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OI S.A.

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Oi S A : under Judicial Reorganization and Subsidiaries - Form 6-K

11/15/2021 | 06:40am EST

Oi S.A. - under Judicial Reorganization and Subsidiaries

Financial Statements for the Quarters

Ended September 30, 2021

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Contents

Company Data
Capital Breakdown 1
Individual Financial Statements
Balance Sheets, Assets 2
Balance Sheets, Liabilities and Equity 4
Statements of Profit or Loss 6
Statements of Comprehensive Income 7
Statements of Cash Flows 8
Statements of Changes in Equity
Statement of Changes in Equity - 1/1/2021 to 9/30/2021 10
Statement of Changes in Equity - 1/1/2020 to 9/30/2020 11
Statements of Value Added 12
Consolidated Financial Statements
Balance Sheets, Assets 13
Balance Sheets, Liabilities and Equity 15
Statements of Profit or Loss 17
Statements of Comprehensive Income 19
Statements of Cash Flows 20
Statements of Changes in Equity
Statement of Changes in Equity - 1/1/2021 to 9/30/2021 22
Statement of Changes in Equity - 1/1/2020 to 9/30/2020 23
Statements of Value Added 24

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Company Data / Capital Breakdown

Number of Shares

(thousand)

Current Quarter
09/30/2021
Paid-in Capital
Common shares 5,796,478
Preferred shares 157,727
Total 5,954,205
In Treasury
Common shares 30
Preferred shares 1,812
Total 1,842
1

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Balance Sheets as at September 30, 2021
Assets

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

1 Total assets 55,329,866 38,525,202
1.01 Current assets 15,332,497 6,017,124
1.01.01 Cash and cash equivalents 785,300 1,952,680
1.01.02 Cash investments 187,519 184,682
1.01.02.01 Cash investments measured at fair value through profit or loss 187,519 184,682
1.01.02.01.01 Held-for-trading securities 187,519 184,682
1.01.03 Accounts receivable 3,538,029 1,400,570
1.01.03.01 Trade receivables 3,538,029 1,400,570
1.01.04 Inventories 223,990 66,033
1.01.06 Recoverable taxes 146,200 45,159
1.01.06.01 Current recoverable taxes 146,200 45,159
1.01.07 Prepaid expenses 558,978 233,952
1.01.08 Other current assets 9,892,481 2,134,048
1.01.08.03 Other 9,892,481 2,134,048
1.01.08.03.01 Due from subsidiaries 33,965 33,912
1.01.08.03.02 Other taxes 628,096 929,572
1.01.08.03.03 Judicial deposits 1,105,749 716,047
1.01.08.03.04 Dividends and interest on capital 2,448,620 2 ,466
1.01.08.03.05 Pension plan assets 1,743 4,984
1.01.08.03.06 Held-for-sale assets 4,840,885 100,622
1.01.08.03.07 Derivative financial instruments 25,291 0
1.01.08.03.08 Other assets 808,132 346,445
1.02 Non-current assets 39,997,369 32,508,078
1.02.01 Long-term receivables 17,421,914 15,160,428
1.02.01.01 Cash investments measured at fair value through profit or loss 2,607 3,174
1.02.01.01.01 Securities at fair value 2,607 3,174
1.02.01.07 Deferred taxes 3,724,398 3,724,398
1.02.01.07.01 Deferred income tax and social contribution 3,724,398 3,724,398
1.02.01.08 Prepaid expenses 152,447 76,087
1.02.01.09 Due from related parties 8,717,679 7,587,660
1.02.01.09.02 Due from subsidiaries 8,717,679 7,587,660
1.02.01.10 Other non-current assets 4,824,783 3,769,109
1.02.01.10.03 Other taxes 506,878 445,187
1.02.01.10.04 Judicial deposits 3,857,127 3,220,445
1.02.01.10.05 Pension plan assets 39,199 36,917
1.02.01.10.06 Other assets 421,579 66,560
1.02.02 Investments 4 ,835,042 7,353,440
1.02.02.01 Equity interests 4,835,042 7,353,440
1.02.02.01.01 Investments in associates 52,187 0
1.02.02.01.02 Investments in subsidiaries 4,742,932 7,339,368
1.02.02.01.03 Interests in joint ventures 23,223 0
1.02.02.01.04 Other investments 16,700 14,072
1.02.03 Property, plant and equipment 15,078,244 6,948,832
1.02.03.01 Property, plant and equipment in service 10,832,346 6,022,330
1.02.03.02 Right of use in a lease 2,585,736 679,405
2

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Balance Sheets as at September 30, 2021
Assets

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

1.02.03.03 Property, plant and equipment in progress 1,660,162 247,097
1.02.04 Intangible assets 2,662,169 3,045,378
1.02.04.01 Intangible assets 2,662,169 3,045,378
1.02.04.01.02 Regulatory licenses 2,538,988 2,986,914
1.02.04.01.03 Software 61,479 5,710
1.02.04.01.04 Intangibles in progress 84 84
1.02.04.01.05 Other 61,618 52,670
3

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Balance Sheets as at September 30, 2021
Liabilities and Equity

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

2 Total liabilities and shareholders' equity 55,329,866 38,525,202
2.01 Current liabilities 6,704,680 3,044,306
2.01.01 Payroll and related taxes 261,757 284,171
2.01.01.02 Mandatory benefits 261,757 284,171
2.01.02 Trade payables 2,676,984 970,071
2.01.02.01 Domestic suppliers 2,676,984 970,071
2.01.02.01.01 Trade payables 1,964,521 820,488
2.01.02.01.02 Trade payables subject to the Judicial Reorganization 712,463 149,583
2.01.04 Borrowings and financing 167,861 408,027
2.01.04.01 Borrowings and financing 167,861 408,027
2.01.04.01.01 In local currency 451 2,226
2.01.04.01.02 In foreign currency 167,410 405,801
2.01.05 Other payables 3,036,399 910,170
2.01.05.02 Other 3,036,399 910,170
2.01.05.02.01 Dividends and interest on capital payable 825,332 4,775
2.01.05.02.04 Other taxes 349,251 174,097
2.01.05.02.05 Tax refinancing program 85,760 55,784
2.01.05.02.06 Derivative financial instruments 4,159 10,967
2.01.05.02.07 Licenses and concessions payable 0 17,828
2.01.05.02.08 Leases payable 514,464 146,415
2.01.05.02.09 Assignment of receivables 196,720 41,268
2.01.05.02.10 Other payables 1,060,713 459,036
2.01.06 Provisions 561,679 471,867
2.01.06.01 Tax, social security, labor, and civil provisions 561,679 471,867
2.01.06.01.01 Tax provisions 123,154 4,247
2.01.06.01.02 Social security and labor provisions 87,096 58,888
2.01.06.01.04 Civil provisions 351,429 408,732
2.02 Non-current liabilities 47,563,377 27,729,404
2.02.01 Borrowings and financing 22,081,725 12,935,035
2.02.01.01 Borrowings and financing 22,081,725 12,935,035
2.02.01.01.01 In local currency 8,706,107 4,039,068
2.02.01.01.02 In foreign currency 13,375,618 8,895,967
2.02.02 Other payables 21,282,192 12,679,013
2.02.02.01 Due to related parties 1,931,177 1,591,964
2.02.02.01.02 Payables to subsidiaries 1,931,177 1,591,964
2.02.02.02 Other 19,351,015 11,087,049
2.02.02.02.03 Trade payables subject to the Judicial Reorganization 3,332,365 1,444,477
2.02.02.02.04 Tax refinancing program 177,090 156,845
2.02.02.02.05 Other taxes 941,788 549,829
2.02.02.02.06 Provision for negative shareholders' equity 7,136,330 6,017,583
2.02.02.02.07 Leases payable 2,149,929 541,805
2.02.02.02.08 Assignment of receivables 32,787 37,829
2.02.02.02.09 Other payables 5,580,726 2,338,681
2.02.04 Provisions 4,199,460 2,115,356
2.02.04.01 Tax, social security, labor, and civil provisions 4,199,460 2,115,356
2.02.04.01.01 Tax provisions 774,072 232,770
4

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Balance Sheets as at September 30, 2021
Liabilities and Equity

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

2.02.04.01.02 Social security and labor provisions 745,602 602,176
2.02.04.01.03 Accrued employee benefits 779,492 702,058
2.02.04.01.04 Civil provisions 1,900,294 578,352
2.03 Shareholders' equity 1,061,809 7,751,492
2.03.01 Realized capital 32,538,937 32,538,937
2.03.02 Capital reserves 3,889,538 3,873,456
2.03.02.02 Special merger goodwill reserve 1,750,494 1,750,494
2.03.02.05 Treasury shares -33,315 -33,315
2.03.02.08 Other capital reserves 1,379,234 1,379,234
2.03.02.10 Interest on construction in progress 745,756 745,756
2.03.02.11 Law 8200/91 inflation adjustment 31,287 31,287
2.03.02.12 Share-based compensation 16,082 0
2.03.05 Retained earnings/accumulated losses -34,969,116 -28,257,917
2.03.06 Valuation adjustments to equity -801,073 -801,073
2.03.08 Other comprehensive income 403,523 398,089
5

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statements of Profit or Loss for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

7/1/2021 to 9/30/2021

YTD

1/1/2021 to 9/30/2021

Same Quarter Prior Year

7/1/2020 to 9/30/2020

Prior YTD

1/1/2020 to 9/30/2020

3.01 Net operating revenue 2,085,179 4,724,165 942,103 2,521,231
3.02 Cost of sales and/or services -1,742,216 -4,007,722 -664,215 -2,014,979
3.03 Gross profit 342,963 716,443 277,888 506,252
3.04 Expenses Other operating income -3,017,601 -4,873,678 -2,127,244 -9,376,707
3.04.01 Selling expenses -326,387 -719,649 -136,721 -403,389
3.04.02 General and administrative expenses -321,115 -810,952 -209,373 -633,153
3.04.04 Other operating income 378,539 789,542 125,371 406,645
3.04.05 Other operating expenses -31400 -193,992 -97,855 -163,876
3.04.06 Share of results of investees -2,717,238 -3,938,627 -1,808,666 -8,582,934
3.05 Profit (loss) before financial income (expenses) and taxes -2,674,638 -4,157,235 -1,849,356 -8,870,455
3.06 Financial income (expenses) -2,204,038 -3,090,060 -809,017 -2,995,067
3.06.01 Financial income 867,307 1,127,815 465,183 3,364,385
3.06.02 Financial expenses -3,071,345 -4,217,875 -1,274,200 -6,359,452
3.07 Profit (loss) before taxes on income -4,878,676 -7,247,295 -2,658,373 -11,865,522
3.08 Income tax and social contribution 0 0 680 12,765
3.08.01 Current 0 0 680 680
3.08.02 Deferred 0 0 0 12,085
3.09 Profit (loss) for the period from continuing operations -4,878,676 -7,247,295 -2,657,693 -11,852,757
3.10 Profit (loss) for the period from discontinued operations 66,062 536,096 19,309 -475,076
3.10.01 Profit/loss from discontinued operations 66,062 536,096 19,309 -475,076
3.11 Profit/loss for the period -4,812,614 -6,711,199 -2,638,384 -12,327,833
3.99 Earnings per share - (R$ per share)
3.99.01 Basic earnings per share
3.99.01.01 Common shares (ON) -0.81 -1.13 -0.44 -2.07
3.99.01.02 Preferred shares (PN) -0.81 -1.13 -0.44 -2.07
3.99.02 Diluted earnings per share
3.99.02.01 Common shares (ON) -0.81 -1.13 -0.44 -2.07
3.99.02.02 Preferred shares (PN) -0.81 -1.13 -0.44 -2.07
6

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statements of Comprehensive Income for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

7/1/2021 to 9/30/2021

YTD

1/1/2021 to 9/30/2021

Same Quarter Prior Year

7/1/2020 to 9/30/2020

Prior YTD

1/1/2020 to 9/30/2020

4.01 Profit for the period -4,812,614 -6,711,199 -2,638,384 -12,327,833
4.02 Other comprehensive income 10,723 5,434 542,027 650,646
4.02.01 Hedge accounting gains 12,601 8,148 0 1,152
4.02.02 Actuarial gain 32 95 538,956 594,703
4.02.03 Exchange losses on investment abroad -1,910 -2,809 3,071 54,791
4.03 Comprehensive income for the period -4,801,891 -6,705,765 -2,096,357 -11,677,187
7

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statements of Cash Flows - Indirect Method
for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

6.01 Net cash from operating activities -109,964 -717,588
6.01.01 Cash generated by operations 933,422 785,217
6.01.01.01 Pre-tax loss -7,247,295 -11,865,522
6.01.01.02 Charges, interest income, inflation adjustment, and exchange differences 1,914,475 10,224,731
6.01.01.03 Debt discount amortization and inflation adjustments and exchange differences 570,628 -7,674,291
6.01.01.04 Adjustment of trade payables to fair value -151,044 52,560
6.01.01.05 Derivative transactions -7,766 127,581
6.01.01.06 Depreciation and amortization 1,900,608 1,136,182
6.01.01.07 Expected losses on trade receivables 14,992 19,610
6.01.01.09 Provisions/(reversals) -43,938 46,308
6.01.01.10 Equity in investees 3,938,627 8,582,934
6.01.01.11 Gain (loss) on disposals and write-offs of assets -76,529 33,349
6.01.01.12 Concession Agreement Extension Fee - ANATEL 62,425 43,639
6.01.01.13 Employee and management profit sharing 10,769 30,648
6.01.01.14 Tax recovery -38,881 -97,262
6.01.01.15 Inflation adjustment to provisions/(reversals) 89,882 221,646
6.01.01.16 Inflation adjustment to tax refinancing program 2,943 3,119
6.01.01.17 Other -6,474 -100,015
6.01.02 Changes in assets and liabilities -64,492 -691,124
6.01.02.01 Accounts receivable 568,251 -571,483
6.01.02.02 Inventories -27,055 11,594
6.01.02.03 Taxes 599,223 229,087
6.01.02.04 Increases/decreases of cash investments 8,872 1,142
6.01.02.05 Trade payables -604,258 -327,670
6.01.02.06 Payroll, related taxes and benefits -80,879 -14,312
6.01.02.07 Assignment of receivables 0 96,292
6.01.02.08 Licenses and concessions -34,557 0
6.01.02.09 Provisions -212,388 -157,470
6.01.02.10 Other assets and liabilities -281,701 41,696
6.01.03 Other -978,894 -811,681
6.01.03.01 Financial charges paid - debt -877,380 -792,304
6.01.03.02 Financial charges paid - leases -101,514 -19,377
6.02 Net cash from investing activities -1,484,374 2,328,865
6.02.01 Purchases of tangibles and intangibles -1,373,580 -632,723
6.02.02 Due from related parties and debentures - disbursements -22,646 365,092
6.02.03 Proceeds from the sale of investments and capital assets 336,319 3,500
6.0204 Cash received due to capital reduction in subsidiary - PT Participações 0 3,663,391
6.02.05 Judicial deposits -93,687 -47,780
6.02.06 Redemptions of judicial deposits 353,310 380,642
8

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statements of Cash Flows - Indirect Method
for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

6.02.07 Capital increase in subsidiaries -684,090 -179,632
6.02.08 Advance for future capital increase in subsidiary 0 -1,223,625
6.03 Net cash from financing activities 430,304 -246,930
6.03.01 Repayment of principal of borrowings and financing -1,909 -4,046
6.03.02 Proceeds from/(repayments of) derivative financial instrument transactions -21,954 -121,600
6.03.03 Cash and cash equivalents acquired by merger 725,084 0
6.03.05 Tax refinancing program -49,241 -32,512
6.03.07 Leases -221,676 -88,772
6.04 Exchange differences on cash and cash equivalents -3,346 185,699
6.05 Increase (decrease) in cash and cash equivalents -1,167,380 1,550,046
6.05.01 Cash and cash equivalents at the beginning of the period 1,952,680 949,967
6.05.02 Cash and cash equivalents at the end of the period 785,300 2,500,013
9

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statement of Changes in Equity for the Period January 1, 2021 to September 30, 2021

(In thousands of Brazilian reais - R$)

Code Line Item Paid-in capital Capital reserves, stock options granted and treasury shares Profit reserves Retained earnings or accumulated losses Other comprehensive income Equity
5.04 Opening balances 32,538,937 3,873,456 0 -28,257,917 -402,984 7,751,492
5.03 Adjusted opening balances 32,538,937 3,873,456 0 -28,257,917 -402,984 7,751,492
5.04 Capital transactions with shareholders 0 16,082 0 0 0 16,082
5.04.08 Share-based compensation 0 16,082 0 0 0 16,082
5.05 Total comprehensive income 0 0 0 -6,711,199 5,434 -6,705,765
5.05.01 Profit for the period 0 0 0 -6,711,199 0 -6,711,199
5.05.02 Other comprehensive income 0 0 0 0 5,434 5,434
5.05.02.06 Other comprehensive income 0 0 0 0 5,434 5,434
5.07 Closing balances 32,538,937 3,889,538 0 -34,969,116 -397,550 1,061,809
10

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statement of Changes in Equity for the Period January 1, 2020 to September 30, 2020

(In thousands of Brazilian reais - R$)

Code Line Item Paid-in capital Capital reserves, stock options granted and treasury shares Profit reserves Retained earnings or accumulated losses Other comprehensive income Equity
5.01 Opening balances 32,538,937 3,873,456 0 -17,727,954 -1,034,113 17,650,326
5.03 Adjusted opening balances 32,538,937 3,873,456 0 -17,727,954 -1,034,113 17,650,326
5.04 Capital transactions with shareholders 0 9,077 0 0 0 9,077
5.04.08 Share-based compensation 0 9,077 0 0 0 9,077
5.05 Total comprehensive income 0 0 0 -12,327,833 650,646 -11,677,187
5.05.01 Profit for the period 0 0 0 -12,327,833 0 -12,327,833
5.05.02 Other comprehensive income 0 0 0 0 650,646 650,646
5.05.02.06 Other comprehensive income 0 0 0 0 650,646 650,646
5.07 Closing balances 32,538,937 3,882,533 0 -30,055,787 -383,467 5,982,216
11

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Individual Statements of Value Added

for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

7.01 Revenue 6,584,444 3,631,124
7.01.01 Sales of goods and services 5,843,101 3,255,276
7.01.02 Other income 756,335 395,458
7.01.04 Allowance for/reversal of doubtful accounts -14,992 -19,610
7.02 Inputs purchased from third parties -2,510,810 -1,437,722
7.02.01 Cost of sales and services -106,477 -50,338
7.02.02 Supplies, power, outside services, and other inputs -2,337,363 -1,340,254
7.02.04 Other -66,970 -47,130
7.03 Gross value added 4,073,634 2,193,402
7.04 Retentions -1,596,278 -1,916,400
7.04.01 Depreciation, amortization and depletion -1,900,608 -1,136,182
7.04.02 Other 304,330 -780,218
7.04.02.01 Provisions (including inflation adjustment) -26,959 -267,954
7.04.02.02 Loss for the year of discontinued operations 536,096 -475,076
7.04.02.03 Other expenses -204,807 -37,188
7.05 Wealth created 2,477,356 277,002
7.06 Value added received as transfer -2,810,812 -5,218,549
7.06.01 Share of results of investees -3,938,627 -8,582,934
7.06.02 Financial income 1,127,815 3,364,385
7.07 Wealth for distribution -333,456 -4,941,547
7.08 Wealth distributed -333,456 -4,941,547
7.08.01 Personnel 446,196 255,848
7.08.01.01 Salaries and wages 320,319 183,523
7.08.01.02 Benefits 89,360 53,357
7.08.01.03 Severance pay fund (FGTS) 26,250 14,570
7.08.01.04 Other 10,267 4,398
7.08.02 Taxes and fees 922,850 576,510
7.08.02.01 Federal 64,684 -28,139
7.08.02.02 State 817,476 589,827
7.08.02.03 Municipal 40,690 14,822
7.08.03 Lenders and lessors 5,008,697 6,553,928
7.08.03.01 Interest 4,168,979 6,196,868
7.08.03.02 Rentals 839,718 357,060
7.08.04 Shareholders -6,711,199 -12,327,833
7.08.04.03 Retained earnings/Accumulated losses for the period -6,711,199 -12,327,833
12

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Balance Sheets as at September 30, 2021
Assets

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

1 Total assets 75,529,348 73,839,787
1.01 Current assets 46,291,077 33,795,738
1.01.01 Cash and cash equivalents 3,020,184 4,107,941
1.01.02 Cash investments 191,942 193,715
1.01.02.01 Cash investments measured at fair value through profit or loss 191,942 193,715
1.01.02.01.01 Held-for-trading securities 191,942 193,715
1.01.03 Accounts receivable 4,238,128 3,974,238
1.01.03.01 Trade receivables 4,238,128 3,974,238
1.01.04 Inventories 422,058 378,462
1.01.06 Recoverable taxes 361,880 358,121
1.01.06.01 Current recoverable taxes 361,880 358,121
1.01.07 Prepaid expenses 568,245 330,131
1.01.08 Other current assets 37,488,640 24,453,130
1.01.08.03 Other 37,488,640 24,453,130
1.01.08.03.01 Other taxes 973,162 1,823,451
1.01.08.03.02 Judicial deposits 1,353,659 1,095,827
1.01.08.03.03 Dividends and interest on capital 25 0
1.01.08.03.04 Pension plan assets 4,139 7,618
1.01.08.03.05 Held-for-sale assets 34,413,026 20,771,942
1.01.08.03.06 Derivative financial instruments 25,291 0
1.01.08.03.07 Other assets 719,338 754,292
1.02 Non-current assets 29,238,271 40,044,049
1.02.01 Long-term receivables 9,444,924 12,087,591
1.02.01.01 Cash investments measured at fair value through profit or loss 9,356 10,341
1.02.01.01.01 Securities at fair value 9,356 10,341
1.02.01.07 Deferred taxes 3,671,070 3,671,070
1.02.01.07.01 Deferred income tax and social contribution 3,671,070 3,671,070
1.02.01.08 Prepaid expenses 172,811 128,385
1.02.01.10 Other non-current assets 5,591,687 8,277,795
1.02.01.10.03 Other taxes 1,016,453 1,447,166
1.02.01.10.04 Judicial deposits 4,077,434 6,198,008
1.02.01.10.05 Pension plan assets 39,199 36,917
1.02.01.10.06 Other assets 458,601 595,704
1.02.02 Investments 113,407 123,579
1.02.02.01 Equity interests 113,407 123,579
1.02.02.01.01 Investments in associates 52,187 50,799
1.02.02.01.04 Interests in joint ventures 23,223 25,081
1.02.02.01.05 Other investments 37,997 47,699
1.02.03 Property, plant and equipment 16,508,439 24,135,058
1.02.03.01 Property, plant and equipment in service 10,548,913 19,273,642
1.02.03.02 Right of use in a lease 3,032,045 2,908,501
1.02.03.03 Property, plant and equipment in progress 2,927,481 1,952,915
1.02.04 Intangible assets 3,171,501 3,697,821
1.02.04.01 Intangible assets 3,171,501 3,697,821
13

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Balance Sheets as at September 30, 2021
Assets

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

1.02.04.01.02 Regulatory licenses 2,420,904 2,979,314
1.02.04.01.03 Software 552,949 517,023
1.02.04.01.04 Intangibles in progress 1,505 9,111
1.02.04.01.05 Other 196,143 192,373
14

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Balance Sheets as at September 30, 2021
Liabilities and Equity

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

2 Total liabilities and shareholders' equity 75,529,348 73,839,787
2.01 Current liabilities 23,469,967 18,013,108
2.01.01 Payroll and related taxes 610,292 742,378
2.01.01.02 Mandatory benefits 610,292 742,378
2.01.02 Trade payables 3,546,376 3,275,919
2.01.02.01 Domestic suppliers 3,546,376 3,275,919
2.01.02.01.01 Trade payables 2,768,522 2,742,395
2.01.02.01.02 Trade payables subject to the Judicial Reorganization 777,854 533,524
2.01.03 Taxes payable 11,230 12,382
2.01.03.01 Federal taxes payable 11,230 12,382
2.01.03.01.01 Income tax and social contribution payable 11,230 12,382
2.01.04 Borrowings and financing 268,412 424,957
2.01.04.01 Borrowings and financing 268,412 424,957
2.01.04.01.01 In local currency 1,504 19,156
2.01.04.01.02 In foreign currency 266,908 405,801
2.01.05 Other payables 18,161,510 12,775,530
2.01.05.02 Other 18,161,510 12,775,530
2.01.05.02.01 Dividends and interest on capital payable 20,933 18,094
2.01.05.02.04 Derivative financial instruments 4,159 10,967
2.01.05.02.05 Other taxes 1,669,446 1,189,145
2.01.05.02.06 Tax refinancing program 96,361 93,715
2.01.05.02.07 Licenses and concessions payable 0 43,415
2.01.05.02.08 Leases payable 700,218 654,662
2.01.05.02.09 Liabilities associated to held-for-sale assets 13,937,803 9,195,376
2.01.05.02.10 Assignment of receivables 196,720 196,720
2.01.05.02.11 Other payables 1,535,870 1,373,436
2.01.06 Provisions 872,147 781,942
2.01.06.01 Tax, social security, labor, and civil provisions 872,147 781,942
2.01.06.01.01 Tax provisions 157,081 42,576
2.01.06.01.02 Social security and labor provisions 273,678 138,409
2.01.06.01.04 Civil provisions 441,388 600,957
2.02 Non-current liabilities 50,980,265 48,056,769
2.02.01 Borrowings and financing 31,071,532 25,918,777
2.02.01.01 Borrowings and financing 31,071,532 25,918,777
2.02.01.01.01 In local currency 12,174,856 13,052,638
2.02.01.01.02 In foreign currency 18,896,676 12,866,139
2.02.02 Other payables 14,674,140 16,407,413
2.02.02.02 Other 14,674,140 16,407,413
2.02.02.02.03 Trade payables subject to the Judicial Reorganization 3,607,008 5,020,972
2.02.02.02.04 Other taxes 1,316,268 1,324,000
2.02.02.02.05 Leases payable 2,436,577 2,327,016
2.02.02.02.06 Tax refinancing program 192,445 252,502
2.02.02.02.07 Assignment of receivables 32,787 180,327
2.02.02.02.08 Other payables 7,089,055 7,302,596
2.02.04 Provisions 5,234,593 5,730,579
2.02.04.01 Tax, social security, labor, and civil provisions 5,234,593 5,730,579
15

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Balance Sheets as at September 30, 2021
Liabilities and Equity

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

09/30/2021

Prior Year

12/31/2020

2.02.04.01.01 Tax provisions 956,950 1,182,841
2.02.04.01.02 Social security and labor provisions 1,139,374 1,658,211
2.02.04.01.03 Accrued employee benefits 779,492 702,058
2.02.04.01.04 Civil provisions 2,358,777 2,187,469
2.03 Consolidated shareholders' equity 1,079,116 7,769,910
2.03.01 Realized capital 32,538,937 32,538,937
2.03.02 Capital reserves 3,889,538 3,873,456
2.03.02.02 Special merger goodwill reserve 1,750,494 1,750,494
2.03.02.05 Treasury shares -33,315 -33,315
2.03.02.08 Other capital reserves 1,379,234 1,379,234
2.03.02.10 Interest on construction in progress 745,756 745,756
2.03.02.11 Law 8200/91 inflation adjustment 31,287 31,287
2.03.02.12 Share-based compensation 16,082 0
2.03.05 Retained earnings/accumulated losses -34,969,116 -28,257,917
2.03.06 Valuation adjustments to equity -801,073 -801,073
2.03.08 Other comprehensive income 403,523 398,089
2.03.09 Non-controlling interests 17,307 18,418
16

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Profit or Loss for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

7/1/2021 to 9/30/2021

YTD

1/1/2021 to 9/30/2021

Same Quarter Prior Year

7/1/2020 to 9/30/2020

Prior YTD

1/1/2020 to 9/30/2020

3.01 Net operating revenue 2,243,791 6,716,892 2,310,830 7,027,560
3.02 Cost of sales and/or services -1,829,142 -5,237,532 -1,674,372 -5,009,103
3.03 Gross profit 414,649 1,479,360 636,458 2,018,457
3.04 Operating expenses/revenue -1,035,379 -2,232,399 -1,180,064 -3,083,396
3.04.01 Selling expenses -508,538 -1,639,990 -513,329 -1,508,982
3.04.02 General and administrative expenses -526,319 -1,645,685 -635,792 -2,024,167
3.04.04 Other operating income 336,340 2,160,537 360,129 1,566,564
3.04.05 Other operating expenses -336,095 -1,107,659 -392,508 -1,148,992
3.04.06 Share of results of investees -767 398 1,436 32,181
3.05 Profit (loss) before financial income (expenses) and taxes -620,730 -753,039 -543,606 -1,064,939
3.06 Financial income (expenses) -4,255,550 -6,486,212 -2,056,330 -10,821,576
3.06.01 Financial income -34,793 170,517 69,393 750,161
3.06.02 Financial expenses -4,220,757 -6,656,729 -2,125,723 -11,571,737
3.07 Profit (loss) before taxes on income -4,876,280 -7,239,251 -2,599,936 -11,886,515
3.08 Income tax and social contribution -1,266 -10,672 1,089 34,863
3.08.01 Current -1,266 -10,672 1,089 11,049
3.08.02 Deferred 0 0 0 23,814
3.00 Profit (loss) for the period from continuing operations -4,877,546 -7,249,923 -2,598,847 -11,851652
3.10 Profit (loss) for the period from discontinued operations 66,062 536,096 19,309 -475,076
3.10.01 Profit/loss from discontinued operations 66,062 536,096 19,309 -475,076
3.11 Consolidated profit/loss for the period -4,811,484 -6,713,827 -2,579,538 -12,326,728
3.11.01 Attributable to the Company owner -4,812,614 -6,711,199 -2,638,384 -12,327,833
3.11.02 Attributable to non-controlling interests 1,130 -2,628 58,846 1,105
3.99 Earnings per share - (R$ per share)
3.99.01 Basic earnings per share
3.99.01.01 Common shares (ON) -0.81 -1.13 -0.44 -2.07
3.99.01.02 Preferred shares (PN) -0.81 -1.13 -0.44 -2.07
3.99.02 Diluted earnings per share
17

