Consolidated half year report of LOTOS Group 2017 Consolidated report of the LOTOS Group 3Q 2018 This is the translated version of the document originally issued in Polish WorldReginfo - 039b12b5-4115-4904-9a6f-637fbfee568b Consolidated report of LOTOS Group 3Q 2018 The LOTOS Group - financial highlights 3Q 2018 The LOTOS Group Financial report 3Q 2018 Management’s Discussion and Analysis of 3Q 2018 consolidated financial results Supplementary information to the consolidated financial results of the LOTOS Group for 3Q 2018 WorldReginfo - 039b12b5-4115-4904-9a6f-637fbfee568b LOTOS GROUP FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS - CONSOLIDATED PLNm EURm 9 months 9 months 9 months 9 months ended ended ended ended Sep 30 2018 Sep 30 2017 Sep 30 2018 Sep 30 2017 (unaudited) (unaudited) (unaudited) (unaudited) Revenue 22,199.7 17,164.7 5,219.2 4,032.5 Operating profit 2,212.5 1,505.9 520,2 353.8 Pre-tax profit 2,105.1 1,712.7 494.9 402.4 Net profit 1,487.3 1,187.1 349.7 278.9 Net profit attributable to owners of the Parent 1,487.3 1,187.1 349.7 278.9 Net profit/(loss) attributable - - - - to non-controlling interests Total comprehensive income/(loss) 1,436.3 1,640,1 337.7 385.3 Total comprehensive income/(loss) attributable 1,436.3 1,640,1 337.7 385.3 to owners of the Parent Total comprehensive income/(loss) attributable - - - - to non-controlling interests Net cash from operating activities 1,695.7 2,112,8 398.7 496.3 Net cash from investing activities (581.0) (1,104,5) (136.6) (259.5) Net cash from financing activities (924.2) (204,5) (217.3) (48.0) Total net cash flow 190.5 803,8 44.8 188.8 Basic earnings per share (PLN/EUR) 8.04 6.42 1.89 1.51 Diluted earnings per share (PLN/EUR) 8.04 6.42 1.89 1.51 PLNm EURm As at As at As at As at Sep 30 2018 Dec 31 2017 Sep 30 2018 Dec 31 2017 (unaudited) (audited) (unaudited) (audited) Total assets 22,777.8 21,171.2 5,332.6 5,075.9 Equity attributable to owners of the Parent 11,955.1 10,712.4 2,798.9 2,568.4 Non-controlling interests 0.1 0.1 0.0 0.0 Total equity 11,955.2 10,712.5 2,798.9 2,568.4 FINANCIAL HIGHLIGHTS - SEPARATE PLNm EURm 9 months 9 months 9 months 9 months ended ended ended ended Sep 30 2018 Sep 30 2017 Sep 30 2018 Sep 30 2017 (unaudited) (unaudited) (unaudited) (unaudited) Revenue 19,775.7 14,822.9 4,649.3 3,482.3 Operating profit 1,336.7 687.5 314.3 161.5 Pre-tax profit 1,667.5 992.4 392.0 233.1 Net profit 1,420.1 828.1 333.9 194.5 Total comprehensive profit/(loss) 1,360.2 1,268.7 319.8 298.1 Net cash from operating activities 353.9 928.4 83.2 218.1 Net cash from investing activities 398.3 (129.4) 93.6 (30.4) Net cash from financing activities (598.9) (676.9) (140.8) (159.0) Total net cash flow 153.3 122.1 36.0 28.7 Basic earnings per share (PLN/EUR) 7.68 4.48 1.81 1.05 Diluted earnings per share (PLN/EUR) 7.68 4.48 1.81 1.05 PLNm EURm As at As at As at As at Sep 30 2018 Dec 31 2017 Sep 30 2018 Dec 31 2017 (unaudited) (audited) (unaudited) (audited) Total assets 17,187.4 15,779.3 4,023.8 3,783.2 Equity 10,067.6 8,892.3 2,357.0 2,132.0 Items in the Financial Highlights table have been translated at the following EUR exchange rates: Items of the statement of financial position have been translated at the mid-exchange rates quoted by the National Bank of Poland for the last day of the reporting period: As at Sep 30 2018 As at Dec 31 2017 1 EUR = 4.2714 PLN 1 EUR = 4.1709 PLN Items of the statement of comprehensive income and the statement of cash flows have been translated using the arithmetic mean of the mid- exchange rates quoted by the National Bank of Poland for the last day of each month in the reporting period: 9 months ended 9 months ended Sep 30 2018 Sep 30 2017 1 EUR = 4.2535 PLN 1 EUR = 4.2566 PLN This is a translation of a document originally issued in Polish) ( WorldReginfo - 039b12b5-4115-4904-9a6f-637fbfee568b LOTOS Group FINANCIAL REPORT FOR THE THIRD QUARTER OF 2018 (This is a translation of a document originally issued in Polish) WorldReginfo - 039b12b5-4115-4904-9a6f-637fbfee568b I. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30TH 2018, PREPARED IN ACCORDANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS ENDORSED BY THE EUROPEAN UNION ............................................................................................................ 3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ......................................................................................................... 4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................................................... 5 CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................................................................ 6 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................................... 7 NOTES TO THE FINANCIAL STATEMENTS .......................................................................................................................................... 8 1. General information ...................................................................................................................................................................... 8 2. Composition of the Group ............................................................................................................................................................. 8 3. Changes in the entity’s structure in the interim period, including changes which follow from mergers, acquisitions or sale of subsidiaries, long-term investments, restructuring or discontinuation of business ........................................................................ 10 4. Basis of preparation and presentation ......................................................................................................................................... 10 4.1 Accounting policies ................................................................................................................................................................ 10 4.2 New standards and interpretations which have been published but are not yet effective ......................................................... 12 4.3 Exchange rates ..................................................................................................................................................................... 12 5. Seasonality and cyclicality of business in the reporting period ..................................................................................................... 13 6. Material changes to reporting items, including amounts which significantly affect assets, liabilities, equity, net profit/(loss) or cash flows and which are non-typical due to their nature, value, effect or frequency ............................................................................ 13 7. Changes to estimates reported in previous interim periods of the current financial year or in previous financial years, where they have a material effect on the current interim period ..................................................................................................................... 13 8. Business segments .................................................................................................................................................................... 13 9. Expenses by nature .................................................................................................................................................................... 15 10. Other income .............................................................................................................................................................................. 15 11. Other expenses .......................................................................................................................................................................... 15 12. Finance income .......................................................................................................................................................................... 16 13. Finance costs ............................................................................................................................................................................. 16 14. Income tax.................................................................................................................................................................................. 17 14.1 Tax expense .......................................................................................................................................................................... 17 14.2 Deferred income tax .............................................................................................................................................................. 17 14.2.1 Deferred tax assets and liabilities .................................................................................................................................. 17 15. Earnings per share ..................................................................................................................................................................... 19 16. Dividends ..................................................................................................................................................................................