1. 2Q11 HIGHLIGHTS TRIPLE PLAY SERVICES POST SOLID PERFORMANCE STRONG PICK-UP IN OPERATING CASH FLOW AFTER CAPEX DECLINES MATERIALLY

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2 1. 2Q11 HIGHLIGHTS Table 1. Highlights of 2Q11 Results 2Q10 2Q11 2Q11 / 2Q10 1H10 1H11 1H11 / 1H10 Operational ('000) Triple Play Customers % % Triple Play Penetration (%) 49.0% 58.6% 9.6pp 49.0% 58.6% 9.6pp RGUs (1) 3, , % 3, , % Blended ARPU (Euros) % % Financial (Millions of Euros) Operating Revenues (2.2%) (1.0%) Pay TV, Broadband and Voice (3.0%) (0.8%) EBITDA % % EBITDA Margin 35.3% 37.1% 1.9pp 34.8% 37.1% 2.3pp Net Income (32.2%) (15.4%) EBITDA - CAPEX % % (1) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile subscribers. TRIPLE PLAY SERVICES POST SOLID PERFORMANCE o RGU growth of 6.7% yoy to 3,212.8 million services with RGUs per cable subscriber growing by 8.1% to 2.31; o Net growth in cable subscriber base in 2Q11 of 2.3 thousand and thousand cable subscribers have Triple Play services, 58.6% of the cable base; o Solid growth in Broadband and Fixed Voice services of 10.1 thousand and 19.3 thousand subscribers respectively; o 715 thousand customers subscribe to ZON s Broadband services, with 25% taking ultra-broadband speeds, by far the highest number of NGN broadband customers in the market; o Growth in Blended ARPU of 0.5% to 35.8 euros, supported by solid core Triple Play revenues. STRONG PICK-UP IN OPERATING CASH FLOW AFTER CAPEX DECLINES MATERIALLY o Good performance in core basic monthly Triple Play revenues, however some pressure felt from more discretionary premium channel revenues leading to decline in Consolidated Revenues of 2.2% in 2Q11 y.o.y; o EBITDA up 3% y.o.y to 78.5 million euros, representing a 37.1% margin of Revenues, 1.9 pp higher than 2Q10; o Strong improvement in EBITDA-CAPEX of 116.1% led by solid EBITDA performance and a significant decline in recurrent quarterly investment, as expected. 1 2Q11 Earnings Announcement

3 2. OPERATING REVIEW 2Q11 Table 2. Business Indicators ('000) 2Q10 2Q11 2Q11 / 2Q10 1H10 1H11 1H11 / 1H10 Pay TV, Broadband and Voice Homes Passed 3, , % 3, , % RGUs (1) 3, , % 3, , % Cable RGUs per Subscriber (units) (2) % % Basic Subscribers (3) 1, ,552.8 (1.5%) 1, ,552.8 (1.5%) o.w. Cable Subscribers 1, ,157.8 (0.7%) 1, ,157.8 (0.7%) Triple Play Customers % % % Triple Play Cable Customers 49.0% 58.6% 9.6pp 49.0% 58.6% 9.6pp o.w. DTH Subscribers (3.8%) (3.8%) Broadband Subscribers % % Fixed Voice Subscribers % % Mobile Subscribers % % Blended ARPU ( Euros ) % % Cinema Revenue per Ticket (Euros) % % Tickets Sold 1, , % 4, ,110.0 (1.9%) Screens (units) % % (1) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile subscribers. (2) Cable RGUs per Subscriber correspond to the sum of Cable Pay TV, Broadband and Voice Subscribers, divided by the number of Cable Pay TV Customers. (3) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and corporate), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels. ZON is still delivering solid results, notwithstanding the challenging economic backdrop in Portugal. Growth has slowed from the levels of previous quarters, however subscriber behaviour to date continues to reflect the consumer staple-like nature of basic fixed Triple Play services. Underlying, core Triple Play spend remains healthy, and where consumers are tending to be more cautious is on the more discretionary portion of their monthly telecom bill, in particular of premium channel subscriptions. Importantly, the impact felt on ZON s premium revenues is a combination of disconnections not only by ZON customers, but also by those of other operators to whom ZON resells premium content. In addition, the disconnections in premium sports subscriptions are typically higher in the second quarter of the year due to the end of the football season albeit this year the economic climate is creating additional pressure on this front. Triple Play penetration almost 60% Although growing at a slower pace, uptake of additional broadband and voice RGUs is still posting growth quarter on quarter with penetration of Triple Play services reaching 58.6% by the end of 2Q11, thousand subscribers, with cable customers on average subscribing to 2.31 services, up 8.1% from 2Q10. Almost 60% of new cable customers joining ZON continue to seek Triple Play bundles with less than 30% subscribing to just single play Pay TV services. 2Q11 Earnings Announcement 2