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Profit or Loss for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

7/1/2021 to 9/30/2021

YTD

1/1/2021 to 9/30/2021

Same Quarter Prior Year

7/1/2020 to 9/30/2020

Prior YTD

1/1/2020 to 9/30/2020

3.99.02.01 Common shares (ON) -0.81 -1.13 -0.44 -2.07
3.99.02.02 Preferred shares (PN) -0.81 -1.13 -0.44 -2.07
18

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Comprehensive Income for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

Current Quarter

7/1/2021 to 9/30/2021

YTD

1/1/2021 to 9/30/2021

Same Quarter Prior Year

7/1/2020 to 9/30/2020

Prior YTD

1/1/2020 to 9/30/2020

4.01 Consolidated profit for the period -4,811,484 -6,713,827 -2,579,538 -12,326,728
4.02 Other comprehensive income 12,179 6,951 591,091 699,710
4.02.01 Hedge accounting gain 12,601 8,148 0 1,152
4.02.02 Actuarial gain 32 95 538,956 594,703
4.02.03 Exchange losses on investment abroad -454 -1,292 52,135 103,855
4.03 Consolidated comprehensive income for the period -4,799,305 -6,706,876 -1,988,447 -11,627,018
4.03.01 Attributable to the Company owner -4,801,891 -6,705,765 -2,096,357 -11,677,187
4.03.02 Attributable to non-controlling interests 2,586 -1,111 107,910 50,169
19

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Cash Flows - Indirect Method
for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

6.01 Net cash from operating activities -1,631,817 3,539,622
6.01.01 Cash generated by operations 2,061,540 3,830,970
6.01.01.01 Pre-tax loss -7,239,251 -11,886,515
6.01.01.02 Charges, interest income, inflation adjustment, and exchange differences 4,812,834 12,647,743
6.01.01.03 Debt discount amortization and inflation adjustments and exchange differences 508,514 -2,800,610
6.01.01.04 Adjustment of trade payables to fair value 96,807 160,416
6.01.01.05 Derivative transactions -7,766 127,581
6.01.01.06 Depreciation and amortization 2,979,009 2,701,162
6.01.01.07 Expected losses on trade receivables 63,807 108,046
6.01.01.09 Provisions/(reversals) 136,424 127,398
6.01.01.10 Equity in investees -398 -32,181
6.01.01.12 Gain (loss) on disposals and write-offs of assets -965,655 -128,623
6.01.01.13 Concession Agreement Extension Fee - ANATEL 86,384 260,366
6.01.01.14 Employee and management profit sharing 70,238 151,983
6.01.01.15 Tax recovery -75,946 -392,539
6.01.01.16 Inflation adjustment to provisions/(reversals) 246,938 446,549
6.01.01.17 Inflation adjustment to tax refinancing program 4,238 5,715
6.01.01.18 Other -20,449 -186,851
6.01.01.19 Cash flows from discontinued operations 1,365,812 2,521,330
6.01.02 Changes in assets and liabilities -2,251,622 688,688
6.01.02.01 Accounts receivable -326,341 -341,302
6.01.02.02 Inventories -44,676 35,855
6.01.02.03 Taxes 1,120,889 1,430,787
6.01.02.04 Increases/decreases of cash investments 10,211 2,004
6.01.02.05 Trade payables -1,289,357 -1,050,521
6.01.02.06 Payroll, related taxes and benefits -185,357 -53,536
6.01.02.07 Assignment of receivables 0 459,014
6.01.02.08 Licenses and concessions -83,673 -41,209
6.01.02.09 Provisions -442,688 -363,719
6.01.02.10 Changes in assets and liabilities held for sale -1,000,934 240,249
6.01.02.11 Other assets and liabilities -9,696 371,066
6.01.03 Other -1,441,735 -980,036
6.01.03.01 Financial charges paid - debt -1,247,696 -793,342
6.01.03.02 Financial charges paid - leases -128,251 -106,416
6.01.03.03 Income tax and social contribution paid - Company -5,849 -33,433
6.01.03.04 Income tax and social contribution paid - third parties -59,939 -46,845
6.02 Net cash from investing activities -3,576,281 -1,548,142
6.02.01 Purchases of tangibles and intangibles -2,301,158 -1,375,829
6.02.02 Proceeds from the sale of investments and capital assets 1,039,360 144,422
6.02.03 Cash received on the sale of investments - PT Ventures 0 4,132,422
20

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Cash Flows - Indirect Method
for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

6.02.04 Decrease in non-controlling interests 0 -175,788
6.02.05 Judicial deposits -336,727 -226,162
6.02.06 Redemptions of judicial deposits 509,453 499,902
6.02.07 Cash flows from discontinued operations -2,487,209 -4,547,109
6.03 Net cash from financing activities 4,163,879 1,184,677
6.03.01 Borrowings, net of costs 6,412,426 2,473,319
6.03.02 Repayment of principal of borrowings and financing -3,512,438 -8,341
6.03.03 Proceeds from/(repayments of) derivative financial instrument transactions -21,954 -121,600
6.03.06 Tax refinancing program -60,628 -48,412
6.03.08 Leases -444,025 -452,447
6.03.09 Cash flows from discontinued operations 1,790,498 -657,842
6.04 Exchange differences on cash and cash equivalents -43,538 205,008
6.05 Increase (decrease) in cash and cash equivalents -1,087,757 3,381,165
6.05.01 Cash and cash equivalents at the beginning of the period 4,107,941 2,081,945
6.05.02 Cash and cash equivalents at the end of the period 3,020,184 5,463,110
21

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statement of Changes in Equity for the Period January 1, 2021 to September 30, 2021

(In thousands of Brazilian reais - R$)

Code Line Item Paid-in capital Capital reserves, stock options granted and treasury shares Profit reserves Retained earnings or accumulated losses Other comprehensive income Equity Non-controlling interests Consolidated equity
5.01 Opening balances 32,538,937 3,873,456 0 -28,257,917 -402,984 7,751,492 18,418 7,769,910
5.03 Adjusted opening balances 32,538,937 3,873,456 0 -28,257,917 -402,984 7,751,492 18,418 7,769,910
5.04 Capital transactions with shareholders 0 16,082 0 0 0 16,082 0 16,082
5.04.08 Share-based compensation 0 16,082 0 0 0 16,082 0 16,082
5.05 Total comprehensive income 0 0 0 -6,711,199 5,434 -6,705,765 -1,111 -6,706,876
5.05.01 Profit for the period 0 0 0 -6,711,199 0 -6,711,199 -2,628 -6,713,827
5.05.02 Other comprehensive income 0 0 0 0 5,434 5,434 1,517 6,951
5.05.02.06 Other comprehensive income 0 0 0 0 5,434 5,434 1,517 6,951
5.07 Closing balances 32,538,937 3,889,538 0 -34,969,116 -397,550 1,061,809 17,307 1,079,116
22

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statement of Changes in Equity for the Period January 1, 2020 to September 30, 2020

(In thousands of Brazilian reais - R$)

Code Line Item Paid-in capital Capital reserves, stock options granted and treasury shares Profit reserves Retained earnings or accumulated losses Other comprehensive income Equity Non-controlling interests Consolidated equity
5.01 Opening balances 32,538,937 3,873,456 0 -17,727,954 -1,034,113 17,650,326 146,180 17,796,506
5.03 Adjusted opening balances 32,538,937 3,873,456 0 -17,727,954 -1,034,113 17,650,326 146,180 17,796,506
5.04 Capital transactions with shareholders 0 9,077 0 0 0 9,077 0 9,077
5.04.08 Share-based compensation 0 9,077 0 0 0 9,077 0 9,077
5.05 Total comprehensive income 0 0 0 -12,327,833 650,646 -11,677,187 -125,619 -11,802,806
5.05.01 Profit for the period 0 0 0 -12,327,833 0 -12,327,833 1,105 -1,2326,728
5.05.02 Other comprehensive income 0 0 0 0 650,646 650,646 -126,724 523,922
5.05.02.06 Other comprehensive income 0 0 0 0 650,646 650,646 49,064 699,710
5.05.02.07 Decrease in non-controlling interests 0 0 0 0 0 0 -175,788 -175,788
5.07 Closing balances 32,538,937 3,882,533 0 -30,055,787 -383,467 5,982,216 20,561 6,002,777
23

Interim Financial Information (ITR) - September 30, 2021 - OI S.A. - under Judicial Reorganization

Version: 1

Consolidated Statements of Value Added

for the Periods Ended September 30, 2021 and 2020

(In thousands of Brazilian reais - R$)

Code Line Item

YTD

1/1/2021 to 9/30/2021

Prior YTD

1/1/2020 to 9/30/2020

7.01 Revenue 10,724,672 10,461,816
7.01.01 Sales of goods and services 8,679,040 9,069,106
7.01.02 Other income 2,109,439 1,500,756
7.01.04 Allowance for/reversal of doubtful accounts -63,807 -108,046
7.02 Inputs purchased from third parties -3,471,907 -3,846,365
7.02.01 Cost of sales and services -116,632 -134,937
7.02.02 Supplies, power, outside services, and other inputs -3,243,871 -3,563,477
7.02.04 Other -111,404 -147,951
7.03 Gross value added 7,252,765 6,615,451
7.04 Retentions -3,186,096 -4,020,957
7.04.01 Depreciation, amortization and depletion -2,979,009 -2,701,162
7.04.02 Other -207,087 -1,319,795
7.04.02.01 Provisions (including inflation adjustment) -358,937 -562,326
7.04.02.02 Loss for the year of discontinued operations 536,096 -475,076
7.04.02.03 Other expenses -384,246 -282,393
7.05 Wealth created 4,066,669 2,594,494
7.06 Value added received as transfer 170,915 782,342
7.06.01 Share of results of investees 398 32,181
7.06.02 Financial income 170,517 750,161
7.07 Wealth for distribution 4,237,584 3,376,836
7.08 Wealth distributed 4,237,584 3,376,836
7.08.01 Personnel 1,230,218 1,251,484
7.08.01.01 Salaries and wages 890,439 909,170
7.08.01.02 Benefits 232,746 233,843
7.08.01.03 Severance pay fund (FGTS) 78,859 75,151
7.08.01.04 Other 28,174 33,320
7.08.02 Taxes and fees 2,236,284 2,184,399
7.08.02.01 Federal 422,018 299,232
7.08.02.02 State 1,618,138 1,697,540
7.08.02.03 Municipal 196,128 187,627
7.08.03 Lenders and lessors 7,484,909 12,267,681
7.08.03.01 Interest 6,470,893 11,208,848
7.08.03.02 Rentals 1,014,016 1,058,833
7.08.04 Shareholders -6,713,827 -12,326,728
7.08.04.03 Retained earnings/Accumulated losses for the period -6,711,199 -12,327,833
7.08.04.04 Non-controlling interests in retained earnings -2,628 1,105
24

Additional Disclosures Relating to the Statement of Cash Flows

a) Non-cash transactions
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Variance between economic and financial investment (acquisition of PP&E and intangible assets) 199,436 73,797 305,545 212,811
Offset of judicial deposits against provisions 45,459 132,007 192,896 316,325
Offset of judicial deposits against trade payables 495,312 752,919
Offset of recoverable taxes against taxes payable 1,245,138 863,161 2,637,734 3,290,060
Fistel fee 1,373 366,054

Reconciliation of liabilities resulting from financing activities

The changes in financial charges and the settlement of the debt resulting from financing activities are presented in Note 19.

b) Merger of Telemar Norte Leste S.A. - Under Judicial Reorganization ("Telemar")

The assets acquired and liabilities assumed arising from the merger of Telemar on May 3, 2021 are presented in Note 1.

25
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
1. GENERAL INFORMATION

Oi S.A. - under Judicial Reorganization ("Company" or "Oi"), is a Switched Fixed-line Telephony Services ("STFC") concessionaire, operating since July 1998 in Regions I and II of the General Concession Plan ("PGO"), except Sectors 03, 20, 22, and 25, as a domestic local and long-distance carrier, and a license to operate STFC services in Region III of the PGO and Sectors 03, 20, 22, and 25, as a domestic local and long-distance carrier. The Company also provides domestic and international long-distance services in Regions I, II, and III of the PGO under licenses granted by Agência Nacional de Telecomunicações - ANATEL (National Telecommunications Agency), the regulator of the Brazilian telecommunications industry ("ANATEL" or "Agency").

The Company is headquartered in Brazil, in the city of Rio de Janeiro, at Rua do Lavradio, 71 - 2º andar.

Oi holds a license to provide nationwide Multimedia Communication Service ("SCM").

And, through its subsidiary Oi Móvel S.A. - under Judicial Reorganization ("Oi Móvel"), holds a license to provide mobile telephony services in Regions I, II, and III of the General Licensing Plan (PGA), and the license to provide nationwide SCM services and the Conditional Access Service (SeAC).

In Africa, the Company provides fixed and mobile telecommunications services through own subsidiaries and the subsidiaries of Africatel Holdings B.V. ("Africatel"), and in Asia the Company provides fixed, mobile, and other telecommunications services basically related through its subsidiary Timor Telecom (Note 30).

The Company is registered with the Brazilian Securities and Exchange Commission ("CVM") and the U.S. Securities and Exchange Commission ("SEC"). Its shares are traded on B3 S.A. - Brasil, Bolsa, Balcão ("B3") and its American Depositary Receipts ("ADRs") representing Oi common shares traded until then on the New York Stock Exchange ("NYSE"). On October 28, 2021, the Company issued a Material Fact Notice informing its shareholders and the market in general that as of that date it voluntarily withdrew its ADRs from the NYSE, at which time the ADRs began trading on the over-the-counter market in the United States under the trading code "OIBZQ". The Company further advised that it will continue to be registered under the U.S. Securities Exchange Act of 1934 (the "Exchange Act") and will remain in compliance with its disclosure obligations under the Exchange Act ("Disclosure Obligations"). Until the discontinuation criteria of its Disclosure Obligations are met.

Once the Company meets the discontinuation criteria of its the Disclosure Obligations, the Company intends to file a Form 15F with the SEC to deregister and discontinue its Disclosure Obligations. Immediately following the filing of Form 15F, the Company's Disclosure Obligations shall be suspended and the deregistration is expected to become effective after ninety (90) days, while noting that the Company reserves the right, for any reason and at any time, to postpone or discontinue these actions before they become effective and to change its plans with respect to this matter.

26
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Concession agreements

The local and nationwide STFC long-distance concession agreements entered into by the Company and Telemar with ANATEL on May 3, 2021, are effective until December 31, 2025. These concession agreements provide for reviews on a five-year basis and in general have a higher degree of intervention in the management of the business than the licenses to provide private services.

After the end of the term of the Agency's Public Hearing No. 51/2018, a proposal to amend the PGMU, forwarded to the Ministry of Communications (Letter No. 478/2020/GPR-ANATEL, dated December 1, 2020), were approved, through Ruling nº 619/2020, in addition to the new texts for the Concession Contracts (Resolution No. 737/2020). The drafts of the Concession Agreements were not executed by Oi, as in the case of the 2011 Agreement revision.

On January 28, 2021, the Government enacted Decree 10610/2021, which repeals Decree 9619/2018 and approves the PGMU V, applicable to 2021-2025. Among the provisions of the new PGMU we highlight the introduction of the backhaul obligation, under which carriers may use the balance resulting from the changes in targets of the previous PGMU. The PGMU V also provides for the end of the obligation to build fixed wireless new access facilities required by PGMU VI and the infrastructure already in place shall be maintained.

As a result of the enactment of Law 13879/2019, which opens the legal possibility of adapting to the private law regime of STFC provision from a public regime, as well as Decree 10402, which regulates Law 13879/2019 and set a deadline for ANATEL to edit the rules for adapting concessions to licenses, ANATEL enacted Resolution 741/2021, which approves the Regulation for the Adaptation of Switched Fixed-line Telephony Service Concessions to Licenses of the same service. This regulation sets the rules for the migration from the concession regime to a licensing regime, pending, however, the definition of the Migration Balance Calculation Methodology and its quantification, on a case-by-case basis, by concessionaire (the work is being conducted by a consulting firm engaged by ANATEL/UIT and is expected to be approved by the Agency's Board of Directors by the end of the second half of 2021).

On December 30, 2020, Oi filed a Request for Arbitration Proceedings with ANATEL for the discussion of issues regarding our Concession Agreements. On August 13, 2021, Oi and ANATEL entered into the Arbitration Commitment Agreement that outlines the purpose and the rules applicable to the arbitration procedure to be conducted between the parties.

On May 3, 2021, ANATEL's Act No. 2875/2021 was published on the Federal Official Gazette. This Act transfers to Oi the concessions held by its wholly-owned subsidiary Telemar for the provision of STFC services both under public and private law, in all their modalities, and SCM services, including the associated licenses for the right to use radiofrequencies. As a result of the transfer of the concessions, Telemar's merger with and into Oi became effective on that date, under the terms approved at the Company's Extraordinary Shareholders' Meeting of April 30, 2021.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

With the submission of the Judicial Reorganization Plan ("JRP", "Plan" or "Original Plan") on June 20, 2016, ANATEL initiated some procedures aiming at monitoring the Company's financial situation, as well as to assess its Company's ability to discharge its obligations arising from the terms of the concession agreements. In March 2019, ANATEL decided, among other issues, to maintain the special monitoring of the provision of telecommunications services of the Oi Group companies in 2019 by imposing actions related to transparency, corporate governance, and corporate control, financial and operating performance, and asset and credit management, as informed in the Notice to the Market disclosed by the Company on May 8, 2019.

On February 10, 2020, as per the Notice to the Market released by the Company, ANATEL's Board of Directors concluded there was no longer the need for special monitoring based on the decision issued in May 2019 as it considers that the Company's and its subsidiaries' short-term liquidity risk has been extinguished and revoked the obligations previously imposed on the Oi Group companies.

Corporate Authorization

The Executive Committee authorized the completion of this quarterly information at the meeting held on November 10, 2021, after being reviewed at the Board of Directors' meeting held on the same daily.

Judicial Reorganization

On June 20, 2016, the Company and its direct and indirect wholly owned subsidiaries Oi Móvel, Telemar (merged with and into the Company in May 2021), Copart 4 Participações S.A. - under Judicial Reorganization ("Copart 4), Copart 5 Participações S.A. - under Judicial Reorganization ("Copart 5", merged with and into the Company in March 2019), Portugal Telecom International Finance B.V. - under Judicial Reorganization ("PTIF"), and Oi Brasil Holdings Cooperatief U.A. - under Judicial Reorganization ("Oi Holanda") (collectively with the Company, the "Oi Companies", or "Debtors") filed a petition for judicial reorganization with the Court of the State of Rio de Janeiro ("Judicial Reorganization Proceeding").

On December 19, 2017, after confirming that the required quorum of classes I, II, III, and IV creditors was in attendance, the General Creditors' Meeting was held and the Oi Companies' judicial reorganization plan ("Plan" or "JRP") was approved by a vast majority of creditors on December 20, 2017.

On January 8, 2018, the judicial reorganization court ("Judicial Reorganization Court") issued a decision that ratified the JRP and granted the judicial reorganization to the Oi Companies, which was published on February 5, 2018 ("JRP's Homologation").

On July 31, 2018, the restructuring of the Oi Companies' financial debt was completed with the implementation of the applicable terms and conditions provided for in the JRP, including the completion of the first capital increase provided for in the JRP, Capital Increase - Claim Capitalization.

On January 25, 2019 the Company completed the second capital increase provided for in the JRP, with the issue of 3,225,806,451 new book-entry, registered common shares, without par value, including

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

new common shares represented by ADSs, pursuant to the JRP and the subscription and commitment agreement entered into by the Company, its subsidiaries, and the Backstop Investors.

On December 6, 2019, the Company released a Material Fact Notice informing that the Oi Companies had filed a petition with the Judicial Reorganization Court requesting that the court oversight of the Oi Companies not to terminated on February 4, 2020, the date when the JRP's homologation would complete two (2) years. The non-termination of the judicial oversight did not introduce any changes to the current position of the Oi Companies and had no impact on the compliance with the Plan in force or on current receivables, or any other new funds that were obtained by the Oi Companies. It is worth noting that the continuity of court oversight at the end of the two-year period is a natural measure that has been applied in most judicial reorganization proceedings. Notwithstanding the good progress of the Plan implementation, which has already concluded most of the steps provided for in the proceeding, which were important for the Company's recovery, said petition presented the Judicial Reorganization Court with circumstances related to the complexity inherent to the Judicial Reorganization Proceeding's magnitude and to the reforms underway in the legal and regulatory environment, and which would require actions still to be implemented as part of the Judicial Reorganization Proceeding.

On December 23, 2019, the Company disclosed a Material Fact Notice informing that its subsidiary Oi Móvel entered into a 1st issue indenture of collateralized, simple, nonconvertible debentures, with additional trust security, in a single series, for private placement, in the total amount of up to R$2,500,000,000.00 ("Oi Móvel 1st Issue Debentures", "Oi Móvel 1st Issue", and "Oi Móvel 1st Issue Indenture", respectively), pursuant Clause 5.3 of the Original JRP. Oi Móvel's 1st Issue Debentures were paid in on February 4, 2020 and were settled on July 30, 2021, through the prepayment of Oi Móvel's 1st Issue Debentures with funds raised with the Oi Móvel's Notes Issue (as defined below).

On February 28, 2020, the Company released a Material Fact Notice informing its shareholders and the general market that on February 28, 2020 the Oi Companies filed with the Judicial Reorganization Court a petition exposing its interest in submitting for deliberation to a new general creditors' meeting ("New GCM") an amendment to the Plan ("Amendment to Plan" or "amendment to the JRP") aimed at achieving greater operating and financial flexibility to continue its investment project and the compliance with its strategic transformation plan ("Strategic Plan"), both broadly disclosed to the market.

In line with the foregoing, on March 6, 2020, the Company disclosed a Material Fact Notice informing that the Judicial Reorganization Court awarded a decision, on the same date, granting the Company's request for a New General Creditors' Meeting to deliberate on an amendment to the Plan.

On June 15, 2020, the Oi Companies filed with the Judicial Reorganization Court the draft Amendment to the JRP for the purposes of increasing the flexibility of the Original JRP by creating a more efficient corporate and operating structure, aiming at maximizing the Company's value to the benefit of all its stakeholders. This initiative was fully aligned with the Strategic Plan, which is being transparently implemented.

On August 13, 2020, the Oi Companies filed with the Judicial Reorganization Court an updated draft of the Amendment to the JRP that adjusts certain terms and conditions. This proposal reflected the

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

several discussions with creditors, potential investors, and other stakeholders, including discussions held with the mediator appointed by the Judicial Reorganization Court, for the purpose of discussing improvements to the Amendment to the JRP.

The Amendment to the JRP was submitted to a vote by the Debtors and approved at the New GCM held on September 8, 2020, the date of the first notice to convene, at the SulAmérica, Convention Center, and was confirmed by the Judicial Reorganization Court on October 5, 2020, in a decision issued on October 8, 2020 that rejected all the allegations of procedural nullity of the New GCM, ruling out the allegation of unequal treatment among creditors and rejecting the requests for nullity of the voting and approval quorum of the Amendment to the JRP because it did not include any drafting and unresolved issues and, among other measures, has set a twelve-month period for ending the Debtors' judicial reorganization, beginning on the date of said decision issue date, which may be extended, should there be a need to complete the acts relating to the disposals provided for in the Amendment to the JRP.

The Amendment to the JRP aims at allowing the Oi Companies and their subsidiaries ("Oi Group") to implement their long-term plan, with the necessary resolution of their debt, in the current context, and their continuity as going concerns by following said JRP and their Strategic Plan. The main purpose of the Oi Group's strategy is transforming its business model by focusing on the use and rapid expansion of its extensive fiber optics infrastructure as a competitive edge, including its transportation networks (backbone, backhaul and data network), and primary and secondary access networks (dedicated links, metropolitan rings, and FTTH access networks), enabling and supporting the high-speed connection and service provision needs of its residential, business, corporate, and government customers, and the provision of infrastructure services for other telecommunication service providers in the country, including the facilitation of connections for the new 5G technology.

On July 19, 2021, the Company released a Material Fact Notice to its shareholders and to the market in general presenting its Strategic Plan for the three-year period 2022-24, focused on the transformation of the "New Oi", after the confirmation of the winning bids in the bidding processes for the sale of the main IPUs, and considering the structural separation set forth in the Amendment to the JRP. The Company intends to use the drivers of its Strategic Plan to pursue a sustainable business model by (i) accelerating revenue generation by its core businesses, as regards the connectivity platform and customer-focused digital services, notably: (i) B2C and SME Fiber customers, in the copper, TV, digital services segments; (ii) B2B customers (Oi Soluções) with regard to connectivity and IT solutions; and (iii) Infrastructure in the Digital, IPTV, DTH, and copper segments, and implementation of new sources of revenue, (ii) restructuring its cost structure, (iii) solving concession-related issues; and (iv) developing the InfraCo (defined below) to become a leading provider of digital solutions and fiber optics connections that improve people's lives and businesses throughout the country.

On September 2, 2021, the Judicial Reorganization Court issued a decision, in response to a request filed by the Debtors, granting the request to extend the court supervision term of the Judicial Reorganization Proceeding until the end of March 2022, since the Oi Companies evidenced (i) the need to complete the sales of the UPIs; (ii) the need to implement certain terms and conditions provided for in the Amendment to the JRP; and (iii) that there were opinions from the Trustee and the Public Prosecutor assigned to the case favorable to such extension. Subsequently, in response to motions for

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

clarification filed by certain financial institutions, the Judicial Reorganization Court issued a decision clarifying that the judicial supervision period had been extended until the specific date of March 31, 2022. A financial institution filed an appeal against this decision, requesting that the judicial supervision end only on May 30, 2022, as expressly provided for in the Amendment to the JRP. The appeal has no suspensive effect and is pending judgment.

Amendment to the JRP

For more information on the goals of the Amendment to the JRP, as well as on the composition of each UPI provided for in the Amendment to the JRP, and the terms and conditions applicable to their sale, including structure and minimum price, please read the Amendment to the JRP, available for consultation purposes at www.recjud.com.br.

The Amendment to the JRP provides for the possibility of making adjustments to the payment terms and conditions of the prepetition creditors and also mechanisms that would allow or require the Company to pay certain claims subject to the Plan within a term shorter than the term provided for in the Original Plan.

1. Payment of Creditors

The Amendment to the JRP contains detailed information on the payment proposals for each class of creditors, summarized below.

1.1 Labor Claims

The Amendment to the JRP prescribes that labor creditors whose claims had not been fully settled by the date of the New GCM would have their claims up to a total of R$50,000 paid within 30 days of ratification of the Amendment to the JRP, provided that said labor claims (i) were listed in the trustee's list of creditors; (ii) were the subject of a final and unappealable court decision that terminated the underlying lawsuit and ratified the amount due to the related creditor; or (iii) in the case of creditors entitled to recover lawyers' fee, a decision was rendered in the event of claim qualification or challenge filed by the date of the New GCM, provided that they elect this form of payment.

1.2 Collateralized claims

The Amendment to the JRP prescribes that, in the event of the disposal of the UPI Mobile Assets, part of the funds to be paid by the winning bidder of the related bidding process and the buyer of the UPI Mobile Assets will, at the risk and expense of the Debtors and using the Debtors' full instructions on the amount due to each Creditor with collateralized claims and the related data for payment, directly assigned by the buyer to the Creditors with collateralized claims for the prepayment of 100.0% of the remaining amount of Collateralized Claims (as defined in the Amendment to the JRP).

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
1.3 Regulatory agencies' claims

In light of the Amendment to the JRP, approved at the GCM held on September 8, 2020 and ratified by a court decision issued on October 5, 2020, the claims of Regulatory Agencies are being paid as provided for by Law 13988. This law allows the negotiation of all amounts established under Noncompliance Investigation Proceedings (PADOS) registered as enforceable debt, payable in 84 installments, after a 50% discount on the consolidated claim limited to the principal, a six-month grace period, and with the possible use of judicial deposits made as guarantee of the processed claims, fully transferable to ANATEL for the early settlement of as many initial installments as possible to be paid with the total amount of the deposits. Accordingly, the Company devised the installment plan, as established in the Amendment to the JRP, and the transfer of judicial deposits for payment of the first installments commencing in December 2020 (Notes 12 and 18).

