztain -Dan has served as an economist at Magen Eco-Energy Ltd. since 2014. From 2019 to 2020 Ms. Elsztain -Dan served as director of Discount Investment Corporation Ltd. and from 2016 to 2020, she served as director of IDB Development Corporation Ltd., Shufersal Ltd. and Shufersal Nadlan Ltd. From 2014 to 2016 she served as a cost accountant at Ginegar Plastic Products Ltd. and from 2000 to 2012 as a cost accountant at Polysack Plastic Industries Ltd. From 1996 to 2000 she served as an accounts manager at Polysack R.a.c.s Ltd and Chemada Fine Chemicals Ltd. Ms. Diana Elsztain -Dan holds an M.B.A. in Business Administration and Management from the UBA University, Argentina. Ms. Elsztain -Dan is the sister of Mr. Eduardo Elsztain, the former indirect controlling shareholder of the Company.

In September 2020, Mr. Shai Amsalem was appointed as the Company's CFO.

Mr. Amsalem has served as CFO of Golan Telecom Ltd. since 2017. From 2012 to 2016 he served as CFO of Tiv Taam Group. From 2010 to 2012 he served as CFO of Rav-Bariach (08) Industries Ltd. and from 2006 to 2009 he served as CFO of Gibor Sport Active wear Ltd. Mr. Amsalem is a Certified Public Accountant and holds an M.B.A. with major in finance and a B.A. with major in accounting, both from the College of Management.

In October 2020, Mr. Ilan Sigal was appointed as the Company's VP Business Development and as CEO of Golan Telecom (a wholly owned subsidiary of the Company) effective February 1, 2021.

Mr. Sigal has served as VP marketing of Pelephone communications Ltd., and VP marketing and business development of Yes - D.B.S Satellite Services (1998) Ltd. and Bezeq International Ltd. since January 2019 and from 2016 as VP marketing of Pelephone communications Ltd. From 2010 to 2016 he served as a marketing division manager of Bezeq, the Israeli Telecommunications Company Ltd. for the private and SOHO sectors and from 2007 to 2010 he served as its internet marketing department manager for the private sector. From 2004 to 2007 he served as a marketing department manager of Internet Gold-Golden Lines ltd. for the private sector. Mr. Sigal holds an M.B.A. from the Ono Academic College and a B.A. with major in communications and management, from the College of Management.

In November 2020, Mr. Eli Adadi was appointed as the Company's VP Retail, effective November 23, 2020.

Mr. Adadi has served as CEO of Dynamica Communications Chain Stores Ltd., our wholly owned subsidiary and as manager of our retail apparatus, since 2011. From 2009 to 2011 he served as our sales and revenues manager for the private sector. Mr. Adadi holds an M.B.A. with major in marketing and a B.A. in Business Administration, both from the Ben-Gurion University.

For additional details see the Company's 2019 Annual Report under "Item 6. Directors, Senior Management and Employees" - A. Directors and Senior Management".

Developments Regarding Controlling Shareholder

Following previous announcements regarding receivership actions taken in relation to the Company indirect controlling shareholder, Discount Investment Corporation Ltd., or DIC's shares, the court appointed receivers to DIC's shares pledged in favor of the debenture holders of IDB Development Corporation Ltd., or IDB, representing approximately 70.14% of DIC's share capital and an additional [temporary] receiver to additional pledged DIC shares representing approximately 12.12% of DIC's share capital. The receivers received offers for the purchase of the pledged DIC shares and on November 20, 2020, the court approved the sale of DIC's pledged shares to a group of investors led by Mega Or Holdings Ltd subject to further approvals as may be required by law. Pursuant to the Company's licenses such transfer of control requires the approval of the Israeli Ministry of Communications yet to be provided.

For additional details see the Company's 2019 Annual Report, under "Item 3. Key Information - D. Risk Factors - We are controlled by a single shareholder who can significantly influence matters requiring shareholders' approval", "Item 4 - Information on the Company - B. Business Overview - Government Regulations Cellular Segment" "Item 7 - Major Shareholders and Related Party Transactions - A. Major Shareholders".

Debentures, Material Loans and Financial Liabilities

In October 2020, the Company repaid in early repayment part of the loan in accordance with the loan agreement from June 2017 with Israeli bank, which provided to the Company in March 2019, in amount of approximately NIS 113 million.

For information regarding the Company's debentures and material loans, including the terms of the loan, see the Company's 2019 Annual Report under "Item 5B. Liquidity and Capital Resources - Debt Service - Public Debentures" and "-Other Credit Facilities".

