UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: November 7, 2022

Commission File Number: 001-39570

TIM S.A.
(Exact name of Registrant as specified in its Charter)

João Cabral de Melo Neto Avenue, 850 – North Tower – 12^th floor
22775-057 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Yes ☐ No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Yes ☐ No ☒

TIM S.A.

INDIVIDUAL AND CONSOLIDATED QUARTERLY INFORMATION

September 30, 2022

TIM S.A.

INDIVIDUAL AND CONSOLIDATED QUARTERLY INFORMATION

September 30, 2022

Index

Report on the review of individual and consolidated quarterly information

Independent auditor’s review report on quarterly information

Shareholders, Directors and Officers of

TIM S.A.

Rio de Janeiro - RJ

Introduction

We have reviewed the accompanying individual and consolidated interim financial information, contained in the Quarterly Information Form (ITR) of Tim S.A. (the “Company”) for the quarter ended September 30, 2022, comprising the balance sheet as of September 30, 2022, and the statements of income and of comprehensive income for the three and nine-month periods then ended, and the statements of changes in shareholders’ equity and of cash flows for the nine-month period then ended, including the explanatory notes.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with NBC TG 21 – Interim Financial reporting, and IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair presentation of this information in conformity with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review engagements (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Report on the review of individual and consolidated quarterly information

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above are not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of Quarterly Information Form (ITR) and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission (CVM).

Other matters

Statements of value added

The abovementioned quarterly information includes the individual and consolidated statement of value added (SVA) for nine-month period ended September 30, 2022, prepared under Company’s Management responsibility and presented as supplementary information by IAS 34. These statements have been subject to review procedures performed together with the review of the quarterly information with the objective to conclude whether they are reconciled to the interim financial information and the accounting records, as applicable, and if its format and content are in accordance with the criteria set forth by NBC TG 09 – Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the overall individual and consolidated interim financial information.

Rio de Janeiro, November 7, 2022

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP015199/O-6

Fernando Alberto S. Magalhães

Accountant CRC-1SP133169/O-0

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

Explanatory notes are an integral part of the quarterly information.

QUARTERLY EVENTS AND SUBSEQUENT EVENTS

	PAYMENT OF INTEREST ON SHAREHOLDERS’ EQUITY     On September 12, 2022, TIM S.A. announced that its Board of Directors approved the distribution of R$ 480 million as Interest on Shareholders’ Equity (“IoE”), payable in two installments. The first installment, in the amount of R$ 235 million, was paid on October 31, 2022, and the second installment, in the amount of R$ 245 million, will be paid on January 31, 2023.
	TIM OBTAINS RIGHT TO EXERCISE THE 8TH TRANCHE OF SUBSCRIPTION BONUSES AT BANK C6   In October, 2022, TIM obtained the right to exercise the 8th tranche of the subscription bonus of C6's share capital as a result of the achievement of the 8th level of the agreed targets within the partnership, totaling an accumulated indirect interest of 5.52% in C6’s share capital, subject to the outcome of the ongoing arbitration.
	CHANGES TO THE ADJUSTED CLOSING PRICE FOR THE ACQUISITION OF THE MOBILE ASSETS OF OI AND INITIATION OF THE ARBITRATION PROCEDURE   In a Material Fact disclosed on September 19, 2022, TIM announced that the “Buyers” (TIM, Telefônica Brasil S.A. and Claro S.A.) of the mobile assets of Oi Móvel S.A. (“Seller”) identified differences in assumptions and calculation criteria that, under the terms of the Share Purchase Agreement and Other Covenants (“SPA”), justify a proposal to change the Adjusted Closing Price (“ACP”), for the benefit of TIM, of approximately R$ 1.4 billion. In addition to the differences regarding the ACP, other divergences were identified with the respect to the Cozani’s contracts with companies providing mobile infrastructure services (rental of sites/towers), which give rise, under the terms of the SPA, to an indemnity from the Seller to TIM of approximately R$ 231 million. As a result of the differences found, R$ 634 million that was fully retained by TIM and it was not transferred to the Seller. In a Material Fact disclosed on October 3, 2022, in view of the Seller's express violation of the dispute resolution mechanisms provided for in the SPA, TIM announced that Buyers had no alternative but to file an arbitration proceeding on this date with the Market Arbitration Chamber of B3 S.A - Brasil, Bolsa, Balcão against the Seller to determine the effective amount of the adjustment to the ACP, in the form of the SPA.

In the Material Fact disclosed on October 4, 2022, the Company was surprised by news published in the press, and by a Material Fact disclosed by the Seller on this date, that an injunction had been handed down by the 7^th Business Court of the Judicial District of Rio de Janeiro determining an deposit in escrow by the Buyers, in the amount of approximately R$ 1.53 billion – of which approximately R$ 670 million by TIM – in an account linked to the judicial recovery process of the Seller, where it will be safeguarded until a later decision by an arbitration court.

On October 17, 2022, TIM appealed the decision and the Superior Court of Justice, in a monocratic decision, rejected the appeal submitted by TIM and the other Buyers. Therefore, on October 19, 2022, TIM made the deposit in escrow on behalf of the 7^th Business Court of the Judicial District of Rio de Janeiro, in the amount of R$ 670 million.

FINANCIAL PERFORMANCE

OPERATING REVENUE

New level of Net Revenue was maintained after the acquisition of Oi's mobile assets, increasing by 24.4% YoY in 3Q22, driven by a strong performance from the Mobile segment.

In 3Q22, Net Revenue totaled R$ 5,611 million, up by 24.4% YoY, with all main lines contributing to this result: (i) Mobile Services Revenue (+25.8% YoY), with positive results from Prepaid and Postpaid segments and the 3 months of additional revenue arising from the acquisition of Oi’s mobile assets (as of May 1^st); (ii) Fixed Service Revenue (+8.4% YoY), driven by the recurring performance of TIM Live (+12.2% YoY); and (iii) Handset Revenue (+12.9% YoY), with a better sales mix of products and a lower comparative base. In 9M22, Total Net Revenue increased by 18.5% YoY.

Breakdown of the Mobile Segment (net of taxes and deductions):

Mobile Service Revenue (MSR) reached R$ 5,154 million in 3Q22, up by 25.8% YoY, supported by revenues generated by the mobile base acquired from Oi and performance of the Prepaid and Postpaid segments. Mobile ARPU (Average Monthly Revenue Per User) reached R$ 24.9 (-5.8% YoY), impacted by the dilution effects caused with the addition of customers arriving from Oi. In 9M22, MSR totaled R$ 14,339 million, up by 19.2% YoY.

Performance breakdown for each mobile segment in 3Q22:

Interconnection Revenue (ITX) fell by 11.9% YoY in 3Q22 (down by 15.3% YoY in 9M22), due to lower incoming traffic. The effect of MTR on Net Service Revenue was 1.9% in the quarter.

Customer Platform Revenue totaled R$ 50 million in 3Q22. In 9M22, this line totaled R$ 137 million.

The Other Revenues line increased by 10.3% YoY in 3Q22, mainly explained by the higher revenue from network sharing and swap contracts, in line with the Company’s strategy to expand the fiber transport infrastructure (backbone and backhaul) and to allocate resources more efficiently (Capex and Opex). In 9M22, the recorded growth was 19.0% YoY.

Breakdown of the Fixed Segment (net of taxes and deductions):

Fixed Service Revenue totaled R$ 311 million in 3Q22, up by 8.4% YoY, and up by 7.1% YoY in 9M22, totaling R$ 911 million.   TIM Live, the main fixed revenue line, recorded a growth of 12.2% YoY in 3Q22, reflecting the following strategies: (i) migration from FTTC to FTTH, focused on customer retention; and (ii) customer profitability through higher value services – in September, 73% of the customer base had plans with speed above 100 Mbps. In 9M22, the recorded growth in this line was 10.8% YoY.