1.4 Unsecured Claims
1.4.1 Class III Unsecured Creditors.
1.4.1.1 Straight-line payment option

Pursuant to the Amendment to the JRP, Class III Unsecured Creditors (as defined in the Plan), with claims of up to R$3,000 that have not yet been fully settled by the date of the New GCM and that have filed a claim qualification or challenge by the date of the New GCM, may elect to receive the full claim, via the on-line platform to be made available by the Oi Group www.credor.oi.com.br within 45 days after the New GCM. The option to receive R$3,000 may be exercised, within the same term, by the Class III Unsecured Creditors with claims higher than R$3,000 provided that (i) the claims had not yet been fully paid by the date of the New GCM; (ii) they had already filed a claim qualification or challenge by the date of the New GCM; and (iii) at the time the option is exercised, such creditors granted the Debtors, on the same platform, a receipt of full payment of their claims.

The Amendment to the JRP prescribes that the payment of the related claims is made through a deposit, in Brazilian legal tender, in a bank account in Brazil to be indicated by the corresponding Class III Unsecured Creditors, within no more than ninety (90) calendar days beginning on (a) the date of the Court Ratification of the Amendment to the JRP; or (b) the issue date of the final decision that, in the event the claim in not claimed or is disputed, determined the inclusion of their related Unsecured Claims in the General List of Creditors.

In relation to the straight-line payments, provided for by the JRP and the Amendment to the JRP, in 2021, the Debtor's made a payment totaling R$1,316 to small claims and civil court creditors.

1.4.1.2 Repurchase Obligation in Liquidity Events

The Amendment to the JRP includes an amendment to Clause 5.2 of the Original Plan to provide for the obligation of prepayment at a discount, by the Debtors, of the Unsecured Creditors that have elected Restructuring Options I or II, pursuant to Clauses 4.3.1.2 or 4.3.1.3 of the Original Plan, respectively, also when there is one or more Liquidity Events (notably meaning, collectively, the Round 1 Purchase

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Obligation Liquidity Event, the Round 2 Purchase Obligation Liquidity Event. and the Round 3 Purchase Obligation Liquidity Event, as defined in the Amendment to the JRP) in the first five years from the court ratification of the JRP. Accordingly, the Amendment to the JRP establishes that the Oi Group shall allocate 100.0% of the Net Revenue from Liquidity Events (as defined in the Amendment to the JRP) exceeding R$6.5 billion to, in up to the payment rounds, anticipate the payment of the claims held by the Unsecured Creditors provide for in said Clause, at a discount of fifty-five percent (55%) on the related Total Balance of the Unsecured Claims, as described in Clause 5.4 of the Amendment to the JRP.

1.4.1.3 Reverse Auction

The Amendment to the JRP allows the Debtors, at any time, during the five-years period after the ratification of the Amendment to the JRP, to hold one or more prepayment rounds to the Unsecured Creditors that offer the highest discount rate of their claims in each round held ("Reverse Auction"). In each Reverse Auction, the winning bidder shall be the Unsecured Creditors that successively offer the lowest amount novated unsecured claims under the terms of the Plan in each round, under the terms provided for in Clause 4.7.1 of the Amendment to the JRP.

The specific terms of each Reverse Auction, including the rules, the net present value (NPV) of the future payment flows of the related unsecured claims, as provided for in the Plan, to be taken into consideration, which cannot be lower than one hundred percent (100%) of the NPV of the related unsecured claims at any Reverse Auction, and the maximum amount of the related unsecured claims to be paid by the Debtors, including possible restrictions, will be detailed in the related notice to be disclosed prior to the Reverse Auction, at www.recjud.com.br, and subsequently sent to the interested Unsecured Creditors that complete their registration, as provided for in Clause 4.7.4 of the Amendment to the JRP.

1.4.1.4 Bank Sureties

The Amendment to the JRP allows the Debtors to seek in the market a credit limit for hiring bank guarantees to be provided to the Unsecured Creditors. Clause 5.6.6 and following of the Amendment to the JRP provides for the possibility of the Unsecured Creditors to offer bank guarantee lines to the benefit of the Debtors, within the limit of their restructured claims, to be drawn on the condition that the Debtors reduce their exposure under guarantee in relation to the position as at December 31, 2017, while guaranteeing the reduction of the prepayment discount from 55% to 50%, to be applied at each Exercise Round of the Purchase Obligation, to volumes equivalent to those offered in new guarantee lines, as provided for in the Plan.

In relation to the regular payments provided for under the JRP and the Amendment to the JRP, in 2021, the Debtors made payments to Class III creditors totaling R$621,346 referring to the payment of their suppliers, R$127 referring to financial participation agreements (PEX) creditors, and R$876,782 to bondholders.

For information on the payments made in 2020, please read the Company's 2020 Standard Financial Statements (DFPs) available at CVM and on our IR website (https://ri.oi.com.br/).

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
1.4.2 Unsecured Claims of Small Businesses, listed in Class IV

Pursuant to the Amendment to the JRP, Small Businesses with Unsecured Claims listed in Class IV (as defined in the Plan), with claims of up to R$150,000 that have not yet been fully settled by the date of the New GCM and that have filed have filed a claim qualification or challenge by the date of the New GCM, may elect to receive the full claim, via the on-line platform to be made available by the Oi Group at www.credor.oi.com.br, within 45 days after the New GCM. The option to receive R$150,000 could have been be exercised, within the same term, by the Small Businesses with Unsecured Claims listed in Class IV with claims higher than R$150,000 provided that (i) the claims have not yet been fully paid by the date of the New GCM; (ii) they have already filed a claim qualification or challenge by the date of the New GCM; and (iii) at the time the option is exercised, such creditors grant the Debtors, on the same platform, a receipt of full payment of their claims.

The Amendment to the JRP prescribes that the payment of the related claims to be made via a deposit, in Brazilian legal tender, in a bank account in Brazil to be indicated by the corresponding Unsecured Small Business Creditor, within no more than ninety (90) calendar days beginning on (a) the date of the Court Ratification of the Amendment to the JRP, i.e., October 8, 2020 ;("Homologation of the Amendment to the JRP") or (b) the issue date of the final decision that, in the event the claim in not claimed or is disputed, determined the inclusion of their related Unsecured Small Business Claims in the General List of Creditors.

2. Financing provided for in the Amendment to the JRP

Infraco SPC Debentures - Section 5 of the Amendment to the JRP

On February 18, 2021, Oi disclosed a Material Fact Notice informing that its subsidiary BrT Multimídia had entered into an indenture for the issue of collateralized, simple, nonconvertible debentures, backed by collaterals, for private placement, in the total amount of up to 2,500,000,000.00 ("InfraCo Debentures", "InfraCo Issue", and "InfraCo Issue Indenture", respectively).

The InfraCo Issue was approved pursuant to the provisions of Section 5 of the Amendment to the JRP. As provided for by the Amendment to the JRP and the InfraCo Issue indenture, Oi, through its subsidiary Oi Móvel, shall hold a call option on all the preferred shares held by the Debentureholders as a result of the Conversion. Alternatively, and at the sole discretion of Oi (on its behalf or as successor by merger of Telemar) and Oi Móvel, InfraCo SPC may redeem all of the preferred shares held by the Debentureholders as a result of Conversion.

InfraCo Debentures are convertible into redeemable preferred shares, representing the majority of the voting shares of InfraCo SPC, mature in twenty-four (24) months from the Issue Date - InfraCo Issue (defined below), subject to the early redemption and early maturity events of the InfraCo Debentures set forth in the InfraCo Debenture Indenture, and are backed by collaterals and fiduciary guarantees provided by InfraCo SPC.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

On May 26, 2021 ("Issue Date - InfraCo Issue"), the Company released a Notice to the Market informing shareholders and the market in general that the subscription and full payment of the private placement of the InfraCo Issue, totaling R$2,500,000,000.00, had been completed.

2nd Issue of Oi Móvel Debentures - Clause 5.5.2 of the Amendment to the Plan (as defined below)

On June 21, 2021, the Company disclosed a Material Fact Notice informing that its direct subsidiary Oi Móvel, responsible for contributing the mobile telephony assets to the capital stock of UPI Mobile Assets, in accordance with the Amendment to the Plan (as defined below), entered into a 2nd issue indenture of collateralized, simple, nonconvertible debentures, with additional trust security, in a single series, for private placement, in the total amount of up to R$2,500,000,000.00 ("Oi Móvel 2nd Issue Debentures", "Oi Móvel 2nd Issue", and "Oi Móvel 2nd Issue Indenture", respectively).

Oi Móvel's 2nd Issue Debentures are nonconvertible, mature in 16 months from the Oi Móvel 2nd Issue Date (defined below), except for the early redemption and early maturity events of the Debentures set forth in the Oi Móvel 2nd Issue Indenture, and are backed by collaterals and fiduciary guarantees provided by Oi Móvel and the Company.

The Oi Móvel 2nd Issue was approved pursuant to Clause 5.5.2 of the Amendment to the Plan (as defined below) and is part of the post-petition financing, under the Debtor in Possession Financing ("DIP Financing") modality, for the purpose of financing the operating activities and general and administrative expenses of Oi and its subsidiaries under judicial reorganization, until the date of financial settlement of the sale of the UPI Mobile Assets.

As at July 30, 2021 ("Issue Date - Oi Móvel 2nd Issue"), the Company disclosed a Notice to the Market informing shareholders and the market in general that the subscription and payment of the Oi Móvel 2nd Issue had been completed for private placement in the amount of R$2,000,000,000.00.

Issue of Oi Móvel Notes - Clause 5.5.4 of the Amendment to the Plan (as defined below)

On July 27, 2021, the Company released a Material Fact Notice informing that it had priced an offering in the international market of note units, comprised of senior notes to be issued by its direct subsidiary Oi Móvel, backed by collateral and a fiduciary guarantee provided by Oi Móvel and the Company ("Notes"), in line with the provisions of Clause 5.5.4 of the Amendment to the Plan (as defined below).

On July 30, 2021, the Notes issue was completed in the total amount of US$880,000,000.00, maturing on July 30, 2026 and bearing compensatory interest, as prescribed in the Notes indenture. On the same date, the principal of R$2,500,000.00 (including interest and charges) of Oi Móvel 1st Issue Debentures, maturing in January 2022, with was fully repaid with part of the net proceeds from the Notes issue.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
3. Partial Sale of UPI InfraCo - Investment Agreement and Other Covenants

The Amendment to the JRP provides for the segregation of the Company's assets, liabilities, and rights related to the operation of telecommunications networks, as well as new investments in infrastructure, in InfraCo SPC, for the purpose of expanding its fiber optics networks. Under this structure, it was agreed that BrT Multimídia would be used and Oi would maintain a relevant stake in the capital stock of InfraCo SPC.

Against this backdrop, on October 1, 2021, Company and Globenet Cabos Submarinos S.A. ("Globenet") entered into an Investment Agreement and Other Covenants ("Agreement"), the subject matter of which is the sale of shares representing the control of BrT Multimídia to said investor, whose winning bid in the judicial competitive process was confirmed by the Judicial Reorganization Court, in a hearing held on July 7, 2020, under the terms of the Amendment to the JRP.

The sale transaction price totals twelve billion, nine hundred and twenty-three million, three hundred and thirty-eight thousand, two hundred and ninety Brazilian reais and sixty-seven centavos (R$12,923,338,290.67), which will be subject to adjustment mechanisms based on certain financial and operating performance metrics of BrT Multimídia.

Following the payment of all installments and the completion of all the steps required to close the transaction, Globenet's shareholders will hold shares representing 57.9% of the voting and total capital stock of BrT Multimídia, and Oi and its affiliates will hold the remaining voting and total capital stock.

On October 18, 2021, the Company issued a Notice to the Market informing that it became aware that the Board of the by the Administrative Economic Defense Council ("CADE") (Brazilian antitrust authority) had issued on that date, SG Order No. 1538/2021, approving the partial sale of UPI InfraCo, without restrictions, confirming that, according to the applicable law, the approval decision would become final within fifteen (15) calendar days, as of its issue date, if there were no appeal by stakeholders or a transaction reversal by CADE's Administrative Court.

On November 4, 2021, the Company released a new Notice to the Market on this matter, informing that a Certificate of Final and Unappealable Decision was issued for the unrestricted approval by CADE of the partial sale of UPI InfraCo, pursuant to Concentration Act no. 08700.005071/2021. The Company also informed that the actual completion of the transaction is subject to the prior consent of ANATEL, whose process is currently underway at the agency, as well as to the fulfillment of the usual conditions precedent for transactions of this nature, provided for in the Agreement.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
4. Corporate restructuring provided for in the JRP
4.1. Merger of Telemar with and into the Company, under the JRP

On May 3, 2021, the concessions granted to the Company's wholly-owned subsidiary Telemar for the provision of STFC services, under both the public and private law regimes, in all their modalities, and the SCM, including the associated licenses for the use of radiofrequencies, were transferred to the Company. As a result of this transfer of concessions and licenses, the merger of Telemar with and into the Company implemented, in connection with the JRP.

The assets acquired and liabilities assumed from Telemar on May 3, 2021 arising from the merger are summarized below:

Cash and cash equivalents 725,084
Cash investments 4,295
Accounts receivable 1,819,296
Inventories 135,203
Recoverable taxes 627,239
Dividends and interest on capital 1,622,606
Judicial deposits 2,342,486
Prepaid expenses 393,229
Investments 3,231,218
Property, plant and equipment 14,801,995
Intangible assets 20,536
Borrowings and financing (7,715,041)
Trade payables (4,534,031)
Assignment of receivables (246,133)
Taxes payable (647,980)
Leases payable (1,901,424)
Provisions (2,274,944)
Other assets and liabilities (2,241,617)
Merged net assets 6,162,017

The upstream merger of Telemar does not affect the Company's consolidated financial statements.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
4.2. Oi's activities once the measures provided for in the Amendment to the JRP are implemented

If the corporate restructuring carried out to segregate the UPIs and the sale of these UPIs as provided for by the Amendment to the JRP is implemented, the Company will retain all activities, assets, rights and obligations not expressly transferred to the UPIs, residential, business, and corporate customers (including utility assets), in addition to the Digital and IT services (Oi Soluções), as well as the field maintenance and installation operations at Serede - Serviços de Rede S.A. ("Serede") and customer service operations at Brasil Telecom Call Center S.A. ("BrT Call Center").

With these measures, the goal is to ensure that this set of remaining assets is sufficient to guarantee the continuity of the Company as a going concern and the payment of its debts under the terms of the Amendment to the JRP.

5. Full Content of the Amendment to the JRP

The full Amendment to the JRP is available to the Company's shareholders at the Company's headquarters and on its website (www.oi.com.br/ri or http://www.recjud.com.br/), CVM's Empresas.NET System (www.cvm.gov.br;), and the website of B3 S.A. - Brasil, Bolsa, Balcão (www.b3.com.br;).

Going concern

The interim financial information for the period ended September 30, 2021, has been prepared assuming that the Company will continue as a going concern and in compliance with the legal requirements applicable to a judicial reorganization. The judicial reorganization is aimed at ensuring the continuation of the Oi Companies as going concerns. The continuity of the Company as a going concern was strengthen with the approval of the Amendment to the JRP (Nota 1) and ultimately depends on the successful outcome of the judicial reorganization and the realization of other forecasts of the Oi Companies.

The Company has been successfully discharging the obligations set forth in the judicial reorganization proceedings and even though there are no indications in this regard, we emphasize that the conditions and circumstances point to material uncertainties because of their own nature that may affect the success of the judicial reorganization and cast significant doubts as to the Oi Companies' ability to continue as going concerns. As at September 30, 2021 and after the implementation of the JRP, total shareholders' equity was R$1,079,116 (R$1,061,809 in the Company), consolidated loss for the period then ended was R$6,713,827 (R$6,711,199 in the Company), and working capital totaled R$22,821,110 (R$8,627,817 in the Company). As at December 31, 2020 and after the implementation of the JRP, total shareholders' equity was R$7,769,910 (R$7,751,492 in the Company), consolidated loss for the year then ended was R$10,528,499 (R$10,529,963 in the Company), and working capital totaled R$15,782,630 (R$2,972,818 in the Company).

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

On January 31, 2020, the World Health Organization announced that COVID-19 was a global health emergency and on March 3, 2020, the World Health Organization categorized COVID-19 as a pandemic.

By the closing date of this Interim Financial information, we had no records of material deviations in our operations and COVID-19-related results, even though the scenario is adverse and uncertainties regarding the duration and effects of the pandemic still persist.

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The Company's individual and consolidated interim financial information has been prepared and is being presented in accordance with the pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM), which are consistent with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). All relevant information part of the interim financial information, and only this information, corresponds to the information the Company's management uses while managing the Company.

(a) Reporting basis

The Company's interim financial information has been prepared for the period ended September 30, 2021 and in accordance with IAS 34 and CPC 21 (R1) issued by the Accounting Pronouncements Committee ("CPC"), which address interim financial reporting.

CPC 21 (R1)/IAS 34 requires that management use certain accounting estimates. The quarterly information has been prepared based on the historical cost, except for certain financial assets and financial liabilities measured at their fair values.

This quarterly information does not include all the information and disclosures required in annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs") and the accounting practices adopted in Brazil. There were no changes in the accounting policies adopted in the period ended September 30, 2021 as compared to those applicable in the year ended December 31, 2018, besides the new pronouncements, interpretations, and changes that became effective after December 31, 2018, as described in item (b) of this note.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Restatement of the comparative balances of discontinued operation

The Company restated the comparative balances of the statement of profit or loss, statement of comprehensive income, statement of cash flows and statement of value added, in accordance with CPC 31/IFRS 5, which requires that an entity reclassifies the disclosures related to all operations that have been discontinued at the balance sheet date of the last reporting period presented. The effects of the reclassification are disclosed in Note 30.

Estimates and critical accounting judgments

The Company's management uses estimates and assumptions based on historical experience and other factors, including expected future events, which are considered reasonable and relevant, and also requires judgments related to these matters. Actual results of operations and the financial position may differ from these estimates. The estimates and critical accounting judgments that represent a significant risk of causing material adjustments to the carrying amounts of assets and liabilities are related to: (i) the recognition of revenue and trade receivables; (ii) expected credit losses on doubtful accounts; (iii) depreciation and amortization of assets with finite useful lives; (iv) impairment of long-lived assets; (v) leases; (vi) fair value of financial liabilities; (vii) provisions; (viii) fair value of financial assets; (ix) deferred income tax and social contribution; and (x) noncurrent assets held for sale and discontinued operations.

Functional and presentation currency

The Company and its subsidiaries operate mainly as telecommunications industry operators in Brazil, Africa, and Asia, and engage in activities typical of this industry. The items included in the financial statements of each group company are measured using the currency of the main economic environment where it operates ("functional currency"). The individual and consolidated financial statements are presented in Brazilian reais (R$), which is the Company's functional and presentation currency.

Transactions and balances

Foreign currency-denominated transactions are translated into the functional currency using the exchange rates prevailing on the transaction dates. Foreign exchange gains and losses arising on the settlement of the transaction and the translation at the exchange rates prevailing at period-end, related foreign currency-denominated monetary assets and liabilities are recognized in the income statement, except when qualified as hedge accounting and, therefore, deferred in equity as cash flow hedges.

Group companies with a different functional currency

The profit or loss and the financial position of all Group entities, none of which uses a currency from a hyperinflationary economy, whose functional currency is different from the presentation currency are translated into the presentation currency as follows:

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
· assets and liabilities are translating at the rate prevailing at the end of the reporting period;
· revenue and expenses disclosed in the statement of profit or loss are translated using the average exchange rate;
· all the resulting foreign exchange differences are recognized as a separate component of equity in other comprehensive income; and
· goodwill and fair value adjustments, arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate.

As at September 30, 2021 and December 31, 2020, the foreign currency-denominated assets and liabilities were translated into Brazilian reais using mainly the following foreign exchange rates:

Closing rate Average rate
Currency 09/30/2021 12/31/2020 09/30/2021 09/30/2020
Euro 6.2983 6.3779 6.3768 5.7207
US dollar 5.4394 5.1967 5.3317 5.0793
Cape Verdean escudo 0.0571 0.0578 0.0579 0.0519
Sao Tomean dobra 0.257100 0.260300 0.260453 0.000242
Kenyan shilling 0.04927 0.0476 0.0490 0.0481
Namibian dollar 0.3615 0.3540 0.3661 0.3032
Mozambican metical 0.0861 0.0700 0.0823 0.0743

Reclassifications of the comparative period's accounting balances

The Company made some reclassifications in the note to financial income (expenses) for the period ended September 30, 2020 for better comparability and understanding of the transactions and balances in the individual and consolidated accounting information for the period ended September 30, 2021. These reclassifications do not affect the Company's or equity as at that date and profit or loss for the period then ended. We highlight below the stated reclassifications:

Three-month period ended
COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Originally stated Reclassification Currently stated Originally stated Reclassification Currently stated
Inflation adjustment and exchange differences on third-party debt discount 126,229 (126,229) 559,365 (559,365)
Inflation adjustment and exchange differences on related-party debt discount 1,511,619 (1,511,619)
Total reclassifications of financial income 1,637,848 (1,637,848) 559,365 (559,365)
Total financial income 2,103,031 465,183 655,526 96,161
Inflation adjustment and exchange differences on third-party debt discount 126,229 126,229 559,365 559,365
Inflation adjustment and exchange differences on related-party debt discount 1,511,619 1,511,619
Total reclassifications of financial expenses 1,637,848 1,637,848 559,365 559,365
Total financial expenses (2,912,048) (1,274,200) (3,818,198) (3,258,833)
Financial income (expenses) (809,017) (809,017) (3,162,672) (3,162,672)
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Originally stated Reclassification Currently stated Originally stated Reclassification Currently stated
Inflation adjustment and exchange differences on third-party debt discount 1,151,301 (1,151,301) 4,100,063 (4,100,063)
Inflation adjustment and exchange differences on related-party debt discount 8,133,275 (8,133,275)
Total reclassifications of financial income 9,284,576 (9,284,576) 4,100,063 (4,100,063)
Total financial income 12,648,961 3,364,385 4,876,992 776,929
Inflation adjustment and exchange differences on third-party debt discount 1,151,301 1,151,301 4,100,063 4,100,063
Inflation adjustment and exchange differences on related-party debt discount 8,133,275 8,133,275
Total reclassifications of financial expenses 9,284,576 9,284,576 4,100,063 4,100,063
Total financial expenses (15,644,028) (6,359,452) (16,804,910) (12,704,847)
Financial income (expenses) (2,995,067) (2,995,067) (11,927,918) (11,927,918)
(b) New and revised standards and interpretations

b.1) New standards adopted as at January 1, 2021:

New and revised standards

Effective beginning on or after:
Standard enhancement Setting benchmark interest rates for application pf IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 January 1, 2021

The amendments to the mentioned standards had no impacts on the Company's Interim Financial Information.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

b.2) The new and revised standards and interpretations issued by the IASB that are effective in future reporting periods and that the Company decided not to early adopt are the following, effective for periods beginning on or after January 1, 2022:

New and revised standards

Effective beginning on or after:
IAS 37 Onerous contract - classification of the cost of fulfilling an onerous contract. January 1, 2022
IAS 16 Property, plant and equipment - classification of property, plant and equipment items before being ready for their intended use January 1, 2022
IFRS 3 Conceptual framework January 1, 2022
Standard enhancement IFRS 1 - aspects of first-time adoption in a subsidiary; IFRS 9 - '10 percent' test criterion to reverse financial liabilities; IFRS 16 - illustrative examples of leases; and IAS 41 - fair value measurement aspects January 1, 2022
IAS 1 Classification of liabilities wither as current or non-current. January 1, 2023
IFRS 4 Insurance contract - temporary exemptions to the application of IFRS 9 for insurers January 1, 2023
IFRS 17 New Insurance Contracts standard superseding IFRS 4 January 1, 2023

The Company does not anticipate any impact from these amounts to accounting standards.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
3. FINANCIAL INSTRUMENTS AND RISK ANALYSIS
3.1. Financial Instruments

The carrying amounts and the estimated fair values of our main financial assets and financial liabilities as at September 30, 2021 and December 31, 2020 are summarized as follows:

Accounting measurement COMPANY CONSOLIDATED
09/30/2021
Carrying
amount
Fair value Carrying
amount
Fair value
Assets
Cash and banks Fair value 165,747 165,747 603,561 603,561
Cash equivalents Fair value 619,553 619,553 2,416,623 2,416,623
Cash investments Fair value 190,126 190,126 201,298 201,298
Derivative financial instruments Fair value 25,291 25,291 25,291 25,291
Due from related parties Amortized cost 8,751,645 8,751,645
Accounts receivable (i) Amortized cost 3,538,029 3,538,029 4,238,128 4,238,128
Dividends and interest on capital Amortized cost 2,448,620 2,448,620 25 25
Financial asset at fair value Fair value 51,957 51,957 51,957 51,957
Liabilities
Trade payables (i) Amortized cost 6,009,349 6,009,349 7,153,384 7,153,384
Borrowings and financing (ii)
Borrowings and financing Amortized cost 9,449,298 9,449,298 11,295,011 11,295,011
Due to related parties Amortized cost 1,930,031 1,930,031
Public debentures Amortized cost 4,348,723 4,348,723 4,348,723 4,348,723
Private debentures 2,029,572 2,029,572
Senior Notes Amortized cost 8,452,711 14,064,615 13,666,638 14,064,615
Derivative financial instruments Fair value 4,159 4,159 4,159 4,159
Dividends and interest on capital Amortized cost 825,332 825,332 20,933 20,933
Tax refinancing program (iii) Amortized cost 262,850 262,850 288,806 288,806
Leases payable (iv) Amortized cost 2,664,393 2,664,393 3,136,795 3,136,795
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Accounting measurement COMPANY CONSOLIDATED
12/31/2020
Carrying
amount
Fair value Carrying
amount
Fair value
Assets
Cash and banks Fair value 174,952 174,952 692,742 692,742
Cash equivalents Fair value 1,777,728 1,777,728 3,415,199 3,415,199
Cash investments Fair value 187,856 187,856 204,056 204,056
Due from related parties Amortized cost 7,621,572 7,621,572
Accounts receivable (i) Amortized cost 1,400,570 1,400,570 3,974,238 3,974,238
Dividends and interest on capital Amortized cost 1,466 1,466
Financial asset at fair value Fair value 71,594 71,594 71,594 71,594
Liabilities
Trade payables (i) Amortized cost 2,414,548 2,414,548 8,296,891 8,296,891
Borrowings and financing (ii)
Borrowings and financing Amortized cost 2,556,144 2,556,144 10,542,777 10,542,777
Due to related parties Amortized cost 1,591,964 1,591,964
Public debentures Amortized cost 2,590,369 2,590,369 4,034,603 4,034,603
Private debentures 3,569,805 3,569,805
Senior Notes Amortized cost 8,196,549 9,821,284 8,196,549 9,821,284
Derivative financial instruments Fair value 10,967 10,967 10,967 10,967
Dividends and interest on capital Amortized cost 4,775 4,775 18,094 18,094
Licenses and concessions payable (iii) Amortized cost 17,828 17,828 43,415 43,415
Tax refinancing program (iii) Amortized cost 212,629 212,629 346,217 346,217
Leases payable (iv) Amortized cost 688,220 688,220 2,981,678 2,981,678

For the closing of the period ended September 30, 2021:

(i) The balances of accounts receivable have near terms and, therefore, they are not adjusted to fair value. The balances of trade payables subject to the judicial reorganization were adjusted to fair value at the date of novation of the liabilities and are represented by the amounts expected to be settled (Note 18).

(ii) The balance of the borrowings and financing with the BNDES, Local Banks, and ECAs correspond to exclusive markets, and the fair value of these instruments is similar to their carrying amounts. The balances of borrowings and financing refers to the bonds issued in the international market, for which is there is a secondary market, and their fair values differ from their carrying amounts.

(iii) The licenses and concessions payable and the tax refinancing program are stated at the amounts that these obligations are expected to be discharged and are not adjusted to fair value.

(iv) The leases payable are represented by the amounts that the obligations are expected to be settled, adjusted at present value.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The levels of the financial assets cash and cash equivalents and cash investments, held-for-sale assets, and derivative financial instruments at fair value as at September 30, 2021 and December 31, 2020, are as follows:

Fair value measurement hierarchy COMPANY CONSOLIDATED
Fair value Fair value Fair value Fair value
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Assets
Cash and banks Level 1 165,747 174,952 603,561 692,742
Cash equivalents Level 1 619,553 1,777,728 2,416,623 3,415,199
Cash investments Level 1 190,126 187,856 201,298 204,056
Derivative financial instruments Level 2 25,291 25,291
Liabilities
Derivative financial instruments Level 2 4,159 10,967 4,159 10,967

There were no transfers between levels in the periods ended September 30, 2021 and December 31, 2020.

The Company and its subsidiaries have measured their financial assets and financial liabilities at their market or actual realizable values (fair value) using available market inputs and valuation techniques appropriate for each situation, as follows:

(a) Cash, cash equivalents and cash investments

Foreign currency-denominated cash equivalents and cash investments are basically kept in checking deposits denominated in euro and US dollars.

The fair value of securities traded in active markets is equivalent to the amount of the last closing quotation available at the end of the reporting period, multiplied by the number of outstanding securities.