Affirmation of the Company's Rating in Relation to Debentures Traded In Israel*

In August 2020, Standard & Poor's Maalot, or Maalot, affirmed the Company's rating at ilA and maintained the Company's rating outlook at "negative", in relation to the Company's debentures traded on the Tel Aviv Stock Exchange. Among its main assumptions for the rating and outlook, Maalot noted: a significant decrease in revenues from roaming services as well as a decrease in revenues from the sale of end-user equipment, as a result of the Corona virus pandemic; the completion of the acquisition of Golan, during the third quarter 2020; continued erosion in cellular segment revenues in light of the competition in the market; a decrease in the Company's revenues and EBITDA in 2020 and a certain increase in 2021, and a certain increase in the Company's revenues and EBITDA due to the acquisition of Golan.

For additional details regarding the Company's public debentures and undertakings of the Company in relation to their rating included in the Company's shelf prospectus, see the Company's 2019 Annual Report under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Debt Service -Public Debentures".

*A security rating is not a recommendation to buy, sell or hold securities, it may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

CONFERENCE CALL DETAILS

The Company will be hosting a conference call regarding its results for the third quarter of 2020 on Monday, November 23, 2020 at 9:00 am ET, 06:00 am PT, 2:00 UK time, 16:00 Israel time. On the call, management will review and discuss the results, and will be available to answer questions. To participate, please either access the live webcast on the Company's website, or call one of the following teleconferencing numbers below. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US Dial-in Number: 1 888 642 5032 Israel Dial-in Number: 03 918 0609 International Dial-in Number: +972 3 918 0609 at: 09:00 am Eastern Time; 06:00 am Pacific Time; 14:00 UK Time; 16:00 Israel Time

To access the live webcast of the conference call, please access the investor relations section of Cellcom Israel's website: www.cellcom.co.il. After the call, a replay of the call will be available under the same investor relations section.

About Cellcom Israel

Cellcom Israel Ltd., established in 1994, is a leading Israeli communications group, providing a wide range of communications services. Cellcom Israel is the largest Israeli cellular provider, providing its cellular subscribers with a broad range of services including cellular telephony, roaming services, text and multimedia messaging, advanced cellular and data services and other value-added services in the areas of mobile office, data protection etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates advanced networks enabling high speed broadband and advanced multimedia services. Cellcom Israel offers nationwide customer service including telephone customer service, retail stores, and service and sale centers. Cellcom Israel further provides OTT TV services, internet infrastructure and connectivity services and international calling services, as well as landline telephone services in Israel. Cellcom Israel's shares are traded both on the New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For additional information please visit the Company's website http://investors.cellcom.co.il.

Forward-Looking Statements

The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company's current expectations and projections about future events. There are important factors that could cause the Company's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: changes to the terms of the Company's license, new legislation or decisions by the regulator affecting the Company's operations, new competition and changes in the competitive environment, the outcome of legal proceedings to which the Company is a party, particularly class action lawsuits, the Company's ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission, including under the caption "Risk Factors" in its 2019 Annual Report.

Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company assumes no duty to update any of these forward-looking statements after the date hereof to conform its prior statements to actual results or revised expectations, except as otherwise required by law.

The Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). Unless noted specifically otherwise, the dollar denominated figures were converted to US$ using a convenience translation based on the New Israeli Shekel (NIS)/US$ exchange rate of NIS 3.441 = US$ 1 as published by the Bank of Israel for September 30, 2020.

Use of non-IFRS financial measures

Adjusted EBITDA is a non-IFRS measure and is defined as income before financing income (expenses), net; other income (expenses) that is not part of the Company's operation; income tax; depreciation and amortization, share of profit (losses) of equity accounted investees and share based payments. This is an accepted measure in the communications industry. The Company presents this measure as an additional performance measure as the Company believes that it enables us to compare operating performance between periods and companies, net of any potential differences which may result from differences in capital structure, taxes, age of fixed assets and related depreciation expenses. Adjusted EBITDA should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. Adjusted EBITDA does not take into account debt service requirements, or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company's use. In addition, Adjusted EBITDA as presented by the Company may not be comparable to similarly titled measures reported by other companies, due to differences in the way these measures are calculated. See the reconciliation of net income to Adjusted EBITDA under "Reconciliation of Non-IFRS Measures" in the press release.

Free cash flow is a non-IFRS measure and is defined as the net cash provided by operating activities (including the effect of exchange rate fluctuations on cash and cash equivalents), minus the net cash used in investing activities, excluding acquisition or selling of a subsidiary, short-term investment in tradable debentures and deposits and proceeds from sales of such debentures (including interest received in relation to such debentures) and deposits. See "Reconciliation of Non-IFRS Measures" below.

