NOS SGPS

Investor Presentation • Nov 10, 2023

9M23 Highlights

Table 1.
9M23 Highlights	9M22	9M23	9M23 / 9M22
Operating Highlights ('000)
Convergent + Integrated Customers	1,071.2	1,126.2	5.1%
Fixed Convergent + Integrated Customers as % of Fixed Access Customers	66.5%	69.0%	2.4pp
Broadband RGUs	1,501.5	1,534.5	2.2%
Fixed Pay TV RGUs	1,424.1	1,455.3	2.2%
Post-Paid mobile RGUs	3,432.5	3,740.0	9.0%
Residential ARPU / Unique Subscriber With Fixed Access (Euros)	47.8	50.1	4.7%
Homes Passed	5,216.6	5,369.4	2.9%
% FttH	59.0%	70.4%	11.4pp
Financial Highlights (Millions of Euros)
Consolidated Revenues	1,123.5	1,183.1	5.3%
Consolidated EBITDA	500.1	553.0	10.6%
Consolidated EBITDA Margin	44.5%	46.7%	2.2pp
Consolidated EBITDA AL	428.0	468.7	9.5%
Consolidated EBITDA AL Margin	38.1%	39.6%	1.5pp
Consolidated EBITDA AL - Consolidated CAPEX Excluding Leasings & Other Contractual Rights	63.7	175.9	175.9%
Telco Revenues	1,089.0	1,131.6	3.9%
Telco EBITDA	468.2	516.3	10.3%
Telco EBITDA Margin	43.0%	45.6%	2.6pp
Telco EBITDA AL	404.1	439.5	8.8%
Telco EBITDA Margin AL	37.1%	38.8%	1.7pp
Telco EBITDA AL - Telco CAPEX Excluding Leasings & Other Contractual Rights	56.7	160.8	183.3%

Strategic objective to lead unequivocally in 5G, aligned with our focus on best-in-class customer solutions keep driving sustained commercial momentum and customer satisfaction across our Telco business. Cinema ticket sales reached a new all-time high in 3Q23, beating the previous quarterly record of 3Q19, evidence that cinema going remains popular as long as there are popular movies on show in theatres.

• NOS' technological leadership in mobile has been repeatedly validated by independent agencies. For the third time running, Ookla© recognized NOS' 5G network as the fastest in Portugal and OPEN Signal signalled NOS as the best overall mobile network, ranking first or joint first in 13 out of the 14 criteria assessed, amongst which download and upload Speed Experience, coverage and consistency.
• Continued focus on technological superiority, through both next generation network deployment, ongoing investment to upgrade customers to best-in-class customer premise equipment and relentless focus on customer experience, are all contributing to drive material improvement in customer satisfaction and NPS.

• During 9M23 total RGUs grew by 202.5 thousand to 10.985 million, up by 3.0% yoy. This positive momentum was reflected across all businesses with 161.7 thousand mobile net adds, 5.4 thousand in PayTV, 11.2 thousand in fixed voice and 23.1 thousand in broadband.
• The convergent value proposition remains the first choice among customers, with an additional 37.1 thousand customers choosing convergent and integrated bundles in 9M23, accounting for 69.0% of NOS´ residential customer base at the end of the quarter, +2.4pp versus 9M22.
• Post-paid mobile subscriptions continued to leverage strong operational performance, with 187.8 thousand net adds in 9M23 to 3,809,4 thousands, representing 65% of total mobile RGUs.
• Cinema operations are progressively recovering to pre-pandemic levels, with ticket sales rising 45.2% yoy to 6,345.9 thousand, only 7.5% down vs 9M19 and in fact posting an all-time record in 3Q23 with the simultaneous exhibition of two major box-office hits – Barbie and Oppenheimer. Cinema demand is clearly healthy as long as the blockbuster line-up is strong.

Robust operational performance remains the catalyst for positive financial results, reaching double digit growth in both EBITDA and FCF.

• Consolidated revenues grew by 5.3% yoy, reaching 1,183.1 million euros in 9M23, driving 10.6% growth in EBITDA, to 553.0 million euros. Adjusted EBITDA AL rose by 9.5% to 468.7 million euros driven by positive operational performance and reflecting continued cost efficiency and improvements achieved with our ongoing transformation program, compensating inflationary pressures across different areas.
• Telco Revenues increased by 3.9% to 1,131.6 million euros impacted by the high volume of resale revenues booked in 9M22. Adjusting for low margin resale revenues, Telco Revenues would have grown by 5.1%. Telco EBITDA experienced yoy growth of 10.3% to 516.3 million euros. Telco EBITDA AL increased by 8.8% yoy, reaching 439.5 million euros.
• Audiovisual and Cinema Revenues posted substantial growth of 23.5%, reaching 77.2 million euros and EBITDA AL increased by 22.5% to 29.2 million euros.
• Total CAPEX, excluding leasing contracts and other contractual rights continues its declining trajectory, down by 19.6% yoy to 292.8 million euros in 9M23, as 5G deployment is already close to conclusion with more than 91% population coverage by the end of September.
• Total Free Cash Flow Before Dividends, Financial Investments, and Own Shares Acquisition amounted to 93.8 million euros in 9M23, improving 84.3 million euros when excluding the net impact of the tower transaction recorded last year, benefiting from EBITDA AL performance and decreased investment requirements.

ESG highlights

• NOS launched the international sustainability label "ECO rating" in stores, which enables customers and operators to compare equipment and make more informed choices, encourages suppliers to develop more sustainable products, and mobilizes all agents to increase transparency and reduce the sector's environmental footprint. The Eco Rating system evaluates the environmental impact of the entire process of production, transportation, use and disposal of mobile phones. As a member of the Eco Rating consortium, NOS believes that this evaluation system will improve transparency and help raise awareness of the environmental impact of the mobile phones.
• Together with 11 leading global operators and GSMA, the international organization of mobile operators, NOS signed up to ambitious new targets to reduce e-waste and boost circularity of the mobile industry. Operators are committing to two strategic targets: by 2030, the number of used mobile devices collected through operator takeback schemes amounts to at least 20% of the number of new mobile devices distributed directly to customers; also by 2030, 100% of used mobile devices collected through operator take-back schemes will be repaired, reused or transferred to controlled recycling organisations. These commitments are aligned with NOS' sustainability strategy and its goal to consistently increase the level of circularity of the business between 2022 and 2025.
• NOS secured 350 millions in sustainable financing lines (January 2023), through bank loans, structured as bond issues and commercial paper programmes with maturity in 2028. These bank loans are supported by NOS' Sustainability-Linked Financing Framework and are linked to the Sustainability Performance Targets of the Group's Greenhouse gas (GHG) emission (Scope 1 and 2), establishing a reduction of at least 80% by 2025, compared to 2019. With these transactions, NOS continues to strengthen the link between its financing costs and sustainability performance, highlighting and demonstrating its strategic relevance and commitment, at every organizational level, to achieve best-in-class targets in ESG (Environmental, Social and Corporate Governance) indicators, namely through new sustainable financing lines.

• NOS achieved a score of 59/100 in the 2023 S&P Global Corporate Sustainability Assessment (CSA), improving 7pp yoy. With a score of 71/100 in the environmental dimension, 57/100 in the social dimension, and 54/100 in the governance & economic dimension NOS was able to improved the classification in all dimensions. This places NOS above the industry average across all dimensions and globally. The CSA conducts an annual evaluation of practices for companies worldwide, focusing on sector-specific sustainability criteria with financial materiality.

Operating and Financial Review

The Consolidated Financial Statements of the 9M23 were subject to a limited review.

Table 2.
Profit and Loss Statement (Millions of Euros)	9M22	9M23	9M23 / 9M22
Operating Revenues	1,123.5	1,183.1	5.3%
Telco	1,089.0	1,131.6	3.9%
Consumer Revenues	764.3	814.5	6.6%
Business Revenues	253.8	243.3	(4.1%)
Wholesale and Others	70.9	73.8	4.0%
Audiovisuals & Cinema	62.5	77.2	23.5%
Others and Eliminations	(28.0)	(25.7)	(8.5%)
Operating Costs Excluding D&A	(623.4)	(630.1)	1.1%
Telco	(620.8)	(615.3)	(0.9%)
Audiovisuals & Cinema	(30.6)	(40.4)	32.2%
Others and Eliminations	28.0	25.7	(8.5%)
EBITDA (1)	500.1	553.0	10.6%
EBITDA Margin	44.5%	46.7%	2.2pp
Telco	468.2	516.3	10.3%
EBITDA Margin	43.0%	45.6%	2.6pp
Cinema Exhibition and Audiovisuals	31.9	36.7	15.1%
EBITDA Margin	51.1%	47.6%	(3.5pp)
Depreciation and Amortization	345.6	359.9	4.1%
(Other Expenses) / Income	76.4	(1.1)	(101.4%)
Operating Profit (EBIT) (2)	230.9	192.1	(16.8%)
Share of profits (losses) of associates and joint ventures	(17.0)	(4.6)	(72.6%)
(Financial Expenses) / Income	(25.8)	(48.5)	88.0%
Leases Financial Expenses	(18.7)	(23.0)	23.4%
Funding & Other Financial Expenses	(7.1)	(25.5)	257.6%
Income Before Income Taxes	222.2	148.3	(33.3%)
Income Taxes	(31.0)	(21.8)	(29.5%)
Net Income Before Associates & Non-Controlling Interests	174.2	121.8	(30.1%)
Net income	191.2	126.4	(33.9%)
Net income attributable to Non-controlling interests	(0.1)	0.1	185.6%
Net Income attributable to NOS shareholders	191.3	126.3	(34.0%)
Net Income attributable to NOS shareholders excluding gain from tower sale	128.4	126.3	(1.6%)

(1) EBITDA = Operating Profit + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains

(2) EBIT = Income Before Financials and Income Taxes.

Table 3.
EBITDA AL (Millions of Euros)	9M22	9M23	9M23 / 9M22
Leasings	(72.1)	(84.3)	16.9%
Telco	(64.1)	(76.8)	19.9%
Cinema Exhibition and Audiovisuals	(8.1)	(7.5)	(6.8%)
Operating costs Excluding D&A AL	(695.5)	(714.4)	2.7%
Telco	(684.9)	(692.1)	1.1%
Audiovisuals & Cinema	(38.7)	(48.0)	24.1%
Others and Eliminations	28.0	25.7	(8.5%)
EBITDA AL	428.0	468.7	9.5%
EBITDA AL margin	38.1%	39.6%	1.5pp
Telco	404.1	439.5	8.8%
EBITDA AL margin	37.1%	38.8%	1.7pp
Audiovisuals & Cinema	23.9	29.2	22.5%
EBITDA AL margin	38.2%	37.9%	(0.3pp)

Revenues

Consolidated revenues increased by 5.3% yoy to 1,183.1 million euros in 9M23, with operational performance in Telco driving positive financials. Telco revenues were 3.9% higher yoy, reaching 1,131.6 million euros, however adjusting for low margin resale revenues, Telco revenues would have grown by 5.1% and Consolidated revenues by 6.5%. Consumer revenues increased by 6.6% driven by very positive RGU performance, mainly by core value services as fixed bundled offers, supporting healthy ARPU growth. B2B revenues, adjusted for the impact of low margin B2B resale revenues increased by 0.6%. Wholesale and other revenues increased by 4.0% yoy, supported by the ongoing recovery in roaming revenues.

Audiovisual & Cinema revenues posted a 23.5% yoy increase to 77.2 million euros driven particularly by the "Barbenheimer" phenomenon, with the cinema unit hitting an all time record for quarterly ticket sales in 3Q23 which grew 57.4% yoy. Cinemas revenues increased 64.5% yoy driven by strong tick sales, up 45.2% yoy to 6.346 million, with blockbusters such as Barbie, Oppenheimer, Fast X, Avatar or Mission Impossible representing 28.2% of acummulated ticket sales. Tickets sold during 9M23 were just 7.5% below 9M19, with 2019 being the best year on record to date and the last "normal" year before the pandemic. The Audiovisuals division distributed 4 out of the top 10 movies in 3Q23.

Table 4.
Operating Indicators ('000)	9M22	9M23	9M23 / 9M22
Cinema
Revenue per Ticket (Euros)	5.6	5.9	5.1%
Tickets Sold - NOS	4,370.2	6,345.9	45.2%
Tickets Sold - Total Portuguese Market (1)	6,757.2	9,588.8	41.9%
Screens (units) (1) Source: ICA - Portuguese Institute For Cinema and Audiovisuals	214	214	0.0%

OPEX, EBITDA, EBITDA AL and Net Results

Consolidated EBITDA maintained a positive trend in 9M23, increasing by 10.6% to 553.4 million euros and Consolidated EBITDA AL increased by 9.5% to 468.7 million euros. Telco EBITDA AL posted a yoy increase of 8.8% to 439.5 million euros, while Audiovisual and Cinema EBITDA AL increased by 22.5% to 29.2 million euros.

Consolidated OPEX after leases increased 2.7% yoy to 714.4 million euros and Telco OPEX increased by 1.1% as cost efficiencies helped to mitigate inflationary pressure across different areas. Audiovisuals & Cinema OPEX recorded a substantial increase of 24.1% due to the strong commercial activity, which drove higher royalty costs.

In the current macroeconomic and inflationary environment, our focus is to optimize our cost structure and processes through transformation programmes to help mitigate the pressures felt across crucial areas. External services such as maintenance and repairs or support services continue to be negatively impacted by inflation. Leasing costs increased by 15.1% as a reflection of the additional tower sale executed in 2022, with inflationary adjustments on lease contracts with Cellnex capped at 2%. With a positive impact, we recorded a very significant decline in COGS due to the lower sales in the period of low margin software and IT resale revenues in comparison with 9M22.

Consolidated Net Results, excluding the gain from the tower sale, amounted to 126.3 million euros in 9M23, remaining flat yoy with a decrease of 1.6%. Consolidated Net results were positively impacted by the strong EBITDA AL performance. Including the capital gain recorded last year from the sale of a portfolio of towers to Cellnex, net income decreased by 33.9%. Net financial costs increased by 22.7 million euros to 48.5 million euros in 9M23, reflecting the challenging interest rate environment and the impact of new refinancing lines. Income taxes were lower in 3Q23 reflecting the lower EBT.

CAPEX

Total CAPEX, excluding leasing contracts and other contractual rights decreased by 19.6% yoy to 292.8 million euros. Due to our accelerated 5G deployment, 91% population coverage already at the end of 9M23, we are recording a significant decline in expansionary telco CAPEX. Overall Telco Technical CAPEX amounted to 171.6 million euros, of which 65.1 milliom euros related to network expansion, substitution, and integration projects, down more than 45% yoy. During the period, customer-related CAPEX amounted to 107.1 million euros, a decrease of 2.0% yoy, reflecting commercial strength and maintenance of historically low levels of churn.

Table 5.
CAPEX (Millions of Euros) (1)	9M22	9M23	9M23 / 9M22
Total CAPEX Excluding Leasing Contracts & Other Contractual Rights	364.2	292.8	(19.6%)
Telco	347.4	278.7	(19.8%)
% of Telco Revenues	31.9%	24.6%	(7.3pp)
o.w. Technical CAPEX	238.1	171.6	(27.9%)
% of Telco Revenues	21.9%	15.2%	(6.7pp)
Baseline Telco	118.7	106.5	(10.3%)
Network Expansion / Substitution and Integration Projects and Others	119.4	65.1	(45.4%)
o.w. Customer Related CAPEX	109.3	107.1	(2.0%)
% of Telco Revenues	10.0%	9.5%	(0.6pp)
Audiovisuals and Cinema Exhibition	16.9	14.1	(16.3%)
Leasing Contracts & Other Contractual Rights	49.4	66.1	33.8%
Total Group CAPEX	413.6	358.9	(13.2%)

(1) CAPEX = Increase in tangible and intangible fixed assets, contract costs and rights of use

Cash Flow

Table 6.
Cash Flow (Millions of Euros)	9M22	9M23	9M23 / 9M22
EBITDA AL	428.0	468.7	9.5%
Total CAPEX Excluding Leasings & Other Contractual Rights	(364.2)	(292.8)	(19.6%)
EBITDA AL - Total CAPEX Excluding Leasings & Other Contractual Rights	63.7	175.9	175.9%
% of Revenues	5.7%	14.9%	9.2pp
Non-Cash Items Included in EBITDA AL - CAPEX and Change in Working Capital	2.4	(6.7)	(379.2%)
Operating Cash Flow	66.2	169.1	155.6%
Interest Paid	(8.7)	(20.7)	137.2%
Income Taxes Paid	(19.3)	(42.3)	119.1%
Disposals	121.8	0.7	(99.4%)
Other Cash Movements (1)	23.6	(13.0)	(155.1%)
Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition	183.5	93.8	(48.9%)
Financial Investments	(1.9)	(0.6)	(66.3%)
Acquisition of Own Shares	(7.1)	(5.2)	(27.0%)
Dividends	(142.3)	(220.0)	54.5%
Free Cash Flow	32.2	(132.0)	(509.6%)
Debt Variation Through Financial Leasing, Accruals & Deferrals & Others	(0.1)	(5.2)	10109.3%
Change in Net Financial Debt	32.2	(137.2)	(526.6%)

(1) Includes Cash Restructuring Payments and Other Cash Movements.

In 9M23, EBITDA AL minus total CAPEX excluding leases and other contractual rights amounted to 175.9 million euros, representing a significant increase compared to 63.7 million euros in 9M22, reflecting the positive trend in EBITDA AL and reduction in investment following peak CAPEX levels recorded in 2022. Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition and excluding disposals increased by 84.3 million euros impacted positively by Operating Cash Flow, despite the negative impact of income taxes paid of 42.3 million euros in the quarter impacted by the capital gain of the tower sales executed last year. During 9M22 we recorded cash proceeds, related to the aggreamnet with Cellnex for the monetization of mobile towers, amounted to 118.3 million euros and in "other cash movements" we recorded 27.2 million euros relating to VAT charged on the tower sale. In 9M23 we recorded 28.4 million euros in "Other Cash Movements", representing mostly the tower sale VAT payment that was received from the final tower transaction in 2022. Including those impacts, Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition decreased by 48.9%.

Consolidated Balance Sheet

Table 7.

Balance Sheet (Millions of Euros)	9M22	9M23	9M23 / 9M2
Non-current Assets	2,845.5	2,919.2	2.6%
Current Assets	687.3	570.2	(17.0%)
Total Assets	3,532.8	3,489.3	(1.2%)
Total Shareholders' Equity	1,028.8	945.9	(8.1%)
Non-current Liabilities	1,280.4	1,761.1	37.5%
Current Liabilities	1,223.6	782.3	(36.1%)
Total Liabilities	2,503.9	2,543.4	1.6%
Total Liabilities and Shareholders' Equity	3,532.8	3,489.3	(1.2%)

Capital Structure and Funding

Table 8.
Net Financial Debt (Millions of Euros)	9M22	9M23	9M23 / 9M22
Short Term	500.8	110.0	(78.0%)
Medium and Long Term	649.4	1,031.4	58.8%
Total Debt	1,150.2	1,141.4	(0.8%)
Cash and Short Term Investments	150.6	11.9	(92.1%)
Net Financial Debt (1)	999.5	1,129.4	13.0%
Net Financial Debt / EBITDA after lease payments (last 4 quarters) (2)	1.85x	1.92x	0.04pp
Leasings and Long Term Contracts	562.3	633.8	12.7%
Net Debt	1,561.8	1,763.3	12.9%
Net Debt / EBITDA	2.44x	2.50x	0.03pp
Net Financial Gearing (3)	60.3%	65.1%	8.0%
(1) Net Financial Debt = Borrowings – Leasings - Cash

(2) EBITDA After Lease Payments = EBITDA - Lease Cash Payments (Capital & Interest)

(3) Net Financial Gearing = Net Debt / (Net Debt + Total Shareholders' Equity).

As of the end of 9M23, NOS had a total Net Financial Debt stood of 1,129.4 million euros and Total Net Debt, including leasings and long-term contracts (according to IFRS16) amounted to 1,763.3 million euros.

NOS maintains a solid liquidity position, with unissued available committed commercial paper programmes totaling 267.5 million euros, and cash & equivalents totaling 11.9 million euros. Net financial debt / EBITDA AL stood at 1.92x in 9M23, which is below NOS' target leverage ratio of around 2x Net Financial Debt / EBITDA AL.

The all-in average cost of debt for 9M23 was 3.2%, reflecting the increasing interest rates context and impact of DCM Bond refinancing (300 million euros with a 1.125% coupon, redeemed in May). As at 30 September 2023, the proportion of NOS' issued debt paying interest at a fixed rate was approximately 25% and in addition, 34% of the issued debt had interest rate hedging collars in place. At the end of 9M23, the average maturity of NOS debt stood at 2.8 years.

Governing Bodies

As at the date of this report, 2nd of November 2023, the Governing Bodies were made up as follows:

Board of Directors
Chairman of the Board of Directors _________________________
Chairman of the Executive Committee
Members of the Executive Committee Members ____________________________	Daniel Beato Filipa Santos Carvalho Jorge Graça Luis Nascimento Manuel Ramalho Eanes António
	Catarina Tavira Van-Dúnem Cláudia de Azevedo Cristina Marques Eduardo Verde Pinho João Torres Dolores Rita Rodrigues
Fiscal Board
Chairman of the Fiscal Board _________________________
Members ____________________________	Paulo Mota Pinto
Ana Luísa Aniceto da Ana Luísa Aniceto da Fonte Alternate
Officials of the General Meeting of Shareholders
Chairman	_____________________________
Secretary __________________________
Statutory Auditor
In Office ERNST & YOUNG AUDIT & ASSOCIADOS, SROC,	S.A., (ROC number 178 and registered at CMVM with the number 20161480, represented by Sandra e Sousa Amorim (ROC number 1213);
Alternate	(ROC n.º 1258)

CONDENSED CONSOLIDATED STATEMENT OF THE FINANCIAL POSITION

AT 30 SEPTEMBER 2022, 31 DECEMBER 2022 AND 30 SEPTEMBER 2023

(Amounts stated in thousands of euros)

	NOTES	30-09-2022	31-12-2022	30-09-2023
ASSETS
NON - CURRENT ASSETS:
Tangible assets	7	1,088,464	1,107,052	1,096,335
Investment property		608	514	504
Intangible assets	8	1,207,162	1,209,558	1,209,071
Contract costs	9	160,872	160,594	159,022
Rights of use	10	238,942	297,723	309,579
Investments in jointly controlled companies and associated companies	11	44,205	38,961	30,178
Accounts receivable - other	12	5,173	4,758	4,674
Tax receivable	13	48	369	58
Other financial assets non-current	14	4,964	5,248	5,929
Deferred income tax assets	15	84,506	89,554	92,019
Derivative financial instruments	20	10,517	11,249	11,801
TOTAL NON - CURRENT ASSETS		2,845,461	2,925,580	2,919,170
CURRENT ASSETS:
Inventories	16	66,398	67,223	64,861
Accounts receivable - trade	17	318,974	319,441	352,015
Contract assets	18	59,137	60,095	52,007
Accounts receivable - other	12	17,978	16,632	18,915
Tax receivable	13	5,827	6,906	12,775
Prepaid expenses	19	60,524	52,232	57,374
Derivative financial instruments	20	3,135	-	265
Cash and cash equivalents	21	150,622	15,215	11,943
Assets held for sale		4,701	-	-
TOTAL CURRENT ASSETS		687,296	537,744	570,155
TOTAL ASSETS		3,532,757	3,463,324	3,489,325

CONDENSED CONSOLIDATED STATEMENT OF THE FINANCIAL POSITION

AT 30 SEPTEMBER 2022, 31 DECEMBER 2022 AND 30 SEPTEMBER 2023

(Amounts stated in thousands of euros)

	NOTES	30-09-2022	31-12-2022	30-09-2023
SHAREHOLDER'S EQUITY
Share capital	22.1	855,168	855,168	855,168
Capital issued premium	22.2	4,202	4,202	4,202
Own shares	22.3	(15,968)	(15,968)	(15,059)
Legal reserve	22.4	1,030	1,030	4,374
Other reserves and accumulated earnings	22.4	(13,155)	(22,914)	(35,395)
Net Income		191,281	224,574	126,320
EQUITY BEFORE NON - CONTROLLING INTERESTS		1,022,558	1,046,092	939,610
Non-controlling interests	23	6,272	6,251	6,337
TOTAL EQUITY		1,028,830	1,052,343	945,947
LIABILITIES
NON - CURRENT LIABILITIES:
Borrowings	24	1,150,340	1,210,181	1,585,194
Provisions	25	79,702	81,267	83,399
Accounts payable - other	29	38,512	42,128	41,691
Deferred income	27	3,517	2,824	-
Deferred income tax liabilities	3.2 & 15	50,823	50,125	50,813
TOTAL NON - CURRENT LIABILITIES		1,322,894	1,386,525	1,761,097
CURRENT LIABILITIES:
Borrowings	24	560,944	427,453	190,008
Accounts payable - trade	28	273,708	253,355	260,864
Accounts payable - other	29	24,717	53,789	42,464
Tax payable	3.2 & 13	61,107	38,842	27,976
Accrued expenses	26	223,168	212,430	222,330
Deferred income	27	35,797	38,190	38,515
Derivative financial instruments	20	-	397	124
Liabilities directly associated with the assets held for sale		1,592	-	-
TOTAL CURRENT LIABILITIES		1,181,033	1,024,456	782,281
TOTAL LIABILITIES		2,503,927	2,410,981	2,543,378
TOTAL LIABILITIES AND SHAREHOLDER´S EQUITY		3,532,757	3,463,324	3,489,325

As a standard practice, only the annual accounts are audited, therefore the quarter amounts were not audited autonomously.

The Notes to the Financial Statements form an integral part of the consolidated statement of financial position as at 30 September 2023.

CONDENSED CONSOLIDATED STATEMENT OF INCOME BY NATURE

FOR THE NINE MONTHS ENDED ON 30 SEPTEMEBR 2022 AND 2023

(Amounts stated in thousands of euros)

	NOTES	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
REVENUES:
Services rendered		346,016	1,012,443	372,958	1,081,714
Sales		28,437	89,725	27,304	79,433
Other operating revenues		7,079	21,330	7,654	21,964
	30	381,532	1,123,498	407,916	1,183,111
COSTS, LOSSES AND GAINS:
Wages and salaries	31	22,175	63,037	23,306	68,815
Direct costs	32	77,765	245,947	86,359	256,982
Costs of products sold	33	23,889	79,852	22,114	66,104
Marketing and advertising		6,646	17,842	5,772	20,901
Support services	34	18,361	58,499	20,947	67,582
Supplies and external services	34	40,716	117,516	38,546	112,990
Other operating losses / (gains)		86	635	130	685
Taxes		9,201	26,807	8,882	26,843
Provisions and adjustments	35	4,848	13,242	1,428	9,175
Depreciation, amortisation and impairment losses	7,8,9,10 & 37	124,239	345,556	122,838	359,854
Reestructuring costs	38	315	1,563	132	1,227
Losses / (gains) on sale of assets, net	7 & 8	(74,565)	(74,547)	(387)	(723)
Other losses / (gains) non recurrent net	39	92	(3,398)	124	600
		253,768	892,551	330,191	991,035
INCOME BEFORE LOSSES / (GAINS)
PARTICIPATED COMPANIES, FINANCIAL RESULTS AND TAXES		127,764	230,947	77,725	192,076
Net losses / (gains) of affiliated companies	11 & 36	(6,586)	(16,975)	(1,415)	(4,649)
Financial costs	40	7,332	23,534	18,206	45,590
Net foreign exchange losses / (gains)		(355)	(400)	(267)	(61)
Net losses / (gains) on financial assets		41	97	190	195
Net other financial expenses / (income)	40	847	2,541	834	2,739
		1,279	8,797	17,548	43,814
INCOME BEFORE TAXES		126,485	222,150	60,177	148,262
Income taxes	15	20,615	30,976	14,353	21,850
NET CONSOLIDATED INCOME		105,870	191,174	45,824	126,412
ATTRIBUTABLE TO:
NOS Group Shareholders		105,962	191,281	45,859	126,320
Non-controlling interests	23	(92)	(107)	(35)	92
EARNINGS PER SHARES
Basic - euros	41	0.21	0.37	0.09	0.25
Diluted - euros	41	0.21	0.37	0.09	0.25

As a standard practice, only the annual accounts are audited, therefore the quarter amounts were not audited autonomously.

The Notes to the Financial Statements form an integral part of the consolidated statement of income by nature for the nine months ended on 30 September 2023.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED ON 30 SEPTEMBER 2022 AND 2023

(Amounts stated in thousands of euros)

	NOTES	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
NET CONSOLIDATED INCOME		105,870	191,174	45,824	126,412
OTHER INCOME
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO THE INCOME STATEMENT:
Accounting for equity method	11	2,105	9,139	94	(11,959)
Fair value of interest rate derivatives	20	7,622	9,647	(1,411)	541
Deferred income tax - interest rate derivatives	20	(1,715)	(2,171)	317	(122)
Fair value of equity swaps	20	225	186	-	-
Deferred income tax - equity swap	20	(51)	(42)	-	-
Fair value of exchange rate derivatives	20	2,422	3,308	846	503
Deferred income tax - exchange rate derivatives	20	(700)	(956)	(237)	(139)
Currency translation differences and others		(45)	(107)	(3)	(338)
INCOME RECOGNISED DIRECTLY IN EQUITY		9,863	19,004	(394)	(11,514)
TOTAL COMPREHENSIVE INCOME		115,733	210,178	45,430	114,898
ATTRIBUTABLE TO:
NOS Group Shareholders		115,825	210,285	45,465	114,806
Non-controlling interests		(92)	(107)	(35)	92
		115,733	210,178	45,430	114,898

As a standard practice, only the annual accounts are audited, therefore the quarter amounts were not audited autonomously.