For the remaining contracts, the Company carries out an analysis comparing the current contractual terms and conditions with the terms and conditions effective for the contract when they were originated. When terms and conditions are dissimilar, fair value is calculated by discounting future cash flows at the market rates prevailing at the end of the period, and when similar, fair value is similar to the carrying amount on the reporting date.

(b) Derivative financial instruments

The Company conducts derivative transactions to manage certain market risks, mainly the foreign exchange risk. At the closing date of the period ended September 30, 2021, these instruments include Non-deliverable Forward (NDF) contracts.

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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

It is worth noting that the Company does not use derivatives for purposes other than the hedging these risks and the method used to calculate the fair value of the derivative instruments contracted throughout the year was the future cash flows method associated to each contracted instrument, discounted using the market rates prevailing at the reporting date.

3.2. Financial risk management

The Company's and its subsidiaries' activities expose them to several financial risks, such as: market risk (including currency fluctuation risk, interest rate risk on fair value, interest rate risk on cash flows), credit risk, and liquidity risk. According to their nature, financial instruments may involve known or unknown risks, and it is important to assess to the best judgment the potential of these risks. The Company and its subsidiaries may use derivative financial instruments to mitigate certain exposures to these risks.

The Company's risk management process is a three-step process, taking into account its consolidated structure: strategic, tactical, and operational. At the strategic level, the Company's executive committee agrees with the Board of Directors the risk guidelines to be followed each financial year. A Financial Risk Management Committee is responsible for overseeing and ensuring that Oi comply with the existing policies. At the operating level, risk management is carried out by the Company's treasury officer, in accordance with the policies approved by the Board of Directors.

The Financial Risk Management Committee meets on a monthly basis and currently consists of the Chief Finance and Investor Relations Officer, Chief Governance, Risks and Compliance Officer, the Chief Treasurer and Performance Analysis Officer, and no more than other two officers from the finance department and at least one former finance officer.

The Hedging and Cash Investments Policies, approved by the Board of Directors, document the management of exposures to market risk factors generated by the financial transactions of the Oi Group companies. In line with the Hedging Policy pillars, the strategy is focused on the preservation of the Company's cash flows, maintaining its liquidity, and complying with the financial covenants, if applicable.

3.2.1. Market risk
(a) Foreign exchange risk

Financial assets

The Company is not exposed to any material foreign exchange risk involving foreign currency-denominated financial assets as at September 30, 2021 for which the Company does not enter into any currency hedging transaction.

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Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Financial liabilities

The Company and its subsidiaries have foreign currency-denominated or foreign currency-indexed borrowings and financing. The risk associated with these liabilities is related to the possibility of fluctuations in foreign exchange rates that could increase the balance of such liabilities. The Company's and its subsidiaries' borrowings and financing exposed to this risk represent approximately 61.4% of total liabilities from borrowings and financing (64.0% at December 31, 2020), less the contracted currency hedging transactions.

To minimize this type of risk, after the sale of PT Ventures was completed in 2020, the Company elected to keep part of the funds received with this sale in offshore cash, as a natural hedge both to cover the payment of foreign currency-denominated interest to be made in 2020 and the portion of the Company's US dollar-denominated operating expenses. Additionally, the Company also hedged part of the Company's US dollar-denominated operating expenses. Throughout the nine months ended September 30, 2021, the Company continued to contract hedging transactions against foreign exchange exposure of short-term cash flows, in the form of forward currency contracts for the interest on the Qualified Bond due in February and August 2021, and due in February 2022, as well as for a material portion of the US dollar-denominated expenses until November of the current year. Additionally, the Company kept in an offshore account part of the amount disbursed in the issue of the 2026 Bond, as a natural hedge for the payment of interest on this January 2022 instrument, as well as part of the amounts that will potentially be subject to the repurchase offer for these notes.

The percentage of currency hedging for the effects of foreign exchange exposure in the financial result of Borrowings and financing contracted is 39.3%. This percentage includes the exchange rate impacts on the adjustment gain at fair value.

Foreign currency-denominated financial assets and financial liabilities are presented in the balance sheet as follows (includes intragroup balances transferred to Company amounts):

COMPANY
09/30/2021 12/31/2020

Carrying

amount

Fair value Carrying
amount
Fair value
Financial assets
Cash and banks 130,161 130,161 148,750 148,750
Due from related parties 8,751,022 8,751,022 7,621,168 7,621,168
Derivative financial instruments 25,291 25,291
Financial liabilities
Borrowings and financing (Note 19) 15,473,060 15,473,060 10,833,843 10,833,843
Derivative financial instruments 4,159 4,159 10,967 10,967
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Consolidated
09/30/2021 12/31/2020
Carrying
amount
Fair value Carrying
amount
Fair value
Financial assets
Cash and banks 498,458 498,458 526,133 526,133
Cash equivalents 669,537 669,537 1,410 1,410
Derivative financial instruments 25,291 25,291
Financial liabilities
Borrowings and financing (Note 19) 19,163,584 19,163,584 16,841,745 16,841,745
Derivative financial instruments 4,159 4,159 10,967 10,967

The amounts of the derivative financial instruments as at September 30, 2021 and December 31, 2020 are summarized as follows:

Derivatives designated for hedge accounting
COMPANY CONSOLIDATED
Notional (US$) Maturity (years) Fair value Fair value
Amounts (payable)/receivable Amounts (payable)/receivable
09/30/2021 12/31/2020 09/30/2021 12/31/2020
USD/R$ Non-deliverable forwards (NDFs) 22,911 < 1 year 4,587 (3,561) 4,587 (3,561)
Derivatives not designated for hedge accounting
COMPANY CONSOLIDATED
Notional (US$) Maturity (years) Fair value Fair value
Amounts (payable)/receivable Amounts (payable)/receivable
09/30/2021 12/31/2020 09/30/2021 12/31/2020
USD/R$ Non-deliverable forwards (NDF) 82,677 < 1 year 16,544 (7,406) 16,544 (7,406)

As at September 30, 2021 and December 31, 2020, the main hedging transactions conducted with financial institutions with the objective minimizing the foreign exchange risk were as follows:

Non-deliverable Forward (NDF) contracts

US$/R$: Refer to future dollar purchase transactions using NDFs to hedge against the depreciation of the Brazilian real against the US dollar. The key strategy for these contracts is to eliminate foreign exchange differences during the contract period, mitigating unfavorable changes in foreign exchange rates on dollar-denominated debts or operating expenses.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

As at September 30, 2021, the Company recognized as result of derivative transactions the amounts shown below:

Three-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Forward currency transaction - financial results 31,438 31,438
Forward currency transaction - operating results (3,850) (7,133) (3,850) (7,133)
Total 27,588 (7,133) 27,588 (7,133)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Forward currency transaction - financial results 7,766 127,581 7,766 127,581
Forward currency transaction - operating results (5,769) (5,981) (5,769) (5,981)
Total 1,997 121,600 1,997 121,600

And the movements in foreign exchange hedges designated for hedge accounting were recognized in other comprehensive income.

Table of movements in hedge accounting effects in other comprehensive income
COMPANY CONSOLIDATED
Balance at Dec 31, 2020 (3,561) (3,561)
Amortization of hedges to profit or loss 8,148 8,148
Balance at Sep 30, 2021 4,587 4,587

Foreign exchange risk sensitivity analysis

Pursuant to CPC 40 (R1)/IFRS 7, as at September 30, 2021, management estimated the depreciation scenarios of the Brazilian real in relation to other currencies, at the end of the reporting period.

The foreign exchange rates used for the probable scenario are the closing rates prevailing in September 2021. The probable rates were then depreciated by 25% and 50% and used as benchmark for the possible and remote scenarios, respectively.

Rate
Description 09/30/2021 Depreciation
Probable scenario
U.S. dollar 5.4394 0%
Euro 6.2983 0%
Possible scenario
U.S. dollar 6.7993 25%
Euro 7.8729 25%
Remote scenario
U.S. dollar 8.1591 50%
Euro 9.4475 50%
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BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The impacts of foreign exchange exposure on the foreign currency-denominated debt with third parties, taking into consideration derivatives and offshore cash, in the sensitivity scenarios estimated by the Company, are shown in the table below (excludes intragroup balances):

09/30/2021
COMPANY CONSOLIDATED
Description Individual
risk
Probable scenario Possible scenario Remote scenario Probable scenario Possible scenario Remote scenario
US dollar debts Dollar appreciation 20,279,295 25,349,119 30,418,943 26,028,476 32,535,595 39,042,715
Derivatives (net position - USD) Dollar depreciation (16,544) (128,978) (241,412) (16,544) (128,978) (241,412)
US dollar cash Dollar depreciation (72,481) (90,601) (108,721) (816,418) (1,020,522) (1,224,627)
Euro debt Euro appreciation 257,517 321,896 386,275 3,765,558 4,706,947 5,648,337
Euro cash Euro depreciation (57,497) (71,871) (86,245) (331,661) (414,577) (497,492)
Fair value adjustment Dollar/euro depreciation (6,983,335) (8,729,168) (10,475,002) (10,532,260) (13,165,325) (15,798,390)
Total assets/liabilities indexed to exchange fluctuation 13,406,955 16,650,397 19,893,838 18,097,151 22,513,140 26,929,131
Total (gain) loss 3,243,442 6,486,883 4,415,989 8,831,980
(b) Interest rate risk

Financial assets

Cash equivalents and cash investments in local currency are substantially maintained in financial investment funds exclusively managed for the Company and its subsidiaries, and investments in private securities issued by prime financial institutions. Most of the portfolio of exclusive funds consists of repurchase agreements pegged to the SELIC rate (Central Bank's policy rate).

The interest rate risk linked to these assets arises from the possibility of decreases in these rates and consequent decrease in the return on these assets.

Financial liabilities

The Company and its subsidiaries have borrowings and financing subject to floating interest rates, based on the Long-term Interest Rate (TJLP), the CDI, the Benchmark Rate, and more recently the Broad Consumer Price Index (IPCA) in the case of real-denominated debt as at September 30, 2021. After the approval of the JRP, the Company does not have borrowings and financing subject to the foreign currency-denominated floating interest rate.

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Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

As at September 30, 2021, approximately 32.3% (35.9% at December 31, 2020) of the incurred debt was subject to floating interest rates. The most material exposure of Company's and its subsidiaries' debt after is to CDI. Therefore, a continued increase in this interest rate would have an adverse impact on future interest payments.

These assets and liabilities are presented in the balance sheet as follows:

COMPANY
09/30/2021 12/31/2020
Carrying
amount
Market value Carrying
amount
Market value
Financial assets
Cash equivalents 619,553 619,553 1,777,728 1,777,728
Cash investments 190,126 190,126 187,856 187,856
Due from related parties 622 622 404 404
Financial liabilities
Borrowings and financing (Note 19) 8,701,473 8,701,473 4,092,958 4,101,183
CONSOLIDATED
09/30/2021 12/31/2020
Carrying
amount
Market value Carrying
amount
Market value
Financial assets
Cash equivalents 1,747,086 1,747,086 3,413,789 3,413,789
Cash investments 201,298 201,298 204,056 204,056
Financial liabilities
Borrowings and financing (Note 19) 12,149,380 12,149,380 9,501,988 9,501,988

Interest rate fluctuation risk sensitivity analysis

Management believes that the most material risk related to interest rate fluctuations arises from its liabilities pegged to the CDI, the TJLP, and the IPCA. This risk is associated to an increase in those rates. The TJLP has been successively cut since January 2020, when it was set at 5.09% per year. Beginning April 2020, the TJLP was cut again to 4.94% p.a. and subsequently to 4.91% p.a. for July-September 2020, to 4.55% p.a. for October-December 2020, and 4.39% p.a. for January-March 2021. Beginning April 2021, after successive cuts, the National Monetary Council decided to increase this rate to 4.61% p.a. and in July-September 2021, to 4.88% p.a. Before the end of the quarter, together with the Selic increase cycle, there was a new increase of the TJLP to 5.32% p.a., effective for October-December 2021. The CDI has also been showing successive increases since March 2021, after a long period of stability at 1.90% p.a. After five successive increases, the CDI closed the quarter at 6.15% p.a.

Pursuant to CPC 40 (R1)/IFRS 7, Management estimated the fluctuation scenarios of the rates CDI and TJLP as at September 30, 2021. The rates used for the probable scenario were the rates prevailing at the end of the reporting period.

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BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

These rates have been stressed by 25% and 50%, and used as benchmark for the possible and remote scenarios.

09/30/2021
Interest rate scenarios
Probable scenario Possible scenario Remote scenario
CDI TJLP CDI TJLP CDI TJLP
6.15% 4.88% 7.69% 6.10% 9.23% 7.32%

Such sensitivity analysis considers outflows for the repayment of debts to third parties in future dates. Thus, the aggregate of the amounts for each scenario is not equivalent to the fair values, or even the fair values of these liabilities.

The impacts of exposure to interest rates, in the sensitivity scenarios estimated by the Company, are shown in the table below:

09/30/2021
COMPANY CONSOLIDATED
Description Individual
risk
Probable scenario Possible scenario Remote scenario Probable scenario Possible scenario Remote scenario
Debt pegged to CDI CDI increase 3,736,130 4,713,996 5,708,322 3,991,157 5,000,530 6,026,186
Debt pegged to TJLP TJLP increase 2,258,637 2,624,613 2,990,240 3,077,978 3,575,982 4,073,319
Total assets/liabilities pegged to the interest rate 5,994,767 7,338,609 8,698,562 7,069,135 8,576,512 10,099,505
Total (gain) loss 1,343,842 2,703,795 1,507,377 3,030,370
3.2.2. Credit risk

The concentration of credit risk associated to trade receivables is immaterial due to the diversification of the portfolio. The expected losses on trade receivables are adequately covered by an allowance intended to cover possible losses on their realization.

Transactions with financial institutions (cash investments and borrowings and financing) are made with prime entities, avoiding the concentration risk. The credit risk of financial investments is assessed by setting caps for investment in the counterparts, taking into consideration the ratings released by the main international risk rating agencies for each one of such counterparts. As at September 30, 2021, approximately 91.0% of the consolidated cash investments were made with counterparties with an AAA, AA, A, and or sovereign risk rating.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
3.2.3. Liquidity risk

The liquidity risk also arises from the possibility of the Company being unable to discharge its liabilities on maturity dates and obtain cash due to market liquidity restrictions. Management uses its resources mainly to fund capital expenditures incurred on the expansion and upgrading of the network, invest in new businesses.

The Company's management monitors the continual forecasts of the liquidity requirements to ensure that the company has sufficient cash to meet its operating needs and fund capital expenditure to modernize and expand its network.

In May 2021, Oi completed the subscription and payment of the R$2,500 million convertible debentures issued by Brasil Telecom Comunicação Multimídia S.A. The funds disbursed through these debentures are being used to support the subsidiary's CAPEX, focused on the expansion of the fiber-to-the-home (FTTH) network.

In July 2021, Oi Móvel issued R$2,000 million in simple, nonconvertible debentures indexed to the CDI and a US$880 million Senior Bond. For details of the disbursements, see Note 19 - Borrowings and Financing. Part of the total amount disbursed with the Bond was used in the prepayment of the DIP Loan of that subsidiary. Both funds raised are in line with the provisions of the Amendment to the JRP and aim at strengthening cash and contributing to the execution of its CAPEX plan.

Capital management

The Company seeks to manage its equity structure according to best market practices.

The objective of the Company's capital management strategy is to ensure that liquidity levels and financial leverage allow the sustained growth of the Group, the compliance with the strategic investment plan, and generation of returns to our shareholders.

We may change our capital structure, according to existing economic and financial conditions, to optimize our financial leverage and debt management.

The indicators used to measure capital structure management are: gross debt to accumulated twelve-month EBITDA (earnings before interest (financial income and expenses), taxes, depreciation, and amortization), and the interest coverage ratio, as shown below:

Gross debt-to-EBITDA between 2x and 4.0x
Interest coverage ratio (*) higher than 1.75

(*) Measures the Company's capacity to cover its future interest obligations.

3.2.4. Risk of accelerated maturity of borrowings and financing

At the end of September 30, 2021 there was no risk of accelerated maturity of the Company's debt.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

It is worth emphasizing that, in line with the provisions of the Plan, as amended, BNDES (Brazilian development bank) agrees that, as of the Court Ratification of the Amendment to the JRP (October 8, 2020) and until the first of the financial settlement of the disposal of the UPI Mobile Assets or by May 30, 2022, the obligation to comply with the financial ratios set forth in the agreement will be temporarily stayed by BNDES and, therefore, during such period, its noncompliance will not imply a possible breach of the agreement, as reported in Note 19, 'Covenants' section.

4. NET OPERATING REVENUE
Three-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021

09/30/2020

Restated

Gross operating revenue 2,586,506 1,182,300 3,017,382 3,063,898
Deductions from gross revenue (501,327) (240,197) (773,591) (753,068)
Taxes (494,885) (238,109) (661,577) (674,460)
Other deductions (6,442) (2,088) (112,014) (78,608)
Net operating revenue 2,085,179 942,103 2,243,791 2,310,830
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021

09/30/2020

Restated

Gross operating revenue 5,856,893 3,262,241 8,997,903 9,256,927
Deductions from gross revenue (1,132,728) (741,010) (2,281,011) (2,229,367)
Taxes (1,118,936) (734,045) (1,962,148) (2,041,546)
Other deductions (13,792) (6,965) (318,863) (187,821)
Net operating revenue 4,724,165 2,521,231 6,716,892 7,027,560
55
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Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
5. REVENUE AND EXPENSES BY NATURE
Three-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Net operating revenue 2,085,179 942,103 2,243,791 2,310,830
Operating income (expenses):
Interconnection (48,847) (16,304) (36,611) (46,564)
Personnel (207,228) (109,455) (457,711) (471,766)
Third-party services (536,271) (247,672) (644,725) (771,974)
Grid maintenance service (335,100) (120,326) (107,571) (112,267)
Handset and other costs (2,821) (3,640)
Advertising and publicity (19,688) (18,725) (81,339) (84,828)
Rentals and insurance (353,583) (120,225) (317,801) (377,644)
(Provisions)/reversals 38,701 (42,808) (33,069) (64,356)
Expected losses on trade receivables (12,652) 5,771 (12,526) (25,484)
Taxes and other income (expenses) (2,442,524) (1,749,516) (20,559) (9,623)
Other operating income (expenses), net (53,200) 3,383 (62,408) 22,480
Operating expenses excluding depreciation and amortization (3,970,392) (2,415,877) (1,777,141) (1,945,666)
Depreciation and amortization (789,425) (375,582) (1,087,380) (908,770)
Total operating expenses (4,759,817) (2,791,459) (2,864,521) (2,854,436)
Loss before financial income (expenses) and taxes (2,674,638) (1,849,356) (620,730) (543,606)
Financial income (expenses):
Financial income 867,307 465,183 (34,793) 69,393
Financial expenses (3,071,345) (1,274,200) (4,220,757) (2,125,723)
Total financial income (expenses) (2,204,038) (809,017) (4,255,550) (2,056,330)
Pre-tax loss (4,878,676) (2,658,373) (4,876,280) (2,599,936)
Income tax and social contribution 680 (1,266) 1,089
Loss for the period from discontinued operations (4,878,676) (2,657,693) (4,877,546) (2,598,847)
Discontinued operations
Profit for the year from discontinued operations (net of taxes) (Nota 30) 66,062 19,309 66,062 19,309
Loss for the period (4,812,614) (2,638,384) (4,811,484) (2,579,538)
Loss attributable to Company owners (4,812,614) (2,638,384) (4,812,614) (2,638,384)
Profit (loss) attributable to non-controlling interests 1,130 58,846
Operating expenses by function:
Cost of sales and/or services (1,742,216) (664,215) (1,829,142) (1,674,372)
Selling expenses (326,387) (136,721) (508,538) (513,329)
General and administrative expenses (321,115) (209,373) (526,319) (635,792)
Other operating income 378,539 125,371 336,340 360,129
Other operating expenses (31,400) (97,855) (336,095) (392,508)
Share of results of investees (2,717,238) (1,808,666) (767) 1,436
Total operating expenses (4,759,817) (2,791,459) (2,864,521) (2,854,436)
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Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Net operating revenue 4,724,165 2,521,231 6,716,892 7,027,560
Operating income (expenses):
Interconnection (106,477) (50,338) (109,955) (125,464)
Personnel (519,018) (292,364) (1,374,817) (1,393,169)
Third-party services (1,214,358) (716,091) (2,031,607) (2,378,860)
Grid maintenance service (729,427) (370,304) (343,574) (353,969)
Handset and other costs (5,876) (8,336)
Advertising and publicity (39,215) (44,753) (296,580) (204,280)
Rentals and insurance (839,718) (357,060) (1,014,016) (1,058,833)
(Provisions)/reversals 62,923 (46,308) (111,999) (127,398)
Expected losses on trade receivables (14,992) (19,610) (63,807) (108,046)
Taxes and other income (expenses) (i) (3,633,321) (8,362,059) (47,465) (22,020)
Other operating income (expenses), net (ii) 52,811 3,383 908,774 389,038
Operating expenses excluding depreciation and amortization (6,980,792) (10,255,504) (4,490,922) (5,391,337)
Depreciation and amortization (1,900,608) (1,136,182) (2,979,009) (2,701,162)
Total operating expenses (8,881,400) (11,391,686) (7,469,931) (8,092,499)
Loss before financial income (expenses) and taxes (4,157,235) (8,870,455) (753,039) (1,064,939)
Financial income (expenses):
Financial income 1,127,815 3,364,385 170,517 750,161
Financial expenses (4,217,875) (6,359,452) (6,656,729) (11,571,737)
Total financial income (expenses) (3,090,060) (2,995,067) (6,486,212) (10,821,576)
Pre-tax loss (7,247,295) (11,865,522) (7,239,251) (11,886,515)
Income tax and social contribution 12,765 (10,672) 34,863
Loss for the period from discontinued operations (7,247,295) (11,852,757) (7,249,923) (11,851,652)
Discontinued operations
Profit for the year from discontinued operations (net of taxes) (Nota 30) 536,096 (475,076) 536,096 (475,076)
Loss for the period (6,711,199) (12,327,833) (6,713,827) (12,326,728)
Loss attributable to Company owners (6,711,199) (12,327,833) (6,711,199) (12,327,833)
Profit (loss) attributable to non-controlling interests (2,628) 1,105
Operating expenses by function:
Cost of sales and/or services (4,007,722) (2,014,979) (5,237,532) (5,009,103)
Selling expenses (719,649) (403,389) (1,639,990) (1,508,982)
General and administrative expenses (810,952) (633,153) (1,645,685) (2,024,167)
Other operating income 789,542 406,645 2,160,537 1,566,564
Other operating expenses (193,992) (163,876) (1,107,659) (1,148,992)
Share of results of investees (3,938,627) (8,582,934) 398 32,181
Total operating expenses (8,881,400) (11,391,686) (7,469,931) (8,092,499)
(i) Includes the share of results of investees.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
(ii) In 2021, represented primarily by the gain on the sale of UPI Towers amounting to R$986,196. In 2020, represented primarily by the gain on the sale of properties amounting to R$107,400 and the gain on the sale of the investment held in PT Ventures amounting to R$79,114.

6. FINANCIAL INCOME (EXPENSES)

Three-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Financial income
Interest, inflation adjustment, and exchange differences on other assets (149,739) (49,511) (138,495) 1,077
Income from cash investments 9,116 11,395 22,897 21,752
Interest and exchange differences on intragroup loans 950,652 458,686
Exchange differences on translating foreign cash investments 9,227 38,188 74,915 27,935
Other income 48,051 6,425 5,890 18,629
Total 867,307 465,183 (34,793) 69,393
Financial expenses and other charges
a)Borrowing and financing costs
Amortization of third-party debt discount (401,886) (147,245) (483,111) (357,248)
Amortization of related-party debt discount (336,689) (248,211)
Inflation adjustment and exchange differences on third-party debt discount 738,822 126,229 1,001,787 559,364
Inflation adjustment and exchange differences on related-party debt discount 1,714,838 1,511,619
Inflation adjustment and exchange losses on third-party (1,619,829) (381,811) (2,300,854) (1,028,749)
Interest on borrowings from third parties (412,640) (293,943) (555,554) (397,270)
Interest on debentures (71,737) (18,992) (183,138) (108,282)
Interest and exchange differences on intragroup loans (1,644,119) (1,467,121)
Subtotal: (2,033,240) (919,475) (2,520,870) (1,332,185)
b)Other charges
Interest on leases (78,857) (20,916) (91,790) (83,332)
Gain (loss) on cash investments classified as held for sale (11,649) 1,716 (30,671) 99,729
Tax on transactions and bank fees (23,062) (21,484) (300,664) (49,007)
Interest on, inflation adjustment to, and foreign exchange differences on other liabilities (809,155) (255,868) (958,600) (653,380)
Inflation adjustment to (provisions)/reversals (54,956) (40,259) (95,420) (69,323)
Interest on taxes in installments - tax financing program (1,566) (686) (1,929) (1,261)
Derivative transactions 31,438 31,438
Other expenses (90,298) (17,228) (252,251) (36,964)
Subtotal: (1,038,105) (354,725) (1,699,887) (793,538)
Total (3,071,345) (1,274,200) (4,220,757) (2,125,723)
Financial income (expenses) (2,204,038) (809,017) (4,255,550) (2,056,330)
58
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Financial income
Interest, inflation adjustment, and exchange differences on other assets 9,672 114,821 67,783 158,634
Income from cash investments 21,953 47,137 48,704 93,378
Interest and exchange differences on intragroup loans 1,035,776 2,955,050
Exchange differences on translating foreign cash investments 3,345 238,105 43,538 483,303
Other income 57,069 9,272 10,492 14,846
Total 1,127,815 3,364,385 170,517 750,161
Financial expenses and other charges
a)Borrowing and financing costs
Amortization of third-party debt discount (588,357) (538,612) (901,035) (1,299,453)
Amortization of related-party debt discount (454,825) (1,071,673)
Inflation adjustment and exchange differences on third-party debt discount 193,847 1,151,301 392,521 4,100,063
Inflation adjustment and exchange differences on related-party debt discount 278,707 8,133,275
Inflation adjustment and exchange losses on third-party (586,194) (3,633,913) (1,111,901) (8,351,377)
Interest on borrowings from third parties (1,038,833) (895,852) (1,322,960) (1,202,558)
Interest on debentures (131,030) (83,275) (509,186) (402,507)
Interest and exchange differences on intragroup loans (155,824) (7,957,596)
Subtotal: (2,482,509) (4,896,345) (3,452,561) (7,155,832)
b)Other charges
Interest on leases (175,820) (62,796) (265,220) (267,689)
Gain on cash investments classified as held for sale (8,130) 420,410 (15,130) 232,751
Tax on transactions and bank fees (65,372) (80,104) (387,752) (161,014)
Interest, inflation adjustment, and exchange differences on other liabilities (i) (950,704) (1,289,649) (1,584,835) (3,448,380)
Inflation adjustment to (provisions)/reversals (89,882) (221,646) (246,938) (434,928)
Interest on taxes in installments - tax financing program (2,943) (3,119) (4,238) (5,708)
Derivative transactions 7,766 (127,581) 7,766 (127,581)
Other expenses (ii) (450,281) (98,622) (707,821) (203,356)
Subtotal: (1,735,366) (1,463,107) (3,204,168) (4,415,905)
Total (4,217,875) (6,359,452) (6,656,729) (11,571,737)
Financial income (expenses) (3,090,060) (2,995,067) (6,486,212) (10,821,576)
(i) This line item includes interest related to the present value adjustment associated with the liabilities of onerous contracts and trade payables subject to the Judicial Reorganization, and related exchange differences and adjustment for inflation.
(ii) Represented mainly by financial banking fees and commissions.
59
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
7. INCOME TAX AND SOCIAL CONTRIBUTION

Income taxes encompass the income tax and the social contribution. The income tax rate is 25% and the social contribution rate is 9%, generating aggregate nominal tax rate of 34%.