4 During the period, ZON s cable customer base posted encouraging net growth of 2.3 thousand customers to 1,157.8 thousand subscribers. However this positive performance in the multiple play customer base was offset by a decline in single play DTH subscribers of 3.9 thousand, therefore leaving the total customer base relatively flat at 1,552.8 thousand at the end of 2Q11. At the start of 2011, ZON launched its new high-end Triple Play bundles, IRIS a service based on a new pay TV user interface developed by NDS. IRIS addresses the higher-end of the market, available only to customers that subscribe to ZON Fibra broadband offers of at least 30 Mbps. Since launch, IRIS has gained significant recognition for its award winning design and user interface. In June, IRIS was awarded the prize for the Most Innovative Design or User Interface worldwide at this year s edition of the TV of Tomorrow Show held in San Francisco. Previously IRIS had been distinguished with the prestigious Janus award by the Institut Français du Design for Best Service. The new interface has several functions that set it apart from other systems, amongst which its minimalist design, personalization ability, focus on content and multi-platform availability. By the end of 2Q11, over 50 thousand customers had installed the new IRIS interface. The increasing take-up of new VOD services is being stimulated by the ease of use of both the new IRIS interface and the upgrades made to the mainstream ZON user interface. In 2Q11, revenues from VOD increased by 100% to 1.5 million euros, representing an ARPU uplift of around 4 euros per customer using the VOD platform. Digital services remain core to Pay TV offers with over 80% of the cable subscriber base equipped with digital set top boxes (929 thousand Next Generation ZON Boxes installed) and therefore net growth in ZON HD boxes installed has now begun to slow significantly quarter on quarter. Resilience in ARPU Operating conditions in the Triple Play market remain encouraging with the level of competitive aggression and promotional activity having fallen-off significantly from previous years. This trend is helping to sustain the value of the services offered and thus an ARPU increase of 0.5% in 2Q11 in comparison with 2Q10, to 35.8 euros, and in line with 1Q11. ZON has been continuously innovating its services over the past years, be it through the launch of new Pay TV user interfaces and functionalities, upgrades to the speed, quality and coverage of its NGN broadband offers and exciting new digital and HD channels amongst many other innovations thus enabling continued resilience and growth of monthly revenues from subscribers. These initiatives have been key to sustain ARPU at constant levels, with core basic Triple Play ARPU posting a yoy increase of 2.9% in 2Q11, excluding the impact of more discretionary premium channel revenues. Good growth in Broadband The number of Broadband subscribers continued to grow in 2Q11, albeit at a slower pace with net adds of 10.1 thousand, to thousand, an increase of 9.9% compared with 2Q10. Broadband penetration of the cable base has reached 62%, an additional 6 p.p. compared with the end of 2Q10. According to data published by the regulator, by the end of 1Q11, ZON s global broadband market share stood at 33.1% up from 32.6% the year before. ZON s market share in Broadband in 2008 and 2009 was 31.3% and 32.2%, respectively. Although official data is not available, if this market share were to be adjusted for network coverage, ZON would be #1 or close to #1 in most of its coverage areas. 3 2Q11 Earnings Announcement