The Notes to the Financial Statements form an integral part of the consolidated statement of comprehensive income for the nine months ended on 30 September 2023.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

FOR THE NINE MONTHS ENDED ON 30 SEPTEMEBR 2022 AND 2023

(Amounts stated in thousands of euros)

		ATTRIBUTABLE TO NOS GROUP SHAREHOLDERS
	NOTES	SHARE CAPITAL	CAPITAL ISSUED PREMIUM	OWN SHARES	LEGAL RESERVE	OTHER RESERVES	NET INCOME	NON - CONTROLLING INTERESTS	TOTAL
BALANCE AS AT 1 JANUARY 2022		5,152	854,219	(12,353)	1,030	(35,586)	144,159	6,379	963,000
Result appropriation
Transfers to reserves		-	-	-	-	144,159	(144,159)	-	-
Dividends paid	22.4	-	-	-	-	(142,357)	-	-	(142,357)
Share capital increase by incorporation of share premium	22.2	850,016
Aquisition of own shares	22.3	-	-	(7,087)	-	-	-	-	(7,087)
Distribution of own shares:
Distribution of own shares - share incentive scheme	22.3	-	-	3,186	-	(3,186)	-	-	-
Distribuition of own shares - other remunerations	22.3	-	-	286	-	(14)	-	-	272
Share Plan - costs incurred in the period and others		-	-	-	-	4,825	-	-	4,825
Comprehensive Income		-	-	-	-	19,004	191,281	(107)	210,178
Others		-	(1)	-	-			-	(1)
BALANCE AS AT 30 SEPTEMBER 2022		855,168	4,202	(15,968)	1,030	(13,155)	191,281	6,272	1,028,830
BALANCE AS AT 1 JANUARY 2023		855,168	4,202	(15,968)	1,030	(22,914)	224,574	6,251	1,052,343
Result appropriation
Transfers to reserves		-	-	-	3,344	221,230	(224,574)	-	-
Dividends paid	22.4	-	-	-	-	(219,987)	-	-	(219,987)
Aquisition of own shares	22.3	-	-	(5,171)	-	-	-	-	(5,171)
Distribution of own shares:
Distribution of own shares - share incentive scheme	22.3	-	-	5,970	-	(5,970)	-	-	-
Distribuition of own shares - other remunerations	22.3	-	-	110	-	7	-	-	117
Share Plan - costs incurred in the period and others	45	-	-	-	-	3,753	-	(6)	3,747
Comprehensive Income		-	-	-	-	(11,514)	126,320	92	114,898
BALANCE AS AT 30 SEPTEMBER 2023		855,168	4,202	(15,059)	4,374	(35,395)	126,320	6,337	945,947
									-

As a standard practice, only the annual accounts are audited, therefore the quarter amounts were not audited autonomously.

The Notes to the Financial Statements form an integral part of the consolidated statement of changes in shareholders equity for the nine months ended on 30 September 2023.

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE NINE MONTHS ENDED ON 30 SEPTEMBER 2022 AND 2023

(Amounts stated in thousands of euros)

	NOTES	9M 22	9M 23
OPERATING ACTIVITIES
Collections from clients		1,332,754	1,348,631
Payments to suppliers		(665,804)	(641,774)
Payments to employees		(78,924)	(85,135)
Receipts / (Payments) relating to income taxes		(19,317)	(42,333)
Other cash receipts / (payments) related with operating activities		(43,835)	(47,740)
CASH FLOW FROM OPERATING ACTIVITIES (1)		524,874	531,649
INVESTING ACTIVITIES
CASH RECEIPTS RESULTING FROM
Financial investments		832	875
Tangible assets		149,024	829
Interest and related income		3,385	5,324
		153,241	7,028
PAYMENTS RESULTING FROM
Financial investments	4 & 14	(2,909)	(1,504)
Tangible assets		(226,976)	(167,652)
Intangible assets and contract costs		(168,364)	(166,491)
		(398,249)	(335,647)
CASH FLOW FROM INVESTING ACTIVITIES (2)		(245,008)	(328,619)
FINANCING ACTIVITIES
CASH RECEIPTS RESULTING FROM
Borrowings		456,693	640,200
		456,693	640,200
PAYMENTS RESULTING FROM
Borrowings		(416,733)	(512,700)
Lease rentals (principal)		(68,284)	(75,388)
Interest and related expenses		(31,825)	(34,934)
Dividends	22.4	(142,357)	(219,987)
Aquisition of own shares	22.3	(7,087)	(5,171)
		(666,286)	(848,180)
CASH FLOW FROM FINANCING ACTIVITIES (3)		(209,593)	(207,980)
Change in cash and cash equivalents (4)=(1)+(2)+(3)		70,273	(4,950)
Effect of exchange differences		20	(1)
Cash and cash equivalents at the beginning of the year		10,170	8,079
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	22	80,463	3,128
Cash and cash equivalents	21	150,622	11,943
Bank overdrafts	24	(70,159)	(8,815)

As a standard practice, only the annual accounts are audited, therefore the quarter amounts were not audited autonomously.

The Notes to the Financial Statements form an integral part of the consolidated statement of cash flows for the nine months ended on 30 September 2023.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS AT 30 SEPTEMBER 2023

(Amounts stated in thousands of euros, unless otherwise stated)

1. Introductory Note

NOS, SGPS, S.A. ("NOS", "NOS SGPS" or "Company"), formerly named ZON OPTIMUS, SGPS, S.A. ("ZON OPTIMUS") and until 27 August 2013, named ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. ("ZON"), with Company headquarters registered at Rua Actor António Silva, nº9, Campo Grande, was established by Portugal Telecom, SGPS, S.A. ("Portugal Telecom") on 15 July 1999 for the purpose of implementing its multimedia business strategy.

During the 2007 financial year, Portugal Telecom proceeded with the spin-off of ZON through the attribution of its participation in the company to their shareholders, which become fully independent from Portugal Telecom.

During the 2013 financial year, ZON and Optimus, SGPS, S.A. ("Optimus SGPS") have merged through the incorporation of Optimus SGPS into ZON. Thereafter, the Company adopted the designation of ZON OPTIMUS, SGPS, S.A..

On 20 June 2014, because of the launch of the new brand "NOS" on 16 May 2014, the General Meeting of Shareholders approved the change of the Company's name to NOS, SGPS, S.A..

The businesses operated by NOS and its associated companies, form the "NOS Group" or "Group", which includes cable and satellite television services, voice and Internet access services, video production and sale, advertising on Pay TV channels, cinema exhibition and distribution, the production of channels for Pay TV, management of datacenters and consulting services in IT, mainly in the Portuguese market.

NOS shares are listed on the Euronext Lisbon market. The shareholders' structure of the Group as at 30 September 2023 is shown in Note 22.

The business of NOS Comunicações, S.A. ("NOS SA") and its subsidiaries, NOS Technology, NOS Açores, NOS Madeira, NOS Wholesale and NOS Sistemas comprehends: a) cable and satellite television distribution; b) the operation of the latest generation mobile communication network, GSM/UMTS/LTE/5G; c) the operation of electronic communications services, including data and multimedia communication services in general; d) IP voice services ("VOIP" - Voice over IP); e) Mobile Virtual Network Operator ("MVNO"), f) the provision of consultancy and similar services directly or indirectly related to the above mentioned activities and services, and g) datacentre management and consulting services in IT. The business of these companies is regulated by Law no. 5/2004 (Electronic Communications Law), which establishes the legal regime governing electronic communications networks and services.

The main activity of NOS Audio – Sales and Distribution, S.A., previously designated NOS Lusomundo TV, S.A. and the result of the merger of NOSPUB with NOS Lusomundo TV on December 2020, is the negotiation, acquisition and distribution of content rights and other multimedia products to television and other platforms of distribution, currently producing films and series channels through the compilation of the acquired contents, which are distributed, among other operators, by NOS SA and its subsidiaries. This company also manages the advertising space on Pay TV channels and in the cinemas of NOS Cinemas.

NOS Audiovisuais and NOS Cinemas, together with their associated companies, operate in the audiovisual sector, which includes video production and sale, cinema exhibition and distribution, and the acquisition/negotiation of Pay TV and VOD (video-on-demand) rights.

NOS Inovação main activities are conducting and stimulating scientific activities of R&D (it owns all the intellectual property developed within the NOS Group, intending to guarantee the return of the initial investment through the commercialization of patents and concessions regarding commercial operation, as a result of the creation of new products and services), the demonstration, disclosure, technology and training transfers in the services and information management domains as well as fixed and mobile solutions of the latest generation of TV, internet, voice and data solutions.

These notes to the Financial Statements follow the order in which the items are shown in the consolidated financial statements.

The consolidated financial statements for the quarter ended on 30 September 2023 were approved by the Board of Directors and their issue authorised on 02 November 2023.

The Board of Directors believes that these financial statements give a true and fair view of the Group's operations, financial performance, and consolidated cash flows.

2. Accounting policies

The principal accounting policies adopted in the preparation of the financial statements are described below. These policies were consistently applied to all the financial years presented, unless otherwise stated.

2.1. Principles of presentation

The consolidated financial statements were prepared in accordance with IAS 34 Interim Financial Reporting ("IAS 34"). Therefore, these financial statements do not include all the information required by IFRS, so they must be read in conjunction with the consolidated financial statements for the year ended on 31 December 2022.

The consolidated financial statements are presented in euros as this is the main currency of the Group's operations and all amounts are presented in thousands of euros, except when referred to the financial statements of subsidiaries located abroad were converted into euros in accordance with the accounting policies described in Note 2.3.21.

The consolidated financial statements were prepared on a going concern basis from the ledgers and accounting records of the companies included in the consolidation (Annex A)), using the historical cost convention, adjusted when necessary for the valuation of financial assets and liabilities (including derivatives) at their fair value (Note 2.3.24).

In preparing the consolidated financial statements in accordance with IFRS, the Board used estimates, assumptions, and critical judgments with impact on the value of assets and liabilities and the recognition of income and costs in each reporting period. Although these estimates were based on the best information available at the date of preparation of the consolidated financial statements, current and future results may differ from these estimates. The areas involving a higher element of judgment and estimates are described in Note 3.

The Board of Directors is convinced that there are no material uncertainties that might question this assumption. An analysis was made that the Group has the necessary resources to continue its operations into the future, for a period of no less than 12 months from the reporting date.

In the preparation and presentation of the consolidated financial statements, the NOS Group declares that it complies explicitly and without reservation with IAS/IFRS reporting standards and related SIC/IFRIC interpretations as approved by the European Union.

Changes in accounting policies and disclosures

The following standards, interpretations, amendments and revisions adopted ("endorsed") by the European Union were mandatory for the first time on the financial year beginning 1 January 2023:

• IFRS 17 Insurance Contracts. IFRS 17 applies to all insurance contracts (i.e. life, non-life, direct insurance and reinsurance) regardless of the type of entity that issues them, as well as some guarantees and some financial instruments with discretionary participation features. Overall, IFRS 17 provides an accounting model for insurance contracts that is more useful and more consistent for issuers. In contrast to the requirements of IFRS 4, which are based on previously adopted local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects.
• Amendments to IFRS 17 Insurance contracts Initial application of IFRS 17 and IFRS 9 Comparative information. This amendment to IFRS 17 relates to the presentation of comparative information for financial assets in initial application of IFRS 17. The amendment adds a transition option that permits an entity to apply an 'overlay' in classifying a financial asset in the comparative period(s) presented in initial application of IFRS 17. The overlay permits all financial assets, including those held in relation to non-contractual activities within the scope of IFRS 17, to be classified, instrument by instrument, in the comparative period(s) in a manner aligned with how the entity expects those assets to be classified on initial application of IFRS 9.

• Amendments to IAS 1 Disclosure of accounting policies. These amendments are intended to assist the entity in disclosing 'material' accounting policies, previously referred to as 'significant' policies. However, due to the absence of this concept in the IFRS standards, it was decided to replace it by the concept 'materiality', a concept already known to users of financial statements. In assessing the materiality of accounting policies, the entity has to consider not only the size of transactions but also other events or conditions and the nature of these.
• Amendments to IAS 8 Definition of accounting estimates. The amendment clarifies the distinction between change in accounting estimate, change in accounting policy and correction of errors. In addition, it clarifies how an entity uses measurement techniques and inputs to develop accounting estimates.
• Amendments to IAS 12 Deferred tax related to assets and liabilities arising from a single transaction. The amendment clarifies that payments that settle a liability are tax deductible, however it is a matter of professional judgement whether such deductions are attributable to the liability that is recognised in the financial statements or the related asset. This judgment is important in determining whether there are temporary differences in the initial recognition of the asset or liability. Thus, the initial recognition exception is not applicable to transactions that gave rise to equal taxable and deductible temporary differences. It is only applicable if the recognition of a leasing asset and a leasing liability gives rise to taxable and deductible temporary differences that are not equal.

These standards and amendments had no material impacts on the consolidated financial statements of the Group.

The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have not been endorsed by the European Union, until the date of approval of these financial statements:

• Amendments to IAS 12 Income taxes: International Tax Reform Pillar Two Model Rules clarify the treatment to income taxes arising from the application of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD). The Amendments introduce a mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and disclosure requirements for affected entities to help users of the financial statements better understand an entity's exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date. The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or before 31 December 2023.
• Amendments to IAS 1 Disclosure of accounting policies. Classification of current and non-current liabilities. This amendment intends to clarify the classification of liabilities as current or non-current balances depending on the rights that an entity has to defer its payment, at the end of each reporting period. The classification of liabilities is not affected by the entity's expectations (the assessment should determine whether a right exists, but should not consider whether the entity will or will not exercise that right), or by events that occur after the reporting date, such as non-compliance with a covenant. However, if the right to defer settlement for at least twelve months is subject to the fulfilment of certain conditions after the reporting date, those criteria do not affect the right to defer settlement for the purpose of classifying a liability as current or non-current. This amendment also includes a new definition of "settlement" of a liability and is applicable retrospectively.
• Amendments to IFRS 16 Leasings Responsibility of a lease in a sale and leaseback transaction. This amendment specifies the requirements regarding the subsequent measurement of lease liabilities, related to sale and leaseback transactions that qualify as "sale" in accordance with the principles of IFRS 15, focusing on variable lease payments that do not depend on an index or rate. In subsequently measuring lease liabilities, seller-lessees shall determine "lease payments" and "revised lease payments" in a manner that does not recognise any gain or loss related to the retained right-of-use. Applying these requirements does not prevent a seller-lessee from recognising, in the income statement, any gain or loss relating to the partial or total "sale" as required by paragraph 46(a) of IFRS 16. This amendment is retrospective.
• Amendment to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures. This amendment introduces new requirements to increase the transparency and, consequently, the usefulness of the information provided by entities on financing agreements with suppliers, requiring entities to provide information on the impact of these agreements on liabilities and cash flows. The amendments will be effective for annual reporting periods beginning on or after January 1, 2024. Early adoption is permitted but will have to be disclosed.

• Amendments to IAS 21 - Effect of changes in foreign exchange rates: The amendments clarify how an entity should assess whether a currency is exchangeable and how the exchange rate should be determined when there is no possibility of exchange, as well as requiring the disclosure of information that allows users of financial statements to understand the impacts of a non-exchangeable currency. The amendments do not specify how an entity estimates the exchange rate, but state that an entity may use an unadjusted exchange rate or other estimation technique.

The Group did not apply any of these standards in advance in the financial statements in the period of nine months ended on 30 September 2023. No significant impacts on the financial statements resulting from their adoption are estimated.

2.2. Bases of Consolidation

Controlled companies

Controlled companies were consolidated by the full consolidation method. Control is deemed to exist when the Group is exposed or has rights, because of their involvement, to a variable return of the entity's activities, and has capacity to affect this return through the power over the entity. Namely, when the Company directly or indirectly holds a majority of the voting rights at a General Meeting of Shareholders or has the power to determine the financial and operating policies. In situations where the Company has, in substance, control of other entities created for a specific purpose, although it does not directly hold equity in them, such entities are consolidated by the full consolidation method. The entities in these situations are listed in Annex A).

The interest of third parties in the equity and net profit of such companies' income presented separately in the consolidated statement of financial position and in the consolidated statement, respectively, under the item "Non-controlling Interests" (Note 23).

The identifiable acquired assets and the liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date, irrespective of the existence of non-controlled interests. The excess of acquisition cost over the fair value of the Group's share of identifiable acquired assets and liabilities is stated in Goodwill. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the income statement in the period in which the acquisition occurs.

The non-controlling interests are initially recognized as their proportion of the fair value of the identifiable assets and liabilities.

On the acquisition of additional equity shares in companies already controlled by the Group, the difference between the share of capital acquired and the corresponding acquisition value is recognized directly in equity.

When an increase in position in the capital of an associated company results in the acquisition of control, with the latter being included in the consolidated financial statements by the full consolidation method, the share of the fair values assigned to the assets and liabilities, corresponding to the percentages previously held, is stated in the income statement.

The directly attributable transaction costs are recognized immediately in profit or loss.

When the Group loses control over a controlled entity, the assets and liabilities of that entity, and any non-controlling interests and other components recognised in equity, are derecognised. Any resulting gain or loss is recognised in the income statement. Any interest retained in the entity is measured at fair value when control is lost.

Intercompany transactions, balances, unrealized gains on transactions and dividends distributed between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction shows evidence of impairment of the transferred asset.

When necessary, adjustments are made to the financial statements of controlled companies in order to align their accounting policies with those of the Group.

Jointly controlled companies

The classification of investments as jointly controlled companies is determined based on the existence of shareholder agreements, which show and regulate the joint control. Financial investments of jointly controlled companies (Annex C)) are stated by the equity method. Under this method, financial investments are adjusted periodically by an amount corresponding to the share in the net profits of jointly controlled companies, as a contra entry in "Losses / (gains) of

affiliated companies" in the income statement before financial results and taxes. Direct changes in the post-acquisition equity of jointly controlled companies are recognized as the value of the shareholding as a contra entry in reserves, in equity.

Additionally, financial investments may also be adjusted for recognition of impairment losses.

Any excess of acquisition cost over the fair value of identifiable net assets and liabilities (goodwill) is recorded as part of the financial investment of jointly controlled companies and subject to impairment testing when there are indicators of loss of value. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the income statement in the period in which the acquisition occurs.

Losses in jointly controlled companies, which exceed the investment made in them, are not recognized, except when the Group has entered into undertakings with that entity.

Dividends received from these companies are recorded as a reduction in the value of the financial investments.

Associated companies

An associated company is a company in which the Group exercises significant influence through participation in decisions about its financial and operating policies, but in which does not have control or joint control.

Any excess of the acquisition cost of a financial investment over the fair value of the identifiable net assets is recorded as goodwill and is added to the value of the financial investment and its recovery is reviewed annually or whenever there are indications of possible loss of value. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the statement of comprehensive income in the period in which the acquisition occurs.

Financial investments in associated companies (Annex B)) are stated by the equity method. Under this method, financial investments are adjusted periodically by an amount corresponding to the share in the net profits of associated companies, as a contra entry in "Losses / (gains) of affiliated companies" in the income statement. Direct changes in the post-acquisition equity of associated companies are recognized as the value of the shareholding as a contra entry in reserves, in equity. Additionally, financial investments may also be adjusted for recognition of impairment losses.

Losses in associated companies, which exceed the investment made in them, are not recognized, except when the Group has entered undertakings with that associated company.

Dividends received from these companies are recorded as a reduction in the value of the financial investments.

Holdings in entities without significant influence

Investments made by the Group in entities where it does not have significant influence are initially recorded at cost and subsequently measured at fair value through profit or loss.

These investments are presented under "Other financial assets non-current" in the statement of financial position and changes in fair value are recorded against "Net losses / (gains) of affiliated companies" in the income statement.

Balances and transactions between group companies

Balances and transactions as well as unrealized gains between Group companies, and between them and the parent company, are eliminated in the consolidation.

The part of unrealized gains arising from transactions with associated companies or jointly controlled companies attributable to the Group is eliminated in the consolidation. Unrealized losses are similarly eliminated except when they show evidence of impairment of the transferred asset.

2.3. Accounting Policies

2.3.1. Segment Reporting

As stipulated in IFRS 8, the Group presents operating segments based on internally produced management information (Note 5).

Operating segments are reported consistently with the internal management information model provided to the chief operating decision maker of the Group, who is responsible for allocating resources to the segment and for assessing its performance, and for taking strategic decisions.

2.3.2. Classification of the statement of financial position and income statement

The Group presents assets and liabilities in the financial statements based in the current and non-current classification. An asset is classified as current when:

• The asset is expected to be realized, sold or consumed in its normal operational cycle;
• If the asset is held, essentially, for negotiation purposes;
• The asset is expected to be realized 12 months after reported;
• The asset is a cash or a cash equivalent, unless its trade or use is limited to settle a liability during, at least, 12 months after reporting.

A liability is classified as current when:

• The liability is expected to be settled in its normal operational cycle;
• The liability is held, essentially, for negotiation purposes;
• The liability is expected to be settled in a 12 month period after reported;
• There is no unconditional right to differ the liability settlement during, at least, 12 months after reported;

The remaining assets and liabilities of the Group are classified as non-current.

Realizable assets and liabilities due in less than one year from the date of the statement of financial position are classified as current in assets and liabilities, respectively.

In accordance with IAS 1, "Integration costs", "Losses / (gains) on disposal of assets" and "Other non-recurring costs / (gains)"reflect unusual costs and revenues, that should be disclosed separately from the usual cost and revenues lines, in order to avoid distortion of the financial information from regular operations, and be consistent with the way the group's financial performance is analyzed and monitored by management. These unusual costs and revenues may not be comparable to similarly titled measures used by other companies. When determining whether an event or transaction is unusual, management considers both quantitative and qualitative factors. Examples of unusual costs and revenues are: business restructuring programs and respective compensation; regulatory affairs and lawsuits; extraordinary impairment of assets due to the reduction of their recoverable amount, sale of non current assets, among others. If costs and revenues meet these criteria, which are applied consistently from year to year, they are treated as unusual and presented in the specific lines above.

2.3.3. Tangible Assets

Tangible assets are stated at acquisition cost, less accumulated depreciation and impairment losses, when applicable. Acquisition cost includes, in addition to the purchase price of the asset: (i) costs directly attributable to the purchase; and (ii) the estimated costs of decommissioning and removal of the assets and restoration of the site, which in Group applies to the cinema operation business, telecommunication towers and offices (Note 7).

Estimated losses resulting from the replacement of equipment before the end of its useful life due to technological obsolescence are recognized by a deduction, from the corresponding asset as a contra entry in profit and loss. The costs of current maintenance and repairs are recognized as a cost when they are incurred. Significant costs incurred on renovations or improvements to the asset are capitalized and depreciated over the corresponding estimated payback period when it is probable that there will be future economic benefits associated with the asset and when these can be measured reliably.

The gains and losses from the disposal of tangible assets, determined by the difference between the sale value and the net book value, are recognized in the item "Losses/ (gains) on disposal of assets".

Depreciation

Tangible assets are depreciated from the time they are completed or ready to be used. These assets, less their residual value, are depreciated by the straight-line method, in twelfths, from the month in which they become available for use, according to the useful life of the assets defined as their estimated utility.

The depreciation rates used correspond to the following estimated useful lives:

	2022	2023
	(YEARS)	(YEARS)
Buildings and other constructions	2 - 50	2 - 50
Technical equipment:
Network Installations and equipment	7 - 40	7 - 40
Terminal equipment	2 - 8	1 - 5
Other technical equipment	1 - 16	1 - 16
Transportation equipment	3 - 4	3 - 4
Administrative equipment	2 - 10	2 - 10
Other tangible assets	4 - 8	4 - 8

2.3.4. Non-current assets held for sale and discontinued operations

The non-current assets (or discontinued operations) are classified as held for sale if the respective value is realizable through a sale transaction instead of its continued use.

This situation is considered to happen only when: i) the sale is very likely to happen and the asset is immediately available to be sold in its current conditions, ii) the Company made the commitment to sell, and iii) the sale is expected to take place in a period of 12 months. In this case, the non-current assets are measured by the lower amount between accounting value or the respective fair value deducted from the costs of the sale.

The non-current assets held for sale and discontinued operations are measured at the lower of two: i) the accounting value and, ii) the fair value deducted from the costs of the sale. The costs of the sale are the incremental costs directly assigned to the disposal of the asset (or group to be disposed), excluding financial costs and income tax expenses.

From the moment that tangible assets are considered to be "held for sale" the inherent depreciation of those assets ceases, and the assets are determined as non-current asset held for sale.

A discontinued operation unit is a component of and entity that was disposed or is classified as held for sale and:

• Represents an important line of business or geographical area separated from the operational units;
• It is an integrant part of a single coordinated plan to dispose an important line of business or geographical area separated from the operational units or;
• It is a subsidiary acquired exclusively for resale.

Discontinued operations are excluded from the continued operations results and are presented in separate as an amount of net income after taxes from discontinued operations on the financial statement of income by nature.

2.3.5. Intangible Assets

Intangible assets are stated at acquisition cost, less accumulated amortization and impairment losses, when applicable. Recognized only when they generate future economic benefits for the Group and when they can be measured reliably.

Intangible assets consist mainly of goodwill, telecom and software licenses, content utilization rights and other contractual rights.

Group companies periodically carry out an impairment assessment of intangible assets in-progress. This impairment assessment is also carried out whenever events or changes in circumstances indicate that the amount at which the asset is recorded may not be recoverable. When such indications exist, the Group calculates the recoverable value of the asset in order to determine the existence and extent of the impairment loss.

Goodwill

Goodwill represents the excess of acquisition cost over the net fair value of the assets, liabilities, and contingent liabilities of a subsidiary, jointly controlled company or associated company at the acquisition date, in accordance with IFRS 3.

Goodwill is recorded as an asset and included in "Intangible assets" (Note 8) in the case of a controlled company or in the case in which the excess of cost has been originated by a merger, and in "Financial investments in group companies" (Note 11) in the case of a jointly controlled company or an associated company.

Goodwill is not amortised and is subject to impairment tests at least once a year, on a specified date, and whenever there are changes in the test's underlying assumptions at the date of the statement of financial position which may result in a possible loss of value. Any impairment loss is recorded immediately in the income statement in "Impairment losses" and is not liable to subsequent reversal.

For the purposes of impairment tests, goodwill is attributed to the cash-generating units to which it is related (Note 8), which may correspond to the business segments in which the Group operates, or a lower level.

Internally generated intangible assets

Internally generated intangible assets, including expenditure on research, are expensed when they are incurred. Research and development costs are only recognized as assets when the technical capability to complete the intangible asset is demonstrated and when it is available for use or sale.

Industrial property and other rights

Assets classified under this item relate to the rights and licenses acquired under contract by the Group to third parties and used in realizing the Group's activities, and include:

• Telecom licenses;
• Software licenses;
• Content utilization rights;
• Other contractual rights.

The content exploration rights are recorded in the consolidated statement of financial position, as intangible assets, when the following conditions are fulfilled: (i) there is control over the content, (ii) the Company has the right to choose the way to explore the content, and (iii) it is available for exhibition.

The conclusion of contracts relating to sports contents, which are not immediately available, originates rights that are initially classified as contractual commitments.

In the specific case of broadcasting rights of sports competitions, these are recognized as assets when the necessary conditions to organize each sports competition are present, which occurs in the homologation date of the participating teams in the competition that is being held in the sports season to be initiated, by the organizing entity, taking into consideration that it is from that date that the conditions for the recognition of an asset are present, namely, the unequivocal attainment of the exploration rights of the games of the stated season. In this situation, the stated rights are recognized in the income statement in "Depreciation, amortization, and impairment losses", by the linear method, by twelfths, starting from the beginning of the month in which they are available for use.

Resulting from agreements concluded for the cession of the exclusive rights to exploit sports content, and as it is permitted by IAS 1, since 2017, NOS presents the net assets and liabilities of the values ceded to other operators, considering that this compensation best reflects the substance of the transactions.

When the recognized intangible assets involve payments in periods above 1 year, the intangible asset corresponds to the present value of those payments.

Amortization

The useful lives of the intangible assets are classified as finite or indefinite.

Intangible assets with finite useful lives are amortised over their useful lives, with an impairment analysis carried out whenever there are indications that the amount at which the intangible asset is mentioned in the financial statements may not be recovered. The amortization period and the amortization method of an intangible asset with a finite useful life are reviewed periodically. Any changes in the expected useful life or in the expected pattern of future consumption of the economic benefits incorporated in the asset, are considered in the modification over the period or method of amortization and, if verified, are treated as changes in accounting estimates. The amortization costs of intangible assets with finite lives are recognized in the income statement.

The assets with finite useful life are amortised by the straight-line method, in twelfths, from the beginning of the month in which they become available for use.

The amortization rates used correspond to the following estimated useful lives:

	2022	2023
	(YEARS)	(YEARS)
Telecom licences	20 - 33	20 - 33
Software licences	1 - 8	1 - 8
	Period of the	Period of the
Content utilization rights	contract	contract
Other	1 to 20	1 to 20

The intangible assets with indefinite useful lives are not amortised, and impairment assessments are performed annually.

Accordingly, the useful life of an intangible asset that is not being amortised is periodically reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If not, the change in the assessment of the useful life from indefinite to finite is accounted for as a change in an accounting estimate.