OPERATING COSTS AND EXPENSES

In 3Q22, our Cost dynamics had a better growth curve, although it was still impacted by I-Systems and expenses related to the acquisition of assets from Oi Mobile.

* Operating costs normalized by: expenses with the price adjustment from the sale of control of I-Systems (+R$ 14.6 million in 3Q22), expenses with specialized legal and administrative services (+R$ 8.6 million in 3Q22, +R$ 50.3 million in 2Q22, +R$ 8.4 million in 1Q22, +R$ 7.7 million in 3Q21 and +R$ 13.7 million in 2Q21), expenses with consulting services within the scope of the migration project of clients arriving from Oi (+R$ 15.4 million in 3Q22) and payroll expenses (+R$ 11.8 million in 1Q22), also related to the acquisition of Oi's mobile assets.

Normalized Operating Costs and Expenses totaled R$ 2,914 million in 3Q22, up by 24.3% YoY, reflecting a lower growth rate compared to the levels in 2Q22. Even so, this line continues to be pressured by inflation, additional costs related to the operation, such as the acquisition of Oi's mobile assets (3 months of TSA - Temporary Service Agreement)^[1], and rental expenses for I-Systems. In 9M22, this line totaled R$ 8,400 million, up by 20.5% YoY. Excluding the impacts from I-Systems^[2], this line would have increased by 20.9% YoY in the quarter, and by 17.3% YoY in 9M22.

In 3Q22, Reported Operating Costs and Expenses totaled R$ 2,953 million, up by 25.5% YoY. In the quarter, this line was impacted by non-recurring expenses related to: (i) the price adjustment from the sale of control of I-Systems, in the amount of R$ 14.6 million; (ii) specialized administrative and legal services related to the acquisition/restructuring projects of Oi's mobile assets and I-Systems, in the amount of R$ 8.6 million; and (iii) consulting services within the scope of the migration project of customers arriving from Oi, in the amount of R$ 15.4 million.

^[1] The Temporary Service Agreement (“TSA”) is a temporary contract to provide management services for the subscriber base and maintenance of the Network Operations Center (”NOC”) within the scope of the acquisition of Oi’s mobile assets. The TSA has a 12-month term and was adjusted to exclude recharging services.

^[2] I-Systems was created in partnership with IHS Brasil, in November 2021, as an open provider of fiber-optic infrastructure. The transaction included the selling of a 51% stake to the new partner upon payment of R$ 1.1 billion to TIM and the allocation of R$ 600 million into I-Systems' cash balance.

Breakdown of Normalized Costs and Expenses Performance:

Normalized Personnel Costs^[3] increased by 7.6% YoY in 3Q22, lower than the annual growth rates reported in the previous quarters. This line continues to be impacted by: (i) inflation effects on wages, bonuses and incentives – however, this impact was smaller than in 2021, when inflation was already at higher levels; and (ii) effects related to the provision for profit sharing in 2022. In 9M22, the recorded growth was 9.9% YoY.

The Commercialization and Advertising line, one of the most affected by the acquisition of Oi's mobile assets, increased by 29.5% YoY in the quarter. This result reflects: (i) higher expenses related to the management of the customer base (billing, collection, and services) and Fistel expenses, both resulting from the migration of customers from Oi; and (ii) TSA costs with Oi (R$ 72 million). In 9M22, the reported growth of the line was 22.1% YoY.

Normalized Network and Interconnection^[4] grew by 25.5% YoY in 3Q22, at a smaller growth level than those reported during the first half of the year. This line continues to be affected by: (i) higher expenses with the rental of I-Systems; (ii) higher expenses related to the sites acquired with Oi’s mobile transaction; (iii) higher expenses with content and VAS providers; and (iv) partially offset by reduction effects from lower leased line and network sharing costs. In 9M22, this line increased by 28.9% YoY.

Normalized General and Administrative (G&A) Expenses ^[5] increased by 41.5% YoY in the quarter, mainly explained by: (i) higher expenses related to the systemic integration of new customers from Oi into TIM's structure; (ii) higher expenses related to Journey to the Cloud project (migration of IT infrastructure to the cloud); and (iii) higher consulting expenses for recurring projects. In 9M22, the recorded growth was 22.0% YoY.

Cost of Goods Sold (COGS) increased by 15.3% YoY in 3Q22, following the dynamics of handset revenue with a greater mix for product sales and a weaker comparative base during the year of 2021. In 9M22, this cost line increased by 20.8% YoY.

In 3Q22, Provisions for Doubtful Accounts (Bad Debt) grew by 20.7% YoY, totaling R$ 173 million. This line continues to be impacted by the higher revenue base exposed to delinquency with the increase of the Postpaid customer base, influenced by customers that migrated from Oi. Despite a still challenging macroeconomic environment, the Bad Debt over Gross Revenue ratio was 2.3%, remaining flat in the annual comparison. In 9M22, Bad Debt increased by 10.0% YoY, impacted by the same elements as in the quarter, although with a different intensity.

^[3] The Personnel costs line had a non-recurring impact of R$ 11.8 million in 1Q22, referring to payroll expenses related to the acquisition of Oi's mobile assets.

^[4] The Network and Interconnection line had a non-recurring impact of R$ 15.4 million in 3Q22, referring to consulting services within the scope of the migration project for customers arriving from Oi.

^[5] The General and Administrative Expenses line was impacted by non-recurring items, in the amount of R$ 8.6 million in 3Q22, R$ 50.3 million in 2Q22, R$ 8.4 million in 1Q22, and R$ 13.7 million in 2Q21, related to expenses with specialized legal and administrative services for the acquisition/restructuring projects for Oi’s mobile assets and I-Systems.

Other Normalized Operating Expenses (Revenues)^[6] increased by 8.3% YoY in 3Q22, explained by: higher expenses with labor and tax contingencies; and (ii) higher FUST/FUNTEL expense levels. This line corresponded to 2.1% of the Normalized Total Costs and Expenses (vs. 2.4% in 3Q21). In 9M22, this line fell by 20.4% YoY.

FROM EBITDA TO NET INCOME

Sustaining EBITDA growth, which was driven by the performance in Service Revenue.

* EBITDA normalized according to the items described in the Costs section (+R$ 38.6 million in 3Q22, +R$ 50.3 million in 2Q22, +R$ 20.3 million in 1Q22, +R$ 7.7 million in 3Q21 and +R$ 13.7 million in 2Q21). Net Income normalized by: tax credit and other effects (-R$ 13.1 million in 3Q22, -R$ 17.1 million in 2Q22, -R$ 6.9 million in 1Q22, -R$ 526.8 million in 3Q21 and -R$ 4.6 million in 2Q21).

^[6] The Other Operating Expenses (Revenues) line was impacted by a non-recurring item, in the amount of R$ 14.6 million in 3Q22, referring to the price adjustment from the sale of control of I-Systems.

EBITDA^[7] (Earnings Before Interest, Taxes, Depreciation, Amortization and Equity in Earnings)

Normalized EBITDA totaled R$ 2,697 million in 3Q22, up by 24.5% YoY, in which Service Revenue was the main driver of this performance. Normalized EBITDA Margin totaled 48.1%, remaining flat in comparison to the same period in 2021, even with the impacts from I-Systems and TSA. Excluding the effects associated with the leasing of the I-Systems network, Normalized EBITDA reached a growth of 28.2% YoY, totaling R$ 2,777 million in 3Q22, with a Normalized EBITDA Margin of 49.5%, up by 1.5 p.p. over the same period in the previous year. In 9M22, Normalized EBITDA increased by 16.2% YoY, reaching R$ 7,306 million, with an EBITDA Margin of 46.5%, down by 0.9 p.p. vs. 9M21.