5 Strong take-up of NGN services Within the broadband segment, ZON is clearly leading the higher end of the market. The number of customers that take offers of 30 Mbps or more increased to 177 thousand, already representing almost 25% of the total broadband customer base. According to the most recent data published by ANACOM, ZON s share of NGN customers (Internet connections over 30 Mbps), was around 75%. ZON s network quality provides the largest coverage with very high bandwidth services, positioning it well ahead of its main domestic competitors in terms of share of NGN services. 400 thousand free hotspots, the best WiFi coverage in Portugal Further reinforcing its strong market position in Broadband capacity and availability, during 2Q11 ZON launched a nationwide campaign to raise awareness of its ZON@FON Wifi network, by far the largest in Portugal with over 400 thousand hotspots by the end of May. ZON customers can access these Wifi hotspots for free with unlimited access in terms of both time and traffic. In one particular coverage area, the Madeira Island, ZON provides one of the best WiFi coverages in the world: 13 thousand hotspots with an average of 20 inhabitants per hub and almost full coverage of the entire downtown Funchal area. ZON is the only Fixed Voice operator growing in Portugal During 2Q11, ZON recorded net growth in Fixed Voice subscribers of 19.3 thousand bringing the total Fixed Voice subscriber base up to thousand, and representing a 70% penetration of the cable base. Fixed Voice accesses are increasing in Portugal, on the back of the very competitive offers associated with Triple Play bundles that, in ZON s case, provide flat-rate unlimited Fixed Voice calls both within Portugal and to 50 international destinations across 4 continents. ANACOM recently published data regarding the fixed telephony market for 1Q11. The number of total direct access Fixed Voice services in Portugal increased by 3.7% to 3.7 million, when compared with 1Q10 and ZON was the only operator that grew during this period, posting an increase in market share of 3.7 percentage points to 22.0%. ZON Mobile continues to grow The mobile subscriber base posted net growth of 3.7 thousand subscribers to thousand customers at the end of 2Q11, representing an increase of 28.3% compared with 2Q10. ZON s MVNO continues to post sturdy quarter on quarter growth, and for customers that are more sensitive to mobile voice tariffs, is one of the most attractive offers available in the Portuguese market. For the time being, opportunity for increased fixed-mobile residential convergent offers remains relatively limited, primarily because consumers manifest quite different decision processes when choosing their mobile or fixed operators. As such, ZON s mobile offer currently serves more as a complement to its existing fixed Triple Play offers, with comparatively more take-up of mobile broadband solutions. Quarterly CAPEX coming down as expected With the end of the intense CAPEX programme of the past years to upgrade the entire footprint to EURODOCSIS 3.0, increase network capacity and independence from the incumbent operator in addition to the accelerated roll-out of HD digital set top boxes, ZON is now beginning to see a marked decline in recurrent levels of quarterly CAPEX to more normalized levels. In 2Q11, total CAPEX was 2Q11 Earnings Announcement 4

6 35.5 million euros, of which just 12.1 million euros was investment in customer terminal equipment. These figures compare with 56.3 million euros of total CAPEX and 16.8 million euros of terminal equipment related CAPEX in 2Q10. The ability to bring down the levels of quarterly terminal equipment CAPEX is due to a combination of the slowdown in market growth on one hand and, on the other, the already very high penetration levels of next generation set top boxes and the successful implementation of refurbishment processes. The total CAPEX figure in 2Q11 gives a good indication of levels of ongoing investment in future quarters. Audiovisuals and Cinemas The number of tickets sold in ZON s cinemas posted a significant yoy increase of 22.0% in 2Q11 to million tickets and a sequential improvement of 3.8% compared with 1Q11. This improvement is explained primarily by the larger number of blockbuster movies exhibited in comparison with the previous quarter, namely Pirates of the Caribbean: On Stranger Tides or Fast Five. In 2Q11, revenue per ticket climbed 7.4% to 4.9 euros from 4.6 euros in 2Q10. This performance is supported by ZON s leading position in innovation, with unparalleled levels of digitalization and penetration of 3D projection technology (83 screens out of a total of 217) in the Portuguese market. The increase in cinema attendance with increased revenue per ticket in 2Q11 combined to deliver an 18.9% yoy increase in revenues to 14.4 million euros. The Portuguese Institute For Cinema and Audiovisuals, ICA, recently published market data for 1H11. The total number of spectators in the Portuguese cinema market declined by 5.5% in 1H11, which compares with a 1.9% decline in the attendance of ZON s cinemas. As regards gross revenues, ZON s relative performance was even stronger in comparison with the rest of the market, posting an increase in 1H11 of 4.2% yoy whilst the total market s gross revenues fell by 1.9%. As a result, ZON s market share of attendance and gross revenues at the end of June had increased to 55.6% and 56% respectively. The most successful films shown in 1H11 were Fast Five ; The Tourist, Pirates of the Caribbean: On Stranger Tides, The Hangover Part II and Rio. Revenues in the Audiovisuals division declined in 2Q11 by 6.7% to 17.7 million euros however this is not a like-for-like comparison given that 2Q10 was positively impacted by the consolidation of the Dreamia joint venture for the first time. ZON Lusomundo Audiovisuais maintained its leading position in the distribution of movies for cinema exhibition, VoD viewing and sale of DVD content in Portugal. Of the top 10 films shown in cinemas in 1H11, ZON Lusomundo distributed 6 of them, the most successful films being Pirates of the Caribbean: On Stranger Tides, Fast Five, The King s Speech, Kung Fu Panda 2, No Strings Attached and Rango. According to ICA, ZON s share of gross revenues in terms of cinema distribution in 1H11 stood at 50.6%. 5 2Q11 Earnings Announcement