An intangible asset is unrecognized in its disposal moment, or when no future economic benefits from its use or disposal are expected. The gain or loss related with an unrecognized intangible asset (determined as the difference between the net income of its disposal, if there is any, and the carrying amount of that same asset) is recognised in the financial statement of income by nature.

2.3.6. Contract Costs

This item corresponds to costs incurred in attracting customers and costs associated with fulfilling a contract that are capitalized whenever they meet all of the following criteria:

• they are related to an existing contract or a specific future contract;
• generate or increase resources that will be used in the future;
• costs are expected to be recovered; and
• they are not already covered by the scope of another standard, such as inventories, tangible or intangible assets.

These costs are recognized for the period expected to fulfill the contract (2 to 4 years).

The costs of attracting customers are essentially:

• Commissions paid to third parties with the acquisition of new contracts / new customers;
• Commissions paid to third parties for upgrading the services provided;
• Commissions paid to third parties for renewal of loyalty of services and offers to customers; and
• Several commissions with revenue collection.

The costs associated with fulfilling the contracts are essentially:

• Costs incurred with the portability of mobile / fixed numbers of other operators;
  • Variable costs, variables, incurred with the activation of services contracted by customers.

2.3.7. Impairment of non-current assets, excluding goodwill

Group companies periodically carry out an impairment assessment of non-current assets. This impairment assessment is also carried out whenever events or changes in circumstances indicate that the amount at which the asset is recorded may not be recoverable. When such indications exist, the Group calculates the recoverable value of the asset to determine the existence and extent of the impairment loss.

The recoverable value is estimated for each asset individually or, if that is not possible, assets are grouped at the lowest levels for which there are identifiable cash flows to the cash-generating unit to which the asset belongs. Each of the Group's businesses is a cash-generating unit, except for the assets allocated to the cinema exhibition business, which are grouped into regional cash-generating units.

The recoverable amount is calculated as the higher of the net sale price and the current use value. The net sale price is the amount that would be obtained from the sale of the asset in a transaction between independent and knowledgeable entities, less the costs directly attributable to the sale. The current use value is the current value of the estimated future cash flows resulting from continued use of the asset or of the cash-generating unit. When the amount at which the asset is recorded exceeds its recoverable value, it is recognised as an impairment loss.

The reversal of impairment losses recognised in previous years is recorded when there are indications that these losses no longer exist or have decreased. The reversal of impairment losses is recognised in the statement of comprehensive income in the year in which it occurs. However, an impairment loss can only be reversed up to the amount that would be recognised (net of amortization or depreciation) if no impairment loss had been recorded in previous years.

2.3.8. Financial Assets

Financial assets are recognised in the statement of financial position of the Group on the trade or contract date, which is the date on which the Group undertakes to purchase or sell the asset.

Initially, apart from commercial accounts receivable, financial assets are recognised at fair value plus directly attributable transaction costs, except for assets at fair value through income in which transaction costs are immediately recognised in income. Trade accounts receivable, at the initial time, are recognised at their transaction price, as defined in IFRS 15.

The financial assets are derecognised when:

• the Group's contractual rights to receive their cash flows expire;
• the Group has substantially transferred all the risks and benefits associated with their ownership; or
• although it retains part but not substantially all of the risks and benefits associated with their ownership, the Group has transferred control of the assets.

The financial assets and liabilities are offset and shown as a net value when, and only when, the Group has the right to offset the recognised amounts and intends to settle for the net value.

The Group classifies its financial assets into the following categories: financial assets at fair value through profit or loss, financial assets measured at amortised cost, financial assets at fair value through other comprehensive income. Its classification depends on the entity's business model to manage the financial assets and the contractual characteristics in terms of the cash flows of the financial asset.

Financial assets at fair value through profit and loss

This category includes financial derivatives and equity instruments that the Group has not classified as financial assets through other comprehensive income at the time of initial recognition. This category also includes all financial instruments whose contractual cash flows are not exclusively capital and interest.

Financial assets at fair value through results are presented in the financial statements at fair value, the net changes being known in the income statement. This category of assets includes derivative instruments and investments in listed companies for which the Company has not classified them as financial assets at fair value through other comprehensive income. Dividends from investments in listed companies are recognised as income in the income statement when the respective right of receipt is formalized.

Gains and losses resulting from changes in the fair value of assets measured at fair value through profit or loss are recognised in results in the year in which they occur under "Losses / (gains) on financial assets", including the income from interest and dividends.

Financial assets at fair value through other comprehensive income

Financial assets measured at fair value through other comprehensive income are those that are part of a business model whose objective is achieved through the collection of contractual cash flows and the sale of financial assets, being that these contractual cash flows are only capital and interest reimbursement on the capital in debt.

Financial assets measured at amortised cost

Financial assets measured at amortised cost are those that are included in a business model whose purpose is to hold financial assets in order to receive the contractual cashflows, being that these contractual cash flows are only capital reimbursement and interest payments on the capital in debt.

Financial assets measured at amortised cost are subsequently measured using the effective tax rate method and subject to impairment. Income and costs are recognised in the income statement when the asset is derecognised, updated or an impairment is recognised over it. Financial assets measured at the Company's amortised cost include accounts receivable and loans granted to related parties.

Cash and cash equivalents

The amounts included in "Cash and cash equivalents" correspond to the amounts of cash, bank deposits, term deposits and other investments with maturities of less than three months which may be immediately realizable and with a negligible risk of change of value.

For the purposes of the statement of cash flows, "Cash and cash equivalents" also includes bank overdrafts included in the statement of financial position under "Borrowings" (when applicable).

2.3.9. Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to their contractual substance irrespective of their legal form. Equity instruments are contracts that show a residual interest in the Group's assets after deducting the liabilities. The equity instruments issued by Group companies are recorded at the amount received, net of the costs incurred in their issue. Financial liabilities are recognised only when extinguished, i.e. when the obligation is settled, cancelled, or extinguished.

In accordance with IFRS 9, financial liabilities are classified as subsequently measured at amortised cost, except for:

• Financial liabilities at fair value through profit or loss. These liabilities, including derivatives that are liabilities, should subsequently be measured at fair value;
• Financial liabilities that arise when a transfer of a financial asset does not meet the conditions for derecognition or when it is applied the continued involvement approach;
• Financial guarantee contracts;
• The commitments to grant a loan at a lower interest rate than the market;
• The recognised contingent consideration by a buyer in a concentration of business activities to which IFRS 3 applies. Such contingent consideration shall be subsequently measured at fair value, with changes recognised in profit or loss.

Financial liabilities of the Group include borrowings, accounts payable and derivative financial instruments.

2.3.10.Impairment of financial assets

At the date of each financial position statement, the Group analyses and recognizes expected losses on its debt securities, loans and accounts receivable. The expected loss results from the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the original effective interest rate.

The objective of this impairment policy is to recognize expected credit losses over the respective duration of financial instruments that have undergone significant increases in credit risk since initial recognition, assessed on an individual or collective basis, considering all reasonable and sustainable information, including prospects. If, at the reporting date, the credit risk associated with a financial instrument has not increased significantly since the initial recognition, the Group measures the provision for losses relating to that financial instrument by an amount equivalent to the expected credit losses within a period of 12 months.

For receivables and assets resulting from contracts under IFRS 15, the Group adopts the simplified approach when calculating expected credit losses. As a result, the Group does not monitor changes in credit risk, recognizing instead impairment losses based on the expected credit loss on each reporting date. The Group established a provisions' matrix where it presents an impairment loss criterion based on the history of credit losses, adjusted by specific prospective factors for the clients and the economic environment.

2.3.11.Derivative financial instruments

Initial and subsequent recognition

The Group uses derivative financial instruments, such as exchange rate forward contracts, interest rate swaps, to cover its exchange rate risks, interest, respectively. Such derivative financial instruments are initially recorded at fair value on the date the derivative is contracted and are subsequently measured at fair value. Derivatives are presented in assets when their fair value is positive and in liabilities when their fair value is negative.

In terms of hedge accounting, hedges are classified as:

• Fair value hedge when the purpose is to hedge the exposure to fair value changes of a registered asset or liability or an unregistered Groups' commitment;
• Cash flow hedge when the purpose is to hedge the exposure to cash flow variability arising from a specific risk associated with the whole or a component of a registered asset or liability or an anticipated highly probable occurrence or exchange risk associated with an unregistered Groups' commitment;
• Coverage of a net investment in a foreign operational unit.

NOS Group uses derivative financial instruments with fair value and cash flow hedges.

At the beginning of the hedge relationship, the Group formally designates and documents the hedging relationship for which hedge accounting is intended to apply as well as the management and strategy purpose of such hedge.

The documentation includes the identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all the following effectiveness requirements:

• There is an economic relationship' between the hedged item and the hedging instrument;
• The effect of credit risk does not "dominate the value changes" that result from that economic relationship; and
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group hedges and the quantity of the hedging instrument that the Group actually uses to hedges that quantity of hedged item.

Hedges that meet all the quantifying criteria for hedge accounting are accounted for, as described below:

Fair value hedges

The change in the fair value of a hedging instrument is recognised in the statement of profit or loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit or loss.

For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.

If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.

When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss.

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.

The Group uses forward contracts of:

• currency contracts for its exposure to foreign currency risk in forecast transactions and firm commitments;
• interest rates to cover the risk of volatility of the interest rates;
• own shares contracts for its exposure to volatility in own shares to be distributed within the scope of share incentive scheme.

The ineffective portion relating to foreign currency contracts is recognised as "Net foreign exchange losses/(gains)", the ineffective portion relating to interest rates is recognised as "Financial costs" and the ineffective portion relating to own shares contracts is recognised as "Wages and salaries".

On the nine months ended on 30 September 2023, the Group did not change the recognition method.

The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a Group's commitment for which fair value hedge accounting is applied.

For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss.

If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above.

2.3.12.Inventories

Inventories, which mainly include mobile phones, customer terminal equipment, DVDs, and content broadcasting rights, are valued at the lower of their cost or net realizable value.

The acquisition cost includes the invoice price, freight, and insurance costs, using the Weighted Average Cost as the method of costing goods sold.

Inventories are adjusted for technological obsolescence, as well as for the difference between the purchase cost and the net realizable value, whichever is the lower, and this reduction is recognised directly in the income statement.

The net realizable value corresponds to the normal sale price less restocking costs and selling costs.

The differences between the cost and the corresponding net realizable value of inventories, when this is less than the cost, are recorded as operating costs in "Cost of goods sold".

Inventories in transit, since they are not available for consumption or sale, are separated out from other inventories and are valued at their specific acquisition cost.

The signing of contracts related with sports content originates rights that are initially classified as contractual commitments.

The content broadcasting rights are recorded in the consolidated statement of financial position, as Inventories, in the event of the nonexistence of full right over the way of exploration of the asset, by the respective value of cost or net realizable value, whenever it is lower, when programmatic content has been received and is available for exhibition or use, according to contractual conditions, without any production or change, given that the necessary conditions for the organization of each sports competition are present, which occurs in the homologation date of the participating teams in the competition that is being held in the sports season to be initiated, by the organizing entity. The stated rights are recognised in the income statement in "Direct costs: Exhibition costs", on a systematic basis given the pattern of economic benefits obtained through their commercial exploration. No balances of content rights are registered in the Inventories caption.

Due to the agreement between the three national operators of reciprocal availability, for several sports seasons (collaborative arrangement), of sports content (national and international) owned by them, (Note 42.2), NOS considered the recognition of the costs, excluding those divided by the remaining operators, on a systematic basis, given the pattern of economic benefits obtained through their commercial exploration.

2.3.13.Subsidies

Subsidies are recognized at fair value when there is reasonable assurance that they will be received and that the Group companies will comply with the requirements for their award.

Operating subsidies, mainly for employee training, are recognized in the statement of comprehensive income by deduction from the corresponding costs incurred.

Investment subsidies, which were recorded as deferred income and recognized as income, from 2023 onwards, are deducted from tangible and intangible fixed assets to the extent of the associated expenses and are recognized in the income statement (depreciation and amortization) on a systematic and rational basis over the useful life of the asset.

2.3.14.Provisions and contingent liabilities

Provisions are recognised when:

• there is a present obligation arising from past events and it is likely that in settling that obligation, the expenditure of internal resources will be necessary; and
• the amount or value of such obligation can be reasonably estimated.

When one of the above conditions is not met, the Group discloses the events as a contingent liability unless the likelihood of an outflow of funds resulting from this contingency is remote, in which case they are not disclosed.

Provisions for legal procedures taking place against the Group are made in accordance with the risk assessments carried out by the Group and by their legal advisers, based on success rates.

Provisions for restructuring are only recognised when the Group has a detailed, formal plan, which identify the main features of the restructuring program, and after these facts have been reported to the entities involved.

Provisions for dismantling costs, removal of assets and restoration of the site are recognised when the assets are installed, in line with the best estimates available at that date. The amount of the provisioned liability reflects the effects of the passage of time and the corresponding financial indexing is recognised in results as a financial cost.

Obligations arising from onerous contracts are recorded and measured as provisions. An onerous contract exists when the Company is an integral part of a contract, whose compliance has associated costs directly associated with the contract (both incremental costs and an allocation of costs directly related to the contract) that exceed future economic benefits.

Provisions for potential future operating losses are not covered.

Contingent liabilities are not recognised in the financial statements, unless the exception provided under IFRS 3 business combination, and are disclosed whenever there is a good chance to shed resources including economic benefits. Contingent assets are not recognised in the financial statements, being disclosed when there is a likelihood of a future influx of financial resources.

Provisions are reviewed and brought up to date at the date of the statement of financial position to reflect the best estimate at that time of the obligation concerned.

2.3.15.Rights of use and Leases

A lease is defined as a contract, or part of a contract, that transfers the right to use a good (the underlying asset) for a period in exchange for a value.

At the beginning of each contract, it is evaluated and identified if it is or contains a lease. This assessment involves an exercise of judgement as to whether each contract depends on a specific asset if NOS obtains substantially all the economic benefits from the use of that asset and whether NOS has the right to control the use of the asset.

All contracts that constitute a lease are accounted for based on the on-balance model in a similar way with the treatment that IAS 17 establishes for financial leases.

At the commencement date of the lease, NOS recognises the liability related to lease payments (lease liability) and the asset representing the right to use the underlying asset during the lease period (the right of use or "ROU").

The cost of interest on the lease liability and the depreciation of the ROU are recognised separately.

Lease liability is remeasured at the occurrence of certain events (such as a change in the lease period, a change in future payments that result from a change in the reference rate or rate used to determine such payments). This remeasurement of the lease liability is recognised as an adjustment in the ROU.

The estimated costs of dismantling, removal of assets and restoration of the site related with leases are recognised in tangible assets with works carried out (Note 2.3.3).

2.3.15.1 Rights of use of assets

The Group recognizes the right to use the assets at the start date of the lease (that is, the date on which the underlying asset is available for use).

The right to use the assets is recorded at acquisition cost, deducted from accumulated depreciation and impairment losses and adjusted for any new measurement of lease liabilities. The cost of the ROU of the assets includes the recognised amount of the lease liability, any direct costs incurred initially, and payments already made prior to the initial rental date, less any incentives received.

Unless it is reasonably certain that the Group obtains ownership of the leased asset at the end of the lease term, the recognised right of use of the assets is depreciated on a straight-line basis over the shorter of its estimated useful life and the term of the lease.

Rights of use are subject to impairment.

The rights of used of assets are depreciated using the straight-line method by the shortest period between length of the contract and its expected useful life.

If at the end of the leasing contract the asset is transferred to the company, or if the cost reflects the possibility of exercising the call option, the depreciation is calculated according to the estimated useful life of the asset.

2.3.15.2 Liabilities with leases

At the start date of the lease, the Group recognizes the liabilities measured at the present value of the future payments to be made until the end of the lease.

Lease payments include fixed payments (including fixed payments on the substance), deducted of any incentives to be received, variable payments, dependent on an index or rate, and expected amounts to be paid under residual value guarantees. The lease payments also include the exercise price of a call option if it is reasonably certain that the Group will exercise the option, and penalties for termination of the lease if it is reasonably certain that the Group will terminate the lease.

Variable payments that do not depend on an index or a rate are recognised as an expense in the period in which the event giving rise to them occurs.

To calculate the present value of the lease payments, the Group uses the incremental loan rate at the start date of the lease if the implied interest rate is not readily determinable. After the start date of the lease, the value of the lease liability is increased to reflect the increase in interest and reduces by the payments made. In addition, the book value of the lease liability is remeasured if there is a change, such as a change in the lease term, fixed payments or the purchase decision of the underlying asset.

2.3.16 Income Tax

NOS is covered by the special tax regime for groups of companies, which covers all the companies in which it directly or indirectly owns at least 75% of the share capital and which simultaneously are resident in Portugal and subject to Corporate Income Tax (IRC).

The remaining subsidiaries not covered by the special tax regime for groups of companies are taxed individually based on their respective taxable incomes and the applicable tax rates.

Income tax is stated in accordance with the IAS 12 criteria. In calculating the cost relating to income tax for the period, in addition to current tax, allowance is also made for the effect of deferred tax calculated in accordance with the liability method, taking into account the temporary differences resulting from the difference between the tax basis of assets and liabilities and their values as stated in the consolidated financial statements, and the tax losses carried forward at the date of the statement of financial position. The deferred income tax assets and liabilities were calculated based on the tax legislation currently in force or of legislation already published for future application.

Deferred income tax assets are recognised for all the deductible temporary differences until it is likely that a taxable profit is obtained to which the deductible temporary difference may be used, unless the deferred income tax asset results from the initial recognition of an asset or liability in a transaction which:

• Is not a concentration of business activities;
• At the moment of the transaction, it does not affect neither the accounting profit nor the taxable profit (fiscal loss);
• With respect to deductible temporary differences arising from investments in subsidiaries, branches and associates and interests in joint arrangements, deferred income tax assets are recognised only to the extent that the temporary difference will revert in the foreseeable future and taxable profit against which the temporary difference can be used will be available.

As stipulated in the above standard, deferred income tax assets are recognised only when there is reasonable assurance that these may be used to reduce future taxable profit, or when there are deferred income tax liabilities whose reversal is expected to occur in the same period in which the deferred income tax assets are reversed. At the end of each period an assessment is made of deferred income tax assets, and these are adjusted in line with the likelihood of their future use.

The amount of tax to be included, either in current tax or in deferred tax resulting from transactions or events recognised in equity accounts, is recorded directly under those items and does not affect the results for the period.

In a business combination, the deferred tax benefits acquired are recognised as follows:

• The deferred tax benefits acquired recognised in the measurement period of one year after the date of merger and that result from new information about facts and circumstances that existed at the date of acquisition are recorded against the goodwill-carrying amount related to the acquisition. If the goodwill-carrying amount is null, any remaining deferred tax benefits are recognised in the income statement.
• All the other acquired deferred tax benefits performed are recognised in the income statement (when applicable, directly in shareholders' equity).

2.3.17 Payment based in shares

The benefits granted to employees under share purchase or share option incentive plans are recorded in accordance with the requirements of IFRS 2 – Share-based payments.

In accordance with IFRS 2, since it is not possible to reliably estimate the fair value of the services received from employees, their value is measured by reference to the fair value of equity instruments in accordance with their share price at the grant date.

The cost is recognised, linearly over the period in which the service is provided by employees, under the caption "Wages and salaries" in the income statement, with the corresponding increase in "Other reserves" in equity.

The accumulated cost recognised at the date of each statement of financial position up to the vesting reflects the best estimate of the number of own shares that will be vested, weighted by the tire elapse between the grant and the vesting. The impact on the income statement each year corresponds to the accumulated cost valuation between the beginning and the end of the year.

In turn, benefits granted based on shares but paid in cash lead to the recognition of a liability valued at fair value at the date of the statement of financial position.

2.3.18 Equity

Share issue premiums

Issue of shares corresponds to premiums from the issuance or capital increases. According to Portuguese law, share premiums follow the treatment given to the "Legal reserve", that is, the values are not distributable, except in case of liquidation, but can be used to absorb losses after having exhausted all other reserves and to increase share capital.

Own shares

The own shares are recorded at acquisition cost as a deduction from equity. Gains or losses on the sale of own shares are recorded under "Other reserves".

Legal reserve

Portuguese commercial legislation requires that at least 5% of annual net profit must be appropriated to a legal reserve until it represents at least 20% of the share capital. This reserve is not distributable, except in case of liquidation, but can be used to absorb losses, after having exhausted all other reserves and to increase share capital.

Other reserves and accumulated earnings

Reserves for plans of medium term incentive

According to IFRS 2 - "Share-based payments", the responsibility with the medium-term incentive plans settled by delivery of own shares is recorded as credit under "Reservations for mid-term incentive plans" and such reserve is not likely to be distributed or used to absorb losses.

Hedging reserves

Hedging reserve reflects the changes in fair value of derivative financial instruments as cash flow hedges that are considered effective, and they are not likely to be distributed or be used to absorb losses.

Own shares reserves

The "Own shares reserves" reflect the value of the shares acquired and follows the same legal regime as the legal reserve.

Other reserves and Retained results

This item includes the results available for distribution to shareholders and earnings per fair value in financial instruments increases, financial investments and investment properties, which, in accordance with paragraph 2 of article 32 of the CSC, will only be available for distribution when the elements or rights that originated them are sold, exercised, terminated, or settled.

Under Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of the company prepared in accordance with IFRS. In addition, the increases resulting from the application of fair value through equity components, including its application through the net profit can only be distributed when the elements that originated them are sold, exercised liquidated or when the end their use, in the case of tangible assets or intangible assets.

Dividends

The company recognizes the liability, as well as its impact over the equity, associated with the responsibility to distribute dividends when it is approved by the shareholders.

2.3.19 Revenue

The main types of revenue of NOS subsidiaries are as follows:

• Revenues of Communications Services:

Cable/Satellite television, fixed broadband and fixed voice: The revenues from services provided using the fibre optic cable network result from:

• basic channel subscription packages that can be sold in a bundle with fixed broadband/fixed voice services;
• premium channel subscription packages and S-VOD;
• terminal equipment rental;
• consumption of content (VOD);
• traffic and voice termination;
• service activation;
• sale of equipment, licensing and others; and
• other additional services (ex: firewall, antivirus).

• Mobile broadband and voice services: Revenues from mobile broadband Internet access services and mobile voice services result mainly from monthly subscriptions and/or usage of the Internet and voice service, as well as the traffic associated with the type chosen by the client.
• Advertising revenue: Advertising revenues mainly derive from the attraction of advertising for Pay TV channels to which the Group has publicity rights and in cinemas. These revenues are recognised from when they are received, taken off any discounts given.
• Film showings and distribution: Distribution revenue pertains to the distribution of films to film exhibitors not distributed by the Group, that are included in the film showings, whilst income from film showings mostly derive from cinema ticket sales and the product sales in the bars; the film showings revenue includes the revenue from ticket sales and bar sales respectively.
• Revenue from distributing channel content: Revenue from distribution essentially includes the sale of DVDs, the sale of content and the distribution of television channels subscriptions to third parties and count from the time at which they are sold, shown, and made available for distribution to telecommunications operators, respectively. The television channels distribution by subscription to third parties consists in the transmission and retransmission of information, including, namely, the distribution of television emissions and radio broadcasting, owned and third partied owned, codified or not, as well as the addressed nature rendered services and data transmission. NOS is leading these activities since it: controls the channel exhibition, in its package of products disposes the power of pricing, the retribution corresponds to the service price and not to a mere commission and it is exposed to the credit risk of its customers.
• Consultancy and datacenter management: information systems consultancy and datacenter management are the major services rendered by NOS Sistemas.
• Insurance brokerage commissions: income from insurance sales commissions is obtained by NOS Mediação de Seguros.
• Intelligent Alarm: the revenues obtained with the NOS | Securitas Intelligent Alarm include security solutions for people and property, which combine the professional monitoring of the Securitas Alarm Center with NOS latest technology.

The Group's revenue is based on the five-step model established by IFRS 15:

• Identification of the contract with the customer;
• Identification of performance obligations;
• Determining the price of the transaction;
• Allocation of the price of the transaction to the performance obligations; and
• Recognition of revenue.

Thus, at the beginning of each contract, the NOS Group evaluates the promised goods or services and identifies, as a performance obligation, every promise of transfer to the customer of any distinct good or service (or package of goods or services). These promises in customer contracts may be express or implied, provided such promises create a valid expectation in the client that the entity will transfer a good or service to the customer, based on the entity's published policies, specific statements or usual business practices.

The NOS Group has internally defined that a performance obligation corresponds to the promise of delivery of a good or service that can be used in an isolated/separated way by the customer and on which there is a clear perception of this good or service by the customer among the available in each contract.

The main performance obligations are summarized as Sales of Mobile Phones, Telephones, Hotspots, DVD's, Movie Tickets, Licensing and Other Equipment and the Services Rendered of Mobile Internet Services, Fixed Internet, Mobile Phone, Landline Phone, Television, Consulting, Cloud/ IT Services, distribution of audio-visual rights among others.

The provision of Set-top-boxes, routers, modems and other terminal equipment at the customers' home and respective installation and activation services were considered by the group as not corresponding to a performance obligation, since they are necessary actions to fulfil the promised performance obligation.

In determining and allocating the transaction price of each performance obligation, NOS used stand-alone prices of the promised products and services at the time of entering into the agreement with the customer to distribute the amount expected to be received under the contract.

The recognition of revenue occurs at the time of performance of each performance obligation.

Revenue from selling equipment is included when the buyer takes on the risks and advantages of taking possession of goods and the value of the benefits are reasonably quantified.

Revenue from telecom services subscriptions (TV, internet, mobile and fixed voice services bundle subscription, individually or as a bundle) is recognised linearly over the subscription period.

Revenue from equipment rental is recognised linearly over the rental agreement, except in the case of instalment sales, which are accounted as credit sales.

The Group attributes to its customers loyalty points in each call or recharge, that might be exchanged, over a limited period, for discounts in equipment purchase.

In each reporting period, NOS recognizes the current liability with discounts to be awarded in the future. This responsibility is calculated based on the amount of points awarded and not yet used, discounted from the estimate of points that will not be used (based on the history of use) and valued based on the offer available at each time for the use of points (specific catalog).

The recognition of liability configures a deferred income (until the date on which the points are definitively converted into benefits), which is recognised at the time of the use of the discount, as a revenue accrual.

Revenue related with traffic, roaming, data usage, audiovisual content, and others is recognised when the service is rendered. The Group also offers various personalised solutions, particularly to its corporate customers in telecom management, access, voice, and data transmission services. These personalised solutions are also recognised when the service is rendered.

Unless demanded or allowed by IFRS, the compensation of revenues and costs is not performed, namely, when it reflects the nature of the transaction or other event.

The compensation of revenues and costs is performed in the following situations:

• When the gross inflows from economic benefits do not result in equity increases to the Group, i.e., the amount charged to the customer is equal to the amount delivered to the partner. This situation is applicable to the revenue obtained by the invoicing special services operators, in these cases the amounts charged on account of the capital are not revenue; and
• When the counterpart is not a "customer" but a partner who shares the risks and benefits of developing a product or services in order for it to be commercialised. Thus, a counterpart of a contract will not be a customer if, for instance, the counterpart has hired from NOS to participate in an activity or process in which the parties in the contract share the risks and benefits instead of obtaining the Group's ordinary activities result. These cases are designated collaborative arrangements. This situation is applicable to revenues from operators affected by the reciprocal availability agreement regarding broadcasting rights of sports content.

Discounts granted to customers related with loyalty programmes are allocated to the entire retention contract to which the customer is committed to. Therefore, the discount is recognised as the goods and services made available to the customer.

Amounts that have not been invoiced for are included based on estimates. The differences between the estimated amounts and the actual amounts, which are normally immaterial, are recorded in the next financial year.

The revenue from penalties is recognised in the "Other income" item upon receival.

Interest revenue is recognised using the effective interest method, only when they generate future economic benefits.

2.3.20 Accruals

Group's revenues and costs are recognised in accordance with the accrual's principle, under which they are recognised as they are generated or incurred, regardless of when they are received or paid.

The costs and revenues related to the current period and whose expenses and income will only occur in future periods are registered under "Accounts receivable – trade", "Accounts receivable – other", "Prepaid expenses", "Accrued expenses" and "Deferred income", as well as the expenses and income that have already occurred that relate to future periods, which will be recognised in each of those periods, for the corresponding amount.

The costs related to the current period and whose expenses will only occur in future periods are registered under "Accrued expenses" when it is possible to estimate with certainty the related amount, as well as the timing of the expense's materialization. If uncertainty exists related to any of these aspects, the value is classified as Provisions (Note 2.3.14).

2.3.21 Assets, liabilities and transactions in foreign currencies

Transactions in foreign currencies are converted into the functional currency at the exchange rate on the transactions dates. On each accounting date, outstanding balances (monetary items) are updated by applying the exchange rate prevailing on that date. The exchange rate differences in this update are recognised in the income statement for the year in which they were calculated in the item "Losses / (gains) on exchange variations". Exchange rate variations generated on monetary items, which constitute enlargement of the investment denominated in the functional currency of the Group or of the subsidiary in question, are recognised in equity. Exchange rate differences on non-monetary items are classified in "Other reserves" in equity.

The financial statements of subsidiaries denominated in foreign currencies are converted at the following exchange rates:

• The exchange rate obtaining on the date of the statement of financial position for the conversion of assets and liabilities;
• The average exchange rate in the period for the conversion of items in the income statement, apart from cases of affiliated companies that are in a hyperinflationary economy;
• The average exchange rate in the period, for the conversion of cash flows (in cases where the exchange rate approximates to the real rate, and for the remaining cash flows the rate of exchange at the date of the operations is used), apart from cases of affiliated companies that are in a hyperinflationary economy;
• The historical exchange rate for the conversion of equity accounts.