Excluding the effects from leasing on these indicators, Normalized EBITDA-AL (“After Lease”) totaled R$ 1,906 million in 3Q22, reaching a growth of 14.4% YoY. In 9M22, this indicator reached R$ 5,275 million, up by 9.0% YoY.

DEPRECIATION AND AMORTIZATION (D&A) / EBIT

The D&A line increased by 33.9% YoY in 3Q22, and by 16.8% YoY in 9M22, being one of the most affected lines by the acquisition of Oi’s mobile assets. In 3Q22, this line was mainly comprised of: (i) R$ 612 million in depreciation related to Lease IFRS 16, of which R$ 261 million are related to the addition of 7,200 sites acquired from Oi; and (ii) R$ 56 million in amortization related to the acquisition of the 49 MHz spectrum.

Normalized EBIT grew by 4.9% YoY in 3Q22, and by 13.1% YoY in 9M22, reflecting the solid EBITDA growth.

^[7] EBITDA normalized according to the items described in the “Operating Costs and Expenses” section.

NET FINANCIAL RESULT

Net Financial Result was negative by R$ 402 million in 3Q22, a better performance in comparison to 2Q22 mainly explained by the lower monetary restatement of the 5G frequencies licenses, since the last EAF installment was paid in May, and by the increase of capitalized interest arising from the payment of the second EAF installment and higher SELIC rate. In the YoY comparison, this result deteriorated by R$ 191 million, mainly explained by:

In 9M22, Net Financial Result came in as a negative R$ 1,089 million, deteriorating by R$ 616 million in the annual comparison.

INCOME TAX AND SOCIAL CONTRIBUTION

In 3Q22, the Reported Income Tax (“IR”) and Social Contribution (“CSLL”) totaled +R$ 88 million, compared to +R$ 449 million in 3Q21. This improvement in the current quarter was mainly explained to: (i) the distribution of R$ 480 million in IoE; (ii) the consumption of tax benefits at TIM S.A.; and (iii) the constitution of a deferred asset in the company Cozani. In the quarter, this line was impacted by non-recurring itens in the amount of R$ 13.1 million, as shown previously in the “From EBITDA to Net Income” table. In the Normalized view, IR/CSLL totaled +R$ 75 million in 3Q22, compared to -R$ 78 million in the same period of the previous year – an improvement explained by the same reasons described above. In the Normalized view, the effective tax rate was +18.7% in 3Q22 vs. -14.2% in 3Q21.

NET INCOME^[8]

Normalized Net Income at the end of 3Q22 totaled R$ 473 million, flat in comparison to the same period in the previous year, while Normalized Earnings per Share (EPS) for the quarter was R$ 0.20, flat YoY. In 9M22, Normalized Net Income reached R$ 1,205 million, down by 15.9% YoY, and the Normalized EPS was R$ 0.50, compared to R$ 0.59 in 9M21.

CASH FLOW, DEBT, AND CAPEX

* EBITDA normalized according to the items described in the Costs section (+R$ 38.6 million in 3Q22, +R$ 50.3 million in 2Q22, +R$ 20.3 million in 1Q22, +R$ 7.7 million in 3Q21 and +R$ 13.7 million in 2Q21).

At the end of 3Q22, Operating Free Cash Flow (OFCF) totaled R$ 2,426 million, up by 36.1% over the amount of R$ 1,783 million reported in 3Q21. This dynamic was mainly impacted by a higher EBITDA level driven by the incorporation of the assets acquired from Oi, in addition to an improvement in working capital in YoY comparison, confirming the Company's cash generation ability. In 9M22, OFCF totaled R$ 2,191 million, down by 39.6% YoY, mainly due to the payment related to the spectrum auction held in November 2021.

^[8] Net Income normalized according to items in the “From EBITDA to Net Income” section.

At the end of 3Q22, Normalized EBITDA (-) Capex was R$ 1,719 million, up by 35.3% YoY, due to the EBITDA expansion, as explained in the previous section, which surpassed the increase in Capex in the period, driving the Normalized EBITDA (-) Capex over Net Revenue ratio to 30.6%.

Excluding the effects from leases, Normalized EBITDA-AL (-) Capex totaled R$ 928 million, up by 20.6% YoY.

CAPEX

Capex totaled R$ 978 million in 3Q22, of which R$ 787 million was related to network and R$ 190 million was used in IT and other investments. The growth in comparison to the previous year (+9.0% YoY) was already expected due to the costs of integrating Oi's mobile assets, as well as the implementation of 5G. Capex over Net Revenue was 17.4%, a reduction of 2.4 p.p. over the same period in 2021. In 9M22, Capex totaled R$ 3,355 million (+7.3% YoY), corresponding to 21.4% over Net Revenue (-2.2 p.p. YoY).

WORKING CAPITAL VARIATION

In 3Q22, the Working Capital Variation was positive by R$ 745 million, mainly impacted by the payment of R$ 250 million to Oi as TSA remuneration, in April. TSA impacts the prepaid expenses line in monthly installments (pro rata) for 12 months of services, during the transition phase for the assets acquired from Oi. In the quarter, the prepaid expenses line improved by R$ 359 million vs. 2Q22.

The improvement in 3Q22 vs. 2Q22 was due to the payment of the EAF and EACE licenses in the previous quarter, related to the 3.5 GHz and the others 5G frequencies auction, which impacted the working capital line by R$ 1.3 billion in the mentioned quarter.

The payment of the TFF rate for 2022, which is a component of the Fistel tax, continues suspended, as well as for 2020 and 2021, and no payment date has been established, therefore benefiting our Working Capital dynamics (Note 22 of the Financial Statements).

DEBT AND CASH

Debt Profile

Total Debt (post-hedge) totaled R$ 18,219 million in 3Q22, increasing by R$ 6,508 million YoY. The total amount includes the recognition of finance leases arising from the acquisition of Oi’s mobile assets, in the total amount of approximately R$ 2.9 billion, considering the accelerated decommissioning term and fines related to lease sites contracts.

At the end of 3Q22, the amount of financings (post-hedge) totaled R$ 4,913 million. The average cost of debt, excluding leases and licenses related to the 5G auction, was 14.2% per year (105.2% of the CDI) in the quarter, higher when compared to the cost of 6.3% per year (122.7% of the CDI) in 3Q21, impacted by the increase in the CDI rate in the period.

At the end of the quarter, our Cash and Securities balance totaled R$ 3,703 million, down by R$ 3,670 million YoY, mainly explained by the acquisition of Oi’s mobile assets in 2Q22 and the payment for the 2021 spectrum auction. It is worth noting that, in October 2022, the Company made an escrow deposit of R$ 670 million related to the discussion on the Price Adjustment of the acquisition of Oi Mobile.

The average financial yield reached 14.0% per year (104.1% of the CDI) in 3Q22, up by 8.2 p.p. over 3Q21, resulting from the recent increases in the basic interest rate.

OPERATING AND MARKETING PERFORMANCE

MOBILE SEGMENT:

At the end of 3Q22, TIM had a total of 68.8 million mobile lines which, with the addition of clients arriving from Oi Mobile, grew by 33.3% YoY, reaching a market share of 26.6%.