The provision for income tax and social contribution is broken down as follows:

Three-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Income tax and social contribution
Current taxes 680 (1,266) 1,089
Deferred taxes (Note 10)
Total 680 (1,266) 1,089
Three-month period ended
CONTROLADORA CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Pre-tax loss (4,878,676) (2,658,373) (4,876,280) (2,599,937)
Income tax and social contribution
Income tax and social contribution on taxed income 1,658,750 903,847 1,657,935 883,979
Equity in investees (923,861) (614,946) (261) 488
Tax incentives 16 3
Permanent deductions (add-backs) 714,953 397,252 330,709 (30,137)
Reversal of (Allowance for) impairment losses on deferred tax assets (1,449,842) (685,473) (1,749,737) (777,486)
Tax effects of deferred tax assets of foreign subsidiaries (239,928) (75,758)
Income tax and social contribution effect on profit or loss 680 (1,266) 1,089
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Income tax and social contribution
Current taxes 680 (10,672) 11,049
Deferred taxes (Note 10) 12,085 23,814
Total 12,765 (10,672) 34,863
60
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021

09/30/2020

Restated

09/30/2021

09/30/2020

Restated

Pre-tax loss (7,247,295) (11,865,522) (7,239,251) (11,886,515)
Income tax and social contribution
Income tax and social contribution on taxed income 2,464,080 4,034,278 2,461,345 4,041,415
Equity in investees (1,339,133) (2,918,198) 135 10,942
Tax incentives (i) 97 37
Permanent deductions (add-backs) (ii) (798,875) 2,645,454 (6,520,232) 1,161,779
Reversal of (Allowance for) impairment losses on deferred tax assets (iii) (326,072) (3,748,769) 4,302,864 (4,531,250)
Tax effects of deferred tax assets of foreign subsidiaries (iv) (254,881) (648,060)
Income tax and social contribution effect on profit or loss 12,765 (10,672) 34,863
(i) Refer basically to the income surtax (10%) payable by subsidiaries.
(ii) The tax effects of permanent add-backs are represented primarily by the write-off of deferred tax credits, amounting to R$6,520,403, related to tax loss carryforwards of subsidiary Telemar, merged with and into the Company on May 3, 2021, and by the effects of changes in foreign exchange rates on the fair value adjustments to restructured liabilities included in the JRP.
(iii) The reversal in the period corresponds mainly to the effects of the reversals of the provisions to the realizable value of deferred tax credits on tax loss carryforwards derecognized from Telemar, as commented in the previous paragraph and referred to in Note 10.
(iv) Effects of unrecognized deferred tax assets held by foreign subsidiaries that do not have a history of profitability and/or an expectation to generate taxable income.
61
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
8. CASH, CASH EQUIVALENTS AND CASH INVESTMENTS

Cash investments and cash investments made by the Company and its subsidiaries in the periods ended September 30, 2021 and December 31, 2020 are measured at their fair values.

(a) Cash and cash equivalents
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Cash and banks 165,747 174,952 603,561 692,742
Cash equivalents 619,553 1,777,728 2,416,623 3,415,199
Total 785,300 1,952,680 3,020,184 4,107,941
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Repurchase agreements (i) 456,039 1,518,113 1,555,197 2,919,122
Certificated of Bank Deposit (CDB) 151,986 185,564 152,834 343,084
Private securities (ii) 8,615 71,254 34,623 134,411
Time deposits 669,537 1,407
Other 2,913 2,797 4,432 17,175
Cash equivalents 619,553 1,777,728 2,416,623 3,415,199
(b) Short- and long-term cash investments
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Private securities (iii) 175,452 170,660 182,202 177,827
Government securities 14,674 17,196 19,096 26,229
Total 190,126 187,856 201,298 204,056
Current 187,519 184,682 191,942 193,715
Non-current 2,607 3,174 9,356 10,341
(i) Represented, mainly, by exclusive investment funds, most the portfolio of which consists of government securities with yields pegged to SELIC (Central Bank's policy rate). The portfolio is preferably allocated to highly liquid spot market instruments for all investments.
(ii) Represented primarily by highly liquid treasury financial bills of private banks pegged to CDI.
(iii) Represented mainly by investments whose yields are pegged to SELIC and CDB rates.

The Company and its subsidiaries hold cash investments in Brazil and abroad for the purpose of earning interest on cash, benchmarked to CDI in Brazil, LIBOR for the US dollar-denominated portion, and EURIBOR for the euro-denominated portion.

62
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
9. ACCOUNTS RECEIVABLE
COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Billed services 3,755,870 1,471,972 4,379,884 3,984,006
Unbilled services 533,182 378,225 829,058 1,024,380
Subtotal 4,289,052 1,850,197 5,208,942 5,008,386
Expected losses on trade receivables (751,023) (449,627) (970,814) (1,034,148)
Total 3,538,029 1,400,570 4,238,128 3,974,238

1 These amounts include related-party balances, as shown in Note 29 and include balances merged from Telemar (Nota 1).

The aging list of trade receivables is as follows:

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Current 3,444,635 1,469,935 3,750,120 3,650,943
Past-due up to 60 days 239,359 120,279 566,297 564,145
Past-due from 61 to 90 days 100,560 14,665 150,307 88,377
Past-due from 91 to 120 days 34,318 11,898 89,981 76,252
Past-due from 121 to 150 days 35,520 12,366 102,173 78,409
Over 150 days past-due 434,660 221,054 550,064 550,260
Total 4,289,052 1,850,197 5,208,942 5,008,386

The movements in the expected credit losses on trade receivables are as follows:

COMPANY CONSOLIDATED
Balance at January 1, 2021 (449,627) (1,034,148)
Telemar merger (Note 1) (287,300)
Expected losses on trade receivables (14,992) (62,450)
Trade receivables written off as uncollectible 896 125,784
Balance at September 30, 2021 (751,023) (970,814)
63
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
10. CURRENT AND DEFERRED INCOME TAXES
ASSETS
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Current recoverable taxes
Recoverable income tax (IRPJ) (i) 93,907 10,466 190,223 179,780
Recoverable social contribution (CSLL) (i) 4,823 3 81,404 73,435
IRRF/CSLL - withholding income taxes (ii) 47,470 34,690 90,253 104,906
Total current 146,200 45,159 361,880 358,121
Deferred recoverable taxes
Income tax and social contribution on temporary differences1 3,724,398 3,724,398 3,671,070 3,671,070
Total non-current 3,724,398 3,724,398 3,671,070 3,671,070

1 See movements table below.

Liabilities
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Current taxes payable
Income tax payable 10,878 11,752
Social contribution payable 352 630
Total current 11,230 12,382
(i) Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future.
(ii) Withholding income tax (IRRF) credits on cash investments, derivatives, intragroup loans, government entities, and other amounts that are used as deductions from income tax payable for the years, and social contribution withheld at source on services provided to government agencies.
64
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Movements in deferred income tax and social contribution

COMPANY
Balance at 12/31/2020 Recognized in deferred tax benefit/ expenses Telemar merger
(Note 1)
Balance at 09/30/2021
Deferred tax assets arising on:
Temporary differences
Provisions 421,463 (61,798) 540,864 900,529
Provisions for suspended taxes 125,495 4,727 130,222
Provisions for pension funds (50,806) 157 (159,690) (210,339)
Expected losses on trade receivables 167,165 259 256,907 424,331
Profit sharing 30,252 (32,672) 3,410 990
Foreign exchange differences 3,548,033 113,530 1,184,559 4,846,122
Merged goodwill (i) 1,131,992 (213,043) 918,949
Onerous obligation 536,237 (11,687) 961,672 1,486,222
Leases 13,748 7,616 39,802 61,166
ORA - MTM - Derivatives 1,211 (2,771) (1,560)
Other temporary add-backs and deductions 217,967 22,425 510,414 750,806
Deferred taxes on temporary differences 6,142,757 (173,257) 3,337,938 9,307,438
CSLL tax loss carryforwards (iii) 4,991,972 835,805 5,827,777
Total deferred tax assets 11,134,729 662,548 3,337,938 15,135,215
Deferred tax liabilities
Temporary differences and income tax and social contribution of goodwill (ii) (1,467,357) (336,476) 313,425 (1,490,408)
Allowance for impairment loss (iii) (5,942,974) (326,072) (3,651,363) (9,920,409)
Total deferred tax assets (liabilities) 3,724,398 3,724,398
65
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
CONSOLIDATED
Balance at 12/31/2020 Recognized in deferred tax benefit/ expenses Balance at 09/30/2021
Deferred tax assets arising on:
Temporary differences
Provisions 1,223,404 (113,847) 1,109,557
Provisions for suspended taxes 169,539 7,882 177,421
Provisions for pension funds (211,187) 157 (211,030)
Expected losses on trade receivables 487,033 42,979 530,012
Profit sharing 133,156 (97,573) 35,583
Foreign exchange differences 3,442,455 377,463 3,819,918
Merged goodwill (i) 1,131,992 (213,043) 918,949
Onerous obligation 2,438,425 (8,122) 2,430,303
Leases 196,332 71,126 267,458
ORA - MTM - Derivatives 1,211 (2,771) (1,560)
Other temporary add-backs and deductions 1,127,492 116,291 1,243,783
Deferred taxes on temporary differences 10,139,852 180,542 10,320,394
CSLL tax loss carryforwards (iii) 16,561,970 (4,824,235) 11,737,735
Total deferred tax assets 26,701,822 (4,643,693) 22,058,129
Deferred tax liabilities
Temporary differences and income tax and social contribution of goodwill (ii) (2,423,808) 340,829 (2,082,979)
Allowance for impairment loss (iii) (20,606,944) 4,302,864 (16,304,080)
Total deferred tax assets (liabilities) 3,671,070 3,671,070
(i) Refer to: (i) deferred income tax and social contribution assets calculated as tax benefit originating from the goodwill paid on acquisition of the Company and recognized by the merged companies in the course of 2009. The realization of the tax credit arises from the amortization of the goodwill balance based on the STFC license and in the appreciation of property, plant and equipment, the utilization of which is estimated to occur through 2025, and (ii) deferred income tax and social contribution assets originating from the goodwill paid on the acquisition of interests in the Company in 2008-2011, recognized by the companies merged with and into Telemar Participações S.A. ("TmarPart") and by TmarPart merged with and into the Company on September 1, 2015, which was based on the Company's expected future profitability and the amortization of which is estimated to occur through 2025.
(ii) Refers basically to the tax effects on the appreciation of property, plant and equipment and intangible assets, merged from TmarPart.
(iii) The Company regularly tests deferred tax assets for impairment and recognizes an allowance for impairment losses of deferred tax assets when it is probable that these assets will not be realized, based on a statement of expected generation of future taxable income, supported by a technical feasibility study and the matching the estimated annual realization portion of the asset and liability temporary differences. The allowance for impairment losses is reversed as it becomes probable that taxable income will be available.
66
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Throughout the period, at the time of the merger of Telemar (Note 1), the Company derecognized deferred tax credits on tax loss carryforwards to profit or loss and the corresponding provisions were reversed at the realizable value of these credits, totaling R$6,520,403.

The stock of tax loss carryforwards in Brazil and foreign subsidiaries is approximately R$23,910,705 and R$14,432,380, and corresponds to R$8,129,640 and R$3,608,095 in deferred tax assets, respectively, which can be carried forward indefinitely and offset against taxes payable in the future.

Non-levy of IRPJ/CSLL on adjustments to recoverable taxes using SELIC

On September 24, 2021, the Federal Supreme Court ("STF") unanimously decided, in its ruling on the merits of Appeal RE No. 1.063.187, which sets precedence on Issue No. 962, for the unconstitutionality of the levy of corporate income tax (IRPJ) and social contribution on net income (CSLL) on adjustments made to tax overpayments using SELIC (Central Bank's policy rate) refunded under a court decision. On September 29, 2021, the Court issued the Judgment Minutes but the full decision has not been issued to date.

On July 12, 2019, the Company and its subsidiary Oi Móvel filed lawsuits challenging the assessment of IRPJ and CSLL on the amounts corresponding to the SELIC adjustment plus (i) the amounts related to the unduly paid or overpaid taxes that have been refunded as a result of a tax overpayment recovery or administrative offset lawsuit; and (ii) the judicial deposits withdrawn by the companies; also claiming the right to offset the overpaid taxes since July 12, 2014.

With regards to the lawsuit filed by Oi, the court awarded a ruling on October 29, 2020, which was later confirmed in the appellate court in a hearing held on August 13, 2021, leading to the filing of special and extraordinary appeals by the Company, which have not yet been judged. The lawsuit to which Oi Móvel is a party is still pending judgment by the lower court.

Based on the STF's decision, as well as on the legal grounds stated in the Supreme Court's decision, the Company believes it is entitled to claiming deferred IRPJ and CSLL assets totaling approximately R$500 million. The Company believes that the criteria required for recognition of deferred tax assets have been met, but will not have an impact on the interim financial information for the period ended September 30, 2021, due to the existing limitation for purposes of recognizing tax credits.

67
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
11. OTHER TAXES
ASSETS
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Recoverable State VAT (ICMS) (i) 486,064 221,582 702,124 1,056,583
PIS and COFINS (ii) 611,943 1,153,103 1,166,172 2,115,486
Other 36,967 74 121,319 98,548
Total 1,134,974 1,374,759 1,989,615 3,270,617
Current 628,096 929,572 973,162 1,823,451
Non-current 506,878 445,187 1,016,453 1,447,166
Liabilities
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
State VAT (ICMS) 229,903 129,638 391,970 389,852
ICMS Convention No. 69/1998 64,612 47,476 138,041 136,462
PIS and COFINS (iii) 366,067 274,605 578,374 560,554
FUST/FUNTTEL/broadcasting fees (iv) 572,852 258,245 670,741 665,169
Telecom Inspection Fund (FISTEL) fee (v) 2,883 654 974,374 488,538
Other (vi) 54,722 13,308 232,214 272,570
Total 1,291,039 723,926 2,985,714 2,513,145
Current 349,251 174,097 1,669,446 1,189,145
Non-current 941,788 549,829 1,316,268 1,324,000

(i) Recoverable ICMS arises mostly from prepaid taxes and credits claimed on purchases of property, plant and equipment, which can be offset against ICMS payable within 48 months, pursuant to Supplementary Law 102/2000.

(ii) The Company and its subsidiaries filed legal proceedings to claim the right to deduct ICMS from the PIS and COFINS tax bases and the recovery of past unduly paid amounts, within the relevant statute of limitations.

In 2019, the 1st and 2nd Region Federal Courts (Brasília and Rio de Janeiro) issued final and unappealable decisions favorable to the Company on two of the three main lawsuits of the Company relating to the discussion about the non-levy of PIS and COFINS on ICMS.

These credits were cleared for offset by the Federal Revenue Service between May and October 2019 so that the Company has been using them to pay federal taxes due since June 2019. The total amount of the credit was approximately R$3 billion, added to the three lawsuits.

(iii) Represented primarily by the Social Integration Program Tax on Revenue (PIS) and Social Security Funding Tax on Revenue (COFINS) on revenue, financial income, and other income.

68
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

(iv) The Company and Oi Móvel filed lawsuits to discuss the correct calculation of the contribution to the FUST and in the course of the lawsuits made escrow deposits to suspend its collection. These discussions are also being judged by higher courts and a possible transformation of the deposited amounts into definitive payments should not occur within two (2) years.

(v) The Company and Oi Móvel, together with other industry companies, filed a lawsuit aiming at removing the obligation to pay the Installation Inspection Fee (TFI) and the Operation Fee (TFF). The court awarded a sentence rejecting the claims, which led to the filing of an appeal, which is still awaiting judgment. As the 2020 TFF payment deadline is about to expire and the appeal is pending judgment, the companies filed a request for an early appeal, granted on March 18, 2020, to suspend the payment of the 2020 TFF until the appeal is judged, and this request was renewed for 2021, also granted by a decision issued in March 2021, to maintain the collection suspension until the judgment of the appeal.

(vi) Represented primarily by inflation adjustment to suspended taxes and withholding tax on intragroup loans and interest on capital.

12. JUDICIAL DEPOSITS

In some situations, the Company makes, as ordered by courts or even at its own discretion to provide guarantees, judicial deposits to ensure the continuity of ongoing lawsuits. These judicial deposits can be required for lawsuits with a likelihood of loss, as assessed by the Company based on the opinion of its legal counselors, as probable, possible, or remote. The Company recognizes in current assets that amount it expects to withdraw from escrow deposits or the amount of escrow deposits it expects to offset against provisions in the coming twelve months.

As set forth by relevant legislation, judicial deposits are adjusted for inflation.

COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Civil (i) 2,500,280 2,718,735 2,690,629 4,433,968
Tax 1,832,471 888,000 1,908,228 1,985,621
Labor 663,186 344,990 875,066 902,294
Subtotal: 4,995,937 3,951,725 5,473,923 7,321,883
Estimated loss (33,061) (15,233) (42,830) (28,048)
Total 4,962,876 3,936,492 5,431,093 7,293,835
Current 1,105,749 716,047 1,353,659 1,095,827
Non-current 3,857,127 3,220,445 4,077,434 6,198,008

1The parent company's balances as at September 30, 2021, include the judicial deposits of Telemar merged in May 2021 (Note 1).

(i) The reduction made in the period results mainly from the transfer of judicial deposits to the regulatory agency ANATEL, in accordance with the provisions of the Amendment to the JRP and the transaction agreement signed, based on the provisions of Law 13988/2020 (Notes 1 and 18).

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
13. PREPAID EXPENSES
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Costs incurred on the performance of a contract (IFRS 15) (i) 372,849 187,927 354,403 255,407
Telecom Inspection Fund (FISTEL) fee 2,023 136,129
Advertising and publicity 7,600 511 14,299 20,928
Insurance 35,762 12,245 45,138 46,357
Bank guarantee 28,570 5,860 34,673 24,956
Other 264,621 103,496 156,414 110,868
Total 711,425 310,039 741,056 458,516
Current 558,978 233,952 568,245 330,131
Non-current 152,447 76,087 172,811 128,385

(i) Represented by commission costs incurred in the compliance with agreements. The movements in the period are as follows:

COMPANY CONSOLIDATED
Balance at January 1, 2021 187,927 255,407
Telemar merger (Note 1) 251,837
Incurred costs 115,302 769,419
Allocation to profit or loss (182,217) (670,423)
Balance at September 30, 2021 372,849 354,403

14. OTHER TAXES

COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Sureties from related parties 60,340
Receivables (i) 260,040 89,620 260,280 427,451
Advances to and amounts recoverable from suppliers 308,506 69,480 302,633 294,553
Amounts receivable from the sale of property, plant and equipment items 223,019 84,031 225,746 308,806
Amounts receivable (ii) 286,043 54,145 268,801 177,626
Advances to employees 29,588 16,802 45,568 48,257
Other 122,515 38,587 74,911 93,303
Total 1,229,711 413,005 1,177,939 1,349,996
Current 808,132 346,445 719,338 754,292
Non-current 421,579 66,560 458,601 595,704

1 The balances as at September 30, 2021 include the balances merged from Telemar (Note 1).

(i) The receivables from Fundação Sistel arise from the Company's interest in the distribution of the PBS-A plan surplus, duly approved by the National Pension Plan Authority (PREVIC). As at September 30, 2021, the Company had claim to fourteen (14) installments of receivables that are adjustable according to the Plan's profitability.
(ii) As at September 30, 2021, includes R$84,245 related to the amounts receivable arising from the sale of the UPI Datacenter.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
15. INVESTMENTS
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Investment in subsidiaries 4,742,932 7,339,368
Joint arrangements 23,223 23,223 25,081
Investments in associates 52,187 52,187 50,799
Tax incentives, net of allowances for losses 16,698 10,273 31,916 31,876
Other investments 2 3,799 6,081 15,823
Total 4,835,042 7,353,440 113,407 123,579

Summary of the movements in investment balances

COMPANY CONSOLIDATED
Balance at January 1, 2021 7,353,440 123,579
Equity in investees (*) (2,579,200) 114
Investment - BrT Multimídia (**) 1,476,838
Disposal of investment (Drammen) (36,774)
Capital increase - BrT Multimídia (***) 5,615,135
Merger of Telemar (****) (2,246,707)
Dividends (6,431)
Write-off of investments (10,286) (10,286)
Reclassification to held-for-sale assets (*****) (4,730,973)
Balance at September 30, 2021 4,835,042 113,407

(*) Breakdown shown below.

(**) On May 1, 2021 the Company (Assignor) and BrT Multimídia (Assignee) entered into Indefeasible Rights of Use (IRU) agreements, which establishes the conditions for the onerous and permanent assignment, by the Assignor to the Assignee, of the exclusive, indefeasible, and unalterable right of use of the assets that are the subject matter of the agreements (transmission of telecommunication signals capacity, underground network, and fiber optics). Certain assets subject matter of these agreements are reversible assets and after the enactment of ANATEL Resolution 744, on April 8, 2021, Management concluded for the transfer contractual assets from Oi to BrT Multimedia in the form of a capital contribution (Note 16).

(***) Refers basically to the capital increase in BrT Multimídia, approved in the Extraordinary Shareholders' Meeting held on September 27, 2021, through the partial payment of assets associated with the IRU contracts. The other assets associated with the IRU agreements, referred to in item (**) above, will be paid by the end of 2021.

(****) On May 3, 2021, Telemar was merged with and into the Company (Note 1).

(*****) Reclassification of held-for-sale assets from assets held in UPI InfraCo (at the percentage of 57.9 to be sold), UPI Mobile Assets, and UPI TVCo, through the direct investment in Oi Móvel, and well as from international operations and due to the fulfillment of the recognition criteria as held-for-sale assets (Note 30).

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The main data related to direct equity interests in subsidiaries, for equity accounting purposes, are as follows:

COMPANY
09/30/2021
In thousands of shares Private equity Equity interests - %
Subsidiaries and joint ventures Shareholders' equity Profit (loss) for the period Common Preferred Total capital Voting capital
Telemar (1,666,575)
Rio Alto 3,971 82 215,538,129 215,538,129 100 100
Oi Holanda (2,262,301) (216,413) 100 100 100
Oi Serviços Financeiros 1,977 1,976 799 100 100
PTIF (4,456,983) (532,607) 0.042 100 100
CVTEL (5,195) (238) 18 100 100
Carrigans 148 0.100 100 100
Serede (341,493) (90,082) 24,431,651 99.12 99.12
PT Participações (*) 229,246 (287) 1,000,000 100 100
Drammen 3,601
Oi Móvel 1,073,719 (3,283,318) 14,209,581 100 100
BrT Serviços Financeiros 664 9 7,499,999 100 100
BrT Call Center (73,363) (31,047) 22,370 100 100
BrT Multimídia 9,303,432 (194,593) 8,045,264 59.37 59.37
Hispamar 274,091 13,218 113,213 19.04 19.04
AIX 19,066 1,788 298,563 50 50

(*) The interest in the equity and the share of results of PT Participações are represented by: (i) investment of R$229,057 and share of profits of R$811, classified in investments; and (ii) investments of R$(189) and share of losses of R$523, classified in investments held-for-sale assets.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Equity in investees Investment value Provision for negative shareholders' equity
Subsidiaries and joint ventures 09/30/2021

09/30/2020

Restated

09/30/2021 12/31/2020 09/30/2021 12/31/2020
Telemar (618,123) (7,166,215) 7,156,690
Rio Alto 82 24 3,971 3,908
Oi Holanda (216,413) (699,996) 2,262,301 2,045,888
Oi Serviços Financeiros 1,976 2,904 1,977 2,970
PTIF (532,607) (1,323,232) 4,456,983 3,924,376
CVTEL (219) (267) 5,195 3,297
Carrigans 148 147
Serede (47,183) 6,762 338,488 44,022
PT Participações (287) 113,376 229,246 229,466
Drammen 1,742 38,466
Oi Móvel (2,325,246) 1,073,719
BrT Serviços Financeiros 6 664
BrT Call Center (28,399) 73,363
BrT Multimídia 353,961 6,685,767
Hispamar 1,456 52,187
AIX (1,170) 23,223
Unrealized profits or losses with investees 7,893 8,634 (76,331) (35,075)
Loss for the year of discontinued operations (536,096) 475,076
Share of results of investees of continuing operations in profit or loss (Note 5) (3,938,627) (8,582,934)
Exchange differences on share of results of investees 68
Reclassification of equity in investees to the provision for equity deficiency (i) 824,821 2,016,733
Investees' share of other comprehensive income (1,036) 48
Loss for the year of discontinued operations 536,096 (475,076)
Reclassified from held-for-sale assets (522) (113,376) (3,176,229) (57,204)
Total (2,579,200) (7,154,605) 4,818,342 7,339,368 7,136,330 6,017,583
(i) Represented by the share of results of subsidiaries Oi Holanda, PTIF, CVTEL, and Serede.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Summarized financial information

09/30/2021
Subsidiaries and joint ventures Assets Liabilities Revenue
Telemar (1) 1,402,121
Oi Holanda (1) 2,753,177 5,015,478
PTIF (1) 2,011,113 6,468,096
Rio Alto 5,476 1,505
Oi Serviços Financeiros 13,441 11,464 333
CVTEL 5,195
Serede 1,205,102 1,546,595 1,510,214
PT Participações 720,945 491,699 170,762
Drammen 18,348
Oi Móvel 27,032,834 25,959,115 7,736,968
BrT Serviços Financeiros 678 14
BrT Call Center 135,624 208,987 315,419
BrT Multimídia 17,174,290 7,870,858 2,183,654
Hispamar 367,047 92,956 262,223
AIX 46,723 27,657 41,645

(1) Amounts adjusted for consolidation and equity accounting purposes.

12/31/2020 09/30/2020
Subsidiaries Assets Liabilities Revenue
Telemar (1) 30,029,239 22,872,549 3,835,387
Oi Holanda (1) 2,208,027 4,253,915
PTIF (1) 1,665,144 5,589,520
Rio Alto 5,386 1,478
Oi Serviços Financeiros 14,303 11,333 294
CVTEL 3,297
Serede 1,305,345 1,556,756 1,710,619
PT Participações 716,476 487,010 160,954
Drammen 107,558 28,034

(1) Amounts adjusted for consolidation and equity accounting purposes.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
16. PROPERTY, PLANT AND EQUIPMENT
COMPANY
Works in progress Automatic switching equipment Transmission and other equipment(1) Infrastructure Buildings Right of use - leases Other assets Total
Cost of PP&E (gross amount)
Balance at December 31, 2020 247,097 6,543,019 26,556,428 6,530,293 1,746,607 794,502 1,649,991 44,067,937
Telemar merger (Note 1) 924,917 10,309,857 38,837,650 9,711,658 2,221,012 2,225,160 2,409,449 66,639,703
Corporate restructuring (i) (7) (14,383,273) (7,448,521) (324,423) 53,735 (22,102,489)
Contractual changes 91,107 91,107
Additions 1,306,078 168,079 38,562 4,504 153,004 9,178 1,679,405
Write-offs (i) (5,973) (207,156) (24,685) (16,233) (28,391) (2,322) (284,760)
Transfers (811,950) 23,367 665,240 112,043 (1,937) 13,237
Balance at September 30, 2021 1,660,162 16,876,243 51,636,968 8,919,350 3,629,530 3,235,382 4,133,268 90,090,903
Accumulated depreciation
Balance at December 31, 2020 (6,478,456) (22,234,444) (5,336,279) (1,530,157) (115,097) (1,424,672) (37,119,105)
Telemar merger (Note 1) (10,129,808) (30,309,241) (7,112,428) (1,889,348) (371,179) (2,025,704) (51,837,708)
Corporate restructuring 9,493,044 5,461,985 273,953 (66,991) 15,161,991
Depreciation expenses (33,927) (955,088) (186,511) (29,185) (169,768) (66,172) (1,440,651)
Write-offs (i) 180,063 24,557 10,297 6,398 1,499 222,814
Balance at September 30, 2021 (16,642,191) (43,825,666) (7,148,676) (3,164,440) (649,646) (3,582,040) (75,012,659)
PP&E, net
Balance at December 31, 2020 247,097 64,563 4,321,984 1,194,014 216,450 679,405 225,319 6,948,832
Balance at September 30, 2021 1,660,162 234,052 7,811,302 1,770,674 465,090 2,585,736 551,228 15,078,244
Annual depreciation rate (average) 10% 12% 10% 9% 8% 15%
(1) Transmission and other equipment include transmission and data communication equipment.
(i) Refers basically to the Company's capital increase in BrT Multimídia (UPI InfraCo), through the payment of assets, as well as the assets associated with the IRU contracts that will be paid until the end of the year, as mentioned in Note 15.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
CONSOLIDATED
Works in progress Automatic switching equipment Transmission and other equipment(1) Infrastructure Buildings Right of use - leases Other assets Total
Cost of PP&E (gross amount)
Balance at December 31, 2020 1,952,915 17,205,772 51,441,011 30,715,032 4,116,196 3,587,031 4,869,248 113,887,205
Contractual changes 119,090 119,090
Additions 2,034,754 1,996 19,046 127,454 13,537 464,182 266,797 2,927,766
Write-offs (i) (19,059) (7,284) (280,083) (39,285) (16,243) (255,279) (2,368) (619,601)
Transfers (1,036,477) 153,233 518,907 317,588 5,004 41,745
Transfer to held-for-sale assets (ii) (4,652) 53,821 (15,091,558) (7,385,167) (324,568) (116,794) (22,868,918)
Balance at September 30, 2021 2,927,481 17,407,538 36,607,323 23,735,622 3,793,926 3,915,024 5,058,628 93,445,542
Accumulated depreciation
Balance at December 31, 2020 (16,903,988) (41,522,059) (23,308,511) (2,767,697) (678,530) (4,571,362) (89,752,147)
Depreciation expenses (iii) (83,669) (1,431,692) (366,309) (66,825) (340,989) (294,565) (2,584,049)
Write-offs 7,284 248,344 38,284 10,299 137,889 2,375 444,475
Transfers 4,367 (4,399) (11) 2 41
Transfer to held-for-sale assets (ii) (15,428) 9,452,973 5,237,865 273,023 (1,349) 7,534 14,954,618
Balance at September 30, 2021 (16,991,434) (33,256,833) (18,398,682) (2,551,198) (882,979) (4,855,977) (76,937,103)
PP&E, net
Balance at December 31, 2020 1,952,915 301,784 9,918,952 7,406,521 1,348,499 2,908,501 297,886 24,135,058
Balance at September 30, 2021 2,927,481 416,104 3,350,490 5,336,940 1,242,728 3,032,045 202,651 16,508,439
Annual depreciation rate (average) 10% 12% 10% 9% 11% 15%
(1) Transmission and other equipment include transmission and data communication equipment.
(i) They refer basically to the impacts arising from the sale of UPI Towers.
(ii) Represented basically by assets of the UPIs transferred to held-for-sale assets (Note 30 (a.1)).
(iii) Considers the amount of R$295,537 reclassified to profit or loss from discontinued operations (Note 30 (a.2)).