Exchange differences arising from the conversion into euros of the financial statements of subsidiaries denominated in foreign currencies are included in equity under "Other reserves".

In the last quarter of 2017, the Angolan economy was considered a hyperinflationary economy according to IAS 29 - Financial Reporting in Hyperinflationary Economies.

This standard requires that the financial statements prepared in the currency of a hyperinflationary must be expressed in terms of the current measurement unit at the financial statements' preparation date.

In summary, the general aspects that must be considered for the restatement of the individual financial statements are the following ones:

• The monetary assets and liabilities are not amended because they are already updated to the current unit at the financial statements date;
• The non-monetary assets and liabilities (that are still not expressed in terms of the current unit at the financial statements) are restated by the application of an index;
• The effect of the inflation on the net monetary position of the subsidiaries companies is reflected in the income statement as a loss in the net monetary position.

Additionally, according to IAS 21, the restatement of the consolidated financial statements is prohibited when the parent company does not operate in a hyperinflationary economy.

The conversion coefficient that was used for the restatement of the individual financial statements of the subsidiaries in Angola was the Consumer Price Index (CPI), issued by the National Bank of Angola.

In the last quarter of 2019, the Angolan economy was no longer considered a hyperinflationary economy.

IAS 29 - Financial Reporting in Hyperinflationary Economies provides that "when an economy ceases to be hyperinflationary, the company should treat the amounts expressed in the current unit of measurement at the end of the previous reporting period, as the basis for the carrying amounts in its statements subsequent financial statements". In this way, the adjustments / revaluations, carried out until the end of the classification as a hyperinflationary economy, are treated as a deemed cost and recognised in the same proportion as the assets that gave rise to it.

At 31 December 2022 and 30 September 2023, assets and liabilities expressed in foreign currencies were converted into euros using the following exchange rates of such currencies against the euro, as published by the Bank of Portugal:

	31-12-2022	30-09-2023
US Dollar	1.0666	1.0594
Angolan Kwanza	537.5664	879.3020
British Pound	0.8869	0.8646
Mozambican Metical	67.4500	66.9500
Canadian Dollar	1.4440	1.4227
Swiss Franc	0.9847	0.9669
Real	5.6386	5.3065

In the period of nine months ended on 30 September 2022 and 2023, the income statements of subsidiaries expressed in foreign currencies were converted to euros at the average exchange rates of the currencies of their countries of origin against the euro. The average exchange rates used are as follows:

	9M 22	9M 23
Angolan Kwanza	464.9699	709.4723
Mozambican Metical	66.7544	68.4222

2.3.22 Financial charges and borrowings

Financial charges related to borrowings are recognised as costs in accordance with the accrual's principle, except in the case of loans incurred (whether these are generic or specific) for the acquisition, construction or production of an asset that takes a substantial period (over one year) to be ready for use, which are capitalized in the acquisition cost of that asset. Costs from capitalized borrowings are determined having in consideration the amount of borrowing costs obtained that can be capitalized, according to the application of a capitalization rate over the expenses associated with that asset. The capitalization rate (aligned with NOS average financing rate) as well as with the costs to be capitalized are determined monthly, taking into consideration the monthly balance of eligible borrowings and the monthly amount of the asset in progress that qualifies.

2.3.23 Investment property

Investment property mainly includes buildings held to generate rents rather than for use in the production or supply of goods or services, or for administrative purposes, or for sale in the ordinary course of business. These are measured initially at cost.

Subsequently, the Group uses the cost model for the valuation of investment property since use of the fair value model would not result in material differences.

An investment property is eliminated from the statement of financial position on disposal or when the investment property is taken permanently out of use and no financial benefit is expected from its disposal.

2.3.24 Fair value measurement

The Group measures part of the financial assets, such as financial assets available for sale, and some of its non-financial assets, at fair value on the date of the financial statements.

The fair value measurement assumes that the asset or liability is exchanged in an orderly transaction among market participants to sell the asset or transfer the liability at the measurement date under current market conditions. The fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability may occur:

• On the main market of the assets and liabilities, or
• In the absence of a primary market, it is assumed that the transaction occurs in the most advantageous market. This is what maximizes the amount that would be received for selling asset or minimizes the amount that would be paid to transfer the liability, after considering transaction costs and transport costs.

Since different entities and businesses within a single entity can have access to different markets, the main or most advantageous market for the same asset or liability can vary from one entity to another, or even between businesses within the same entity, but it is assumed that they are accessible to the Group.

The fair value measurement uses assumptions that market participant's use in defining price of the asset or liability, assuming that market participants would use the asset to maximize its value.

The Group uses valuation techniques appropriate to the circumstances whenever there is information to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities measured at fair value or of which disclosure is mandatory, are rated on a fair value hierarchy, which ranks data in three levels to be used in the measurement at fair value, and detailed below:

• Level 1 Listed and unadjusted market prices, in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 valuation techniques using inputs that aren't quoted, but which are directly or indirectly observable;
• Level 3 valuation techniques using inputs not based on observable market data, based on unobservable inputs.

The fair value measurement is classified in the same fair value hierarchy level at the lowest level of input, which is significant to the measurement as a whole.

2.3.25 Assets and liabilities offsetting

Financial assets and liabilities are offset and presented at the net amount when, and only when, the Group has the right to offset the recognised amounts and intends to settle for the net amount.

2.3.26 Employee benefits

Personnel expenses are recognised when the service is rendered by employees independently of their date of payment. Here are some specificities:

• Termination of employment. The benefits for termination of employment are due for payment when there is cessation of employment before the normal retirement date or when an employee voluntarily accepts to leave in exchange of these benefits. The Group recognizes these benefits when it can be shown to be committed to a termination of current employees according to a detailed formal plan for termination and there is no realistic possibility of withdrawal or these benefits are granted to encourage voluntary redundancy. When the benefits of cessation of employment are due more than 12 months after the balance sheet date, they are updated to their present value.
• Holiday, holiday allowances, and bonuses. According to the labor law, employees are entitled to 22 days annual leave, as well as one month of holiday allowances, rights acquired in the year preceding payment. These liabilities of the Group are recorded when incurred, independently of the moment of payment, and are reflected under the item "Accounts payable and other".

• Labor Compensation Fund (FCT) and the Labor Compensation Guarantee Fund (FGCT). Based on the publication of Law No. 70/2013 and subsequent regulation by Order No. 294-A / 2013, entered into force on 1 October the Labor Compensation Fund schemes (FCT) and the Guarantee Fund Compensation of Labor (FGCT). In this context, companies that hire a new employee are required to deduct a percentage of the respective salary for these two new funds (0.925% to 0.075% and the FCT for FGCT), in order to ensure, in the future, the partial payment the compensation for dismissal. Considering the characteristics of each Fund, the following is considered:
  • The monthly deliveries to FGCT, made by the employer are recognised as expense in the period to which they relate.
  • The monthly deliveries to FCT, made by the employer are recognised as a financial asset, in the caption "Other non-current financial assets" of the entity, measured at fair value with changes recognised in the respective results.

2.3.27 Statement of cash flows

The statement of cash flows is prepared in accordance with the direct method. The Group classifies under "Cash and cash equivalents" the assets with maturities of less than three months and for which the risk of change in value is negligible. For purposes of the statement of cash flows, the balance of cash and cash equivalents also include bank overdrafts included in the statement of financial position under "Borrowings".

The statement of cash flows is divided into operating, investing, and financing activities.

Operating activities include cash received from customers and payments to suppliers, staff and others related to operating activities. Under "Other cash receipts / (payments) related with operating activity" includes the amount received and subsequent payments related to assignments without recourse, coordinated by the Banco Comercial Português and Caixa Geral de Depósitos, and these operations do not involve any change in the accounting treatment of the underlying receivables or in the relationship with their clients.

The cash flows included in investing activities include acquisitions and disposals of investments in subsidiaries and cash received and payments arising from the purchase and sale of tangible and intangible assets, amongst others.

Financing activities include cash received and payments relating to borrowings, the payment of interest and similar costs, finance leases, the purchase and sale of own shares and the payment of dividends.

2.3.28 Subsequent events

Events occurring after the date of the statement of financial position, which provide additional information about conditions that existed at that date, are considered in the preparation of financial statements of the quarter.

Events occurring after the date of the statement of financial position, which provide information on conditions that occur after that date, are disclosed in the notes to the financial statements, when they are materially relevant.

3. Judgements and estimates

3.1. Relevant accounting estimates

The preparation of consolidated financial statements requires the Group's management to make judgments and estimates that affect the statement of financial position and the reported results. These estimates are based on the best information and knowledge about past and/or present events and on the operations that the Company considers it may implement in the future. However, at the date of completion of such operations, their results may differ from these estimates.

Changes to these estimates that occur after the date of approval of the consolidated financial statements will be corrected in the income statement in a prospective manner, in accordance with IAS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors".

The estimates and assumptions that imply a greater risk of giving rise to a material adjustment in assets and liabilities are described below:

Entities included in the consolidation perimeter

To determine the entities to be included in the consolidation perimeter, the Group assesses the extent to which it is exposed, or has rights, to variability in return from its involvement with that entity and can take possession of them through the power it holds over this entity.

The decision that an entity must be consolidated by the Group requires the use of judgment, estimates, and assumptions to determine the extent to which the Group is exposed to return variability and the ability to take possession of them through its power.

Other assumptions and estimates could lead to the Group's consolidation perimeter being different, with direct impact on the consolidated financial statements.

Impairment of non-current assets, excluding goodwill

The determination of a possible impairment loss can be triggered by the occurrence of various events, such as the availability of future financing, the cost of capital or other market, economic and legal changes or changes with an adverse effect on the technological environment, many of which are beyond the Group's control.

The identification and assessment of impairment indicators, the estimation of future cash flows, and the calculation of the recoverable value of assets involve a high degree of judgment by the Board.

Impairment of goodwill

Goodwill is annually subject to impairment tests or whenever there are indications of a possible loss of value, according to the criteria referred on Note 8. The recoverable values of the cash-generating units to which goodwill is allocated are determined based on the calculation of current use values. These calculations require the use of estimates by management.

Intangible and tangible assets

The life of an asset is the period during which the Company expects that an asset will be available for use and this should be reviewed at least at the end of each financial year.

The determination of the useful lives of assets, the amortization/depreciation method to be applied, and the estimated losses resulting from the replacement of equipment before the end of its useful life due to technological obsolescence is crucial in determining the amount of amortization/depreciation to be recognised in the consolidated income statement each period.

These three parameters are defined using management's best estimates for the assets and businesses concerned and taking account of the practices adopted by companies in the sectors in which the Group operates.

The capitalized costs with the audiovisual content distribution rights acquired for commercialization in the various windows of exhibition are amortised over the period of exploration of the respective contracts. Additionally, these assets are subject to impairment tests whenever there are indications of changes in the pattern generation of future revenue underlying each contract.

The residual value, the useful life and the depreciation methods are periodically revised by the various companies of the Group and prospectively adjusted, if appropriated.

Rights of use

The Group determines the end of the lease as the non-cancelable part of the lease term, together with any periods covered by an option to extend the lease if it is reasonably certain that it will be exercised, or any periods covered by an option to terminate the lease agreement, if it is reasonably certain that it will not be exercised.

The Group has the option, under some of its lease agreements, to lease its assets for additional periods. NOS assesses the reasonableness of exercising the option to renew the contract. That is, NOS considers all the relevant factors that create an economic incentive for exercising the renewal. After the start date, the Group re-evaluates the termination of the contract if there is a significant event or changes in circumstances that are under control and affect its ability to exercise (or not exercise) the renewal option (a change in strategy of business).

Provisions

The Group periodically reviews any obligations arising from past events, which should be recognised or disclosed. The subjectivity involved in determining the probability and amount of internal resources required to meet obligations may give rise to significant adjustments, either due to changes in the assumptions made, or due to the future recognition of provisions previously disclosed as contingent liabilities.

Deferred income tax assets

Deferred income tax assets are recognised only when there is strong assurance that there will be future taxable income available to use the temporary differences or when there are deferred tax liabilities whose reversal is expected in the same period in which the deferred tax assets are reversed. The assessment of deferred income tax assets is undertaken by management at the end of each period taking account of the expected future performance of the Group.

Expected credit losses

The credit risk on the balances of accounts receivable is assessed at each reporting date, using a collection matrix based on the historical past collections adjusted from the future expectation of collections evolution, to determine the uncollectibility rate. The expected credit losses of the accounts receivable are thus adjusted for the assessment made, which may differ from the effective risk that will incurred in the future.

Fair value of financial assets and liabilities

When the fair value of an asset or liabilities is calculated, on an active market, the respective market price is used. When there is no active market, which is the case with some of the Group's financial assets and liabilities, valuation techniques generally accepted in the market, based on market assumptions, are used.

The Group applies evaluation techniques for unlisted financial instruments, such as derivatives, financial instruments at fair value and instruments measured at amortised cost. The most frequently used valorization models are models of discounted cash flows and option models, which incorporate, for example, interest rate and market volatility curves.

For certain types of more complex derivatives, more advanced valuation models are used containing assumptions and data that are not directly observable in the market, for which the Group uses internal estimates and assumptions.

3.2. Errors, estimates, and changes to accounting policies

During the nine months ended 30 September 2022 and 2023 no material errors, estimates or changes in accounting policies were recognised in relation to prior years. On 31 December 2022, a reclassification of estimates to address uncertainties regarding the acceptance of a particular tax treatment by the Tax Administration was made from Taxes payable to deferred tax liabilities, with restatement of the period ended on 30 September 2022, for comparability purposes, in the amount of €42.5 million (Note 15).

4. Changes in the perimeter

During the nine months ended on 30 September 2022, there were no changes in the perimeter.

During the nine months ended on 30 September 2023, the following changes in perimeter occurred:

• Incorporation of the company Ten Twenty One, S.A., in February 2023, whose main activity is the provision of engineering and consulting services in the area of information technologies, communications and electronics;
• Disposal of the stake held in Big Picture 2 Films (20%), in June 2023, for the amount of 50 thousand euros (Note 11);
• Acquisition of the company BLU, S.A., in March 2023, whose main activity is the provision of telecommunications services, establishment, management and operation of telecommunications networks, and subsequent merger into NOS Comunicações in May 2023. This merger did not originate any material impacts on the Group's consolidated financial statements.

• Acquisition of a stake in the company BrightCity, S.A. (50%), in September 2023, for the sum of 255 thousand euros (Note 11) and shareholder loans of 129 thousand euros.

Following the acquisition of BLU, S.A., NOS made a preliminary assessment of the fair value of assets acquired and liabilities assumed through this operation, so the purchase price allocation is still subject to changes until the conclusion of the period of one year from the control date, as permitted by IFRS 3 - Business Combinations. Nevertheless, NOS does not estimate material changes as a result of any changes to the allocation made.

The detail of net assets acquired and goodwill arising on this transaction is as follows:

	BOOK VALUE	ADJUSMENTS TO FAIR VALUE	FAIR VALUE
ACQUIRED ASSETS
Contract costs - customer portfolio	-	183	183
Accounts receivable	141	-	141
Prepaid expenses	21	-	21
Cash and cash equivalents	158	-	158
	320	183	503
ACQUIRED LIABILITIES
Accounts payable	120	-	120
Tax payable	7	-	7
Deferred income	26	-	26
	153	-	153
TOTAL NET ASSETS ACQUIRED	167	183	350
GOODWILL			-
ACQUISITION PRICE (NOTE 11)			350

The difference between the amount paid and the net assets acquired was allocated in full to the company's client portfolio, taking into account the rationale behind the acquisition operation.

The contribution of BLU, S.A. to net income and revenues for the period of nine months ended on 30 September 2023, was 72 thousand euros and 275 thousand euros respectively, corresponding to a period of three month (from March to May, date of the fusion).

The net cash flows with the acquisition of BLU, S.A., resulted in a payment of 192 thousand euros, included in the cash flows of Investment Activities (Price paid: 350 thousand euros; Cash and cash equivalents: 158 thousand euros).

Following the acquisition of the stake in BrightCity, S.A., NOS carried out a preliminary assessment of the fair value of the assets acquired and liabilities assumed through this operation, so the purchase price allocation is still subject to change until the conclusion of the one-year period from the date of control, as permitted by IFRS 3 - Business Combinations. Nevertheless, NOS does not estimate any material changes as a result of possible alterations to the allocation made.

	BOOK VALUE	ADJUSMENTS TO FAIR VALUE	FAIR VALUE
ACQUIRED ASSETS
Tangible and Intagible fixed assets	63	461	524
Accounts receivable	530	-	530
Tax receivable	153	-	153
Prepaid expenses	6	-	6
Cash and cash equivalents	123	-	123
	875	461	1,336
ACQUIRED LIABILITIES
Loans	256	-	256
Accounts payable	568	-	568
Tax payable	2	-	2
	826	-	826
TOTAL NET ASSETS ACQUIRED	49	461	510
TOTAL NET ASSETS ACQUIRED (50%)	25	231	255
GOODWILL			-
ACQUISITION PRICE			255

The difference between the amount paid and the net assets acquired was allocated in full to the company's Intangible Assets, consider the intellectual property owned/developed by the company.

The net value of the assets and liabilities acquired is recognized under "Investments in joint ventures and associates".

5. Segment reporting

The business segments are as follows:

• Telco TV, Internet (fixed and mobile) and voice (fixed and mobile) services rendered and includes the following companies: NOS Technology, Per-mar, Sontária, NOS SGPS, NOS Açores, NOS Property, NOS Madeira, NOS SA, NOS Audio- Sales and Distribution, Teliz Holding, NOS Sistemas, NOS Sistemas España, NOS Inovação, NOS Internacional SGPS, NOS Corporate Center, NOS Wholesale, Fundo NOS 5G, Dualgrid, NOS Mediação de Seguros and Ten Twenty One.
• Audiovisual the supply of video production services and sales, cinema exhibition and distribution and the acquisition/negotiation of Pay TV and VOD (video-on-demand) rights and includes the following companies: NOS Audiovisuais, NOS Cinemas, Lusomundo Moçambique, Lda ("Lusomundo Moçambique"), Lusomundo Imobiliária 2, S.A. ("Lusomundo Imobiliária 2"), Lusomundo Sociedade de Investimentos Imobiliários, SGPS, S.A. ("Lusomundo SII"), Empracine – Empresa Promotora de Atividades Cinematográficas, Lda ("Empracine"), NOS Audio SGPS and Dreamia S.L.

Assets and liabilities by segment at 31 December 2022 and 30 September 2023 are shown below:

	31-12-2022
	TELCO	AUDIOVISUALS	ELIMINATIONS	GROUP
ASSETS
NON - CURRENT ASSETS:
Tangible assets	1,098,022	9,030	-	1,107,052
Intangible assets	1,117,022	92,536	-	1,209,558
Contract costs	160,594	-	-	160,594
Rights of use	270,493	27,230	-	297,723
Investments in jointly controlled companies
and associated companies	122,712	46,256	(130,007)	38,961
Accounts receivable - other	43,569	3,082	(41,893)	4,758
Deferred income tax assets	81,545	8,009	-	89,554
Other non-current assets	16,917	463	-	17,380
TOTAL NON - CURRENT ASSETS	2,910,874	186,606	(171,900)	2,925,580
CURRENT ASSETS:
Inventories	66,657	566	-	67,223
Account receivables	391,650	47,390	(42,872)	396,168
Prepaid expenses	50,891	1,721	(380)	52,232
Other current assets	4,788	2,118	-	6,906
Cash and cash equivalents	14,265	950	-	15,215
TOTAL CURRENT ASSETS	528,251	52,745	(43,252)	537,744
TOTAL ASSETS	3,439,125	239,351	(215,152)	3,463,324
SHAREHOLDER'S EQUITY
Share capital	855,168	48,917	(48,917)	855,168
Capital issued premium	4,202	-	-	4,202
Own shares	(15,968)	-	-	(15,968)
Legal reserve	1,030	1,989	(1,989)	1,030
Other reserves and accumulated earnings	7,998	37,897	(68,809)	(22,914)
Net income	216,203	18,207	(9,836)	224,574
EQUITY BEFORE NON - CONTROLLING
INTERESTS	1,068,633	107,010	(129,551)	1,046,092
Non-controlling interests	6,286	-	(35)	6,251
TOTAL EQUITY	1,074,919	107,010	(129,586)	1,052,343
LIABILITIES
NON - CURRENT LIABILITIES:
Borrowings	1,188,142	63,931	(41,892)	1,210,181
Provisions	73,656	7,611	-	81,267
Other non-current liabilities	44,952	-	-	44,952
Deferred income tax liabilities	49,296	829	-	50,125
TOTAL NON - CURRENT LIABILITIES	1,356,046	72,371	(41,892)	1,386,525
CURRENT LIABILITIES:
Borrowings	433,941	17,185	(23,673)	427,453
Accounts payable	305,870	17,086	(15,812)	307,144
Tax payable	37,485	1,357	-	38,842
Accrued expenses	199,001	17,274	(3,845)	212,430
Other current liabilities	31,898	7,068	(379)	38,587
TOTAL CURRENT LIABILITIES	1,008,195	59,970	(43,709)	1,024,456
TOTAL LIABILITIES	2,364,241	132,341	(85,601)	2,410,981
TOTAL LIABILITIES AND SHAREHOLDER´S
EQUITY	3,439,160	239,351	(215,187)	3,463,324

	30-09-2023
	TELCO	AUDIOVISUALS	ELIMINATIONS	GROUP
ASSETS
NON - CURRENT ASSETS:
Tangible assets	1,087,518	8,817	-	1,096,335
Intangible assets	1,115,779	93,292	-	1,209,071
Contract costs	159,022	-	-	159,022
Rights of use	273,850	35,729	-	309,579
Investments in jointly controlled companies
and associated companies	114,181	46,004	(130,007)	30,178
Accounts receivable - other	43,394	3,173	(41,893)	4,674
Deferred income tax assets	84,757	7,262	-	92,019
Other non-current assets	17,840	452	-	18,292
TOTAL NON - CURRENT ASSETS	2,896,342	194,729	(171,901)	2,919,170
CURRENT ASSETS:	-	-	-	-
Inventories	64,229	632	-	64,861
Account receivables	464,747	53,183	(94,993)	422,937
Prepaid expenses	56,677	1,075	(378)	57,374
Other current assets	11,550	1,490	-	13,040
Cash and cash equivalents	10,872	1,071	-	11,943
TOTAL CURRENT ASSETS	551,398	56,376	(37,619)	570,155
TOTAL ASSETS	3,447,740	251,105	(209,520)	3,489,325
SHAREHOLDER'S EQUITY	-	-	-	-
Share capital	855,168	48,917	(48,917)	855,168
Capital issued premium	4,202	-	-	4,202
Own shares	(15,059)	-	-	(15,059)
Legal reserve	4,374	2,697	(2,697)	4,374
Other reserves and accumulated earnings	(12,734)	48,241	(70,902)	(35,395)
Net income	119,732	13,624	(7,036)	126,320
EQUITY BEFORE NON - CONTROLLING
INTERESTS	955,683	113,479	(129,552)	939,610
Non-controlling interests	6,337	-	-	6,337
TOTAL EQUITY	962,020	113,479	(129,552)	945,947
LIABILITIES	-	-	-	-
NON - CURRENT LIABILITIES:	-	-	-	-
Borrowings	1,555,223	71,864	(41,893)	1,585,194
Provisions	75,390	8,009	-	83,399
Other non-current liabilities	41,691	-	-	41,691
Deferred income tax liabilities	50,448	365	-	50,813
TOTAL NON - CURRENT LIABILITIES	1,722,752	80,238	(41,893)	1,761,097
CURRENT LIABILITIES:	-	-	-	-
Borrowings	202,926	10,882	(23,800)	190,008
Accounts payable	294,516	17,999	(9,187)	303,328
Tax payable	26,542	1,434	-	27,976
Accrued expenses	206,657	20,383	(4,710)	222,330
Other current liabilities	32,327	6,690	(378)	38,639
TOTAL CURRENT LIABILITIES	762,968	57,388	(38,075)	782,281
TOTAL LIABILITIES	2,485,720	137,626	(79,968)	2,543,378
TOTAL LIABILITIES AND SHAREHOLDER´S
EQUITY	3,447,740	251,105	(209,520)	3,489,325

The results by segment and investments in tangible and intangible assets, contract costs and rights of use for the nine months ended on 30 September 2022 and 2023 are shown below:

	TELCO			AUDIOVISUALS		ELIMINATIONS		GROUP
	3º QUARTER 22	9M 22	3º QUARTER 22	9M 22	3º QUARTER 22	9M 22	3º QUARTER 22	9M 22
REVENUES:
Services rendered	335,668	986,768		25,068 58,534	(14,720)	(32,859)		346,016 1,012,443
Sales	25,044	81,383	3,432	8,452	(39)	(110)	28,437	89,725
Other operating revenues	6,893	20,845	337	937	(151)	(452)	7,079	21,330
		367,605 1,088,996		28,837 67,923	(14,910)	(33,421)		381,532 1,123,498
COSTS, LOSSES AND GAINS:
Wages and salaries	19,494	55,641	2,681	7,396	-	-	22,175	63,037
Direct costs	80,048	255,802	5,282	12,717	(7,565)	(22,572)	77,765	245,947
Costs of products sold	23,139	78,066	758	1,809	(8)	(23)	23,889	79,852
Marketing and advertising	8,865	24,638	682	2,069	(2,901)	(8,865)	6,646	17,842
Support services	18,438	58,723	708	2,143	(785)	(2,367)	18,361	58,499
Supplies and external services	37,421	110,833	6,946	6,277	(3,651)	406	40,716	117,516
Other operating losses / (gains)	59	497	27	138	-	-	86	635
Taxes	9,158	26,711	43	96	-	-	9,201	26,807
Provisions and adjustments	4,835	13,957	13	(715)	-	-	4,848	13,242
	201,457	624,868		17,140 31,930	(14,910)	(33,421)	203,687	623,377
EBITDA	166,148	464,128		11,697 35,993	-	-	177,845	500,121
Depreciation, amortisation and impairment losses	117,490	323,563	6,749	21,993	-	-	124,239	345,556
Other losses / (gains), net	(74,290)	(76,740)	132	358	-	-	(74,158)	(76,382)
INCOME BEFORE LOSSES / (GAINS)
PARTICIPATED COMPANIES, FINANCIAL	122,948	217,305		4,816 13,642	-	-	127,764	230,947
RESULTS AND TAXES
Net losses / (gains) of affiliated companies	(6,720)	(16,908)	134	(67)	-	-	(6,586)	(16,975)
Financial costs	7,070	22,590	262	944	-	-	7,332	23,534
Net foreign exchange losses / (gains)	(295)	(377)	(60)	(23)	-	-	(355)	(400)
Net losses / (gains) on financial assets	41	(7,282)	-	(2,754)	-	10,133	41	97
Net other financial expenses / (income)	842	2,523	5	18	-	-	847	2,541
	938	546		341 (1,882)	-	10,133	1,279	8,797
INCOME BEFORE TAXES	122,010	216,759		4,475 15,524	-	(10,133)	126,485	222,150
Income taxes	19,517	28,414	1,098	2,562	-	-	20,615	30,976
NET INCOME	102,493	188,345		3,377 12,962	-	(10,133)	105,870	191,174
CAPEX	136,829	398,168	(37)	15,425	-	-	136,792	413,593
EBITDA - CAPEX	29,319	65,960		11,734 20,568	-	-	41,053	86,528

	TELCO AUDIOVISUALS			ELIMINATIONS		GROUP
	3º QUARTER 23	9M 23	3º QUARTER 23	9M 23	3º QUARTER 23	9M 23	3º QUARTER 23	9M 23
REVENUES:
Services rendered		355,785 1,043,458		26,136 63,256	(8,963)	(25,000)		372,958 1,081,714
Sales	21,857	66,711	5,510	12,927	(63)	(205)	27,304	79,433
Other operating revenues	7,287	21,403	517	1,011	(150)	(450)	7,654	21,964
	384,929	1,131,572		32,163 77,194	(9,176)	(25,655)		407,916 1,183,111
COSTS, LOSSES AND GAINS:
Wages and salaries	20,247	60,455	3,059	8,362	-	(2)	23,306	68,815
Direct costs	84,774	257,618		7,820 17,978	(6,235)	(18,614)	86,359	256,982
Costs of products sold	20,796	63,162	1,321	2,958	(3)	(16)	22,114	66,104
Marketing and advertising	7,277	26,701	1,443	3,118	(2,948)	(8,918)	5,772	20,901
Support services	21,024	67,766	734	2,052	(811)	(2,236)	20,947	67,582
Supplies and external services	35,042	104,602	2,683	4,257	821	4,131	38,546	112,990
Other operating losses / (gains)	92	565	38	120	-	-	130	685
Taxes	8,855	26,776	27	67	-	-	8,882	26,843
Provisions and adjustments	1,667	9,573	(239)	(398)	-	-	1,428	9,175
	199,774	617,218		16,886 38,514	(9,176)	(25,655)	207,484	630,077
EBITDA	185,155	514,354		15,277 38,680	-	-	200,432	553,034
Depreciation, amortisation and impairment losses	116,302	339,550		6,536 20,304	-	-	122,838	359,854
Other losses / (gains), net	(66)	784	(65)	320	-	-	(131)	1,104
INCOME BEFORE LOSSES / (GAINS)
PARTICIPATED COMPANIES, FINANCIAL	68,919	174,020		8,806 18,056	-	-	77,725	192,076
RESULTS AND TAXES
Net losses / (gains) of affiliated companies	(1,469)	(4,850)	54	201	-	-	(1,415)	(4,649)
Financial costs	17,499	44,195	707	1,395	-	-	18,206	45,590
Net foreign exchange losses / (gains)	(283)	(45)	16	(16)	-	-	(267)	(61)
Net losses / (gains) on financial assets	198	(6,837)	(8)	(4)	-	7,036	190	195
Net other financial expenses / (income)	831	2,727	3	12	-	-	834	2,739
	16,776	35,190	772	1,588	-	7,036	17,548	43,814
INCOME BEFORE TAXES	52,143	138,830		8,034 16,468	-	(7,036)	60,177	148,262
Income taxes	12,696	19,006	1,657	2,844	-	-	14,353	21,850
NET INCOME	39,447	119,824		6,377 13,624	-	(7,036)	45,824	126,412
CAPEX	104,459	329,491		3,576 29,390	-	-	108,035	358,881
EBITDA - CAPEX	80,696	184,863	11,701	9,290	-	-	92,397	194,153

EBITDA = Operational Result + Depreciation, amortization and impairment losses + Restructuring costs + Losses / (gains) on sale of assets + Other losses / (gains) non-recurrent

CAPEX = Increases in tangible and intangible assets, contract costs and rights of use

Transactions between segments are performed on market terms and conditions in a comparable way to transactions performed with third parties.