7 3. CONSOLIDATED INCOME STATEMENT Table 3. Profit and Loss Statement (Millions of Euros) 2Q10 2Q11 2Q11 / 2Q10 1H10 1H11 1H11 / 1H10 Operating Revenues (2.2%) (1.0%) Pay TV, Broadband and Voice (3.0%) (0.8%) Audiovisuals (6.7%) % Cinema % % Others and Eliminations (12.3) (12.2) 0.7% (22.7) (24.3) (7.2%) Operating Costs Excluding D&A (5.0%) (4.5%) W&S (0.7%) % Direct Costs (2.3%) (1.6%) Commercial Costs (1) (32.1%) (20.9%) Other Operating Costs % (4.0%) EBITDA (2) % % EBITDA Margin 35.3% 37.1% 1.9pp 34.8% 37.1% 2.3pp Depreciation and Amortization % % Income From Operations (3) % % Other Expenses / (Income) % % Operating Profit (EBIT) (4) % % Financial Expenses (Income) % % Income Before Income Taxes (11.2%) % Income Taxes (1.5) (4.6) (205.5%) (3.9) (8.2) (109.5%) Income From Continued Operations (34.5%) (17.6%) o.w. Attributable to Minority Shareholders (0.5) (0.0) 99.3% (0.9) (0.2) 75.0% Net Income (32.2%) (15.4%) (1) Commercial costs include commissions, marketing and publicity expenses and costs of equipment sold; (2) EBITDA = Income From Operations + Depreciation and Amortization; (3) Income From Operations = Income Before Financials and Income Taxes + work force reduction programme costs + impairment of goodwill + Losses/Gains on disposal of fixed assets + Other costs/income. (4) EBIT = Income Before Financials and Income Taxes 3.1 Operating Revenues Total Operating Revenues fell by 2.2% in 2Q11 y.o.y. to million euros, totaling a 1.0% decline in 1H11 to million euros. Pay TV, Broadband and Voice revenues decreased 3.0% yoy in 2Q11 to million euros. However, excluding more discretionary premium channel revenues, total ARPU revenues grew by 1.1% yoy in 2Q11, after already having grown 1.5% yoy in 1Q11 this clearly shows the resilience of core Triple Play revenues in such a challenging macroeconomic environment. In addition to the austere economic environment, premium channel revenues were impacted by the normal seasonal disconnections at the end of each football season, albeit higher than usual this year, leading to a decline in revenues of 13.1% yoy in 2Q11 and 7.0% yoy in 1Q11. This decline in premium subscriptions was felt in the ZON subscriber 2Q11 Earnings Announcement 6