Additional disclosures

Pursuant to ANATEL's concession agreements, the property, plant and equipment items of the Concessionaires that are indispensable for the provision of the Switched Fixed-line Telephony Services ("STFC") provided for in said agreements are considered returnable assets.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

As at September 30, 2021, the residual balance of the Company's returnable assets is R$6,233,480 (R$2,970,354 at December 31, 2020) and consists of assets and installations in progress, switching and transmission equipment, payphones, outside network equipment, power equipment, and systems and operation support equipment. On a consolidated basis, this balance amounts to R$8,495,927 (R$9,095,320 at December 31, 2020).

In the period ended September 30, 2021, financial charges and transaction costs incurred on works in progress were capitalized at the average rate of 7% per year.

Movements in the rights of use - leases

COMPANY
Towers Physical space Vehicles Properties Power distributed Total
Lease cost (gross amount)
Balance at December 31, 2020 677,011 62,493 53,690 1,308 794,502
Telemar merger (Note 1) 1,921,298 254,857 24,061 24,944 2,225,160
Contractual changes 83,964 15,405 (1) (8,261) 91,107
Additions 10,142 142,520 338 4 153,004
Write-offs (4,133) (8,344) (5,389) (10,525) (28,391)
Balance at September 30, 2021 2,688,282 466,931 48,638 17,112 14,419 3,235,382
Accumulated depreciation
Balance at December 31, 2020 (88,359) (12,514) (13,832) (392) (115,097)
Telemar merger (Note 1) (272,020) (86,539) (11,355) (1,265) (371,179)
Depreciation expenses (104,473) (40,305) (21,914) (2,585) (491) (169,768)
Write-offs 652 2,491 2,955 300 6,398
Balance at September 30, 2021 (464,200) (136,867) (32,791) (14,332) (1,456) (649,646)
Right of use, net
Balance at December 31, 2020 588,652 49,979 39,858 916 679,405
Balance at September 30, 2021 2,224,082 330,064 15,847 2,780 12,963 2,585,736
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
CONSOLIDATED
Towers Physical space Stores Vehicles Properties Power distributed Total
Lease cost (gross amount)
Balance at December 31, 2020 2,577,359 472,644 148,596 266,442 97,046 24,944 3,587,031
Contractual changes 106,091 37,680 13,060 140 (37,881) 119,090
Additions 10,142 303,649 107,382 32,596 10,413 464,182
Write-offs (5,309) (13,208) (558) (214,059) (11,620) (10,525) (255,279)
Balance at September 30, 2021 2,688,283 800,765 161,098 159,905 80,141 24,832 3,915,024
Accumulated depreciation
Balance at December 31, 2020 (328,199) (122,671) (61,764) (126,200) (38,797) (899) (678,530)
Depreciation expenses (137,015) (86,334) (26,474) (78,106) (11,774) (1,286) (340,989)
Write-offs 1,014 2,196 448 124,263 8,319 300 136,540
Balance at September 30, 2021 (464,200) (206,809) (87,790) (80,043) (42,252) (1,885) (882,979)
Right of use, net
Balance at December 31, 2020 2,249,160 349,973 86,832 140,242 58,249 24,045 2,908,501
Balance at September 30, 2021 2,224,083 593,956 73,308 79,862 37,889 22,947 3,032,045
17. INTANGIBLE ASSETS
COMPANY
Intangibles in progress Data processing systems Regulatory licenses Other Total
Cost of intangible assets (gross amount)
Balance at December 31, 2020 84 2,565,404 14,478,133 518,133 17,561,754
Telemar merger (Note 1) 10 2,694,123 379,141 3,073,274
Additions 56,182 30 56,212
Transfers (56,192) 56,170 22
Balance at September 30, 2021 84 5,315,727 14,478,133 897,296 20,691,240
Accumulated amortization
Balance at December 31, 2020 (2,559,694) (11,491,219) (465,463) (14,516,376)
Telemar merger (Note 1) (2,685,038) (367,700) (3,052,738)
Amortization expenses (9,516) (447,926) (2,515) (459,957)
Balance at September 30, 2021 (5,254,248) (11,939,145) (835,678) (18,029,071)
Intangible assets, net
Balance at December 31, 2020 84 5,710 2,986,914 52,670 3,045,378
Balance at September 30, 2021 84 61,479 2,538,988 61,618 2,662,169
Annual amortization rate (average) 20% 20% 23%
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NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
CONSOLIDATED
Intangibles in progress Data processing systems Regulatory licenses Other Total
Cost of intangible assets (gross amount)
Balance at December 31, 2020 9,111 7,468,361 14,672,893 1,020,832 23,171,197
Additions 141,689 15,251 2,395 159,335
Write-offs (36,455) (17) (12,225) (48,697)
Transfers (149,211) 150,333 (1,122)
Transfer to held-for-sale assets (i) (84) (85,423) 6 16,976 (68,525)
Balance at September 30, 2021 1,505 7,512,067 14,672,882 1,026,856 23,213,310
Accumulated amortization
Balance at December 31, 2020 (6,951,338) (11,693,579) (828,459) (19,473,376)
Amortization expenses (105,633) (558,399) (8,334) (672,366)
Write-offs 37,732 10,235 47,967
Transfer to held-for-sale assets (i) 60,121 (4,155) 55,966
Balance at September 30, 2021 (6,959,118) (12,251,978) (830,713) (20,041,809)
Intangible assets, net
Balance at December 31, 2020 9,111 517,023 2,979,314 192,373 3,697,821
Balance at September 30, 2021 1,505 552,949 2,420,904 196,143 3,171,501
Annual amortization rate (average) 20% 20% 23%
(i) Represented basically by assets of the UPIs transferred to held-for-sale assets (Note 30).
18. TRADE PAYABLES
COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
ANATEL (*) 5,592,555 2,253,571 5,862,183 7,054,295
Services 2,225,882 589,789 1,297,420 1,476,270
Infrastructure, network and plant maintenance materials 607,827 455,787 2,348,139 2,459,582
Rental of polls and rights-of-way 90,776 85,504 100,692 115,154
Other 49,231 27,464 289,947 314,279
Adjustment to present value (**) (2,556,922) (997,567) (2,744,997) (3,122,689)
Total 6,009,349 2,414,548 7,153,384 8,296,891
Current 2,676,984 970,071 3,546,376 3,275,919
Non-current 3,332,365 1,444,477 3,607,008 5,020,972
Trade payables subject to the Judicial Reorganization 4,044,828 1,594,060 4,384,862 5,554,496
Trade payables not subject to the Judicial Reorganization 1,964,521 820,488 2,768,522 2,742,395
Total 6,009,349 2,414,548 7,153,384 8,296,891

1 These amounts include related-party balances, as shown in Note 29 and the merger of subsidiary Telemar in May 2021 (Note 1).

(*) Regulatory Agency's claim pursuant to the Amendment to the JRP, the amount of which recognized as enforceable debt was the subject matter of the Transaction Agreement entered into pursuant to Law 13988/2020 (Note 1, 3.3).

(**) The calculation takes into consideration the contractual flows provided for in the JRP and the Transaction Agreement entered into with ANATEL, discounted using rates that range from 14.9% per year to 17.2% per year considering the maturities of each liability (ANATEL and other payables).

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Aging list of non-current trade payables

COMPANY CONSOLIDATED
2022 2,514 2,514
2023 38,088 41,785
2024 1,315,337 1,377,774
2025 1,326,745 1,380,264
2026 to 2030 2,710,106 2,820,278
2031 and thereafter 443,430 608,068
Adjustment to present value (**) (2,503,855) (2,623,675)
Total non-current 3,332,365 3,607,008

19. BORROWINGS AND FINANCING

Borrowings and financing by type

COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020 Contractual maturity
Principal Interest
Foreign currency Senior Notes 9,156,021 9,000,226 14,060,359 9,000,226 Jul 2026 Semiannual
Debentures
Public 7,413,170 4,666,043 7,413,170 7,267,752 Aug 2023 to Feb 2035 Semiannual
Private 2,069,434 3,583,906 Nov 2022 Monthly
Financial institutions
Local currency
BNDES 3,168,597 1,089,195 4,495,599 4,256,709 Mar 2024 to Feb 2033 Monthly
Other 1,960,510 604,641 2,139,737 2,102,188 Apr 2021 to Feb 2035 Monthly and semiannual
Foreign currency 9,363,199 1,256,636 9,363,199 8,825,443 Aug 2023 to Feb 2035 Semiannual
Foreign currency multilateral financing 543,287 492,674 543,287 492,674 Aug 2024 to Feb 2030 Semiannual
Default payment
Local currency 207,006 151,988 207,035 207,035 Feb 2038 to Feb 2042 Single installment
Foreign currency 1,474,305 1,423,268 5,827,190 5,782,888 Feb 2038 to Feb 2042
Loan from subsidiaries (Note 29) 24,928,355 25,751,080
Subtotal 58,214,450 44,435,751 46,119,010 41,518,821
Incurred debt issuance cost (11,489) (11,217) (139,597) (27,103)
Debt discount (*) (34,022,198) (29,489,508) (14,639,469) (15,147,984)
Total 24,180,763 14,935,026 31,339,944 26,343,734
Current 167,861 408,027 268,412 424,957
Non-current 24,012,902 14,526,999 31,071,532 25,918,777

1 The parent company's balances as at September 30, 2021, include the borrowings and financing of Telemar merged in May 2021 (Note 1).

(*) The calculation takes into consideration the contractual flows provided for in the JRP, discounted using rates that range from 12.6% per year to 16.4% per year, depending on the maturities and currency of each instrument.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Debt issuance costs by type

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Financial institutions 10,954 10,927 99,200 12,437
Debentures 535 290 40,397 14,666
Total 11,489 11,217 139,597 27,103
Current 1,386 1,385 19,553 14,402
Non-current 10,103 9,832 120,044 12,701

Debt breakdown by currency

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Euro 1,340,897 1,086,527 695,482 590,083
US dollar (*) 14,132,164 9,747,316 18,468,102 16,251,663
Brazilian reais 8,707,702 4,101,183 12,176,360 9,501,988
Total 24,180,763 14,935,026 31,339,944 26,343,734

(*) Considers Oi Móvel's First Issue Private Debenture. Even though this is a local debt, denominated in Brazilian reais, it is compounded on a daily basis based on the US dollar foreign exchange rate.

Debt breakdown by index

Index/rate COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Fixed rate 1.75% p.a. - 13.61% p.a. 13,279,729 9,092,617 20,186,507 15,980,649
CDI 80% CDI 5,495,293 2,921,511 5,548,411 5,184,615
TJLP 2.95% p.a. + TJLP 3,168,092 1,088,926 4,494,588 4,255,632
TR 0% p.a. 36,942 22,633 36,948 30,830
Other 0% p.a. 2,200,707 1,809,339 1,073,490 892,008
Total 24,180,763 14,935,026 31,339,944 26,343,734

Maturity schedule of the long-term debt and debt issuance costs allocation schedule

Long-term debt Debt issuance costs Debt discount
COMPANY CONSOLIDATED COMPANY CONSOLIDATED COMPANY CONSOLIDATED
09/30/2021
2022 2,059,984 459 4,994 1,436,695 1,097,627
2023 372,423 377,656 1,830 20,028 1,434,363 1,095,256
2024 876,766 928,319 1,830 20,028 1,440,193 1,101,183
2025 9,994,726 10,047,563 1,253 19,450 1,363,158 1,024,129
2026 and thereafter 46,801,288 32,417,523 4,731 55,544 28,347,789 10,321,274
Total 58,045,203 45,831,045 10,103 120,044 34,022,198 14,639,469
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BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Changes in borrowings and financing

12/31/2020 Borrowing Interest, inflation adjustment, and exchange differences Amortization of debt discount Principal and interest payment Tax and other payments Transfers and other 09/30/2021
Borrowings and financing 41,518,821 6,465,317 2,944,036 (4,669,152) (156,204) 16,192 46,119,010
Debt discount (15,147,984) (392,520) 901,035 (14,639,469)
Debt issuance costs (27,103) (112,494) (139,597)
Total borrowings and financing 26,343,734 6,465,317 2,551,516 901,035 (4,669,152) (156,204) (96,302) 31,339,944

On December 23, 2019, the Company disclosed a Material Fact Notice informing that its subsidiary Oi Móvel entered into a 1st issue indenture of collateralized, simple, nonconvertible debentures, with additional trust security, in a single series, for private placement, in the total amount of up to R$2.5 billion ("Oi Móvel 1st Issue Debentures", "Oi Móvel 1st Issue", and "Oi Móvel 1st Issue Indenture", respectively), pursuant Clause 5.3 of the Original Judicial Reorganization Plan. Oi Móvel's 1st Issue Debentures were paid in on February 4, 2020, and were fully settled on July 30, 2021.

As mentioned in Note 1, section Financing provided for in the Amendment to the JRP, on June 21, 2021, Oi Móvel signed an indenture of the issue of nonconvertible, collateralized debentures, with additional fiduciary guarantee, in a single series, for private placement, totaling R$2,000 million, to be fully subscribed on July 30, 2021. The 2nd Issue Debentures are subject to monthly compound interest, added principal and paid in a bullet payment upon the first of maturity of the issue, on November 30, 2022 or the completion of the disposal of the UPI Mobile Assets.

Also as mentioned in Note 1, section Financing provided for in the Amendment to the JRP, on July 30, 2021 Oi Móvel issued collateralized US dollar-denominated Senior Notes in the aggregate amount of US$880 million, subject to semiannually interest payments and coupon of 8.75% p.a. This issue's principal will be repaid in a bullet payment upon maturity, on July 30, 2026. Part of these funds were used to fully repay the Oi Móvel's 1st Issue Debentures, which mature in January 2022 and have a principal of R$2,500 million (including interest and charges). This issue's indenture prescribes that the issuer will make a repurchase offer for these notes after the completion of the disposal of UPI Mobile Assets. Acceptance of the offer is at the sole discretion of each holder.

In August 2021, the Company paid interest on the Senior Notes.

Guarantees

BNDES financing facilities are originally collateralized by receivables of the Company and its subsidiaries Telemar, merged with and into the Company on May 3, 2021, and Oi Móvel.

The bonds issued by Oi Móvel on July 30, 2021 are fully guaranteed by receivables of the Company and its subsidiaries, in addition to a fiduciary guarantee provided by the Company and the pledge of the rights to use radiofrequencies until the sale of the IPU Mobile Assets, all of which will only be exercised in the event of default.

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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Oi Móvel's 2nd Issue Debentures are fully guaranteed by the receivables from the expected sale of the UPI Mobile Assets, the shares of Oi Móvel, and the Company dividends receivable from BrT Multimídia, in addition to a fiduciary guarantee provided by the Company.

The total amount of the guarantees is R$11,469,370.

Covenants

Pursuant to a Clause 17 of Appendix 4.2.4 to the Judicial Reorganization Plan ("Original Plan"), the Company and its subsidiaries are subject to certain covenants existing in some loan and financing agreements, based on certain financial ratios, which are monitored on a quarterly basis.

In line with the provisions of the Original Plan, as amended ("Amendment to the JRP"), BNDES (Brazilian development bank) agreed that, as of the Court Ratification of the Amendment to the JRP, issued on October 8, 2020, and until the first of the financial settlement of the disposal of the UPI Mobile Assets or by May 30, 2022, the obligation to comply with the financial ratios set forth in the BNDES financing agreement will be temporarily stayed by BNDES and, therefore, during such period, its noncompliance will not cause, among other contractually prescribed consequences, the accelerated maturity of the outstanding balance of the Company's debt.

20. ASSIGNMENT OF RECEIVABLES

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Assignment of receivables 229,507 79,097 229,507 377,047
Total 229,507 79,097 229,507 377,047
Current 196,720 41,268 196,720 196,720
Non-current 32,787 37,829 32,787 180,327

This assignment of receivables refers to an advance received from a financial institution of cash flows receivable from Fundação Sistel, as described in Note 14. On August 14, 2020, the Company received R$459,014, of which R$362,722 is recognized at Telemar, merged with and into the Company on May 3, 2021, related to the early settlement of 28 monthly, successive installments, corresponding to the period August 2020-November de 2022, discounted at the rate of 11.35% per year.

21. LICENSES AND CONCESSIONS PAYABLE

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
STFC concessions 17,828 43,415
Total 17,828 43,415
Current 17,828 43,415

Correspond to the amounts payable to ANATEL as fees for the concessions of STFC services.

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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

22. LEASES PAYABLE

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Towers 2,279,923 593,665 2,279,923 2,280,952
Physical space 350,227 52,736 627,173 371,240
Stores 81,261 94,121
Properties 3,573 1,020 41,805 63,793
Vehicles 16,841 40,799 82,561 146,974
Power distributed 13,829 24,072 24,598
Total 2,664,393 688,220 3,136,795 2,981,678
Current 514,464 146,415 700,218 654,662
Non-current 2,149,929 541,805 2,436,577 2,327,016

Movements in leases payable

COMPANY CONSOLIDATED
Balance at December 31, 2020 688,220 2,981,678
Telemar merger (Note 1) 1,901,424
New contracts 153,004 464,181
Cancellations (22,819) (125,774)
Interest 176,647 269,878
Payments (323,190) (572,276)
Contractual changes 91,107 119,108
Balance at September 30, 2021 2,664,393 3,136,795

Aging list of long-term lease payments

COMPANY CONSOLIDATED
2022 131,301 165,992
2023 496,878 611,700
2024 478,841 563,515
2025 464,673 534,719
2026 to 2030 1,420,980 1,511,979
2031 and thereafter 2,067,424 2,106,515
Total 5,060,097 5,494,420
Interest (2,910,168) (3,057,843)
Non-current 2,149,929 2,436,577

The present value of leases payable was calculated based on a projection of future fixed payments, which do not take into consideration the projected inflation, discounted using discount rates that range from 10.79% to 12.75% p.a.

Contracts not recognized as leases payable

The Company elected not to recognize a lease liability for short-term leases (leases with expected period of 12 months or less) or leases of low value assets. As at September 30, 2021, these leases were recognized in profit or loss and total R$2,283 (R$423 at September 30, 2020) in the Company and R$18,400 (R$23,545 at September 30, 2020) on a consolidated basis. Additionally, the Company also

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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

recognized in profit or loss the amount R$15,305 (R$672 at September 30, 2020) in the Company and R$62,647 (R$11,049 at September 30, 2020) on a consolidated basis, related to variable lease payments.

Supplemental information

In compliance with Circular/CVM/SNC/SEP/No. 02/2019, of December 18, 2019 and Circular SNC/SEP01/20, of February 5, 2020, the table below shows required supplemental information:

COMPANY
Maturity Average discount rate 2022 2023 2024 2025 2026 to
2030
After
2031
Up to 2023 10.79% 10,417 13,340
2024 to 2030 12.27% 21,069 84,276 79,579 65,411 64,434
2031 to 2034 12.58% 75,998 303,994 303,994 303,994 880,203 408,967
2035 onwards 12.75% 23,817 95,269 95,269 95,269 476,343 1,658,456
Total 131,301 496,879 478,842 464,674 1,420,980 2,067,423
Projected inflation¹ 5.57% 5.75% 5.96% 6.21% 6.64% 6.64%
CONSOLIDATED
Maturity Average discount rate 2022 2023 2024 2025 2026 to
2030
After
2031
Up to 2023 10.79% 16,176 26,458
2024 to 2030 12.27% 207,494 829,975 811,005 775,035 2,258,216
2031 to 2034 12.58% 30,627 122,510 122,510 122,510 612,549 168,803
2035 onwards 12.75% 84,737 338,949 338,949 338,949 1,694,744 2,181,814
Total 339,034 1,317,892 1,272,464 1,236,494 4,565,509 2,350,617
Projected inflation¹ 5.57% 5.75% 5.96% 6.21% 6.64% 6.64%

¹Source: Anbima

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

23. TAX REFINANCING PROGRAM

The outstanding balance of the Tax Debt Refinancing Program is broken down as follows:

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Law 11941/09 and Law 12865/2013 tax financing program 262,423 212,202 288,379

345,790

PERT (Law 13496/2017) (i) 427 427 427 427
Total 262,850 212,629 288,806 346,217
Current 85,760 55,784 96,361 93,715
Non-current 177,090 156,845 192,445 252,502

The amounts of the tax refinancing program created under Law 11941/2009, Provisional Act (MP) 766/2017, and Law 13469/2017, divided into principal, fine and interest, which include the debt declared at the time the deadline to join the program (Law 11941/2009 installment plan) was reopened as provided for by Law 12865/2013 and Law 12996/2014, are broken down as follows:

CONSOLIDATED
09/30/2021 12/31/2020
Principal Fines Interest Total Total
Tax on revenue (COFINS) 2,012 99,083 101,095 121,184
Income tax 961 25,109 26,070 31,261
Tax on revenue (PIS) 26,295 25,272 51,567 61,822
INSS - SAT 428 227 1,310 1,965 2,356
Social contribution 403 15 7,590 8,008 9,603
Tax on banking transactions (CPMF) 14,360 1,621 21,941 37,922 45,459
PERT - Other payables - RFB 240 187 427 427
Other 6,172 3,219 52,361 61,752 74,105
Total 50,871 5,082 232,853 288,806 346,217

The payment schedule is as follows:

COMPANY CONSOLIDATED
2021 21,704 26,777
2022 85,110 92,481
2023 85,110 92,481
2024 70,926 77,067
Total 262,850 288,806

The tax debts, as is the case of the debts included in tax refinancing programs, are not subject to the terms of the judicial reorganization terms.

(i) Special Tax Compliance Program (PERT)

The Company elected to include in and settle through PERT only tax debts that in aggregate do not exceed the fifteen million Brazilian reais (R$15,000,000.00) ceiling set by Article 3 of Law 13496/2017.

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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The tax debts included in said program were those being disputed at the administrative level in proceedings classified with a low likelihood of the Company winning and which, in the event of an unfavorable outcome, would result in a lawsuit-and entail all the associated costs-, the reason why the cost effectiveness of joining the program was quite positive, because of the benefits offered by PERT (especially the payment of just 5% of the debt in cash).

24. PROVISIONS

Balance breakdown

Type COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Labor
Overtime 299,394 275,929 492,317 659,318
Sundry premiums 116,547 48,522 237,785 253,173
Stability/reintegration 105,678 77,217 179,832 194,122
Indemnities 94,732 62,217 169,534 222,153
Additional post-retirement benefits 50,684 53,310 66,454 103,274
Lawyer/expert fees 31,104 42,555 49,139 87,143
Salary differences and related effects 33,244 40,555 47,562 88,102
Severance pay 15,477 8,152 30,389 31,394
Labor fines 13,548 5,444 27,687 28,420
Employment relationship 10,044 26 21,669 20,636
Severance Pay Fund (FGTS) 6,578 4,538 12,158 15,977
Joint liability 216 181 414 5,465
Other claims 55,452 42,418 78,112 87,443
Total 832,698 661,064 1,413,052 1,796,620
Tax
State VAT (ICMS) 518,251 161,300 689,025 781,249
Tax on services (ISS) 68,715 7 70,815 71,394
INSS (joint liability, fees, and severance pay) 20,733 459 37,325 36,927
Real Estate Tax (IPTU) 114,474 58,541 114,474 150,223
Other claims 175,053 16,710 202,392 185,624
Total 897,226 237,017 1,114,031 1,225,417
Civil
ANATEL 1,023,142 271,766 1,318,393 1,264,321
Corporate 310,029 338,932 310,029 338,932
Small claims courts 55,392 36,384 97,388 97,973
Other claims 863,160 340,002 1,074,355 1,087,200
Total 2,251,723 987,084 2,800,165 2,788,426
Total provisions 3,981,647 1,885,165 5,327,248 5,810,463
Current 561,679 471,867 872,147 781,942
Non-current 3,419,968 1,413,298 4,455,101 5,028,521
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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Pursuant to the laws applicable to labor, tax, and civil lawsuits, amounts disputed in lawsuits are adjusted for inflation on a monthly basis using the relevant adjustment indices, including the General Market Price Index (IGPM), Benchmark Rate (TR) and SELIC.

Summary of movements in provision balances

COMPANY
Labor Tax Civil Total
Balance at December 31, 2020 661,064 237,017 987,084 1,885,165
Telemar merger (Note 1) 457,671 736,766 1,080,507 2,274,944
Inflation adjustment (135,673) (7,318) 232,873 89,882
Additions/(reversals) (104,761) (28,509) 89,332 (43,938)
Write-offs for payment/terminations (45,603) (40,730) (138,073) (224,406)
Balance at September 30, 2021 832,698 897,226 2,251,723 3,981,647
CONSOLIDATED
Labor Tax Civil Total
Balance at December 31, 2020 1,796,620 1,225,417 2,788,426 5,810,463
Inflation adjustment (104,329) 2,296 348,971 246,938
Additions/(reversals) (61,861) 9,910 188,375 136,424
Write-offs for payment/terminations (217,378) (123,592) (525,607) (866,577)
Balance at September 30, 2021 1,413,052 1,114,031 2,800,165 5,327,248

Breakdown of contingent liabilities, per nature

The breakdown of contingent liabilities with a possible unfavorable outcome and, therefore, not recognized in accounting, is as follows:

COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Labor 177,828 108,379 223,646 299,178
Tax 20,323,379 5,633,770 28,643,988 28,419,340
Civil 1,996,608 1,415,787 2,439,513 2,464,987
Total 22,497,815 7,157,936 31,307,147 31,183,505

1 The parent company's balances as at September 30, 2021, include the contingent liabilities of Telemar merged in May 2021 (Note 1).

Guarantees

The Company has bank guarantee letters and guarantee insurance granted by several financial institutions and insurers to guarantee commitments arising from lawsuits, contractual obligations, and biddings with ANATEL. The adjusted amount of contracted bonds and guarantee insurances, effective at September 30, 2021 corresponds to R$9,287,351 (R$4,571,603 at December 31, 2020) in the Company and R$11,621,610 (R$11,705,924 at December 31, 2020) on a consolidated basis. The commission charges on these contracts are based on market rates.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
25. OTHER PAYABLES
COMPANY1 CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Onerous obligation (i) 4,371,240 1,577,170 5,812,821 5,777,175
Unearned revenues (ii) 1,345,330 431,427 1,374,521 1,524,112
Provisions for indemnities payable 529,649 532,000 529,649 532,000
Advances from customers 63,821 40,776 306,014 231,838
Consignment to third parties 17,767 13,056 24,839 37,303
Provision for asset decommissioning 19,407 7,413 19,407 18,836
Other 294,225 195,875 557,674 554,768
Total 6,641,439 2,797,717 8,624,925 8,676,032
Current 1,060,713 459,036 1,535,870 1,373,436
Non-current 5,580,726 2,338,681 7,089,055 7,302,596

1 The parent company's balances as at September 30, 2021, include the contingent liabilities of Telemar merged in May 2021 (Note 1).

(i) The Company and its subsidiaries are parties to a telecommunications signals transmission capacity supply agreement using submarine cables that connect North America and South America. Since (a) the agreement obligations exceed the economic benefits that are expected to be received throughout the agreement and (b) the costs are unavoidable, the Company and its subsidiaries recognized, pursuant to CPC 25/IAS 37, an onerous obligation measured at the lowest of net output cost of the agreement brought to present value.
(ii) Amounts received a prepayment for the assignment of the commercial operation and the use of infrastructure assets that are recognized in revenue for the agreements' effective period. Include also certification/installation rates of the service that are recognized in the revenue pursuant to the period that the services are used by the customers.
89
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
26. SHAREHOLDERS' EQUITY
(a) Capital Shares

Subscribed and paid-in capital is R$32,538,937 (R$21,438,374 at December 31, 2020), represented by the following shares, without par value:

Number of shares (in thousands)
09/30/2021 12/31/2020
Total capital in shares
Common shares 6,440,497 5,796,478
Preferred shares 157,727 157,727
Total 6,598,224 5,954,205
Treasury shares
Common shares 644,020 30
Preferred shares 1,812 1,812
Total 645,832 1,842
Outstanding shares
Common shares 5,796,477 5,796,448
Preferred shares 155,915 155,915
Total outstanding shares 5,952,392 5,952,363

At the Company's Annual Shareholders' Meeting held on April 30, 2021, it was approved the allocation of the loss for the year 2020, amounting to R$10,529,963, recognized in accumulated losses.

(b) Treasury shares

As at September 30, 2021, the Company keeps all its treasury preferred shares pledged as collateral in lawsuits.

(c) Capital reserves

The capital reserves consist mainly of the reserves described below and according to the following practices:

Special merger goodwill reserve: represents the net amount of the balancing item to the tax credit amount.

Special merger reserve - net assets: represented by: (i) the net assets merged by the Company under the Corporate Reorganization approved on February 27, 2012; and (ii) the net assets merged with and into the Company upon the merger of TmarPart approved on September 1, 2015.