At 30 September 2023, fully consolidated foreign companies represent less than 1% of assets (at 30 September 2022: less than 1%) and their turnover is less than 0.1% of consolidated turnover.

6. Financial assets and liabilities classified in accordance with the IFRS 9 – financial instruments

The accounting policies set out in IFRS 9 for financial instruments were applied to the following items:

	31-12-2022
	FINANCIAL ASSETS	DERIVATIVES	FINANCIAL LIABILITIES	TOTAL FINANCIAL ASSETS AND LIABILITIES	NON FINANCIAL ASSETS AND LIABILITIES	TOTAL
ASSETS
Other financial assets non-current (Note 14)	5,248	-	-	5,248	-	5,248
Derivative financial instruments (Note 20)	-	11,249	-	11,249	-	11,249
Accounts receivable - trade (Note 17)	319,441	-	-	319,441	-	319,441
Accounts receivable - other (Note 12)	9,425	-	-	9,425	11,965	21,390
Cash and cash equivalents (Note 21)	15,215	-	-	15,215	-	15,215
TOTAL FINANCIAL ASSETS	349,329	11,249	-	360,578	11,965	372,543
LIABILITIES
Borrowings (Note 24)	-	-	1,637,634	1,637,634	-	1,637,634
Derivative financial instruments (Note 20)	-	397	-	397	-	397
Accounts payable - trade (Note 28)	-	-	253,355	253,355	-	253,355
Accounts payable - other (Note 29)	-	-	95,725	95,725	192	95,917
Accrued expenses (Note 26)	-	-	212,430	212,430	-	212,430
TOTAL FINANCIAL LIABILITIES	-	397	2,199,144	2,199,541	192	2,199,733

	30-09-2023
	FINANCIAL ASSETS	DERIVATIVES	FINANCIAL LIABILITIES	TOTAL FINANCIAL ASSETS AND LIABILITIES	NON FINANCIAL ASSETS AND LIABILITIES	TOTAL
ASSETS
Other financial assets non-current (Note 14)	5,929	-	-	5,929	-	5,929
Derivative financial instruments (Note 20)	-	12,066	-	12,066	-	12,066
Accounts receivable - trade (Note 17)	352,015	-	-	352,015	-	352,015
Accounts receivable - other (Note 12)	11,107	-	-	11,107	12,482	23,589
Cash and cash equivalents (Note 21)	11,943	-	-	11,943	-	11,943
TOTAL FINANCIAL ASSETS	380,994	12,066	-	393,060	12,482	405,542
LIABILITIES
Borrowings (Note 24)	-	-	1,775,202	1,775,202	-	1,775,202
Derivative financial instruments (Note 20)	-	124	-	124	-	124
Accounts payable - trade (Note 28)	-	-	260,864	260,864	-	260,864
Accounts payable - other (Note 29)	-	-	75,935	75,935	8,220	84,155
Accrued expenses (Note 26)	-	-	222,330	222,330	-	222,330
TOTAL FINANCIAL LIABILITIES	-	124	2,334,331	2,334,455	8,220	2,342,675

Considering its nature, the balances of the amounts to be paid and received to/from state and other public entities were considered outside the scope of IFRS 7. Also, the captions of "Prepaid expenses" and "Deferred income" were not included in this note, as the nature of such balances are not included in the scope of IFRS 7.

The Board of Directors believes that the fair value of the breakdown of financial instruments recorded at amortised cost or registered at the present value of the payments does not differ significantly from their book value. This decision is based in the contractual terms of each financial instrument.

7. Tangible Assets

In the nine months ended on 30 September 2022 and 2023, the movements in this item were as follows:

	31-12-2021	INCREASES	DISPOSALS AND WRITE OFFS	TRANSFERS AND OTHERS	30-09-2022
ACQUISITION COST
Lands	796	-	(4)	-	792
Buildings and other constructions	276,320	(888)	(32,485)	16,869	259,816
Basic equipment	2,765,157	37,337	(69,853)	146,696	2,879,337
Transportation equipment	514	-	-	1	515
Tools and dies	1,596	-	-	14	1,610
Administrative equipment	195,035	1,097	(883)	1,257	196,506
Other tangible assets	43,864	81	-	196	44,141
Tangible assets in-progress	41,226	165,058	-	(159,736)	46,548
	3,324,508	202,685	(103,225)	5,297	3,429,265
ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES
Buildings and other constructions	180,308	9,157	(22,993)	(1,097)	165,375
Basic equipment	1,872,564	136,590	(66,730)	(71)	1,942,353
Transportation equipment	513	1	-	1	515
Tools and dies	1,479	46	-	-	1,525
Administrative equipment	185,182	2,903	(883)	189	187,391
Other tangible assets	43,362	280	(15)	15	43,642
	2,283,408	148,977	(90,621)	(963)	2,340,801
	1,041,100	53,708	(12,604)	6,260	1,088,464

	31-12-2022	INCREASES	DISPOSALS AND WRITE OFFS	TRANSFERS AND OTHERS	30-09-2023
ACQUISITION COST
Land	519	-	-	-	519
Buildings and other constructions	264,259	(1,813)	(1,186)	12,829	274,089
Basic equipment	2,909,175	37,459	(68,244)	92,768	2,971,158
Transportation equipment	514	-	-	-	514
Tools and dies	1,607	-	(4)	634	2,237
Administrative equipment	195,921	1,048	(3,983)	1,172	194,158
Other tangible assets	44,162	100	(47)	194	44,409
Tangible assets in-progress	53,438	95,188	13,510	(98,694)	63,442
	3,469,595	131,982	(59,954)	8,903	3,550,526
ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES
Buildings and other constructions	159,518	8,905	(1,186)	37	167,274
Basic equipment	1,971,674	137,515	(54,818)	1,877	2,056,248
Transportation equipment	514	1	-	-	515
Tools and dies	1,528	50	(4)	-	1,574
Administrative equipment	185,650	2,908	(3,941)	(75)	184,542
Other tangible assets	43,659	426	(47)	-	44,038
	2,362,543	149,805	(59,996)	1,839	2,454,191
	1,107,052	(17,823)	42	7,064	1,096,335

The net amount of "Transfers and Others" predominantly corresponds to the transfer of assets from "Intangible assets" (Note 8).

At 30 September 2023, the net value of tangible assets is composed mainly by basic equipment, namely:

• Network and telecommunications infrastructure (fibre optic network and cabling, network equipment, and other equipment) in the amount of 818.1 million euros (31 December 2022: 831.8 million euros);
• Terminal equipment installed on client premises, included under Basic equipment, amounts to 96.8 million euros (31 December 2022: 105.7 million euros).

Tangible and intangible assets include interests and other financial expenses incurred directly related to the construction of certain tangible or intangible assets in progress.

At 30 September 2023, total net value of these costs amounted to 13 million euros (31 December 2022: 13.6 million euros). The amount of interest capitalised in the period of nine months ended on 30 September 2023 amounted to 2 million euros (31 December 2022: 1.1 million euros).

8. Intangible assets

In the nine months ended on 30 September 2022 and 2023, the movements in this item were as follows:

	31-12-2021	INCREASES	TRANSFERS AND OTHERS	30-09-2022
ACQUISITION COST
Industrial property and other rights	1,981,959	7,706	82,680	2,072,345
Goodwill	641,400	-	-	641,400
Intangible assets in-progress	39,861	81,549	(92,410)	29,000
	2,663,220	89,255	(9,730)	2,742,745
ACCUMULATED AMORTISATION AND IMPAIRMENT LOSSES
Industrial property and other rights	1,456,166	77,495	(175)	1,533,486
Other intangible assets	2,023	-	74	2,097
	1,458,189	77,495	(101)	1,535,583
	1,205,031	11,760	(9,629)	1,207,162

	31-12-2022 INCREASES		TRANSFERS AND OTHERS	30-09-2023
ACQUISITION COST
Industrial property and other rights	2,103,180	19,977	57,750	2,180,907
Goodwill	641,400	-	-	641,400
Intangible assets in-progress	27,217	68,840	(65,149)	30,908
	2,771,797	88,817	(7,399)	2,853,215
ACCUMULATED AMORTISATION AND IMPAIRMENT LOSSES
Industrial property and other rights	1,559,907	82,221	816	1,642,944
Intangible assets in-progress	2,332	-	(1,132)	1,200
	1,562,239	82,221	(316)	1,644,144
	1,209,558	6,596	(7,083)	1,209,071

The amount of "Transfers and Others" corresponds, mainly, to the transfer of assets to "Tangible assets" (Note 7).

At 30 September 2023, the item "Industrial property and other rights" includes mainly:

• A net amount of 137.5 million euros (31 December 2022: 143.2 million euros) corresponding to the acquisition of frequency usage rights in 5G bands and other relevant bands (100MHz in the 3.6GHz band and 2x10MHz in the 700MHz band, also acquiring 2x5MHz in the 2100MHz band and 2x2MHz in the 900MHz band);
• A net amount of 75.2 million euros (31 December 2022: 85.8 million euros) mainly related to the investment, net of amortization, made in the development of the UMTS network by NOS SA, including:
  • 25.2 million euros (31 December 2022: 27.2 million euros) related to the license,
  • 8.4 million euros (31 December 2022: 9.1 million euros) related to the agreement signed in 2002 between Oni Way and the other three mobile telecommunication operators with activity in Portugal,
  • 2.6 million euros (31 December 2022: 2.8 million euros) related to the Share Capital of "Fundação para as Comunicações Móveis'', established in 2007, under an agreement entered with "Ministério das Obras Públicas, Transportes e Comunicações" and the three mobile telecommunication operators in Portugal;
  • 36.9 million euros (31 December 2022: 39.7 million euros) related with the program "Initiatives E"; and
  • the net amount of 4.4 million euros (31 December 2022: 4.7 million euros) corresponding to the valuation of the license in the fair value allocation process resulting from the merger;
• A net amount of 68.6 million euros (31 December 2022: 71.4 million euros) corresponding to the current value of future payments related with the acquisition of rights of use for frequencies (spectrum) bands of 800 MHz, 1800 MHz, 2600 MHz, which will be used to develop 4th generation services (LTE - Long Term Evolution) and a net amount of 2.4 million euros (31 December 2022: 2.5 million euros) corresponding to the valuation of the license in the fair value allocation process resulting from the merger;
• A net amount of 171 million euros related with software development (31 December 2022: 173 million euros);
• A net amount of 16.4 million euros (31 December 2022: 15.7 million euros) corresponding to the future rights to use movies and series.

Increases in the period of nine months ended on 30 September 2023 correspond mainly to the acquisition of movies and television series usage rights, for an amount of 12.2 million euros, and acquisition and development of software and other assets, for an amount of 76.6 million euros.

Impairment tests on goodwill

Goodwill was allocated to the cash-generating units of each reportable segment, as follows:

	31-12-2022	30-09-2023
Telco	564,799	564,799
Audiovisuals	76,601	76,601
	641,400	641,400

In 2022 impairment tests were performed based on assessments in accordance with the discounted cash flow method, which corroborate the recoverability of the book value of the Goodwill. The amounts in these assessments are based on the historical performances and forecast growth of the businesses and their markets, incorporated in medium/long term approved plans.

These estimates are based on the following assumptions:

		AUDIOVISUALS SEGMENT
	TELCO SEGMENT	NOS	NOS
Discount rate (before taxes)	6.5%	AUDIOVISUALS 9.4%	CINEMAS 9.4%
Assessment period	5 years	5 years	5 years
EBITDA Growth (2022-27)*	3.0%	-6.2%	4.2%
Perpetuity growth rate	2.0%	2.0%	2.0%

* EBITDA = Operating Income + Depreciation, Amortization and Impairment Losses + Restructuring Costs + Losses / (Gains) on disposal of assets + Other Costs / (Gains) Non-Recurring (CAGR - average 5 years)

In the Telco segment, the assumptions used are based on past performance, evolution of the number of customers, expected development of regulated tariffs, current market conditions, and expectations of future development.

In the cinema segment, the most affected segment by COVID-19, strong EBITDA growth is justified on the prospect of a recovery in activity to levels close to those pre-pandemic.

The number of years specified in the impairment tests depends on the degree of maturity of the several businesses and markets, and were determined based on the most appropriate criterion for the valuation of each cash-generating unit.

Sensitivity analyses were performed to variations in the discount rate and growth rate in the perpetuity of the various reported segments, of 1 percentage point and 0.4 percentage points, respectively.

In the telecommunications segment, sensitivity analysis were also performed to variations in the operational indicators RGU (Revenue Generating Unit), ARPU (Average Revenue per User), EBITDA and CAPEX, in perpetuity, of approximately 5%.

In the cinema segment, sensitivity analysis were conducted on variations in the projected number of tickets sold, average revenue per ticket, EBITDA and CAPEX, in perpetuity, of approximately 5%.

These simulations did not result in the need to reinforce impairment.

In the nine months ended on 30 September 2023, it was understood that the assumptions made in the impairment tests carried out in 2022 were conservative due the more recent developments, so there are no indications of the existence of any impairment.

9. Contract costs

In the nine months ended on 30 September 2022 and 2023, the movements in this item were as follows:

	31-12-2021	INCREASES	30-09-2022
ACQUISITION COST
Cost of attracting customers	556,967	49,965	606,932
Costs of fulfilling customer contracts	256,884	22,327	279,211
	813,851	72,292	886,143
ACCUMULATED AMORTIZATIONS AND IMPAIRMENT LOSSES
Cost of attracting customers	457,570	48,410	505,980
Costs of fulfilling customer contracts	194,163	25,128	219,291
	651,733	73,538	725,271
	162,118	(1,246)	160,872

	31-12-2022	INCREASES	30-09-2023
ACQUISITION COST
Cost of attracting customers	623,472	49,624	673,096
Costs of fulfilling customer contracts	286,840	22,405	309,245
	910,312	72,029	982,341
ACCUMULATED AMORTIZATIONS AND IMPAIRMENT LOSSES
Cost of attracting customers	522,150	49,193	571,343
Costs of fulfilling customer contracts	227,568	24,408	251,976
	749,718	73,601	823,319
	160,594	(1,572)	159,022

Contract costs refers to commissions paid to third parties and other costs related to raising customers' loyalty contracts, including portability costs. These costs are amortised, systematically and consistently, with the transfer to customers of goods or services to which the asset is related (between 2 and 4 years).

10. Rights of use

In the nine months ended on 30 September 2022 and 2023, the movements in this item were as follows:

	31-12-2021	INCREASES	DISPOSALS AND WRITE OFFS	TRANSFERS AND OTHERS	30-09-2022
ACQUISITION COST
Telecommunications towers and rooftops	142,921	21,813	-	(1,968)	162,766
Movie theatres	118,322	(1,468)	-	-	116,854
Transponders	91,787	1,965	-	-	93,752
Equipments	149,061	13,736	-	-	162,797
Buildings	77,480	9,807	(3)	-	87,284
Fiber optic rental	40,146	-	-	-	40,146
Stores	21,445	831	-	-	22,276
Others	41,321	2,677	(4)	-	43,994
	682,483	49,361	(7)	(1,968)	729,869
ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES
Telecommunications towers and rooftops	56,137	8,980	(212)	(807)	64,098
Movie theatres	89,550	6,079	-	-	95,629
Transponders	68,380	4,572	-	-	72,952
Equipments	102,784	12,064	-	-	114,848
Buildings	58,411	5,675	(3)	-	64,083
Fiber optic rental	32,019	2,290	-	-	34,309
Stores	16,585	1,877	-	-	18,462
Others	22,554	3,996	(4)	-	26,546
	446,420	45,533	(219)	(807)	490,927
	236,063	3,828	212	(1,161)	238,942

	31-12-2022	INCREASES	DISPOSALS AND WRITE OFFS	TRANSFERS AND OTHERS	30-09-2023
ACQUISITION COST
Telecommunications towers and rooftops	224,319	23,968	-	-	248,287
Movie theatres	124,323	15,201	-	-	139,524
Transponders	93,752	383	-	-	94,135
Equipments	165,910	14,555	-	-	180,465
Buildings	91,336	3,335	-	-	94,672
Fiber optic rental	40,137	4	-	-	40,141
Stores	24,547	6,407	-	-	30,954
Others	43,415	2,200	-	13	45,628
	807,739	66,053	-	13	873,806
ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES
Telecommunications towers and rooftops	69,950	14,716	-	-	84,666
Movie theatres	97,322	6,657	-	-	103,978
Transponders	74,552	4,888	-	-	79,440
Equipments	119,138	12,602	-	-	131,740
Buildings	66,151	6,402	-	-	72,553
Fiber optic rental	35,068	2,289	-	-	37,357
Stores	19,874	2,787	-	-	22,661
Others	27,961	3,877	-	(6)	31,832
	510,016	54,218	-	(6)	564,227
	297,723	11,835	-	19	309,579

The caption "Rights of Use" refers to assets associated with lease contracts. These assets are amortised according to the duration of the respective agreement, except for the lease of equipment with a purchase option that is amortised over the estimated period of use.

11. Investments in jointly controlled companies and associated companies

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022	30-09-2023
INVESTMENTS - EQUITY METHOD
Finstar*	32,811	23,177
Dreamia	2,347	2,170
Mstar	3,023	3,242
Other companies	780	1,589
ASSETS	38,961	30,178
* Consolidated from Finstar and ZAP Media

Movements in "Investments in jointly controlled companies and associated companies" in the nine months ended on 30 September 2022 and 2023 were as follows:

	9M 22	9M 23
AS AT JANUARY 1	17,016	38,961
Profit/(loss) for the year (Note 36)	16,975	3,795
Acquisition of Bright City (Note 4)	-	255
Disposal of Big Picture 2 Films (Note 4)	-	(50)
Dividends distribution Mstar	-	(824)
Changes in equity	9,139	(11,959)
AS AT SEPTEMBER 30	43,130	30,178

Amounts related to changes in equity of the companies registered by the equity method of consolidation are mainly related to foreign exchange impacts of the investment in currencies other than euro.

The assets, liabilities and results of the jointly controlled companies and associated companies in the periods ended on 31 December 2022 and 30 September 2023, are as follows:

			31-12-2022
ENTITY	NON CURRENT ASSETS	CURRENT ASSETS	NON CURRENT LIABILITIES	CURRENT LIABILITIES	EQUITY	REVENUE	NET INCOME	% HELD
Sport TV*	84,507	99,229	71	159,280	24,385	208,331	12,080	25%
Dreamia	876	16,985	6,924	6,066	4,871	16,568	(1,272)	50%
Finstar	77,697	199,314	-	167,640	109,371	339,309	68,907	30%
Mstar	1,064	16,336	-	9,009	8,391	30,665	2,927	30%
Upstar	976	20,089	-	18,873	2,192	21,423	920	30%
Big Picture 2 Films (a)	770	893	522	780	361	3,270	(172)	20%
Dualgrid	6	267	-	176	97	516	38	50%
Dreamia S.L.	14,967	1,126	6,363	2,302	7,428	2,213	(9)	50%
	180,863	354,239	13,880	364,126	157,096	622,295	83,419

30-09-2023 ENTITY NON-CURRENT ASSETS CURRENT ASSETS NON-CURRENT LIABILITIES CURRENT LIABILITIES EQUITY REVENUE NET INCOME % HELD Sport TV* 128,444 65,812 48 170,664 23,544 133,213 (840) 25% Dreamia 1,008 14,103 7,090 3,638 4,383 12,888 (489) 50% Finstar 46,668 131,540 - 100,953 77,255 173,866 7,928 30% Mstar 819 21,812 - 10,869 11,762 20,086 4,319 30% Upstar 977 14,146 - 10,818 4,305 14,975 1,518 30% Dualgrid 5 261 - 178 88 431 7 50% Dreamia S.L. 15,134 774 6,504 1,950 7,454 1,712 25 50% Bright City 63 812 256 570 974 (426) 50% 193,118 249,260 13,898 299,640 128,840 358,145 12,042

* Sport TV annual reporting period is from 1 July to 30 June (aligned with the period of the football seasons), therefore, in the accounts presented in the table above, revenues and net income correspond to the values relating to the reported period of 12 months of 2022 and 9 months of 2023, respectively.

Indicators presented in the tables above do not include consolidated adjustments which were considered when determining the Group's interest in the results, assets and liabilities of jointly controlled and associated companies.

In the nine months ended on 30 September 2023, the assets, liabilities and results of jointly controlled company ZAP Media (100% held by Finstar) are:

30-09-2023
ENTITY	NON CURRENT ASSETS	CURRENT ASSETS	NON CURRENT LIABILITIES	CURRENT LIABILITIES	EQUITY	REVENUE	NET INCOME
ZAP Media	18,157	6,423	-	12,617	11,963	27,697	2,727

The differences between the individual accounts (prepared in accordance with Angolan regulations) and the Finstar Group (Finstar + ZAP Media) correspond, predominantly, to the annulment of balances and transactions between the companies and the adjustment because the companies were in a hyperinflationary economy from 2017 to September 2019 (IAS 29) and using different accounting plans from IAS/IFRS.

The Group has several controls regarding the reporting process of its jointly controlled and associated companies. The amounts included in the reported financial statements are subject to audit in cases where it is legally required. In the remaining cases and in those where the audit has not been completed, specific review procedures are carried out by the Group.

The Board of Directors believes that the seizure of assets to Mrs. Isabel dos Santos, in the specific case of the shares held by her in Finstar and ZAP Media (where she holds 70% of the capital), does not change the control profile, in this case joint control as defined in IFRS 11.

12. Accounts receivable - other

At 31 December 2022 and 30 September 2023, this item was composed as follows:

		31-12-2022	30-09-2023
	CURRENT	NON CURRENT	CURRENT	NON CURRENT
Accounts receivables	5,646	5,640	7,182	4,702
Advances to suppliers	11,965	-	12,482	-
	17,611	5,640	19,664	4,702
Impairment of other receivable	(979)	(882)	(749)	(28)
	16,632	4,758	18,915	4,674

At 30 September 2023, this item corresponds predominantly to:

• short-term loans, medium and long-term loans from Group and interests' receivable; and
• associated companies, the amount receivable of 1.9 million euros from the sale of NOS International Carrier Services.

Additionally, as of 30 September 2023, advances to suppliers correspond predominantly to amounts paid under football rights contracts and other operating costs.

The summary of movements in impairment of other receivable in other accounts receivable is as follows:

	9M 22	9M 23
AS AT JANUARY 1	1,524	1,861
Increases (Note 35)	165	94
Reductions (Note 36)	-	(854)
Utilizations / Others	312	(324)
AS AT SEPTEMBER 30	2,001	777

13. Taxes payable and receivable

At 31 December 2022 and 30 September 2023, these items were composed as follows:

	31-12-2022		30-09-2023
	RECEIVABLE	PAYABLE	RECEIVABLE	PAYABLE
NON CURRENT
Debt regularization	369	-	58	-
	369	-	58	-
CURRENT
Value-added tax (VAT)	6,484	21,891	6,072	24,495
Income taxes	-	13,070	6,687	-
Personnel income tax witholdings	-	1,883	-	1,525
Social Security contributions	-	1,865	-	1,892
Others	422	133	16	64
	6,906	38,842	12,775	27,976
	7,275	38,842	12,833	27,976

At 31 December 2022 and 30 September 2023, the amounts of CIT (Corporate Income Tax) receivable and payable were composed as follows:

	31-12-2022	30-09-2023
Estimated current tax on income	(45,776)	(27,382)
Payments on account	30,596	32,423
Withholding income taxes	966	709
Others	1,144	937
	(13,070)	6,687

14. Other non-current financial assets

On 31 December 2022 and 30 September 2023, this caption is composed as follows:

	31-12-2022	30-09-2023
Fundo TechTransfer	1,233	1,276
Didimo*	1,415	1,415
Seems Possible*	800	1,200
Reckon.ai*	500	854
MindProber*	500	500
SkillAugment*	300	150
Others	500	534
	5,248	5,929

During the financial year ended on 31 December 2022, NOS reinforced its investment in start-up Reckon.ai and invested in the start-up Didimo, which develops photo-based 3D digital avatars, in the start-up MindProber, which has developed a pioneering platform capable of measuring the emotional impact that multimedia content has on consumers, and in the start-up SkillAugment (KIT-AR), which develops solutions using emerging technologies such as augmented reality and artificial intelligence.

During the nine months ended September 30, 2023, NOS reinforced its investment in the TechTransfer Fund, in the company Reckon.ai and in the company Seems Possible. During the same period, impairments were recorded on the valuations of the TechTransfer Fund and the company SkillAugmented, in the amounts of 74 thousand euros and 150 thousand euros, respectively.

15. Income tax expense

NOS and its subsidiaries are subject to IRC - Corporate Income Tax - at the rate of 21% on taxable amount (taxable profit less eventual tax losses subject to deduction), plus IRC surcharge at the maximum rate of 1.5% on taxable profit, giving an aggregate rate of approximately 22.5%. Additionally, following the introduction of austerity measures approved by Law 66- B/2012 of 31 December, and respective addendum published by Law 114/2017 of 29 December, this rate was raised by 3% and will be applied to the company's taxable profit between 1.5 million euros and 7.5 million euros, by 5% to the company's taxable profit which exceeds 7.5 million euros, and by 9% to the company's taxable profit above 35 million euros.

In the calculation of taxable income, amounts, which are not fiscally allowable, are added to or subtracted from the book results. These differences between accounting income and taxable income may be of a temporary or permanent nature.

NOS is taxed in accordance with the Special Regime for Taxation of Corporate Groups, which covers the companies in which it directly or indirectly holds at least 75% of their share capital and which fulfil the requirements of Article 69 of the IRC Code.

The companies covered by the Special Regime for Taxation of Corporate Groups in 2023 are:

• NOS (parent company)
• Empracine
• Lusomundo Imobiliária
• Lusomundo SII
• NOS Açores
• NOS Audiovisuais
• NOS Audiovisuais SGPS
• NOS Cinemas
• NOS Comunicações
• NOS Inovação
• NOS Internacional SGPS
• NOS Audio Sales and Distribution
• NOS Madeira
• NOS Mediação de Seguros
• NOS Sistemas
• NOS Technology
• NOS Wholesale
• NOS Corporate Center
• NOS Property
• Per-mar
• Sontária
• Teliz

Under current legislation, tax declarations are subject to review and correction by tax authorities for a period of four years, except when tax losses have occurred or tax benefits have been obtained, whose term, in these cases, matches the deadline to use them. It should be noted that in the event of inspections, appeals, or disputes in progress, these periods might be extended or suspended.

The Board of Directors of NOS, based on information from its tax advisers, believes that these and any other revisions and corrections to these tax declarations, as well as other contingencies of a fiscal nature, will not have a significant effect on the consolidated financial statements as at 30 September 2023.

A) Deferred tax

NOS and its associated companies have reported deferred tax relating to temporary differences between the taxable basis and the book amounts of assets and liabilities, and tax losses carried forward at the date of the statement of financial position. The movements in deferred tax assets and liabilities for the nine months ended on 30 September 2022 and 2023 were as follows:

	31-12-2021	INCOME (NOTE B)	EQUITY	30-09-2022
DEFERRED INCOME TAX ASSETS
Impairment of other receivable	6,531	1,327	-	7,858
Inventories	2,539	73	-	2,612
Other provision and adjustments	41.645	(3,907)	-	37,738
Intragroup gains	20,892	4,373	-	25,265
Liabilities recorded as part of the allocation of
fair value to the liabilities acquired in the	4,968	-	-	4,968
merger
Assets recognised under application of IFRS 16	4,739	1,326	-	6,065
Derivatives	76	(34)	(42)	-
	81,390	3,158	(42)	84,506
DEFERRED INCOME TAX LIABILITIES
Tax litigation	42,167	366	-	42,533
Revaluations of assets as part of the allocation
of fair value to the assets acquired in the	2,429	(131)	-	2,298
merger
Derivatives	116	84	3,127	3,327
Assets recognised under application of IFRS 16	23	(2)	-	21
Others	2,591	53	-	2,644
	47,326	370	3,127	50,823
NET DEFERRED TAX	34,064	2,788	(3,169)	33,683

	31-12-2022	INCOME (NOTE B)	EQUITY	30-09-2023
DEFERRED INCOME TAX ASSETS
Impairment of other receivable	9,288	(1,674)	-	7,614
Inventories	2,579	133	-	2,712
Other provision and adjustments	39.761	1,924	-	41,685
Intragroup gains	26,851	(606)	-	26,245
Liabilities recorded as part of the allocation of
fair value to the liabilities acquired in the	4,865	(170)	-	4,695
merger
Assets recognised under application of IFRS 16	6,160	2,872	-	9,032
Derivatives	50	125	(139)	36
	89,554	2,604	(139)	92,019
DEFERRED INCOME TAX LIABILITIES
Tax litigation	42,618	224	-	42,842
Revaluations of assets as part of the allocation
of fair value to the assets acquired in the	2,235	(129)	-	2,106
merger
Derivatives	2,487	137	122	2,746
Others	2,785	334	-	3,119
	50,125	566	122	50,813
NET DEFERRED TAX	39,429	2,038	(261)	41,206

At 30 September 2023, the deferred tax assets related to the other provisions and adjustments are mainly due:

• Impairments and acceleration of amortizations beyond the acceptable fiscally and other adjustments in fixed tangible assets and intangible assets, amounted to 33.5 million euros (31 December 2022: 31.2 million euros); and
• Other provisions amounted to 8.2 million euros (31 December 2022: 8.6 million euros).