8 base as well as in other operators to whom ZON wholesales premium channels. In addition, the terms of the wholesale contracts were renegotiated during 1H11, further negatively impacting the level of wholesale revenues received. Some recovery in premium channel revenues is expected in 3Q11 and 4Q11 with the start of the new football season. The Cinema division recorded a strong improvement in revenues of 18.9% in 2Q11 and also in comparison with 1Q11 of 5.5%, due to the larger number of box-office hits in the quarter, thus driving up spectator numbers. On the other hand, as regards the audiovisuals segment, revenues fell by 6.7% y.o.y. in 2Q11 to 17.7 million euros, albeit posting a sequential improvement of 3.6% in comparison with 1Q11. The lower sales in comparison with the same quarter last year are a result of the previously discussed comparison effect due to the Dreamia consolidation. 3.2 EBITDA EBITDA grew by 3% in 2Q11 to 78.5 million euros, despite the decrease in Operating Revenues, representing a margin of 37.1%, 1.9pp higher than in 2Q10. In 1H11, EBITDA grew by 5.7% to 158 million euros, representing an increase in consolidated margin of 2.3pp to 37.1%. The yoy increase in EBITDA was the result of both the reduction in commercial and customer driven costs mostly due to the slower pace of RGU growth, the less aggressive promotional competitive environment supporting lower levels of churn, and a clear focus on cost control. EBITDA Margins (%) 34.3% 35.3% 35.9% 37.1% 37.1% 33.2% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q Consolidated Operating Costs Wages and Salaries remained almost flat in 2Q11, with a marginal decline of 0.7% in comparison with 2Q10. Direct Costs in 2Q11 amounted to 60.9 million euros, 2.3% lower than in 2Q10, however remaining practically flat in comparison with 1Q11. The decrease in 2Q11 is mostly a result of the lower level of programming costs, on the back of lower premium channel subscriptions, which more than offset an increase in traffic and capacity costs due to higher broadband and voice usage. Commercial Costs posted a significant decline of 32.1% in 2Q11 to 12.1 million euros and of 20.9% in 1H11 in comparison with 1H10. This continued reduction in Commercial Costs is a result of the lower 7 2Q11 Earnings Announcement

9 level of commercial activity and of a less aggressive competitive and promotional environment, driving lower churn and lower sales related costs. The decline in Commercial Costs was also supported by a more efficient use of available sales channels. Other Operating Costs remained comparatively flat yoy in 2Q11 at 45.5 million euros. 3.4 Net Income Net Income was 9.2 million euros in 2Q11, lower than in 2Q10 as a result of the impact of the equity consolidation of the Angolan operation and a more normalized level of income tax, as explained below. Depreciation and Amortization recorded an increase of 2.1% in 2Q11 to 53.3 million euros, explained by the significant CAPEX of the previous years. Although recurrent levels of CAPEX are now significantly lower, accumulated investment on the balance sheet will still take some time to flow through the P&L as depreciation. Net Financial Expenses in 2Q11 amounted to 10.5 million euros compared with 8.0 million euros in 2Q10. The increase is explained mostly by the equity consolidation of the Angolan operation as from March 2010, with the negative contribution kicking in with commercial launch in August The negative contribution of ZAP to consolidated ZON results recorded a sequential improvement from 2.8 million euros in 1Q11 to 2.3 million euros in 2Q11, as a result of the continued growth and operational success of the operation, however it was still higher than the 1.3 million euros recorded in 2Q10. The other main item which affected Net Financial Expenses, Net Interest Expenses, amounted to 6.1 million euros in 2Q11 compared with 5.9 million euros in 2Q10. Income Taxes were 4.6 million euros in 2Q11 which represents a significant increase from the 1.5 million euros recorded in 2Q10 and translates into a more normalized effective tax rate of 29.5% for 1H11. The lower tax rate that had been reflected in the previous year s accounts was related to the positive one-off impact that the higher corporate tax rate generated on deferred taxes in 2010 and also to the tax benefit for research and development and Next Generation Networks. 2Q11 Earnings Announcement 8