The Postpaid base had a total of 29.7 million lines in 3Q22 (+32.6% YoY), with the addition of lines migrated from Oi Mobile. This segment’s mix represents 43% over the total base and remained flat in the annual comparison.

Human Postpaid (ex-M2M) reached 24.9 million lines at the end of the quarter (+36.4% YoY), including the addition of lines arriving from Oi Mobile.

The M2M base reached 4.7 million lines in 3Q22, up by 15.5% YoY, also impacted by the new customers that arrived from Oi.

The Prepaid base had a total of 39.1 million lines in 3Q22, up by 33.9% YoY, including the addition of new lines from Oi Mobile.

FIXED SEGMENT:

At the end of the quarter, TIM Live recorded a customer base of 708k connections, therefore maintaining its growth pace (+5.0% YoY). Net additions reached 9.3k new lines in the period, growing by +9.4% YoY, mainly driven by the FTTH base, which grew by 33.1% in annual comparison. Higher-value plans, with speed above 100 Mpbs, continued to gain more relevance, just as in previous quarters. Another positive highlight was voluntary churn, which reduced by -1.4 p.p. YoY.

CUSTOMER PLATFORM AND MOBILE ADVERTISING

Since 2020, TIM has been developing strategies to increase the solutions ecosystem for its customer base and to expand and diversify the Company’s value creation sources, including a Customer Platform, which aims to monetize the Company’s customer base and increase client loyalty by observing market trends and innovative partnerships. This initiative is made possible by two business models:

Within this strategy, some verticals were ranked as great opportunities for having a more direct connection with mobile services and a higher market valuation than telecom companies. Below are details of the verticals in which we are already operating.

TIM ADS AND TIM INSIGHTS

With more than 550 data points per user, TIM Insights has proven to be a powerful tool to identify the clusters concerned on digital services in various industries, such as Financial Services, Education, Social Networks, Food & Beverage, Retail, Consumer Goods, etc.

With more than 34 million customers with Opt Ins, TIM Ads provides advertising awareness and performance in several forms such as text, image, gif, and mainly, video in TIM's traditional channels, as well as in applications such as Meu TIM, TIM +Vantagens, TIM Fun and TIM News. In addition, it works as a platform for app installing, generating qualified leads, consumer surveys, 1^st party data enrichment and brand lift measurement.

In this third quarter, we had over 5 million TIM users engaged in our advertising campaigns.

FINANCIAL SERVICES

In March 2020, the Company concluded the negotiation with C6 bank and, as of April 2020, launched exclusive offers for TIM customers who opened bank accounts at C6, in addition to using its services. As remuneration for this contract, TIM receives a commission per activated account and the option to gain an equity interest in the bank according to the number of active account targets reached. The number of shares received for each target achieved varies throughout the contract’s term, with the initial percentages being more advantageous for TIM due to the greater effort required for a new digital company to take off.

By the end of 3Q22, the partnership with C6 had achieved another record of accounts created, where 25% of the clients in TIM’s base with Opt In and Digital Profile already had installed the C6 application on their cellphones, surpassing the penetration of applications of 3 out of the 4 largest Brazilian banks. At the end of the quarter, TIM reached an accumulated equity stake of 5.2% in the C6 bank’s share capital.

Even with the project’s success, differences between the partners resulted in the opening of an Arbitration Procedure, in 2021, which remains open, as described in Note 38 of the Financial Statements.

DIGITAL EDUCATIONAL SERVICES

In July 2021, following the strategy adopted with C6, the Company concluded the negotiation with Anhanguera Educacional Participações S.A., a subsidiary of Cogna Educação S.A (“Cogna”), establishing a strategic partnership to develop offers with special benefits for distance learning through the Ampli platform.

Besides the partnership announced, the Company launched exclusive offers for customers enrolled in the platform’s courses, and TIM customers begin to get discounts on selected courses - which is in line with a strategy aimed at generating professional knowledge, providing employability, and encouraging free courses to its users.

As in the partnership with C6, TIM’s remuneration is a commission and equity interest in Ampli, which may reach up to 30% of its share capital – the subscription of shares was approved by Cade in September 2021. It should also be noted that the eligible subscription rights will be calculated annually.

At the end of the third quarter of 2022, the partnership reached over 29k users enrolled in undergraduate and graduate. As for open professional courses, 176k enrollment subscriptions have been made since the beginning of the partnership. In addition, during the year, we reached more than 8 million accesses on the partnership website.

DIGITAL CONTENT AND SECURITY SERVICES

In May 2022, TIM announced a new strategic partnership, this time focused on the digital security market and entertainment. This partnership was born between TIM and the FS group with the creation of EXA, a new brand dedicated to digital solutions for the end consumer. EXA began to offer reading solutions to TIM’s customers directly in their plans through the Ayabook and Aya Minibooks applications (access to digital books) and through Bancah (access to several Brazilian newspapers and magazines). With that, more than 40 million TIM customers can benefit from these services.

INFRASTRUCTURE

For another quarter, TIM reinforces its commitment to enhance and continuously improve the quality of its services, aiming to ensure the best user experience for its customers. The focus on expanding and improving network infrastructure remains an essential pillar in our business plan. In 3Q22, we implemented the 5G standalone coverage in 22 cities, covering 25% of the country's urban population with the technology. In 4G, we reinforced our leading presence, with more than 5,100 cities covered and reaching 99% of Brazil's urban population.

^[9] Article “Brazil has almost 6k 5G antennas” by Valor Econômico, dated 10/14/2022.

Below are the evolution details of our mobile and fixed networks:

* Includes the following locations: Rio de Janeiro (RJ), São Gonçalo (RJ), Nilópolis (RJ), Nova Iguaçu (RJ), São João do Meriti (RJ), Duque de Caxias (RJ), São Paulo (SP), Mauá (SP), Poá (SP), Suzano (SP), Francisco Morato (SP), Franco da Rocha (SP), Diadema (SP), Guarulhos (SP), Taboão da Serra (SP), Salvador (BA), Lauro de Freitas (BA), Camaçari (BA), Feira de Santana (BA), Recife (PE), Olinda (PE), Jaboatão dos Guararapes (PE), Paulista (PE), Goiânia (GO), Aparecida de Goiânia (GO), Anápolis (GO), Manaus (AM), Belo Horizonte (MG), Betim (MG), Contagem (MG), Joinville (SC), Taguatinga (DF), Samambaia (DF), Ceilândia (DF), Águas Claras (DF), Guará (DF), Candangolândia (DF) and Gama (DF).

** The amounts for homes passed were adjusted after a change in recognition methodology, in which the retroactive values were also adjusted.

ENVIRONMENTAL, SOCIAL & GOVERNANCE

For TIM Group, the business role is increasingly tied to the responsible management of aspects that go beyond the financial targets and could also generate a positive value for society in a long term. For this reason, its ESG’s ambitions are connected to the Company's materiality matrix and the UN Sustainable Development Goals.

Driven by the aspiration to "be an ESG reference in Brazil", TIM has updated its ESG Plan 2022-24, with environmental, social, and governance goals and commitments:

* Base year 2019

** Reduce by 50% customer complaints at Anatel in the personal mobile service by 2023, with respect to 2019, without considering complaints from customers coming from Oi Mobile's base.

ENVIRONMENTAL

SOCIAL

GOVERNANCE

o   TIM received from the American Internal Control Institute (ICI), the International Certificate of Excellence of the Internal Control System. The ICI is a worldwide organization dedicated exclusively to internal control and corporate governance;

o   With three winning cases in the Smart Customer 2022 Company of the Year Award, TIM was recognized for its successful strategy in handling customer requests, for the decrease in complaints on the Reclame Aqui website, and for its virtual assistant TAIS;

o   Since 2011, the Company is listed in Novo Mercado segment, B3’s highest governance level;

o   For the second time in a row and the only Telecom company in the country to integrate the list of Pro-Ethical Companies from the Office of the Comptroller General (CGU);

o   First telecom operator to achieve ISO 37001 certification, which attests to the safety and effectiveness of the anti-bribery management system.