In the nine months ended on 30 September 2023, the item "Tax litigation" includes liabilities, related to ongoing tax processes, of which highlights:

• Future credits transferred: for the financial year ended at 31 December 2010, NOS SA was notified of the Report of Tax Inspection, when it is considered that the increase, when calculating the taxable profit for the year 2008, of the amount of 100 million euros, with respect to initial price of future credits transferred to securitization, is inappropriate. Given the principle of periodization of taxable income, NOS SA was subsequently notified of the improper deduction of the amount of 20 million euros in the calculation of taxable income between 2009 and 2013. Given that the increase made in 2008 was not accepted due to not complying with Article 18 of the CIRC, also in the years following, the deduction corresponding to credits generated in that year, will eliminate the calculation of taxable income, to meet the annual amortization hired as part of the operation (20 million per year for 5 years). NOS SA challenged the decisions regarding the 2009 to 2013 fiscal year and will appeal for the judicial review in due time the decision regarding the 2008 to 2013 fiscal year. Regarding the year 2008, the Administrative and Fiscal Court of Porto has already decided unfavorably, in March 2014. The company has appealed.

In March 2021, NOS SA was notified of the dismissal issued by the Court of Appeal. Not accepting the decision, NOS filed a Review Appeal with the Supreme Administrative Court, pending, in this regard, the issuance of the respective admissibility order.

In May 2022, NOS was notified of the decision which did not admit the review appeal. An appeal has been filed against the Constitutional Court with suspensive effects on the transit of that non-admission decision. In addition to that appeal, an application was lodged in the file for recognition of the invalidity of the decision, for lack of reasoning. Both expedients are pending consideration and decision.

• Supplementary Capital: the fiscal authorities believe that NOS SA has broken the principle of full competition under the terms of (1) of Article 58 of the Corporate Tax Code (CIRC) – currently Article 63 –, by granting

supplementary capital to its subsidiary NOS, without having been remunerated at a market interest rate. In consequence, it has been notified, with regard to the years 2004, 2005, 2006 and 2007 of corrections to the determination of its taxable income in the total amount of 20.5 million euros. NOS SA contested the decision with regard to all the above-mentioned years. As for the year 2004, the Court has decided favorably. This decision is concluded (favorably), originating a reversal of provisions, in 2016, in the amount of 1.3 million euros plus interest. As for the years 2006 and 2007, the Porto Fiscal and Administrative Court has already decided unfavorably. As for the year 2005, the Court decided favorably, having been concretized by the Tax Authorities, which meant the provision reversal of one million euros, in 2018.

The revaluations of assets refer to the appreciation of telecommunications licenses and other assets at the merger of Group companies.

At 30 September 2023, deferred tax assets were not recognised for an amount of 0.4 million euros, corresponding mainly to tax incentives and losses.

Deferred tax assets were recognised when it is probable that taxable profits will occur in future that may be used to absorb tax losses or deductible tax differences. This assessment was based on the business plans of the Group's companies, which are regularly revised and updated.

At 30 September 2023, the tax rate used to calculate the deferred tax assets relating to tax losses carried forward was 21% (2022: 21%). In the case of temporary differences, the rate used was 22.5% (2022: 22.5%) increased to a maximum of 6.3% (2022: 6.3%) of state surcharge when the taxation of temporary differences in the estimated period of application of the state surcharge was perceived as likely. Tax benefits, related to deductions from taxable income, are considered 100%, and in some cases, their full acceptance is conditional upon the approval of the authorities that grants such tax benefits.

Under the terms of Article 88 of the IRC Code, the Company is subject to autonomous taxation on a series of charges at the rates set out in that Article.

With the State Budget for 2023, tax losses will have no time limit for carry forward, but there will be a limitation on their deduction up to 65% of the taxable profit generated.

B) Effective tax rate reconciliation

In the nine months ended on 30 September 2022 and 2023, the reconciliation between the nominal and effective rates of tax was as follows:

	3º QUARTER 22	9M 22	3º QUARTER 22	9M 23
Income before taxes	126,485	222,150	60,177	148,262
Statutory tax rate	22.5%	22.5%	22.5%	22.5%
ESTIMATED TAX	28,459	49,984	13,540	33,359
Permanent differences	(9,661)	(11,986)	(204)	(972)
Tax benefits	(1,657)	(9,884)	(2,391)	(14,522)
State surcharge	4,978	7,939	3,038	6,430
Autonomous taxation	166	476	174	438
Others	(1,670)	(5,553)	196	(2,883)
INCOME TAXES	20,615	30,976	14,353	21,850
Effective Income tax rate	16.3%	13.9%	23.9%	14.7%
Income tax	22,417	33,764	16,766	23,888
Deferred tax	(1,802)	(2,788)	(2,413)	(2,038)
	20,615	30,976	14,353	21,850

3º QUARTER 22 9M 22 3º QUARTER 22 9M 23 Equity method (Note 36) (6,586) (16,975) (1,415) (4,649) Others i) (36,352) (36,295) 507 328 (42,938) (53,270) (908) (4,321) 22.5% 22.5% 22.5% 22.5% (9,661) (11,986) (204) (972)

In the nine months ended on 30 September 2022 and 2023, the permanent differences were composed as follows:

i) During the nine months ended on 30 September 2022, the item Others refers predominantly to capital gains generated with the sale of mobile sites (Note 46), taxed at 50%, resulting from the reinvestment of the realization value of the assets held for more than one year.

Additionally, the amount registered as fiscal benefits relates to the register of deferred taxes and the use of tax benefits for which there was no record of deferred taxes: SIFIDE (Business Research and Development Tax Incentives System), a tax benefit introduced by Law 40/2005 of 3 August; fiscal benefit – RFAI (Investment Tax Incentive Regime) introduced by Law 10/2009 of 10 March; fiscal benefit of Incentive to Capitalization of Companies (ICE) – introduced by the Law 20/2023 of 17 May; and provisions for used tax incentives.

16. Inventories

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022	30-09-2023
INVENTORIES
Telco	75,818	73,856
Audiovisuals	566	632
	76,384	74,488
IMPAIRMENT OF INVENTORIES
Telco	(9,161)	(9,627)
	(9,161)	(9,627)
	67,223	64,861

The movements occurred in impairment adjustments were as follows:

	9M 22	9M 23
AS AT JANUARY 1	8,935	9,161
Increase and decrease - Cost of products sold (Note 33)	1,200	1,500
Utilizations / Others	(933)	(1,034)
AS AT SEPTEMBER 30	9,202	9,627

17. Accounts receivable – trade

At 31 December 2022 and 30 September 2023, this item was as follows:

	31-12-2022	30-09-2023
Trade receivables	444,218	494,111
Unbilled revenues	89,805	76,955
	534,023	571,066
Impairment of trade receivable	(214,582)	(219,051)
	319,441	352,015

The amounts to be invoiced correspond mainly to the value of contractual obligations already met or partially met and whose invoicing will occur subsequently.

The movements occurred in impairment adjustments were as follows:

	9M 22	9M 23
AS AT JANUARY 1	197,628	214,582
Increases and decreases (Note 35)	13,167	10,428
Penalties	14,422	15,907
Utilizations / Others	(17,432)	(21,866)
AS AT SEPTEMBER 30	207,785	219,051

Penalties correspond to the invoiced penalties, in the period, for which the full expected credit losses are registered, and the register was made by deduction from the respective revenue.

18. Contract assets

At 30 September 2023, the contract assets, in the amount of 52 million euros (31 December 2022: 60.1 million euros), correspond to discounts, attributed to customers at the time of the sale of equipment (included in the telecommunications packages) and which are allocated to monthly fees / services rendered, within the scope of the allocation of credits to different types of performance obligations, according to IFRS 15. These assets are deferred, at the time of sale of the equipment, and recognised over the contract period (service rendered).

19. Prepaid expenses

At 31 December 2022 and 30 September 2023, this item was composed as follow:

	31-12-2022	30-09-2023
Costs related to specific corportate projects	10,941	19,938
Programming costs i)	21,091	6,379
Costs of litigation procedure activity ii)	5,591	6,327
Taxes	-	5,558
Repair and maintenance	1,875	2,812
Insurance	1,333	2,039
Advertising	132	334
Others iii)	11,269	13,987
	52,232	57,374

• i) Programming costs correspond to costs inherent to the availability of channels, namely fixed fees, billed in advance. This cost is recognised in the period in which the channel is made available and transmitted, and recognised as a programming cost, in the Consolidated Income Statement.
• ii) Deferred costs related to collection actions correspond to services paid in advance to external entities as part of the processes for recovering customer debts / collection actions. These costs are recognised as the service is provided.
• iii) "Others" includes deferred costs, mainly related to expenses to be recognised from various supplies and external services, such as specialized works, maintenance and repair work and others, billed in advance by suppliers (quarterly or annual billing), the respective expense being recognised in the income statement as the service is provided. The increase in this item results mainly from expenses paid in advance at the beginning of each year in respect of the current year.

20. Derivative financial instruments

Interest rate derivatives

At 30 September 2023, NOS have 3 interest rate swaps in a total amount of 180 million euros (31 December 2022: 180 million euros) and 9 zero cost collars, amounting a total of 377.5 million euros, contracted in 2023.

Exchange rate derivatives

At the date of the statement of the financial position there are foreign currency forwards open worth 24,994 thousand euros (31 December 2022: 41,147 thousand euros).

	31-12-2022
	NOTIONAL	ASSETS		LIABILITIES
		CURRENT	NON CURRENT	CURRENT	NON CURRENT
Interest rate derivatives	180,000		- 10,947	-	-
Exchange rate derivatives	41,147		- 302	397	-
	221,147		- 11,249	397	-

			30-09-2023
	NOTIONAL		ASSETS	LIABILITIES
		CURRENT	NON CURRENT	CURRENT	NON CURRENT
Interest rate derivatives	557,500	-	11,488	-	-
Exchange rate derivatives	24,994	265	313	124	-
	582,494	265	11,801	124	-

Movements during the nine months ended on 30 September 2022 and 2023 were as follows:

	31-12-2021	INCOME	EQUITY	30-09-2022
Fair value interest rate swaps	(10)	-	9,647	9,637
Fair value exchange rate forward	313	394	3,308	4,015
Fair value equity swaps	(218)	32	186	-
DERIVATIVES	85	426	13,141	13,652
Deferred income tax liabilities	(116)	(84)	(3,127)	(3,327)
Deferred income tax assets	76	(34)	(42)	-
DEFERRED INCOME TAX	(40)	(118)	(3,169)	(3,327)
	45	308	9,972	10,325

	31-12-2022	INCOME	EQUITY	30-09-2023
Fair value interest rate swaps	10,947	-	541	11,488
Fair value exchange rate forward	(95)	46	503	454
DERIVATIVES	10,852	46	1,044	11,942
Deferred income tax liabilities	(2,487)	(137)	(122)	(2,746)
Deferred income tax assets	50	125	(139)	36
DEFERRED INCOME TAX	(2,437)	(12)	(261)	(2,710)
	8,415	34	783	9,232

21. Cash and cash equivalents

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022	30-09-2023
Cash	1,017	644
Other deposits	-	4,576
Term deposits i)	14,198	6,723
Cash and cash equivalents	15,215	11,943
Bank overdrafts (Note 24)	7,136	8,815
Cash and cash equivalents for the purposes of the Cash Flow Statement	8,079	3,128

At 30 September 2023, the "Term deposits" have maturity of less than 10 days and bear interest at market rates.

At 31 December 2022 and 30 September 2023, there are 5.6 million euros and 4.7 million euros, respectively, recorded in the item "Current deposits" whose use is restricted, because they are held by the Capital Fund NOS 5G, subscribed by NOS.

22. Shareholder's equity

22.1. Share capital

At 31 December 2022 and 30 September 2023, the share capital of NOS was 855,167,890.80 euros. At 30 September 2023, the share capital is represented by 515,161,380 shares registered book-entry shares, with a nominal value of 1.66 euro each (2022: 1.66 euro each).

The main shareholders as of 31 December 2022 and 30 September 2023 are:

	31-12-2022		30-09-2023
	NUMBER OF SHARES	% SHARE CAPITAL	NUMBER OF SHARES	% SHARE CAPITAL
Sonaecom, SGPS, S.A.	134,322,268	26.07%	192,527,188	37.37%
ZOPT, SGPS, SA	134,322,269	26.07%	134,322,269	26.07%
Mubadala Investment Company	25,758,569	5.00%	25,758,569	5.00%
Sonae, SGPS, S.A.	55,524,516	10.78%	-	0.00%
TOTAL	349,927,622	67.93%	352,608,026	68.45%

According to paragraphs b) and c) of number 1 of article 20º and article 21º of the Portuguese Securities Code, a qualified shareholding of the share capital and voting rights of NOS, SGPS, S.A. as calculated in the terms of article 20º of the Portuguese Securities Code, is attributable to the following companies:

• As a consequence of the qualified shareholding notifications sent on July 21, 2023, by Sonae SGPS S.A. (Sonae) and Sonaecom SGPS S.A. (Sonaecom), the voting rights corresponding to 192,527,188 shares of NOS become directly attributable to Sonaecom SGPS S.A. and indirectly attributable to Sonae SGPS S.A. due to the shareholding held by Sonaecom SGPS S.A.
• ZOPT This qualified holding is attributable to the companies Kento Holding Limited ("Kento"), BV, as well as to Mrs. Isabel dos Santos, being (i) Kento and Unitel International directly and indirectly controlled by Mrs. Isabel dos Santos; (ii) a ZOPT, a society controled by Kento Holding Limited, Unitel International Holdings, BV.

22.2. Capital issued premium

On 27 August 2013, following the completion of the merger between ZON and Optimus SGPS, the Company's share capital was increased by 856,404,278 euros, corresponding to the total number of issued shares (206,064,552 shares), based on the closing market price of 27 August 2013. The capital increase is detailed as follows:

• share capital in the amount of 2,060,646 euros;
• premium for issue of shares in the amount of 854,343,632 euros.

Additionally, the premium for issue of shares was deducted for an amount of 125 thousand euros related to costs with the respective capital increase.

• The capital issued premium is subject to the same rules as for legal reserves and can only be used:
• To cover part of the losses on the balance of the year that cannot be covered by other reserves;
• To cover part of the losses carried forward from the previous year that cannot be covered by the net income of the year or by other reserves;
• To increase the share capital.

On 21 April 2022, was approved in the Annual General Meeting of shareholders of NOS SGPS, an increase of share capital, by incorporation of share premium, in the amount of 850,016,277.00, through the increase of the nominal value of the total shares representing the share capital in the amount of 1.65€. The nominal value of each share is now 1.66€.

As of 30 September 2023, the amount of share issue premium is 4,202,356 euros (2022: 4,202,356 euros).

22.3. Own shares

Company law regarding own shares requires the establishment of a non-distributable reserve of an amount equal to the purchase price of such shares, which becomes frozen until the shares are disposed of or distributed. In addition, the applicable accounting rules determine that gains or losses on the disposal of own shares are stated in reserves.

At 30 September 2023 there were 3,736,403 own shares, representing 0.7253% of share capital (31 December 2022: 4,008,391 own shares, representing 0.7781% of the share capital).

The movements occurred in the nine months ended on 30 September 2022 and 2023 were as follows:

	QUANTITY	VALUE
BALANCE AS AT 1 JANUARY 2022	3,002,427	12,353
Acquisition of own shares	1,868,129	7,087
Distribution of own shares - share incentive scheme	(791,257)	(3,186)
Distribution of own shares - other remunerations	(70,908)	(286)
BALANCE AS AT 30 SEPTEMBER 2022	4,008,391	15,968
BALANCE AS AT 1 JANUARY 2023	4,008,391	15,968
Acquisition of own shares	1,234,638	5,171
Distribution of own shares - share incentive scheme	(1,479,000)	(5,970)
Distribution of own shares - other remunerations	(27,626)	(110)
BALANCE AS AT 30 SEPTEMBER 2023	3,736,403	15,059

22.4.Reserves

Legal reserve

Company law and NOS Articles of Association establish that at least 5% of the Company's annual net profit must be used to build up the legal reserve until it corresponds to 20% of the share capital. This reserve cannot be distributed except in the event of liquidation of the company, but it may be used to absorb losses after all other reserves have been exhausted, or for incorporation in the share capital.

Other reserves

Under Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of the company prepared in accordance with IAS / IFRS. Thus, on 30 September 2023 NOS had reserves, which by their nature are considered distributable for an amount of approximately 150.7 million euros, not including the net income.

Dividends

The General Meeting of Shareholders held on April 21, 2022 approved the Board of Directors' proposal to pay an ordinary dividend per share of €0.278, in the amount of €143,215 thousand. The dividend attributable to own shares amounted to approximately 858 thousand euros. The dividend was paid on May 9, 2022.

The General Meeting of Shareholders held on April 5, 2023 approved the Board of Directors' proposal to pay an ordinary dividend per share of €0.430, in the amount of €221,519 thousand. The dividend attributable to own shares amounted to approximately 1,532 thousand euros. The dividend was paid on April 21, 2023.

23. Non-controlling interests

The movements of the non-controlling interests occurred during the nine months ended on 30 September 2022 and 2023 and the results attributable to non-controlling interests for the year are as follows:

	31-12-2021	ATTRIBUTABLE PROFITS	OTHERS	30-09-2022
NOS Madeira	5,289	76	-	5,365
NOS Açores	1,090	(183)	-	907
	6,379	(107)	-	6,272

	31-12-2022	ATTRIBUTABLE PROFITS	OTHERS	30-09-2023
NOS Madeira	5,432	247	(5)	5,674
NOS Açores	819	(155)	(1)	663
	6,251	92	(6)	6,337

24. Borrowings

At 31 December 2022 and 30 September 2023, the composition of borrowings was as follows:

	31-12-2022		30-09-2023
	CURRENT	NON CURRENT	CURRENT	NON CURRENT
LOANS - NOMINAL VALUE	350,136	655,000	101,809	1,032,500
Debenture loan	300,000	290,000	50,000	365,000
Commercial paper	43,000	365,000	42,994	667,500
Bank overdrafts	7,136	-	8,815	-
LOANS - ACCRUALS AND DEFERRALS	2,832	(541)	8,141	(1,083)
LOANS - AMORTISED COST	352,968	654,459	109,950	1,031,417
LEASES	74,485	555,722	80,058	553,777
	427,453	1,210,181	190,008	1,585,194

During the nine months ended on 30 September 2023, the average cost of debt of the used lines was approximately 3.1% (2022: 1.2%).

The average global financing cost (used and unused lines) during the nine months ended on 30 September 2023 was approximately 3.2% (2022: 1.3%).

At 30 September 2023 there is no default in terms of capital, interest, conditions for redemption on loans payable or other commitments.

24.1. Debenture loans

At 30 September 2023, NOS has a total amount of 415 million euros of bonds issued:

• A bond loan in the amount 50 million euros placed by BPI bank in June 2019 and maturing in June 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually.
• A bond loan in the amount 50 million euros placed by Caixa Geral de Depósitos in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually.
• A bond loan in the amount 25 million euros placed by Medio Banca in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually.
• A bond loan in the amount of 15 million euros placed by BPI in July 2021 and maturing in July 2026.The loan bears interest at a variable rate, indexed to the Euribor and paid on a quarterly basis.
• A bond loan in the amount of 75 million euros placed by Caixa Geral de Depósitos in March 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually.
• A bond loan in the amount of 75 million euros placed by BPI in July 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid quarterly.
• A bond loan in the amount 50 million euros placed by BPI in April 2023 and maturing in January 2028. The loan bears interest at variable rates, indexed to Euribor and paid quarterly.
• A bond loan in the amount 75 million euros placed by Caixa Geral de Depósitos in April 2023 and maturing in April 2028. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually.

At 30 September 2023, an amount of 3,784 thousand euros, corresponding to interest and commissions, was added to this amount and recorded in the item "Loans - accruals and deferrals".

24.2.Commercial paper

At 30 September 2023, the Company has borrowings of 710.5 million euros in the form of commercial paper of which €93 million issued under programmes without underwriting. The total amount contracted, under underwriting securities, is of 885 million euros, corresponding to 17 programmes, with 7 banks, 785 million euros of which bear interest at market rates and 100 million euros are issued in fixed rate. Commercial paper programmes with maturities over one-year totaling 760 million euros (of which 567.5 million euros have been used as of 30 September 2023), since the Company can renew unilaterally current issues on or before the programmes' maturity dates and because they are underwritten by the organizer. As such, this amount, although having a current maturity, it was classified as non-current for presentation purposes in the financial position statement.

At 30 September 2023 an amount of 3,274 thousand euros, corresponding to interest and commissions, was deducted to this amount, and recorded in the item "Loans - accruals and deferrals".

24.3. Leases

At 31 December 2022 and 30 September 2023, the leases refer mainly to rental agreements for telecommunications towers, movie theaters, equipment, shops and vehicles, exclusive acquisition of satellite capacity and rights to use distribution network capacity.

Leases – payments

	31-12-2022	30-09-2023
Until 1 year	120,515	110,733
Between 1 and 5 years	305,011	315,834
Over 5 years	420,531	404,033
	846,057	830,600
Future financial costs (lease)	(215,850)	(196,765)
PRESENT VALUE OF LEASE LIABILITIES	630,207	633,835

Leases – present value

	31-12-2022	30-09-2023
Until 1 year	74,485	80,058
Between 1 and 5 years	214,269	221,235
Over 5 years	341,453	332,542
	630,207	633,835

The maturities of the loans obtained are as follows:

	31-12-2022		30-09-2023
	UNTIL 1 YEAR	BETWEEN 1 AND 5 YEARS	OVER 5 YEARS	UNTIL 1 YEAR	BETWEEN 1 AND 5 YEARS	OVER 5 YEARS
Debenture loan	302,944	289,466	-	54,759	364,025	-
Commercial paper	42,888	364,993	-	46,376	667,392	-
Bank overdrafts	7,136	-	-	8,815	-	-
Leases	74,485	214,269	341,453	80,058	221,235	332,542
	427,453	868,728	341,453	190,008	1,252,652	332,542

25. Provisions

At 31 December 2022 and 30 September 2023, the provisions were as follows:

	31-12-2022	30-09-2023
Litigation and other - i)	32,158	34,305
Dismantling and removal of assets - ii)	22,294	23,130
Contingent liabilities - iii)	22,908	22,908
Contingencies - other - iv)	3,907	3,056
	81,267	83,399

• i) At 30 September 2023, the amount under the item "Litigation and other" corresponds to provisions to cover the legal and others claims in-progress.
• ii) The amount under the item "Dismantling and removal of assets "refers to the estimated future costs discounted to the present value, related with the termination of the use of the space where there are telecommunication towers and cinemas;
• iii) The amount in the item "Contingent liabilities" refers to several provisions recorded for present but not likely obligations, related to the merger by incorporation of Optimus SGPS, namely:
  • a. Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CLSU): The Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CLSU) is legislated in Articles 17 to 22 of Law no 35/2012, of 23 August. From 1995 until June 2014, MEO, SA (former PTC) was the sole provider for the universal service of electronic communications, having been designated administratively by the government, i.e. without a formal contest procedure led by the government for that effect, which constitutes an illegality, by the way acknowledged by the European Court of Justice who, through its decision taken in June 2014, condemned the Portuguese State to pay a fine of 3 million euros for illegally designating MEO. In accordance with Article 18 of the abovementioned Law 35/2012, of 23 August, the net costs incurred by the operator responsible for providing the universal service, approved by ANACOM, must be shared between other companies who provide, in national territory public communication networks and publicly accessible electronic communications services. NOS is therefore within the scope of this extraordinary contribution given that MEO has being requesting the payment of CLSU to the compensation fund of the several periods during which it was responsible for providing the services. In accordance with law, the compensation fund can be activated to compensate the net costs of the electronic communications universal service, relative to the period before the designation of the provider by tender, whenever, cumulatively (i) there are net costs, considered excessive, the amount of which is approved by ANACOM, following an audit to their preliminary calculation and support documents, which are provided by the universal service provider, and (ii) the universal service provider requester the Government compensation for the net costs approved under the terms previously mentioned.

Therefore:

• In 2013, ANACOM deliberated to approve the final results of the CLSU audit presented by MEO, relative to the period from 2007 to 2009, in a total amount of 66.8 million euros, a decision that was contested by the Company. In January 2015, ANACOM issued the settlement notes in the amount of 18.6 million euros related to NOS, SA, NOS Madeira and NOS Açores which were contested by NOS and for which a bail was presented by NOS SGPS (Note 44) to avoid Tax Execution Proceedings. The guarantees have been accepted by ANACOM.

• In 2014, ANACOM deliberated to approve the final results of the CLSU audit by MEO, relative to the period from 2010 to 2011, in a total amount of 47.1 million euros, a decision also contested by NOS. In February 2016, ANACOM issued the settlement notes in the amount of 13 million euros, related to NOS, SA, NOS Madeira and NOS Açores which were also contested and for which it was before also presented bail by NOS SGPS in order to avoid the promotion of respective tax enforcement processes. The guarantees that have been accepted by ANACOM.

• In 2015, ANACOM deliberated to approve the final results of the audit to CLSU presented by MEO relative to the period from 2012 to 2013, in the amount of 26 million euros and 20 million euros, respectively, and as the others, it was contested by NOS. In December 2016, the notices of settlement were issued relating to NOS, SA, NOS Madeira and NOS Açores, corresponding to that period, in the amount of 13.6 million euros which were contested by NOS and for which guarantees have been already presented by NOS SGPS in order to avoid the promotion of the respective proceedings of tax execution. The guarantees were also accepted by ANACOM.

• In 2016, ANACOM approved the results of the audit to the CLSU presented by MEO related with the period between January and June 2014, for an amount of 7.7 million euros that was contested by NOS, in standard terms.

• In 2017, NOS, SA, NOS Madeira and NOS Açores were notified of the decision of ANACOM concerning the entities that are obliged to contribute toward the compensation fund and the setting of the values of contributions corresponding to CLSU that must be compensated and relating to the months of 2014 in which MEO still remained as provider of the Universal Service, which establishes for all these companies a contribution around 2.4 million euros. In December 2017, the settlement notes relating to NOS, SA, NOS Madeira and NOS Açores, concerning that period, were issued in the amount of approximately 2.4 million euros, which were challenged by NOS and for which guarantees have also been presented by NOS SGPS, in order to avoid the promotion of their tax enforcement procedures. The guarantees were also accepted by ANACOM.

It is the opinion of the Board of Directors of NOS that these extraordinary contributions to Universal Service (not designated through a tender procedure) flagrantly violate the Directive of Universal Service. Moreover, considering the existing legal framework since NOS began its activity, the request of payment of the extraordinary contribution violates the principle of the protection of confidence, recognised on a legal and constitutional level in Portuguese domestic law. For these reasons, NOS has judicially challenged either the approval of audit results of the universal service net cost related with the pre-contest period as well as the liquidation of each and every extraordinary contributions that may be required. In September 2021, the Lisbon Administrative Circle Court ruled as unfounded the action regarding the administrative challenge of the results of the CLSU 2007-2009 audit, which NOS appealed in October 2021. The Board of Directors is convinced it will be successful in both challenges and appeals undertaken;

iv) The amount under the caption "Contingencies - other" refers to provisions for risks related to miscellaneous events/disputes of various kinds, the settlement of which may result in outflows of cash, and other likely liabilities related to several transactions from previous periods, and whose outflow of cash is probable, namely, costs charged to the current period or previous years, for which it is not possible to estimate reliably the time of occurrence of the expense.

	31-12-2021	INCREASES	DECREASES	OTHERS	30-09-2022
Litigation and other	32,468	2,697	(2,883)	-	32,282
Financial investments	1,075	-	-	-	1,075
Dismantling and removal of assets	22,326	354	-	(1,844)	20,836
Contingent liabilities	23,707	-	-	-	23,707
Contingencies - other	2,940	1,397	(49)	(2,486)	1,802
	82,516	4,448	(2,932)	(4,330)	79,702

During the nine months ended on 30 September 2022, movements in provisions were as follows:

During the nine months ended on 30 September 2023, movements in provisions, were as follows:

	31-12-2022	INCREASES	DECREASES	OTHERS	30-09-2023
Litigation and other	32,158	3,574	(2,645)	1,218	34,305
Financial investments	-	-	-	-	-
Dismantling and removal of assets	22,294	836	-	-	23,130
Contingent liabilities	22,908	-	-	-	22,908
Contingencies - other	3,907	1,224	-	(2,075)	3,056
	81,267	5,634	(2,645)	(857)	83,399

During the nine months ended on 30 September 2022 and 2023, the increases refer mainly to compensation to employees, provisions for legal and other claims plus interests and charges, and the decreases refer mainly to the reassessment and prescription of several legal contingencies.