Company Contact         Investor Relations Contact
Shai Amsalem            Elad Levy
Chief Financial Officer Investor Relations Manager
investors@cellcom.co.il investors@cellcom.co.il
Tel: +972 52 998 9735   Tel: +972-52-998-4774

Financial Tables Follow

Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Financial Position (Unaudited)
                                                                                                          Convenience
                                                                                                          translation
                                                                                                          into US dollar
                                                                           September 30,   September 30,  September 30,   December 31,
                                                                           2019            2020           2020            2019
                                                                           NIS millions                   US$ millions    NIS millions
Assets
Cash and cash equivalents                                                  698             630            183             1,006
Current investments and deposits, including derivatives                    430             123            36              473
Trade receivables                                                          1,153           967            281             1,142
Current tax assets                                                         3               3              1               3
Other receivables                                                          32            * 46             13              32           *
Deferred expenses - right of use                                           34            * 58             17              37           *
Inventory                                                                  67              80             23              66
Total current assets                                                       2,417           1,907          554             2,759
Trade and other receivables                                                478           * 217            63              459          *
Deferred expenses - right of use                                           331           * 308            90              323          *
Property, plant and equipment, net                                         1,456           1,363          396             1,432
Intangible assets and others, net                                          1,301           2,161          628             1,294
Investments in equity accounted investees                                  150             138            40              150
Right-of-use assets, net and Investment property                           735             648            188             745
Total non- current assets                                                  4,451           4,835          1,405           4,403
Total assets                                                               6,868           6,742          1,959           7,162
Liabilities
Current maturities of debentures and of loans from financial institutions  509             513            149             509
Current taxation liabilities                                               8               -              -               6
Current maturities of lease liabilities                                    225             204            59              226
Trade payables and accrued expenses                                        662             653            190             687
Provisions                                                                 102             170            49              99
Other payables, including derivatives                                      272             214            62              299
Total current liabilities                                                  1,778           1,754          509             1,826
Long-term loans from financial institutions                                300             163            47              300
Debentures                                                                 2,517           2,336          679             2,511
Long-term lease liabilities                                                528             468            136             533
Provisions                                                                 22              30             9               22
Other long-term liabilities                                                3               3              1               4
Liability for employee rights upon retirement, net                         14              18             5               19
Deferred tax liabilities                                                   77              52             15              60
Total non- current liabilities                                             3,461           3,070          892             3,449
Total liabilities                                                          5,239           4,824          1,401           5,275
Equity attributable to owners of the Company
Share capital                                                              1               2              1               2
Share premium                                                              335             792            230             623
Receipts on account of share options                                       -               -              -               24
Retained earnings                                                          1,292           1,124          327             1,236
Non-controlling interests                                                  1               -              -               2
Total equity                                                               1,629           1,918          558             1,887
Total liabilities and equity                                               6,868           6,742          1,959           7,162
*Reclassified
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Income (Unaudited)
                                                                                                                                          Convenience                                   Convenience
                                                                                                                                          translation                                   translation
                                                                                                                                          into US dollar                                into US dollar
                                                                                                            For the nine                  For the nine    For the three                 For the three   For the
                                                                                                            months ended                  months ended    months ended                  months ended    year ended
                                                                                                            September 30,                 September 30,   September 30,                 September 30,   December 31,
                                                                                                            2019             2020         2020            2019             2020         2020            2019
                                                                                                            NIS millions                  US$millions     NIS millions                  US$millions     NIS millions
Revenues                                                                                                    2,776       *    2,703        786             928         *    956          278             3,708
Cost of revenues                                                                                            (2,033)     *    (2,052)      (596)           (659)       *    (744)        (216)           (2,725)
Gross profit                                                                                                743              651          190             269              212          62              983
Selling and marketing expenses                                                                              (468)            (411)        (120)           (161)            (147)        (43)            (610)