90
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Other capital reserves: represented mainly by: (i) R$1,933,200 arising from the capitalization of the earnings reserves in February 2015; (ii) R$3,837,009 related to the capital increase with new funds in January 2019; and (iii) R$2,462,799 related to the absorption of capital reserves, due to the delivery of treasury shares to Bratel in April 2019.

(d) Other comprehensive income

For purposes presentation of CVM's Empresas.Net form, were included in other comprehensive income and are stated below:

Other comprehensive income Share issue costs Valuation adjustments to equity Total
Balance at December 31, 2020 539,960 (801,073) (141,871) (402,984)
Hedge accounting gains 8,148 8,148
Actuarial gain 95 95
Exchange losses on investment abroad (2,809) (2,809)
Balance at September 30, 2021 545,394 (801,073) (141,871) (397,550)
(e) Basic and diluted earnings (losses) per share

The common and preferred shareholders have different rights in terms of dividends, voting rights, and liquidation, as prescribed by the Company's bylaws. Accordingly, basic and diluted earnings (losses) per share were calculated based on profit (loss) for the period available to the common and preferred shareholders.

Basic

Basic earnings (losses) per share are calculated by dividing the profit attributable to the owners of the Company, available to common and preferred shareholders, by the weighted average number of common and preferred shares outstanding during the period.

Diluted

Diluted earnings (loss) per share are calculated by adjusting the weighted average number of outstanding common and preferred shares, to estimate the dilutive effect of all convertible securities.

91
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The table below shows the calculations of basic and diluted earnings per share:

Three-month period ended 09/30/2021 Nine-month period ended 09/30/2021

Three-month period ended 09/30/2020

Restated

Nine-month period ended 09/30/2020

Restated

Loss of continuing operations (4,878,676) (7,247,295) (2,657,693) (11,852,757)
Profit (loss) from discontinued operations (net of taxes) 66,062 536,096 19,309 (475,076)
Loss attributable to owners of the Company (4,812,614) (6,711,199) (2,638,384) (12,327,833)
Loss allocated to common shares - basic and diluted (4,686,553) (6,535,407) (2,569,369) (12,005,198)
Loss allocated to preferred shares - basic and diluted (126,061) (175,792) (69,015) (322,635)

Weighted average number of outstanding shares

(in thousands of shares)

Common shares - basic and diluted 5,796,477 5,796,464 5,804,587 5,801,588
Preferred shares - basic and diluted 155,915 155,915 155,915 155,915
Loss per share (in reais):
Common shares - basic and diluted (0.81) (1.13) (0.44) (2.07)
Preferred shares - basic and diluted (0.81) (1.13) (0.44) (2.07)
Loss per share from continuing operations (in reais):
Common shares - basic and diluted (0.82) (1.22) (0.45) (1.99)
Preferred shares - basic and diluted (0.82) (1.22) (0.45) (1.99)
Profit (loss) per share from discontinued operations (in reais):
Common shares - basic and diluted 0.01 0.09 0.01 (0.08)
Preferred shares - basic and diluted 0.01 0.09 0.01 (0.08)

Preferred shares will become voting shares if the Company does not pay minimum dividends to which preferred shares are entitled under the Company's Bylaws during three consecutive years.

92
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
27. EMPLOYEE BENEFITS

As at September 30, 2021, the liabilities referring to retirement benefits recognized in the balance sheet are as follows:

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Actuarial assets
TCSPREV Plan 40,942 41,901 40,969 42,233
CELPREV Plan 157 160
PBS-TNC Plan 2,212 2,142
Total 40,942 41,901 43,338 44,535
Current 1,743 4,984 4,139 7,618
Non-current 39,199 36,917 39,199 36,917
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Actuarial liabilities
Financial obligations - BrTPREV plan (i) 771,037 694,063 771,037 694,063
PAMEC Plan 8,455 7,995 8,455 7,995
Total 779,492 702,058 779,492 702,058
Non-current 779,492 702,058 779,492 702,058
(i) The Company had a financial obligations agreement entered into with Fundação Atlântico intended for the payment of the mathematical provision without coverage by the plan's assets. With the approval and ratification of the JRP, the related claim of Fundação Atlântico against Oi is subject to the terms and conditions of the JRP.

PENSION FUNDS

The Company and its subsidiaries sponsor retirement benefit plans ("Pension Funds") for their employees, provided that they elect to be part of such plan, and current beneficiaries.

The sponsored plans are valued by independent actuaries at the end of the annual reporting period.

The obligations in the balance as at September 30, 2021 were recognized based on the actuarial studies for base date December 31, 2015, prepared using the "Projected Unit Credit Method". The main actuarial assumptions taken into consideration in the actuarial studies as at September 30, 2021 and December 31, 2020 after the revision of the discount rates are as follows:

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
CONSOLIDATED
PENSION FUNDS MEDICAL CARE PLANS
TCSPREV PBS-Telemar TelemarPrev PBS-A PBS-TNC CELPREV PAMEC PAMA
Nominal discount rate of actuarial liability 7.38% 7.38% 7.38% 7.07% 7.38% 6.35% 7.59% 7.59%
Estimated inflation rate 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
Estimated nominal salary increase index Per sponsor 0.00% Per sponsor N.A. 4.84% 3.59% N.A. N.A.
Estimated rate of the nominal benefit increase 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% N.A. N.A.
Total expected rate of return on plan assets 7.38% 7.38% 7.38% 7.07% 7.38% 6.35% 7.59% 7.59%
General mortality biometric table AT-2000 Basic
eased by 15%, segregated by gender
AT-2000 Basic
eased by 25%, segregated by gender
AT-2000 Basic
eased by 25%, segregated by gender
AT-2000 Basic
eased by 15%, segregated by gender
AT-2000 Basic
eased by 15%, segregated by gender
N.A. AT-2000 Basic
eased by 15%, segregated by gender
AT-2000 Basic
eased by 15%, segregated by gender
Biometric disability table Álvaro Vindas, increased by100% Álvaro Vindas Álvaro Vindas N.A. Álvaro Vindas N.A. N.A. Álvaro Vindas
Biometric disabled mortality table AT-49, segregated by gender AT-49, segregated by gender AT-49, segregated by gender AT-49, segregated by gender AT-49, segregated by gender N.A. AT-49, segregated by gender AT-49, segregated by gender
Turnover rate Per sponsor Per sponsor Per sponsor, null starting at 50 years old and null for Settled Benefit Nil Nil 2% Nil Nil
Benefit starting age 57 years old 57 years old 55 years old N.A. 57 years old 55 years old N.A. 57 years old
Nominal medical costs growth rate N.A. N.A. N.A. N.A. N.A. N.A. 6.61% 6.61%

N.A. = Not applicable.

The main movements in the actuarial assets related to the pension plans in the period ended September 30, 2021 were as follows:

COMPANY CONSOLIDATED
Balance at December 31, 2020 41,901 44,535
Pension plan income, net 2,401 2,558
Payments, contributions and reimbursements (3,360) (3,755)
Balance at September 30, 2021 40,942 43,338

The main movements in the actuarial liabilities related to pension plans in the period ended September 30, 2021 were as follows:

COMPANY CONSOLIDATED
Balance at December 31, 2020 702,058 702,058
Pension plan costs, net 461 461
Interest on actuarial liabilities 76,973 76,973
Balance at September 30, 2021 779,492 779,492
94
FEDERAL PUBLIC SERVICE
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Share-based compensation

The Company's compensation strategy since 2019, when the share-based Long-Term Incentive Plans (ILPs) were approved at a Shareholders' Meeting, is to focus most of the compensation packages on variable components subject to achievement of performance targets and the smallest part on fixed compensation. The short- and long-term variable components have targets that are consistent with Oi's strategy and thus aim to align the interests of management with the interests of shareholders in the short, medium and long terms. The compensation strategy definitions and implementation adopted by the Company are monitored and supervised by the Board of Directors, through its People, Appointments and Corporate Governance Committee.

Board of Directors Stock Option Plan

The members of the Board of Directors and the Board's committees receive fixed monthly fees. In addition, in order to align the Board members' interests with the interests of the Company's shareholders, in addition to bringing the compensation of Oi's Board closer to comparable market compensation, the Company set a long-term share-based incentive plan for the Board of Directors (Board of Directors Stock Option Plan), which was submitted to and approved at an Extraordinary Shareholders' Meeting held on April 26, 2019.

The plan provides for granting annual shares over a three-year period that shall not exceed 0.40% of the Company's share capital.

The implementation of the plan approved by the Shareholders' Meeting is suspended, by court decision, until the judicial reorganization of the Company is terminated, when then shares will be granted to the members of the Board of Directors holding these rights, respectively, on the grant dates in 2019, 2020 and 2021.

In view of the prospect, with reasonable probability, of concluding the Judicial Reorganization Plan at the beginning of 2022, it was necessary to accrue the amounts according to the terms originally provided for in the Plan.

As a result, the Company recognizes the obligation related to the long-term incentive plan, according to the rules approved in the Shareholders' Meeting, amounting to R$8,633 as at September 30, 2021 (R$4,893 at December 31, 2020).

The number of shares in each grant is calculated individually for the Board of Directors' members according to their role and will be delivered to them, provided that the performance condition of the plan is met.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Executives' Stock Option Plan

A long-term incentives plan based on shares granted the Executives (Executives' Stock Option Plan) was submitted to and approved at the Extraordinary Shareholders' Meeting held on April 26, 2019, together with the Board of Directors Stock Option Plan, described above. The Executives' Stock Option Plan, like the Board of Directors Stock Option Plan, in addition to the targets already set out above, allows at the same time for making executive compensation more competitive compared to market compensation.

The plan provides for granting annual shares over a three-year period that shall not exceed 1.5% of the Company's share capital.

The number of shares per grant is calculated individually for the purpose of maintaining the competitiveness of the executives with regard to the performance of their duties and shall be delivered to them provided that the plan's performance condition is met.

The information used in the executives' stock option plan's assessment is as follows:

Grant date Stock dilution percentage Number of shares granted Vesting portions Vesting dates Average share value at the grant date Estimated fair value at the vesting date (i)
12/30/2019 0.57% 33,704,937 1/3 12/30/2020 0.95 34,406
1/3 12/30/2021
1/3 12/30/2022
12/30/2020 0.36% 21,549,687 1/3 12/30/2021 2.02 47,079
1/3 12/30/2022
1/3 12/30/2023

(i) The estimated fair value at the vesting date was measured taking into account the price of the shares granted on December 30, 2019 and December 30, 2020, adjusted by the weighted average cost of capital of 10.98% and 9.34%, respectively, estimated for the three-year period of the program, brought to present value at the period's opportunity cost of 14.67% and 10.55%, respectively, which corresponds to the fair value of the share.

Changes in the stock option balance are summarized below:

Shares Average Share Price (R$)
Granted shares at December 31, 2019 33,704,937 0.95
Granted shares at December 31, 2020 21,549,687 2.02
Settled shares granted (i) (14,128,406) 2.04
Share balance at December 31, 2020 41,126,218 -
Increase of shares granted (ii) 667,330 2.02
Granted shares balance at September 30, 2021 41,793,548 -

(i) In February 2021, the first vested stock options granted were settled based on the Company's common stock price (OIBR3) at the close of the trading 45 days after the vesting date, as prescribed in the stock option grant agreement.

(ii) Stock options granted to executives hired in the 1st quarter of 2021.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The fair value of the granted stock options is determined based on the vesting period and recognized as the services are provided. The expense recognized in the period ended September 30, 2021 was R$23,438.

28. SEGMENT REPORTING

The Company's Board of Directors uses operating segment information for decision-making. The Company identified only one operating segment that excludes discontinued operations and corresponds to the telecommunications business in Brazil.

In addition to the telecommunications business in Brazil, the Company conducts other businesses that individually or in aggregate do not meet any of the quantitative indicators that would require their disclosure as reportable business segments. These businesses refer basically to the companies Companhia Santomense de Telecomunicações, S.A. R.L. ("CSTT") and Timor Telecom S.A., which provide fixed and mobile telecommunications services.

The revenue generation is assessed by the Board of Directors based on a view segmented by customer, into the following categories:

· Residential Services, focused on the sale of fixed telephony services, including voice services, data communication services (broadband); and
· SMEs/Corporate, which includes corporate solutions for our small, medium-sized, and large corporate customers, as well as Digital and IT services (Oi Soluções).
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Telecommunications in Brazil

In preparing the financial information for this reportable segment, the transactions between the companies included in the segment have been eliminated. The financial information of this reportable segment for the periods ended September 30, 2021 and 2020 is as follows:

Three-month period ended
09/30/2021

09/30/2020

Restated

Residential 1,300,297 1,276,043
Fixed-line services 473,949 686,194
Broadband 819,792 580,442
Interconnection 6,556 9,407
SMEs/Corporate (B2B services) 866,968 953,997
Other services and businesses 19,701 22,880
Net operating revenue 2,186,966 2,252,920
Operating expenses
Depreciation and amortization (1,076,916) (891,465)
Interconnection (35,834) (45,169)
Personnel (447,108) (458,701)
Third-party services (631,520) (754,691)
Grid maintenance services (107,110) (111,857)
Handset and other costs 1,432
Advertising and publicity (80,743) (84,186)
Rentals and insurance (311,062) (372,231)
Provisions/reversals (33,132) (64,519)
Expected losses on trade receivables (11,633) (25,558)
Taxes and other expenses (16,411) (20,608)
Other operating income (expenses), net (62,408) 22,479
Operating income before financial income (expenses) and taxes (626,911) (552,154)
Financial income (expenses)
Financial income (62,224) 137,715
Financial expenses (4,201,395) (2,214,008)
Pre-tax loss (4,890,530) (2,628,447)
Income tax and social contribution (342) 2,149
Loss of continuing operations (4,890,872) (2,626,298)
Discontinued operations
Profit for the year from discontinued operations (net of taxes) (Nota 30) 66,062 19,309
Loss for the period (4,824,810) (2,606,989)
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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
09/30/2021

09/30/2020

Restated

Residential 3,851,899 3,806,581
Fixed-line services 1,585,923 2,170,554
Broadband 2,235,713 1,608,221
Interconnection 30,263 27,806
SMEs/Corporate (B2B services) 2,624,558 2,986,992
Other services and businesses 69,674 73,033
Net operating revenue 6,546,131 6,866,606
Operating expenses
Depreciation and amortization (2,940,379) (2,651,675)
Interconnection (107,378) (122,318)
Personnel (1,338,415) (1,355,964)
Third-party services (1,988,885) (2,330,574)
Grid maintenance services (342,172) (352,942)
Handset and other costs 2,567 3,958
Advertising and publicity (294,436) (202,208)
Rentals and insurance (997,512) (1,044,924)
Provisions/reversals (111,999) (131,050)
Expected losses on trade receivables (62,450) (107,721)
Taxes and other expenses (29,203) 52,738
Other operating income (expenses), net 908,774 107,399
Operating income before financial income (expenses) and taxes (755,357) (1,268,675)
Financial income (expenses)
Financial income 165,834 564,059
Financial expenses (6,658,438) (11,352,175)
Pre-tax loss (7,247,961) (12,056,791)
Income tax and social contribution (7,954) 38,065
Loss of continuing operations (7,255,915) (12,018,726)
Discontinued operations
Profit for the year from discontinued operations (net of taxes) (Nota 30) 536,096 (475,076)
Loss for the period (6,719,819) (12,493,802)
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01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Reconciliation of revenue and profit (loss) for the quarter and information per geographic market

In the periods ended September 30, 2021 and 2020, the reconciliation of the revenue from the segment telecommunications in Brazil and total consolidated revenue is as follows:

Three-month period ended
09/30/2021

09/30/2020

Restated

Net operating revenue
Revenue related to the reportable segment 2,186,966 2,252,920
Revenue related to other businesses 56,825 57,910
Consolidated net operating revenue (Note 5) 2,243,791 2,310,830
Nine-month period ended
09/30/2021

09/30/2020

Restated

Net operating revenue
Revenue related to the reportable segment 6,546,131 6,866,606
Revenue related to other businesses 170,761 160,954
Consolidated net operating revenue (Note 5) 6,716,892 7,027,560

In the periods ended September 30, 2021 and 2020, the reconciliation between the profit (loss) before financial income (expenses) and taxes of the segment telecommunications in Brazil and the consolidated profit (loss) before financial income (expenses) and taxes is as follows:

Three-month period ended
09/30/2021

09/30/2020

Restated

Profit (loss) before financial income (expenses) and taxes
Telecommunications in Brazil (626,911) (552,154)
Other businesses 6,181 8,546
Loss before financial income (expenses) and taxes from continuing operations (Note 5) (620,730) (543,608)
Nine-month period ended
09/30/2021

09/30/2020

Restated

Profit (loss) before financial income (expenses) and taxes
Telecommunications in Brazil (755,357) (1,268,675)
Other businesses 2,318 203,735
Loss before financial income (expenses) and taxes from continuing operations (Note 5) (753,039) (1,064,940)
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NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Total assets, liabilities and tangible and intangible assets per geographic market as at September 30, 2021 are as follows:

09/30/2021
Total assets Total liabilities Tangible assets Intangible assets Investment in tangible and intangible assets
Brazil 74,833,178 74,084,968 16,441,128 3,161,278 5,034,888
Other, primarily Africa 696,170 365,264 67,311 10,223 19,815
29. RELATED-PARTY TRANSACTIONS

Transactions with consolidated related parties

COMPANY
09/30/2021 12/31/2020
Assets
Accounts receivable 2,131,699 1,028,195
BrT Call Center 88,600 92,012
BrT Multimídia 77,806 2,657
Oi Móvel 1,956,311 804,891
Telemar 123,318
Serede 8,940 3,970
Paggo Administradora 42
Drammen 1,270
Calitéia 77
Receivables from related parties (current and non-current) 8,751,644 7,621,572
PTIF 5,809,497 5,049,527
Oi Holanda 2,941,525 2,571,641
Pointer 622 404
Dividends and interest on capital receivable 2,448,595 2,466
Oi Serviços Financeiros 3,958 990
Rio Alto 1,496 1,476
BrT Multimídia 2,426,474
BrT Serviços Financeiros20210308~005222 12
Oi Móvel 16,655
Other 293,518 155,978
Telemar 63,671
Oi Móvel 27,401 13,202
Oi Holanda 18,428 17,836
PTIF 698 309
CVTEL 3,310 1,485
Serede 197,086 39,248
BrT Multimídia 46,595 17,039
Drammen 3,188
101
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
COMPANY
09/30/2021 12/31/2020
Liabilities
Trade payables 386,467 139,509
BrT Call Center 69,590 60,262
BrT Multimídia 68,534 29,031
Oi Móvel 141,850 33,654
Telemar 11,492
Paggo Administradora 102 47
Serede 106,391
Drammen 5,023
Borrowings and financing (i) 1,931,177 1,591,964
Telemar 59,889
Oi Móvel 1,146
Oi Holanda 1,930,031 1,532,075
Dividends (ii) 819,571
Oi Móvel 819,571
Other payables 43,094 31,690
Telemar 3,393
Oi Móvel 14,867
Rio Alto 975 975
BrT Multimídia 3,988 717
Oi Investimentos 11,388 11,972
PT Participações 11,876 14,633
(i) The Company contracts loans from its subsidiaries under market terms and conditions to finance its operations or repay its debt. The amounts stated are net of PVA.
(ii) Dividends due after the merger of Telemar with and into the Company on May 3, 2021.
Three-month period ended
COMPANY
09/30/2021 09/30/2020
Revenue
Revenue from services rendered 406,873 7,734
BrT Multimídia 222,910 (3,388)
Oi Móvel 183,766 7,489
Telemar 3,448
Serede 195 76
Paggo Administradora 2
Drammen 109
Other operating income 38,485 12,089
BrT Multimídia 15,633 2,204
Oi Móvel 12,818 9,550
Serede 678
BrT Call Center 9,356
Drammen 180
Calitéia 155
Financial income 2,709,485 1,970,980
Telemar 902
Oi Holanda 1,982,356 1,634,773
PTIF 683,660 335,304
BrT Call Center 43,461
Pointer 8 1
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY
09/30/2021 09/30/2020
Revenue
Revenue from services rendered 712,642 33,959
BrT Multimídia 391,633 404
Oi Móvel 316,001 23,262
Telemar 4,371 9,950
Serede 414 234
Paggo Administradora 4
Drammen 219 109
Other operating income 74,459 34,020
BrT Multimídia 29,071 5,029
Oi Móvel 34,193 28,650
Serede 1,135 6
BrT Call Center 9,356
Drammen 472 180
Calitéia 232 155
Financial income 1,358,902 11,091,300
Telemar 1,177 2,688
Oi Holanda 541,531 8,992,527
PTIF 772,717 2,087,978
PT Participações 8,105
BrT Call Center 43,461
Pointer 16 2
Three-month period ended
COMPANY
09/30/2021 09/30/2020
Operating costs and expenses (453,679) (183,616)
BrT Multimídia (124,558) (342)
Oi Móvel (18,504) (6,211)
Telemar (3,211)
Paggo Administradora (10)
BrT Call Center (106,769) (101,534)
Serede (203,848) (69,797)
Drammen (2,511)
Financial expenses (2,010,465) (1,718,522)
Telemar (5,091)
Oi Móvel (16)
Serede (4,504) (983)
BrT Call Center (23,169) (401)
BrT Multimídia (1,909) (1,615)
Oi Holanda (1,917,451) (1,686,380)
PTIF (63,351) (23,877)
PT Participações (65) (175)
103
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Nine-month period ended
COMPANY
09/30/2021 09/30/2020
Operating costs and expenses (1,017,890) (574,156)
BrT Multimídia (262,802) (1,026)
Oi Móvel (38,591) (20,987)
Telemar (3,195) (8,739)
Paggo Administradora (247)
BrT Call Center (296,577) (322,854)
Serede (413,502) (217,792)
Drammen (3,223) (2,511)
Financial expenses (651,316) (9,038,536)
Telemar (6,788) (15,273)
Oi Móvel (23)
Serede (8,817) (2,956)
BrT Call Center (23,974) (1,218)
BrT Multimídia (5,322) (4,902)
Oi Holanda (569,881) (8,780,711)
PTIF (35,216) (233,301)
PT Participações (1,295) (175)

Credit facilities

The Company may grant credit facilities to its subsidiaries for the purpose of providing working capital for their operating activities. In these cases, maturities can be rescheduled based on these companies' projected cash flows and these facilities bear interest equivalent to 115% of CDI (115% of CDI at December 31, 2020). In the period ended September 30, 2021 there are no outstanding balances between group companies for this purpose since, as approved in the JRP, real-denominated intercompany claims for working capital purposes were extinguished by netting payables and receivables between the Brazilian RJ Debtors.

The intercompany credit facilities effective at September 30, 2021 are in accordance with the approved JRP. The intercompany claims not covered by said netting as provided for in the JRP were restructured and will be paid 20 years after the end of the settlement of all the claims paid under the terms and conditions of the Default Payment Method, adjusted using the TR for real-denominated credit facilities and changes in foreign exchange rates for international credit facilities. Additionally, credit facilities between the Company, a PTIF, and Oi Holanda were created since that in the context of the implementation of the JRP, the financial debt of the RJ Debtors were substantially consolidated in the Company, which issued financial and equity instruments to settle these debts originally recognized by said subsidiaries. In the second quarter of 2021, Oi and PTIF entered into a loan agreement amounting to US$4.15 million to complement the payment of a fee by this (non-operating) company, due in connection with the amendment to the documentation required from the approval of the Amendment to the JRP. In the quarter ended September 30, 2021 there was no breakdown of loan agreements between the Company and its subsidiaries.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Guarantees

The Company and the other RJ Debtors are jointly and severally liable for the compliance of all obligations set forth by the JRP, as provided therefor.

Oi Futuro

Since 2001, Oi has been reinforcing its commitment to building a more diverse and inclusive society through projects and programs developed by Oi Futuro, our social impact innovation and creativity institute. Legally established as an OSCIP (Civil Society Organization of Public Interest), Oi Futuro has a nationwide presence to promote activities in Culture, Education and Social Innovation areas, thus contributing to the ESG (Environmental Social Governance) agenda and the Sustainable Development Goals (SDGs). Through subsidiary Oi Móvel, contributions to Oi Futuro were made totaling R$10,633 (R$11,665 at September 30, 2020).

Transactions with jointly controlled entities, associates, and unconsolidated entities

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Dividends receivable
Other entities 25 25
COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Accounts payable and other liabilities 29,505 520 32,087 66,021
Hispamar 29,094 520 29,094 61,078
Other entities 411 2,993 4,943
Three-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Revenue
Revenue from services rendered 139 60 139 121
Hispamar 139 60 139 121
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Revenue
Revenue from services rendered 341 181 342 417
Hispamar 341 177 342 358
Other entities 4 59
Other income 2 6,118
Hispamar 2 2
Other entities 6,116
Financial income 120
Other entities 120
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
Three-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Costs/expenses
Operating costs and expenses (38,596) (3,691) (46,343) (61,623)
Hispamar (38,596) (3,691) (38,596) (55,640)
Other entities (7,747) (5,983)
Financial expenses (10) (10) (19)
Hispamar (9) (9) (18)
Other entities (1) (1) (1)
Nine-month period ended
COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Costs/expenses
Operating costs and expenses (64,330) (3,997) (135,110) (172,950)
Hispamar (64,330) (3,993) (112,911) (153,793)
Other entities (4) (22,199) (19,157)
Financial expenses (16) (33) (61)
Hispamar (15) (31) (58)
Other entities (1) (2) (3)

The balances and transactions with jointly controlled entities, associates, and unconsolidated entities result from business transactions carried out in the normal course of operations, namely the provision of telecommunications services by the Company to these entities and the acquisition of these entities' contents and the lease of their infrastructure.

Compensation of key management personnel

As at September 30, 2021, the compensation of the officers responsible for planning, managing and controlling the Company's activities, including the compensation of the directors and executive officers, totaled R$36,368 (R$46,639 at September 30, 2020), as shown in the table below:

Three-month period ended
09/30/2021 09/30/2020
Compensation of key management personnel1
Short-term benefits paid to officers (i)2 10,983 11,626
Share-based compensation 776 1,313
Total 11,759 12,939
Nine-month period ended
09/30/2021 09/30/2020
Compensation of key management personnel1
Short-term benefits paid to officers (i)2 28,906 42,699
Share-based compensation 7,462 3,940
Total 36,368 46,639
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

1 The amounts shown above refer to the parent company and consolidated since key management personnel is allocated to the Company.

2 The amounts shown do not take into consideration the impacts related to payroll taxes pursuant to a decision issued by the CVM Board on December 8, 2020 (CVM Proceeding No. 19957.007457/2018-10) and communicated by Official Letter in January 2021.

(i) Wages, salaries, fees, paid leave and paid sick leave, profit sharing and bonuses, and noncash benefits (such as medical care, housing, cars, and free or subsidized goods or services).

30. HELD-FOR-SALE ASSETS AND DISCONTINUED OPERATIONS

The information on held-for-sale assets should be read together with the financial statements for the year ended December 31, 2020.

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Assets
Sale of UPIs (a) (*) 4,735,685 34,277,735 20,625,007
International operations (b) 53,015 57,204 83,106 99,633
Sale of properties 52,185 43,418 52,185 47,302
Total 4,840,885 100,622 34,413,026 20,771,942

(*) In the Company, refers to equity interests in investments held for sale.