10 4. CAPEX AND CASH FLOW 4.1 CAPEX Table 4. CAPEX (Millions of Euros) 2Q10 2Q11 2Q11 / 2Q10 1H10 1H11 1H11 / 1H10 Pay TV, Broadband and Voice Infrastructure (7.6%) (6.8%) Terminal Equipment (27.8%) (39.1%) Other (39.5%) (29.0%) "Baseline" CAPEX (18.5%) (23.9%) Long Term Contracts (100.0%) (100.0%) Other Non-Recurrent Items (87.8%) (72.1%) Total CAPEX (37.0%) (32.6%) CAPEX, as anticipated, is posting significant reductions quarter on quarter, reaching 35.5 million euros in 2Q11, compared with 56.3 million euros in 2Q10, representing a drop of 37.0%. Baseline CAPEX, a measure of the more recurrent levels of CAPEX fell by 18.5% yoy to 33.8 million euros in 2Q11 led by the significant decline in customer related investment. As anticipated, once the pace of market growth started to subside, with penetration of HD boxes already at very significant levels and with the success of terminal equipment refurbishment processes, the additional need for investment in new terminal equipment would also begin to decline. In 2Q11, customer related investment fell to 12.1 million euros, 27.8% less than in 2Q10. This is a trend that is set to continue going forward. Total CAPEX (Millions of Euros) Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Baseline CAPEX Non-Recurrent CAPEX With the conclusion in 2010 of important non-recurrent projects, which made a structural change to how ZON manages its network infrastructure, the most relevant of which being ZON-IN (ZON invested to ensure network independence by deploying own fibre along the primary network and relocating hubs 9 2Q11 Earnings Announcement

11 onto own infrastructure) and the deployment of a new data centre, additional, non-recurrent investments are no longer significant, representing just 1.7 million euros in 2Q11. Table 5. Cash Flow (Millions of Euros) 2Q10 2Q11 2Q11 / 2Q10 1H10 1H11 1H11 / 1H10 EBITDA % % CAPEX (56.3) (35.5) 37.0% (110.2) (74.3) 32.6% Baseline CAPEX (41.5) (33.8) 18.5% (91.5) (69.6) 23.9% Non-Recurrent CAPEX (14.9) (1.7) 88.7% (18.7) (4.6) 75.2% Non-Cash Items Included in EBITDA-CAPEX (1) and Change in Working Capital (0.4) (13.9) n.a. (18.5) (48.9) (163.8%) Operating Cash Flow After Investment % % Long Term Contracts (14.2) (27.6) (94.4%) (54.0) (41.8) 22.6% Net Interest Paid and Other Financial Charges (10.4) (12.1) (15.9%) (12.8) (10.2) 20.0% Income Taxes Paid (2.9) (3.9) (32.2%) (3.2) (4.5) (39.8%) Disposals (0.0) % % Other Cash Movements (0.7) (0.7) (5.6%) (0.3) (1.5) n.a. Free Cash-Flow (8.7) (15.1) (73.5%) (42.7) (16.5) 61.4% (1) This caption includes non-cash provisions included in EBITDA and non-cash CAPEX related to the upfront capitalization of long term contracts. 4.2 Operating Cash Flow Operating Cash Flow After Investment improved by 49.3% to 29.2 million euros as a result of the increase in EBITDA and the reduction in CAPEX as discussed previously, thus generating a significant improvement in EBITDA CAPEX to 43.1 million euros in 2Q11 compared with just 19.9 million euros in 2Q10. EBITDA - Total CAPEX (Millions of Euros) (4.7) (5.2) 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Net Working Capital changes had a negative impact on FCF in the quarter due to the significant reduction in suppliers after payments made for the abnormally high levels of investment made at the end 2Q11 Earnings Announcement 10

12 of 2010 and that were carried over into Working capital was also impacted by the fact that, in some cases, ZON benefited from advantageous earlier payment terms from suppliers. The negative working capital impact of the decrease in supplier balances has already filtered through the accounts in full. Accounts Payable; CAPEX + OPEX (Millions of Euros) Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Accounts Payable CAPEX + OPEX 4.3 Free Cash Flow Total FCF in 2Q11 was negative by 15.1 million euros and had it not been for the negative contribution of the change in working capital, as explained above, FCF would have posted a very material improvement in 2Q11. Main additional items affecting FCF in 2Q11 were an increase in long-term contracts in the quarter of around 12 million euros relating primarily to payments for the current football season and Net Interest Paid of 12.1 million euros. 11 2Q11 Earnings Announcement