The movements recorded in "Others", under the heading "Contingencies - other" correspond, predominantly, to compensations to employees.

The net movements for the nine months ended on 30 September 2022 and 2023 reflected in the income statement under Provisions were as follows:

	9M 22	9M 23
Provisions and adjustments (Note 35)	(90)	(1,355)
Other losses / (gains) non-recurrent (Note 38)	1,388	1,224
Interests - dismantling	354	836
Other	(136)	2,284
INCREASES AND DECREASES IN PROVISIONS	1,516	2,989

26. Accrued expenses

At 31 December 2022 and 30 September 2023, this item was composed as follows:

30-09-2023
47,239
40,978
25,781
24,090
17,013
14,578
10,117
8,332
8,187
6,185
6,118
4,384
3,557
5,771
222,330

• i. Invoices to be issued by operators correspond predominantly to interconnection costs for international traffic and for the use of roaming services not yet billed.
• ii. Amounts relating to ANACOM licences and other ICA fees, the invoicing of which is issued annually in subsequent periods.

27. Deferred income

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022		30-09-2023
	CURRENT	NON-CURRENT	CURRENT	NON-CURRENT
Advanced billing i)	37,844	-	38,515	-
BEI implicit subsidy ii)	346	2,824	-	-
	38,190	2,824	38,515	-

• i) This item relates mainly to the billing of Pay TV services regarding the following month to the report period and amounts received from NOS Comunicações, SA customers, related with the recharges of mobile phones and purchase of telecommunications minutes yet unused.
• ii) This item is related mainly to the deferral of income related to the implicit subsidy calculated with the obtaining of a loan, in the meantime fully repaid, from EIB, at interest rates below market values. At 30 September 2023, this amount was reclassified, in accordance with a change in the method of accounting for grants, as disclosed in Note 2.3.13.

28. Accounts payable - trade

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022	30-09-2023
Suppliers current account	252,195	260,502
Invoices in reception and conference	1,160	362
	253,355	260,864

29. Accounts payable - other

At 31 December 2022 and 30 September 2023, this item was composed as follows:

	31-12-2022	30-09-2023
NON-CURRENT
Contractual rights	42,128	41,691
	42,128	41,691
CURRENT
Fixed assets suppliers	47,437	26,613
Contractual rights	1,934	1,739
Advances from customers	191	205
Advances on investment subsidies	-	8,015
Others	4,227	5,892
	53,789	42,464
	95,917	84,155

The caption Contractual Rights refers to the liability to be settled over 20 years, related with the contractual right acquired with the agreement celebrated between NOS Comunicações, S.A., NOS Technology S.A., and Vodafone Portugal, Comunicações Pessoais, S.A with the aim of sharing mobile support network infrastructures (passive infrastructure such as towers and masts) and active mobile network (active radio equipment such as antennas, amplifiers and other equipment), as disclosed to the market on 22 October 2020.

30. Operating revenues

Consolidated operating revenues, for the nine months ended on 30 September 2022 and 2023, were as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
SERVICES RENDERED:
Communications service revenues i)	324,244	953,969	343,131	1,006,873
Revenue distribution and cinematographic exhibition ii)	9,632	24,162	15,933	36,187
Advertising revenue iii)	4,391	13,305	4,899	14,213
Production and distribution of content and channels iv)	6,378	17,952	6,366	17,657
Others	1,371	3,055	2,629	6,784
	346,016	1,012,443	372,958	1,081,714
SALES:
Telco v)	24,955	81,271	21,849	66,681
Audiovisuals and cinema exhibition vi)	3,482	8,454	5,455	12,752
	28,437	89,725	27,304	79,433
OTHER OPERATING REVENUES:
Telco	6,444	20,394	7,287	21,403
Audiovisuals and cinema exhibition	635	936	367	561
	7,079	21,330	7,654	21,964
	381,532	1,123,498	407,916	1,183,111

These operating revenues are shown net of inter-company eliminations.

• i) This item mainly includes revenue relating to: (a) basic channel subscription packages that can be sold in a bundle with fixed broadband/fixed voice services; (b) premium channel subscription packages and S-VOD; (c) terminal equipment rental; (d) consumption of content (VOD); (e) traffic and mobile and fixed voice termination; (f) service activation; (g) mobile broadband access; and (h) other additional services (ex: firewall, antivirus) and services rendered related to datacenter management and consulting services in IT.
• ii) This item mainly includes (a) box office revenue at the NOS Cinemas, and (b) revenue relating to film distribution to other cinema exhibitors in Portugal.
• iii) This item includes advertising revenues on television channels and NOS cinemas.
• iv) This item includes revenues related to production of audiovisual content, thought the compilation of acquired contents, and distribution of channels, essentially TVCines.
• v) Revenue relating to the sale of terminal equipment, telephones, and mobile phones.
• vi) This item mainly includes sales of bar products by NOS Cinemas and DVD sales.

This item includes earned income related with non-compliances and contractual penalties, as well as other supplementary income of diverse natures.

31. Wages and salaries

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Remuneration	16,737	47,308	17,624	52,118
Social taxes	4,437	12,880	4,671	13,768
Social benefits	489	1,525	556	1,599
Other	512	1,324	455	1,330
	22,175	63,037	23,306	68,815

In the nine months ended on 30 September 2022 and 2023, the average number of employees of the companies included in the consolidation was 2,377 and 2,451, respectively. At 30 September 2023, the number of employees of the companies included in the consolidation was 2,419 employees.

The costs of compensations paid to employees, since they are non-recurring costs, are recorded in the item "Restructuring costs" (Note 38).

32. Direct Costs

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Exhibition costs	44,846	138,279	45,708	139,217
Traffic costs	18,349	52,309	19,178	54,135
Costs related to corporate customers services	7,966	34,104	13,104	39,129
Capacity costs	3,862	12,392	5,093	15,162
Shared advertising revenues	2,742	8,863	3,276	9,339
	77,765	245,947	86,359	256,982

33. Cost of products sold

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Costs of products sold	23,724	78,652	21,486	64,604
Increases / (decreases) in inventories impairments (Note 16)	165	1,200	628	1,500
	23,889	79,852	22,114	66,104

34. Support services and supplies and external services

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
SUPPORT SERVICES:
Administrative support and others	7,199	23,166	8,918	28,466
Call centers and customer support	7,594	24,150	7,936	26,077
Information systems	3,568	11,183	4,093	13,039
	18,361	58,499	20,947	67,582
SUPPLIES AND EXTERNAL SERVICES:
Maintenance and repair	11,597	34,865	13,079	41,697
Leasing of ducts and poles	6,727	20,825	6,649	19,687
Electricity	7,483	21,898	4,697	11,979
Professional services	2,692	8,097	2,221	6,579
Installation and removal of terminal equipment	1,212	3,904	1,523	4,084
Travel and accommodation	747	1,871	807	2,584
Communications	1,017	3,022	633	2,065
Other supplies and external services	9,241	23,034	8,937	24,315
	40,716	117,516	38,546	112,990

During the nine months ended on 30 September 2022, given the application of IFRS 16, (practical expedient to consider the changes / concessions related to COVID-19 as not being a modification to the lease) discounts from rents were recognised, on the item "Other Supplies and external services", in the amount of approximately 2.5 million euros.

35. Provisions and adjustments

In the nine months ended on 30 September 2022 and 2023, these items were composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Provisions (Note 25)	77	(90)	22	(1,355)
Impairment of account receivables - trade (Note 17)	4,731	13,167	1,362	10,428
Impairment of account receivables - others (Note 12)	38	165	31	94
Others	2	-	13	8
	4,848	13,242	1,428	9,175

36. Losses / (gains) of affiliated companies, net

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
EQUITY METHOD (NOTE 11)
Dreamia	122	(99)	54	179
Finstar	(6,611)	(16,697)	(1,316)	(2,379)
Mstar	(165)	(555)	(43)	(989)
Upstar	3	(6)	(122)	(634)
Others	65	382	12	28
	(6,586)	(16,975)	(1,415)	(3,795)
OTHERS (NOTE 12)	-	-	-	(854)
	(6,586)	(16,975)	(1,415)	(4,649)

37. Depreciation, amortization and impairment losses

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
TANGIBLE ASSETS
Buildings and other constructions	3,618	9,157	1,996	8,905
Basic equipment	52,688	136,590	49,720	137,515
Transportation equipment	1	1	1	1
Tools and dies	14	46	26	50
Administrative equipment	972	2,903	977	2,908
Other tangible assets	93	281	102	426
	57,386	148,978	52,822	149,805
INTANGIBLE ASSETS
Industrial property and other rights	26,724	77,495	27,289	82,221
	26,724	77,495	27,289	82,221
CONTRACT COSTS
Contract costs	24,503	73,538	24,602	73,601
	24,503	73,538	24,602	73,601
RIGHTS OF USE
Rights of use	15,622	45,533	18,122	54,218
	15,622	45,533	18,122	54,218
INVESTIMENT PROPERTY
Investment property	4	12	3	9
	4	12	3	9
	124,239	345,556	122,838	359,854

38. Restructuring Costs

In the nine months ended on 30 September 2022 and 2023, this item was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Personnel compensation (Note 25)	267	1,388	129	1,224
Others	48	175	3	3
	315	1,563	132	1,227

39. Other losses / (gains) non-recurrent, net

In the nine months ended on 30 September 2022 and 2023, the other non-recurring costs / (gains) was composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
GAINS:
Legal Processes	120	6,338	-	-
	120	6,338	-	-
COSTS:
Others	212	2,940	124	600
	212	2,940	124	600
TOTAL	92	(3,398)	124	600

40. Financing costs and other financials expenses / (income), net

In the nine months ended on 30 September 2022 and 2023, financing costs and other financial expenses / (income) were composed as follows:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
FINANCING COSTS:
INTEREST EXPENSE:
Borrowings	2,346	6,762	10,887	24,977
Finance leases	6,188	18,653	8,008	23,009
Derivatives	4	24	-	50
Others	129	1,162	943	2,750
	8,667	26,601	19,838	50,786
INTEREST EARNED	(1,335)	(3,067)	(1,632)	(5,196)
Interest on late payments	(906)	(2,590)	(878)	(2,548)
Derivatives	-	-	(901)	(1,913)
Others	(429)	(477)	147	(735)
	7,332	23,534	18,206	45,590
NET OTHER FINANCIAL EXPENSES / (INCOME):
Comissions and guarantees	673	2,261	712	2,260
Others	174	280	122	479
	847	2,541	834	2,739

41. Net earnings per share

Earnings per share for the nine months ended on 30 September 2022 and 2023 were calculated as follow:

	3º QUARTER 22	9M 22	3º QUARTER 23	9M 23
Consolidated net income attributable to shareholders	105,962	191,281	45,859	126,320
Number of ordinary shares outstanding during the period (weighted average)	516,769,820	511,668,571	511,424,977	511,382,034
Basic earnings per share - euros	0.21	0.37	0.09	0.25
Diluted earnings per share - euros	0.21	0.37	0.09	0.25

In the above periods, there were no diluting effects on net earnings per share, so the diluted earnings per share are equal to the basic earnings per share.

42. Guarantees and financial undertakings

42.1. Guarantees

At 31 December 2022 and 30 September 2023, the Group presents guarantees in favour of third parties corresponding to the following situations:

	31-12-2022	30-09-2023
Tax authorities i)	33,155	33,852
Others ii)	13,757	14,727
	46,912	48,579

• i) At 31 December 2022 and 30 September 2023, this amount relates to guarantees demanded by the tax authorities in connection with tax proceedings contested by the Company and its subsidiaries (Note 44).
• ii) At 31 December 2022 and 30 September 2023, this amount mainly relates to guarantees provided in connection with Municipal Wayleave Tax proceedings and guarantees provided to cinema owners, and bank guarantees given to providers of satellite capacity renting services.

During the first quarterly of 2015, 2016, 2017 and 2018, and following the settlement notes to CLSU 2007-2009, 2010-2011, 2012-2013 and 2014, respectively, NOS constituted guarantees in favour of the Universal Service Compensation Fund in the amount of 23.6 million euros, 16.7 million euros, 17.5 million euros and 3.0 million euros, respectively, in order to prevent the introduction of tax enforcement proceedings in order to enforce recovery of the amounts paid.

In addition to the guarantees required by the tax authorities, sureties were set up for the current fiscal processes, which NOS was a surety for NOS SA for an amount of 14.6 million euros.

42.2.Other undertakings

Covenants

From the loans obtained (excluding financial leases), besides being subject to the Group's compliance with its obligations (operational, legal and fiscal) 100% of them are subject to Cross default and Pari Passu, 96% are subject to Negative Pledge clauses and 72% are subject to Ownership clauses.

Additionally, about 19% of total borrowings require that the consolidated net financial debt does not exceed 3 times EBITDA after payment of consolidated leases, about 4% require that the consolidated net financial debt does not exceed 3.5 times EBITDA after payment of consolidated leases, about 6% require that the consolidated net financial debt does not exceed 4 times EBITDA after payment of consolidated leases and about 8% require that the consolidated net financial debt does not exceed 5 times EBITDA after payment of consolidated leases.

Net Financial Debt = Loans - Leasings - Cash and Cash Equivalents

EBITDA = Operating profit + Depreciation, amortisation and impairment losses + Restructuring costs + Losses / (gains) on disposal of assets + Other non-recurrent costs / (gains)

EBITDA after lease payments = EBITDA - lease payments (principal and interest)

Assignment agreements football broadcast rights

In December 2015, NOS signed a contract with Sport Lisboa e Benfica - Futebol SAD and Benfica TV, SA of television rights of home matches of football NOS' league, broadcasting rights and distribution of Benfica TV Channel. The contract began in 2016/2017 sports season, had an initial duration of three years, and might be renewed by decision of either party up to a total of 10 sports seasons, with the overall financial consideration reaching the amount of 400 million euros, divided into progressive annual amounts.

Also in December 2015, NOS signed a contract with Sporting Clube de Portugal - Futebol SAD and Sporting and Communication Platforms, S.A. for the assignment of the following rights:

• 1) TV broadcasting rights and multimedia home games of Sporting SAD;
• 2) The right to explore the static and virtual advertising at Stadium José Alvalade;
• 3) The right of transmission and distribution of Sporting TV Channel;
• 4) The right to be its main sponsor.

The contract will last 10 seasons, concerning the rights indicated in 1) and 2) above, starting in July 2018, 12 seasons in the case of the rights stated in 3) starting in July 2017 and 12 and a half seasons in the case of the rights mentioned in 4) beginning in January 2016, with the overall financial consideration amounting to 446 million euros, divided into progressive annual amounts.

Also in December 2015, NOS SA has signed contracts regarding the television rights of home senior team football games with the following sports clubs:

• 1) Associação Académica de Coimbra Organismo Autónomo de Futebol, SDUQ, Lda
• 2) Os Belenenses Sociedade Desportiva Futebol, SAD
• 3) Clube Desportivo Nacional Futebol, SAD
• 4) Futebol Clube de Arouca Futebol, SDUQ, Lda
• 5) Futebol Clube de Paços de Ferreira, SDUQ, Lda
• 6) Marítimo da Madeira Futebol, SAD
• 7) Sporting Clube de Braga Futebol, SAD
• 8) Vitória Futebol Clube, SAD

The contracts began in the 2019/2020 sports season and last up to 7 seasons, apart from the contract with Sporting Clube de Braga - Futebol, SAD which lasts 9 seasons.

In May 2016, NOS and Vodafone have agreed on reciprocal availability, for several sports seasons, of sports content (national and international) owned by the companies, in order to assure to both companies, directly by the assigning party or indirectly through the transfer to third party content distribution channels or models, the availability of broadcasting rights of the sports clubs home football games, as well as the broadcasting and distribution rights of sports and sports clubs channels, whose rights are owned by each of the companies in each moment. The agreement came into force from the beginning of the sports season 16/17, assuring access to Benfica's channel and Benfica's home football games to NOS' and Vodafone's clients, independent from the channel where these football games are broadcast.

Considering that the contract signed allowed for the possibility of extending the agreement to the other operators, in July 2016 MEO and Cabovisão joined the agreement, ending the lack of availability of Porto Canal in the NOS's channel grid, assuring that every Pay TV client can have access to every relevant sports content, regardless of which operator they use.

Following the agreement signed with the remaining operators, which is being made directly in some cases and through channel yield to third parties in others, as a counterpart of the reciprocal provision of rights, the global costs are shared according with retailer telecommunications revenues and Pay TV market shares.

The estimated cash flows are estimated as follows:

Seasons	2023/24	Following
Estimated cash-flows with the contract signed by NOS with the sports entities*	104.4 M€	352.6 M€
NOS estimated cash-flows for the contracts signed by NOS (net amounts charged to the operators) and for the contracts signed by the remaining operators	49.2 M€	201.0 M€
* Includes direct broadcasts of games and channels, advertising and others.

Considering that, following the celebrated agreements with the remaining operators, the risks and benefits associated to contracts with teams are shared amongst the operators, the agreement was considered a collaborative agreement. For this reason, the revenue (with operators) is compensated with the expenses with teams.

Network sharing contract with Vodafone

NOS and Vodafone Portugal celebrated on 29 September 2017 an agreement of infrastructure development and sharing with a nationwide scope. This partnership allows the two Operators providing their commercial offers under a shared network at the beginning of 2018.

The agreement covers the reciprocal sharing of dark fibre in approximately 2.6 million of homes in which each of the entities shares with the other one an equivalent investment value, in other words, they share similar goods. It is assumed that both companies retain full autonomy, independence, and confidentiality concerning the design of the commercial offers, the management of the customers' database and the choice of technological solutions they might decide to implement, that did not originate any impact on the consolidated financial statements (according to IAS 16, this exchange of similar nonmonetary assets will be presented on a net basis).

The partnership has also been extended to mobile infrastructure sharing where it is agreed a minimum sharing of 200 mobile towers.

Celebrated agreements regarding the sharing of mobile network support infrastructure

On 22 October 2020, NOS Comunicações S.A. and NOS Technology, on the one hand, and Vodafone Portugal, Comunicações Pessoais, S.A., on the other hand, celebrated a set of agreements regarding the sharing of mobile network support infrastructure (passive infrastructures such as towers and poles) and activemobile network elements (active radio equipment such as antennas, amplifiers and remaining equipment).These agreements have the following characteristics:

a) the agreements have a nationwide scope with diverse geographical application according to the higher or lower level of population density. In higher density geographies, typically larger urban areas, the parties will pursue synergies by sharing support infrastructure. In lower density areas, typically rural and interior locations, in addition to shared use of support infrastructure, the parties will also share active mobile network.

b) the agreements focus on assets currently held, or that may be held by each party in the future, and on existing 2G, 3G and 4G technology. Incorporation of 5G technology in these agreements will depend on each to deploy this technology.

c) the agreements do not encompass spectrum sharing between the operators and each party will maintain exclusive strategic control of its networks, thus ensuring full competitive, strategic and commercial independence and the ability to differentiate in terms of customer service and provision.

Each party retains the ability to develop its mobile communications network independently.

These agreements will enable NOS to invest more efficiently by capturing value through synergies. NOS will also be able to deploy its mobile network faster and in a more environmentally responsible way, thus benefitting customers and remaining stakeholders.

Sharing of mobile infrastructure represents an important contribution towards greater geographical cohesion and digital inclusion, both of which are essential to the sustainable development of the country.

43. Related parties

43.1. Balances and transactions between related parties

Transactions and balances between NOS and companies of the NOS Group were eliminated in the consolidation process and are not subject to disclosure in this note.

The balances at 31 December 2022 and 30 September 2023 and transactions in the nine months ended on 30 September 2022 and 2023 between NOS Group and its associated companies, joint ventures and other related parties are as follows:

Balances at 31 December 2022

	Balances at 31 December 2022
	ACCOUNTS RECEIVABLES AND PREPAID EXPENSES	ACCOUNTS PAYABLE AND DEFERRED INCOME	BORROWINGS
ASSOCIATED COMPANIES	26,212	12,775	-
Big Picture 2 Films	5	67	-
Sport TV	26,207	12,708	-
JOINTLY CONTROLLED COMPANIES	14,224	1,116	3,082
Dreamia SA	2,409	410	-
Dreamia Servicios de Televisión, S.L.	102	-	3,082
Finstar	11,261	73	-
Upstar	299	142	-
ZAP Media	142	-	-
MSTAR	11	-	-
DUALGRID	-	-	-
OTHER RELATED PARTIES	10,253	3,506	-
Banco BIC Português, S.A.	199	-	-
Cascaishopping- Centro Comercial, S.A.	75	152	-
Centro Colombo- Centro Comercial, S.A.	296	522	-
Centro Vasco da Gama-Centro Comercial,SA	699	819	-
Maiashopping- Centro Comercial, S.A.	76	102	-
MC Shared Services, S.A.	1,667	-	-
Modelo Continente Hipermercados,SA	1,577	38	-
Norteshopping-Centro Comercial, S.A.	351	360	-
SC-Consultadoria,SA	341	-	-
Sierra Portugal, SA	299	131	-
Universo, IME, S.A.	110	-	-
Worten-Equipamento para o Lar,SA	3,318	1,275	-
Other related parties	1,245	107	-
	50,689	17,397	3,082

Transactions in the nine months ended on 30 September 2022

	30-09-2022
	SERVICES RENDERED	SUPPLIES AND EXTERNAL SERVICES	INTEREST GAINS
ASSOCIATED COMPANIES	46,973	57,860	-
Big Picture 2 Films	75	1,708	-
Sport TV(1)	46,898	56,152	-
JOINTLY CONTROLLED COMPANIES	10,468	151	87
Finstar	7,067	-	-
Upstar	60	95	-
Dreamia Servicios de Televisión, S.L.	-	-	97
Dreamia SA	3,341	(145)	(10)
DUALGRID	-	201	-
OTHER RELATED PARTIES	19,841	8,847	-
Banco Bic Português, S.A.	1,346	-	-
Capwatt Services, SA	139	-	-
Cascaishopping- Centro Comercial, S.A.	10	573	-
Centro Colombo- Centro Comercial, S.A.	14	1,256	-
Centro Vasco da Gama-Centro Comercial,SA	10	559	-
Continente Hipermercados, S.A.	360	26	-
Cosmos - Viagens e Turismo, SA	-	206	-
Fashion Division, S.A.	211	-	-
Gaiashopping I- Centro Comercial, S.A.	8	217	-
Insco Insular de Hipermercados, S.A.	134	31	-
Irmãos Vila Nova III - Imobiliária, S.A.	118	-	-
Maiashopping- Centro Comercial, S.A.	7	241	-
MDS Corretor de Seguros, SA(4)	1,061	-	-
Modalfa-Comércio e Serviços,SA	453	-	-
Modelo Continente Hipermercados,SA	4,177	137	-
Modelo - Dist.de Mat. de Construção,S.A.	109	-	-
Norteshopping-Centro Comercial, S.A.	10	1,021	-
Olivedesportos- Publicidade Televisão e Media SA(5)	12	1,110	-
PHARMACONTINENTE - Saúde e Higiene, S.A.	280	-	-
S21SEC Portug-Cyber Security Services,SA	42	1,822	-
SC-Consultadoria,SA(6)	638	-	-
SDSR - Sports Division SR, S.A	159	-	-
SFS, Gestão e Consultoria, S.A.	11	232	-
Sierra Portugal, SA	1,661	81	-
Solinca Classic, S.A.	266	-	-
Sonae Arauco Portugal, S.A.	234	41	-
Sonaecom - Serviços Partilhados, S.A	123	-	-
MC Shared Services, S.A.	1,860	-	-
UNITEL S.a.r.l.	135	152	-
Universo, IME, S.A.	219	-	-
Worten-Equipamento para o Lar,SA	4,388	521	-
ZIPPY - Comércio e Distribuição, SA	160	-	-
Other related parties	1,485	620	-
	77,282	66,858	87

Balances at 30 September 2023

	Balances at 30 September 2023
	ACCOUNTS RECEIVABLES AND PREPAID EXPENSES	ACCOUNTS PAYABLE AND DEFERRED INCOME	BORROWINGS
ASSOCIATED COMPANIES	15,773	9,026	-
Sport TV	15,773	9,026	-
JOINTLY CONTROLLED COMPANIES	15,394	1,444	3,298
Dreamia SA	1,431	1,156	-
Dreamia Servicios de Televisión, S.L.	82	-	3,173
DUALGRID	-	88	-
Finstar	13,054	(31)	-
Mstar	835	-	-
Upstar	(17)	201	-
Bright City S.A.(3)	9	30	125
OTHER RELATED PARTIES	6,471	957	-
Banco Bic Português, S.A.	185	-	-
Centro Colombo Centro Comercial, SA	330	221	-
Modelo Continente Hipermercados, SA	1,176	59	-
Norteshopping Centro Comercial, SA	256	160	-
SC - Sociedade de Consultoria, SA	125	-	-
Universo, IME, S.A.	280	-	-
Sierra Portugal, SA	459	(6)	-
Sonae Investment Management-S.T.,SGPS,SA	150	-	-
Sonae MC - Serviços Partilhados, SA	457	3	-
Worten - Equipamento para o Lar, SA	1,761	367	-
Other related parties	1,292	153	-
	37,638	11,427	3,298

Transactions in the nine months ended on 30 September 2023

	30-09-2023
	SERVICES RENDERED	SUPPLIES AND EXTERNAL SERVICES	INTEREST GAINS
ASSOCIATED COMPANIES	38,295	49,710	-
Big Picture 2 Films(1)	15	934	-
Sport TV(2)	38,280	48,776	-
JOINTLY CONTROLLED COMPANIES	9,924	224	70
Dreamia Servicios de Televisión, S.L.	-	-	70
Dreamia SA	3,676	(106)	-
Finstar	6,218	-	-
Upstar	20	90	-
DUALGRID	-	216	-
Bright City S.A. (3)	10	24	-
OTHER RELATED PARTIES	20,635	6,240	-
Arrábidashopping - Centro Comercial, SA	8	153	-
Banco Bic Português, S.A.	1,419	-	-
Capwatt Services, SA	149	-	-
Cascaishopping Centro Comercial, SA	9	790	-
Centro Colombo Centro Comercial, SA	14	1,424	-
Centro Vasco da Gama Centro Comercial,SA	10	329	-
Continente Hipermercados, SA	371	28	-
Fashion Division, S.A.	471	-	-
Gaiashopping I Centro Comercial, SA	7	321	-
Grupo Habit Analytics	-	135	-
Insco Insular de Hipermercados, S.A.	123	31	-
Irmãos Vila Nova III, SA	169	-	-
Maiashopping Centro Comercial, SA	7	143	-
Modalfa - Comércio e Serviços, SA	310	-	-
Modelo Continente Hipermercados, SA	4,043	110	-
Norteshopping Centro Comercial, SA	11	1,310	-
Pharmacontinente - Saúde e Higiene, SA	300	-	-
SC - Sociedade de Consultoria, SA	588	-	-
SDSR - Sports Division SR, S.A.	155	-	-
Universo, IME, S.A.	580	-	-
SFS, Gestão e Consultoria, S.A.	15	295	-
Sierra Portugal, SA	1,211	57	-
Solinca Classic, S.A.	304	-	-
Sonae Arauco Portugal, S.A.	192	85	-
Sonae Investment Management-S.T.,SGPS,SA	132	-	-
Sonae MC - Serviços Partilhados, SA	2,887	1	-
Worten - Equipamento para o Lar, SA	5,518	588	-
Other related parties	1,632	440	-
	68,854	56,174	70

(1) Company ceased to be a related party in June 2023, due to the disposal of the shareholding in the company.

(2) In the period of nine months ended on 30 September 2022 and 2023, the amount related to Sales and Services Rendered includes about 36.6 million euros (30 September 2022: 45.3 million euros), which are not recorded in the consolidated accounts under Sales and Services Rendered, since it is related to the agreement celebrated with the operators, which configures a sharing of costs and benefits, therefore the compensation of the revenue is made with the expenses with the clubs (Note 42.2).

(3) Stake acquired in September 2023.

(4) Company ceased to be a related party in December 2022.

• (5) Company ceased to be a related party in April 2022.
• (6) Company ceased to be a related party in December 2022.

The Company regularly performs transactions and signs contracts with several parties within the NOS Group. Such transactions were performed on normal market terms for similar transactions, as part of the contracting companies' current activity.

Due to the large number of low value related parties' balances and transactions, it was grouped in the heading "Other related parties" the balances and transactions with entities whose amounts are less than 100 thousand euros.

44. Legal actions and contingent assets and liabilities

44.1.Legal actions with regulators and Competition Authority (AdC)

• NOS SA, NOS Açores and NOS Madeira brought actions for judicial review of ANACOM's decisions in respect of the payment of the Annual Fee of Activity (for 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021 and 2022) as Electronic Communications Services Networks Supplier, and furthermore the refund of the amounts that meanwhile were paid within the scope of the mentioned acts of settlement was requested. Also NOS Wholesale brought action for judicial review of ANACOM's decision in respect of payment of the Annual Fee of Activity for 2020, 2021 and 2022.