General and administrative expenses                                                                         (222)       *    (245)        (71)            (73)        *    (76)         (22)            (300)        *
Credit losses                                                                                               (23)        *    (26)         (8)             (9)         *    (4)          (1)             (29)         *
Other income (expenses), net                                                                                21          *    21           6               10          *    9            3               (20)
Operating profit (loss)                                                                                     51               (10)         (3)             36               (6)          (1)             24
Financing income                                                                                            41               6            2               13               10           3               49
Financing expenses                                                                                          (151)            (136)        (40)            (44)             (42)         (12)            (193)
Financing expenses, net                                                                                     (110)            (130)        (38)            (31)             (32)         (9)             (144)
Share in losses of equity accounted investees                                                               (4)         *    (9)          (3)             (4)         *    (2)          (1)             (10)
Profit (loss) before taxes on income                                                                        (63)             (149)        (44)            1                (40)         (11)            (130)
Tax benefit (taxes                                                                                          10               23           7               (3)              3            1               23
on income)
Loss for the period                                                                                         (53)             (126)        (37)            (2)              (37)         (10)            (107)
Attributable to:
Owners of the Company                                                                                       (52)             (126)        (37)            (1)              (37)         (10)            (107)
Non-controlling interests                                                                                   (1)              -            -               (1)              -            -               -
Loss for the period                                                                                         (53)             (126)        (37)            (2)              (37)         (10)            (107)
Loss per share
Basic loss per share (in NIS)                                                                               (0.45)           (0.83)       (0.24)          (0.01)           (0.22)       (0.07)          (0.90)
Diluted loss per share (in NIS)                                                                             (0.45)           (0.83)       (0.24)          (0.01)           (0.22)       (0.07)          (0.90)
Weighted-average number of shares used in the calculation of basic earnings (loss) per share (in shares)    116,196,729      150,284,438  150,824,438     116,196,729      162,810,134  162,810,134     118,376,455
Weighted-average number of shares used in the calculation of diluted earnings (loss) per share (in shares)  116,196,729      150,824,438  150,824,438     116,196,729      162,810,134  162,810,134     118,376,455
*Reclassified
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Cash Flows (Unaudited)
                                                                                             Convenience                       Convenience
                                                                                             translation                       translation
                                                                                             into US dollar                    into US dollar
                                                                           For the nine      For the nine    For the three     For the three   For the
                                                                           months ended      months ended    months ended      months ended    year ended
                                                                           September 30,     September 30,   September 30,     September 30,   December 31,
                                                                           2019       2020   2020            2019       2020   2020            2019
                                                                           NIS millions      US$ millions    NIS millions      US$ millions    NIS millions
Cash flows from operating activities
Loss for the period                                                        (53)       (126)  (37)            (2)        (37)   (10)            (107)
Adjustments for:
Depreciation and amortization                                              665        690    201             226        230    67              898
Share based payments                                                       5          14     4               3          6      1               8
Gain on sale of property, plant and equipment and intangible assets        (7)        -      -               (8)        -      -               (8)
Net change in fair value of investment property                            4          5      1               4          2      1               6
Gain on sale of shares in a consolidated company                           -          (1)    -               -          -      -               -
Taxes on income (Tax benefit)                                              (10)       (23)   (7)             3          (3)    (1)             (23)
Financing expenses, net                                                    110        130    38              31         32     9               144
Other expenses                                                             2     *    6      2               2     *    6      2               3
Share in losses of equity accounted investees                              4     *    9      3               4     *    2      -               10
Changes in operating assets and liabilities:
Change in inventory                                                        27         (14)   (4)             (7)        14     4               28
Change in trade receivables (including long-term amounts)                  54         109    32              3          (4)    (1)             80
Change in Deferred expenses - right of use (including long-term amounts)   14         (37)   (11)            6          (12)   (3)             20
Change in other receivables (including long-term amounts)                  8          (19)   (6)             15         (18)   (5)             (7)
Changes in trade payables, accrued expenses and provisions                 (44)       (43)   (13)            (34)       (15)   (4)             (27)
Change in other liabilities (including long-term amounts)                  28         (57)   (17)            25         (19)   (6)             23
Payments for derivative hedging contracts, net                             (8)        (1)    -               (1)        16     5               (10)
Income tax paid                                                            (14)       (4)    (1)             (7)        2      -               (12)
Income tax received                                                        10         -      -               10         -      -               10
Net cash from operating activities                                         795        638    185             273        202    59              1,036
Cash flows from investing activities
Acquisition of property, plant and equipment                               (274)      (195)  (56)            (88)       (58)   (17)            (324)
Acquisition of intangible assets and others                                (172)      (145)  (42)            (61)       (50)   (15)            (233)
Investment in equity accounted investee                                    (154) *    (3)    (1)             (154) *    -      -               (157)
Change in current investments, net                                         (9)        401    117             -          446    130             (49)
Receipts for other derivative contracts, net                               8          11     3               -          -      -               9
