Predicted accounting one-offs which impact significantly financial datapresented in ORLEN Group consolidated financial report for the 4quarters 2023Regulatory announcement no 17/2024 dated 19 February2024ORLEN S.A. ("Company") informs that in the ORLEN Groupconsolidated financial report for the 4 quarters 2023, it predicts therecognition of the finalization of accounting for business combinationrelated to merger with PGNiG S.A. ("PGNiG"). It is an accountingnon-cash one-off resulting from the International Financial ReportingStandard 3 Business Combinations, nevertheless it has a significantimpact on the financial results of ORLEN and ORLEN's Group ("Group") forthe period of 12 and 3 months ended on 31 December 2023.On 2November 2022, the merger of ORLEN with PGNiG was registered. Thetransaction of merger with PGNiG was subject to acquisition method inaccordance with the IFRS 3 Business Combinations. In the consolidatedfinancial statements for 2022 the Group presented the provisional valuesof the acquired assets and assumed liabilities that haven't been changedduring the subsequent reporting periods due to the ongoing measurementperiod.On 19 February 2024 the Group has finally completed theprocess of identification and valuation to fair value of the acquiredassets and assumed liabilities, which was carried out by independentexperts. As a result of the finalization of accounting for businesscombination related to the merger with PGNiG transaction the gain on abargain purchase has been reduced by PLN 1,5 bn in relation to theprovisional value of PLN 8,2 bn presented in the consolidated financialstatement for 2022 and amounted to PLN 6,7 bn.Therefore, inaccordance with the principles of IFRS 3, ORLEN Group retrospectivelyadjusted the provisional values of the net assets acquired to their fairvalues as if the accounting for the business combination with PGNiG wascompleted at the acquisition date. As a consequence the Group alsorevised the comparative information for the prior reporting periods,which also affected the financial figures of ORLEN Group for 2023.Recognitionof adjustments to the provisional values of net assets acquired to theirfair values and their settlements in the subsequent reporting periodswill increase the consolidated EBITDA of ORLEN Group for the period of12 and 3 months ended on 31 December 2023, by ca. PLN 7,6 bn and PLN 2,2bn respectively, the consolidated EBIT of ORLEN Group for the period of12 and 3 months ended on 31 December 2023, by ca. PLN 4,7 bn and PLN 1,6bn respectively, and consolidated net result of ORLEN Group for theperiod of 12 and 3 months ended on 31 December 2023, by PLN 3,6 bn andPLN 0,8 bn respectively, which is due in particular to:- recognitionof contract assets and contract liabilities related to contracts mainlyfor the purchase and sale of gas, electricity and CO2 emissionallowances of the former PGNiG Group measured at fair value as at theacquisition date, and settled in the profit and loss statement at thetime of the actual execution of a given futures contract in 2023, in theamounts of PLN 8,3 bn and PLN 2,5 bn respectively.- remeasurement ofthe inventories as at the acquisition date, mainly gas inventories,which affected the value of cost of sales recognized in subsequentperiods, including reversal of the previously recognized effects ofestablishment and reversal of impairments on gas inventories to theirnet realizable values, i.e. PLN 1,6 bn and PLN (0,1) bn respectively.-recognition of the additional impairments as a result of comparison,made by the Group, of the changed book values of non-financialnon-current assets with their recoverable amounts estimated within theimpairment tests carried out at the end of the 1 quarter 2023,particularly in upstream segment, what will negatively affect thepresented result for the 12 months 2023, in the amount of PLN (1,8) bn.-recognition of the changes in amortization and depreciation as a resultof determining the final fair values of fixed assets, intangible assetsand right-of-use assets for the period of 12 and 3 months ended on 31December 2023, in the amounts of PLN (2,9) bn and PLN (0,6) bn.-impact of changes in fair values of the assets and liabilities ondeferred tax assets and deferred tax liabilities which affected therecognition of the deferred tax in the profit and loss statement in theperiod of 12 and 3 months ended on 31 December 2023, amounting to PLN(1,2) bn and PLN (0,8) bn respectively.ORLEN will publishconsolidated financial report of ORLEN Group for the 4 quarters 2023 on22 February 2024.