To access the ESG quarterly report, please go to: ESG Quarterly Report

DISCLAIMER

The consolidated financial and operating information disclosed in this document, except where otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS) and in Brazilian Reais (R$), in compliance with the Brazilian Corporate Law (Law 6,404/76). Comparisons refer to the third quarter of 2022 (“3Q22”) and the accumulated nine months of 2022 (“9M22”), except when otherwise indicated.

This document may contain forward-looking statements. Such statements are not statements of historical fact and reflect the beliefs and expectations of the Company's management. The words “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “plans”, “predicts”, “projects”, “targets” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties foreseen, or not, by the Company. Therefore, the Company’s future operating results may differ from current expectations and readers of this report should not base their assumptions exclusively on the information given herein. Forward-looking statements only reflect opinions on the date on which they are made and the Company is not obliged to update them in light of new information or future developments.

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ATTACHMENT 1 – TIM S.A.

Operating Indicators

1.       Operations

1.1. Corporate Structure

TIM S.A. (“TIM” “Company” and/or “Enterprise”) is a public limited company with Registered office in the city of Rio de Janeiro, RJ, and a subsidiary of TIM Brasil Serviços e Participações S.A. (“TIM Brasil”). TIM Brasil is a subsidiary of the Telecom Italia Group that held 66.59% of the share capital of TIM S.A on September 30, 2022 (66.59% on December 31, 2021).

The Company provides Landline Switched Telephone Service (”STFC“) in Local, National Long-Distance and International Long-Distance modes, as well as Personal Mobile Service (”SMP“) and Multimedia Communication Service (”SCM"), in all Brazilian states and in the Federal District.

The Company's shares are traded on B3 (formerly BM&F/Bovespa). Additionally, TIM S.A. has American Depositary Receipts (ADRs), Level II, traded on the New York Stock Exchange (NYSE) – USA. As a result, the company is subject to the rules of the Securities and Exchange Commission (“CVM”) and the Securities and Exchange Commission (“SEC”). In order to comply with good market practices, the company adopts as a principle the simultaneous disclosure of its financial information in both markets, in reais, in Portuguese and English.

As of September 30, 2022, TIM S.A. holds a 49% equity interest (49% as of December 31, 2021) in the companies I-Systems (associate), formerly FiberCo Soluções de Infraestrutura S.A. (“FiberCo”), and 100% (it had no interest as of December 31, 2021) in the company Cozani RJ Infraestrutura e Rede de Telecomunicações S.A. (“Cozani”) - subsidiary. We describe below the processes in the corporate reorganization regarding these two companies:

1.2. Corporate Reorganization

1.2.1. Business combination - Cozani

On April 14, 2022, TIM, Telefônica Brasil S.A. and Claro S.A. (“Purchasers”) delivered to Oi Móvel S.A. – Under court-ordered reorganization (“Seller” or “Assignor”) the closing notification regarding the process of acquisition of the Seller’s mobile assets, based on the approvals by the Administrative Council for Economic Defense (CADE), upon signature of an Agreement on Control of Concentrations, whose decision has already become final and unappealable, and by the National Telecommunications Agency (ANATEL), particularly with the publication of Acts 4.949/2022, 4.950/2022 and 4.951/2022, in addition to meeting or waived by the Purchasers, as the case may be, all precedent contractual conditions.

On April 20, 2022, TIM S.A., together with the Buyer companies, after complying with the previous conditions established by CADE and ANATEL, concluded the Oi Móvel Transaction process, with TIM, which currently holds 100% of the share capital of Cozani RJ Infraestrutura e Rede de Telecomunicações S.A. (“SPE Cozani”), a company that corresponds to the part of the unit of assets, rights and obligations of Oi Móvel acquired by Company.

With the conclusion of the Transaction, TIM S.A. now holds 100% of the share capital of Cozani, a company that corresponds to the part of the unit of assets, rights and obligations of Oi Móvel acquired by the Company. The Company has been complying with all the measures provided for in Anatel’s conditions and in the Concentration Control Agreement (“ACC”) entered into with CADE.

Within 6 months after Closing, TIM will make a Public Offers available for the sale of 50% of the Radio Base Stations (ERB's) acquired from Oi (Public Offers of ERB's).

The price of 100% of Cozani’s shares, after all the adjustments provided for in the Share Purchase Agreement, was R$ 6,977.6 million.

Adjusted Closing Price:

In addition to the above amounts, the Seller may be entitled to receive up to an additional R$ 230 million from TIM, conditioned to the achievement, up to March 31, 2023, of certain targets related to the radio frequencies and customer base involved in the Transaction. Of this amount, R$ 67.5 million have already been paid due to the fulfillment of part of the established targets. Of the remaining amount not yet paid (R$ 162.5 million), the Company understands that it is expected to disburse the amount of R$ 129.5 million up to the described term recognized as contingent consideration on the date of disclosure of this financial information.

TIM also paid, on April 20, 2022, on behalf of SPE Cozani, the amount of R$ 250.7 million to the Seller, as remuneration, for up to 12 months of service provision in the transition phase, and signed an annual contract term for the use of transport infrastructure capacity with Brasil Telecom Comunicação Multimídia S.A., involving the payment of decreasing amounts which, at present value, total approximately R$ 476 million.

As of September 30, the total consideration transferred for the acquisition of Cozani was R$ 7,174.6 billion.

Identifiable assets acquired and liabilities assumed

As of September 30, 2022, the fair value of the identifiable assets acquired and liabilities assumed by Cozani on the date of the acquisition by TIM S.A. is being prepared and finalized according to the Price purchase allocation report and may be changed until the final conclusion, which may occur up to 12 months from the acquisition date. On this date, the preliminary analysis indicates assets and liabilities presented below:

The assets acquired and liabilities assumed related to Cozani (“net assets”) by TIM S.A. on the acquisition date and the impacts on the Company’s consolidated results, which reflect the results of the company acquired as of April 30, 2022, are summarized below:

(i)      The intangible asset value refers to the adjustment in the authorizations item reflecting the fair value of the acquired grants and the Spectrum assessment was carried out using the market approach, with the application of a transaction multiple. The average useful life is 17.68 years;

(ii)    The evaluation of the client portfolio was conducted using the profitability approach, using the MPEEM (Multi-period excess earning method) method based on a calculation of cash flows from future economic benefits attributable to the client base. The average useful life is 8.67 years.

The goodwill paid of R$ 2,195,091 comprises the value of future economic benefits arising from synergies arising from the acquisition. Goodwill is allocated on a consolidated basis as the assets acquired and liabilities assumed bring benefits to the business as a whole. There is no expectation that the goodwill recognized will be deductible for tax purposes until the corporate merger of the company Cozani takes place, which should occur in 2023.

1.2.2 Sale of 51% of I-Systems (formerly FiberCo) to IHS

In December 2020, FiberCo was established by the Company to segregate network assets and provide infrastructure services. FiberCo was born to implement, operate and maintain last-mile infrastructure for broadband access to be offered in the wholesale market. Nevertheless, the terms of the agreement define TIM as current main customer, having the prerogative of 6 months of exclusivity after entering new areas.