Proceeds from sale of property, plant and equipment and intangible assets  181        -      -               181        -      -               181
Interest received                                                          9          5      1               2          -      -               13
Acquisition of subsidiary, net of cash acquired                            -          (608)  (177)           -          (608)  (177)           -
Cash disposed from sale of shares in a consolidated company                -          (1)    -               -          3      1               -
Net cash used in investing activities                                      (411)      (535)  (155)           (120)      (267)  (78)            (560)
*Reclassified
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Cash Flows (cont'd) (Unaudited)
                                                                           Convenience                    Convenience
                                                                           translation                    translation
                                                                           into US dollar                 into US dollar
                                                            For the nine   For the nine    For the three  For the three   For the
                                                            months ended   months ended    months ended   months ended    year ended
                                                            September 30,  September 30,   September 30,  September 30,   December 31,
                                                            2019    2020   2020            2019    2020   2020            2019
                                                            NIS millions   US$ millions    NIS millions   US$millions     NIS millions
Cash flows from financing activities
Payments for derivative contracts, net                      (1)     (4)    (1)             (1)     (3)    (1)             (2)
Receipt of long-term loan from financial institutions       150     -      -               -       -      -               150
Repayment of long-term loans from financial institutions    (212)   (100)  (29)            -       -      -               (212)
Repayment of debentures                                     (504)   (417)  (121)           (196)   (194)  (56)            (504)
Repurchase of own debentures                                -       -      -               -       -      -               (10)
Proceeds from issuance of debentures, net                   -       194    56              -       -      -               -
Interest paid                                               (117) * (120)  (35)            (42)  * (43)   (13)            (151)
Equity offering                                             -       5      1               -       -      -               309
Proceeds from exercise of share options                     -       140    41              -       75     22              4
Payment of principal of lease liabilities                   (204) * (177)  (51)            (71)  * (59)   (17)            (256)
Net cash used in financing activities                       (888)   (479)  (139)           (310)   (224)  (65)            (672)
Changes in cash and cash equivalents                        (504)   (376)  (109)           (157)   (289)  (84)            (196)
Cash and cash equivalents as at the beginning of the period 1,202   1,006  292             855     919    267             1,202
Cash and cash equivalents as at the end of the period       698     630    183             698     630    183             1,006
*Reclassified
Cellcom Israel Ltd
(An Israeli Corporation)
Reconciliation for Non-IFRS Measures
Adjusted EBITDA
The following is a reconciliation of loss to Adjusted EBITDA:
                                  Three-month period ended                 Year ended
                                  September 30,                            December 31,
                                  2019         2020         Convenience    2019
                                                            translation
                                                            into US dollar
                                                            2020
                                  NIS millions              US$ millions   NIS millions
Loss for the period               (2)          (37)         (10)           (107)
Taxes on income (tax benefit)     3            (3)          (1)            (23)
Financing income                  (13)         (10)         (3)            (49)
Financing expenses                44           42           12             193
Other income                      6            1            -              10
Depreciation and amortization     226          230          67             898
Share of loss of equity accounted 4            2            1              10
investees (net of income tax)
Share based payments              3            6            1              8
Adjusted EBITDA                   271          231          67             940
Free cash flow
The following table shows the calculation of free cash flow:
                                        Three-month period ended                                          Year ended
                                        September 30,                                                     December 31,
                                        2019                  2020                  Convenience           2019
                                                                                    translation
                                                                                    into US dollar
                                                                                    2020
                                        NIS millions                                US$ millions          NIS millions
Cash flows from operating activities(*) 202                   137                   40                    756
Cash flows from investing activities    (120)                 (267)                 (77)                  (560)
Purchase (sale) of short-term tradable  (2)                   (446)                 (130)                 38
debentures and deposits (**)
Acquisition (sale) of shares in a       154                   620                   180                   157
consolidated company or in equity
accounted investees
Free cash flow                          234                   44                    13                    391
(*)   Including the effects of exchange rate fluctuations in cash and cash equivalents and lease payments.
(**) Net of interest received in relation to tradable debentures.
Cellcom Israel Ltd.
(An Israeli Corporation)
Key financial and operating indicators
NIS millions unless otherwise stated                 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 FY-2019
Cellular service revenues                            404     420     439     416     396     385     414     1,679
Fixed-line service revenues                          317     312     311     318     327     339     327     1,258
Cellular equipment revenues                          158     162     172     169     156     147     223     661
Fixed-line equipment revenues                        92      63      47      69      54      25      38      271
Consolidation adjustments                            (43)    (37)    (41)    (40)    (41)    (41)    (46)    (161)
Total revenues                                       928     920     928     932     892     855     956     3,708
Cellular adjusted EBITDA                             146     163     185     133     131     125     114     627
Fixed-line adjusted EBITDA                           78      70      86      79      113     97      117     313
Total adjusted EBITDA                                224     233     271     212     244     222     231     940
Operating profit (loss)                              9       6       36      (27)    18      (22)    (6)     24
Financing expenses, net                              27      52      31      34      64      34      32      144
Loss for the period                                  (16)    (35)    (2)     (54)    (43)    (46)    (37)    (107)
Free cash flow                                       46      55      234     56      57      24      44      391
Cellular subscribers at the end of period (in 000's) 2,853   2,745   2,767   2,744   2,747   2,734   3,641   2,744
Monthly cellular ARPU (in NIS)                       47.2    51.9    53.2    50.5    48.1    46.9    45.7    50.7
Churn rate for cellular subscribers (%)              11.0%   11.3%   11.4%   11.3%   8.8%    8.7%    8.7%    48.8%