The settlement amounts are, respectively, as follows:

• NOS SA: 2009: 1,861 thousand euros, 2010: 3,808 thousand euros, 2011: 6,049 thousand euros, 2012: 6,283 thousand euros, 2013: 7,270 thousand euros, 2014: 7,426 thousand euros, 2015: 7,253 thousand euros, 2016: 8,242 thousand euros, 2017: 9,099 thousand euros, 2018: 10,303 thousand euros, 2019: 10,169 thousand euros; 2020: 10,184 thousand euros, 2021: 9,653 thousand euros and 2022: 9,850 thousand euros.
• NOS Açores: 2009: 29 thousand euros, 2010: 60 thousand euros, 2011: 95 thousand euros, 2012: 95 thousand euros, 2013: 104 thousand euros, 2014: 107 thousand euros, 2015: 98 thousand euros, 2016: 105 thousand euros, 2017: 104 thousand euros, 2018: 111 thousand euros, 2019: 107 thousand euros, 2020: 120 thousand euros, 2021: 123 thousand euros and 2022: 123 thousand euros.
• NOS Madeira: 2009: 40 thousand euros, 2010: 83 thousand euros, 2011: 130 thousand euros, 2012: 132 thousand euros, 2013: 149 thousand euros, 2014:165 thousand euros, 2015: 161 thousand euros, 2016: 177 thousand euros, 2017: 187 thousand euros, 2018: 205 thousand euros, 2019: 195 thousand euros, 2020: 202 thousand euros, 2021: 223 thousand euros and 2022: 235 thousand euros.
• NOS Wholesale: 2020: 36 thousand euros, 2021: 110 thousand euros and 2022: 90 thousand euros.

This fee is a percentage decided annually by ANACOM (in 2009 it was 0.5826%) of operators' electronic communications revenues. The appeals invoke: i) unconstitutionality and illegality, related to the inclusion in the cost accounting of ANACOM of the provisions made by the latter, due to judicial proceedings against the latter (including these appeals of the activity rate) and ii) that only revenues from the electronic communications business per se, subject to regulation by ANACOM, should be considered for the purposes of the application of the percentage and the calculation of the fee payable, and that revenues from television content should be excluded. Judgments have been handed down in more than two dozen cases on the matter, which ANACOM has appealed to the Central Administrative Court and/or the Constitutional Court, pending the outcome of the cases. In the second and third quarters of 2023, the Constitutional Court ruled, in more than a dozen separate cases, that Ordinance 1473-B/2008, of December 17, which regulates the determination of fees due for the exercise of the activity of provider of electronic communications networks and services, is unconstitutional, and also ordered ANACOM to refund the amount unduly charged. These decisions are awaiting final judgment, except for one of them.

• During the first quarter of 2017, NOS was notified by ANACOM of the initiation of an infraction process related to communications of prices update at the end of 2016, beginning of 2017. In the end of the last trimester of 2020, ANACOM notified NOS of the accusation, with the practice of 4 very severe offences and 1 severe offence related, respectively, with i) the non-communication to customers of the right to rescind the contract with no charges, as

a result of prices changes, with (ii and iii) the supposed non-communication of pricing update and with (iv) the adequate advance and, yet, (v) the lack of information to be communicated to ANACOM. However, ANACOM did not present any value for a fine, except in relation to the with severe offence. In this case, ANACOM gave NOS the possibility to settle the fine by the minimum, in the amount of 13 thousand euros, which NOS did. NOS presented its written defense on 29 January 2021. NOS was notified, in November 2022, of ANACOM's decision that condemned NOS to pay a fine of 5.2 million euros. NOS has challenged the decision in court and, in June 2023, the court reduced the amount of the fine imposed on NOS to €4.2 million. NOS appealed this decision to the Court of Appeal.

• On 17 July 2020, NOS was notified by the AdC of an illegality note (accusation) related to digital marketing without a google search engine, which accuses the operators MEO, NOS, NOWO and Vodafone of concertation, for a period ranging from between 2010 and 2018, failing to identify a concrete fine. It is not possible, at this moment, to estimate the value of an eventual fine. NOS presented its written defense to the Portuguese Competition Authority (AdC) and an appeal to the Lisbon Court of Appeal, where it challenged the nullity of the obtained evidence. In July 2022, the Lisbon Court of Appeal confirmed NOS position pending further developments. Is the Board of Directors' conviction, taking into account the elements it knows, that will be able to demonstrate the various arguments in favor of its defense.
• On 15 December 2021, NOS was notified by the Portuguese Competition Authority (AdC) of an illegality note (accusation) related to advertising service practices in automatic recordings, which accuses NOS, other operators and a consultant of concertation behavior in the television recordings advertising market. NOS presented its written defense and subsequently challenged the nullity of the taking of evidence. At the time, it is not possible to estimate whether there will be an acquittal or conviction and, in the case of the latter, the amount of a possible fine. Further developments on the AdC's decision are awaited. It is the conviction of the Board of Directors, taking into account the elements it knows, that it will be able to demonstrate the various arguments in favor of its defense.

44.2.Tax authorities

During the course of the 2003 to 2023 financial years, some companies of the NOS Group were the subject of tax inspections for the 2001 to 2021 financial years. Following these inspections, NOS SGPS, as the controlling company of the Tax Group, and companies not covered by Tax Group, were notified of the corrections made to the Group's tax losses, to VAT and stamp tax and to make the payments related to the corrections made to the above exercises. The total amount of the notifications unpaid is about 38 million euros, added interest, and charges. These settlement notes, which totally were contested, are the respective lawsuits in progress.

Based on the advice obtained from the process representatives and tax consultants, the Board of Directors maintains the belief in a favorable outcome, which is why these proceedings are maintained in court. However, in accordance with the principle of prudence, an assessment of the group's level of exposure to these proceedings is made periodically, in the light of the evolution of case law, and consequently the provisions recorded for this purpose are adjusted. The Group provided the guarantees demanded by the Tax Authorities, related to these processes, according reference in Note 42.

44.3.Actions by MEO against NOS SA, NOS Madeira and NOS Açores and by NOS SA against MEO

In 2011, MEO brought against NOS SA, in the Judicial Court of Lisbon, a claim for the compensation of 10.3 million of Euros, as compensation for alleged unauthorized portability of NOS SA in the period between March 2009 and July 2011. NOS SA contested, and the Court ordered an expert opinion, meanwhile, deemed without effect. The discussion and trial hearing took place in the first quarter of 2016, being the rendered in September of the same year, which considered the action to be partially justified, based not on the occurrence of improper portability, which the Court has determined to restrict itself to those which do not correspond to the will of the proprietor. In that regard, it sentenced NOS to the payment of approximately 5.3 million euros to MEO, a decision of which NOS appealed to the Lisbon Court of Appeal. MEO, on the other hand, was satisfied with the decision and did not appeal against the part of the sentence that acquitted NOS. This Court, in the first quarter of 2018, upheld the decision of the Court of First Instance, except for interests, in which it gave reason to the claims of NOS, in the sense that interests should be counted from the citation to the action and not from the due date

of the invoices. NOS filed an extraordinary appeal with the Supreme Court of Justice (SCJ), that appeal which found that the facts established were insufficient to resolve on the substance of the case. Consequently, the SCJ ordered that the court under appeal should amplify the facts. The case was transferred to the Court of First Instance and in November 2019, this, granted the parties the possibility of requesting the production of supplementary evidence on the subject of the extension, with NOS requesting an expert examination and the repetition of testimonial evidence. In February 2020, the Court determined the need to obtain new evidence, which requires the analysis of the information relating to all portabilities that serve as the basis for the process, determining the carrying out of expert evidence for that purpose. The appointment of the expert occurred on October 2021. In December 2022, the expert asked to be relieved of his duties because he felt that the qualified non-judicial verification was unfeasible in view of the volume of documentation to be analysed, having the court determined in April 2023, that, in view of the expert's request, the trial should be limited to the submission of written pleadings. The parties submitted their written pleadings in June and NOS, in addition, filed an autonomous appeal against that order, on the grounds that the court's decision violated the STJ judgment. In July 2023, despite the fact that no additional evidence had been produced as determined by the STJ, the Court handed down a new decision ordering NOS to pay 5.3 million euros. This decision has already been appealed to the Lisbon Court of Appeal. Further developments are awaited.

In 2011, NOS SA brought an action in Lisbon Judicial Court against MEO, claiming payment of 22.4 million euros, for damages suffered by NOS SA, arising from violations of the Portability Regulation by MEO, in particular, the large number of unjustified refusals of portability requests by MEO in the period between February 2008 and February 2011. The court declared the performance of expert evidence of technical nature and an economic-financial survey, which were completed in February 2016 and June 2018, respectively. MEO argued for the nullity of the expert economic-financial report, which was dismissed. After the trial, in May 2022, the court partially agreed with NOS, condemning MEO to pay 7.9 million euros, a decision challenged by MEO and NOS by filing appeals in October 2022. At the end of March 2023, the Lisbon Court of Appeal revoked the initial decision and ordered the expansion of the facts, which will entail new trial sessions. It is the understanding of the Board of Directors, corroborated by the attorneys accompanying the process, that it is, in formal and substantive terms, likely that NOS SA will be able to win the lawsuit, due to MEO already having been convicted for the same offences by ANACOM.

44.4.Action brought by DECO

In March 2018, NOS was notified of a lawsuit brought by DECO against NOS, MEO and NOWO, in which a declaration of nullity of the obligation to pay the price increases imposed on customers at the end of 2016 is requested. In April and May 2018, the operators, including NOS, lodged a defence. The action's value has been fixed at EUR 60,000. After the discussion and trial sessions were held in 2022, NOS filed an appeal against the court decision that dispensed with the production of testimonial evidence, which was upheld by the Lisbon Court of Appeal. The parties are now awaiting for the discussion and trial sessions to be scheduled. Board of Directors is convinced that the arguments used by the author are not justified, which is why it is believed that the outcome of the proceeding should not result in significant impacts for the Group's financial statements.

44.5.Action brought by Citizens Voice

In November 2022, NOS was served with a lawsuit filed by Citizens Voice - Consumer Advocacy Association ("Citizens Voice"), where a set of requests related to the automatic activation of pre-defined volumes of mobile data, once the data volume included in the monthly fee contracted by customers has been exhausted. Citizens Voice requests more specifically (i) the judicial declaration of the illegality of this practice for understanding that violates a set of national and European rules, (ii) the recognition of the right of customers to refuse to contract these services, (iii) the return of amounts paid on this basis over the past years by NOS customers, as well as (iv) the payment of compensation in the amount of 100 euros to each customer for alleged moral damages resulting from that practice. In December 2022 NOS presented its response invoking the illegitimacy of Citizens Voice to present the action, namely by the existence of a profit interest, and furthermore defending the lawfulness of the practice and its total transparency and clarity for the respective customers. The Board of Directors is convinced that the arguments used by the plaintiff are unfounded, reason why it is believed that the outcome of the process will not result in significant impacts for the Group's financial statements.

44.6. Interconnection tariffs

At 30 September 2023, accounts receivable and accounts payable include 37,139,253 euros and 43,475,093 euros, respectively, resulting from a dispute between the subsidiary NOS SA and, essentially, the operator MEO – Serviços de Comunicação e Multimédia, S.A. (previously named TMN – Telecomunicações Móveis Nacionais, S.A.), in relation to the non-definition of interconnection tariffs of 2001. In what concerns to that dispute with MEO, the result was totally favourable to NOS S.A., having already become final. In March 2021, MEO filed a new lawsuit against NOS, in which it claimed the price of interconnection services between TMN and Optimus for 2001 at 55\$00 (€ 0.2743) per minute. After NOS presented its defence contesting MEO's petition, a preliminary hearing was held and, by court decision, NOS was acquitted of the case. MEO filed an appeal against the decision, which was dismissed, and in February 2023 filed a new appeal to the STJ where NOS presented reply allegations. Further developments of the process are awaited, being the understanding of the Board of Directors, supported by the lawyers who monitor the process, that there is, in substantive terms, a good chance that NOS SA can win the action.

45. Share incentive scheme

On 23 April 2014, the General Meeting approved the Regulation on Short and Medium-Term Variable Remuneration, which establishes the terms of the Share Incentive Scheme ("NOS Plan"). This plan aimed at more senior employees with the vesting taking place three years being awarded, assuming that the employee is still with the company during that period.

At 30 September 2023, the unvested plans are:

	NUMBER OF SHARES
NOS PLAN
Plan 2021	1,426,641
Plan 2022	1,165,183
Plan 2023	1,039,485

During the nine months ended on 30 September 2023, the movements that occurred in the plans are detailed as follows:

	NOS PLAN 2020	NOS PLAN 2021	NOS PLAN 2022	NOS PLAN 2023	TOTAL
BALANCE AS AT 31 DECEMBER 2022:	1,459,370	1,320,809	1,079,152	-	3,859,331
MOVEMENTS IN THE PERIOD:
Awarded	-	-	-	1,040,472	1,040,472
Vested	(1,458,712)	(11,380)	(8,908)	-	(1,479,000)
Cancelled / elapsed / corrected (1)	(658)	117,212	94,939	(987)	210,506
BALANCE AS AT 30 SEPTEMBER 2023	-	1,426,641	1,165,183	1,039,485	3,631,309

(1) Refers mainly to correction made for dividends paid, exit of employees not entitled to the vesting of shares and other adjustments resulting from the way the shares are vested.

The share plans costs are recognised over the year between the awarding and vesting date of those shares. The responsibility is calculated taking into consideration the share price at award date of each plan, for plans settled in shares, or at the closing date, for plans settled in cash. The responsibility is recorded in Reserves and Accrued Expenses, respectively.

As at 30 September 2023, the outstanding responsibility related to these plans is 5,752 thousand euros and is recorded in Reserves.

The costs recognised in previous years and in the nine months ended on 30 September 2023, and its liabilities are as follows:

	ACCRUED EXPENSES	RESERVES	TOTAL
Costs recognised in previous years related to plans as at 31 December 2021	-	6,675	6,675
Costs of plans vested in the period	-	(4,670)	(4,670)
Costs incured in the period and others	-	3,747	3,747
TOTAL COST OF THE PLANS	-	5,752	5,752

46. Other matters

46.1.Preventive seizure of 26.075% of the share capital of NOS SGPS, S.A.

On 4 April 2020, SONAECOM, SGPS, SA, holder of 50% of the capital of ZOPT, SGPS, SA (hereinafter "ZOPT"), was informed by this company of the communication received from the Central Criminal Investigation Court of Lisbon (hereinafter Tribunal) to proceed to the preventive seizure of 26.075% of the share capital of NOS, SGPS, SA, corresponding to half of the shareholding in NOS held by ZOPT and, indirectly, by the companies Unitel International Holdings, BV and Kento Holding Limited ", controlled by Eng.ª Isabel dos Santos.

Under the terms of the aforementioned decision, the foreclosed shares are deprived of the exercise of voting rights and the right to receive dividends, the latter of which must be deposited with Caixa Geral de Depósitos, S.A. at the court's discretion.

The other half of ZOPT's participation in NOS share capital, corresponding to an identical percentage of 26.075% - and which, at least in line with the criterion used by the Court, embodies the 50% held in ZOPT by SONAECOM - was not subject to seizure, nor the rights attached to it were subject to any limitation.

On 12 June 2020, ZOPT was authorized by the Lisbon Central Criminal Investigation Court to exercise the voting right corresponding to the 26.075% of NOS share capital preventively seized under the aforementioned Court order.

Following the communication of April 4, 2020, ZOPT filed third-party claims, which, in June 2020, were rejected by the investigating judge on the grounds that the Portuguese courts had no jurisdiction to hear and decide them, a decision that, having been appealed by ZOPT, was revoked by the Lisbon Court of Appeal, in February 2021.

In November 2021, the Investigating Judge, aware of the cause's merit, dismissed the third-party embargoes presented by ZOPT, a decision that, according to ZOPT, was appealed to the Court of Appeal. After being admitted in February 2022, in June 2022, ZOPT was notified of the decision dismissing the appeal. Further developments are awaited. The Board of Directors of NOS is not aware of any developments in this process.

In September 2022, Sonaecom informed that in a meeting of the General Meeting of ZOPT it was decided to proceed with the amortization of Sonaecom's stake in that company and the refund of the additional payments made by Sonaecom, for a consideration that includes the delivery of shares representing 26.075% of the capital of NOS. As a result of this repayment, which was subject to the applicable legal procedures, Sonaecom is no longer a shareholder of ZOPT, which is now wholly owned by Unitel International Holdings, BV and Kento Holding Limited, companies controlled by Isabel do Santos. In December 2022, Sonaecom, upon completion of the legal procedures, informed that it now holds directly 134,322,268 ordinary shares of NOS, corresponding to 26.07% of its share capital.

Additionally, also informed that such participation is also attributable to the entities with which it is in a control relationship, namely, SONTEL, BV, Sonae Investments, BV, SONAE, SGPS, S.A. and EFANOR INVESTIMENTOS, SGPS, S.A..

The Board of Directors of NOS is not aware of any developments in the above mentioned preventive seizure process.

47. Subsequent events

As of the date of approval of this document, no other material subsequent events have occurred that merit disclosure in this report.

These financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards (IAS / IFRS) as adopted by the European Union and the format and disclosures required by those Standards, some of which may not conform to or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

48. Annexes

A) Companies included in the consolidation by the full consolidation method

				PERCENTAGE OF OWNERSHIP
COMPANY	HEADQUARTERS	PRINCIPAL ACTIVITY	SHARE HOLDER	EFFECTIVE 30-09-2022	DIRECT 30-09-2023	EFFECTIVE 30-09-2023
NOS, SGPS, S.A. (Holding)	Lisbon	Management of investments	-	-	-	-
BLU S.A (a)	Lisbon	Rendering of telecommunications services, establishment, management and operation of telecommunications networks	NOS Comunicações	-	0%	0%
Empracine - Empresa Promotora de Atividades Cinematográficas, Lda.	Lisbon	Invest and support the development of companies that aim to commercialize technologies and products that result from scientific and technological research	Lusomundo SII	100%	100%	100%
Fundo de Capital de Risco N5G (b)	Lisbon	Movies exhibition	NOS	100%	100%	100%
Lusomundo - Sociedade de investimentos imobiliários SGPS, SA	Lisbon	Management of Real Estate	NOS	100%	100%	100%
Lusomundo Imobiliária 2, S.A. Lusomundo Moçambique, Lda. (c)	Lisbon Maputo	Management of Real Estate Movies exhibition and commercialization of other public events	Lusomundo SII NOS + NOS Cinemas	100% 100%	100% 100%	100% 100%
NOS Açores Comunicações, S.A.	Ponta Delgada	Distribution of television by cable and satellite and operation of telecommunications services in the Azores area	NOS Comunicações	84%	84%	84%
NOS Audio - Sales and Distribution, S.A.	Lisbon	Movies distribution, editing, distribution, commercialization and production of audiovisual products. Procurement and exploitation of advertising and any activity of commercial valorization of objects and figures related to entertainment activities.	NOS	100%	100%	100%
NOS Audiovisuais, SGPS, S.A.	Lisbon	Management of social participations in other companies as an indirect form of economic activity	NOS	100%	100%	100%
NOS Comunicações, S.A.	Lisbon	Implementation, operation, exploitation and offer of networks and rendering services of electronic comunications and related resources; offer and commercialisation of products and equipments of electronic communications	NOS	100%	100%	100%
NOS Corporate Center, S.A.	Lisbon	Service rendered of business support and management and administration consultancy services, including accounting, logistics, administrative, financial, tax, human resources services and any other services that are subsequent or related to previous activities. The company may also perform any other services. activities that are complementary, subsidiary or ancillary to those referred to in the preceding paragraph, directly or through participation in any other form of association, temporary or permanent, with other companies and / or other entities governed by public or private law.	NOS	100%	100%	100%
NOS Inovação, S.A.	Matosinhos	Achievement and promotion of scientific activities and research and development as well as the demonstration, dissemination, technology transfer and formation in the fields of services and information systems and fixed solutions and last generation mobile, television, internet, voice and data, and licensing and engineering services and consultancy	NOS	100%	100%	100%
NOS Internacional, SGPS, S.A.	Lisbon	Management of social participations in other companies as an indirect form of economic activity	NOS	100%	100%	100%
NOS Lusomundo Audiovisuais, S.A.	Lisbon	Import, distribution, commercialization and production of audiovisual products	NOS Audiovisuais SGPS	100%	100%	100%
NOS Lusomundo Cinemas , S.A.	Lisbon	Movies exhibition and commercialization of other public events Distribution of television by cable and satellite and operation of telecommunications services in the Madeira	NOS	100%	100%	100%
NOS Madeira Comunicações, S.A.	Funchal	area Distribution of insurance and related activities. It may also engage in any other complementary, subsidiary	NOS Comunicações	78%	78%	78%
NOS Mediação de Seguros, S.A.	Lisbon	or accessory activities, directly or through participation in any other forms of association, temporary or permanent, with other companies and/or other public or private entities.	NOS	-	100%	100%
NOS Property, S.A.	Lisbon	Management of investments	NOS	100%	100%	100%
NOS Sistemas España, S.L.	Madrid	Rendering of consulting services in the area of information systems	NOS Comunicações	100%	100%	100%
NOS Sistemas, S.A.	Lisbon	Rendering of consulting services in the area of information systems	NOS Comunicações	100%	100%	100%
NOS TECHNOLOGY – Concepção, Construção e Gestão de Redes de Comunicações, S.A. ('Artis')	Matosinhos	Design, construction, management and exploitation of electronic communications networks and their equipment and infrastructure, management of technologic assets and rendering of related services	NOS Comunicações	100%	100%	100%
NOS Wholesale, S.A.	Lisbon	Trade, service rendered and exploitation of wholesale offerings of national and international electronic communications services and related services, namely information and communication technology services. Rendering of consulting services and support to contract management in roaming business. The organization of the material and human resources necessary for the commercialization, promotion and operation of electronic communications networks and circuits. The company may also perform any other activities that are complementary, subsidiary or ancillary to those referred to in the preceding paragraphs, directly or through participation in any other form of association, temporary or permanent, with other companies and / or other entities governed by public or private law.	NOS SA	0%	100%	100%
Per-Mar – Sociedade de Construções, S.A. ('Per Mar')	Lisbon	Purchase, sale, renting and operation of property and commercial establishments	NOS SA	100%	100%	100%
Sontária - Empreendimentos Imobiliários, S.A. ('Sontária')	Lisbon	Realisation of urbanisation and building construction, planning, urban management, studies, construction and property management, buy and sale of properties and resale of purchased for that purpose	NOS Comunicações	100%	100%	100%
Teliz Holding, S.A.	Lisbon	Management of group financing activities	NOS	100%	100%	100%
Ten Twenty One, S.A (d)	Lisbon	Provision of engineering and consulting services in the area of information technology, communications and electronics	NOS	-	100%	100%
(a) Acquired on March 2023. On May 2023 merged with NOS Comunicações

(b) NOS SGPS: 27,50%; NOS Audiovisuais SGPS: 22,50%; NOS Sistemas: 20,00%; NOS Internacional SGPS: 20,00%; NOS Cinemas: 10,00% (c) NOS SGPS: 90%; NOS Lusomundo Cinemas: 10%

(d) Created on February 2023

B) Associated companies

	HEADQUARTERS	PRINCIPAL ACTIVITY		PERCENTAGE OF OWNERSHIP
COMPANY			SHARE	EFFECTIVE	DIRECT	EFFECTIVE
			HOLDER	30-09-2022	30-09-2023	30-09-2023
Big Picture 2 Films, S.A. (a)	Oeiras	Import, distribution, commercialization and production of audiovisual products	NOS Audiovisuais	20.00%	0.00%	0.00%
Big Picture Films, S.L.	Madrid	Distribution and commercialization of movies	Big Picture 2 Films, S.A.	20.00%	0.00%	0.00%
Sport TV Portugal, S.A.	Lisbon	Conception, production, realization and commercialization of sports programs for telebroadcasting, purchase and resale of the rights to broadcast sports programs for television and provision of publicity services	NOS	25.00%	25.00%	25.00%

(a) Disposal of the stake in the company in June 2023

C) Jointly controlled companies

				PERCENTAGE OF OWNERSHIP
COMPANY	HEADQUARTERS	PRINCIPAL ACTIVITY	SHARE HOLDER	EFFECTIVE 30-09-2022	DIRECT 30-09-2023	EFFECTIVE 30-09-2023
Dreamia Servicios de Televisión, S.L.	Amsterdam	Management of investments	NOS Audiovisuais	-	50,00%	50,00%
Dreamia - Serviços de Televisão, S.A.	Lisbon	Conception, production, realization and commercialization of audiovisual contents and provision of publicity services	Dreamia Holding BV	50,00%	100,00%	50,00%
FINSTAR - Sociedade de Investimentos e Participações, S.A.	Luanda	Distribution of television by satellite, operation of telecommunications services	Teliz Holding B.V.	30,00%	30,00%	30,00%
MSTAR, SA (a)	Maputo	Distribution of television by satellite, operation of telecommunications services	NOS	30,00%	30,00%	30,00%
Upstar Comunicações S.A.	Vendas Novas	Electronic communications services provider, production, commercialization, broadcasting and distribution of audiovisual contents	NOS	30,00%	30,00%	30,00%
ZAP Media S.A.	Luanda	Projects development and activities in the areas of entertainment, telecommunications and related technologies, the production and distribution of the contents and the design, implementation and operation of infrastructure and related facilities	FINSTAR	30,00%	100,00%	30,00%
Dualgrid - Gestão de Redes Partilhas, S.A.	Luanda	Projects development and activities in the areas of entertainment, telecommunications and related technologies, the production and distribution of the contents and the design, implementation and operation of infrastructure and related facilities	FINSTAR	50,00%	50,00%	50,00%
BrightCity S.A. (b)	Maia	Creation and development of technologies to improve electrical, lighting, communications, information systems management or other infrastructures; trade and provision of services for better management of available resources with an environmental, economic and social impact.	NOS Comunicações S.A.	0%	50,00%	50,00%
(a) NOS SGPS: 29,40%; NOS Comunicações: 0,60%.

(b) Stake acquired in september 2023.

Financial investments whose participation is less than 50% were considered as joint arrangements due to shareholder agreements that confer joint control.

D) Companies in which NOS does not have significant influence

	HEADQUARTERS			PERCENTAGE OF OWNERSHIP
COMPANY		PRINCIPAL ACTIVITY	SHARE HOLDER	EFFECTIVE 30-09-2022	DIRECT 30-09-2023	EFFECTIVE 30-09-2023
Associação Laboratório Colaborativo em Transformação Digital - DTX Fundo TechTransfer	Guimarães Lisboa	Research applied to different areas associated with digital transformation to encourage cooperation between R&D units, educational institutions and the productive sector Invest and support the development of companies that aim to commercialize technologies and products that result from scientific and	NOS Inovação NOS Inovação	4.92% 3.90%	4.92% 3.90%	4.92% 3.90%
		technological research
RK. AI - Serviços de Processamento de Imagens e Análise de Dados, S.A. (Reckon.ai)	Porto	The Company's activities relate to information and computer technologies, images and data processing and analysis, hosting and related activities and IT consulting.	Fundo NOS 5G	11.76%	11.76%	11.76%
SkillAugment, Lda (KIT-AR) (a)		KIT-AR is a software-based startup, founded in 2018, resulting from a European industrial research project led by 2 European R&D entities - Sintef (NO) and UCL (UK). KIT-AR has developed an innovative augmented reality platform supporting operators on the shop floor equipped with smart glasses: (By using KIT-AR, large industrial companies with processes requiring manual intervention from operators will be able to mitigate errors in the various manufacturing processes and increase the global productivity of the operation;As a company operating in a rapidly expanding market, with a technically differentiated solution already validated by a small initial set of customers and with a technically robust team, KIT-AR configures a relevant investment opportunity.
Seems Possible, Lda. (Knock Healthcare) (b)	Porto	Data processing activities, information domiciliation and related activities, namely in the health area. Business and management consultancy, namely planning, organization, control, information and management, company reorganization. Compensation strategies for termination of employment relationship. Consultancy on safety and hygiene at work. Design of accounting programs and budget control processes. Development of all types of software. Marketing objectives and policies and human resources management. Sale of medical devices and other health equipment. Services to support the internationalization of plans in health area.	Fundo NOS 5G	0.00%	0.00%	0.00%
Mindprober	Braga	The society aims to measure the emotional impact that multimedia content has on consumers, through wearables that monitor biometric data such as sweat or heartbeat acceleration.	Fundo NOS 5G	2.09%	2.09%	2.09%
Didimo Inc. (c)	Dover	DIDIMO has developed a platform that allows the generation, in about 60 seconds, of 3D digital avatars based on photographs.	Fundo NOS 5G	0.00%	0.00%	0.00%
Didimo SA (c)	Porto	DIDIMO has developed a platform that allows the generation, in about 60 seconds, of 3D digital avatars based on photographs.	Fundo NOS 5G	0.00%	0.00%	0.00%
Lusitânia Vida - Companhia de Seguros, S.A ("Lusitânia Vida")	Lisboa	Insurance services	NOS	0.03%	0.03%	0.03%
Lusitânia - Companhia de Seguros, S.A ("Lusitânia Seguros") (a) The investment in the entity (KIT-AR) was in convertible debt, which represent a participation of 0%	Lisboa	Insurance services	NOS	0.02%	0.02%	0.02%

(b) The investment in the entity (Knock Healthcare) was in convertible debt, which represent a participation of 0%

(c) NOS 5G Fund only holds 1 share in each entity, representing 0.0% of the capital.

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