On May 5, 2021, the Company disclosed the decision of its Board of Directors on the sale by TIM of 51% of the share capital of FiberCo in favor of IHS Fiber Brasil - Cessão de Infraestruturas Ltda. (“IHS”), with the remaining 49% remaining under the control of the Company upon closing of the transaction.

According to the valuation report of the net assets and liabilities, the calculated amount of R$ 1,211,789 was paid-in as share capital of I-Systems on November 1, 2021.

The process for acquisition of equity interest at FiberCo, later named I–Systems, by IHS was completed on November 16, 2021. As a result, IHS currently holds 51% of the share capital of I-Systems, with TIM S.A. having a minority (non-controlling) interest of 49% in I-Systems. As of this moment, TIM S.A. ceased the line-by-line consolidation of I-Systems (formerly FiberCo).

For the conclusion of the sale, IHS made a capital contribution of R$ 582,498 (primary) in the new company (I-Systems) and the payment of R$ 1,096,294 (secondary) directly to TIM S.A., thus totaling R$ 1,678,792 for the acquisition of a 51% equity interest. The fair value calculated for 100% of the new company was R$ 3,291,794.

Upon closing, the remaining non-controlling interest of 49% in the investee was recorded by TIM S.A. at fair value in the amount of R$ 1,612,957, as provided for by IFRS 10 (CPC 36). As provided for in IAS 28 (CPC 18), the sale of an investment with loss of control must be recognized by the total write-off of the investment and recognition of part of the associated company’s investment at fair value.

Subsequently, the interest in the investee started to be valued under the equity method, as defined in IAS 28 (CPC 18).

Currently, due to the closing of the transaction and loss of I- Systems’s control, TIM S.A. wrote-off about 90% of the total goodwill recorded in the acquisition of TIM Fiber SP Ltda. and TIM Fiber RJ S.A. in the amount of R$ 1,051,477.

The effects of the transaction are detailed below:

2.       Preparation basis and presentation of individual and consolidated quarterly information

The individual and consolidated quarterly information was prepared in accordance with accounting practices adopted in Brazil, which comprise the resolutions issued by the CVM and the pronouncements, guidelines and interpretations issued by Comitê de Pronunciamentos Contábeis [Accounting pronouncements committee] (CPC) and the International Financial Reporting Standards (International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board (IASB) and show all relevant information specific to the quarterly information, and only this information, which is consistent with that used by management in its management. Additionally, the Company considered the guidelines provided for in Technical Guideline OCPC 07 - Evidencing upon Disclosure of General Purpose Financial-Accounting Reports in the preparation of its quarterly information. In this way, the relevant information specific to the quarterly information is being evidenced and correspond to those used by the management in its duties.

The main accounting policies applied in the preparation of this quarterly information are defined below and / or presented in their respective notes. Those policies were consistently applied in the years presented.

a. General criteria for preparation and disclosure

The individual and consolidated quarterly information was prepared considering the historical cost as value basis and financial assets and liabilities (including derivative financial instruments) measured at fair value.

Assets and liabilities are classified according to their degree of liquidity and collectability. They are reported as current when they are likely to be realized or settled over the next 12 months. Otherwise, they are recorded as non-current. The exception to this procedure involves deferred income tax and social contribution balances (assets and liabilities) and provision for lawsuits and administrative proceedings that are fully classified as long-term.

The presentation of the Statement of Value Added is required by Brazilian corporate law and the accounting practices adopted in Brazil applicable to publicly-held companies. The DVA was prepared according to the criteria set forth in CPC Technical Pronouncement No. 09 - “Statement of Value Added”. IFRS does not require the presentation of this statement. As a consequence, according to the IFRS, this statement is presented as supplementary information, without affecting the quarterly information.

Interests paid are classified as financing cash flow in the statement of cash flows as it represents costs of obtaining financial resources.

b. Functional currency and presentation currency

The currency of presentation of the quarterly information is the Real (R$), which is also the Company´s functional currency.

Foreign currency transactions are recognized at the exchange rate on the date of the transaction. Monetary items in foreign currency are converted into reais at the exchange rate on the balance sheet date, informed by Banco Central do Brasil [Central Bank of Brazil]. Foreign exchange gains and losses linked to these items are recorded in the statement of income.

Operating segments are components of the entity that carry out business activities from which revenues can be obtained and expenses incurred. Its operating results are regularly reviewed by the entity's main operations manager, who makes decisions on resource allocation and evaluates segment performance. For the segment to exist, individualized financial information is required.

The main operational decision maker in the Company, responsible for the allocation of resources and periodically evaluating performance, is the Executive Board, which, along with the Board of Directors, are responsible for making the strategic decisions of the company and its management.

The Group’s strategy is focused on optimizing results, and from the corporate reorganization mentioned in note 1, all the operating activities of the group are concentrated exclusively in TIM S.A. Although there are diverse activities, decision makers understand that the company represents only one business segment and do not contemplate specific strategies focused only on one service line. All decisions regarding strategic, financial planning, purchases, investments and investment of resources are made on a consolidated basis. The aim is to maximize the consolidated result obtained by operating the SMP, STFC and SCM licenses.

Subsidiaries are all the entities in which the Group retains control. The Group controls an entity when it is exposed to, or has a right over the variable returns arising from its involvement with the entity and has the ability to interfere in those returns due to its power over the entity. The subsidiaries are fully consolidated as of the date control is transferred to the Group. Consolidation is interrupted beginning as of the date in which the Group no longer holds control.

The purchase accounting method is used to record the acquisition of subsidiaries by the Group. The acquisition cost is measured as the fair value of the assets acquired, equity instruments (i.e.: shares) and liabilities incurred or assumed by the acquirer on the date of the change of control. Identifiable assets acquired, contingencies and liabilities assumed in a business combination are initially measured at fair value on the date of acquisition, regardless of the proportion of any minority interest. The portion exceeding the acquisition cost of the Group's interest in the acquired identifiable net assets, is recorded as goodwill. Should the acquisition cost be less than the fair value of the net assets of the acquired subsidiary, the difference is recognized directly in the statement of income as a revenue once concepts and calculations applied are reviewed.

Intercompany transactions, as well as the balances and unrealized gains and losses in those transactions, are eliminated. The base date of the financial information used for consolidation purposes is the same for all the companies in the Group.

There are no consolidated balances for the balance sheet for December 2021 since the comparative consolidated balances in December 2021 were not presented, since the subsidiary I-Systems (formerly FiberCo) was incorporated in December 2020 and, as described in Note 1, had 51% of its equity interest sold to IHS in November 2021, when TIM S.A. now holds a non-controlling minority interest of 49%. At that moment, TIM S.A. started having I-Systems as an affiliated company and to record the income (loss) of this company under the equity method, no longer consolidating it.

The Company’s consolidation basis as of September 30, 2022 includes the wholly-owned subsidiary Cozani (100% interest), due to the acquisition of this company, as described in Note 1.

Business combinations are accounted for under the acquisition method. The cost of an acquisition is measured for the consideration amount transferred, which is valuated on fair value basis on the acquisition date, including the value of any non-controlling interest in the acquiree, regardless of their proportion. For each business combination, the buyer must measure the non-controlling interest in the acquired business at the fair value of based on its interest in the net assets identified in the acquired business. Costs directly attributable to the acquisition are accounted for as expense when incurred.

On acquiring a business, the Group assesses the financial assets and liabilities assumed in order to rate and to allocate them in accordance with contractual terms, economic circumstances and pertinent conditions on the acquisition date, which includes segregation by the acquired entity of built-in derivatives existing in the acquired entity’s host contracts.

Any contingent payments to be transferred by the acquiree will be recognized at fair value on the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability should be recognized in accordance with CPC 48 in the statement of income.