13 5. CONSOLIDATED BALANCE SHEET Table 6. Balance Sheet (Millions of Euros) H11 Current Assets Cash and Equivalents Accounts Receivable, Net Inventories, Net Taxes Receivable Prepaid Expenses and Other Current Assets Non-current Assets 1, ,088.5 Investments in Group Companies Intangible Assets, Net Fixed Assets, Net Deferred Taxes Other Non-current Assets Total Assets 1, ,742.6 Current Liabilities Short Term Debt Accounts Payable Accrued Expenses Deferred Income Taxes Payable Current Provisions and Other Liabilities Non-current Liabilities 1, Medium and Long Term Debt Non-current Provisions and Other Liabilities Total Liabilities 1, ,521.3 Equity Before Minority Interests Share Capital Own Shares (0.0) (0.0) Reserves, Retained Earnings and Other Net Income Minority Interests Total Shareholders' Equity Total Liabilities and Shareholders' Equity 1, , Q11 Earnings Announcement 12

14 5.1 Capital Structure At the end of June 2011, Net Financial Debt stood at million euros, an increase of 10.5% in comparison with the end of FY10. This increase is explained by the dividend payment of 50 million euros which was made on 6 May, and by negative Free Cash Flow generated in 1H11 as discussed above. Due to the refinancing of a 150 million euros commercial paper line until 2016, which took place at the end of 1Q11, the average maturity of ZON s financial debt has increased to 2.64 years. The all-in average cost of ZON s Net Financial Debt was 3.95%. Net Financial Gearing increased to 76.1% compared with 71.9% at the end of 2010, and Net Financial Debt / EBITDA (last 4 quarters) stands at 2.3x. Total Net Debt of million euros also includes commitments with Long Term contracts recorded as liabilities on the Balance Sheet, of which the most relevant are long-term transponder and content contracts. Table 7. Net Financial Debt (Millions of Euros) H11 1H11 / 2010 Short Term n.a. Bank and Other Loans n.a. Financial Leases % Medium and Long Term (18.9%) Bank Loans (18.9%) Financial Leases (13.7%) Total Debt , % Cash, Short Term Investments and Intercompany Loans % Net Financial Debt % Net Financial Gearing (1) 71.9% 76.2% 4.3pp Net Financial Debt / EBITDA 2.1x 2.3x n.a. (1) Net Financial Gearing = Net Financial Debt / (Net Financial Debt + Total Shareholders' Equity). 13 2Q11 Earnings Announcement

15 6. INTERNATIONAL GROWTH ANGOLA ZAP, ZON s Pay TV joint venture in Angola continues to post very robust growth reaching 90 thousand active customers at the end of 2Q11 and with very healthy levels of ARPU of over 35 USD. The majority of the customer base subscribes to the higher tier Pay TV offers sold at 60 USD per month, including premium sports and movies, albeit gross adds to the customer base are now spread more evenly between the Premium and Max tariff plans. In terms of its distribution network, by the end of June, ZAP had 10 own stores and 350 points of sale from agents in Angola in addition to a door-to-door sales force of over 150 people. ZAP has also officially launched its commercial offer in Mozambique in June 2011, having started operations with two own stores and 14 points of sale from agents. 2Q11 Earnings Announcement 14