Cellcom Israel Ltd.

Disclosure for debenture holders as of September 30, 2020

Aggregation of the information regarding the debenture series issued by the Company (1), in million NIS

Series        Original Issuance Date Principal on the Date of Issuance As of 30.09.2020                                                                                                            As of 23.11.2020                                    Interest Rate (fixed) Principal Repayment Dates Interest Repayment Dates (3) Linkage       Trustee
                                                                                                                                                                                                                                                                                                                                                  Contact Details
                                                                       Principal        Linked Principal Balance Interest Accumulated in Books Debenture Balance   Value in Books (2) Market Value Principal Balance on Trade Linked Principal Balance                       From         To
                                                                       Balance on Trade
H (4)(5)(6)** 08/07/14               949.624                           608.299          575.783                  2.871                         578.654                                605.328      608.299                    579.259                  1.98%                 05.07.18     05.07.24     January-5 and July-5         Linked to CPI Mishmeret Trust Company Ltd. Rami
              03/02/15*                                                                                                                                                                                                                                                                                                                           Sebty. 48 Menachem Begin Rd. Tel
              11/02/15*                                                                                                                                                                                                                                                                                                                           Aviv. Tel: 03-6374355.
I (4)(5)(6)** 08/07/14               804.010                           562.807          549.009                  5.554                         554.563                                588.640      562.807                    549.808                  4.14%                 05.07.18     05.07.25     January-5 and July-5         Not linked    Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
              03/02/15*
              11/02/15*
              28/03/16*
J (4)(5)      25/09/16               103.267                           104.192          103.661                  0.608                         104.269                                104.599      104.192                    103.893                  2.45%                 05.07.21     05.07.26     January-5 and July-5         Linked to CPI Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
K (4)(5)**    25/09/16               710.634                           710.634          706.624                  6.013                         712.637                                715.040      710.634                    706.817                  3.55%                 05.07.21     05.07.26     January-5 and July-5         Not linked    Mishmeret Trust Company Ltd. Rami
              01/07/18*                                                                                                                                                                                                                                                                                                                           Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
              10/12/18*
L (4)(5)(7)** 24/01/18               835.937                           824.979          775.989                  15.2                          791.189                                781.255      824.979                    777.514                  2.50%                 05.01.23     05.01.28     January-5                    Not linked    Strauss Lazar Trust Company (1992) Ltd. Ori Lazar. 17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777.
              10/12/18*
              12/05/20*
Total                                3,403.472                         2,810.911        2,711.066                30.246                        2,741.312                              2,794.862    2,810.911                  2,717.291

Comments:

(1) For a summary of the terms of the Company's outstanding debentures see the Company's 2019 Annual Report under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Debt Service - Public Debentures". In the reporting period, the Company fulfilled all terms of the debentures and Indentures. Debentures financial covenants - as of September 30, 2020 the net leverage *** was 2.65. In the reporting period, no cause for early repayment occurred. (2) Including interest accumulated in the books. (3) Semi annual payments other than regarding Series L. (4) Regarding the debentures, the Company undertook not to create any pledge on its assets, as long as debentures or loans are not fully repaid, subject to certain exclusions. (5) Regarding the debentures - the Company has the right for early redemption under certain terms. (6) In February 2015, pursuant to an exchange offer of the Company's Series H and I debentures for a portion of the Company's outstanding Series D and E debentures, respectively, the Company exchanged approximately NIS 555 million principal amount of Series D debentures with approximately NIS 844 million principal amount of Series H debentures, and approximately NIS 272 million principal amount of Series E debentures with approximately NIS 335 million principal amount of Series I debentures. Series D and E debentures were fully repaid in July 2017 and in January 2017, respectively. (7) In December 2019, the Company repurchased Series L Debentures for approximately NIS 10 million.

(*) On these dates additional debentures of the series were issued, the information in the table refers to the full series. (**) As of September 30, 2020, debentures Series H, I, K and L are material, which represent 5% or more of the total liabilities of the Company, as presented in the financial statements. (***) Net Leverage - the ratio of Net Debt to Adjusted EBITDA, excluding one-time influences. Net Debt defined as credit and loans from banks and others, debentures and interest payable, net of cash and cash equivalents and current investments in tradable securities. The definition of net leverage refers to Adjusted EBITDA for a period of 12 consecutive months. Accordingly, the net leverage ratio above includes the effects of the new standard IFRS 16 (applied by the Company as of January 1, 2019) on the Adjusted EBITDA for the year ended on September 30, 2020. For details of the effects of IFRS 16 on the Company's results see footnote 2 on page 1 of this press release and note 2 F to the Company's financial statement for the period ended on December 31, 2019.