COMPANY CONSOLIDATED
09/30/2021 12/31/2020 09/30/2021 12/31/2020
Liabilities
Sale of UPIs (a) 13,907,712 9,152,947
International operations (b) 30,091 42,429
Total 13,937,803 9,195,376
(a) Sale of UPIs

The assets and liabilities related to the disposal of UPI Mobile Assets, UPI InfraCo, and UPI TVCo are classified as held for sale since their carrying amounts are being recovered primarily through sale transactions rather than through continuous use. The Company considers that the sale of these assets is highly probable, considering how the divestment plan of these assets is unfolding. The group of assets and liabilities of the UPIs are stated at the lower of carrying amounts and fair values less selling expenses.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
(a.1) Held-for-sale assets

The main components of the assets held sale and liabilities associated to assets held for sale of the UPIs, net of intragroup transactions, are as follows:

09/30/2021 12/31/2020
Held-for-sale assets 34,277,735 20,625,007
Cash and cash equivalents 889,642 207,925
Accounts receivable 1,119,138 1,075,583
Inventories 11,547 11,932
Current recoverable taxes 8,242 (41,328)
Other taxes 336,469 230,207
Judicial deposits 38,539 35,004
Pension plan assets 1 127
Prepaid expenses 981,351 953,899
Other assets 29,539 96,507
Property, plant and equipment (i) 30,052,350 17,297,887
Intangible assets 810,917 757,264
Liabilities associated to held-for-sale assets 13,907,712 9,152,947
Payroll, related taxes and benefits 116,800 208,563
Trade payables 1,108,547 1,267,096
Borrowings and financing (ii) 2,708,084
Current taxes payable 878,408 3,866
Other taxes 238,062 226,281
Licenses and concessions payable 58,059 44,502
Tax refinancing program 452 555
Provisions 64,349 63,933
Leases payable (iii) 7,093,509 5,636,122
Other payables 1,641,442 1,702,029
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
(i) Changes in held-for-sale property, plant and equipment items
Works in progress Automatic switching equipment Transmission and other equipment Infrastructure Buildings Right of use - leases Other assets Total

PP&E, net

Balance at December 31, 2020 624,911 585,976 10,148,731 491,495 60,387 5,224,465 161,922 17,297,887
Contractual changes 780,057 780,057
Additions (*) 2,574,487 786 96,158 10,563 495 1,180,605 297,837 4,160,931
Write-offs (18,212) (58,333) (17,391) (13,182) (107,118)
Transfer from/to held-for-sale assets (**) (38,329) 5,641,115 2,147,302 52,151 1,349 117,005 7,920,593
Transfers (1,847,979) 64,164 1,614,313 162,862 3,149 3,491
Balance at September 30, 2021 1,351,419 612,597 17,482,105 2,753,889 98,791 7,173,294 580,255 30,052,350
(*) The additions to line item 'Rights of use - leases' result primarily from the recognition of the tower lease contracts entered into with Highline, the company that acquired the UPI Towers.
(**) The transfers to held-for-sale assets are mainly related to: (i) capital increase in BrT Multimedia, approved at the Extraordinary Shareholders' Meeting held on September 27, 2021, amounting to R$5,885 million; and (ii) transfer of assets subject to the Indefeasible Rights of Use (IRU) contracts, between the Company and the UPI InfraCo, amounting to R$1,136 million (Note 16 (ii)).
(ii) The increase in borrowings and financing is represented by the private placement of convertible debentures of the UPI InfraCo, pursuant to the terms of the Amendment to the JRP. The debentures bear monthly compound interest equivalent to the IPCA variance + 11% p.a., and principal is repayable in a bullet payment on the issue's maturity, on May 26, 2023, fully collateralized by claims, including present and future receivables, not limited to the revenue flow of BrT Multimídia, and its operating assets, except for the wholesale contracts, as well as the amounts to be paid by the potential acquirer of the shares of the UPI InfraCo under the final documentation relating to this sale transaction, except for the funds paid as consideration for the acquisition of the shares of the UPI InfraCo itself. The Company provided a surety for this instrument. The total amount of the guarantees is R$2,726,377. For more information see Note 1, section Financing provided for in the Amendment to the JRP.
(iii) Increase arising from the lease contracts entered into with Highline (item (i) above).
(a.2) Discontinued operations

The operations related to the UPI Mobile Assets, the UPI InfraCo, and UPI TVCo are classified as discontinued operations as they are an integral part of coordinated divestment plan.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

The table below shows the main revenue and expenses components related to profit (loss) from discontinued operations of the UPIs, as well as the revenue and expenses related to the Company's continuing operations, net of intragroup transactions:

COMPANY CONSOLIDATED
09/30/2021 09/30/2020 09/30/2021 09/30/2020
Discontinued operation
Net operating revenue 6,645,573 6,970,759
Operating income (expenses):
Interconnection (180,555) (220,870)
Personnel (324,727) (377,699)
Third-party services (1,916,887) (1,741,586)
Grid maintenance service (250,668) (315,899)
Handset and other costs (53,717) (64,805)
Advertising and publicity (39,932) (28,163)
Rentals and insurance (950,544) (715,859)
(Provisions)/reversals 708 (672)
Expected losses on trade receivables (137,890) (225,169)
Taxes and other income (expenses) (225,073) (173,472)
Other operating income (expenses), net 536,096 (475,076) 244,447
Operating expenses excluding depreciation and amortization 536,096 (475,076) (3,834,838) (3,864,194)
Depreciation and amortization (i) (295,537) (2,474,624)
Total operating expenses 536,096 (475,076) (4,130,375) (6,338,818)
Profit (loss) before financial income (expenses) and taxes 536,096 (475,076) 2,515,198 631,941
Financial income (expenses):
Financial income 42,082 4,126,831
Financial expenses (1,131,583) (5,233,173)
Total financial income (expenses) (1,089,501) (1,106,342)
Pretax profit (loss) 536,096 (475,076) 1,425,697 (474,401)
Income tax and social contribution (889,601) (675)
Profit (loss) for the period 536,096 (475,076) 536,096 (475,076)
(i) The depreciation expenses from discontinued operations result from the classification to held-for-sale assets, as at May 1, 2021, consisting of assets subject to the IRU agreements between Oi and the UPI InfraCo, of which R$216,948 from the first quarter of 2021 and R$78,589 from April 2021. Pursuant to CPC 31/IFRS 5, the related depreciation expenses are presented comparatively to prior periods, which required the reclassification of the depreciation expense previously presented in continued operations to discontinued operation, in the prior three- and nine-month periods ended September 30, 2020 and the three-month period ended March 31, 2021.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
(a.2.1) Restatement of the comparative balances of discontinued operation

Statement of Profit or Loss

COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Previously stated Reclassification(Note 2) Discontinued operations Continuing operations Previously stated Reclassification(Note 2) Discontinued operations Continuing operations
Net operating revenue 2,521,231 2,521,231 13,998,319 6,970,759 7,027,560
Cost of sales and/or services (2,014,979) (2,014,979) (10,932,661) (5,923,558) (5,009,103)
Gross profit 506,252 506,252 3,065,658 1,047,201 2,018,457
Operating income (expenses)
Share of results of investees (9,058,010) (475,076) (8,582,934) 32,181 32,181
Selling expenses (403,389) (403,389) (2,207,192) (698,210) (1,508,982)
General and administrative expenses (633,153) (633,153) (2,026,100) (1,933) (2,024,167)
Other operating income 406,645 406,645 1,939,693 373,129 1,566,564
Other operating expenses (163,876) (163,876) (1,237,238) (88,246) (1,148,992)
Loss before financial income (expenses) and taxes (9,345,531) (475,076) (8,870,455) (432,998) 631,941 (1,064,939)
Financial income 12,648,961 9,284,576 9,284,576 3,364,385 4,876,992 4,100,063 26,768 750,161
Financial expenses (15,644,028) (9,284,576) (9,284,576) (6,359,452) (16,804,910) (4,100,063) (1,133,110) (11,571,737)
Financial income (expenses) (2,995,067) (2,995,067) (11,927,918) (1,106,342) (10,821,576)
Pre-tax loss (12,340,598) (475,076) (11,865,522) (12,360,916) (474,401) (11,886,515)
Income tax and social contribution
Current 680 680 10,374 (675) 11,049
Deferred 12,085 12,085 23,814 23,814
Loss of continuing operations (12,327,833) (475,076) (11,852,757) (12,326,728) (475,076) (11,851,652)
Discontinued operations
Profit (loss) for the year of discontinued operations (net of taxes) 475,076 (475,076) 475,076 (475,076)
Loss for the period (12,327,833) (12,327,833) (12,326,728) (12,326,728)
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Statement of cash flows

COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Previously stated Discontinued operations Continuing operations Previously stated Discontinued operations Continuing operations
Cash flows from operating activities
Pre-tax loss (12,340,598) (475,076) (11,865,522) (12,360,916) (474,401) (11,886,515)
Non-cash items
Charges, interest income, inflation adjustment, and exchange differences 10,224,731 10,224,731 13,069,923 422,180 12,647,743
Fair value adjustment to borrowings and financing (7,674,291) (7,674,291) (2,800,610) (2,800,610)
Adjustment of trade payables to present value 52,560 52,560 160,416 160,416
Transaction with derivative financial instruments (Note 6) 127,581 127,581 127,581 127,581
Depreciation and amortization (Note 5) 1,136,182 1,136,182 5,175,786 2,474,624 2,701,162
Gain (loss) on disposals and write-offs of assets 33,349 33,349 (128,623) (128,623)
Estimated loss on doubtful debts (Note 5) 19,610 19,610 333,215 225,169 108,046
Provisions/(reversals) (Note 5) 46,308 46,308 128,070 672 127,398
Share of results of investees (Note 5) 9,058,010 475,076 8,582,934 (32,181) (32,181)
Concession Agreement Extension Fee - ANATEL 43,639 43,639 234,422 (25,944) 260,366
Employee and management profit sharing 30,648 30,648 151,983 151,983
Tax recovery (97,262) (97,262) (392,539) (392,539)
Inflation adjustment to provisions/(reversals) (Note 6) 221,646 221,646 446,549 446,549
Inflation adjustment to tax refinancing program (Note 6) 3,119 3,119 5,715 5,715
Other (100,015) (100,015) (173,799) 13,052 (186,851)
Changes in assets and liabilities
Accounts receivable (571,483) (571,483) (341,302) (341,302)
Inventories 11,594 11,594 35,855 35,855
Taxes 229,087 229,087 1,430,787 1,430,787
Increases/decreases of cash investments 1,142 1,142 2,004 2,004
Trade payables (327,670) (327,670) (1,050,521) (1,050,521)
Payroll, related taxes and benefits (14,312) (14,312) (53,536) (53,536)
Assignment of receivables 96,292 96,292 459,014 459,014
Licenses and concessions (41,209) (41,209)
Provisions (157,470) (157,470) (363,719) (363,719)
Changes in assets and liabilities held for sale 240,249 240,249
Other assets and liabilities 41,696 41,696 371,066 371,066
Financial charges paid - debt (792,304) (792,304) (793,342) (793,342)
Financial charges paid - leases (19,377) (19,377) (220,438) (114,022) (106,416)
Income tax and social contribution paid - Company (33,433) (33,433)
Income tax and social contribution paid - third parties (46,845) (46,845)
Cash flows generated by (used in) operating activities - continuing operations (717,588) 1,018,292
Cash flows generated by (used in) operating activities - discontinued operations (2,521,330) 2,521,330
Cash flows generated by (used in) operating activities (717,588) (717,588) 3,539,622 3,539,622
Cash flows from investing activities
Purchases of tangibles and intangibles (632,723) (632,723) (5,903,907) (4,528,078) (1,375,829)
Due from related parties and debentures - receipts 365,092 365,092
Proceeds from the sale of investments and capital assets 3,500 3,500 144,422 144,422
Cash received due to capital reduction in subsidiary - PT Participações 3,663,391 3,663,391
Cash received on the sale of investments - PT Ventures 4,132,422 4,132,422
Decrease in non-controlling interests (175,788) (175,788)
Judicial deposits (47,780) (47,780) (245,193) (19,031) (226,162)
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
Quarterly Financial Information (ITR) Corporate Legislation
COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Previously stated Discontinued operations Continuing operations Previously stated Discontinued operations Continuing operations
Redemptions of judicial deposits 380,642 380,642 499,902 499,902
Capital increase in subsidiaries (179,632) (179,632)
Advance for future capital increase in subsidiary (1,223,625) (1,223,625)
Cash flows used in investing activities - continuing operations 2,328,865 2,998,967
Cash flows used in investing activities - discontinued operations 4,547,109 (4,547,109)
Cash flows used in investing activities 2,328,865 2,328,865 (1,548,142) (1,548,142)
Cash flows from financing activities
Borrowings, net of costs 2,473,319 2,473,319
Repayment of principal of borrowings, financing, and derivatives (4,046) (4,046) (8,341) (8,341)
Proceeds from (repayments of) derivative financial instrument transactions (121,600) (121,600) (121,600) (121,600)
Tax refinancing program (32,512) (32,512) (48,412) (48,412)
Lease payment (88,772) (88,772) (1,110,289) (657,842) (452,447)
Cash flows generated by financing activities - continuing operations (246,930) 1,842,519
Cash flows generated by financing activities - discontinued operations 657,842 (657,842)
Cash flows generated by financing activities (246,930) (246,930) 1,184,677 1,184,677
Foreign exchange differences on cash equivalents 185,699 185,699 205,008 205,008
Cash flows for the period 1,550,046 1,550,046 3,381,165 3,381,165
Cash and cash equivalents
Closing balance 2,500,013 2,500,013 5,463,110 5,463,110
Opening balance 949,967 949,967 2,081,945 2,081,945
Changes in the period 1,550,046 1,550,046 3,381,165 3,381,165

Statement of Value Added

COMPANY CONSOLIDATED
09/30/2020 09/30/2020
Previously stated Discontinued operations Continuing operations Previously stated Discontinued operations Continuing operations
Revenue 3,631,124 3,631,124 19,348,109 8,886,293 10,461,816
Inputs purchased from third parties (1,437,722) (1,437,722) (6,996,219) (3,149,854) (3,846,365)
Gross value added 2,193,402 2,193,402 12,351,890 5,736,439 6,615,451
Retentions (1,441,324) 475,076 (1,916,400) (6,059,971) (2,039,014) (4,020,957)
Wealth created by the Company 752,078 475,076 277,002 6,291,919 3,697,425 2,594,494
Value added received as transfer 3,590,951 8,809,500 (5,218,549) 4,909,173 4,126,831 782,342
Wealth for distribution 4,343,029 9,284,576 (4,941,547) 11,201,092 7,824,256 3,376,836
Wealth distributed
Personnel (255,848) (255,848) (1,582,868) (331,384) (1,251,484)
Taxes and fees (576,510) (576,510) (3,739,725) (1,555,326) (2,184,399)
Lenders and lessors (15,838,504) (9,284,576) (6,553,928) (18,205,227) (5,937,546) (12,267,681)
Shareholders 12,327,833 12,327,833 12,326,728 12,326,728
Wealth distributed (4,343,029) (9,284,576) 4,941,547 (11,201,092) (7,824,256) (3,376,836)
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
(b) International operations

Oi's management was authorized to take all the necessary steps to sell the investments in Africa and in Asia.

The Company maintained in the group of international assets held for sale the investments in Companhia Santomense de Telecomunicações, S.A.R.L. ("CST"), since, on October 20, 2020, Africatel signed a Share Purchase and Assignment Agreement for the sale of its shares in CST, subject to approval of the Government of the Democratic Republic of São Tomé and Príncipe upon proposal by the General Regulatory Authority of the Democratic Republic of São Tomé and Príncipe ("AGER"). Said request is still under analysis by the local authority.

The Company remains committed to disposing of the operating assets related to the operations in Africa and Asia, including its investments in Timor Telecom S.A. and in telephone directory companies in Africa, and has been assessing projects to decommission the companies that remain after the sale of foreign companies is completed.

The group of assets and liabilities of the African operations are stated at the lower of their carrying amounts and their fair values less costs to sell, and are consolidated in the Company's statement of profit or loss.

The main components of the assets held sale and liabilities associated to assets held for sale of the African operations are as follows:

Operations in Africa
09/30/2021 12/31/2020
Held-for-sale assets 83,106 99,633
Cash, cash equivalents and cash investments 21,136 33,752
Accounts receivable 41,809 41,609
Other assets 9,686 7,172
Investments 189 191
Property, plant and equipment 7,366 13,659
Intangible assets 2,920 3,250
Liabilities directly associated to assets held for sale 30,091 42,429
Borrowings and financing 10,406
Trade payables 13,149 11,223
Other liabilities 16,942 20,800
Total held-for-sale assets, net of the corresponding liabilities - consolidated 53,015 57,204
Total assets held for sale - parent company 53,015 57,204
Investments in Africa 53,015 57,204

The companies that are not expected to be sold in the short term started to be consolidated in the balance sheet.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)
31. OTHER INFORMATION
a) Operation: Mapa da Mina

On December 10, 2019, the Brazilian Federal Police launched the 69th phase of Operation: Lava Jato (Car Wash), named "Operation: Mapa da Mina" (Mine Plan) (Criminal Search and Seizure Order No. 5024872-64.2018.4.04.7000/PR - 13th Federal Criminal Court of Curitiba), one of the main targets of which was Fábio da Silva, son of former president Luiz Inácio Lula da Silva. The investigation, which has neither the Company nor any of its current officers as defendants, is based on a suspected transfer of several companies to Gamecorp and Grupo Gol, in exchange for alleged benefits from the Federal Government. As a result of such investigation, Company buildings in the States of São Paulo and Rio de Janeiro, and in Brasília were searched and documented were seized. Since then, the Company has cooperated with the investigations by making all the clarifications and delivering all the documents requested. On March 12, 2020, the 4th Region Federal Court granted an habeas corpus (Habeas Corpus No. 5052647-8.2019.4.04.000/PR) was granted, requiring that the records of said Operation be sent to the São Paulo Judiciary Section, after concluding that there was no connection between the facts reported in the investigation and those verified in Operation: "Lava Jato". On December 7, 2020, the 10th Criminal Court of São Paulo declined on its jurisdiction to process the case and required that the court records be sent to one of the Rio de Janeiro, RJ Judiciary Subsection.

Because of this decision, the defense attorneys of the individuals involved have filed requests for reconsideration and a strict appeal so that the investigation remains under the jurisdiction of the 10th Federal Court of São Paulo.

On October 28, 2021, the strict appeal was heard and the court elected the 10th Penal Court of São Paulo as the proper venue to judge the investigation records.

Among the initiatives undertaken, the Company engaged an independent external auditor to conduct a forensic investigation to cover all the allegations made in the case record and created a Multidisciplinary Committee consisting of members from different departments, such as the legal, compliance, internal audit and accounting department, to determine the main procedures to be performed, and set a schedule of relevant activities in response to the allegations of said investigation involving the Company and its subsidiaries. In this regard, the Multidisciplinary Committee determined the following procedures: (i) retain a renowned, specialized law firm, independent from the Company and its subsidiaries, to conduct an internal investigation on the allegations made in the Federal Public Prosecution Office (MPF) and the Brazilian Federal Police (PF) investigations; (ii) request an assessment by the outside legal counsel of the results of said internal investigation to be conducted by the specialized law firm, if applicable; (iii) request an assessment by the outside legal counsel of possible legal and regulatory impacts in Brazil and in the United States, regarding all allegations made in the investigation, considering the applicable anticorruption legislation and/or illegal activities; (iv) request an assessment by the compliance department to determine whether any material weaknesses in the internal control environment existing at the time covered by the investigations still persist in the current Company governance and internal control scenario; (v) conduct periodic meetings to follow up on the status of the assessments to be carried out; and (vi) submit of the results of all assessments to be carried out to the members of the Audit, Risk and Controls Committee ("CARC"), which reports to the Company's Board of Directors. In this context, the

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

specialized law firm completed its internal independent investigation in February 2020, based on interviews, information, and documentation submitted by the Company's management and taking into consideration the constraints imposed by the time period covered by said investigation (2003-2019), and did not identify any indications of illegalities committed by the Company linked to the allegations made by the MPF and the PF in the "Operation: Mine Plan" investigation. This internal use report was extensively discussed and presented to the members of the Multidisciplinary Committee, as well as to the members of the CARC.

b) Potential effects of the COVID-19 pandemic

On January 31, 2020, the World Health Organization announced that COVID-19 was a global health emergency and in March the World Health Organization categorized COVID-19 as a pandemic that has caused death and the imposition of measures that have caused unprecedented social and economic impacts in Brazil and the world.

The Company understands the key role of telecommunications for society, is complying with the health and safety recommendations issued by the authorities, and has been monitoring the situation and how it unfolds and its possible impacts. For this reason, since March 2020, the Company has maintained a multidisciplinary crisis response team focused on ensuring the continuity of its operation and services to customers, the health of its employees, and monitoring actions to fight the impacts of the pandemic.

The main measures adopted and maintained by the Company since the beginning of the pandemic include:

· home office: approximately 71% of the workforce is working remotely and have been able to perform their duties without any interruption;
· safe fieldwork protocol: employees whose activities are not compatible with the home office work, such as outside service technicians (classified by the authorities as an essential workers), follow health and preventive protocols, including the use of PPE (personal protection equipment), tests, and the timely isolation of any suspected or confirmed cases;
· stock coverage: we maintain regular communications with our suppliers and service providers in order to ensure timely delivery of inputs and equipment and prevent disruptions in our logistics and supply chain;
· strengthening the network: the Company responded quickly to the increased demand for telecom services and activated new circuits in its backbone infrastructure that did not suffer any significant decline even with the increase in traffic.
· digitalization: the Company has intensified and maintains the digitalization of processes, sales and customer service channels, telemarketing and teleagents, providing alternatives for its customers and minimizing the possible impact of restrictions to face-to-face activities.
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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Regarding the second quarter of 2021, because of the new wave of the pandemic, stronger in April 2021, local and regional authorities promoted and implemented social distancing and lockdown measures and issued decrees limiting noncore business operations, which resulted in the shutdown of the Company's retail stores and distribution channels of its mobile service. In contrast, follows an increase in demand for our broadband services, specifically FTTH services, from both residential and B2B customers. On the operations side, there were no significant impacts, since the provision of telecom services is classified as an essential activity and continues to operate normally.

Throughout the second quarter, with the gradual progress of vaccination and the reduction of bed occupancy rates, many states and municipalities began the introduce a gradual reopening and easing of restrictive measures. Thus, the Company has gradually resumed the activities of its own stores, pursuant to all established protocols, even though the situations in each location will continue to be monitored in case of any change.

Entering the third quarter of the year, we restructured the questionnaire for monitoring the health of our workforce by making it not only a tool for preventing and fighting the effects of the pandemic, but also a survey tool about vaccination among our staff and for monitoring people with chronic diseases.

With the variants of the virus and a still unstable scenario especially for the elderly and people with comorbidities, and the progress of the roll-out of third stage vaccines, uncertainties still persist about the duration of vaccination coverage and the permanence of the pandemic. We continue with no records of material deviations in our operations and results, and maintaining the mitigating actions already taken.

c) Corporate restructuring to establish the UPI InfraCo

The Extraordinary Shareholders' Meeting of indirect subsidiary BrT Multimídia held on June 8, 2020 approved its capital increase in the amount of R$822,673,091.98, without the issuance of new shares, which was fully subscribed and paid in by Oi Móvel, also an indirect subsidiary of the Company, through the assignment of net assets comprised of (i) property, plant and equipment and intangible assets of Oi Móvel, the Fiber-to-the-Home ("FTTH") class; (ii) part of the usage and consumption supplies acquired for use in the expansion of FTTH; and (iii) the balance of dividends payable.

Subsequently, at the Extraordinary Shareholders' Meeting of BrT Multimídia held on October 13, 2020, a new capital increase was approved, totaling R$1,673,412,964.45, through the issuance, by BrT Multimídia, of 52,700 registered common shares without par value, of which R$173,485,677.43 was allocated to the issued capital line item and R$1,499,927,287.02 was allocated to the recognition of a capital reserve. Oi Móvel subscribed all of the shares issued in connection with the aforementioned capital increase, which were paid in through the contribution of FTTH fiber assets, recorded as property, plant and equipment and intangible assets of Oi Móvel, to the assets of BrT Multimídia.

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

In addition, at the Extraordinary Shareholders' Meeting of BrT Multimídia held on December 30, 2020, the capitalization of an Advance for Future Capital Increase ("AFAC") amounting to R$700,000,000.00, which had been granted by Oi Móvel to BrT Multimídia, was approved. As a result of this capital increase, BrT Multimídia issued 212,640 registered common shares without par value, which were fully subscribed and paid in by Oi Móvel through the capitalization of the granted AFAC.

BrT Multimídia's Extraordinary Shareholders' Meeting held on January 1, 2021 approved its partial spin-off, with the segregation and removal from its assets of elements not related to the core business of UPI InfraCo, which were merged with and into Oi Móvel. As a result of the partial spin-off, the capital of BrT Multimídia was reduced by R$17,698,607.37, without the cancellation of shares, from 2,013,309,621.84 to 1,995,611,014.47, divided into 611,586 registered common shares and without nominal amount.

BrT Multimídia's Annual and Extraordinary Shareholders' Meeting held on April 30, 2021 approved a new partial spin-off, with the segregation and removal from its assets elements not related to the core business of UPI InfraCo, which were merged with and into Oi. Given that the assets spun-off from BrT Multimídia were valued at 0.00 (zero Brazilian reais), BrT Multimídia's share capital did not change as a result of the transaction.

The Extraordinary Shareholders' Meeting held on September 1, 2021 approved one more partial spin-off of BrT Multimídia, with the merger of the spun off portion with and into Oi Móvel. As a result of this transaction, the share capital of BrT Multimídia was reduced by R$132,960,967.37 and 22,587 registered common shares without par value issued by BrT Multimídia that were held by Oi Móvel were cancelled. Consequently, BrT Multimídia's share capital is now represented by six hundred and forty thousand, five hundred and three (640,503) common shares without par value. There was no change in the proportion of the Company's shareholding and thus Oi Móvel continued to hold a 99.99% stake and Oi continued to hold a 0.01% stake in BrT Multimídia's capital stock.

Subsequently, at the Extraordinary Shareholders' Meeting of BrT Multimídia held on September 27, 2020, a new capital increase was approved, totaling R$5,884,740,642.68, through the issuance, by BrT Multimídia, of 1,048,739 registered common shares without par value. As a result of this capital increase, Oi Móvel subscribed for 45,844 of the issued shares, in the amount of R$257,243,507.17, which were paid in through contribution of Fiber To The Home ("FTTH"), Optical Network Terminal ("ONT"), Optical Line Terminal ("OLT"), and External Network assets and real estate (including land, air conditioning equipment, elevators and improvements made) . Oi subscribed for 1,002,895 of the shares issued, amounting to R$5,627,497,135.51, which were paid in by the contribution of Fiber Backhaul assets (comprising network and transmission equipment, including Carrier Grade Access ("CGA"), Packet Transport Network ("PTN"), Synchronous Digital Hierarchy ("SDH"), Plesiochronous Digital Hierarchy ("PDH"), Ethernet Demarcation Device ("EDD"), and optical modem) assets, ducts and poles, data circuits, Optical Network Terminals ("ONTs") and Ethernet Demarcation Devices ("EDDs") and real estate (including land, air conditioning equipment, elevators and improvements made), as well as the performed and unpaid portions of the Indefeasible Fiber Optic Patching Rights Assignment Agreement, of the Agreement for Assignment of Indefeasible Right of Use of Telecommunication Signal Transmission Capacity, and the Agreement for Assignment of

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COMMERCIAL, INDUSTRIAL AND OTHER COMPANY Base Date - 09/30/2021
01131-2 Oi S.A. - UNDER JUDICIAL REORGANIZATION 76.535.764/0001-43
NOTES TO THE FINANCIAL STATEMENTS (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

Indefeasible Right of Use of Network, all entered into on April 26, 2021, between Telemar, merged with and into the Company, on May 3, 2021, Oi and BrT Multimedia.

The partial spin-off transactions were approved without joint and several liability, so that Oi Móvel and Oi became liable only for the obligations that were transferred to Oi Móvel and Oi as a result of the partial spin-offs and did not assume any liability, either individually or jointly, for any debts, obligations or liabilities of BrT Multimídia that had not been transferred as part of the partial spin-off in question, regardless of their nature and if they are present, contingent, past and/or future.

The capital increases and partial spin-offs of BrT Multimídia are in line with the terms of the Strategic Plan and the JRP, as amended, and are steps in the corporate and asset restructuring process of the Oi Companies described in the JRP, aimed at optimizing their operations, assets and liabilities and, more specifically, the formation of UPI InfraCo.

32. EVENTS AFTER THE REPORTING PERIOD
a) American Depositary Receipts ("ADRs") Program of the Company

On October 1, 2021, the Company announced its intention to: (i) delist its American Depositary Receipts ("ADRs"), each representing five (5) common shares issued by the Company ("Common ADRs"), from the New York Stock Exchange ("NYSE"), and to maintain a Level 1 ADR program on the over-the-counter market in the United States, for trading in its Common ADRs and its Preferred ADRs, which are already traded on this market today; and (ii) once the Company complies with the applicable requirements, cancel its registration with the U. S. Securities and Exchange Commission ("SEC").

b) Alienação Parcial UPI InfraCo - Decisão de aprovação pelo CADE

On October 18, 2021, the Company issued a Notice to the Market informing that it became aware that the Board of the by the Administrative Economic Defense Council ("CADE") (Brazilian antitrust authority) had issued on that date, SG Order No. 1538/2021, approving the partial sale of UPI InfraCo, without restrictions, confirming that, according to the applicable law, the approval decision would become final within fifteen (15) calendar days, as of its issue date, if there were no appeal by stakeholders or a transaction reversal by CADE's Administrative Court. Subsequently, on November 4, 2021, the Company released a new Notice to the Market on this matter, informing that a Certificate of Final and Unappealable Decision was issued for the unrestricted approval by CADE of the partial sale of UPI InfraCo, pursuant to Concentration Act no. 08700.005071/2021. The Company also informed that the actual completion of the transaction is subject to the prior consent of ANATEL, whose process is currently underway at the agency, as well as to the fulfillment of the usual conditions precedent for transactions of this nature, provided for in the Agreement.

119

Disclaimer

Oi SA em Recuperação Judicial published this content on 15 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 November 2021 11:39:22 UTC.


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Sales 2021 18 318 M 3 317 M 3 317 M
Net income 2021 -6 969 M -1 262 M -1 262 M
Net Debt 2021 30 937 M 5 602 M 5 602 M
P/E ratio 2021 -0,86x
Yield 2021 -
Capitalization 4 675 M 848 M 847 M
EV / Sales 2021 1,94x
EV / Sales 2022 1,74x
Nbr of Employees 13 305
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Last Close Price 1,36 BRL
Average target price 2,30 BRL
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Rodrigo Modesto de Abreu Chief Executive Officer
Cristiane Barretto Sales Chief Financial Officer
Eleazar de Carvalho Filho Chairman
José Cláudio Moreira Gonçalves Chief Operating & Technology Officer
Renata Bertele Chief Compliance & Risk Officer
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