Initially, goodwill is initially measured as being the excess of consideration transferred in relation to net assets acquired (acquired identifiable assets and assumed liabilities) measured at fair value on acquisition date. If consideration is lower than fair value of net assets acquired, the difference must be recognized as gain in bargain purchase in the statement of income on the acquisition date.

After initial recognition, the goodwill is carried at cost less any accumulated loss for the impairment losses. For impairment testing purposes, goodwill acquired in a business combination is, from the acquisition date, allocated to each cash-generating units of the Group that are expected to benefit by the synergies of combination, regardless of other assets or liabilities of the acquiree being allocated to those units.

When the goodwill is part of a cash generating unit and a portion of this unit is disposed of, the premium associated with the disposed portion should be included in the cost of the operation when calculating gains or losses in the disposal. The goodwill disposed under these circumstances of this operation is determined based on the proportional values of the portion disposed of, in relation to the cash generating unit maintained.

The Group measures the lease liabilities assumed at the present value of the remaining payments as if the lease agreement acquired were a new lease agreement at the acquisition date. Right-of-use assets were measured at an amount equivalent to the lease liabilities and adjusted to reflect the favorable terms of these leases compared to market terms. Considering that the off-market nature of said lease is reflected in the right-of-use asset, the acquirer does not recognize separately an intangible asset or liability relating to favorable or unfavorable terms in relation to market value.

This quarterly information was approved by the company's Board of Directors on November 7, 2022.

The following new standards/amendments were issued by the Accounting Pronouncement Committee (“CPC”) and International Accounting Standards Board (IASB), are effective for the year ended September 30, 2022.

·        Amendments to CPC 06(R2), CPC 11, CPC 38, CPC 40 (R1) and CPC 48: Benchmark Interest Rate Reform.

The amendments to Pronouncements CPC 38 and CPC 48 provide for temporary exceptions that address the financial statement effects when a rate of interbank deposit certificate is replaced with an alternative to an almost risk-free rate. The amendments include the following practical expedients:

·        A practical expedient that requires contractual changes, or changes in cash flows which are directly required by the reform, to be treated as changes in a floating interest rate, equivalent to a change in a market rate;

·        A practical expedient that allows changes required by the reform, to be carried out in hedge designation and documentation

and hedge relationship will not be discontinued;

·        A practical expedient that provides a temporary exception to entities so they will comply with the separately identifiable requirement when a risk-free rate instrument is designated as an hedge risk component.

These amendments did not impact the Group’s quarterly and consolidated information.

If they become applicable, the group intends to use the practical expedients in future periods.

·        Amendments to CPC 06 (R2): COVID-19 related benefits granted to leaseholders in lease agreements that go beyond June 30, 2021.

The amendments provide for the granting of benefits to lessees upon adoption of the guidelines of CPC 06 (R2) on the modification of the lease agreement, when accounting for the related benefits as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may choose not to assess whether a benefit related to Covid-19 granted by the lessor is a modification of the lease agreement. The lessee who makes this option must account for any change in the lease payment resulting from the benefit granted in the lease agreement related to Covid-19 in the same way that it would account for the change by adopting CPC 06 (R2) if the change was not a modification of the lease agreement.

The amendment was intended to be applied until June 30, 2021, but as the impact of COVID-19 pandemic may continue, on March 31, 2021, the CPC extended the application period of this practical expedient to June 30, 2022. This amendment becomes effective for the fiscal years beginning on or after January 1, 2021. However, with the advancement of vaccination and lesser impact of the pandemic on economic activities, benefits granted to lessees related to COVID-19 were not observed in 2022. However, if identified, the Company plans to apply the practical expedient when available within the period of the standard.

The following new standards were issued by Comitê de Pronunciamentos Contábeis [Accounting pronouncements committee] (CPC) and the International Accounting Standards Board (IASB), but are not in effect for the period ended on September 30, 2022.

In May 2017, the IASB issued IFRS 17 - Insurance Contracts (a standard not yet issued by CPC in Brazil, but which will be codified as CPC 50 - Insurance Contracts and will replace CPC 11 - Insurance Contracts), a new comprehensive accounting standard for insurance contracts that includes recognition and measurement, presentation and disclosure. As soon as it comes into force, IFRS 17 (CPC 50) will replace IFRS 4 - Insurance Contracts (CPC 11), issued in 2005. IFRS 17 applies to all types of insurance contracts (such as life, non-life, direct insurance and reinsurance), regardless of the type of entity that issues them, as well as certain guarantees and financial instruments with discretionary participation characteristics. Some scope exceptions apply. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements of IFRS 4, which are largely based on local accounting policies in force in previous periods, IFRS 17 provides for a comprehensive model for insurance contracts, covering all relevant accounting aspects. The focus of IFRS 17 is the general model, covering the following:

• A specific adaptation for contracts with direct participation characteristics (variable rate approach).

• A simplified approach (premium allocation approach), mainly for short-term contracts. IFRS 17 is effective for periods beginning on or after January 1, 2023, requiring the presentation of comparative amounts. Early adoption is allowed if the entity also adopts IFRS 9 and IFRS 15 on the same date or before the first-time adoption of IFRS 17.

This standard does not apply to the Company.

·        Amendments to IAS 1: Classification of liabilities as current or non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1, related to CPC 26, aiming to specify the requirements for classifying the liabilities as current or non-current. The amendments clarify the following:

• What a right to postpone settlement means;

• That the right to postpone settlement must exist on the base date of the report;

• That this classification is not affected by the likelihood that an entity will exercise its right to postpone settlement

• That only if a derivative embedded in a convertible liability is itself an equity instrument would the terms of a liability not affect its classification. Amendments are valid for periods started on January 1, 2023 and must be applied on a retrospective basis.

The Company is currently assessing the impact that the changes will have on current practice and whether or not existing loan agreements will require renegotiation.

·        Amendments to IAS 8: Definition of accounting estimates

In February 2021, IASB issued amendments to IAS 8 (standard related to CPC 23), in which the definition of ‘accounting estimates’ is introduced. The amendments clarify the difference between changes in accounting estimates and changes in accounting policies and correction of errors. Additionally, they clarify how entities use measurement and input techniques to develop accounting estimates.

The amendments will become effective for periods beginning on or after January 1, 2023 and will be applied to changes in accounting policies and estimates that occur on or after the beginning of that period. If disclosed, early adoption is allowed.

Amendments are not expected to have a significant impact on the Group’s financial statements.

·        Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of accounting policies

In February 2021, IASB issued amendments to IAS 1 (standard related to CPC 26 (R1)) and IFRS Practice Statement 2 Making Materiality Judgments, in which guides and examples are provided to help entities to apply materiality judgment to the disclosure of accounting policies. The aim of amendments is to assist entities in the disclosure of accounting policies that are most useful by replacing the requirement for disclosure of significant accounting policies to material accounting policies and adding guides about how entities should apply the concept of materiality to make decisions about the disclosure of accounting policies.

The amendments to IAS 1 are applicable for periods started as of or after January 1, 2023, with early adoption allowed. Since the amendments to Practice Statement 2 provide non-mandatory guides about the application of material definition to the accounting policy information, an adoption date is not required for this amendment.

The Group is currently evaluating the impacts of these amendments to the accounting policies disclosed.

COVID-19 impacts

Since March 2020 a pandemic was declared by the World Health Organization due to the outbreak of the new Coronavirus (COVID-19). The main impacts and first cases were recorded in Brazil and in the world also in the first quarter of 2020.