Cellcom Israel Ltd.

Disclosure for debenture holders as of September 30, 2020 (cont`d)

Debentures Rating Details*

Series                                                                                                                                  Rating     Rating as of   Rating as of 23.11.2020 Rating assigned upon   Recent date of rating as Additional ratings between original issuance and the recent date of rating
                                                                                                                                        Company    30.09.2020 (1)                         issuance of the Series of 23.11.2020            as of 23.11.2020 (2)
                                                                                                                                                                                                                                                                                                                                                                                  Rating
H                                                                                                                                       S&P        A              A                       A+                     08/2020                  06/2014, 08/2014, 01/2015, 09/2015, 03/2016,                                                                                            A+,A(2)
                                                                                                                                        Maalot                                                                                            08/2016, 06/2017, 01/2018, 06/2018, 08/2018,
                                                                                                                                                                                                                                          12/2018, 03/2019, 08/2019, 05/2020, 08/2020
I                                                                                                                                       S&P Maalot A              A                       A+                     08/2020                  06/2014, 08/2014, 01/2015, 09/2015, 03/2016, 08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019, 05/2020, 08/2020   A+,A(2)
J                                                                                                                                       S&P Maalot A              A                       A+                     08/2020                  08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019, 05/2020, 08/2020                                                A+,A(2)
K                                                                                                                                       S&P Maalot A              A                       A+                     08/2020                  08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019, 05/2020, 08/2020                                                A+,A(2)
L                                                                                                                                       S&P Maalot A              A                       A+                     08/2020                  01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019, 05/2020, 08/2020                                                                  A+,A(2)
(1)       In August 2019, S&P Maalot updated the Company's rating outlook from an ""ilA+/negative" to an "ilA/negative".
(2)       In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an "ilAA-/negative". In November 2012, S&P Maalot affirmed the Company's rating of "ilAA/negative". In June 2013, S&P Maalot updated the Company's rating from an "ilAA-/negative" to an "ilA+/stable". In June 2014, August 2014, January 2015, September 2015, March 2016, August 2016, June 2017, January 2018, June 2018, August 2018 and December 2018 S&P Maalot affirmed the Company's rating of "ilA+/stable". In March 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/stable" to an "ilA+/negative". In August 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/negative" to an "ilA/negative". In May 2020, S&P Maalot affirmed the Company's rating of "ilA/negative".  In August 2020, S&P Maalot affirmed the Company's rating of "ilA/negative". For details regarding the rating of the debentures see the S&P Maalot report dated August 17, 2020, included in the Company's current report filled in the Israeli Securities Authority website ("MAGNA") on August 17, 2020.
* A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating.

Cellcom Israel Ltd.

Aggregation of the information regarding the Company's Material Loans (1), in million NIS

Loan                                           Provision Date Principal Amount Interest Rate Principal Repayment Dates Interest                                                               Linkage
                                                              as of 30.09.2020 (nominal)     (annual payments)         Repayment Dates
                                                                                                                       (semi-annual
                                                                                                                       payments)
                                                                                             From         To
Loan from financial institution                06/2016        50               4.60%         30.06.18     30.06.21     June-30                                                                Not linked
(2)(3)(4)(5)(6)                                                                                                        and December-
                                                                                                                       31, commencing
                                                                                                                       December 31,
                                                                                                                       2016 through
                                                                                                                       June 30, 2021
Loan from financial institution(2)(3)(4)(5)(6) 06/2017        100              5.10%         30.06.19     30.06.22     June-30                                                                Not linked
                                                                                                                       and December-31, commencing December 31, 2017 through June 30, 2022
Loan from bank(2)(3)(4)(5)(6)(7)               03/2019        150              4.00%         31.03.21     31.03.24     March-31                                                               Not linked
                                                                                                                       and September-30, commencing September 30, 2019 through March 31, 2024
Total                                                         300

Comments:

(1) For a summary of the terms of the Company's loan agreements see the Company's 2019 Annual Report under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Other Credit Facilities" and the reference therein to "- Debt Service - Public Debentures". (2) In the reporting period, the Company fulfilled all terms of the loan agreements. (3) Loan agreements financial covenants - as of September 30, 2020 the net leverage* was 2.65. (4) In the reporting period, no cause for early repayment occurred. (5) In the loan agreements, the Company undertook not to create any pledge on its assets, as long as the loans are not fully repaid, subject to certain exclusions. (6) According to the loan agreements the Company may prepay the loans, subject to a prepayment fee. (7) In October 2020, the Company repaid part of the loan in early repayment, in amount of approximately NIS 113 million.