16 7. APPENDIX 7.1 APPENDIX I Table 8. Business Indicators ('000) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Pay TV, Broadband and Voice Homes Passed 3, , , , , ,223.3 Basic Subscribers (1) 1, , , , , ,552.8 of which Fixed Broadband Fixed Voice Mobile (2) Cable Subscribers 1, , , , , ,157.8 Triple Play Customers % Triple Play Cable Customers 45.6% 49.0% 51.9% 55.2% 57.6% 58.6% Double Play Customers % Double Play Cable Customers 17.1% 16.0% 15.2% 14.2% 13.9% 14.1% Single Play Customers % Single Play Cable Customers 37.3% 35.0% 32.9% 30.6% 28.5% 27.3% DTH Subscribers Premium Sports and Movies Penetration (3) 48.5% 47.3% 45.6% 44.4% 44.1% 41.6% RGUs (4) 2, , , , , ,212.8 Cable RGUs per Subscriber (units) (5) Blended ARPU ( Euros ) Net Additions Triple Play Customers Basic Subscribers (6.4) (11.6) (3.8) (1.5) (17.1) (1.6) Fixed Broadband Fixed Voice Mobile RGUs Cinema Revenue per Ticket (Euros) Tickets Sold 2, , , , , ,093.6 Screens (units) (1) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and corporate), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels. (2) Mobile subscribers include Mobile Voice and Mobile Broadband. (3) Includes Sports, Movies and other Premium channels with relevant scale and Subscription VoD services. (4) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile services. (5) Cable RGUs per Subscriber correspond to the sum of Cable Pay TV, Broadband and Voice Subscribers, divided by the number of Cable Pay TV Customers. 15 2Q11 Earnings Announcement

17 7.2 APPENDIX II Table 9. Profit and Loss Statement (Millions of Euros) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Operating Revenues Pay TV, Broadband and Voice Audiovisuals Cinema Others and Eliminations (10.4) (12.3) (13.3) (11.9) (12.1) (12.2) Operating Costs Excluding D&A W&S Direct Costs Commercial Costs (1) Other Operating Costs EBITDA (2) EBITDA Margin 34.3% 35.3% 35.9% 33.2% 37.1% 37.1% Depreciation and Amortization Income From Operations (3) Other Expenses / (Income) (0.5) (0.3) 0.9 Operating Profit (EBIT) (4) Financial Expenses (Income) Income Before Income Taxes Income Taxes (2.4) (1.5) (4.1) (1.4) (3.6) (4.6) Income From Continued Operations o.w. Attributable to Minority Shareholders (0.4) (0.5) (0.4) (0.1) (0.2) (0.0) Net Income #REF! Baseline CAPEX Total CAPEX Free Cash Flow (34.0) (8.7) 3.5 (7.0) (1.4) (15.1) Net Financial Debt (1) Commercial costs include commissions, marketing and publicity expenses and costs of equipment sold; (2) EBITDA = Income From Operations + Depreciation and Amortization; (3) Income From Operations = Income Before Financials and Income Taxes + work force reduction programme costs + impairment of goodwill + Losses/Gains on disposal of fixed assets + Other costs/income; (4) EBIT = Income Before Financials and Income Taxes. 2Q11 Earnings Announcement 16

18 8. DISCLAIMER Except for historic information contained herein, this document contains certain forward-looking information and statements on [the results of operations or its economic and financial conditions] which are not guarantees of future performance. The Forward-looking statements herein included are subject to a number of factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forward-looking statements were based to substantially differ from the expectations predicted herein. These factors, risks and uncertainties include, but are not limited to, the continuous and increasing demand of the company s services by its clients, the technological outcome, the effects of competition, the telecommunications sector conditions, the changes in regulation, and the economic conditions. The forward-looking information and statements are naturally based on management s current and reasonable expectations or beliefs only as of the date they were made. ZON Multimedia does not undertake any obligation to update any forward-looking information or statements included in this document or to provide reasons why actual results my differ from the plan, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. This document is not an offer to sell or a solicitation of an offer to buy any securities. ZON Multimedia is exempt from filing periodic reports with the United States Securities and Exchange Commission ( SEC ) pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. The SEC file number for ZON Multimedia s exemption is No Under this exemption, ZON Multimedia is required to post on its website English language translations, versions or summaries of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. 9. ENQUIRIES Chief Financial Officer: José Pedro Pereira da Costa Tel.: (+351) Analysts/Investors: Maria João Carrapato Tel.: (+351) / ir@zon.pt Press: Paulo Camacho / Irene Luís Tel.: (+351) / comunicacao.corporativa@zon.pt Conference call scheduled for 12h00 on 28 July 2011 Conference ID: Portugal Free Call: UK Standard International: +44 (0) USA Dial In: Encore Replay Access Number: # International Encore Dial In: +44 (0) Q11 Earnings Announcement