The Company has a robust infrastructure and is part of an extremely important segment in this period of crisis, essential for the population, government and health system since 2020.  After an internal analysis, there was no indication of impairment of assets or risks associated with the fulfillment of obligations, since the Company is not highly leveraged and still has credit lines available to be used in the event of a significant reduction in cash volume. 

In September 2021, the country showed a significant evolution in vaccination levels, with a reduction in the transmission rate and number of cases. Thus, there was a slight improvement in economic activities. In June, the stores returned with activities with a positive impact on device sales.

The country currently has vaccination levels at approximately 80% and we have not identified any relevant impacts in the quarterly information.

3.       Estimates and areas where judgment is significant in the application of the company's accounting policies

Accounting estimates and judgments are continuously assessed. They are based on the Company's historical experience and on other factors, such as expectations of future events, considering the circumstances present on the base date of quarterly information.

By definition, the resulting accounting estimates will rarely be the same as the actual results. The estimates and assumptions that present a significant risk, with the probability of causing a material adjustment to the carrying amounts of assets and liabilities for the fiscal period, are covered below.

(a)       Impairment loss on non-financial assets and investments in associated companies

Impairment losses occur when book value of an asset or cash generating unit exceeds its recoverable value, which is the highest of fair value less selling costs and value in use. Calculation of fair value less selling costs is based on information available on similar assets’ selling transactions or market prices less additional costs to dispose of the asset. The calculation of value in use is based on the discounted cash flow model.

Any reorganization activities with which the Company is not committed to on the reporting date of the quarterly information or significant future investments that could improve the asset base of the cash generating unit under test are excluded for impairment testing purposes.

The main non-financial assets for which this assessment was made are goodwill recorded by the Company (Note 16) and its tangible and intangible assets.

Net investments in associated companies are valued after applying the equity method to determine whether there is any objective evidence of impairment. The recoverable amount of an investment in an associated company must be determined for each investment, unless the associated company does not generate cash inflows on an ongoing basis that are largely independent of those generated by the entity’s other assets. The investment in an associated company was valued as described in Note 14.

(b)       Income tax and social contribution (current and deferred)

Income tax and social contribution (current and deferred) are calculated according to interpretations of current legislation and CPC 32 / IAS 12. This process typically involves complex estimates to determine taxable income and temporary differences. In particular, the deferred assets on tax losses, negative basis of social contribution and temporary differences is recognized in proportion to the probability that future taxable income is available and can be used. The measurement of the recoverability of deferred income tax on tax losses, negative basis of social contribution and temporary differences takes the history of taxable income into account, as well as the estimate of future taxable income (Note 10).

(c)       Provision for legal and administrative proceedings

The legal and administrative proceedings are analyzed by the Management along with its legal advisors (internal and external). The Company considers factors in its analysis such as hierarchy of laws, precedents available, recent court judgments, their relevance in the legal system and payment history. These assessments involve Management’s judgment (note 25).

(d)       Fair value of derivatives and other financial instruments

The financial instruments presented in the balance sheet at fair value are measured using valuation techniques that consider observable data or observable data derived from market (Note 38).

(e)       Unbilled revenues

Since some cut dates for billing occur at intermediate dates within the months of the year, as the end of each month there are revenues earned by the Company, but not actually invoiced to its customers. These unbilled revenues are recorded based on estimate that takes into consideration historical consumption data, number of days elapsed since the last billing date, among others (note 29).

(f)       Leases

The Company has a significant number of the lease contracts in which it acts a lessee (Note 17), and with the adoption of the accounting standard IFRS 16 / CPC 06 (R2) – Leases, on 01/01/2019, certain judgments were exercised by Company’s management in measuring lease liabilities and right-of-use assets, such as: (i) estimate of the lease term, considering non-cancellable period and the period covered by options to extend the contract term, when the exercise depends only from the Company, and this exercise is reasonably certain; and (ii) using certain assumptions to calculate the discount rate.

The company is not able to readily determine the interest rate implicit on the lease and, therefore, considers its incremental rate on loans to measure lease liabilities. Incremental rate on the lessee’s loan is the interest rate that the lessee would have to pay when borrowing, for a similar term and with a similar guarantee, the resources necessary to obtain the asset with a value similar to the right of use asset in a similar economic environment. The company estimates the incremental rate using observable data (such as market interest rates) when available and considers aspects that are specific to the Company (such as the cost of debt) in this estimate.

4.       Cash and cash equivalents

These are financial assets measured at amortized cost through the effective interest rate method.

The Company’s Management determines the classification of its financial assets upon initial recognition.

As of December 31, 2021, there were no companies for consolidation. Therefore, the balances presented were only individual.

Parent company Consolidated

Bank certificates of deposit (“CDBs”) and committed transactions are nominative securities issued by banks and sold to the public as a form of fund raising. Such securities may be traded during the contracted term, at any time, without significant loss in their value and are used for the fulfilment of short-term obligations by the company.

The decrease in the cash position is explained by the acquisition of an equity interest in Cozani (Note 1.2.1). and payments for 5G licenses and related obligations (Note 16.f).

The annual average return of the Company's applications related to CBD's is 102.14% (101.57% as of December 31, 2021) and of Repurchase and resale agreements is 96.28% of the variation of the Interbank Deposit Certificate – CDI.

5.       Marketable securities

Comprise financial assets measured at fair value through profit or loss.

The decrease in the cash position is explained by the acquisition of an equity interest in Cozani (Note 1.2.1). and payments for 5G licenses and related obligations (Note 16.f).

(i)As of December 2017, the Company, with the aim of using tax deductibility benefit for income tax purposes, started investing in the National Film Industry Financing Fund (FUNCINE). The average remuneration in 2022 is 0.21% p.a. (-0.06% p.a. on December 31, 2021).

(ii) Fundo Soberano is composed only of federal government bonds. The average remuneration in 2022 is 100.68% (95.13% on December 31, 2021) of the variation of the interbank deposit certificate – CDI.

(iii) In August 2017, the Company invested in open FIC's (Quota Investment Fund). Funds are mostly made up of federal government bonds and papers from top-tier financial institutions. The average remuneration in 2022 of the FICs was 107.85% (122.76% on December 31, 2021) of the variation of the Interbank Deposit Certificate - CDI.

(iv) Government bonds are fixed income financial instruments issued by the National Treasury to finance the activities of the Federal Government.

(v) The CDB operations are emitted by the banks with the commitment of stock buyback by the bank itself and with predetermined taxes.

(vi) The Financial bills is a fix income tittle emitted by financial institutions with the objective of a long-term fund raising.

(vii) Is represented by: Debentures, FIDC, commercial notes, promissory notes, bank credit note.

6.       Trade accounts receivable

These are financial assets measured at amortized cost, and refer to accounts receivable from users of telecommunications services, from network use (interconnection) and from sales of handsets and accessories. Accounts receivable are recorded at the price charged at the time of the transaction. The balances of accounts receivable also include services provided and not billed (“unbilled”) up to the balance sheet date. Accounts receivable from clients are initially recognized at fair value and subsequently measured at amortized cost using the effective interest rate method less the provision for expected credit losses ("impairment").

The provision for expected credit losses was recognized as a reduction in accounts receivable based on the profile of the subscriber portfolio, the aging of overdue accounts receivable, the economic situation, the risks involved in each case and the collection curve, at an amount deemed sufficient by Management, as adjusted to reflect current and prospective information on macroeconomic factors that affect the customers’ ability to settle the receivables.

The fair value of trade accounts receivable equals the book value recorded as at September 30, 2022 and December 31, 2021.

The average rate considered in calculating the present value of accounts receivable recorded in the long term is 0.31% (0.19% on December 31, 2021).