(*) Net Leverage - the ratio of Net Debt to Adjusted EBITDA, excluding one-time influences. Net Debt defined as credit and loans from banks and others, debentures and interest payable, net of cash and cash equivalents and current investments in tradable securities. The definition of net leverage refers to Adjusted EBITDA for a period of 12 consecutive months. Accordingly, the net leverage ratio above includes the effects of the new standard IFRS 16 (applied by the Company as of January 1, 2019) on the Adjusted EBITDA for the year ended on September 30, 2020. For details of the effects of IFRS 16 on the Company's results see footnote 2 on page 1 of this press release and note 2 F to the Company's financial statement for the period ended on December 31, 2019.

Cellcom Israel Ltd.

Summary of Financial Undertakings (according to repayment dates) as of September 30, 2020

a. Debentures issued to the public by the Company and held by the public, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).

                  Principal payments                            Gross interest
                                                                payments
                                                                (without
                                                                deduction of
                                                                tax)
                  ILS linked to ILS not       Euro Dollar Other
                  CPI           linked to CPI
First year        167,516       218,787       -    -      -     83,358
Second year       167,516       218,787       -    -      -     71,538
Third year        167,516       340,880       -    -      -     59,717
Fourth year       167,516       340,880       -    -      -     44,844
Fifth year and on 41,234        965,634       -    -      -     58,907
Total             711,298       2,084,968     -    -      -     318,364

b. Private debentures and other non-bank credit, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).

                  Principal payments                            Gross interest
                                                                payments
                                                                (without
                                                                deduction of
                                                                tax)
                  ILS linked to ILS not       Euro Dollar Other
                  CPI           linked to CPI
First year        -             100,000       -    -      -     7,390
Second year       -             50,000        -    -      -     2,550
Third year        -             -             -    -      -     -
Fourth year       -             -             -    -      -     -
Fifth year and on -             -             -    -      -     -
Total             -             150,000       -    -      -     9,940

c. Credit from banks in Israel based on the Company's "Solo" financial data (in thousand NIS) - None.

                  Principal payments                            Gross interest
                                                                payments
                                                                (without
                                                                deduction of
                                                                tax)
                  ILS linked to ILS not       Euro Dollar Other
                  CPI           linked to CPI
First year        -             37,500        -    -      -     5,248
Second year       -             37,500        -    -      -     3,748
Third year        -             37,500        -    -      -     2,248
Fourth year       -             37,500        -    -      -     750
Fifth year and on -             -             -    -      -     -
Total             -             150,000       -    -      -     11,994

Cellcom Israel Ltd. Summary of Financial Undertakings (according to repayment dates) as of September 30, 2020 (cont`d)

d. Credit from banks abroad based on the Company's "Solo" financial data (in thousand NIS) - None.

e. Total of sections a - d above, total credit from banks, non-bank credit and debentures based on the Company's "Solo" financial data (in thousand NIS).

                  Principal payments                            Gross interest
                                                                payments
                                                                (without
                                                                deduction of
                                                                tax)
                  ILS linked to ILS not       Euro Dollar Other
                  CPI           linked to CPI
First year        167,516       356,287       -    -      -     95,996
Second year       167,516       306,287       -    -      -     77,836
Third year        167,516       378,380       -    -      -     61,965
Fourth year       167,516       378,380       -    -      -     45,594
Fifth year and on 41,234        965,634       -    -      -     58,907
Total             711,298       2,384,968     -    -      -     340,298

f. Out of the balance sheet Credit exposure based on the Company's "Solo" financial data - None.

g. Out of the balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above (in thousand NIS) - None.

h. Total balances of the credit from banks, non-bank credit and debentures of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above (in thousand NIS) - None.

i. Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of debentures offered by the Company held by the parent company or the controlling shareholder (in thousand NIS) - None.

j. Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of debentures offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company (in thousand NIS).

                  Principal payments                     Gross interest
                                                         payments
                                                         (without
                                                         deduction of tax)
                  ILS linked ILS not   Euro Dollar Other
                  to CPI     linked to
                             CPI
First year        188        370       -    -      -     391
Second year       188        370       -    -      -     373
Third year        188        2,023     -    -      -     356
Fourth year       188        2,023     -    -      -     297
Fifth year and on 442        8,666     -    -      -     576
Total             1,194      13,452    -    -      -     1,993

k. Total balances of credit granted to the Company by consolidated companies and balances of debentures offered by the Company held by the consolidated companies (in thousand NIS) - None.

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